The costs of tackling or not tackling anthropogenic global warming

by Michael Cunningham (“Faustino”)

There are many issues of debate about global warming.  Has there been warming this century?  Will there be further warming?  If so, will the cause be anthropogenic or other?  What will be the impacts, both positive and negative?  Should we take action to reduce emissions?  How might we proceed, and what are the costs and benefits of various approaches?

These issues are of enormous economic and political significance, given claims of “catastrophic” outcomes and that many emissions-offsetting policies are very costly, involve large-scale structural change and would divert resources from other priorities.

The UK Government commissioned a study into the Economics of Climate Change by Sir Nicholas Stern, Head of the Government Economic Service and Adviser to the Government on the economics of climate change and development.  Stern’s 2006 paper has been severely criticized by both scientists and economists, but continues to be influential in many countries and remains the basis for UK policy.  This continuing influence of Stern’s work has prompted a rebuttal by UK MP Peter Lilley.  Lilley has degrees in Natural Science and Economics from Cambridge, has worked as a development economist and investment analyst specialising in energy industries and held economic Ministerial posts from 1987-97.  His paper is published by the Global Warming Policy Foundation.

The rebuttal is not a “denialist” paper.  Richard Tol notes in his Foreword that “there is an economic case for greenhouse gas emission reduction. We cannot be certain that greenhouse gas emissions do not cause climate change. We cannot be certain that climate change is harmless. In fact, most evidence points in the opposite direction.”  In order to focus exclusively on the economics, Lilley’s paper – like the Stern Review – takes the IPCC’s assessment as given.  Rather, Lilley says,

“This study simply challenges Stern’s economic methods and conclusions – and shows that his Review was an exercise not in evidence-based policy making but in policy-based evidence making.”

Fighting words.

This post on Climate Etc is an assessment of Lilley’s paper.  As the paper has about 100 pages and is accessible to the non-specialist, I’ll not go into too much depth here – if you want to go deeper into the reasoning and supporting evidence and argument, please check the original then raise questions/comments on CE if necessary.  [Page numbers in brackets] [link]  http://www.thegwpf.org/wp-content/uploads/2012/09/Lilley-Stern_Rebuttal.pdf

UPDATE:  a new slightly modified paper is posted [here].

Lilley argues that “rather than being used to stimulate public debate, [the Review] has been used to silence dissent from the official orthodoxy … The intelligent lay reader and even the professional economist could not readily work out how the Review had reached its [dramatic] conclusions … [which] became established as proven before their rationale was understood or subjected to criticism. …

“Overall, [the conclusions] give the impression that for a modest cost we can prevent damages which are imminent, would cost us five to twenty times as much and would involve large scale loss of lives and livelihoods.  However, these conclusions are highly misleading and misrepresent the body of the Review …”  [18]

Estimating the impact of global warming [25-36]

Lilley says that “Estimating the amount of global warming and its impact if no action is taken to reduce emissions involves a series of steps, each requiring a number of assumptions and estimates.”  One must project future concentrations of greenhouse gases; estimate the resultant changes in climate; and evaluate the impact climate change will have on the economy, society and human well-being.  This step, for example, requires “estimates of how climate change will affect a host of variables, including the prevalence of diseases, crop yields, energy demand, species abundance etc and how people, business, government and markets would respond to that.

 “At every stage, a range of different estimates of each factor have been published in the literature which Stern reviews.  Stern generally tends to adopt estimates and assumptions towards the pessimistic end of the range.”  [25]

Stern’s own estimates of the cost of warming were much higher than those in other studies.  For example, his estimate of increased building and infrastructure damage from storms was 50-100 times that of a 2011 World Bank study, and he has stated that it could be 5% of Gross World Product, 500 times the Bank’s figure.  [35]  Stern’s highest cost estimates depend heavily on the occurrence of “catastrophes,” one of which is potentially beneficial, one which did not occur under previous warm periods and one which might materialise only over thousands of years.  [64-66]

Given that Stern’s cost and benefits were to be the basis for significant policies, one would expect some rigour in their estimation.  In fact, Stern modelled simple assumptions to get his cost figures.  Lilley says that “Although the Review enumerates a whole range of alarming estimates of different forms of harm that global warming could cause,” with “disparate times scales, metrics and coverage,” these are not used.  Instead,

“the total cost estimate comes from a simple equation embedded in the PAGE2002 Impact Assessment Model.  The model is given a range of assumptions of impacts on the GDP of each geographic area for a 2.5C rise in temperature, [which is] deemed to reduce GDP by between 1.5% and 4% – with a median 2% loss.  The loss is then set to increase as a power of temperature ranging between linear and cube – averaging 1.3.  [35, 65]

“Additional assumptions are made about the effect of temperature on non-economic factors … a proportion of losses … is assumed to be prevented by adaptation. …  There is no overarching scientific theory relating damage to temperature changes – only a patchwork of hypotheses about how different aspects of life might be affected.”

Further, the model assumes that “all forms of damage happen simultaneously and immediately the temperature increases.”  [35]

I am sceptical of any attempt to estimate costs on the timescale used by Stern, and would not base policy advice on such a simplistic and arbitrary assessment.

The costs of restricting emissions [37-45]

While Stern’s damage estimates were far above those in other studies, his estimate of the costs of reducing emissions was far below them.  He “concluded that the cost of stabilising emissions at his target [550 ppm] could be limited to just 1% of GDP by 2050.  That was below the bottom of the range of Stanford University’s Energy Modelling Forum, whose average was 2.2% of GDP.  Moreover, that group of 21 model estimates calculated that the cost would rise to 6.9% of GDP by 2100.  Stern did not project costs beyond 2050 – ignoring any subsequent escalation as further reductions in CO2 emissions became increasingly costly.”  [37]  That is, having based a very high cost of non-action on assumption, Stern compares it with a very low assessment of the costs of action.  This comparison is exacerbated by his use of discounting (see below).

That said, although the marginal cost of any activity tends to rise, in the case of emissions reduction, one would expect it to fall as new, more efficient, technologies appear.  This is a major argument for deferring action, and I would be cautious about accepting the pattern projected by the Stanford Forum.  Of course, as noted I am highly sceptical of all attempts to provide economic estimates for 40 and more years ahead.

In 2008 the UK Labour Government enshrined in law targets to meet Stern’s objectives.  However, it emerged that its own estimate of costs exceed Stern’s.  “The Impact Assessment estimated a permanent loss of 1.6% (or in the range of 1-2%) of GDP from 2050 onwards.  It put a net present value of up to 400 billion pounds (or 18 bn pa before discounting) on the cost of mitigation up to 2050 but admitted that this excluded the transitional cost which it said could average a further 1.3-2% of GDP up to 2020, not to mention the costs of driving British carbon-intensive industries overseas, the risk of which the IPCC found to be “relatively high” and could result in a leakage of 5-20% of carbon savings overseas.”  [37]  Ignoring these costs, the Impact Assessment concluded that the costs were “consistent with the range of costs identified by the Stern Review – 1% of GDP by 2050, within a range of +/- 3%.”  (I don’t know whether that means 0.97-1.03 or -2 to +4.)

However, the Assessment said that “Short and medium (i.e. to 2020) transition costs could be in the upper end of the range indicated by the Stern Review.”

Discount rate [46-58]

Lilley says that, without emissions reduction action, “The Stern Review predicts that costs of global warming … will rise faster than GDP until 2200 and thereafter continue to rise in line forever and ever,”  which, as Lilley points out, is physically impossible.  “By contrast, the cost of reducing emissions starts now.  We therefore need to compare … damages into the indefinite future with the cost of taking action in the coming decades to prevent it.”  [46]

As discussed in a recent CE thread Activate your science, a dollar in the future is worth less than a dollar now.  In order to compare future streams of costs and benefits, we need to put them on a common basis.  This is normally done by applying a discount rate which gives the present value of each stream.  As Lilley points out, “The rate at which future costs and benefits are discounted is crucial.”  He calculates the present value of $100 [he uses pounds, but no matter] 100 and 200 years hence for various discount rates.  At a discount rate of 0.1%, the present values will be $90 and $82 respectively; at 6.0%, the kind of rate used for government investment assessment, the present values would be 30 cents and zero.  That is, costs and benefits in the far distance are irrelevant.  You can make the costs relevant only by using an absurdly low discount rate.

“In its 700 pages, the Stern Review does not reveal the discount rate used even though this is its most crucial assumption.  It was not until some time after publication and as a result of strenuous inquiries, that it emerged that the Review uses a discount rate of just 1.4%.”  [46]  Rather than the 30 cents and zero of our 6.0% example, this gives values of $25 and $6, which skews the cost-benefit analysis towards the reducing-emissions-now option.

“The effect of using the Stern Review’s low discount rate is to give huge weight to events in the distant future which are assumed to be the ineluctable consequences of actions taken by  this generation.  … Nordhaus has estimated that, under Stern’s methodology, half of all benefits of preventing global warming will accrue to generations living after 2800!”

Commonly, the opportunity cost – the risk-adjusted rate of return which can be obtained on alternative investments – is used as the discount rate by governments and businesses.  Lilley says that the US government uses 7% pa, and until 2003 the UK government rate was 6%.  [47]

Treatment of uncertainty and risks [59-78]

I have mentioned “risk-adjusted rates of return.”  Lilley points out that “There is an additional reason for discounting the future … to account for uncertainty.  The analysis discussed in the previous chapter, from which Stern derives his discount rate, tacitly assumes that we have perfect foresight of the future.”  I have long argued that the only certainty is change, and that the future will bring unforeseen significant events – “Black Swans.”  There are no Black Swans for Stern.

“In the business world it is common to use a higher discount rate the greater the uncertainty about the future.  Stern argues for the reverse.”  The reasons for a higher rate are that “the less well we can see the future, the less we can meaningfully say about it.  Using a higher discount rate shortens the time span over which our guesstimates of the future have any meaningful present value.  … [and] because they assume that, for any investment project, unforeseeable events are more likely to make it less profitable than to boost its profitability.  … the very needs which make the investment appear profitable are likely to attract new competitors, stimulate human ingenuity and call forth as yet unforeseeable alternatives.”  [59-60]

To me, this is the way the world works, it has been that way throughout history, and Stern’s view seems absurd.

Lilley looks at discounting, uncertainty and risk in some depth.  He notes that “The Review tackles uncertainty by weighting all possible outcomes by their probability and then discounting them.  But it uses a lower discount rate the less well off the outcome leaves us.  The effect is to reduce the average discount rate the wider the range of outcomes.  The Review assumes that uncertainty consists of a wider dispersion of possible outcomes the further we look into the future.  The greater the dispersion, the lower the weighted average discount rate.  Hence the lower discount rate over time.”  Stern assumes “that the future will be like what we already know – except for ever wider uncertainty about the value of a number of key variables.” [35]

I don’t believe that there is any time in human history that a prediction of the world 90-100 ahead would have been accurate.  Whatever tools we use to predict, there are too many uncertainties, too many Black Swans.  What we do know, unlike Stern, is that it will not be what we would expect based on projections of present trends continuing.

I’ll dismiss Stern at this point, but Lilley also addresses issues such as the range of values for climate sensitivity and possible catastrophic climate change impacts.  [61-66]

Key recommendations [15, 92-93]

In considering policy, Lilley says that the UK’s “political parties have measured their virtue by the austerity of the targets they sign up to, rather than the benefits their citizens’ sacrifices will bring, adopted a hodge-podge of individually fashionable policies regardless of cost or coherence, and – rather than pursuing evidence-based policy – they have relied on ‘policy based evidence’ like the Stern review.  … [there] has been an almost heroic disregard of costs.  It should not need saying – if the costs of a proposed strategy exceed the benefits one should amend the strategy or seek another.  Unfortunately it does need saying.”  [88]

Readers from many other countries will see clear parallels.  While Lilley’s key recommendations are for the UK government, they have broader applicability, and similar points have been argued in Australia.  Lilley recommends that:

“The government should cease to rely on the flawed Stern Review to justify policy and should commission a new, independent Review.

“The government should prescribe the same discount rate for assessing costs and benefits of climate policies as it uses for all long-term public projects or explain fully why it is not  so doing – and show the sensitivity to alternative plausible discount rates and the Internal Rate of Return of alternative pathways for tackling global warming.

“The Review should assess the costs and benefits for scenarios with varying degrees of international cooperation.  Meanwhile, Parliament should remove the legal requirement on the UK to act unilaterally.” [15]

On the last point, Lilley notes that the annual increase in China’s emissions exceeds the UK’s annual emissions, which are only 2% of the global total.  [14]  In effect, he echoes the argument of many at CE that current policies have been made without an adequate basis, and that a far more solid basis is needed to determine what policies might be worthwhile.

In the absence of a new review, Lilley says that “government strategy should at most involve:

  • gradually ramping up incentives to reduce carbon emissions
  • cost effective measures to increase energy efficiency
  • greater focus on incentivising Research and Development
  • acceptance that developing countries need to develop the cheapest energy sources available to them
  • more emphasis on adaptation to climate change as it occurs
  • focussing development aid on helping vulnerable countries adapt to climate change, whatever its cause”  [15, 92]

Faustino’s view

I find it impossible to take the Stern Review seriously, given that its findings and advice are based on predictions of how the next 200 years and more will unfold.  I don’t believe that there is any time in human history that a prediction of the world 90-100 years ahead would have been accurate.  Whatever tools we use to predict, there are too many uncertainties, too many Black Swans.  Given that, the Review seems to have done its best to exaggerate the cost of non-action and minimise the costs of taking action, and its estimates have little credence.

There have been many more technical critiques of Stern’s work, several of which Lilley cites.  Yet Stern’s Review is still taken as gospel by many decision-makers and advisers.  The significance of Lilley’s paper is two-fold: the author has credibility with policy-makers, given that he is a former government economics minister who is well-qualified to assess the Review; and it is written so as to be accessible to policy-makers and others with little or no technical expertise.  It will therefore have more chance than technical academic papers of influencing policy.

To me, that would be a good thing.  Taking the science as given by the IPCC, Lilley’s views are generally similar to those I’ve expressed at Climate Etc and elsewhere.  I’ve also argued for almost 20 years that if it were necessary to reduce emissions to counter global warming, then it should be done in the most cost-effective way – both to minimise the negative impacts and to increase the chance of popular support.  Lilley makes good arguments – as have others for some years – for minimising costs now and encouraging R&D aimed at lower-cost solutions later.  [His rationale for a gradual approach is in pp 84-91.]

Many proponents of strong action to reduce emissions appear to have little awareness of or concern for the economic and social costs of many proposed policies, and Lilley’s paper is a useful contribution to a more balanced and informed debate.  Its impact in the UK might be enhanced because its release coincided with a Cabinet reshuffle which favoured pro-growth over greener ministers.

Of course, many posters on Climate Etc do not take the IPCC’s science as given, and would favour an independent review of the scientific validity of alleged AGW.  But that is an argument for other threads.

Biosketch:  Michael Cunningham is a former economic policy adviser to the UK, Australian and Queensland governments.

JC note:  I invited Faustino to do a guest post on this topic, based upon his comments in the thread Activate your science.  As with all guest posts, this reflects the views of the author only.

UPDATE:  email from Chris Hope:

I notice that this blog post has attracted a large number of comments
overnight. Unfortunately one of the main quotes in it is wrong, as I
show in my blog
http://www.chrishopepolicy.com/2012/09/errors-in-peter-lilleys-critique-of-stern/
; if you look in the comments to my blog you will see that Peter
Lilley has accepted the quote is wrong and will correct it. I was in
a position to point out the error becuase it relates to my model, PAGE2002.

Dr Chris Hope
Judge Business School
University of Cambridge
Tel: 01223 338194

407 responses to “The costs of tackling or not tackling anthropogenic global warming

  1. I saw no mention of British Columbia, which has a revenue neutral carbon tax. Wouldn’t it be useful to look at BC’s experience?

    • Max_OK, a revenue neutral carbon tax, where other taxes are lowered commensurately, obviously has less impact than an uncompensated tax rise or heavy subsidies to non-viable technologies. The main impact is via the change in relative prices, the intention being to reduce emissions without impact on overall economic activity. If you think that emissions-reductions are worthwhile, a RNCT is less distorting than many other options.

      • Max_OK and Faustino,

        I’d add to Faustino’s comment, a carbon tax cannot be revenue neutral. There will be very high compliance costs if a carbon tax is imposed so it will do what it is intended to do – cut global emissions.
        http://www.onlineopinion.com.au/view.asp?article=13578

        It has to apply to all CO2-eq emissions or it won’t work.

        It has to be global or it won’t work.

      • Peter, compliance costs of eliminated taxes must be considered. I may be wrong, but didn’t British Columbia eliminate a corporate capital tax when it implemented the revenue neutral carbon tax?

        U.S. Federal and State income tax have compliance costs. Revenue-neutral carbon tax could make it possible to both reduce income tax and the compliance cost of income tax.

      • Max_OK,

        The compliance cost of existing taxes is nothing like what the compliance cost will be for CO2 taxes or ETS. The compliance cost for CO2 tax or ETS will require very costly measurement and monitoring of CO2 emissions from all sources. You didn’t read the link did you?

        According to EPA, the cost to EPA alone to implement the currently legislated requirements would be $21 billion per year. That is just the EPA cost. The cost to business would be orders of magnitude more (according to EPA there are 10,500 business it would apply to if implemented as legislated; the cost to business to implement, operate, maintain and update the systems each time EPA changes the rules, and to fight EPAover disputes would be far higher than the cost to EPA per business).

        These EPA instructions http://www.epa.gov/airmarkets/business/ecmps/docs/ECMPSEMRI2009Q2.pdf give some idea as to what the requirements for CO2 emissions measurement and reporting look like now. However, this is just the start. It applies to only a few emitters. It would increase dramatically over time and as international agreements tighten if a global carbon pricing scheme is implemented. It would have to be applied to all emitters in all countries eventually.

        Estimate the costs yourself: here’s some ideas to get you started:
        http://www.onlineopinion.com.au/view.asp?article=13578

      • Peter Lang said: The compliance cost of existing taxes is nothing like what the compliance cost will be for CO2 taxes or ETS. The compliance cost for CO2 tax or ETS will require very costly measurement and monitoring of CO2 emissions from all sources.”
        ______
        I wasn’t aware British Columbia’s revenue-neutral carbon tax was based on measuring and monitoring of CO2 emissions for compliance. I thought it was based on fuel usage and the carbon content in various fuels. It doesn’t seem to me finding the carbon content of a type of fuel would be costly.

      • Max_OK,

        That’s correct. A fuel tax is not a carbon tax, its a fuel tax.

        I’ve been through this in many posts with Pekka Pirila over the past two months. I suggest you refer back to those if you are interested.

      • Peter, British Columbia’s revenue-neutral carbon tax is based on a fuel’s carbon content. For example, the tax on a ton of “high-heat value” coal (62.31 cents) is more than the tax on a ton of “low-heat value” coal (53.31 cents) because the former contains more carbon than the latter. If instead, there were simply a fuel tax on coal, the tax rate per ton on the two kinds of coal would be the same.

        For British Columbia’s tax rates on other fuels go to http://www.fin.gov.bc.ca/tbs/tp/climate/A4.htm

      • Advocacy is incompatible with basic principles of science

        http://omanuel.wordpress.com/about/#comment-1045

      • Faustino,

        This is an excellent and much needed post. It is very well written. Thank you for putting the effort In to do this. I can see a lot of work went into it.

      • Faustino, an uncompensated carbon tax with it’s revenue used to balance the budget ( and even to pay down the national debt) might be better than raising the income tax for the same purpose.

      • Max, if you want to reduce emissions, and if you want to balance the budget by raising taxes rather than cutting spending, yes, it might be. But there would be little or no additional cost to raising income tax, there would be monitoring and compliance costs with the carbon tax.

      • Faustinio, that’s true, but you don’t get “two birds with one stone” just by raising the income tax.

    • Does the carbon tax reduce emissions? I don’t think so. As long as there is no good technology available for producing carbon free energy, the carbon tax would only accomplish the driving away, to othe countries of heavy industry.
      So, the carbon tax is the least harmful way of aceiving nothing.
      I would be for a carbon tax as long as all other renewable subsidies and mandates were repealed.

      • Jacob,

        That is a really important point. It is a point that many people do not appreciate. Importantly, I think many economist do not really appreciate this, or at least they do not seem to properly factor it into their analyses.

        Parsing the Kaya identity shows how important your point is. The Kaya Identity has four components:
        • Population
        • GDP per capita
        • Energy use per GDP
        • CO2 emission per energy used

        Consider what a carbon price can do to each of these: components

        • Carbon pricing cannot address population growth rate

        • People want GDP growth (except for a few elites and extremists on the fringe)

        • Energy use per GDP (energy efficiency) cannot be reduced much faster than the rate it is reducing

        • That leaves ‘CO2 per energy use’ as the parameter we must target if we want to cut emissions.

        If we want to cut CO2 emissions we need a low cost alternative to fossil fuels.

        If we don’t have this option (we could have it but it is prevented by the Greenies), then the only other options is a carbon price to reduce GDP growth rate.

        If we enter realistic figures into the Kaya Identity, and hold all parameters constant except GDP growth rate, Then Australia’s GDP growth rate would have to be -1.7% per year for 8 years (2012-2010) to achieve Australia’s CO2 emissions reductions target of 5% by 2020.
        http://rogerpielkejr.blogspot.com.au/2011/02/reality-check.html

    • Max OK,

      What percentage of BC’s power comes from hydro? Obviously, an area that is hydro resource rich has options that areas that aren’t hydro resource don’t have.

  2. Sound summary,except for one point.

    Uncertain benefits are worth less than certain benefits, which is why companies use a higher discount rate in a more uncertain environment.

    However, uncertain losses are more worrying than certain losses, which is why you should use a lower discount rate in a more uncertain environment.

    • Thanks, Richard, not my area of expertise.

    • Richard Tol,

      Thank you very much for contributing to the discussion here. I consider you and William Nordhaus as two of the most authoritative rational contributors to this costs and benefits analysis.

      Could you please provide substantiation for this comment. But please address make it understandable to a non economist.

      From my perspective, I wonder why we use discount rates of, for example, 10% (in Australia [1] in our analyses to decide whether to build coal or nuclear power stations, yet we use 1.65% and 2.65% discount rates in our analyses to justify imposing a carbon price (Ross Garnaut’s analyses for the Australian Government to justify the Carbon price).

      [1] Australian Government – ‘Australian Electricity Technology Assessment 2012
      http://bree.gov.au/publications/micro/index.html

      [2] ‘Garnaut Climate Change Review – Weighing the costs and benefits of climate change action
      http://www.garnautreview.org.au/update-2011/update-papers/up1-weighing-costs-benefits-climate-change-action.html

      • @Peter
        It’s called the St Petersburg Paradox. It goes back to Daniel Bernoulli, first published in 1738.

        People do not accept a lottery with a 50% chance of losing $10 and a 50% chance of winning $10. They prefer that lottery to one where the stakes are $100, and that one to stakes of $1000, etc.

        That implies that, in an uncertain future, we tend to be pessimistic. If we are considering gains, we emphasize the small wins. If we are considering losses, we emphasize the catastrophes.

      • Richard Tol,

        Thank you for your reply.

        That implies that, in an uncertain future, we tend to be pessimistic. If we are considering gains, we emphasize the small wins. If we are considering losses, we emphasize the catastrophes.

        Yes, I recognise that is the choices we make and out choices demonstrate how we react to risks. But is that rational? Is that how rational analysis should be conducted? Shouldn’t the scientists and economist conduct rational analyses and provide the results to policy makers, rather than distorting their analyses with perceived human responses?

        I would have thought the scientists, engineers, economists and others involved in providing information to inform policy makers should conduct rational, objective analysis and provide those results to the policy makers.

        Then policy makers and the public can decide what policy they want. It is up to the public and politicians to weigh the results from objective analyses against their perceptions of the risks. To do that, they need information from unbiased, objective, rational analyses.

        Please take this as a question, not a statement.

      • Richard Tol,

        Thank you for your reply.

        That implies that, in an uncertain future, we tend to be pessimistic. If we are considering gains, we emphasize the small wins. If we are considering losses, we emphasize the catastrophes.

        Yes, I recognise that is the choices we make and out choices demonstrate how we react to risks. But is that rational? Is that how rational analysis should be conducted? Shouldn’t the scientists and economist conduct rational analyses and provide the results to policy makers, rather than distorting their analyses with perceived human responses?

        I would have thought the scientists, engineers, economists and others involved in providing information to inform policy makers should conduct rational, objective analysis and provide those results to the policy makers.

        Then policy makers and the public can decide what policy they want. It is up to the public and politicians to weigh the results from objective analyses against their perceptions of the risks. To do that, they need information from unbiased, objective, rational analyses.

        Please take this as a question, not a statement.

      • Richard Tol,

        Your answer to my previous post didn’t deal with this question (rephrased):

        How can we justify using a lower discount rate for justifying a carbon price policy that new use in decisions about building a high emissions or low emissions electricity generating station?

        Thus question was worded as follows in my previous comment:

        why do we use discount rates of, for example, 10% (in Australia [1] in our analyses to decide whether to build coal or nuclear power stations, yet we use 1.65% and 2.65% discount rates in our analyses to justify imposing a carbon price?

        References were linked in my previous comment.

