More at Still Life With Cat.

In an effort to counter the subsequent flood of misinformation and lies the world’s best treasurer released some information on Sunday ahead of the release of new modelling that Treasury has done on the actual carbon price to be legislated. The information seems exactly the same as the old information in relation to the purchases of goods and services by consumers. Here’s the table:

The average food bill for a household will go up about 80 cents a week, the average electricity bill will rise by about $3.30 a week, and the average gas bill by around $1.50 a week. All up, the average household will see cost increases of $9.90 per week, while the average assistance will be $10.10 per week.

The total impact on prices is expected to be 0.7 per cent in 2012-13, or less than a third of the impact of the GST. This graph from the CEF site gives the picture:

Carbon pricing impact

The blue bar is the average CPI increase in recent years, the green indicates the immediate GST impact and the red the anticipated carbon pricing impact,

In searching for the above information in the wrong place I came upon a link to the latest of Greg Combet’s series Abbott Absurdities On Climate Change – Bulletin No.14. I was particularly interested in this one:

Claim 8: “A 2009 Spanish study found that for every green job created by subsidies and price supports for renewable power, more than two jobs in other industries are lost.”

Fact 8: This study, by the founder of a libertarian think-tank in Spain, has been widely criticised for poor methodology. The US National Renewable Energy Laboratory has said the study used questionable methodology, lacked transparency and supporting data and ignored key information.

I’d heard that claim being spruiked by Abbott’s minions. Problem is, you don’t know whether it’s right or whether it’s wrong, but having been asserted the information tends to stick.

A bit of sleuthing reveals the first of these bulletins goes back to 27 May.

On the same day there was another media release giving more information on the blatant misrepresentation of Ross Garnaut’s views and a few days later another on building supplies and misrepresentation of the position in NZ. You can find a complete list of Combet’s counters to Abbott’s absurdities can be found in his ministerial media release archive.

Abbott’s negativity has had an effect which reached farcical proportions when David Jones partly blamed the ‘carbon tax’ for a drop in sales when they should have looked in the mirror.

Problem is, unless Combet takes the trouble to call a press conference or spruik into a microphone somehow it the information diligently compiled and posted by staff just isn’t picked up by the MSM. As a busy minister I’m sure he has limited time to feed the chooks. The Opposition OTOH seem to have nothing else to do.

Recently I came across this 1822 quote from James Madison:

A popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or, perhaps both. Knowledge will forever govern ignorance: And a people who mean to be their own Governors, must arm themselves with the power which knowledge gives.

With the state of politics and the MSM in 2011 the chances of the people arming themselves with the power that knowledge gives seems remote. According to the polls we are faced with an even bigger farce and/or tragedy: being governed by those who systematically mislead and distort.

There is scope for a significant piece of investigative journalism here. The recent Four Corners program failed in this regard. It sought to portray a war rather than seek the truth and as such didn’t get beyond the ‘he says, she says’ form of reporting.

Airliner emissions impact the climate in several ways. The first, the CO2 in their exhaust, is easy to calculate from their fuel burn and has the same impact as any other release of CO2 into the atmosphere. However, the contrails and other non-CO2 greenhouse gases also produce a complex mix of effects, which are not as well quantified. this report quotes one study as estimating that, on average, the effects of aviation emissions on climate are about 1.9 times that as would result from the CO2 alone. An earlier estimate from the IPCC used a figure of 2.7; however, a major area of uncertainty (at least from what I’ve been able to read so far) is the warming effects of cirrus clouds formation induced from contrails. One paper linked from Wikipedia suggests that cirrus cloud formation may have a considerable impact, possibly even as much as all the other impacts combined. A further complication is that the estimates in the papers examine the cumulative impact of aviation to date, rather than the incremental impact of an additional flight, which is presumably a more appropriate basis for applying a “carbon price” (actually an emissions price).

But somehwere along the line, a multiplier will be applied to emissions from aviation; and for the purposes of this exercise, we’ll set lower and upper bounds for this at 1 and 4 respectively.

Jet fuel is, by international treaty, untaxed. It appears that the difference between the oil price and the jet fuel price is about 40USD per barrel. As a very rough approximation, then, we’ll assume that that refining margin is constant, and thus the jet fuel price will be the oil price + 40USD.