      • Richard Tol,

        I don’t want to swamp you with questions so you want answer any of them, but I would like to ask you a more important question than my previous questions.

        I recognise that you support carbon pricing as the least cost mitigation strategy.

        I am far from convinced that carbon pricing is practicable in the real world of international politics, domestic politics and fraud. I believe the assumptions on which the cost-benefit analyses have been done are academic and cannot be achieved in the real world. I also believe there is a far better option. Following is my summary of the assumptions and why I believe carbon pricing cannot work. I’d be very interested to understand why you advocate carbon pricing in the face of these issues.

        Here are some of the assumptions that underpin the carbon price cost-benefit analyses (grossly simplified):

        • Negligible leakage (of emissions between countries)

        • All emission sources are included (all countries and all emissions in each country)

        • Negligible compliance cost

        • Negligible fraud

        • An optimal carbon price

        • The whole world implements the optimal carbon price in unison

        • The whole world acts in unison to increase the optimal carbon price periodically

        • The whole world continues to maintain the carbon price at the optimal level for all of this century (and thereafter).

        If these assumptions are not met, the net benefits estimated by Nordhaus cannot be achieved. As Nordhaus says, p198 http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf :

        Moreover, the results here incorporate an estimate of the importance of participation for economic efficiency. Complete participation is important because the cost function for abatement appears to be highly convex. We preliminarily estimate that a participation rate of 50 percent instead of 100 percent will impose a cost penalty on abatement of 250 percent.

        In other words, if only 50% of emissions are captured in the carbon pricing scheme, the cost penalty for the participants would be 250%. The 50% participation could be achieved by, for example, 100% of countries participating in the scheme but only 50% of the emissions in total from within the countries are caught, or 50% of countries participate and 100% of the emissions within those countries are caught in the scheme (i.e. taxed or traded).

        Given the above, we can see that the assumptions are theoretical and impracticable in the real world. To recognize this point, try to envisage how we could capture 100% of emissions from 100% of emitters in Australia (every cow, sheep, goat) in the CO2 pricing scheme, let alone expecting the same to be done across the whole world; e.g. China, India, Eretria, Ethiopia, Mogadishu and Somalia.

        Therefore, we should be asking: what will be the cost of complying with the requirements when they are fully implemented to the standard that will eventually be required?

        Given the above, why do you advocate a carbon price?

        My suggested alternative to carbon pricing is what I believe is a ‘No regrets’ policy that could achieve the CO2 emissions reductions with net economic benefits rather than costs. The proposal is to remove the impediments that are preventing the world from having low-cost nuclear power. This approach would allow us to achieve greater CO2 emissions reductions, greater benefits and at lower cost.

      • @Peter
        Two answers, because I am not quite sure what you mean.

        (1) If risk aversion, as described above in terms of the St Petersburg Paradox, is a general trait of people (a testable hypothesis — in fact, a hypothesis that has been tested many times and never rejected) then, prima facie, a government representing the people should also be risk averse.

        (2) An analysis cannot simply present the raw results. The impacts of climate change and climate policy fall on billions of people, in dozens of countries, in many years to come. A simple model like mine produces results for 16 regions, 30 impacts, 300 years, and 10,000 possible futures. I can’t show 16x30x300x10000 results. I have to aggregate. As soon as you aggregate, you make assumptions about things such as risk aversion.

        The best I can do is show the results for different rates of risk aversion.

      • Richard Tol,

        Thank you for responding. Much appreciated.

        My questions at September 13, 2012 at 2:31 am is more important to me than the question about risk aversion, so if you cannot afford the time to answer my three running questions, then I’d most like you to say why you believe carbon pricing is a practicable policy for the real world.

        prima facie, a government representing the people should also be risk averse.

        I agree with this statement. But that is for the politicians and the pwople to decide, not those providing the policy advice.

        I see a parallel with contingencies in project estimating. When estimating costs for a large project, every subproject manager and every team leader below him tries to build in and hide some contingency for the past of the work he/she is responsible for. As well there is an overall contingency for the project. This inflates the total project cost to more than it should be. Experienced project managers can sift out the excess padding in the estimates.

        I see a parallel with what you are advocating. My interpretation of what you are saying is that you would support the researchers making a value judgements and applying risk contingency instead of providing the objective information to the policy makers. There is a tendency for each level of researcher and bureaucrat to add a risk contingency. In that case, given the information that is fed to policy makers has a large risk contingency already built in, the public and politicians make decisions that are far too conservative and wasteful.

        Comments?

      • Peter @ 2.58: your comments echo my public service experience. I often had a view, often a strong view, on what was the best policy, but I endeavoured to leave decisions to the politicians who, however badly, represent the people, and not to impose my views on the advice. At the state level, most of my colleagues sought to second-guess the Ministers and tell them what they thought they wanted to hear. I sought to follow the classic neutral public servant model.

      • peterdavies252

        That’s exactly the problem with climate science!

      • @Peter
        Two more questions, two more answers.

        I agree that the discount rate should be consistent across all aspects of public policy. Greenhouse gas emission reduction is but one investment in the future. Its importance should not be artificially boosted by a different treatment of risk, or futurity, or empathy.

        I advocate a carbon tax as the least bad policy instrument. International coordination of carbon taxation is impossible now, and unlikely to happen during the next few centuries. I think, however, that people have underestimated the difficulties of linking up national systems of emission permits trade. That is feasible between countries with similar legal and political systems. There is only one data point (RGGI & EU ETS) but 100% failure rate.

      • Richard Tol,

        Thank you very much for taking the time to answer my questions. Your answer @ September 13, 2012 at 3:22 am is clear, concise and, in my opinion, very realistic. I greatly appreciate your responses. You have answered all my questions.

      • > You add yellow, and you can get yellow, but you couldn’t do it without the yellow.

        — Richard Feynman

      • Richard Tol,

        I’d like to check that you did mean “underestimate” here:

        I advocate a carbon tax as the least bad policy instrument. International coordination of carbon taxation is impossible now, and unlikely to happen during the next few centuries. I think, however, that people have underestimated the difficulties of linking up national systems of emission permits trade. That is feasible between countries with similar legal and political systems. There is only one data point (RGGI & EU ETS) but 100% failure rate.

        [my emphasis]

        The “however” seems to conflict with the “underestimated”. So I am wondering if either the “however” is not required (and confusing me) or perhaps you meant to write ‘overestimate’ instead of “underestimate”?

        If you did mean “underestimate” then the rest of this comment is irrelevant.

        If you did mean ‘overestimate’

        If you did mean ‘overestimate’ then I am wondering how you reconcile that with the impracticable assumptions for implementing and maintaining a global carbon pricing scheme (summarised in my comment @ September 13, 2012 at 2:31 am

        By the way, you are probably aware that Australia is negotiating with EU to link the Australian and EU ETS. It is becoming apparent that there are major differences in the two schemes as to what they include, what they exempt and how emissions permits are issued. I cannot see how the differences could possible be bridged. So, if you did mean:
        linking up national systems of emission permits trade … is feasible between countries with similar legal and political systems.
        I am far from persuaded.

        If you do believe it people have “overestimated” the difficulty of linking emissions trading schemes, have you looked into the differences between the EU ETS and the legislated Australian ETS (due to start trading in 2015) and have you considered how the schemes could be linked with out major distortions that will inevitably impact on the small economy – Australia?

        Also, if EU and Australia do link their ETS’s what effect will that have on global emissions and what will be the cost penalty to the EU and ETS given Nordhaus’s statement on p198 here: http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf

        Moreover, the results here incorporate an estimate of the importance of participation for economic efficiency. Complete participation is important because the cost function for abatement appears to be highly convex. We preliminarily estimate that a participation rate of 50 percent instead of 100 percent will impose a cost penalty on abatement of 250 percent.

    • You are incorrectly showing one side only. The uncertain benefits can give you more than certain benefit, which is why companies can profit more than from certain environments. Certain environments tend to have low margins. Higher risk can lead to higher margins.

      Uncertain losses or expenses can help profits more than fixed or certain losses which is why you can profit more if you have few certain or fixed losses.

      Risk can work both ways, for losses or profits.

  3. I was shocked to find that there were actually climate scientists who wouldn’t share the raw data, but would only share their conclusions in summary graphs that were used to prove their various theories about planet warming. ~ Burt Rutan

    • No wonder you like Rutan. He designed a flying hybrid car, borrowing on GM’s Volt technology.

      But Rutan can’t top that other guy you like, the one who believes he used to be Jesus Christ.

  4. From the country that brought you “Through the Looking Glass”, the world of CAGW economics.

    These authors always seem to anticipate a world like that “inTime” movie last summer, but everyone and every activity is based off exchanging carbon.

    People used to say “Not with a confederate”, I have a feeling there will a similiar future saying: “not worth a carbon credit”.

  5. A fan of *MORE* discourse

    Faustino, it is shocking, and dismaying, and gravely saddening, that your post ignorantly disregards the merits of low discount rates as analyzed by David Good and Rafael Reuveny in their recent “On the Collapse of Historical Civilizations” (Am J Ag Ec, 2009).

    After all, it’s plain common-sense that folks who look ahead multiple generations reach very different conclusions regarding climate-change, compared to folks who are less far-sighted, eh?   :)   :)   :)

    It may help you to reflect that universities commonly and successfully plan centuries ahead

    Planning Six Centuries Ahead

    The student reported his discovery [of bark beetles ruining the roof] to the Fellows (College Board), and those worthy gentlemen convened a meeting with great consternation.

    Where would they ever find oak beams of such dimension and quality? How would they ever pay for it once they found it? Would the very College survive this disaster, not to mention the loss of a piece of England’s heritage?

    The Fellows of New College put the question to their Forester: Were oak timbers of the required quality and size obtainable and at what cost? And then they waited upon his reply.

    “Well, sir, we was wondering when you’d be asking about that….”

    It seems that when New College received its Charter in 1379 AD, a grove of oak trees was planted on the first bequested plot of land. These trees were destined to replace the roof beams of (then very) New College Hall when said beams became infested with “beetle”, as it was known that oak always falls prey to beetle in the end.

    This plan had been passed down from College Forester to College Forester for six hundred years. “You don’t cut them oak trees. Them’s for the roof of New College Hall!”

    The oak trees were felled, milled, and used to replace the infested beams. The field was re-sown with acorns harvested from the felled trees and in several hundred years this process will repeat itself.

    Why can’t the whole world be run like that?

    In contrast, the median life-span of a business corporation is about six years … roughtly the same life-span as a small rodent!   :)   :)   :)

    Is it any wonder that corporations seldom look far ahead, eh? To the immense harm of folks, and families, and nations, who do look far ahead.   :shock:   :(   :cry:

    It’s something to reflect upon, eh Faustino?   :)   :grin:   :lol:

    • @A Fan

      Before you overdose on smileys at your own cleverness, you might care to reflect that this story is probably more fable than fact.

      Though often cited as a good yarn, I can see no mention of it in the New College website. Nor, on a recent visit (July 2012) to the Hall was it mentioned in the tourist guide. An important structural work like rebuilding the hall roof would be very well documented (think Oxford dons with time on their hands) and the records would be very much available if true.

      Shame, because it is a good story, But the truth is that in olden times oak trees were deliberately left for many hundreds of years to get them big enough for large architectural uses. And New College is a very well endowed college with many land holdings. So it is not beyond the bounds of possibility that some replacement timbers came from their own land. But whether this would truly indicate great foresight by the founders, or just common arboreal practice remains moot.

      • @A Fan

        Forgot to add that among Oxford’s many epithets is

        ‘City of Expiring Dreams’

        It must share that feeling with the fervent AGW alarmists who are seeing their dreams of a widespread new greenism expiring by the day.

    • Karl Ferdinand Braun invented the cathode ray tube oscilloscope in 1897 and the first commercially made electronic television sets with cathode ray tubes were manufactured by Telefunken in Germany in 1934. Thousands of physicists, chemists, electronic experts and engineers worked on improving cathode ray tubes allowing them to generate color images and to improve them. Millions of hours of research was spent tweeking the design to improve quality and cost.
      In 2008 the last television cathode ray tube was manufactured. The cathode ray tube is all but extinct and is only used in a handful of applications.

      Oak beams were only used because the technology to make laminated wooden beams was not mature enough. The oak tree represented a very poor return on land investment. Using more rapidly growing trees and glues one can make a beam that is lighter, stronger, cheaper and uses less resources to grow, cut, shape and finish.
      Indeed, allowing natural curves to be made in laminates one can make structures impossible using Oak beams, like this;

    • An excellent example even if it may be false.
      The salient question is what was the cost of the acorns and the cost of maintaining the trees for 600 years.
      A low cost low maintanence plan for the future will of course make sense. And the lower the cost the longer you can plan for. But a plan that would have diverted all of the professors salaries to take care of the trees, or a plan to maintain 100 times more trees than needed to cater for a low risk future event, would have been disasterous.

    • Checking YOUR LINK

      “[Editor’s note: The story below is more fable than fact, according to New College’s own web site.]

      If you ask any visitor to Oxford University what is her most vivid impression and she will most likely describe the architecture. The University buildings stand as an exhibit of the evolution of architectural styles from Norman to New Age.”

      • Mosh

        Interesting epitath to that story.

        I went to Exeter Cathedral a few months ago to examine their historic records back to the 12th century. Amongst them was an examination by English Heritage ( a govt quango) of the centuries old timbers of the Cathedral by way of tree ring analysis.

        The report was very realistic about the purposes and limitations of tree rings and made no claim about climate, although it reckoned there was some broad accuracy on precipitation. It was dated 1999 so it seems that Dr Manns studies that got included in the IPCC report took the tree ring science to new levels that were not considered realistic prior to that date.

        tonyb

      • @steven mosher

        Up until about twenty years ago, when widespread restrictions were introduced on motorised traffic in the medieval city centre, the visitor to Oxford would have been right to describe it as

        ‘City of Screaming Tyres’

        Nowadays the hazards are mostly from undergraduates on bicycles and hordes of tourists. With, of course, the high chance of being murdered in order to keep Messrs. Morse and Lewis on your TV screens.

    • Fan, excuse my ignorance. As I’ve mentioned, I was seriously ill from 2000-09, and have not recovered my former capacities. I read current economic literature copiously until 2002, but little since, and discount rates have not been a major field of interest for me. But, I repeat, I don’t see much sense in attempting to look many generations ahead, because we have so little ability to predict a changing world. Hence my emphasis on policies which allow a flexible response to whatever happens. Note this is not an “eat, drink and be merry, for tomorrow we die” stance, but a more realistic response to the reality of constant change.

      • Faustino

        And a sensible “no regrets” (pardon the expression) approach, as well.

        Max

      • A fan of *MORE* discourse

        Faustino, please let me say, that I both appreciate and respect, both the effort you put into your post, and the polite, well-expressed language of it, and Judith Curry’s grace in hosting it here on Climate Etc.

        And let me say also, very sincerely, that my own, initial, intemperative criticism of your post, compares very poorly with your graceful responsive, and so I hereby acknowledge, regret, and sincerely apologize for my own intemperance, which was none of your making, but solely my own.

        Now, I agree with you, and with Judith, and with pretty much every thoughtful person, that our present-day models of decadal-scale climate fluctuations, are (1) certainly much superior to past models, and (2) almost certainly much inferior to models we will have in the future, and (3) much less good than we might wish, so to make long-term carbon-budget plans with perfect confidence.

        Yet on the other hand, our understanding of thermodynamical principles has been reasonably stable since the work of J Willard Gibbs in the late 1800s, and it is therefore entirely reasonable to assume, that our thermodynamical understanding of climate-change (as contrasted with our our dynamical understanding) will remain stable through coming centuries … just as that understanding has been stable for the last 80 years or so.

        Conclusion  Our thermodynamic understanding of climate-changes provides us with scientific foundations that are sufficiently stable as to enable us to plan centuries into the future. And so the main question is, do we possess the moral courage to plan globally and responsibly, on fore-sighted centuries-long time-scales?

      • well put fan +1
        our thermodynamic understanding is stable enough, but there is a wide uncertainty in the key parameter. Before we spend trillions today to subsizdize the rich of the future, a rich class that over populates a risky coastal zone, you would think we might consider narrowing the uncertainty and allocating future benefits with an eye toward social justice

      • It could be….it might be….it IS!…a home run….by moshe the mensch, ‘m usual.
        ==================

      • Centuries of energy planning based on carbon emission?

        Your vision is constrained by a common manifestation of hubris which is “everything worth inventing has been invented already”.

        Technologic progress makes plans more than 50 years into the future an exercise in futility. Several here have mentioned it. Fossil fuels will be obsolete in 50 years and factory automation will make projects of impractical scale today an inexpensive reality tomorrow. Fifty years ago no one envisioned a world where everyone had a super-computer in their pocket that could search the cumulative knowledge of mankind in a half second or put you instant televideo contact with anyone on the other side of the planet.

        Moreover, technologic progress isn’t linear. It’s exponential. Synthetic biology is just ahead now and I believe it will be transformative on the scale of things like writing, agriculture, and metallurgy except the transformation will take place in a single generation unlike the above which took thousands of years to spread across the globe and result in profound change.

      • A fan of *MORE* discourse

        Dave Springer, please let me say that I share with you — and with well-respected scientists like Craig Venter — all of your interest in synthetic biology … and even a considerable portion of your optimism regarding its future capabilities!   :)   :)   :)

        However, it is prudent to reflect that during 148 years since Yosemite Park was protected, the world has already seen incredible technical progress. And that technical progress has not made us less glad we protected Yosemite, but rather has made us *MORE* glad, eh?   :smile:   :grin:   :lol:

        Conclusion  Experience teaches us *NOT* to foolishly discount the future benefits of present-day conservation policies … no matter how great our faith in technical progress.   :!:   :!:   :!:

      • blueice2hotsea

        I agree with Springer. Nonlinear technological progress is pretty much a given, provided it is permitted. Unfortunately permission is not a given. With a sufficient application of force, Stern’s forecast might be true after all.

      • Actually, I am becoming more convinced that our thermodynamic understanding of non-equilibrium systems is woefully lacking.

        http://redneckphysics.blogspot.com/2012/09/catch-wave.html

        Land use change is modeled as a negative or cooling forcing with the exception of tropical changes. Using average temperature anomaly and selecting an arbitrary baseline, cause and effect of climate change can be reversed. It is a nonlinear system with oscillations periods from daily to 100s of thousand years. Picking the wrong portion of any oscillation “wave” would lead to erroneous results. Determining a plan of action based on erroneous results typically is not desired. So the topic of this thread should really be tackling the cost of the stupidity of tackling problems with insufficient information. 1.0 to 1.5 C is the most reasonable estimate for the impact of a doubling of CO2, not 3C.

        That is just one area of the globe where a fairly compelling case for land use change done it can be made.

      • Steven Mosher,

        It’s certainly true that the beneficiaries of action taken now to mitigate AGW will include the “rich of the future”. Of course the poor of the future will also benefit, as will those in between. This also applies to spending on things other than climate change mitigation, such as public spending on infrastructure. I believe your President Obama made a comment to that effect recently which ruffled a few feathers. However, framing such spending purely in terms of “a subsidy to the rich” can be rather misleading because it might encourage people to disregard the fact that there are also more deserving (and more numerous) beneficiaries.

        Of course it is not possible (nor, I would argue, desirable) to take measures to mitigate AGW will will only benefit certain sections of the world’s population. For example I’m pretty sure there is no mechanism for preventing sea level rise in Bangladesh but not in New York. So if we are concerned with social justice, which I agree we should be, we have to look at who pays the trillions of dollars you refer to. And it is certainly possible to ensure that the current rich bear more of that burden than the current poor. It may also be possible (necessary even) to defer some of that cost until the future so that the future rich will be able to pick up their share of the tab themselves.

      • the point is that the decisions about present costs and future benefits are not being made with any idea of “winners” and “losers” in mind.
        Simple example abound. If you impose a carbon tax on the whole population to prevent sea level rise in the future the primary benenficiary of that will be the wealthy class that lives on the coast. Please explain to a inner city family living in detroit why they have to pay more today so that hollywood stars can preserve their beach from property in malibu from a 1 meter sea level rise. Seems to me that if somebody wants to choose to live in an area that is at high risk, that the cost should be applied to those who will have the benefit. There will be transfers of income/benfits in any policy and it would seem that those concerned about social justice would want to make sure that we do not worsen the problem.

      • Sure, but we are not going to implement a carbon tax purely to prevent sea level rise – that is just one impact of climate change amongst many. And in any case there are many poor people in developing countries who are at risk from sea level rise.

        I agree that these kind of questions are important but I would dispute that they are not being considered. At international level they have been an important aspect of the discussions at Copenhagen, Cancun and Durban, hence the agreement on establishing a “Green Climate Fund” to assist developing countries. At national level, in Britain when our last government introduced legislation requiring energy companies to generate more of the electricity supply from renewable sources it also introduced measures to provide assistance for poorer people with their fuel bills and with energy saving measures. there is no reason why US climate change policies can’t be constructed so that the burden falls more on the wealthy people in Malibu than poor families in inner city Detroit.

    • Fan

      You are right to look ahead. By following your logic the inescapable conclusion must be that as future generations will be much richer than us, and have much better technology than us, they will be much more able to deal with any problem than us (should there be one)

      tonyb

      • climatereason,

        I agree,

        I think back to my grandfather’s day. In his day they did the best they could to run a large sheep stations in Australia. They managed it to make it as productive as they knew how and to make it sustainable through long droughts. By doing so he managed to educate (very well) his three children (one at Oxford). My father and uncle continued and my father educated me (many here might say not very well). My point is my grandfather and father gave their descendants the best life they could have. I would not thank them now if they had cut back on development of the property to put money away for some far off possible scenario. I wonder what eventuality they would have decided to put their money away for. I am sure it would not have climate change.

        In fact, my father did take out a life insurance policy for me in 1947. The amount was £1000. That would have paid for a small house in those days. The annual payments were £8 ($16 now). In those days, that was equivalent to several months of wages for a station hand (a worker on our property). I’ve continued to pay the annual payments. The policy will pay out about $6000 which is about half the cost of a coffin! (compared with the cost of a small house in 1947).

        The point I make is that it is unwise to try to invest for future generations. We should make the best policy decisions for now. Faustino and many other rational contributors on Climate Etc have been making the same point.

        Pekka Pirila also makes the point in his comments and on the articles on his web site.

      • Peter Lang

        In a similar vein, you are no doubt familiar with the horse manure crisis of New York?

        “The situation seemed dire. In 1894, the Times of London estimated
        that by 1950 every street in the city would be buried nine feet deep in
        horse manure. One New York prognosticator of the 1890s concluded
        that by 1930 the horse droppings would rise to Manhattan’s third-story
        windows. A public health and sanitation crisis of almost unimaginable
        dimensions loomed.”

        http://www.uctc.net/access/30/Access%2030%20-%2002%20-%20Horse%20Power.pdf

        We should plan ahead (pensions, transport infrastructure etc need to be put in place decades before they are required ), but planning centuries ahead for possible eventualities in a world that will be utterly different to today seems a bit of a pointless exercise, especially as they will be much better equipped than us to come up with a solution should one be required.
        tonyb

      • Peter Lang

        We can all tell “grandfather” tales.

        Mine never learned to drive an automobile.

        But he sure knew how to handle horses.

        The point here is that our lives are so much easier, more pleasant and less brutal than those of our grandparents, to a large extent because of the ready availability of low-cost energy from fossil fuels and the many technological, medical and scientific innovations that have occurred over the years.

        There is no reason to doubt that this will continue into the future. In fact, it will continue to accelerate.

        The importance of fossil fuels will almost certainly decline as more cost-effective alternates are developed (some of which may already exist in the laboratory stage today). As you have pointed out, existing and improved nuclear fission technology will undoubtedly be a major part of this.

        – To fret about the impact of extrapolated future CO2 emissions from fossil fuels into the far distant future is foolish.

        – To predict specific global temperature ranges that will result from these postulated emissions in the next century is downright ludicrous.

        – To go one step further and project trends of sea level rise and extreme weather events that will result from these hypothetical temperatures is absolutely insane.

        [But that’s what’s happening out there in “climate loony tunes land”.]

        Max

      • Manacker,

        We can all tell “grandfather” tales.

        True. However, I hope you didn’t get turned off by my introduction and miss the point I was trying to make. My point was that it would have been a bad decision to have cut back on the rate of development and put money into what ever was the biggest concern for the future they saw in those days. Likewise, it is a bad use of resources to slow global economic growth for what we now believe is a the great future risk.

      • Last comment, last line should have said:

        what some people now believe is a the great future risk.

  6. Faustino

    Thanks for an excellent post.

    Will study the cited attachments in more detail.

    Realize that this was all done under the assumption that the IPCC had the “climate science” portion right (a colossal assumption).

    But even under this assumption, it looks like UK MP Peter Lilley has pretty much deconstructed the Stern Report, which has been attacked by others but is still cited as “gospel” by may CAGW advocates.

    Max

    • Faustino

      Cost/benefit analyses (whether discounted cash flow internal rate of return or other methods) always show some sort of positive “return” on the “investment”.

      Unfortunately for UK citizens, no matter what they do to their CO2 emissions (even if they “turn out the lights” completely and go back to the Dark Ages) this will have no perceptible impact on our planet’s future climate. After the cries for immediate action “before it’s too late” by the previous government (Brown), it appears that the Cameron government is beginning to see that there is nothing the UK can do to change global climate.

      Future CO2 emissions will come primarily from China and India, plus the rest of the developing nations with the USA and the rest of the already industrially developed world contributing a very small part of the total.

      In the process, China and India will improve their carbon efficiency (GDP generated per ton CO2 emitted) from the current US$500-600 to a level such as seen in the USA, EU or Japan today (US$2,000-3,000). And it is reasonable to assume that this figure will continue to improve in the developed world, as well.

      But, even before getting into specific economic evaluations with estimated “winners and losers” and discount rates, etc., I think it is worthwhile to simply calculate the expected impact on 2100 global temperature of cutting back CO2 emissions from business as usual growth levels to 50% or even 25% of these levels, nation by nation, in order to see what the theoretical temperature impact might be.

      Why do we not see such estimates?

      They would be very easy to make.

      The reason, I believe, is quite simple. The presently industrialized nations of the world could cut back to 50% (or even 0%) and this would not have a significant impact on our planet’s future climate.

      And the developing world, including China and India, is not going to let a “rich white man’s” obsession with CO2 stand in the way of developing its energy base and economy in order to improve the quality of life of its inhabitants.

      IOW the whole “mitigation” exercise to “tackle anthropogenic global warming” is purely theoretical – it just ain’t gonna happen.

      Max

      • @manacker

        Excellent analysis. Brings some much needed realpolitik into the airyfairy dreams of the greenies.

        Chinese and Indian politicians are answerable to their people, not to Greenpeace and the WWF. Their combined population is about 8 times that of the USA (2,700,000,000) and they have some of the largest coal reserves in the world. It is simply inconceivable in the foreseeable future that they will voluntarily decide to keep those reserves in the ground in the hope of saving a growing population of 25,000 polar bears that all but a tiny proportion of their peoples will never see.

        The BBC’s Roger Harrabin made an excellent radio documentary in 2010 ‘What really happened at Copenhagen’. You can hear it here:

        http://www.bbc.co.uk/programmes/b00w6pp4

        in which he related (about 21:30) that the negotiators from Brazil, India, China and South Africa were doing their own deal and President Obama had to effectively gatecrash their discussions. Partly they wanted their own deal and partly it was to show the rest of the world that they are now the big players in this debate, not the US or Europe. As Harrabin puts it

        ‘The world’s most powerful man had run into an emerging new world force’

        and was pretty much powerless to do anything about it.

        And if Copenhagen showed that the emerging countries had no desire to make sacrifices on behalf of the polies, things got worse and worse with the fiascos at Cancun and Durban.

        I’m strongly reminded of the earnest activists of CND who were around in their duffel coats when I was growing up in the 1970s. Big dreams of what they saw as a better future – and a huge conceit of their own moral superiority which they lost no opportunities of reminding us of.

        But in reality it was not Banning the Bomb that brought the Cold War to an end but simple economics (the USSR simply could not afford to pay for its commitments any more) and the happy chance that saw two hard-headed determined but very practical politicians in Gorbachev and Reagan in power simultaneously and who both had the courage to bring it about.

        Copenhagen showed us that whatever the huffing and puffing of the Westernised ‘eco-intelligensia’ they are pretty much impotent in the face of what is said to be a global problem. And it sure doesn’t look liek those with the power to do something about it (if anything at all is really needed) have any desire to use that power anytime soon.

      • Latimer,

        The motivation for China and India to take action to mitigate AGW is not to save polar bears, it is to protect their own people from the impacts of climate change.

      • @andrew adams

        You say:

        ‘The motivation for China and India to take action to mitigate AGW is not to save polar bears, it is to protect their own people from the impacts of climate change’

        And does your understanding of recent political history suggest that they are very concerned about this ‘threat’? Or are they placing it pretty much bottom of their list of priorities for their nations?

        Because if that is where it is going to stay then any actions the governments of the West may be persuaded to take will be nothing more than futile gestures. And hence utterly pointless.

        Remember that India and China together comprise approaching half of the world’s population. It is their decisions that will make the difference – not Ed Davey’s or Franny Armstrong’s or Obama’s.

      • Latimer,

        I don’t know much about India but I would say the fact that China is introducing carbon trading schemes and making large investments in wind power is evidence that it recognises the threat of climate change. Just as it has taken measures to tackle the pollution problems which have blighted many of its big cities. Governments of developing countries are not stupid – of course they want economic growth to improve their people’s lives but they are capable of recognising that there are other issues which can have a negative impact on their people, and they do recognise the threat of climate change. A lot of the discussions which have gone on at international level have been about how to balance these competing priorities in a way which still allows people in developing countries to improve their lives.

      • @andrew adams

        It is a nice illusion to have, but you do not stop climate change by building wind farms…either here or in China. You do not even reduce emissions by building wind farms unless you actually close down or displace other forms of fossil fuel generation. And there is scant evidence of this actually happening anywhere either.

        According to the wikipedia

        ‘At present, China’s hydropower output amounts to 14.95 percent of the national total, nuclear power output accounts for 1.94 percent and wind power output amounts to 0.26 percent, while coal-fired power output amounts to at least 78% of the national total. China’s coal-fired power generation will be in a stage of stable development until at least 2020, and China’s installed capacity of coal-fired power generating units will remain at more than 70 percent.

        In the long term, China’s power industry, boosted by accelerated process of industrialization and urbanization, is projected to have an average annual growth rate of 6.6% to 7.0% in the next ten years. This indicates that the power industry will require a great deal of investment. Currently, investment in hydropower, wind power and nuclear power is increasing. However, investment in coal-fired power generation still ranks first’

        Sorry about the rather kludgy translation. But the general thrust is clear. At less than 0.3% of electricity generation, wind power is not a big player in Chinese electricity generation. And it ain’t going to become one anytime soon.

        But given that it has over 30% of global market share of the wind generation equipment manufacturing sector, it is not unreasonable to expect that China wishes to show a decent shop window to the world.

        You also say

        ‘A lot of the discussions which have gone on at international level have been about how to balance these competing priorities in a way which still allows people in developing countries to improve their lives’

        I’m sure you would be very disappointed if I didn’t point out that talk is cheap. ‘International discussions’ can go on until every participant is blue in the face and it won’t make the slightest difference to anything that goes on outside that conference room. It is action that counts…and all the international conferences in the last decade have produced precious little of that! Some might say that ten years of ‘jaw jaw’ have seen negative progress as Kyoto disappears into the sunset, with no apparent prospect of imminent resurrection/

        And even then China’s Climate Change Minister has only said that they will not allow their emissions per capita to reach US level. Which is not a very arduous target and still allows a trebling of current levels

        http://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions_per_capita

        Please do not be deluded into thinking that a few wind farms in China are anything more than token gestures.

      • @andrew adams

        By chance I stumbled on this today from the WSJ. It seems very germane to our discussion about China and its ‘commitment’ to renewable energy.

        https://chovanec.wordpress.com/2012/09/13/wsj-chinas-solyndra-economy/

        It is all good stuff, but the telling quote for me was this one

        ‘Domestic wind farm operators Huaneng and Datang saw profits plunge 63% and 76%, respectively, due to low capacity utilization. China’s national electricity regulator, SERC, reported that 53% of the wind power generated in Inner Mongolia province in the first half of this year was wasted. One analyst told China Securities Journal that “40-50% of wind power projects are left idle,” with many not even connected to the grid’

        It seems that it is wise to take the wind farm propaganda with as big a pinch of salt in China as you should in UK.

      • It does not matter what China does. The developed countries, the US and Europe won’t be cutting their emissions by 50%. That is not feasible at this moment. We do not posses the technology required for this.

      • Jacob

        It’s very likely true that the “developed nations” cannot (and will not) reduce CO2 emissions by 50%.

        But it’s not true that “it does not matter what China does”

        Over the period 1990 to today, the major industrialized economies (USA, EU, Japan) combined have increased their annual CO2 emissions by a compounded rate of 0.57% per year.

        Over this same period, China’s CO2 emissions have grown at a rate of 5.7% per year.

        If these growth rates continue over the next 38 years (to year 2050) , China will have emitted 60% more cumulative CO2 (from today through 2050) than the major industrialized economies combined.

        What will very likely happen is that ALL economies gradually shift away from a carbon base to something else as fossil fuels become more difficult and costly to extract and “something else” becomes more competitive (no “carbon tax” needed, thank you).

        But that last part is admittedly just my guess (so don’t turn on your “BS meter”).

        Max

  7. Pls keep the comments on topic. Repetitive off topic comments will be deleted.

  8. lurker, passing through laughing

    Stern’s decision to not disclose its methodology and to cherry pick a ridiculous discount rate seems part and parcel of the AGW culture.
    A report like that would be tossed out of most corporate planning efforts.
    Yet apparently it is good enuff for govmint work.
    What a hoot.

  9. I have only started reading the Lilley paper, but a fundamental question still comes to mind. The Stern review and Lilley’s paper both start with the assumption of future conditions as described by the IPCC as being an accurate forecast.

    Since the assessments used by the IPCC were based upon the outputs of GCM’s that have been demonstrated to not be able to accurately predict future conditions over the timescales in question, how could a prediction of conditions based on the output of these GCM’s be of value? If the assessment of conditions based upon the GCMs is not reasonably accurate, how can the economic assessment based on these same predictions be of value for making policy decisions?

    • You actually dont even need to use a GCM to get a reasonable number for future warming. In fact its probably a mistake to use a detailed GCM for this type of question

      • Steven, you have a far better understanding of the science than I do. Do you think it is a sufficient basis for policy, or would you agree that there would be merit for policy-making in a review of global warming science outside the IPCC and including other disciplines, e.g. statisticians? Are they any particular areas where you think further research would be valuable to provide a better basis for policy?

      • Steven Mosher is right.

        You don’t need a GCM.

        All you need is an estimate of 2xCO2 temperature response (or climate sensitivity) and estimated CO2 emission growth rates by group of nations without cutbacks. You can get these overall estimates from IPCC.

        For example, IPCC mean estimate for CS = 3 degC

        Year 2100 CO2 level (BaU IPCC case A1T, no cutbacks) = 608 ppmv

        Then you can estimate the impact of cutbacks by country involved to calculate the reduction in CO2 ppmv by 2100 resulting from the cutback

        From this you can estimate the impact of cutbacks on atmospheric CO2 levels and global average temperature.

        It’s a simple calculation and the assumed data are all there.

        Max

        PS This all assumes that you accept as “gospel” the IPCC mean estimate for climate sensitivity, but (as Judith has reminded us) that is not the topic of this thread.

      • Precisely

      • The average (mean) value of a fair die thrown 1000 times has expected value 3.5, but about 166 times the value will be 171% of this mean and another 166 times it will be 29% of the mean. If the climate models sensitivities are distributed randomly over the space of real climate sensitivities, there is a possibility that choosing a average value might be wrong significantly in the same way. Also, my comments about a fair die do not apply to a loaded die. How could we know that the climate models fairly represent actual climate sensitivities?

        There is no way around it, using any model outside its ability to accurately predict results, is scientific malpractice.

      • There are all kinds of models including purely conceptual (See my web site above). Indeed conceptual models provide the structure of computer simulations which can be validated against historical data and be as accurate as you are prepared to pay (the stationarity of the random component of data may impose limits). Apparently the IPCC supports about 34 (different?) models when one good one would be enough. This seems to be an IPCC management problem. My advice: when you have an intractable problem concentrate your resources.

      • You do need a GCM in order to estimate the conditions that were the basis of the reports/papers used by the IPCC that estimated that a warmer world would result in harm to humanity. It is not the fact that it will get warmer in and of itself that is the issue. It is the changes in conditions (such as rainfall) that result from the warming that is the concern. If it was not a GCM that estimated these conditions what was it?

        Mosher?

      • Rob Starkey

        If it was not a GCM that estimated these conditions [trends and projections for extreme weather events] what was it?

        In many cases is was “expert judgment rather than formal attribution studies” [IPCC AR4 WG1 SPM, p.8]

        Max

    • A valid point, which has been made against Stern. Lilley is seeking to demonstrate that, even if the IPCC scenarios are considered valid, Stern’s assessment is so flawed as to be useless, that costs would be much higher and benefits much lower than are claimed, and are not a good basis for policy. If you think that the IPCC’s scenarios are exaggerated, then Stern’s assessment would be even more exaggerated.

      Lilley’s main recommendation is that the UK government should in effect start from scratch, with a new Review which “should assess the impact specifically on the UK, as well as globally, of global warming and of strategies to mitigate. [92]

      By contrast, I have argued for several years that an independent view of the scientific basis of CAGW claims should be the starting point, with anti-emissions policies suspended/deferred pending the outcome of that review. Hence my comment that Lilleys’ views are “generally” similar to those I’ve expressed.

      • Oops, Faustino, aka Genghis Cunn

      • Faustino,

        Who would you have conduct such an “independent” review, and why do you think it would come to conclusions any different from those of the IPCC?
        After all, virtually every national science academy supports the IPCC’s conclusions, do you think they are just dupes or are incapable of asessing the evidence for themselves?

      • Faustino,

        A valid point, which has been made against Stern. Lilley is seeking to demonstrate that, even if the IPCC scenarios are considered valid, Stern’s assessment is so flawed as to be useless, that costs would be much higher and benefits much lower than are claimed, and are not a good basis for policy. If you think that the IPCC’s scenarios are exaggerated, then Stern’s assessment would be even more exaggerated.

        That is an important point that several commenters seem to have missed.

    • @rob starkey

      Softlee softlee catchee monkey.

      Lilley is wise to take this one step at a time. He is, after all, a politician as well as an economist. And politics is not simply an exercise in getting a paper published..it is about making things happen. Different things and you need to do them in different ways.

      If he had come out all guns blazing about IPCC, then all the debate would be about the climatology and none about the economics.

      By assuming that the IPCC is true, and then showing that, even with that assumption, Stern is a crock of sh*t, the debate is restricted to his home ground. It is stuff he knows well and (at least in the UK political circles) his analysis will be taken seriously.

      He can win this one while a wider assault would fail.

      • After eading the paper I agree with most of what was written and can understand that the writers were seeming to strategically avoid the climate science aspects to make it more powerful as a stand alone anaylsis.

  10. @A Fan

    Just doing a bit of ‘due diligence’ on the story that you introduced into the discussion. Nothing anti-intellectual about that.

    The ‘Expiring Dreams’ quip is a pun on Arnold’s (c 1860) description of the ‘City of Dreaming Spires’ and was already in common currency when I was an undergraduate thirty five years ago.

    • These apparent non-sequiturs in response to a post from ‘A Fan etc’ which JC has rightly snipped. But you can probably get the gist of his emoticon-laced accusations from the nature of my reply..

  11. Faustino

    Back on the topic of “tackling or not tackling anthropogenic global warming”.

    Your post goes into the costs associated with doing or not doing various mitigation schemes, but, as I pointed out, even more basic is the question: “how much warming can be averted by groups of nations by implementing forced cutbacks?”

    One such case study was made by Ed Hoskins. This has not been published as far as I know, but the premise was that the EU nations, Australia and New Zealand would cut their CO2 emissions back to 50% of the 2010 level by 2030, freezing this level to 2100, while other nations would continue in business-as-usual fashion (similar to IPCC “scenario and storyline A1T”).

    The net difference in atmospheric CO2 level by 2100 due to the cutbacks calculates out to 16 ppmv. Hoskins then converted this to global warming averted using a low climate sensitivity based on actual observations and his own calculation rather than IPCC model simulations and came up with ridiculously low estimates for averted warming (less than 0.1°C). But even using IPCC’s model-based climate sensitivity estimate of 3°C, the net difference in anthropogenic global warming is only 0.11°C.

    A similar exercise for the USA shows a reduction by 2100 of 19 ppmv and a net reduction of warming of 0.14°C.

    To me this clearly shows that we are unable to change our planet’s climate perceptibly, no matter how much money we throw at it.

    And, without China an India, etc. on board, we can truly forget about it, as Richard Muller has also figured out and stated publicly.

    Max

  12. Max, I have a similar general impression from my reading over the years. The developed countries can incur massive costs with very little impact on future warming. Hence frequent arguments that there are better uses of resources, both in general and in order for us to cope better with whatever warming (or other change) occurs. I read recently (can’t recall the source) that $ billions have been spent on UN programs to provide alternative energy sources (windmills, solar, etc) to poor countries, growth-enhancing policies would have been a far better way of increasing their capacity to deal with a changing world.

  13. This c02 emission thing keeps going round and round. Emissions keep increasing, end of the world ignoring the fact C02 was much higher in the past and the natural world did not end but prospered. So all these “predicted effects” are from, what the 3% that man contributes, ya right.

  14. Faustino,

    The trouble with many economists is that they tend to be, on the one hand, firmly of the opinion that a successful economy is a growing economy but I’m not sure they have any mathematical appreciation of what that means.

    Currently the world’s economy is growing at about 4%. If it carries on like that until the end of the century it will end up 30 times the size it now is.

    So how is that going to be achieved? For a start, world CO2 emissions can’t be allowed to increase at anywhere that rate. Even if CO2 emissions only rose at 2% , they would be 5.5 times greater than they now are in the year 2100.

    Economists, like yourself, tend to talk about “growth-enhancing policies” or pro-environmental greener policies. As if that were the real choice. Its a false dichotomy, to use the cliche.

    CO2 emissions need to be brought under control, and reduced, to allow this projected growth to occur safely. That’s turning the usual argument on its head, it probably won’t please the Green groups, but that’s the reality.

    • tempterrain

      Your logic on “growth” is flawed.

      First of all, you are assuming that humanity will use the same technology in 100 years as it uses today.

      If you look at the past 100 years, you will see that this assumption is absurd.

      Automobiles hardly existed 100 years ago. Nor did radios, airplanes, TVs, computers, etc., etc.

      You have no earthly notion what the new technologies will be in 88 years (by 2100). Nor do I.

      But one thing is sure. There WILL BE new technologies in all sectors, including the energy sector. These will most likely replace fossil fuels to a large extent as current reserves dwindle and these become more difficult and costly to extract. And the rate of new development will accelerate.

      To “project” growth in CO2 emissions over more than a decade based on the assumption that we will be using the same fossil fuel based technologies as today is foolish, tempterrain.

      However, it is clear that there is no CO2/climate problem even if one is silly enough to try such projections for the following reasons:

      – Population growth is slowing down. From the rampant 1.7% per year exponential rate since the 1970s it has now slowed down to around 1.3%. As developing nations become more affluent, population growth rates slow down. UN estimates that it will continue to slow, averaging 0.4% over the remainder of this century, with population reaching around 10 billion by 2100.

      – Per capita fossil fuel consumption increased by a cumulated 10% from 1990 to today. The highest rate of growth is for motor vehicles, which now represent 10% of the total and are expected to double in number over the next 20 years. Hybrid and electrical cars, plus more efficient IC engines will most likely result in lower unit fuel requirements, but let’s assume pessimistically that per capita fossil fuel consumption will increase by 50% from today until 2100.

      – On this purely hypothetical basis we would reach an atmospheric CO2 concentration of around 600 ppmv by 2100, which – even with the rather doubtful climate sensitivity assumption of IPCC – does not get us to any alarming warming. [This happens to be the CO2 level predicted by IPCC for its “scenario and storyline A1T”, for which IPCC projects warming of 1.8°C above its base case of no added CO2 since 2000.]

      Rejoice, man!

      There’s nothing to worry about – these visions of 10-meter sea level rise, extreme droughts and floods, etc. are all just imaginary hobgoblins.

      Max

      • Max,

        Humanity could be using nuclear fusion by the end of the century. There’s no assumption about that either way.

        Your argument is basically: I-don’t-know-what-it-will-be-but-something-will-turn-up-and-even-if-doesn’t-CO2-isn’t-a-problem-anyway.

        Well I think we’ve heard it all before. It not much of a plan when faced with the likelihood that the world economy will be orders of magnitude bigger at the end of the century.

  15. tempt, although drivers of economic growth has been my interest, and I think that in general, particularly in poorer countries, growth provides people with more options, ultimately material wealth beyond a fairly modest level isn’t the prime cause of happiness and well-being. As for “how 4% growth will be achieved for a century,” well, lets see what happens, I’m not into long-term planning. I’m pretty sure that reducing CO2 emissions without a good understanding of the costs and benefits involved is unlikely to help growth, though.

    Any society can choose a no-growth, or low-growth, path, if it wishes. The Soviet Union and Maoist China did adopt growth-reducing policies at times, otherwise probably only Cuba, North Korea, Cambodia (in the Pol Pot era) and Burma have done so. None with happy results.

    But the issue for Lilley is to adopt the policies with the highest cost-benefit ratios on the basis of sound evidence, rather than pursuing damaging policies based on a deeply flawed analysis. Whatever your stance on CAGW, that makes sense to me, and it hasn’t been applied here in Australia.

    • Faustino,
      “I’m not into long-term planning”

      I know. That’s the problem. Most economists aren’t.

      If you’re looking at just the next 5 or 10 years then what you’ve said in your article makes perfect sense. But look at in a slightly longer term and you should be able to see it doesn’t.

      • tempt, I’ll modify that. Some infrastructure is very long-lived and conducive to economic growth; well-directed infrastructure spending can be worthwhile even without a clear view of 40-50 years ahead. But I don’t think long-term planning makes sense more broadly, we can not sufficiently define the future and are constantly surprised by it. Readiness, flexibility, is the key. We won’t agree on this, last word.

      • Faustino,

        You seem to know that ” We won’t agree on this”.
        Is that because you also know I’m right ?

  16. Tempterrain: There is a way of generating lots of power with zero CO2. It is called “nuclear.” But, Big Environment doesn’t like it either.

    We’ve gone down a parallel road in this regard regarding world food supplies. See this on the 3rd anniversary of Norman Borlaug’s passing. http://meteorologicalmusings.blogspot.com/2012/09/important-words-from-most-important-man.html

    It seems that Big Environment is against just about anything that allows the third world to advance.

  17. To those who argue to stop economic growth, I’d make the following points:

    People want better health services, better education facilities, better trained doctors and teachers, better infrastructure for their crowded cities, etc.

    To provide improved standard of living we need GDP growth. To lift people out of poverty and give them longer and healthier lives we need GDP growth.

    There is a progression. Pause and think about what GDP growth has meant for the people of Germany and Japan since the conditions they lived in at the end of WWII. Likewise consider what GDP growth has meant for South Korea, China and Indonesia.

    Now think what is going to happen in the rest of Asia and especially in Africa this century. Think of Eritrea, Ethiopia, Somalia etc. Do people who argue to stop GDP growth understand the consequences of what they are advocating? Do they really want to deny the peoples in these countries t=he opportunity to have what GDP growth would give them?

    Can I suggest they spend a bit of time with “Wealth and Health of Nations”. Change the axes and plot life expectancy, education and other Human Development Indexes on the vertical axis, and GDP per capita, energy per capita, electricity per capita and perhaps CO2 emissions per capita on the horizontal axis. Select log or normal scale as appropriate. Run ply or move the slide bar to see how human well being has improved over time.

    http://www.gapminder.org/ Select “Wealth and Health of Nations”

    • “To those who argue to stop economic growth” Who are “those” ?

      I haven’t seen any such arguments on this blog. Its fair enough to argue for a certain growth rate, but at the same time you should be aware of the mathematics. I haven’t seen you produce any figures to show that you are, though.

      • tempterrain

        Who are those who argue to stop economic growth?

        It is those who want to impose drastic top-down reductions in fossil fuel use rather than promoting the natural transition from a fossil fuel based economy to one based on alternate, less costly energy sources while maintaining overall growth.

        Are you in that camp?

        [I’m not.]

        Max

      • What’s a “natural transition”? London at one time was plagued by smogs caused by smoke from coal burning stoves and open fires. Now there aren’t any. Was that a “natural transition” ? Or did Londoners make it happen?

        There may have been some argument with people like yourself who argued that smoke wasn’t harmful. That the atmosphere always had had lots of smoke. Some may have said that the science was all too uncertain to know what to do either way. Some may have argued that smogs had stopped naturally in 1948. There would have been those who argued that smoke controls were incompatible with individual liberty or couldn’t be afforded. Some may even have said that smogs were a good thing!

      • tempt, not a good example. I lived in London from 1961. There was widespread agreement about the need to cut smog, probably too costly during the slow post-war recovery but the early ’60s Clean Air Act was widely supported and quickly implemented, with very positive results.

      • @tempterrain

        Lots of ‘mights’ in your remarks. But these are relatively easy things to check. Did any of the things you say ‘might’ have happened actually occur to any significant extent?

        FWIW I can just remember my father coming home from London in what must have been one of the last ‘proper’ smogs in about 1962

  18. Thanks, Faustino, for this post. Lilley’s excellent paper deserves wider exposure.

    One point he makes which I found very telling relates to the relative wealth of this generation and the future generations we are supposed to make all these sacrifices for. He calculates that we are being asked to forgo 5% of future GDP in order to help people who will be seven times as wealthy as we are. Apart from the sheer silliness of doing this, it is a very big deal for the less fortunate among us, both in our own countries and in poor countries. Energy poverty in the West is already hurting the poor. In the Third World, it is one of the main contributors to morbidity and mortality and low quality of life.

    • Excellent point Johanna. The link I provided in my post above yours, shows evidence to support your point.