Aircraft are getting more fuel efficient over time. Leaving out routing, scheduling, and passenger loading improvements, from this document it seems that the specific fuel consumption of aircraft has been going down by about 0.7% per year. As a baseline, I’ll assume that efficiency continues to improve at this rate; while we may reach the limits on engines at some point, aircraft manufacturers also have the opportunity to move away from the “tube with wings” design to something more efficient.

Anyway, I’ve plugged all these into an spreadsheet and estimated the fuel and carbon costs for the Melbourne-Sydney air route in a number of scenarios. The results are summarized in the graph below:

The first entry is the current fuel cost estimate. The second is what would happen with an initial $23/tonne carbon tax, using a 1.9 multiplier for the non-CO2 effects. As you can see, it doesn’t make a whole lot of difference.

The next scenario is for 2020, with oil prices at $150 per barrel and the carbon price at $50. Even so, the total fuel+carbon costs for the flight remain under $50.

Then, we look at four scenarios for 2036, which is a year that crops up repeatedly in the HSR study. All four scenarios assume an oil price of $200 per barrel.

The first is a baseline scenario, with a carbon price of $100 per tonne (taken as a plausible number from the 2008 Garnaut Review scenarios) and a radiative forcing of 1.9. The fuel+carbon price has roughly doubled from 2011, to around $56. The second scenario has a forcing of 4, which pushes the cost up to just under $70. The third scenario involves a $150 carbon price – well above the Garnaut estimate – and a multiplier of 4, working out to around $80.

However, if the carbon price and multiplier really are that high, the airlines would almost certainly change their practices. Most notably, they could fly lower, which might increase fuel burn a little but would essentially eliminate the effects of contrails and cirrus cloud formation. To reduce their fuel burn, they could fly a little slower. Over the Melbourne-Sydney route, even flying turboprops would probably only add around 10-15 minutes to the flight. So, for scenario d, I assumed an unchanged fuel burn but a multiplier of only 1.5, which brings us back to similar costs as scenario a).

My conclusions from this are straightforward – you’re going to have to assume extremely high oil and carbon prices (and, remember, increasing one tends to decrease the other) if you expect these factors to make HSR cost-competitive with aircraft on the east coast air routes. Even then, changes to flight practices and known technology could eliminate much of the cost impact.

In my 2009 submission to the Senate Select Committee on Climate Policy I ripped into the Rudd Government for commissioning Ross Garnaut

to analyse two specific stabilisation goals: one at which greenhouse gases are stabilised at 550 ppm CO2-e (strong global mitigation) and one at which they are stabilised at 450 ppm CO2-e (ambitious global mitigation).

I then castigated Garnaut for accepting the brief:

This is sad and actually outrageous. Garnaut, had he acted responsibly at this point, would have gone back to those who commissioned the report and asked for the reference to be changed so that he could develop a strategy for a safe climate.

When the 2050 target was changed from a 60% reduction in emissions relative to 2000 to 80% I wondered whether the assumptions about the science had changed. If you go to the Treasury Report on modelling a carbon price it becomes clear that nothing has changed.

Treasury modelled two scenarios, one called “medium” and the other “ambitious”. The medium scenario is then called “core”. If adopted worldwide, it aims to stabilise greenhouse gas concentration levels at 550 parts per million. The ambitious scenario aims at 450ppm.

Treasury then blithely tell us that 450ppm will give us a 50:50 chance of keeping the average global temperature at less than 2C above pre-industrial levels, while 550ppm raises that figure to 3C. Stabilisation at 2C, they say, is the threshold for “dangerous” climate change. They then calmly tell us the likely implications of a 3C rise:

20 to 30 per cent of all species are projected to face a 50 per cent likelihood of extinction under this scenario (IPCC, 2007b), involving total realignment of ecosystems across Australia. Coastal communities, agriculture and infrastructure would all face significant risks, including frequent or permanent coastal inundation for parts of the Australian coastline, a substantial increase in extreme weather across the nation, and substantial restructuring of the rural sector (Pearman, 2008). (p41)

Martin Nicholson notes that the figures Gillard cites are actually from the core scenario. This seems to be true for the Government generally. So that’s what our ‘clean energy future’ officially looks like, folks.

My impression is that the CEF is calibrated to mesh with the global mitigation effort. We are not out in front, we’ve fallen into line and will do what we assess as our share. Certainly Treasury’s approach takes no account of the climate budget approach, where high per capita emitters would be called upon to make a larger effort in the near future.

Accessing international markets is a key feature of the scheme, as can be seen from this graph:

So we are banking on the restraint of developing countries rather than achieving cuts by our own direct efforts.

Lest you think mitigation is a waste of time, the report tells us that we will have 1500ppm of CO2 by 2100 and a temperature rise of 7C under a do-nothing scenario.

Nicholson’s piece is pushing nuclear, but he does make the point that the Treasury modelling of future energy sources includes technologies which are as yet unproven. Here is the relevant graph:

To spell out the percentages, we’ll have 7.9% black coal, 0.1% brown coal, 15.1% coal CCS, 21.9% gas and oil, 14% gas CCS and 41.1% renewables, which are further subdivided into 4.5% hydro, 13,7% wind, 3.2% solar, 1.9% biomass and 17.8% geothermal. That’s just on 47% from unproven technologies. CCS is assumed to be available from 2021.

The particular mix of renewables is not so much a worry, I think, as the reliance on CCS, which seems brave, to say the least.

It is assumed that the carbon price will rise to US$100 under the core policy, and to US$200 if we are ambitious. Curiously the 2050 target remains at 80% for both scenarios. In that case we’ll have 50.7% renewables, with 21.1% geothermal, 5.6% coal CCS and 25.5% gas and oil CCS.

Tapping into international markets is said to be a way of lessening the cost of mitigation. It also synchronises our effort with that of the rest of the world. The underlying strategy is that we will proceed as the world proceeds.

In my senate submission I spelt out at some length why stabilising at 450 or 550 ppm was inadequate. Here I’ll just mention two reasons. (Warning: scary stuff coming up.)

One is that the midpoint temperatures represent short term feedbacks only, and as conceived in the literature carry unacceptable risk on the upside. I repost here the graph from the Stern Review (2006):

The solid horizontal lines indicate the 5% to 95% range based on the IPCC 2001 report and a 2004 Hadley ensemble study. The dashed lines represent the 5% to 95% range based on 11 “recent” studies (Meinshausen, M. 2006). You’ll notice that at 450ppm and above the 95% values are off the page on the upside, meaning that even for 450ppm there is a better than 1 in 20 chance of a 6°C outcome.

That’s not just dangerous, it’s catastrophic.

We need to remember that the above is based on calculated on short term feedbacks. A recent paper by Hansen, Sato and Kharecha (see pp10-17) outline what they think happens when you take slow feedbacks into account. You need to define exactly which feedbacks are included, but the temperature implications are significantly higher.

We also need to bear in mind the possibility of dangerous tipping points, now thought by some as an issue below 2C.

The important point is that we appear to be committing the planet to a very dangerous future, especially in the second half of this century. We are not shooting for a safe climate.

The second is our commitment to sea level rise. Hansen et al remind us that the ice sheets began to form 34 million years ago, when CO2 levels were about 450 to 500ppm. In warming from where we are now you probably need to reckon on an average of 15 metres for every degree temperature rise – eventually. This is what Australia would look like when the ice is gone, from a talk given by David Spratt at the Climate Action Summit, 31 January, 2009:

Australia when the ice is gone

Sorry, couldn’t resist!

The CEF is a better-than-nothing start which aligns us with the level of ambition of those countries taking action or making pledges on climate change mitigation. Unfortunately when seen against the real problem it remains a half-hearted and anaemic attempt.

On this thread @ 22 Chris linked to an article in the Financial Review by Geoff Kitney and David Crowe saying that as Deputy Prime Minister to Rudd Gillard proposed:

seeking a bipartisan agreement with Mr Abbott on measures to achieve the goal of a 5 per cent reduction on the year 2000 level of Australia’s greenhouse emissions by 2020 without a carbon tax and an emissions trading scheme.

That was on the say so of “a source with close knowledge of the matter”.