    • Johanna,

      “who will be seven times as wealthy as we are”

      “Will be” or “may be” ? They could be seven times poorer, and living in tower blocks in Antarctica, if there is no action on the climate.

      I don’t know about you but I’m happy to have been born when I was. If those who believe in re-incarnation are right, I’ll be re-born some time towards the middle of this century. I don’t expect it will be quite as good though.

      • tempterrain

        Some advice (to make you look less silly).

        Cut the “Antarctica” hyperbole.

        Max

      • @tempterrain

        Under what circumstances will ‘they be living in tower blocks in Antarctica’.

        Please be specific of the conditions that you believe will provoke such an eventuality.

  19. Mentioned but not explored: Opportunity Lost Cost: items, services, productivity not seen because resources are already expended.
    According to Wikipedia: “Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone (that is not chosen). It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices.”

    It is a road not taken.

    This leads me to query: Why would you ever send your kids to college if they did not contractually agree to a specific major, career, or avenue of pursuit? First, because you are dealing with adolescents who will willy nilly do what they want to do. Second, and, more relevant to this discussion, there is hope for a future of your child not envisioned by yourself today. The rewards of investing in a dynamically changing future is best in maximizing future potential: research and development of the unknown.

    How glad I am in not listening to my grandfather and become a tool & die maker, but mostly paying my own way through a public university. Truly a “no regrets policy.” An investment into an unknown future.

  20. “.. “..it emerged that the Review uses a discount rate of just 1.4%.” [46] Rather than the 30 cents and zero of our 6.0% example, this gives values of $25 and $6, which skews the cost-benefit analysis towards the reducing-emissions-now option….”
    .
    About time more on discount rates were discussed. I know that engineering is not considered a “real” science by the alarmist crowd, but through my enginneering classes and the real world, useing the discount rate to review projects was stressed. Even as a junior engineer my EIT exam hit discount rates hard.
    .
    Project and policy review of costs and benifits without using a reasonable discount rate???? Madness

  21. Thank you, Faustino, for exposing the errors in the Stern report and Judith for bringing it to our attention. However the accuracy of economic projections in general is relevant: the failure of economists to forecast the GFC and the problems inherent in the EU pact. What discount rate would one apply to the prediction of these calamities?

    If you want to know the effect of temperature rise on daily lives, just ask the people who moved in large numbers from Tasmania or Melbourne to the Gold Coast (near Brisbane) in the last century. I doubt that economists can quantify the adaptability of humans, animals and plants to climate change.

    Faustino asks: Has there been warming this century? This is the question upon which all else hangs. Climate is a non-linear process and it is perfectly reasonable for global temperature to rise in the 20th century, but not, or very little, in the 21st. See my web site.

    • “If you want to know the effect of temperature rise on daily lives, just ask the people who moved in large numbers from Tasmania or Melbourne to the Gold Coast (near Brisbane) in the last century. ”

      Well that’s fair enough. If you want a warmer climate move your **** to where its warmer! Don’t sit on it saying that AGW is a good thing.

      • @tempterrain

        Double edged sword, mon brave.

        I think it is a reasonable assumption that within the last 200 years or so your ancestors moved from where it is often cold (Europe, possibly Britain) to Australia where it is warm.

        Unless you are imminently planning to make a permanent return trip your credibility on this point (move your arse to somewhere warm then!) is pretty much zero.

      • LA,

        Its a common misperception that Australia is always warm. Tasmania usually isn’t for a start. Canberra, in the winter, can be particularly cold and you just need to drive for an hour or so to be on the ski slopes.

        But people like to live in these regions. If they don’t, they move somewhere else just like you can move to the South of England, or even France or Spain, if you’d prefer a warmer climate.

    • Alexander, economic forecasting is notoriously inaccurate, largely because – like Stern – it extrapolates the continuation of present trends – the one thing we know is unlikely to occur. Modelling of different policy options is much better – it generally aims to give an idea of the difference in outcomes between option A and option B over a ten-year period; it doesn’t aim to forecast the actual outcomes a decade hence, but to show which option is likely to give the better result, and by how much. Decision-makers can choose either option, but with some knowledge of the likely impacts.

      “I doubt that economists can quantify the adaptability of humans, animals and plants to climate change.” No, but I have often stressed that human ingenuity and adaptability are our greatest assets, I’d give more weight to enhancing them than to dubious long-range forecasting. And my non-economist observation over 70 years is that the life-force is very strong, scientists keep finding life forms in areas where they thought it could not exist, e.g deep ocean trenches, low-Ph streams in North Queensland bauxite hills.

      • Thank you again, Faustino, for your comments on mine. I agree with pretty well everything you say. But I think you are a bit pessimistic on the future of climate modelling. As a successful modeller of complex systems (1950’s, multiloop, multidisciplinary, non-linear) long before computers were available, I have faith that eventually models will be built that can predict climate with confidence. I qualify that by saying there will always be random inputs, ok so long as we know their probability distributions, but not serious enough to prevent accurate long range climate forecasts. Of course this implies more research so that we understand and can predict the Nino phenomena and perhaps other ocean cycles.

      • Alexander, when we can predict climate with confidence, then we can make policies to deal with it with confidence. In the meantime, let’s increase our capacity to deal flexibly with unknown futures, and not over-commit resources on uncertain ones.

  22. The Urgent Mitigationist position has the obvious problem that developing countries are never going to go along with a policy of leaving cheap and technically superior fossil fuels in the ground. Something cheaper and better (gross of environmental impacts) would have to be discovered to get them to go along with mitigation. Absent that innovation, it’s all going to get burned eventually. Consumption will continue until fossil-fuel scarcity and/or improvements in competing technologies combine to make fossil fuels uncompetitive. (One CO2-emissions dampening factor is that as economies develop, the amount of energy per unit of GDP tends to decline as output composition shifts away from heavy manufacturing. But every country will want to first go through the energy-intensive stage of growth.)

    Sensible planning should focus on high-emissions scenarios. (If the various peak-fossil-fuelers are correct we’ll have nothing to worry about, but I place little credibility in their long-range forecasts.) Geo-engineering is technically and economically feasible but seems to me politically infeasible. Adaptation, i.e. muddling through, referring to a motley collection of measures ranging from activist government policy to private market adjustments is what will probably happen.

  23. Robert I Ellison

    I am sure economists understand the implications of exponential growth. The trick may be to eliminate the linkage between growth and emissions, growth and environmental degradation, etc. True sustainable development using concepts of conservation farming – techniques ranging from no till and minimum compaction through GPS guided equipment to ‘face recognition’ for weeds and precision spraying – and energy technologies such as thin cell solar.

    Commercial availability of 4th generation nuclear – with the ability to recover hundreds of years of energy needs from the 270,000 tonnes of conventional high level waste sitting in leaky drums around the world – is just around the corner at a cost of $60/MWh. See page 11 of the pdf for a comparison of costs. This is incredibly cheap if there is no requirement for hyper expensive national distribution networks. This is technology matured over decades and is that qualitatively different to conventional nuclear technology. It uses most of the energy in nuclear fuels instead of less than 1%. The waste is toxic for hundreds of years rather than hundreds of thousands and the final volume of waste is 3 or 4 hundred times less than conventional nuclear. A damn good high temp. energy source suitable for many industrial applications – made possible through materials and fuel cycles advances.

    http://nextbigfuture.com/2010/09/general-atomics-to-develop-energy.html
    http://www.nwtrb.gov/meetings/2010/june/rawls.pdf

    Cheap and abundant energy could power many installations to combine hydrogen from pyrolosis with captured carbon dioxide to make as much liquid fuel as we need when and where we need it.

    The solutions to many global problems are indeed technological. Lucky we are so good at technology.

    • Robert I Ellison

      Oh – meant to give you this one.

    • The company has gone out of business.

      • Robert I Ellison

        :lol:

        ‘CE’s focus on cost effective, industrial scale, air-capture technologies includes in-house engineering, laboratory work, and pilot scale research in concert with out sourced design and testing performed by engineering firms and vendors.

        CE has an in-house core of full-time engineers, chemists, and physicists. As of spring 2011, CE has 10 employees on a full-time equivalent basis. Our in-house team is complimented by a handful of part-time senior engineers with expertise in areas of particular importance to CE who are retained on long-term consulting contracts. All of CE’s R&D activities are undertaken in partnership with leading engineering firms and equipment vendors, and with industrial or academic consultants.

        Incorporated in 2009 and privately owned, CE is funded by angel investors including Bill Gates and Murray Edwards. CE grew from academic work conducted on carbon management technologies by Professor David Keith’s research groups at the University of Calgary and Carnegie Mellon University.

        Intellectual property (IP) is crucial to CE’s growth strategy. All IP is owned by CE and is managed by Fish and Richardson, a leading global IP firm.’

        http://www.carbonengineering.com/?page_id=7

        ‘The Virgin Earth Challenge is a competition offering a $25 million prize for whoever can demonstrate a commercially viable design which results in the permanent removal of greenhouse gases out of the Earth’s atmosphere, so as to contribute materially to avoid global warming.[1] The prize was conceived and financed by Sir Richard Branson, a successful British entrepreneur, and was announced in London on 9 February 2007 by Branson and former US Vice President and 2007 Nobel Prize winner Al Gore, creator of the 2006 film An Inconvenient Truth on climate change.[2]

        Among more than 2600 applications, 11 finalists were announced on November 2, 2011…

        Finalists competing with direct air capture designs:
        • Carbon Engineering, Canada
        • Climeworks, Switzerland
        • Coaway, US
        • Global Thermostat, US
        • Kilimanjaro Energy, US’
        http://en.wikipedia.org/wiki/Virgin_Earth_Challenge#Direct_air_capture

      • Sorry for confusion. I had replied to the comment about General Atomics but my comment got posted below your the fans thingy you’ve posted many times. My comment was actually about Adams Atomic Engines which went out of business recently having not been able to get funding to continue the development of its idea.

      • Robert I Ellison

        General Atomics seems pretty solid – and if you don’t want to watch the video don’t. It is a just a lead in to a concept in a multi-horse race.

        Adams Atomic Engines was a similar high temp gas cooled reactor – much cooler name for a lad raised on science fiction. Shame about closing down. It was a pebble bed design from memory – which has it’s own refueling issues. The General Atomics proposal – the energy multiplier module EM2 uses a ‘travelling wave’ fuel burn that will allow it to run without refuelling for 20 to 30 years. It is then pulled out of the bunker and taken back to the factory.

      • Robert Ellison,

        I’ll take a look at the video. The Virginia class submarines run for 33 years on their fuel. They are not designed for refuelling.

        The Hyperion (now called Gen4 Energy) is designed to run for 7 to 10 years and then return to factory for refuelling.
        http://www.nrc.gov/reactors/advanced/hyperion.html

        The issue will all the SMR’s is they will have to go through decades of development, ‘generations’, competition and refinement. To get started we need to remove the impediments to low cost nuclear. that is the first hurdle. Until we get over that we are going nowhere very fast.

      • Robert I Ellison

        I am aware of the Gen4 concept – based on a Los Alamos National Laboratory design. These designs have been in development since a prototype pebble bed reactor in Germany in the 1960’s. As well as in small, mobile plants for military applications. The issue with military hardware is that cost is not always a governing factor.

        The Generation 4 nuclear reactors are inherently safe – and the regulatory processes are underway. http://www.nwtrb.gov/meetings/2010/june/rawls.pdf The modular factory built nature of some of these should facilitate future approvals. I think perhaps you are too pessimistic – and certainly seem unaware of the history of small reactor development.

  24. This statement about UK applies to Australia too:

    In considering policy, Lilley says that the UK’s “political parties have measured their virtue by the austerity of the targets they sign up to, rather than the benefits their citizens’ sacrifices will bring, adopted a hodge-podge of individually fashionable policies regardless of cost or coherence, and – rather than pursuing evidence-based policy – they have relied on ‘policy based evidence’ like the Stern review. … [there] has been an almost heroic disregard of costs. It should not need saying – if the costs of a proposed strategy exceed the benefits one should amend the strategy or seek another. Unfortunately it does need saying.”

  25. peterdavies252

    The Stern Review is yet another example of the policitisation of expert opinion to accord with the ideology of the government of the day.

    The social science of economics has been co-opted in the same way as mainstream climate science.

    I have constantly reminded readers of CE that longer term predictions based on the available data iare invariably spurious and should never be attempted.

  26. “The Review should assess the costs and benefits for scenarios with varying degrees of international cooperation. Meanwhile, Parliament should remove the legal requirement on the UK to act unilaterally.” [15]

    Unless there is coordinated global action, anything individual countries do will have negligible effect and make the participating countries pay dearly for no result. However, “no regrets” polices make economic sense no matter what. An obvious one that could have a very large impact would be for the countries (such as USA especially) to remove the impediments that are preventing the development of low cost nuclear power.

    On the last point, Lilley notes that the annual increase in China’s emissions exceeds the UK’s annual emissions, which are only 2% of the global total.

    And that’s now. The poorer and less developed countries will go through the same development cycle as China is going through now. The rest of Asia and Africa will all go through the same development over the coming decades as Chinas is going through now. Energy consumptions will grow like China’s is. If these countries do not have access to a cost competitive alternative to fossil fuels, they will burn fossil fuels and have emissions growth like China is now.

    See Slide from 6:20 to 8:40 here: http://www.slideshare.net/robert.hargraves/aim-high-1388496

  27. I wonder if any one has calculated the cost of things like contraception, or abortion, or legalization of homosexuality? All these things completely changed society; indeed the first two have completely altered the demographic profile of the Western nations.
    Why was it there was no ‘precautionary principle’ applied here? Why did no one stand up an scream, ‘social security will go bankrupt!’ on Roe vs. Wade?
    Why is it only in ‘Climate Science’ do people proclaim the importance of the ‘precautionary principle’ and economics.
    The closest thing to the ‘precautionary principle’ I can remember was in the debate on allowing Gays/Lesbians to serve openly in the military; there many ‘conservative’ commentators stated that the present system worked and the social changes might not.

    (I am not against contraception, overly pro-Life or anti-Gay in any manner. This above post is an example of other huge decisions that have been made in a completely different manner)

    • Many people certainly argued against the abolition of slavery on the belief that it abolition would destroy our economy at the behest of soft-minded do-gooders who couldn’t accept the cold hard reality that slavery led to economic growth.

      No, I am not equating “skeptics” to slave owners. Yes, in retrospect we can look back and see how such projections obviously inversed important metrics (can anyone believe that our country would have attained global economic preeminence had we not abolished slavery?), and obviously this should give us reason to doubt any long-term economic projections.

      But my main point is that as imperfect as they are, we need to make economic projections. It’s what we do to make policy determinations. So it is absolutely key to acknowledge, accept, and control for the reality that that all of these arguments about economic projections are based on “priors” that are ideologically influenced.

      Looking at the debate from the macro-view, we can see combatants on both sides extrapolating from their calculations, conclusions that are completely in line with their politics. Yet on the ground all of the combatants are completely blinded to that obvious pattern.

      Even more speciously, the combatants on both sides claim that it is only the other side that allows ideology to influence their math. Universally, they claim that projections from the other side are necessarily biased where their projections are necessarily objective.

      Only a non-skeptic could look at such claims, from either side, and still accept the arguments from such combatants as validated or reliable.

      • And do let’s consider, in addition to abolition of slavery, the elements that enabled us to attain and sustain world economic preeminence: organized labor, higher wages and improved working conditions, massive government investment in infrastructure, massive immigration, urbanization, women’s rights (and well, OK, the establishment of corporations). Funny how when I read the “skept-o-sphere” it seems that the only variable that correlates with economic growth is cheap energy.

      • Ooops – forgot public schools and progressive taxation. :-)

      • peterdavies252

        @Joshua “….we can see combatants on both sides extrapolating from their calculations, conclusions that are completely in line with their politics”

        I have found this to be true since before I have been reading Judith’s blog and it is my opinion that neither side can show that their conclusions are justified based on the available data.

        I am inclined to the view that human activity, more particularly land use changes, are responsible for at least some of the CO2 changes over the past 50 years or so, but the extent of this is not discernible from the noise of natural variability.

        Consequently, I feel that the sceptics in general have a stronger case based on the lack of verified and validated science being demonstrated by the pro AGW side. But frankly, the sceptics themselves have provided no sound alternative theoretical basis for their claims that human activity have no harmful effects either.

        There have been a number of alternative hypotheses being bandied around but they are not very well supported by the literature. I have asked a number of them to provide citations for their theories but they usually refer me to their own books and articles. I’m afraid that this is representative of circular argumentation.

        Perhaps, someone like Burt Rutan could also examine the sceptic’s arguments and data and assess whether they pass the engineer’s criteria for sound science.

        There are, a number of contributors who not only have a strong scientific background but who have unselfishly shared their knowledge with the readers of CE and are genuine in their search for the truth and I thank them most sincerely.

        There are others whose contributions have been most enjoyable to read and with whom I feel comfortable in exchanging viewpoints. In many instances, however, I find myself agreeing with Joshua’s POV and think that we have much in common.

      • ” There are, a number of contributors who not only have a strong scientific background but who have unselfishly shared their knowledge with the readers of CE and are genuine in their search for the truth and I thank them most sincerely.”

        Thanks, I and others of the non-troll persuasion appreciate that sentiment.

      • Thanks Peter,

        I have found this to be true since before I have been reading Judith’s blog and it is my opinion that neither side can show that their conclusions are justified based on the available data.

        Yes, because this is not only true at this blog, or on this topic. The dynamics that play out here and w/r/t climate change can be seen in more generally in debates about any variety of issues.

        People confuse “motivated reasoning” with judgments about people’s motives. We all have motives. I assume the motives to be good in the vast majority of the combatants. We all are motivated to seek the most good for the most people, or to have valid conclusions drawn from solid evidence, or to maximize economic growth to the extent it can be done within reasonable cost/benefit trade-offs with climactic and/or environmental damage. But independently of our specific motives, we are all affected by motivated reasoning; a tendency to evaluate evidence subjectively because of various ideological, social, or cultural identifications (or personal identity issues such as wanting to be the “smartest” or wanting to be “right”).

        Judith errs in assuming that the notion of “motivated reasoning” is simply an effort by some combatants to marginalize skepticism. She looks at Kahan’s research and rejects it on those grounds. In fact, motivated reasoning is far more than that, and refers to well-established attributes of how we all reason. Logically, the notion of motivated reasoning must be applicable to combatants on both sides.

        Of course, some combatants seek to use motivated reasoning as a tool for the purpose of marginalizing skeptics in the same way that other combatants seek to use problems with consensus or mixing activism with science as tools to marginalize valid concerns about climate change.

        I see much of value in the arguments of skeptics about climate change. Of course, among skeptics as with climate scientists concerned about climate change, we will see evidence of motivated reasoning. That is a problem but not the most significant problem. The most significant problem is a refusal to account for motivated reasoning. I focus on that problem with “skeptics.” That doesn’t mean that a refusal to account for motivated reasoning doesn’t exist on the other side of the climate debate. Of course it does. Anyone who believes that motivated reasoning isn’t an very real influence on both sides is just kidding themselves, and loses standing in my book. That doesn’t mean that they are necessarily wrong in their analyses – but that they have failed to effectively prove their conclusions to anyone else who doesn’t begin with the same assumptions as those they start with.

      • WHT

        Nice to see you are “taking a bow”.

        Humility or modesty does not seem to be your problem.

        [But maybe you were only joking, in which case, you have good humor.]

        Max

      • Because I would like to see who has a “strong scientific background” yet hasn’t gone around the bend. It certainly isn’t one of those 30+ climate clowns that appear here on a regular basis.

    • Enlisting employers to deduct taxes from paychecks before workers ever see their wages and pay it over to a bloated and out of control government to pay bureaucrats in the EPA to drive business out of America probably should been given a little more thought…..

    • DocMartyn,

      Isn’t effective contraception actually an example of the precautionary principle, anyway?

      • Doesn’t it also have known costs with very high probability know results with very high confidence. Isn’t it also a situation where an single individual is deciding to take or not take an action that impacts the outcome of their individual condition.

        In the case of climate change mitigation actions we know that they will cost a lot of money but we do not know what the change in conditions will come about as a result of the expenditures. We are also asking people to make changes for the unknown but potential benefit to other people somewhere maybe.

  28. Thx, Robert E fer posting that carbon capture video again. Great that carbon can be captured efficiently and cheaply in small or large scale systems and with potential fer production of new fuels. What a pity governments think they must take money out of the economy in carbon taxes instead of leaving it in the pockets of the people, some of whom find ways ter put it ter productive use.

  29. “Lilley says that “Estimating the amount of global warming and its impact if no action is taken to reduce emissions involves a series of steps, each requiring a number of assumptions and estimates.” One must project future concentrations of greenhouse gases; estimate the resultant changes in climate; and evaluate the impact climate change will have on the economy, society and human well-being. This step, for example, requires “estimates of how climate change will affect a host of variables, including the prevalence of diseases, crop yields, energy demand, species abundance etc and how people, business, government and markets would respond to that.”

    Sounds like the Climate Science equivalent of the Drake Equation: Estimate the number of stars in our galaxy, estimate the percentage with planets, estimate the percentage of planets in the ‘habitable zone’ of their stars, estimate the percentage of planets in the ‘habitable zone’ where life has evolved, estimate the percentage of life infested planets where intelligence has developed, estimate the percentage of intelligence life forms which have developed a technical civilization, estimate the percentage of technical civilizations that have developed high power electromagnetic transmitters, and estimate the average duration of the electromagnetic broadcast phase of technical civilizations, combine all those estimates into one giant equation and VOILA! Out pops the exact number of intelligent extraterrestial civilizations just waiting to be discovered. Pending the funding of the SETI program by Congress, of course.

  30. Oops!

    That would be ‘extraterrestrial’.

  31. Faustino said:

    “I don’t believe that there is any time in human history that a prediction of the world 90-100 years ahead would have been accurate.”

    If you meant pin-point accuracy, I would agree. But how accurate should a 100-year projection be in order for it to be useful for policy? And for policy, no projection seems to me like a projection of no change, so how accurate should it be in order to be useful?

    • intrepid_wanders

      Max_OK,

      What do you have to base a “pin point accuracy” vs. a “accurate 100-year ‘projection'”. You do know the difference of *prediction* and *projection*?

    • Faustino doesn’t look ahead much longer than the next 5 years anyway. If he’s advising governments, all they’ll be interested in is the time span between elections.

      As far as the CO2 problem is concerned, Arrhenius was right at the beginning of the 20th century in predicting there would be a warming problem. He didn’t take into account the exponential nature of emissions growth though, and so thought the problem was much further away than its has turned out to be.

      That’s a common mistake even now. Economists will say something like there are 100 years of coal reserves left, for example. What they mean is at the current rate of usage. They don’t understand the exponential function.

  32. First, I would say this is what the debate should be about. The cost, even for a moderate IPCC scenario, is exactly where the uncertainty is, and no one has a definitive answer. Is it 5% of GDP or 100 times less than that? I would put in some numbers like this. A small carbon tax of 1 cent per kg CO2 in the US would raise about 0.5% of current GDP. It could be scaled to GDP. With the lower estimates it could raise ten times the expenses required to adapt. With the higher Stern estimate it is short by a factor of 10.

  33. I’d like to broadly paraphrase the writing of one of my favorite Economists, from 2006, re-applied to this topic:

    The Committee advocates Stern and Lilley set out many principles as a basis for review and proposals. The first principle of Capitalism should be sufficient given a fully privatized carbon cycle with price set by the law of supply and demand. Given the ever-expanding plethora of solution mechanisms and solution providers, market forces should ensure that the public’s requirements are met. Most stated principles of Stern and Lilley seek to impose these Committee advocate’s particular viewpoint on governments, rather than leaving it to the market, and in my view contravene the first principle of Capitalism regarding “minimum regulation.”

    The disagreement here is in part as to whether there is a need to define “climate impacts” and, if so, whether regulation is needed to counter them.

    Re efficiency and need, market forces will ensure efficiencey and the public’s choices will determine need. Re specific measures, this again should be a matter of individual choice rather than public policy.

    Re a “dynamic domestic production industry” might well be a feature of the evolving carbon cycle market. I do not see any grounds for the government to favour such one industry over any other. It should stand or fall on its own merits without regulatory protection. Similarly with continued use of fossil fuels, if there is sufficient demand, then such access will be provided, perhaps in ways not yet envisaged. It should not be regulated for.

    I’m not sure what standards, views and expectations might be alluded to otherwise, but, again, consumer choice in highly competitive and diverse markets should ensure this without regulation, except for example in extreme cases of exploitation.

    Re other considerations that lead to reduction of excess carbon emission, again market forces should ensure this with the privatization of the carbon cycle with prices set by maximum returns to citizens through dividends per capita.

    Delivering impartial scientific information is an area in which government has notoriously failed, constantly being behoven to vested interests, rather than seeking to maximising the overall public benefit. The issue here is how to constrain government from making self-interested political decisions which do not serve the public interest. It is not clear how this can be done, given that such issues are not deciding factors in general elections and governments often ignore well-founded advice from bodies such as the IPCC; but it is essential that the public interest be assessed by a relatively independent body. Rather than a specific body, a scientific panel with broad analytical capacity would probably be the best body. When it comes to special pleading, each industry claims to be different. In my experience as an economic policy adviser, the critical issues are essentially the same whatever the industry, and they are best considered by a body with very broad experience rather than an industry-specific body. The higher the standing of the body, the more difficult it is for government to act in a way contrary to the broader public interest, although, of course, it will continue to do so.