The dead tree version of the article makes it clear that the Gillard proposal was never seen by Cabinet. It was put to and rejected by other members of the Strategic Priories and Budget Committee of Cabinet (‘Gang of Four’) that is by Rudd, Swan and Tanner, and then by Penny Wong as environment minister. Also the proposed approach of not having an ETS was only to last while Abbott retained the leadership. According to that one source.

Gillard’s response was that she wouldn’t be talking about cabinet decisions but she flatly rejected the report.

I don’t talk about cabinet decisions, but I’m certainly happy to talk about my beliefs and in doing so I’ll make it very clear that those matters reported today have no veracity or truthfulness to them.

I’ve always believed that climate change is real. I’ve always believed that carbon pollution caused by human activity needs to be cut. I’ve always believed that in order to do that the most efficient way of doing it, the best way of doing it was by putting a price on carbon.

And I have never believed that this nation could reach its 5 per cent emissions reduction target other than by putting a price on carbon.

But

Of course it would be better if this big economic reform was bipartisan. Of course it would. I offered Tony Abbott a seat on the MPCCC.

Gillard always appears to have been mindful of the advantages of bipartisanship on the issue. In this post I reported on Pamela Williams’ article in the Fin Review (from more than one source):

Gillard spoke forcefully in favour of dropping the [CPRS] until a bipartisan position could be re-established with the Opposition.

That was clearly a different occasion with a dozen or more attending a crisis meeting called by Rudd.

It seems to me that Gillard’s statement that “those matters reported today have no veracity or truthfulness to them” leaves little wriggle room. But is it all that important if she did suggest that strategy? If so it doesn’t add up to an endorsement of Abbott’s policies. At the time the Gillard paper was supposedly written, did Abbott have an articulated policy? I can’t recall, but I doubt it. And there is no reason to assume that Abbott’s policies would have been adopted unchanged by Labor.

Meanwhile Jeremy Thompson’s write-up for ABC Online sees the affair wholly through the eyes of Tony Abbott. OK, it was written before the radio National PM item went to air. Will the ABC update it tomorrow? Possibly not as it will be yesterday’s news.

Via The Poll Bludger, a marginally better poll for the ALP, with its primary vote up 2% and a corresponding fall in the Coalition’s 2PP lead to 56-44.

That’s in the ‘nearly statistically significant’ category, but a 6% shift from opposition to support for the carbon pricing plan is big. It still leaves the tax disapproved by 53-36, but there’s definitely something going on.

In other polling news, robots have found that Julia Gillard would win her seat of Lalor comfortably if an election were held.

Clean Energy Future launch

Frustration at the nonsense purveyed on Madonna King’s program inspired me to send her an email, stating the main features of the Clean Energy Future (CEF) package in three simple points. In this post I give an expanded version so you can check and let me know if I’ve got it right. The scheme does seem to me to have an elegant simplicity about it together with a flexibility that bespeaks careful design.

First, the government is selling permits to pollute, not imposing a tax. About 500 of the biggest polluters will have to buy permits to dump their waste carbon into the atmosphere. Annabel Crabb quotes Gillard as saying:

“Around 500 big polluters will pay for every tonne of carbon pollution THEY put into OUR atmosphere.”

As Crabb says:

WE are getting those polluters to pay for what THEY do to US.

You have to get your head around this aspect if you want to understand what’s going on.

Second, as the scheme proceeds each year there will be fewer permits available. That’s why pollution is sure to decrease. It WILL WORK.

Third, the 80% target by 2050 says that we are serious about climate change and want to go where the rest of the world is going. It is important, not an “empty gesture” as stated by Bernard Keane. 80% is becoming an international norm. Investors in power stations need to consider a 40-year time frame. They won’t build new coal-fired stations under these circumstances unless they are completely daft.

Those are the three points I made to Madonna King. To those I’d add a fourth: institutional arrangements have been set up to take the politics out of the scheme, to give it the scientific/economic/technical inputs it needs, and to adjust it as we proceed.

Back in this post I said that Garnaut saw these as the most important feature he would look for when the scheme was announced. He identified three – one to administer the scheme, one to decide on compensation and one to review targets periodically as we go.

To administer the scheme we have the Clean Energy Regulator. The Productivity Commission will decide on compensation after the initial period. The Climate Change Authority will decide on targets and caps, the government having to justify itself if the Authority’s recommendations are not accepted.

Garnaut was well-pleased with the outcome:

This is a strong climate change policy package. It will allow Australia to do its fair share in an effective global effort to reduce the risks of climate change, and to do so at reasonable cost.

And:

I congratulate the Prime Minister and her colleagues in the Multi-Party Climate Change Committee for the sound process and on the good outcome for Australia and the international community.

That to me is the broad outline. Even if you grasp the first two – we are selling permits to dump waste carbon and over time the number of these permits will reduce – you will be ahead of 98% of people, including, unfortunately, many of the scheme’s advocates.

Of course, there are many other important features. Going beyond compensation of households affected, I’d briefly nominate four.

First, the clean energy initiatives. From 2013-14 there will be a Clean Energy Finance Corporation to invest $10 billion over five years in renewables and low emissions technologies (but not CCS). Any dividends from this will be added to the $3.2b renewable energy fund overseen by the Australian Renewable Energy Agency (ARENA).

Second, decommissioning dirty energy and providing for energy security. An Energy Security Fund will pay for the closure of up to 2000MW of dirty power generation capacity by 2020, and provide $5.5 billion in free permits and cash to the sector to 2016-17 through an Energy Security Council. (From Crikey.)

Third, international trading will be introduced after 2015, when entities will be able to purchase up to 50% of permits internationally. I understand this will limit costs, deepen the market and provide a bridge into international trading.

Fourth, the land use scheme, of which Garnaut says:

The treatment of the land sector will encourage new forms of carbon sequestration that create important opportunities for rural Australia. Here our pioneering role in measuring and rewarding sequestration in soils, pastures, woodlands and forests is likely to have international influence.

Ben Eltham at New Matilda rates Gillard’s achievement very highly seeing it as “the defining accomplishment of Gillard’s political career” and “every bit as significant in Australian terms as the passage of health reform was for Barack Obama and the Democrats in the United States last year.”

Abbott, on the other hand, will become a bit of historical detritus, even if he does become prime minister for a time, unless he succeeds in unpicking the package. Then he will be remembered as an opportunistic destroyer.

In Australia for a conference, German leading climate scientist Hans Joachim Schellnhuber has his eye on us. We need stronger targets (Germany is aiming at complete decarbonisation by 2050) and a greater focus on renewables. Australia has influence beyond its size internationally but in closed ministerial meetings “Australia seems to be less progressive than the world needs it to be.”

Malte Meinshausen says Australia’s had the snooze button on until now. But, he says Australia is now:

sending a very powerful message with the carbon pricing. That signal is going to be a very positive one for the internal US debate and could have a huge knock on effect in terms of emission reductions worldwide.

Well done us. At least it is a beginning.

The political junkies in my social circle have neatly divided along the usual partisan lines, so no surprise there. But I have observed that a few others who are not political junkies have:

• Noted its existence. It’s rare enough that a public policy issue draws much attention at all; most people have better things to do
• Started discussing the merits of the policy.

For instance, GetUp’s 2-minute “how the carbon price works” video seems to be circulating amongst people who aren’t already converted.

Maybe I’m hopelessly optimistic – and don’t get me wrong, there’s still plenty of misconceptions and misinformation mixed in – but I’m getting a vague hope that people are getting some good messages.

What, if anything, are LP readers picking up?

One such case is that of full-time research students on tax-free research scholarships, such as the Australian Postgraduate Award

The APA, and other research scholarships, are awarded to students completing full-time university research degrees. They are generally sufficient to live on, but by no means generous; a full-time research student on an APA will receive $22,860 tax free this year. The majority of such students will also do a little part-time work, but rarely go much over the present tax-free threshold. As such, they fall squarely within the income range that would be compensated under the CEF, were the income received through some combination of conventional employment or a pension.

The only means mentioned thus far by which students in this situation may be compensated is, possibly, the Low Income Supplement, which is a Centerlink payment which provides an additional $300 for low-income earners not otherwise compensated. But that’s a) not certain, and b) a massive administrative hassle.

Hopefully the government can clarify this possible anomaly in the not too distant future, and preferably by the most straightforward mechanism, a small increase in the APA rate in 2012 and beyond.