    I trust I have captured the essence of the Economist’s principles, and would be interested to hear opinion on this algebraically paraphrased submission. If I’ve misrepresented somehow, I apologize, but welcome correction.

    • peterdavies252

      @Bart R

      A good overview of economic and political aspects of social policy-making.

      I also consider that carbon pricing reflects a perceived social cost of CO2 from emissions that should be factored into the cost structures of the main polluters and their customers.

      It remains moot in my mind as to whether CO2 is something to be feared but nonetheless any imposition of carbon pricing on some economies to the exclusion of others seems to be morally indefensible.

      • I take credit only for freely interpreting the intentions of the original author out of context, adapted to this topic:

        http://www.dbcde.gov.au/__data/assets/word_doc/0017/146330/Michael_Cunningham.doc

      • Good find, Bart, I’d forgotten about that.

      • peterdavies252 | September 13, 2012 at 1:09 am |

        ..any imposition of carbon pricing on some economies to the exclusion of others seems to be morally indefensible.

        It’s also indefensible as a matter of pure international trade law. With the signing of multiple international recognitions of CO2 and AGW, most lately in Durban, as serious issues, there is no foundation for any nation to refuse to acknowledge the value of the Carbon Cycle once enough nations do privatize.

        Should markets privatize the carbon cycle, then nations that don’t price their carbon internally will find a price for their goods imposed as they cross the border into nations that do.

      • Robert I Ellison

        Not a problem we will continue to sell into Africa, US, Asia and India – and put a trade embargo on BC and NZ. By the time it becomes an issue anyway – the world will have not warmed for another decade and any chance of rationally reducing emissions will be lost for generations to come at least.

      • Throwing boomerangs at airliners could be an effective and economic way to cut down CO2 emissions. :)

      • peterdavies252

        Indeed, the arguments put forward in respect of the broadband issue is most relevant to the issues under discussion in this thread. Thanks for posting the link to Michael’s earlier letter.

    • “When it comes to special pleading, each industry claims to be different. In my experience as an economic policy adviser, the critical issues are essentially the same whatever the industry …” That seems to be a quote from a recent post of mine, I think in the “Activate (?)” thread. I assume it’s not, but I must support the point.

      • I was deeply impressed by the consiliency of your 2006 broadband submission (written at a time when, coincidentally, I was working in the broadband industry), and the principles my research into the CO2E issue — in part prompted and suggested by Robert Ellison — eventually came to rely on.

        I imagine my restatement of your views from that context to this one may have introduce subtle shifts, which I’d be glad of your correction if you have the time.

    • Robert I Ellison

      ‘Markets are very efficient devices for providing and processing information, for organising production and distribution of goods and services so as to allocate resources to their highest valued use and thus maximise community income. Their superiority to central planning is well attested.

      There may, however, be cases where markets do not produce the most efficient outcome, where there is “market failure.” This tends to arise in particular circumstances, for example when there is a natural monopoly, where externalities are not taken into account, where there is information asymmetry or in the case of public goods. (There is extensive literature on the issue for those who seek more detail.)

      The identification of market failure alone is not, however, sufficient reason for government intervention. There can be no presumption that governments outperform markets: indeed, “government failure” is more common. The World Bank advised that “the countless cases of unsuccessful intervention suggest the need for caution. To justify intervention it is not enough to know that the market is failing; it is also necessary to be confident that the government can do better.” A Bureau of Industry Economics paper assessing the 15 major interventionist policies of the Commonwealth Government from 1970-85 found no positive outcomes: 13 had negative returns, while for two the net outcome was unclear.

      Should the cost to the community of market failure be significant, government should first see whether it is possible to improve the workings of the market. If not, it must assess its capacity to produce a better outcome, and the costs and benefits of any intervention. Given that a number of studies have found administrative costs of around 15-50 per cent in government industry support programs, the prospect of a net benefit from intervention must be considered doubtful. op. cit and without the misrepresentation

      • peterdavies252

        Thanks for your thoughts Chief. It is acknowledged that Pigovian taxes would be the less preferred option, because Government taxes are invariably pooled and applied to other areas of social policy, to the detriment of the original reason for such taxes being imposed.

      • Ahem. The Chief is extracting from earlier work of mine referenced by Bart. I’ll take that as an endorsement, Robert.

      • peterdavies252

        Of course, the text was italicised. Stupid of me to ascribe it to the wrong author. The whole 2006 paper was excellent and I enjoyed reading it. I come from an economic background and this thread has been most interesting to me and thanks again for your scholarship and interactions on CE.

      • Robert I Ellison

        A pleasure Michael. Sorry for the confusion – I was playing Bart’s game. A silly thing to do I know.

        I don’t think a Pigovian tax is what Bart has in mind – because then we would need to price the externality. The very rock on which the good ship Climate etc – and anyone else who has tried it – has foundered.

        I don’t think Bart knows what it is he is proposing – but let’s see if we can imagine something close. Imagine the global public as in essence each owning a little bit of the sky. We then set the right to emit carbon dioxide into the sky at zero. Essentially – no one has the right to emit carbon and the bidding war then commences between the emitters on the one hand and the owners on the other to set a price for rental on the sky. Once they have bought enough indulgences from the public – they may then commence business on a contractual basis by paying up the agreed price. A gentleman’s handshake will do – accompanied of course by dosh.

        The emitters – oil companies, electricity suppliers, paddy fields owners, cowboys with all those dang cows, etc – then put up the price to consumers and go on their merry way. The government will need to be involved only so far as regulating the market to ensure a level playing – as they do with any market. That is to ensure that people don’t register dead relos as owners or don’t hide cows. That sort of thing. The scale of this thing is just enormous – but we can let private enterprise take care of most of it for a slice of the action.

        Shared equally – we all get paid for 4.29 tonnes of carbon dioxide a year. Hell, let’s be generous and say it’s worth 50 bucks a tonne. What is it worth on the open market? Reminds me of the talk back radio guy who was asking if you would let someone sleep with your wife for a milion dollars. The response in Wollongong was of course – ‘mate I would do it for a six pack and a pizza’. But at $50 that’s about $1.5 trillion. I say let’s donate our share to a focused multi-objective program that might actually make a difference. Better yet – let’s leave the energy market and still donate the dosh. Come on Bart – stump up and I want to see receipts.

      • peterdavies252

        This paper is a good ‘un on Pigovian taxes and possible alternatives and features our current debate on global warming and economics.

        http://www.economics.harvard.edu/files/faculty/40_Smart%20Taxes.pdf

      • Robert I Ellison | September 13, 2012 at 3:26 am |

        You’ve provided an fairly apt and mostly rational summary of the concept of privatizing the carbon cycle; my belief is that the initial price would be closer $300/tonne than $50/tonne, with the bulk of the benefit to the citizens of the nation that is first to exercise privatization. And remember, for the USA the tonnage per capita is many times that of a less industrialized nation like China or New Zealand, so US citizens would benefit proportionately more.

        Over time, as CO2E drops due rational individual market choices based on real (unsubsidized, unhidden, no-externalities) price to consumers and providers, incomes may fall as low as the level you project, though it’s hard to imagine US citizens would ever be disadvantaged, compared to — say — Australian or moreso New Zealand shareholders in the Carbon Cycle; this is particularly true if the USA privatizes the Carbon Cycle earliest through a fee and dividend auction system.

        The most benefit inevitably accrues to the first to start. The greater benefit accrues to the nation with the most CO2E per capita to lower. The greatest benefit attaches to the nation that best innovates and adapts, as its new industries will have the lead in technology shaped by the real prices (unhidden, unsubsidized, externalities included) influencing demand.

        Stern, and Lilley, and Faustino (sorry) and you (sorry), and I are all vexed by the problem of bounded rationality. We’re bounded in the information we have (the information we lack we can call Uncertainty, for instance we will never know what the temperatures would have been without CO2E level rise even though we can guesstimate by a variety of methods, which our ability to agree on is bounded too, and thus attribution must be dismissed as an issue since it is unanswerably out of the bounds of knowability); we’re bounded in the information we do not use (have you seen Stern, or Lilley, or Faustino, or you, or I, use temperature days data like http://www.degreedays.net/calculation to calculate the actual shifts in heating or cooling, or demand figures ascribed shifts in tastes to more and larger vehicles thus increasing cost of petroleum products?); we’re bounded in rational inference by biases and weaknesses in logic — what an absurd conclusion, for example, to conclude more paralysis by analysis is a valid recommendation, when we can know on first principles that the Market would fix a high price on CO2E, the Market would return to citizens roughly per capita a high dividend from CO2E emitters, and the Market would ultimately be the most efficient allocator of resources and the Market result would be the opposite of what we get by BAU until the next committee, and the next committee, and the next committee, for some 200 countries acting as prompted by expert elites.

        Now, I’d like to address the topic of Pigouvian taxes, but I can’t. There’s no way to rationally discuss modifying the behavior of actors in a Market towards goods that are irrationally priced to begin with.

      • Robert I Ellison

        Sorry Bart – the US emits much more per capita but we each get 4.29 tonnes per year as a global average. Those emitting much less – Kalhari Bushment for instance – would come out ahead and US citizens would lose. To do it in a single country is really just to simply transfer cash from emitters to consumers who then pay higher prices. Consumers have an incentive to use less energy – but perhaps not so much unless there are alternative sources. Energy efficiency may be one – but how long can you milk that cow? Producers have an incentive to go elsewhere. Politically fairly indigestable one would think. $300/tonne? The highest price and most complete coverage in the world is $23/tonne – and that seems unlikely to survive the next election. Mate – you are seriously off with the fairies and desperately need a reality check.

      • Robert I Ellison | September 13, 2012 at 11:04 pm |

        You think you’re going to get money from the USA to curtail Australian excess CO2E?

        Nonononono. See, that only happens if Australia gets into the revenue neutral fee and dividend game earlier than the USA, and somehow comes up with the influence in international trade to enforce a shift from the value of the US dollar to the value of the Australian.. whatever it is you use on that island of yours on the upside-down part of the globe. ;)

        See, to do it in a single country (we’ll call that country the First State, State One, or the Unit State, amigo) is to provide a shining beacon of hope for the rest of the world, an example of democracy for all others, and of course to get the lion’s share of the benefits of innovation and first to plant the flag. When you’re not the lead dog, the scenery never changes. (We’ll call any scenery-deprived dog not a lead dog something of less stature. Say, ‘dingo’ for instance.)

        As other nations catch up with the Unit State, they’ll naturally still benefit, but the Unit State will benefit more, as it has the most influence in international trade, and is of course first, so will always have been benefitting longest.

        And while you appear to love the example of bushmen (bushment?), the USA has a fair number of its own low-carbon emitters. They’ll do quite well, thankyouverymuch, in the national market.

        It’s only the people who use excess CO2E who will be forced to pay for their free riding ways as the economy becomes a more efficient allocator of scarce resources and more fairly distributes the wealth due the individual virtues of each buyer and seller by Capitalist principles.

        How is it you object to that again?

      • Robert I Ellison

        But Bart – you always get angry and refuse to speak to me when we swap bull. I am a great believer in the American dream as you know – although in your case it is a delusional fantasy. I have been thinking lately that philanthropy is the one thing that Americans do better than Australians. As the world’s 13th largest economy, member of the G20, APEC etc – we are a pretty decent player in our big section of the world. We pull our weight. We have partners in China, Indonesia, Japan, India and all over the Pacific. I seem to remember as well a long term defense pact with some otherwise friendless middle power somewhere. As for the Australian dollar’s strong appreciation against the US Peso – we wish you would stop printing money and go back to making it. We don’t want your money – you really need to keep hold of as much as you can.

        We do have a revenue neutral carbon tax – the biggest and best in the world. We do want to get rid of it as quickly as possible. We are of course leading the world in conservation farming and openly sharing knowledge worldwide. Nothing to do with carbon taxes but the first and most critical response.

        But imagine a country that has the only $300 dollar carbon tax in the world – let’s call it UNtopia. Don’t let me stop you trying – but apart from being a really stupid idea it is just so politically unlikely any time in the current millennium. I would opt for practical and technological every time.

      • Robert I Ellison | September 15, 2012 at 3:19 am |

        Oh.

        You replied.

        Why would you waste your time on this old thread, with so many better ones?

        This “we” that you speak of that wants to get rid of the “best revenue-neutral Carbon Tax in the world”, could you be more specific?

        I’m unfamiliar, as you know, with your little corner of the South Pacific, but I’d heard that polls were indicating an increasing popular acceptance among Australians for the carbon tax there.

        Could you clear that up? Is “we” more than one Australian in twenty? And at this rate, how long will it be before it’s one Australian in a hundred?

        And by all means, please go into detail about the reasons your carbon tax is the best of the two dozen in the world.

        How does it compare to Singapore’s?

      • Bart R,

        Why would you waste your time on this old thread, with so many better ones?

        This is an excellent thread. One of the best. It’s about solutions. It’s about rational policy. I guess you don’t like discussing matters of substance, do you BartR?

        This “we” that you speak of that wants to get rid of the “best revenue-neutral Carbon Tax in the world”, could you be more specific?

        I can help you with that.

        66 of the Australian population is opposed to the carbon tax (despite massive bribes – more below).

        Regarding your question about “best revenue-neutral Carbon Tax in the world”, the Australian ETS will cost ten times the projected benefits assuming the assumptions are achieved. That is the projected cumulative costs and benefits to 2050. However, the assumptions are impracticable and cannot be achieved, Richard Tol confirmed this in a comment near the top of this thread https://judithcurry.com/2012/09/12/the-costs-of-tackling-or-not-tackling-anthropogenic-global-warming/#comment-239101:

        International coordination of carbon taxation is impossible now, and unlikely to happen during the next few centuries.

        You asked about the level of acceptance of the carbon tax in Australia:

        I’d heard that polls were indicating an increasing popular acceptance among Australians for the carbon tax there.

        The Australian public opposes the carbon tax by 2:1. Opposition to the carbon tax has been increasing since the Copenhagen Conference fiasco. Of course there are small blips when people get bribed or distracted by other political events. In the last budget the government ripped an enormous amount of money out of the Defence budget so they could bribe people with extra welfare payments called “Household Assistance – advance lump sum payment to help you prepare for the introduction of the carbon price”. To do this, our Defence budget, as a proportion of GDP, was reduced to less than it was in 1938 (before the start of WWII). I guess this ‘Progressive’ government expects the USA to defend us.

        In your previous comment you asked:

        You think you’re going to get money from the USA to curtail Australian excess CO2E?

        No. But clearly the people who support the carbon tax are hoping and expecting the USA will defend us if we need it – so we can waste money on silly ‘Progressive policies’.

        BartR, I trust this give you the information you are seeking. If you want more, this may help: http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/

  34. Perhaps of interest:

    Carlin, Alan. “My New Article on Climate Change Economics and Science Published in a Peer-reviewed Journal.” Economics. Carlin Economics and Science, April 1, 2011. http://www.carlineconomics.com/archives/1223

    ———. “A Multidisciplinary, Science-Based Approach to the Economics of Climate Change.” International Journal of Environmental Research and Public Health 8, no. 4 (April 1, 2011): 985–1031.
    http://www.mdpi.com/1660-4601/8/4/985/
    (DOI: 10.3390/ijerph8040985)

    • Then, of course, there is the cost of political/bureaucratic control of ~70% of our energy sources (Input/Output tables of the United States). This would indeed control the means of production.

      Solyndra, Abound Solar , Beacon Power, Ener1, Range Fuels, Solar Trust of America, Spectrawatt, Evergreen Solar, Eastern Energy, Unisolar, Bright Automotive, Olson’s Crop Service, Energy Conversion Devices, Sovello, Siag, Solon, Q-Cells and Mountain Plaza come to mind.

  35. If the current global average temperature is not the right one, what is the right one, and for how long should it linger at that temperature? If you can answer that then you can tell us how you know you know what the correct temperature should be and how carbon is involved. I’ve been waiting for this answer since the global cooling of the 1970s when I asked the same question and got no answer.

    • Well, I’ll give you an answer. The current average global temperature is the right one for with me. I like it right where it is right now. I don’t want more CO2 making it higher.

      Now, I have a questions:

      What’s the right life span for a human?

  36. Therefore: the only rational course is to spend nothing now, and deal with it later with significantly improved technology, costing much less and purchasable with cheap future dollars.

  37. I would hope that all politicians would be capable of making a rational decision on the pros and cons of spending on climate change mitigation. I’m assured by the right wing types on this blog that all skepticism is quite rational, and there’s no rejection of the scientific argument on either political or religious grounds.

    I must admit that I’m not entirely convinced by those assurances. I still have a few doubts about the sanity of some American politicians from time to time.

    http://thinkprogress.org/politics/2010/02/22/83337/disabled-abortion/?mobile=nc

  38. dp | September 13, 2012 at 1:31 am |

    In the 1970’s I stopped holding out hope that Santa Claus would deliver Farrah Fawcett.. it may have had something to do with her marrying the Bionic Man. In any case, the ability to separate fantasy from reality also is a plausible hypothesis to explain the data observed.

    Put another way, we’re never going to control the temperature. But we can uncontrol the heck out of it; that control has something to do with the composition of the atmosphere and its gas molecules with three atoms. While no one can say what the right composition is, it’s pretty apparent that the rate of change of that composition matters, and high rates of change are costly to unwilling and uncompensated parties.

    So the question you really want to ask is, “Where’s my money?!”

  39. I’ve not read all the lengthy comments here but I’d like to say it is great to see an old message reinforced. The Copenhagen Consenus debates chaired by Bjorn Lomborg have included economic arguments on addressing climate change as well as many other issues (clean water, sanitation and so on). It is sobering to go back to these and realise that AGW is not our gratest problem (or that of poor countries). In fact in the first round 1, Global Warming came in at number 15 in a long list of wants.

    • I’m torn; when Bill Gates disagrees with Bjorn Lomborg on matters pertaining to LDC issues, which one to back?

      Oh. I know. The one who’s actually doing something.

      • Bill Gates and Bjorn Lomborg both agree that the real important problem is the 2 billion people currently in poverty.
        Bjorn thought was dumb idea to spent trillions of dollars when that would [obviously!] take away funds available to do something more important- doing something to improve the lives of 2 billion people.
        Bill is talking about investment which in worse case is 50 billion- he thinks a couple tens of billion.
        Lomborg was addressing immediate concerns- something occurring at the moment, bill is looking a decade or so in future.
        The kind stuff Lomborg talking already has already occurred- the total dollar amount wasted on silliness has exceeded 1/2 trillion with no reduction CO2 resulting from it.
        Bill gate’s idea will not result in zero global emission by 2050. What Bill is talking about is general what the skeptic/denier [such as myself] have said endless on this blog- the solution is nuclear energy. That is what can be done now, and if Gate makes his wave reactor all the better, but any already designed and tested nuclear reactors will work right now, and if we *had* the right focus to reduce CO2- increasingly used more nuclear reactors, we could already had very significant reductions. And Bill’s idea is to use fuel rod from nuclear reactors [not waste, it’s fuel]. Of course as Gate’s has said there is nothing new about breeder reactors- the French doing it for decades.
        Here in US, breeder reactors are regarded as pure evil, according the usual suspects.
        So cheap and easy to maintained nuclear reactor, you put in the ground for few decades is good solution and would do a lot in terms of the 2 billion, and obviously be good solution everyone else, but it won’t give zero emissions of global CO2 emission. 7 billion breathing makes 2 billion tonnes, and doesn’t do much for transportation. But does cut CO2 in about half. And does whether using bill gate’s reactor or Westinghouse’s.

        But the more immediate concern [which wouldn’t even be problem if there wasn’t such hype against developing nuclear technology] is China and it’s coal burning, which the only reasonable solution if you want to something dramatic about it, is for Chinese to use natural gas, by using fraking technology- because it’s quicker and cheaper to do, than nuclear reactors. Globally at moment we lack the infrastructure to go fast with nuclear reactors- if one can’t wait for Bill Gates.

        This is assuming one is concerned about CO2 emission, which I am not.
        Though I think having less pollution in China is good idea.

        Ran across news story from nytimes.com:
        ” “We are all really sad,” said Miguel Orobiyi, 34, who worked as a mechanical assembler at the Gamesa plant for nearly five years. “I hope they call us back because they are really, really good jobs.”

        Similar cuts are happening throughout the American wind sector, which includes hundreds of manufacturers, from multinationals that make giant windmills to smaller local manufacturers that supply specialty steel or bolts. In recent months, companies have announced almost 1,700 layoffs.

        At its peak in 2008 and 2009, the industry employed about 85,000 people, according to the American Wind Energy Association, the industry’s principal trade group.

        About 10,000 of those jobs have disappeared since, according to the association, as wind companies have been buffeted by weak demand for electricity, stiff competition from cheap natural gas and cheaper options from Asian competitors.”

        The tax break, which costs about $1 billion a year, has been periodically renewed by Congress with support from both parties. This year, however, it has become a wedge issue in the presidential contest. President Obama has traveled to wind-heavy swing states like Iowa to tout his support for the subsidy. Mitt Romney, the Republican nominee, has said he opposes the wind credit, and that has galvanized Republicans in Congress against it, perhaps dooming any extension or at least delaying it until after the election despite a last-ditch lobbying effort from proponents this week. ”
        http://www.nytimes.com/2012/09/21/business/energy-environment/as-a-tax-credit-wanes-jobs-vanish-in-wind-power-industry.html?adxnnl=1&_moc.semityn.www=&pagewanted=all&adxnnlx=1348210858-kOGE+3+wCx2AlhehoYNEfg

        Keep in mind the billion dollars per year, is the least of the costs- making higher cost of electricity is the bigger costs. And does nothing to cut CO2.

  40. Cost and benefaust.
    At any rate, don’t discount
    Michael Cunningham.
    ==============

  41. I’d agree with many of Faustino’s criticisms of Stern.

    However, the proposed use of discounting at 6% simply guarantees there is not a case for any action on any known future impacts, however large when these impacts are not felt until far into the future.

    Lilley says “The effect of using the Stern Review’s low discount rate is to give huge weight to events in the distant future which are assumed to be the ineluctable consequences of actions taken by this generation. …”

    Let’s conduct a thought experiment.

    We detect a large asteroid which will impact the world in 100 years time.

    We need to take action now, at a cost of just 10% of one year’s GDP, to launch projectiles to deflect the course of this asteroid and prevent the obliteration of the human race and most life on the planet.

    Using a discount rate of 6%, and a GDP growth rate of 3% calculate the cost/benefit of this course of action vs doing nothing on a 200 year timescale.

    What does this tell you?

    The conclusion is simple: “The effect of using standard short term discount assumptions for large scale impacts is to unthinkingly condemn future generations to the consequences of deliberate inaction chosen selfishly for our own short term gain”

    Or, if you want to look rationally at long term impacts, using an analysis which presupposes that long term impacts are irrelevant is not a good way to go about it.

    • VeryTallGuy,

      Your point about other risks, such as meteorite impact, and how to prioritise our responses to the many risks that will emerge over time, is well covered here (Judith Curry referred to this some time ago): http://www.tnr.com/blog/critics/75757/why-the-decision-tackle-climate-change-isn%E2%80%99t-simple-al-gore-says?page=0,0
      I’d urge to read the whole article, but here is an extract from near the end:

      In the face of massive uncertainty, hedging your bets and keeping your options open is almost always the right strategy. Money and technology are our raw materials for options. A healthy society is constantly scanning the horizon for threats and developing contingency plans to meet them, but the loss of economic and technological development that would be required to eliminate all theorized climate change risk (or all risk from genetic technologies or, for that matter, all risk from killer asteroids) would cripple our ability to deal with virtually every other foreseeable and unforeseeable risk, not to mention our ability to lead productive and interesting lives in the meantime.

      So what should we do about the real danger of global warming? In my view, we should be funding investments in technology that would provide us with response options in the event that we are currently radically underestimating the impacts of global warming. In the event that we discover at some point decades in the future that warming is far worse than currently anticipated, which would you rather have at that point: the marginal reduction in emissions that would have resulted up to that point from any realistic global mitigation program, or having available the product of a decades-long technology project to develop tools to ameliorate the problem as we then understand it?

      The best course of action with regard to this specific problem is rationally debatable, but at the level of strategy, we can be confident that humanity will face many difficulties in the upcoming century, as it has in every century. We just don’t know which ones they will be. This implies that the correct grand strategy for meeting them is to maximize total technical capabilities in the context of a market-oriented economy that can integrate highly unstructured information, and, most important, to maintain a democratic political culture that can face facts and respond to threats as they develop.

      • Thanks for the link, I’ll read the source when I have time.

        The substantive point I was trying to make though, is that the analysis *method* chosen for future impacts (discounting) ensures that those impacts, however catastrophic, will be *always* be deemed irrelevant.

        So, if a rational economic analysis is desirable, rather than a values based judgement, we need either to choose a much lower discount rate to properly value the very long term (Stern) or some other method. I’m not an expert or even amateur on what the alternatives might be and would like to learn more.

        The alternative is a values based judgement. Here, I’d offer the analogy of national park creation. Any economic analysis based on discounting of the creation of, for example, the Lake District National Park in the UK and associated planning laws would conclude it was undesirable and we should, in fact, allow unfettered economic development.

        However, the creation of the park together with other UK planning laws has ensured the continued existence of a landscape of great beauty and inspiration over a timescale of many decades, and hopefully many more to come. It was the right thing to do, and I’m very grateful earlier generations did this for us today.

      • Fair comment, I love the Lakes, but the tourism it attracts might well be its best economic use anyway. Of course, the scale of modern tourism would have been inconceivable at the time a National Park was declared. As a boy in the 1950s, I thought that the only way I’d ever get to fly would be via a five-pound seaside light plane joy ride (I didn’t hav efive pounds then) … now what did I say about unforeseen futures …

        In most cost-benefit analyses, you would discount the measurables to get an NPV, but also try to assess unmeasurables. If a CBA had been done of the Lake District, it’s value as an area of outstanding natural beauty could have been determined to outweigh its value in other uses – a CBA provides guidance, it doesn’t determine values or outcomes.

        I agree with Judith’s assessment quoted in response to your earlier post.

      • VeryTallGuy,

        So, if a rational economic analysis is desirable, rather than a values based judgement, we need either to choose a much lower discount rate to properly value the very long term

        Don’t you think choosing a discount rate to get the answer you want, rather deriving the discount rate from objective analysis, is the value judgement?

        The alternative is a values based judgement.

        I disagree. I’d suggest choosing a discount rate to give you the answer you want (as Stern did) is the value judgement.

      • VTG, you are running a circular argument here. You are saying that we should accurately predict the future, and then work backwards to determine the discount rate. But, since we can’t predict the future accurately (and we can’t), then we should just decide what we want and do it, ignoring the cost or bodging up a discount rate that fits. It’s nonsense.

        For your thought bubble to make any sense, we would not only have to know exactly when the asteroid will hit and what the effects will be, we would need to know what the exact trajectory of scientific, technological and economic development over the next 100 years will be. Only then could we decide the best choice of what to do and when to do it.

        That is precisely why Stern’s report is such bollocks. The hubris of someone who says we should deprive ourselves now so that people in the year 2800 will be better off is hard to fathom, even if you accept his tendentious views on climate change.

      • Peter,

        yes, I agree, the choice by Stern of a low discount rate was a value judgement.

        Equally, the choice of a 6% discount rate as advocated here is also a value judgement.

        And here’s how I see those values differ qualitatively:
        (1) Stern’s choice puts some value on the distant future
        (2) Faustino’s choice allocates essentially zero value to the distant future.

        Both theoretically (asteroid) and in reality (Lake District) we see that Faustino’s analysis does not put sufficient value on the distant future – beyond a short number of decades.

        I’m open to, and ignorant of, what the best qualitative way to judge this.

        Stern puts forward a low discount rate, Faustino suggests a cost benefit analysis, which I think is basically a subjective value judgement anyway.

      • Johanna,

        it’s actually the choice of a 6% discount which is self fulfilling.

        The simple maths of exponential decay means that this is, however couched in rational economic language, in reality a value judgement which deems all impacts beyond a few decades to be irrelevant.

        That conflicts with my personal values. I can’t speak for yours.

      • VeryTallGuy,

        I don’t agree that selection of discount rates are a value judgement when done objectively. You can see how they are done objectively in these reports (go to the sections the appropriate sections):

        http://www.aemo.com.au/~/media/Files/Other/planning/419-0035%20pdf.pdf (p5 and 21):
        Liabilities 100%
        Debt 60%
        Equity 40%
        Risk free RoR 6.0%
        Market risk premium 6.0%
        Market RoR 12.0%
        Corporate tax rate 30%
        Effective tax rate 22.5%
        Debt basis point premium 200
        Cost of debt 8.0%
        Gamma 0.50
        Asset Beta 0.80
        Debt Beta 0.16
        Equity Beta 1.75
        Required return on equity 16.5%
        Inflation 2.50%
        Equity Beta 1.75
        Required return on equity
        Inflation 2.50%

        Another:
        http://www.ret.gov.au/energy/Documents/AEGTC%202010.pdf (p5-6)

        For example, in this study, the nominal before tax discount rate is calculated as:
        (% debt) x (cost of debt) + (% equity) x (cost of equity) = discount rate
        70% x 9%/year + 30% x 16%/year = 11.1%/year

      • Peter,

        I disagree that the choice of discount rates beyond short term investments is not a value judgement, and I’ve given you examples to illustrate this.

        However, I’m open to being persuaded I’ll read the links you’ve posted and see what I can learn. If you can link anything on the choice of discount rates for long term decisionmaking – on the timescale of climate change – I’d be very interested.

        I’m not able to contribute any further on this thread, thanks for your responses.

      • VTG, it is impossible to calculate a discount rate beyond a few decades, let alone for centuries, because we can’t even come close to predicting the future that far ahead. It would be dishonest to even try. That is why the discount rate becomes, as you say, meaningless in the very long term.

        I repeat, your premise is circular, and based on a fallacy.

      • VTG, @ 6.20 and 6.27, I didn’t actually advocate a discount rate, I noted the typical US and UK rates, and have talked elsewhere of a rate around 6%. That was based largely on a very extensive assessment manual put out Australia’s Department of Finance around the late-80s, perhaps early 90s. I don’t have the document to hand, but recall it as being very well-founded, and rates of around 6-7% have usually been used in government project and policy assessments in Australia, generally derived from that document. Such rates are also in line with real world interest rates by which people indicate their preference for current over future consumption – “revealed preference.” Would you lend money at 1.4% or lower interest?

        Richard Tol, an expert (which I’m not) says @3.22 “I agree that the discount rate should be consistent across all aspects of public policy. Greenhouse gas emission reduction is but one investment in the future. Its importance should not be artificially boosted by a different treatment of risk, or futurity, or empathy.” That would, in my view, tend to favour the widely used 6-7% rates, which are an estimate of the actual cost of deferred consumption, of reducing your current options by locking money up in a loan. Using a consistent, defensible, rate allows you to make sound comparisons between alternatives.

        But, as I’ve said in an earlier reply, the discount rate is one factor, it informs your decision but does not dictate it. It may be that other values, on which it is difficult to place a numerical cost or benefit, are deemed to outweigh what the numerical analysis suggests is optimal. Similarly to your Lakes example, there has been much discussion in Australia about the value of retaining Wilderness areas, e.g. in Tasmania and Northern Queensland. Decisions are not ultimately made on the measurable cost-benefit aspects of the analysis, but on the implicit weight given to non-quantified factors.

        As regards that, I refer you again to Judith’s position quoted in Peter Lang’s 4.38 post, which to me is a very sensible stance regarding an uncertain future, which does not involve, as per my 2.11 post, over-committing resources on uncertain futures.

      • VeryTallGuy,

        I disagree that the choice of discount rates beyond short term investments is not a value judgement, and I’ve given you examples to illustrate this.

        What do you mean by :short term”? The discount rates I gave you are for the life of power plants. To me that is long term and as long or even longer than it makes any sense to project.

        I suggest your examples are making value judgments but you are asserting that others who come up with a figure that does not give you the answer you want are making the value judgements. However, the figures I gave are objectively derived.

        Nordhaus gives extensive discussion on discount rates for climate change cost benefit analyses here:
        http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf

        This recent presentation by Nordhaus says he is using a global average discount rate of 5.5% in his analyses for AR5: http://nordhaus.econ.yale.edu/documents/Prague_June2012_v4_color.pdf (Slide 31). This is close to the figure of 6% that Faustino is quoting from the 1980’s for Australia. However, the global average is a combination of lower discount rates in the developed countries and higher in the less developed countries.

      • Peter Lang

        The debate on how a proper discount rate for an economic evaluation of a project or an investment program should be established is interesting and the answer appears to be “it depends”.

        One could argue that the discount rate should simply reflect the “time value of money”.

        Is that constant over long periods of time? (Obviously not, as oscillating prime interest rates show).

        Is that constant for all locations? (Again, I’d say that it isn’t. Borrowing money in Greece – or in Mali – may be more expensive than in Switzerland).

        In evaluating long-term global decisions involving “investments” made today and which have estimated “paybacks” in the distant future we run into both problems.

        So there is no “right” answer to the “correct” discount rate to be used.

        Obviously, if we understate the discount rate, we are “skewing” the analysis to favor the investment.

        If we overstate it, we do just the opposite.

        If, at the same time, we understate the size of the investment or overstate the value of the benefits, we are again “skewing” the study to favor the investment.

        If we omit the costs associated with unforeseen negative consequences resulting from the investment, (some of which we cannot even foresee today) we are doing the same.

        “Uncertainty” works against the investment, because it is much greater for the “payback” (which may occur in the far distant future) than for the “investment (which must be made now).

        Etc., etc.

        So my advice would be to use a relatively high discount rate of say 6%, rather than a lower one, in order to take these factors into account.

        The wisest approach would be to run the study using different discount rates, say from 5% to 8%, adding in a 20% contingency for the investment and subtracting 20% from the anticipated future benefits to account for unforeseen negative consequences which might occur.

        If the project still looks good, you have a solid story.

        Max

      • The Lake District: I am sure you realize that much of the Lake District was protected and donated to the National Trust by private parties, primarily landowners and farmers. Beatrix Potter had been active in protecting the area during her life. She donated three thousand acres or more, which she had purchased from the sale of her books. I have heard that one of her conditions was that the existing farmers were to be allowed to continue to live there and farm at very low rent.
        Miss Potter had started basically from scratch. She built that.

      • The whole point of LCOE is to give a linear ranking by levelised cost of the various energy resources.

        But the world isn’t easily ranked linearly. Different people have different needs.

        One way around this vexatious discount-rate argument is to separately list the overnight installation cost, the fixed operating costs (which should include any ongoing installation costs), the variable operating costs (defined to be zero when the plant is not operating), and the decommissioning costs (which are very tricky in the case of nuclear fission plants, less so for nuclear fusion).

        Sometimes just a glance at these four numbers will tell you whether you like that alternative or not, no need for laborious discount calculations centuries hence.

      • Until a week or so ago, Vaughan Pratt hadn’t even heard of LCOE. He had to Google it to find out what it meant. No he’s prattling on as if he’s an expert. But what he is writing is complete and utter nonsense. he knows next to nil about LCOE, what it is used for, when its appropriate, the constraints or anything else.

      • Well, it’s a quiet Sunday morning so I guess another round of Trivial Pursuit with Peter Lang won’t hurt.

        The nice thing about Climate Etc. is that people can make up their own minds as to what is and is not credible.

        As Hamlet’s mother said of the widow protesting her innocence in Hamlet’s little play, “The lady doth protest too much, methinks,” by which she meant that the lady was undermining her defense by being too emphatic about it.

        Even more telling than PL’s strong language however is his weak logic. When I objected a while back that the E in LCOE stood for energy rather than electricity as PL claimed, I supported it by going to Google to show that it returned more hits for the former, my usual practice in such disagreements. Almost as soon as I started to type it Google suggested “energy,” not “electricity,” which I figured people should find pretty compelling.

        Perhaps never having seen this way of using Google before, PL inferred that I must have gone to Google to look up the concept, which he should have seen was an illogical inference.

        Just now I typed each of the following four phrases to Google, each in quotes of course.

        “levelized cost of energy” – 178,000 hits
        “levelized cost of electricity” – 134,000 hits
        “levelised cost of energy” – 22,200 hits
        “levelised cost of electricity” – 36,500 hits

        My conclusion from this is that we’re both right when our respective countries of residence are taken into account. “z” countries prefer “energy” by 4 to 3 while “s” countries prefer “electricity” by 5 to 3. However when the country dependence is removed, 178000+22200 beats 134000+36500, favoring “energy” by 7 to 6. Pipped at the post, Peter.

        Ironically PL cited BREE’s Australian Energy Technology Assessment as support for “electricity.” Not surprisingly this report from an “s” country uses both, but on page 1 where the acronyms are explained it says “LCOE Levelised Cost of Energy”.

        Fun, eh? Another round of Trivial Pursuit next Sunday, Peter?

      • @VP (3 comments earlier): Sometimes just a glance at these four numbers will tell you whether you like that alternative or not

        Also their corresponding trends would come in handy. Knowing that coal power stations are skyrocketing in cost while solar panels are plummeting in price could influence one’s preference.

      • Well, it’s a quiet Sunday morning so I guess another round of Trivial Pursuit with Peter Lang won’t hurt.

        That’s right, more silly, obfuscating trivia by ‘Professor’ Pratt.

        The point the Professor is trying to avoid is that he tries to imply he is an authority on energy matters, but has only a trivial understanding of the matters he talks about. It seems what he does say is regurgitated from the renewable energy advocates, nuclear energy haters, and the Greenies.

        To illustrate how little he knows, he had never heard of LCOE until a week or two ago. He had to Google to find out what it meant.

        He demonstrated his ignorance – and trivia skills – by posting a comments saying in effect “Peter Lang doesn’t even know what LCOE means himself. Peter said ‘E” refers to ‘electricity’, whereas in fact it means ‘energy’.

        How trivial. However, if he’d had any background he’d know LCOE has referred to ‘Levelised Cost of Electricity’ for some 30 years or more. It is now becoming more commonly used to mean ‘Levelised Cost of Energy’ which is more technically correct.

        However, this does not divert from the point that Professor Pratt, is a total BS artist. He craps on about subjects but most of what he says is biased by his far Left ideological beliefs, his lack of objectivity and propensity to divert trivia when he is shown up as a BS artist.

      • Sometimes just a glance at these four numbers will tell you whether you like that alternative or not.

        Also their corresponding trends would come in handy. Knowing that coal power stations are skyrocketing in cost while solar panels are plummeting in price could influence one’s preference.

        I find it amazing that a guy could be given the title of “Emeritus Professor” when he demonstrates he is intent on writing misleading information driven by ideological beliefs – in this case that renewable energy is, or will be in the foreseeable future, a viable alternative to fossil fuels.

        He uses one of the common tricks used by renewable energy advocates to mislead. One of the common tricks is to compare the growth rates of renewable energy with the growth rates of fossil fuels. For example, the renewable energy advocates often argue that the growth rate of fossil fuels is say 10% pa but for fossil fuel is just 1% pa (figures made up to convey the point). If non-hydro renewable energy increases from 100 TWh to 110 TWh and fossil fuels increase from 10,000 TWh to 10,100 TWh, which is the greater increase? The fossil fuels increased by a factor of 100 more than the non-hydro renewables. [the generation figures quoted here are abut right for the world [1]]

        And remember, we’ve been developing solar thermal engines for about 100 years, solar PV for nearly 60 years, and wind power for 125 years [2].

        This is the situation now: Electricity from a largely renewable energy system would cost about 5 times more than from a largely nuclear powered system, would save no more electricity and the CO2 abatement cost would be about five times higher.

        An estimate of the cost of the 100% renewable energy electricity generation system for Australia simulated by UNSW [3] (and some scenarios using some natural gas generation) concluded [4]:

        using costs derived for the Federal Department of Resources, Energy and Tourism (DRET, 2011b), the costs [of the system simulated by UNSW] are estimated to be: $568 billion capital cost, $336/MWh cost of electricity and $290/tonne CO2 abatement cost.

        That is, the wholesale cost of electricity for the simulated system would be seven times more than now, with an abatement cost that is 13 times the starting price of the Australian carbon tax and 30 times the European carbon price. (This cost of electricity does not include costs for the existing electricity network).

        Of course, Pratt, being an ideologue, is not prepared to delve into any of this. He doesn’t really want to find out. He wants to argue for his ideological beliefs, not for the betterment of society.

        [1] IEA Electricity/Heat in World in 2009
        http://www.iea.org/stats/electricitydata.asp?COUNTRY_CODE=29

        [2] Wikipedia Wind turbine
        http://en.wikipedia.org/wiki/Wind_turbine

        [3] Elliston, Diesendorf, MacGill (2012) Simulations of scenarios with 100% renewable electricity in the Australian National Electricity Market
        http://www.sciencedirect.com/science/article/pii/S0301421512002169

        [4] Lang (2012) Renewable electricity for Australia – the cost
        http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/

        Pratt, why don’t you open your mind? Why don’t you read the links I’ve posted here, with an open mind, try to understand them and what they mean, then ask questions, instead of posting your continual trivia and avoiding what’s important?

      • Once again it’s a quiet Sunday afternoon. PL suggests I ask open-minded questions about his links [1]-[4] on the ground that they’re important. Fair enough.

        [1] (IEA) Given that this link contains only static data for 2009, without pointing out that coal plants are skyrocketing in construction costs at the same time as PV panels are plummeting in price, how is it relevant to say 2030 or 2050?

        [2] (Wikipedia) Given that I haven’t been advocating wind energy myself (though neither have I argued against it), how is this Wikipedia article (which like many denizens of CE I’m very familiar with) relevant to anything I’ve been advocating lately?

        [3] (Elliston et al) Very nice recent (March 2012) article from UNSW, thanks for that. But what do you see in it that contradicts anything I’ve been saying? In particular the conclusions of Section 6.5, “Greater PV contribution,” seem to support what I’ve been saying.

        [4] (Lang) I was tempted to ask why cost-analyses by those promoting their own work as “important” should be taken seriously, but that might be taken as counterproductive. Instead let me focus on what the BREE projects by 2040 (p.83) as the cheapest of all energy sources, whether or not renewable, namely solar photovoltaic, PV. Your article begins by complaining that [3] (above) “does not analyse costs.” Your section on PV confines its attention to roof top solar PV (as though that were the whole of PV) and concludes “no attempt has been made to cost this” (referring to roof top solar PV). Why doesn’t your criticism of [3] (that it does not analyse costs) apply equally to your attempt to remedy that in the case of PV?

        I was however fascinated to learn that “new owners are not interested in maintaining the [PV] system; some don’t keep it connected.” I knew the Australian economy was doing well, but it must be doing very well if Australians would rather pay through the nose for electricity than sell it to the utility.

        Let me add a fifth question. Whenever I point out that coal power stations are skyrocketing in cost while solar panels are plummeting in price, why do you always divert attention away from that very important point and refuse to address it?

        Q6: Why do you insist on attacking the person instead of the argument? In particular why do you call everyone who disagrees with you an irrational ideologue, and a hypocrite when they point this out? It wouldn’t earn you many points in a debate.

        Q7: Next Sunday?

      • Vaughan Pratt’s trivia about the meaning of LCOE continues.

        Just to repeat the key point, this trivia session started because up until a couple of weeks ago Vaughan Pratt did not know what LCOE meant. So he has been BS about cost of electricity from solar vs nuclear for at least a year without having the slightest understanding of what he is talking about.

        Having done the Google search to find out what it meant, the first search came up with “Levelised Cost of Energy”. He then used this to try to make a point to readers that it showed I didn’t even know want LCOE meant. This further demonstrates he knows nothing about it.

        It is true, that it has recently become more common to use LCOE to mean “Levelised Cost of Energy”. And it is strictly more correct. But it has been a term defined and used in the electricity industry for as long as I can remember and it stood for “Levelised Cost of Electricity”. For example the OECD/NEA have been producing their LCOE comparisons of nuclear coal and gas for 5% and 10% discount rates since at least the early 1980s (from memory) and probably longer. I cannot recall ever seeing it referred to as “energy” in those days (could be wrong of course).

        However, just to repeat the important point, it is that this silly argument began because I pointed out that Vaughan Pratt has no credibility, IMO, because he is BS artist. He also continually obfuscates, avoids what’s important, breaks off discussion when he is clearly wrong, but never admits when he is wrong. Therefor he has no professional and not intellectual integrity.

      • Vaughan Pratt,

        I’ll respond to your six questions @September 23, 2012 at 7:34 pm later.

        In the meantime, how do you respond to what I consider to be my overarching point of my comments? (see the comment at the end of this thread https://judithcurry.com/2012/09/12/the-costs-of-tackling-or-not-tackling-anthropogenic-global-warming/#comment-242650.)

        The key point in that comment is:

        Uncertainty about the problem is a given; uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be.

      • Vaughan Pratt | September 23, 2012 at 7:34 pm |

        Once again it’s a quiet Sunday afternoon. PL suggests I ask open-minded questions about his links [1]-[4] on the ground that they’re important. Fair enough.

        [1] (IEA) Given that this link contains only static data for 2009, without pointing out that coal plants are skyrocketing in construction costs at the same time as PV panels are plummeting in price, how is it relevant to say 2030 or 2050?

        1. I don’t know what you are talking about. Do you? The IEA link is to world electricity generation (GWh) by technology in 2009 not costs. But your question is about projections of costs two to four decades in the future.

        2. Cost projections are just projections. They are notoriously wrong. Fossil fuels are still the cheapest source of electricity in developed countries where nuclear is too expensive – because of regulation and investor risk premium. The real cost of electricity has been coming down for over a century.

        3. You ask about the capital cost. I’ve pointed out repeatedly the comparison has to be on the basis of cost of electricity (LCOE), not capital cost.

        4. For a proper comparison you have to compare on the basis of the cost of electricity for the full system not just the cost of individual technologies and certainly not on the basis of the capital cost. Quoting the capital cost of solar panels is like comparing the cost of cars on the basis of the cost of the engine. It is silly.

        5. I’ve given you a link to a full system cost (admittedly very simplistic so those who are interested can understand it) here: http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/ I’d urge you to actually try to understand it (including downloading the pdf and reading the appendices). It shows that renewable energy is far more expensive than fossil fuels: the wholesale cost of electricity for the simulated system would be seven times more than now, with an abatement cost that is 13 times the starting price of the Australian carbon tax and 30 times the European carbon price. (This cost of electricity does not include costs for the existing electricity network).

        6. You can download the Excel spreadsheet and change the figures yourself. You’ll find that any amount of renewable energy is expensive.

        7. The Australian mandatory Renewable Energy Target is reported to be adding 30% to retail cost of electricity in Australia. Yet non-hydro renewable energy is contributing just 3% of Australia’s electricity and doing so at huge cost. It also avoids much less CO2 emissions than claimed. Solar power contributes just 0.1% of electricity http://www.ret.gov.au/energy/facts/energy_in_aust/Pages/default.aspx . Your comments demonstrate you do not have a sense of perspective.

        8. Renewables are far more expensive than fossil fuels and nuclear so even if renewables costs are reducing faster now, it is unlikely for many reasons renewables will be cost competitive in the foreseeable future, if ever. This is the reality. Get used to it. There are many reasons why this is so, including: the enormous amount of materials required per TWh of electricity generated; the logistics problems of building and maintaining renewables in remote areas; transmission system costs; energy storage costs (see:
        the section on solar thermal here:
        http://bravenewclimate.com/2010/01/09/emission-cuts-realities/
        Solar PV here:
        http://bravenewclimate.com/2009/08/16/solar-power-realities-supply-demand-storage-and-costs/
        Transmissions costs here:
        http://bravenewclimate.com/2009/09/10/solar-realities-and-transmission-costs-addendum/

        Can I urge you to actually read and try to understand these links rather than just come back with your usual dismissive comments – followed by a while later saying I didn’t answer your questions or you don’t like the author. I’d also urge you to read the comments on these threads and you’ll see the articles have been pretty thoroughly debated and ‘on-line peer reviewed’ by knowledgeable people, many of whom are strong advocates of renewable energy.

        9. Please acknowledge that I’ve addressed this question. Please do not ask it again. I am sick of answering it for you.

        [2] (Wikipedia) Given that I haven’t been advocating wind energy myself (though neither have I argued against it), how is this Wikipedia article (which like many denizens of CE I’m very familiar with) relevant to anything I’ve been advocating lately?

        The link was included to substantiate the point that we’ve been developing wind turbines for electricity generation for 125 years. Why don’t you read the comment and take note of the context instead of making stupid, diversionary comments?

        [3] (Elliston et al) Very nice recent (March 2012) article from UNSW, thanks for that. But what do you see in it that contradicts anything I’ve been saying? In particular the conclusions of Section 6.5, “Greater PV contribution,” seem to support what I’ve been saying.

        Your lack of objectivity is displayed again. If you want to understand what is wrong with what you’ve been arguing (about the viability of renewable energy), read the critique (with an intention to try to understand) here:
        http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/

        And Mark Diesendorf’s response to my critique and the comments on Mark Diesendorf’s response to my critique here:
        http://bravenewclimate.com/2012/02/27/100-renewable-electricity-for-australia-response-to-lang/#comment-151865

        [4] (Lang) I was tempted to ask why cost-analyses by those promoting their own work as “important” should be taken seriously, but that might be taken as counterproductive. Instead let me focus on what the BREE projects by 2040 (p.83) as the cheapest of all energy sources, whether or not renewable, namely solar photovoltaic, PV. Your article begins by complaining that [3] (above) “does not analyse costs.” Your section on PV confines its attention to roof top solar PV (as though that were the whole of PV) and concludes “no attempt has been made to cost this” (referring to roof top solar PV). Why doesn’t your criticism of [3] (that it does not analyse costs) apply equally to your attempt to remedy that in the case of PV?

        I was however fascinated to learn that “new owners are not interested in maintaining the [PV] system; some don’t keep it connected.” I knew the Australian economy was doing well, but it must be doing very well if Australians would rather pay through the nose for electricity than sell it to the utility.

        You ask me why I dismiss you as an ideologue, a zealot and a twit. The content of this question demonstrates why. You take sentences out of context to try to score debating points. You are not interested in trying to understand or discuss the important points rationally. You just want to push your beliefs.

        I was tempted to ask why cost-analyses by those promoting their own work as “important” should be taken seriously, but that might be taken as counterproductive.
        Yes. It is counterproductive. You know that. But it didn’t stop you did it? Twit!

        The reason I’ve referred to this link is because it is the only critique I’ve know of that has costed the Elliston et al. analysis of a renewable energy system that is claimed (wrongly) could supply all our power. Everyone else has just dismissed it as so silly it is not worth spending time on it. There are many other critiques, but none that I know have costed it. And, IMO, it is important to cost these scenarios because only when costed can people recognise how ridiculous is it to mandate, subsidise and advocate renewable energy as a way to cut global CO2 emissions. If you weren’t a zealot, you might be able to appreciate it. BTW, here is Mark Diesnedorf’s response to my critique (be sure to read the comments too, including those by John Morgan and me and many other good comments too): http://bravenewclimate.com/2012/02/27/100-renewable-electricity-for-australia-response-to-lang/#comment-151865

        Your section on PV confines its attention to roof top solar PV (as though that were the whole of PV)
        Clearly you didn’t bother to read the Elliston et al. paper I was critiquing, did you? Clearly you didn’t read my critique either, did you? Clearly you are not interested in trying to understand it are you? Clearly your comments are simply part of trying to promote your irrational beliefs, isn’t it?

        The paper I was critiquing assumes a mix of wind power, solar thermal and solar PV, together with existing hydro and backup from gas turbines running on biofuels, can provide all the NEM’s electricity. The PV is assumed to be on residential roofs in Adelaide, Melbourne, Canberra, Sydney and SE Queensland. That is the assumption that was modelled. That’s what I costed. Elliston et al had good reasons for their assumptions. Read the paper and the critique carefully if you want to understand. If you don’t bother, or you make more of your diversionary or ad hominem comments, you’ll further demonstrate you are not interested in objective analysis, you are just interested in pushing your beliefs.

        Let me add a fifth question. Whenever I point out that coal power stations are skyrocketing in cost while solar panels are plummeting in price, why do you always divert attention away from that very important point and refuse to address it?

        I don’t divert attention away from it and I don’t refuse to address it. I’ve addressed it repeatedly, to the point where I am sick of addressing it and sick of responding to your question given that you continually ignore the answer, apparently because it doesn’t say what you want to hear. I’ve answered it again for the umpteenth time in response to your question 1. Please acknowledge that I’ve answered it and please do not ask again. I am sick of answering your repeated questions and you repeatedly ignoring it.

        Q6: Why do you insist on attacking the person instead of the argument? In particular why do you call everyone who disagrees with you an irrational ideologue, and a hypocrite when they point this out? It wouldn’t earn you many points in a debate.

        I am responding to people who behave as you do in the way they behave. While I at first thought you would be someone I could have a rational debate with, you showed that was not the case and continually made the sorts of comments you accuse me of. You do it to others too.

        After a while I decided to respond in kind. As a result of your behaviour, – your lack of integrity, your failure to admit you don’t know or don’t understand what you are talking about and your propensity to BS – I have no respect for you. I pity your students and the education system that appointed you as an Emeritus Professor.

        I’d suggest you look at your own behaviour before trying to advise others how to respond to you. Perhaps you’d like to set an example and sustain it from now on. If you can demonstrate, over a sustained period in all comments, not just those directed to me, that you are worth taking seriously, I’ll reconsider. In the meantime, IMO, you’re a twit.

        I call people who advocate economically irrational solutions – such as PV and renewable energy – irrational. That certainly applies to you.

      • By the way, what I suggested to Vaughan Pratt was:

        Pratt, why don’t you open your mind? Why don’t you read the links I’ve posted here, with an open mind, try to understand them and what they mean, then ask questions, instead of posting your continual trivia and avoiding what’s important?

        Pratt rephrased this as follows:

        PL suggests I ask open-minded questions about his links [1]-[4] on the ground that they’re important.

        As usual, he didn’t follow the suggestion but rephrased it and then used his interpretation as a basis to make points to promote his beliefs. He did not try to understand or ask genuine question where he doesn’t understand.

        I’ve answered his ten questions but I don’t know why I bother because it is clear he doesn’t want to understand.

        My reply is held in moderation.

      • Peter Lang,

        If this is your overarching point:

        > Uncertainty about the problem is a given; uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be.

        then I don’t see why Vaughan would need to respond to it.

        How is it possible to choose an optimal solution (in terms of certainty!) if you are uncertain about the problem?

        The best one can say about this is that it is pure sloganeering.

      • Peter Lang has a serious psychosis. In three consecutive messages he proceeds to:

        Accuse Vaughan of lacking professional integrity :
        Peter Lang | September 23, 2012 at 8:31 pm |

        Then expects Vaughan to address his overarching concerns :
        Peter Lang | September 23, 2012 at 8:39 pm |

        Then accuses Vaughan of not wanting to understand:
        Peter Lang | September 24, 2012 at 12:30 am |

        This is serious entertainment.

      • Willard,

        I expect you didn’t bother to read the link to understand the context did you? So your comment is based on no understanding and is in no way constructive, is it?

      • Sunday rolls round again (at least in Hawaii—it’s past midnight here and into Monday). I had been planning to follow up on this exchange with Peter Lang from last Sunday:

        @VP: Let me add a fifth question. Whenever I point out that coal power stations are skyrocketing in cost while solar panels are plummeting in price, why do you always divert attention away from that very important point and refuse to address it?

        @PL: I don’t divert attention away from it and I don’t refuse to address it. I’ve addressed it repeatedly, to the point where I am sick of addressing it and sick of responding to your question given that you continually ignore the answer, apparently because it doesn’t say what you want to hear. I’ve answered it again for the umpteenth time in response to your question 1. Please acknowledge that I’ve answered it and please do not ask again. I am sick of answering your repeated questions and you repeatedly ignoring it.

        Having previously waited for over a month with bated breath for PL to address my fifth question (which I’d asked earlier though less often than PL implies), I was very surprised to learn that somehow I’d managed to overlook his response.

        Having no idea where to look for it in his many comments on CE, I started searching for it, and ran across a fascinating exchange two months ago with Pekka Pirilä beginning here where PL starts out very civilly with “Pekka Pirila, You have made some good and balanced points in comments here. However, there are some I disagree with.”

        Pekka responds with “I have spent considerable time in looking at the question of real cost of wind energy in a power system. One of my former colleagues wrote her doctoral thesis on that and a couple of my own students their master’s theses.”

        This led to a very long exchange (dozens of comments) which in the end accomplished nothing but hurt feelings on both sides.

        I could pursue my fifth question, but I fear a similar result. So rather than duplicate effort in that way I’ll settle for briefly summarizing the long Peter-Pekka exchange, as a proxy for the likely outcome of persisting with my question.

        PL responds a bit later here with “Many people have spent a considerable amount of time looking at the question of the real costs of wind energy. Renewable energy advocates get diametrically opposite answers to those who work in the real world. ”

        (To make it fair and balanced I would have responded with “Climate skeptics get diametrically opposite answers to those who work in the real world.”)

        Peter and Pekka then get into an argument over whether it makes any difference using 2009 or 2011 figures for Denmark’s electricity production attributable to wind. Several more exchanges follow, then at this point Pekka says “It’s pointless to go on doing personal attacks. Throwing long lists of references is not a substitute for knowledge” which rather gets at the heart of PL’s modus operandi.

        PL then accuses PP of hyperbole and of not reading what he wrote, concluding with “You clearly do not understand any of this. You are trying to pretend you do. Why not take some of the advice you’ve dished out and admit your mistake and lack of understanding. I’d suggest you should withdraw your comment, and acknowledge that everything I’ve stated in this discussion is correct and substantiated.”

        Several further exchanges follow, with civility tending to zero, until PP, completely out of character, bursts out with “You have forced me to defend the points that I have made. You have also made claims that I don’t know the matter I’m writing on. I must say that I have found the way you have done that really insulting and influenced essentially my views of you as a person.”

        Predictably PL takes this as an insult, as he has done in every instance where anyone has dared to complain about his own insults, and even sometimes with no evident provocation (“Another arrogant, nasty comment from Vaughan Pratt who has a habit of accusing others of being rude. What a hypocrite.”) (While I am often brusque, rude, etc., certainly much more so than Pekka, in that instance I remain mystified as to what could possibly have triggered that little outburst.)

        As they say in Italy and Spain, basta!

  42. Peter Lilley has e-mailed me with a correction to his paper. Where I’ve quoted:

    “the total cost estimate comes from a simple equation embedded in the PAGE2002 Impact Assessment Model. The model is given a range of assumptions of impacts on the GDP of each geographic area for a 2.5C rise in temperature, [which is] deemed to reduce GDP by between 1.5% and 4% – with a median 2% loss. The loss is then set to increase as a power of temperature ranging between linear and cube – averaging 1.3. [35, 65]

    it should read:

    “the total cost estimate comes from a fairly simple equation
    embedded in the PAGE2002 Impact Assessment Model. The model is given
    a range of assumptions of impacts on the GDP of each geographic area for
    a 2.5°C rise in temperature. Thus, the first 2.5°C temperature rise is deemed to
    reduce GDP in India by between 1.5 and 4 times the loss in the EU (where the
    median loss is put at 0.5% of GDP). The loss is then set to increase as a power
    of temperature ranging between linear and cubic – averaging 1.3.”

  43. One issue with “carbon taxes” hasn’t been touched (Unless my skimming of the post & responses has failed).
    Once we’ve repented of our sinful ways, what happens next?
    The UK Goverment has recently hit this problem.
    Motor vehicle duties are based upon CO2 emission/km, 13 bands with higher bands attracting more tax, so called “Zero Emission Vehicles” have a zero cost.
    http://www.direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012524
    Now, us sinners have been repenting & thus the Government’s take from duty, has fallen.
    Plans are now to tax previously zero rated vehicles & to increase rates for others.

    • Adam Gallon,

      A somewhat similar thing happened in Germany. They have put a special tax on nuclear energy and are subsidising their coal mines.

      Amazing what politicians can justify as sound policy, eh?

  44. I’ve added an update at the bottom of the post, based on an email from Chris Hope:

    I notice that this blog post has attracted a large number of comments
    overnight. Unfortunately one of the main quotes in it is wrong, as I
    show in my blog
    http://www.chrishopepolicy.com/2012/09/errors-in-peter-lilleys-critique-of-stern/
    ; if you look in the comments to my blog you will see that Peter
    Lilley has accepted the quote is wrong and will correct it. I was in
    a position to point out the error becuase it relates to my model, PAGE2002.

    Dr Chris Hope
    Judge Business School
    University of Cambridge
    Tel: 01223 338194

  45. In the Northern Hemisphere, where the most of the world population is located, short of building an undersea ‘Chinese wall’ across the Greenland –Scotland ridge, the effect would be equal to an organized pea shoot at a herd of elephants (for the SST read ‘ a pod of whales) .
    http://www.vukcevic.talktalk.net/NA3R.htm

  46. lurker passing through, laughing

    The price of global warming has been a great boon to the rent seekers who claim it is a problem. Not one thing they have profited so nicely from at tax payer expense has done anything to help the public or change the climate.
    So far AGW is all cost and no benefit or impact at all.

  47. I have not read the whole Lilley critique and don’t go into it’s details, but I have studied the Stern review and read many other critiques of it by well known environmental economists as well as critique on the critique by Stern and his coauthors (like this one). Based on all that I agree fully with the introductory remarks of Richard Tol to the Lilley paper. There are so severe problems in the Stern review that it does not present anything directly useful.

    The least controversial reason to say that the results of the Stern review are not quantitatively meaningful is in the observation that they can be changed by a really large factor making such changes in the parameters that nobody can claim to exceed plausible limits. Both the estimate of damages and the cost of mitigation may be changed and they may be changed in opposite directions. With perfectly reasonable methodological changes that don’t contradict information provided by IPCC they can be changed so much that their relative order will change.

    The reason for this is that the Stern review tries to make an analysis that cannot be made. It attempts to make an economic comparison of costs that accrue over many centuries when calculating the costs gets impossible within decades and it compares with costs of mitigation when it’s not known at all how the mitigation could reach the results the comparison assumes. It gets its strong results making choices that cannot be supported by any fundamental understanding.

    It’s still possible that the conclusion is right. It may be that the cost of the damages is much higher than the cost of mitigation, but that conclusion cannot be supported by a seriously faulty review.

    The important question is: How could we get evidence that genuinely supports some particular conclusion on the economics of climate change and its mitigation.

    If we wish to have a direct economic comparison in the spirit of the Stern review we cannot extend it far to the future because we cannot make justifiable estimates of either the costs or the benefits over long periods. If we do on the other hand think that the most important effects are those that take more than 50 years to materialize and perhaps even centuries and if we think that those effects should not be discounted so strongly that they have little effect on the outcome, then the only alternative is to drop the basic approach of Stern review. We must search for some other approaches that could help in comparing alternatives that differ most importantly in distant future.

    The Stern report is totally based on a faulty approach but the other analyses that avoid the technical problems trough the use of high discount rates can also be dismissed exactly because they depend on the use of such a discount rate.

    The problem of choosing the discount rate has been discussed by many and as Tol states in the introduction “This is best illustrated with the discount rate. The discount rate has been debated by scholars since Socrates (and perhaps before that). Some of the brightest people in history have investigated the discount rate. The conclusion of all that effort is disagreement: Many positions are defensible, and any position is debatable.”

    One example of the arguments on discount rate is presented by the supposedly resolved “Weitzman-Gollier puzzle”. The resolution provides support for a rather low discount rate, but is certainly not a definitive final answer. Even so it’s enough to tell that low discount rates cannot be dismissed outright – and that we should indeed consider the future over longer periods than we can use in a direct comparison of costs and benefits and that we need some novel approaches.

    • Holocene economists are substantially unprepared for the putative Anthropocene. When they act like they are, I just tune them out. They sound like junior high football players talking about how they’re going to beat a college team. Ten mountains of verbiage, still not going to happen.

      • The existing economics is not capable of giving definitive answers on the overall question, but disregarding all economics leaves as even more unable for making rational choices.

        When we cannot trust intuition at all we absolutely need analysis if we wish to avoid very wasteful choices or wish to argue for necessary costly choices.

        But where can the valid analysis be found?

      • In order to have a useful economic model, one needs to have reliable data upon which base the assumptions. Imo, the core problem is that there are no models that can be relied upon to describe what future conditions will be.

      • I agree. The standard methods are practically worthless when the data cannot provide reasonable values for the variables the methods are built to use. What I’m asking for is trying to find methods that can take full value of the type of limited information we do have.

        It’s clear that the results cannot be numbers of high precision but even so the results might be superior to everything else that we have available.

        As I have written here and earlier: Intuition does not work, therefore we depend on analysis. Standard analysis does not work, therefore we need a novel analysis.

      • Pekka

        As I have written here and earlier: Intuition does not work, therefore we depend on analysis. Standard analysis does not work, therefore we need a novel analysis.

        I feel that a vehicle for improving analysis is with a commitment to open and collaborative dialog among a variety of stakeholders within a non-hierarchical structure (which requires work explicitly on establishing trust). This would be true, in part, because it would allow for the incorporation of the benefits of intuitive perspectives from outside the typical institutions of standard analysis. We can see the product of such an approach in collaborative urban planning where the science of experts is successfully parlayed into an end result where everyone involved has an investment in the outcome.

        The problem, however, is that to engage in that sort of process, it is necessary for people to believe in that process, explicitly and specifically. They have to be open to trust. As long as people spend so much time pointing fingers and questioning motivations, that will be difficult to bring about. But even more, people interested in achieving a higher standard of analysis must be willing to reject analysis that they may actually be in agreement with if it is based on an analytical process that is mixed with polemics and accusations. (FWIW, as I have said many times, this is where I see Judith’s efforts as not achieving their potential value – as she is willing to reject analysis tainted by polemics only when she disagrees with the conclusions of that analysis.)

      • Joshua,

        Urban planning is much closer to people and it’s clearly an issue where intuition has a major role as well. There are some specific issues related to mitigation and adaptation of climate change where people may also contribute in a similar way. The basic values are also an issue where everyone counts and the political process requires wide participation.

        Estimating how serious the threat of climate change is, determining the appropriate level of action and choosing the best approaches are, however, issues that require analysis. Without that it’s not even possible to argue rationally, only in the all too familiar tribal fashion. Only analysis can give all the important questions the appropriate weight and provide a framework where those, who disagree but are willing to listen to contrary arguments, can proceed.

      • Pekka –

        The distinctions of kind and complexity you draw between urban planning and discussions about the economics impact of climate change and mitigation of climate change are real.

        However, I think it is easy to fall into a trap of seeing those distinctions beyond their true magnitude. For example, urban planning involves complicated economic projections in the face of uncertainty, it involves technical expertise on very complex and not perfectly understood questions such as environmental impact or economic inequality. It involves working with activist groups, specifically, many of whom have diametrically opposed positions (although as in climate change, they ultimately share many goals. Distinguishing between positions and interests is a key component of collaborate planning).

        I don’t think that the parallel is perfect, but I do believe collaborative planning is a useful model. And please understand that in no way would I suggest that the importance of analysis be minimized.

      • Joshua

        Imo it also critical to understand the facts of the real world where different nations view the situation differently from their own perspective. All do not share the view that the priority should be placed on the sucess of the world’s population overall vs. the progress of the individual nation deciding what is in their own best interest.

      • Joshua,

        I agree that urban planning is also complex. Many decisions will have very long lasting and complex consequences. Typical cities in U.S. are very different from most cities of Europe and not only because of long past history. Decisions on transportation infrastructure face the risk of being obsolete soon after the infrastructure is ready or they may change the development in many unanticipated ways.

        The difference is that the issues close to individuals are an equally important and perhaps even more important aspect while they are rather peripheral in case of climate change.

      • Rob –

        All do not share the view that the priority should be placed on the sucess of the world’s population overall vs. the progress of the individual nation deciding what is in their own best interest.

        Yes. That is a real world distinction. But my assumption is that with most people, that is a distinction of position as opposed to a distinction of goal, or perhaps we might say means as opposed to ends.

        Most people in this debate are seeking the most good for the most people. There are inherent trade-offs there; for example, you may have to counterbalance the most good against the most people, perhaps.

        There are some people who simply want to maximize the benefits for their own specific group with no consideration for people who lie outside their group. Some people who fit that description are engaged in the debate. There will be nuance as to how people envision the inherent trade-offs in those two, non-mutually exclusive goals. But I think that we can fairly generalize that most people in the debate are seeking the most good for the most people with an understanding that the concept is inherently abstract.

      • Good point, Pekka.

        Yes, the proximity of the impact is much more tangible with urban planning as opposed to decades-out economic projections of impact from ACO2 emissions. There are certainly ramifications to the discussion process that go along that important distinction.

  48. The Soviet Union was a Command Economy, and failed. The discount rate is meaningless in a command economy.

    The Politics of “AGW”
    http://solarcycle24com.proboards.com/index.cgi?board=globalwarming&action=display&thread=192

    Addresses Energy Taxes: Political Solutions to Carbon-Driven AGW, including the Turnover Tax, Cap And Trade, Carbon Tax, Carbon Credit Card, and Hansen’s Tax And Dividend. In case you missed it, the “Turnover Tax” was the method by which the former Soviet Union reduced demand to meet the supply allowed by the state’s planners.

    Garrett, Major, and AP. “Administration Warns of ‘Command-and-Control’ Regulation Over Emissions.” News. FOXNews.com, December 9, 2009.

    “If you don’t pass this legislation, then … the EPA is going to have to regulate in this area,” the official said. “And it is not going to be able to regulate on a market-based way, so it’s going to have to regulate in a command-and-control way, which will probably generate even more uncertainty.” — Lisa Jackson

    http://www.foxnews.com/politics/2009/12/09/administration-warns-command-control-regulation-emissions/

  49. A fan of *MORE* discourse

    High future discount rates are dumb and the reasons why are short-and-simple.

    A Case History  The ecosystem that is now Yosemite National Park was protected by the great (Republican!) president Abraham Lincoln, via the Yosemite Grant of 1864.

    A Crucial Question  What economic value should we assign to the wilderness protected the Yosemite Grant? What discount rate should we apply to that economic value?

    Stupid Economics  If we assuming a 6% discount rate — as climate-change neodenialists commonly assume — then over the years from 1864-2012, a simple economic calculation “proves” that Yosemite’s value to America has declined to 0.018% of its initial value.   :shock:   :blush:   :shock:

    That’s Why Climate-Change Neodenialism is Dumb!  But that neodenialist economic conclusion is dead-wrong, eh? Because Yosemite’s value to America has increased, eh? And so climate-change economic neodenialism is just plain stupid, eh?   :!:   :!:   :!:

    What, are we going to pave-over Yosemite Valley with Wall-Mart parking lots? No matter how much purely economic sense it makes (in the short term) to do so?   :shock:   :blush:   :shock:

    Our Common-Sense Conclusion  Preserving the health of our planet is a wise investment that yields enduring returns … not a cost to be foolishly discounted.

    Heck, that’s pure common sense, eh?   :)   :grin:   :lol:   :!:

    • Eco-nuts like Fan (just reciprocating his “neo-denialist” slur) routinely assume what they are trying to prove. Just because we’re used to Yosemite’s existence doesn’t mean that alternative paths of land (and wilderness) development wouldn’t have been better. I don’t see Wal-Mart investing in a store so far from habitation, but that spot might have turned out to be perfect as a military training ground, hunting preserve, wilderness therapy camp, or climate-denialist internment facility. Furthermore, the existence of Yosemite as a park may have caused the destruction of other wilderness preserves by the usual mechanism of competition.

      And what is the value of Yosemite in its current form? If it were auctioned off, what price would it fetch? I would guess a lot lower than Fan surmises. It is by no means clear that the National Park system was the best idea for managing U.S. lands.

      • A fan of *MORE* discourse

        Srp, with respect, in regard to the strictly economic rationale for the privatization of America’s National Park system (or its Medicare System, or its Social Security System), please let remind me remind you, and Climate Etc readers, of the wise judgment of a truly great Republican conservative from the 1950s:

        There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas.

        Their number is negligible and they are stupid.

           — Dwight D. Eisenhower

        Eisenhower was a wise stateman, eh srp?   :)   :grin:   :lol:   :!:

      • A fan of *MORE* discourse

        Ooops … linky!!   ;)   ;)   ;)

      • DDE had his good points and his bad points. He is far from an oracle. Your addiction to arguments from authority is unfortunate–note your complete whiff on responding at all to the substance of my comment–but they would work better if you used better authorities and refrained from citing out-of-date mid-Twentieth Century shibboleths. The comprehensive and ongoing failure of the Vital Center “end of ideology” ideology has been apparent to every alert thinker left, right, and center for decades.

  50. GI+GO=X(n)

    Get real?:o)

  51. I think it was perfectly obvious from Day 1 that Stern’s brief was to come up with a study that 1. exaggerated costs of global warming, and 2. severely underestimated the cost of doing something about it. The UK government wanted to scare the people into submission, and to convince them at the same time that taking action really wouldn’t cost them more than a marginal increase in the cost of living

    . I came to this understanding based entirely on summaries published in the media, and not from delving into the details of the study. I think it is obvious that you cannot say that there is a monumental, planetary problem, and at the same time claim that the cost of dealing with it will be minimal – nothing to see here, move along! This pairing simply doesn’t pass the sniff test.

    Since Kyoto, the plan has always been to get taxes and regulations in place – at any level – and then to ratchet them up in the future to choke off all carbon fuel use. Stern’s gross underestimation of the costs of such actions was part of that strategy – he game the UK government the cover it wanted to begin to put the screws to the UK economy. As such, he was simply a tool.

  52. “…For example, urban planning involves complicated economic projections in the face of uncertainty, it involves technical expertise on very complex and not perfectly understood questions such as environmental impact or economic inequality. It involves working with activist groups, specifically, many of whom have diametrically opposed positions (although as in climate change, they ultimately share many goals. Distinguishing between positions and interests is a key component of collaborate planning). ..”

    I have spent many the hours in urban planning classrooms on my MPA and worked a number of years in the local planning department, so have a bit of background here.
    .
    One study I brought up time to time to make my compatriots cringe was between two cities, one in Texas and one elsewhere,. Forget the names right off. The Texas city at the time had no zoning law where the other city had fully developed zoning law.
    .
    There was very little difference in the building mix between the two due to the number of zoning variances giving out by the other city.
    .
    Says something about government planning :-)

  53. Breaking climate news (not on this post’s topic). The NRC has issued a lengthy new report: “A National Strategy for Advancing Climate Modeling.”

    The PDF version is free. See
    http://www.nap.edu/catalog.php?record_id=13430
    and
    http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13430 which says “From farmers deciding which crops to plant next season, to mayors preparing for possible heat waves, to insurance companies assessing future flood risks, an array of stakeholders from the public and private sectors rely on and use climate information. With changes in climate and weather, however, past weather data are no longer adequate predictors of future extremes. Advanced modeling capabilities could potentially provide useful predictions and projections of extreme environments, said the committee that wrote the report. Over the past several decades, enormous advances have been made in developing reliable climate models, but significant progress is still required to deliver climate information at local scales that users desire.”

    Reliable climate models? Surely not.

    • David

      One can hope that they were refering to the advances in local and regional weather/climate models that can provide better insight into conditions 1 to 2 years into the future.

    • I’ve read it, a post is coming soon (hopefully within the next 2 days).

    • lurker, passing through laughing

      That is misleading wording worthy of a govt. bureaucrat or even a Dept. Secretary.

    • “The young specialist in English Lit, having quoted me, went on to lecture me severely on the fact that in every century people have thought they understood the universe at last, and in every century they were proved to be wrong. It follows that the one thing we can say about our modern “knowledge” is that it is wrong. The young man then quoted with approval what Socrates had said on learning that the Delphic oracle had proclaimed him the wisest man in Greece. “If I am the wisest man,” said Socrates, “it is because I alone know that I know nothing.” the implication was that I was very foolish because I was under the impression I knew a great deal.

      My answer to him was, “John, when people thought the earth was flat, they were wrong. When people thought the earth was spherical, they were wrong. But if you think that thinking the earth is spherical is just as wrong as thinking the earth is flat, then your view is wronger than both of them put together.”

      The basic trouble, you see, is that people think that “right” and “wrong” are absolute; that everything that isn’t perfectly and completely right is totally and equally wrong.

      However, I don’t think that’s so. It seems to me that right and wrong are fuzzy concepts, and I will devote this essay to an explanation of why I think so.

      When my friend the English literature expert tells me that in every century scientists think they have worked out the universe and are always wrong, what I want to know is how wrong are they? Are they always wrong to the same degree? Let’s take an example.

      In the early days of civilization, the general feeling was that the earth was flat. This was not because people were stupid, or because they were intent on believing silly things. They felt it was flat on the basis of sound evidence. It was not just a matter of “That’s how it looks,” because the earth does not look flat. It looks chaotically bumpy, with hills, valleys, ravines, cliffs, and so on.

      Of course there are plains where, over limited areas, the earth’s surface does look fairly flat. One of those plains is in the Tigris-Euphrates area, where the first historical civilization (one with writing) developed, that of the Sumerians.

      Perhaps it was the appearance of the plain that persuaded the clever Sumerians to accept the generalization that the earth was flat; that if you somehow evened out all the elevations and depressions, you would be left with flatness. Contributing to the notion may have been the fact that stretches of water (ponds and lakes) looked pretty flat on quiet days.

      Another way of looking at it is to ask what is the “curvature” of the earth’s surface Over a considerable length, how much does the surface deviate (on the average) from perfect flatness. The flat-earth theory would make it seem that the surface doesn’t deviate from flatness at all, that its curvature is 0 to the mile.

      Nowadays, of course, we are taught that the flat-earth theory is wrong; that it is all wrong, terribly wrong, absolutely. But it isn’t. The curvature of the earth is nearly 0 per mile, so that although the flat-earth theory is wrong, it happens to be nearly right. That’s why the theory lasted so long.

      There were reasons, to be sure, to find the flat-earth theory unsatisfactory and, about 350 B.C., the Greek philosopher Aristotle summarized them. First, certain stars disappeared beyond the Southern Hemisphere as one traveled north, and beyond the Northern Hemisphere as one traveled south. Second, the earth’s shadow on the moon during a lunar eclipse was always the arc of a circle. Third, here on the earth itself, ships disappeared beyond the horizon hull-first in whatever direction they were traveling.

      All three observations could not be reasonably explained if the earth’s surface were flat, but could be explained by assuming the earth to be a sphere.”

      • Congrats, it’s physically impossible to say less with more words.

      • Howard funny

      • Don’t sell Mosher short. I’m sure he’ll figure out a way.

      • Thats a quote from somebody famous. not me.
        google it

      • Asimov, it would be impressive if I was a Trekkie. Do you think dime-store philosophy from a second rate writer is profound?

      • Asimov is popularizing what most intellegent people know about the relativity of wrong. I figured it was watered down enough even for someone like you. Apparently, you are stupider than the Lit major he was trying to help. Which puts you beyond all help.

      • Hey, guys.

        You can’t accuse Mosher of excessive verbiage in his posts (this last one was a quote from someone else).

        Others (including me, but especially those like “fan”) use a lot more words (plus smileys).

        Max

      • “Good enough for government work” takes twelve paragraphs for you to boil it down for us morons. The problem is, we all fell asleep before the punchline.

      • Steven Mosher

        Golbally versus locally

        Earth is (almost) spherical globally, i.e. as seen from outer space.

        Locally (to a Nebraska corn farmer or East Texas rancher) is is (almost) flat.

        Max

    • Interesting. Looking forward to a post on this. I think it is great if climate models can be put to use where they can actually do some good.

      Max

      • What you dont say, Max, is that if we have these relatively short term forecasts, they will provide the information we need to validate the models. If we have accurate forecasts for only 1 or 2 years in the future, then it is trivial to collect the requisite information to fully validate the models

      • Best joke of the day……….

        ‘Fully validate the models’

        Hilarious

      • Latimer, you write “Best joke of the day……….”

        I resent this. Of course it is possible to validate ANY model, if you go about it the right way. There are countless models, what are generally classified as “engineering”: models, that have been fully validated. To give two examples, the models which are used to calculate the wind loading of structures, and those that are used to deploy the explosive charges when structures are imploded.

        The thing that is wrong with current climate models, is that there are claims that they have been “validated” when they have NOT been validated. The only way you can validate a model is to have it, consistently, predict the future within the accuarcy of the prediction. The only way you can do this is to have the time period over which the predictions are made, short enough so that enough data can be collected to guarantee consistency.

        If there are climate models that are claimed to be able to predict the future in a time frame of a few years, then, yes, it is entirely conceivable that they can be fully validated.

      • Jim

        That’s correct, of course, that models could be validated (or invalidated) with shorter term forecasts.

        A good example were the models used by James E. Hansen in his (now famous) 1988 forecast of future warming.

        as is known today, these failed miserably, pointing out that Hansen’s models used incorrect assumptions.

        The assumptions on GHG increases (primarily CO2) were correct (in fact CO2 rose by slightly more than Hansen’s maximum Case A), but temperature rose by only half of the projected rate.

        In fact, it rose at the same rate as Hansen’s Case C (no further increase in CO2 concentration after 2000).

        So it appears that the other assumption of Hansen’s models (namely the CO2 temperature response or climate sensitivity) was wrong: in this case overestimated by a factor of 2:1.

        Hansen has gotten shrewder since then. Along with other doomsayers he now makes sure his forecasts are over long enough time periods that this embarrassing outcome will not happen to him again.

        Max

      • @jim cripwell

        Take not offence, dear heart.

        I was not laughing at your concept, but at the idea that the ‘climate modelling community’ would ever allow such a thing to happen. They have spent the last 25 years adamantly resisting any such as beneath their notice, a ‘denier’ conspiracy and something that they are certainly not going to demean their great intellects by getting involved with.

        The absolute last thing they need is having anybody capable of checking their predictions against reality. Which is why they have concentrated on making all their prognostications about climate 100 years hence…long enough for everybody involved to be conveniently dead before the acid test comes through.

        Until recently they could get away with this shameless con with the magic phrase ‘Trust Us, We’re Climate Scientists’. But the shine has gone from that particular magic charm in recent years, and fewer and fewer believe it to be a winning hand.

        I’ll make a small climatological prediction of my own. Hell will freeze over before any climatologist allows his/her model to be so publicly tested against reality as is suggested above.

        Note: I exclude meteorologists from the above chastisement. They, of course, metaphorically put their cojones on the line every time they publish a forecast. But as we all are told whenever we complain that its unusually parky ‘weather is not climate’. The two things are different.

  54. A fan of *MORE* discourse

    Hmmm … if present ice-melt trends continue … and the rate of sea-level rise accelerates (as predicted) … then perhaps … in the words of Bob Dylan … We don’t need a weatherman (or computer model, or statistician, or economist) to know which way the wind blows.   :shock:   :oops:   :shock:

    Because elementary thermodynamics suffices, eh?   ;)   :shock:   :oops:   :shock:   :!:

    • @A Fan of John Sidles

      It seems, however, that the rate of sea level rise is not cooperating with the predictions:

      http://wattsupwiththat.com/2012/09/13/sea-level-acceleration-not-so-fast-recently/

      and is in fact slowing down, not speeding up.

      Looks like your much quoted, but never clearly explained ‘elementary thermodynamics’ may not be giving an adequate explanation after all.

    • A fan of *MORE* discourse

      Hmmm … in fact … YIKES   :!:  … we see (from space) that the earth’s sea level is up two full centimeters in the last 15 months …   :!:   :shock:   :!:

      • date: 2011.2030 sea-level: 37.814 mm
      • date: 2012.4518 sea-level: 58.336 mm

      … provided that we cherry-pick precisely the most recent 15 monthsm that is. :!:   :lol:   :!:

      Still, if this newly-accelerated rise-rate (or anywhere near it) is sustained in the coming decade … and affirmed by ice-mass measurements  … and further affirmed by ARCO sea-level measurements …

      … well then … we won’t need need a weatherman (or too-complicated computer models, or theory-free statistical models, or short-sighted economic models) to know which way the wind blows.   :!:   :!:   :!:

      Because we’ll know from straightforward thermodynamical reasoning, eh Latimer Alder? Won’t that make rational climate-change assessments a whole easier? And that will be good, eh?  ;) :!:   :lol:   :!:

      • Robert I Ellison

        Yeah sure – http://sealevel.colorado.edu/

        I am sure you mean ARGO which measures salinity and temperature.

        Things are hardly likely to get any simpler – see for instance Tim Palmer on global warming in a non-linear climate – can we be sure? You obviously are but that is more a function of scientific illiteracy.

        What if Swanson and Tsonis, Latiff and Keenleyside, Takashi Mochizukia
        and his legion of colleagues are right and the world doesn’t warm for a decade or three? You will be looking especially silly. Oh wait – you already look pretty silly so that wont change.

      • A fan of *MORE* discourse

        Robert I Ellison  I am sure you mean ARGO [not ARCO] which measures salinity and temperature.

        You are entirely correct Robert I Ellison! My typo!   :)   :)   :)

        You are correct too, that if the predicted acceleration of sea-level rise this decade is not seen … and neither are the concomitant ice-melts and sea-warmings … then climate-change scientists will conclude that some crucial piece(s) is/are missing from our present scientific understanding of earth’s energy balance.

        But in that event, scientists will not resort to more complicated dynamical models … neither will they resort to more complicated statistical models  … rather they will first amend our simplest models  — that is to say, purely thermodynamical models — of planetary energy balance.

        Please understand that when scientists press for larger and more sophisticated climate-change models, and for more comprehensive and more accurate climate-change data sampling, this amounts to a vote of confidence that Hansen’s climate-change worldview is essentially correct … such that “all” that remains to be done, its accurately tune its (rather simple) thermodynamical parameters, via more extensive observation and modeling.

        This model-parameter tuning is of course important, eh?   :)   :)   :)

        But it does not alter the simple main thrust: most scientists think Hansen’s energy-balance worldview is scientifically correct.

        Uhhh … unless sea-level rise doesn’t accelerate, that is!   :)   :)   :)

      • As long as we’re in cherry picking mode since 2010 global average temperature fell almost 0.5C (0.455C to be precise)..

        http://www.woodfortrees.org/plot/rss/from:2010/plot/rss/from:2010/detrend:-0.455/trend

      • Robert I Ellison

        ‘…and further affirmed by ARCO sea-level measurements … Some typo there cowboy. Smacks more of scientific illiteracy as I said and the response is bad faith and face saving. Who would be surprised? Rather than delusional thermodynamic models – it is more likely to be determined with data – specifically radiant flux at TOA. So if the missing energy has been found in the ocean – as it has – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=vonSchuckmann-OHC.gif – Then we can then ask what the source of the energy may have been. If you look carefully here – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=CERES-BAMS-2008-with-trend-lines1.gif – you will see that all of the energy increase in the von Schuckmann period happened in the short wave. While at the same time the energy from the sun decreased – http://lasp.colorado.edu/sorce/total_solar_irradiance_plots/images/tim_level3_tsi_24hour_640x480.png – Why is it that this is such a difficult and obscure mystery? I am sure I cant answer that question.

        It is surely not a new idea – very much the same thing was shown in both ERBS and ISCCP-FD data. Here is one from Wong et al 2006 – ‘Reexamination of the Observed Decadal Variability of the Earth Radiation Budget Using Altitude-Corrected ERBE/ERBS Nonscanner WFOV Data’ from the Journal of Climate – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=Wong2006figure7.gif

        So if the whole thingy falls down about your ears because you have been a hell of a lot too simplisticlly and absurdly over confident – despite many much more clever people being less confident – you will not have helped the cause of addressing emissions at all. You will deservably be a laughing stock – indeed are a laughing stock now – but that will not help at all.

      • Robert I Ellison

        Ah typo..

        ‘…and further affirmed by ARCO sea-level measurements … Some typo there cowboy. Smacks more of scientific illiteracy as I said and the response is bad faith and face saving. Who would be surprised? Rather than delusional thermodynamic models – it is more likely to be determined with data – specifically radiant flux at TOA. So if the missing energy has been found in the ocean – as it has – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=vonSchuckmann-OHC.gif – Then we can then ask what the source of the energy may have been. If you look carefully here – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=CERES-BAMS-2008-with-trend-lines1.gif – you will see that all of the energy increase in the von Schuckmann period happened in the short wave. While at the same time the energy from the sun decreased – http://lasp.colorado.edu/sorce/total_solar_irradiance_plots/images/tim_level3_tsi_24hour_640x480.png – Why is it that this is such a difficult and obscure mystery? I am sure I cant answer that question.

        It is surely not a new idea – very much the same thing was shown in both ERBS and ISCCP-FD data. Here is one from Wong et al 2006 – ‘Reexamination of the Observed Decadal Variability of the Earth Radiation Budget Using Altitude-Corrected ERBE/ERBS Nonscanner WFOV Data’ from the Journal of Climate – http://s1114.photobucket.com/albums/k538/Chief_Hydrologist/?action=view&current=Wong2006figure7.gif

      • Robert I Ellison

        I give up…

      • A fan of *MORE* discourse

        Do not give up Ralph I Ellison!   :)   :)   :)

        Ironically, a crucial “typo” was entered by you yourself … specifically, before you entered Some typo there cowboy you yourself entered a malformed HTML string that has had the unfortunate effect of deranging all the remaining posts here on Climate Etc. Yikes!   :(   :(   :(

        Please take greater care Ralph I Ellison! … I will now enter characters that (perhaps) will mitigate these bad effects!

        > > > >>> \ > > >>>

        ———————-

        Regarding energy-balance entropy-gradient climate models, this class of models has of course for many decades provided our primary understanding of climate change.   :smile:   :grin:   :lol:   :!:

        The following classes of model are good and useful, of course …

        • purely historical models, and/or
        • purely statistical models, and/or
        • computational fluid dynamical models, and/or
        • purely economic models.

        But none of these are primary, eh?   :!:   :!:   :!:

        There’s a reason why the basic thermodynamical principles associated to energy and entropy are called “The First Law” and “The Second Law” — it is because no natural system, and no artifical system, have ever been observed to violate the Two Laws.

        This astounding track-record of infallibility cannot be asserted of historical, statistical, computational, or economic models, eh Ralph I Ellison?   :smile:   :grin:   :lol:   :!:

        So perhaps James Hansen and his colleagues are wise to rest their climate-change predictions so largely upon the Two Laws!   :smile:   :grin:   :lol:   :!:

      • A fan of *MORE* discourse

        Ah well … it appears that the HTML problems of this thread originate in malformed HTML code within the 6:29 am comment by Ralph I Ellison; this comment probably needs to be deleted (along with its 6:30 am duplicate).

      • David Springer
  55. We are not going to get CO2 concentrations to drop until they reach 1,000-ppmv. Not enough people believe the scare stories because they sound crazy and paranoid. Taxing carbon will not quiet the doomsday folks, they will just move the goals and resume bleating. Also, no evidence will ever convince the WUWT crowd and the tea-party politicians that climate change is bad enough to tax carbon.

    Conceptually, it seems that providing tax breaks and subsidies for capital investment in low and no carbon durable goods would work better. That way, more money would go to people who invent and build better *stuff* rather than to credit-traders and public employees who increase overhead burden.

    10-years ago, there was no private space transportation industry. One silly $10M prize helped to kick-start numerous companies, one of which has sent cargo to the ISS. I bet a $10B prize to build a 100MW zero carbon power plant would kick-start an energy revolution.

    More carrots and honey, less stick and vinegar.

    • But carrots and honey are not attractive policy levers to those who ‘wish to do us good’.

      It is not the goodness itself that gets them the buzz, it is the knowledge that they are smiting the wrongdoers that gives them their feelings of smug self-satisfaction. And their deluded perception that they somehow occupy the moral high ground

      Hence their disquiet at the ability of fracked natural gas to reduce carbon emissions. Rather than rejoice that their supposedly desired goal has come about (but by other means than their interventions). they must find ways to berate the frackers for something….hence the mendacious Gasland propaganda film. Perversely they are therefore campaigning to shut down the only technique that has been actually shown to have the effect they say they want to achieve

      And never forget the infamous 10:10 ‘advert’. Which was, of course, little more than a thinly disguised warmist snuff movie. Who among the activist audience didn’t get a secret thrill as the unbelievers/heretics/scecptics/denier were dispatched at the touch of a button? And which of them didn’t wish it was themselves with their thumb on the trigger?

      Sticks and vinegar are the only acceptable tools in the activists mindset.

      • This suggestion is not meant to sway catastrophists nor denialists. As I pointed out, these folks will never be happy. “Never forget” is the mantra that keeps middle eastern tribes and religious sects in perpetual war.

        I was wrong about Mosher… you said much less with more words.

      • Perzackly, Latimer. It’s not the ‘problem’, it’s the ‘symptoms’ that they hate. Consumerism, waste, selfishness, greed – code for people having a better standard of living, including no longer saving string like in the Depression or growing vegetables because they were too expensive or scarce to buy.

        Selfishness and greed (apparently newly introduced to the human genome by mysterious means) mainly refer to behaviour of which the writer does not approve. You or I may not approve either, but as a rationale for increasing regulation and repression, it’s pretty thin.

    • Howard,

      I certainly agree with you on this point:

      More carrots and honey, less stick and vinegar.

      However, on the next point, we already have what you are asking for and we’ve had it to at least 40 years. You say:

      10-years ago, there was no private space transportation industry. One silly $10M prize helped to kick-start numerous companies, one of which has sent cargo to the ISS. I bet a $10B prize to build a 100MW zero carbon power plant would kick-start an energy revolution.

      You can buy a 2 GW nuclear power plant for $10B (i.e. 20 times more than what your prize being offered for).

      I suggest, you should rephrase your prize. I’d suggest you offer 1 billion for small, modular factory built and refuelled nuclear power plants for sizes up to 300 MW. You might offer awards for best in categories such as $/W, lowest LCOE ($/MWh) ability to follow load changes, life between refuelling, security, suitability for use in underdeveloped countries, etc.

      However, getting focus on developing the technology is not our main problem, in my opinion. I believe the main problem is getting the NRC to change its focus from safety to cost of electricity. The safety of nuclear plants is already 10 to 1000 times safer than what we accept now as safe enough – i.e. coal generation. By demanding such high levels of safety for nuclear we are making it too expensive to compete. So we are blocking a technology that is 10 to 1000 times safer than what we use now and, by so doing, preventing us having safer, cleaner and potentially cheaper electricity. What we are doing is irrational in the extreme.

      So, what should we do?

      I believe the main focus needs to be on educating the anti-nukes whom it is possible to get through to – the moderate Greenies and environmentalists who are open to pragmatic solutions. It is those people, like George Monbiot, who can educate their followers. We need to achieve a mass movement to change the opinion of the open-minded anti-nukes.

      Once we have a majority of Greenies and environmentalists supporting nuclear power, then the politicians, media and public will support it.

      Then the politicians can remove the impediments that are making nuclear power far more expensive than it could and should be.

      Then NRC’s mandate and culture will need to be changed – from top to bottom. A revolutionary change in NRC focus and culture is needed, not an evolutionary change. NRC needs to change its focus from primarily focused on safety to primarily focused on cost of electricity, with appropriate safety. (Cost of electricity includes cost of safety, just as cost of safety is included in cars, roads and air travel.) [I recognise this comment is likely to draw some impassioned responses from the usual suspects].

      Once we’ve fixed all that, then the prize you suggest will be much more effective than it can be at the moment. At the moment, not matter what designs and demonstration plants are produced, we can make little progress because progress is block by public revulsion of all matters nuclear, by paranoia and radiation phobia.

      • Peter, Thanks, you are right, I pulled the prize #’s out of the air.

        Your suggestions for changing the view of nuclear power is good theoretically, however, the promotion of education on issues is usually a recipe for delay and failure. Right now, even with Dr. (Death Train) Hansen supporting nuclear, it is not politically popular. Although, as the baby-boomer generation fades away, our kids will not bring so much baggage to the debate.

        We can’t wait for the NRC and political perceptions of nuclear to evolve before we take action. We will then end up debating the debate like so many in the climate wars live for.

      • Howard,

        I hear you. i am as frustrated as you, and so are many other informed people.

        You say:

        We can’t wait for the NRC and political perceptions of nuclear to evolve before we take action. We will then end up debating the debate like so many in the climate wars live for.

        So what is a realistic solution. I’ve been involved in this debate for 30 years. Progress is extremely slow. I don’t see the solution coming from offering prizes like you suggest, but I could be wrong. Maybe that could be the circuit breaker needed to get people to focus and actually debate the pros and cons. Perhaps that’s what’s needed.

      • Peter:

        Thanks, I don’t know the answers, but I do know that taxation of carbon won’t fly in the US or China. It will be interesting what happens in California with the new carbon tax coming online soon. The state is already counting the future general fund revenue.

      • Let me tell you about frustration. Back in the 1960’s we were promised nuclear energy would make electricity “too cheap to meter”.

        A funny thing happened on my way to pay my electric bill last month. It’s not too cheap to meter and the cheapest way to generate it is still with fossil fuel providing the heat.

      • Our Friend, the Atom.
        ================

      • The u6 unemployment rate in California is already at 22%. The price of gasoline is already the highest in the nation. Fortunately… for some at least … a society in decline isn’t necesarily a bad place to live. But, it can be expensive for all but tourists who can very easily escape the reach of liberal fascism by just going home.

      • “Progress is our most important product.” Fukushima, anyone?
        Didn’t cost Jack.

    • Howard

      You prognosticate:

      We are not going to get CO2 concentrations to drop until they reach 1,000-ppmv.

      This is a very astute prediction.

      The WEC has estimated in 2010 that there are just enough optimistically inferred fossil fuel resources on our planet to arrive at a level of around 1,030 ppmv CO2 concentration in the atmosphere.

      In effect, the WEC estimates tell us that we have used up 15% of all the fossil fuels that were EVER on our planet, leaving 85% to go. [Other estimates are much lower (Hubbert, etc.), but this is the most optimistic estimate or remaining reserves I have seen.]

      The first 15% got us from an estimated 280 ppmv to a measured 392 ppmv, so the next 85% should get us to 1,030 ppmv WHEN THEY ARE ALL 100% USED UP.

      [At the current rate of usage, this should last us around 250-300 years.]

      So, by definition, your forecast is correct that at 1,000 ppmv we will have no other choice but to “get our CO2 concentrations down”.

      Max

      • Max, the 1,000-ppmv is not astute, it’s a guess (like sayin the wurld is flat) assuming the developing world will consume like the developed world in future: nothing is ever at the “current rate of usage”. This guess also assumes the fossil fuel reserve predictions you paraphrase are low by at least an order of magnitude. IMO, 1,000-ppmv CO2 will be reached by 2100.

  56. Harold Pierce Jr

    ATTN: Max_OK

    The BC carbon tax is not “revenue neutral to the government” as we were told when it was started on June 1, 2008.

    Recently former finance minister Kevin Falcon has inadvertantly revealed that elimination of the fossil fuel carbon tax will result in a loss of about a billion dollars of revenue to the government.

    To get us to accept the carbon tax, the BC goverment bribed us by lowering slightly personal, business and corporate income tax rates and by giving carbon tax rebates only to individuals and families earning less than $100,000 per year.

    The carbon tax on nat. gas is presently about 30% of the commodity price.

    The BC government lied to us about the true purpose of the carbon. If we have a cold winter this year, the revenue from the carbon tax on nat. gas and heating oil will soar.

    • So British Columbia’s revenue-neutral carbon tax was just a cunningly crafted scam after all, just as everyone thought (including the smarter supporters).
      It’s really there to hoodwink the public, raise the tax take, and fund leftist policies.

    • No tax by itself is revenue neutral. That’s so trivial that arguing on that basis makes no sense at all.

      What can be revenue neutral is a wider policy that includes addition in some taxes and reductions in some other forms of government income. Even that cannot ever be “pay neutral” from the point of view of all tax payers, otherwise it would not be a change at all (except perhaps by name if some existing charge is renamed as tax without any change in it’s cost).

      So far is clear. Every claim about revenue neutrality makes sense only when the whole is discussed and that means that the alternative must also be fully specified, not only the single detail of carbon tax. Thus the discussion on the specific case of BC requires that the alternatives are stated in full including the compensatory changes.

      Personally I do believe that the total government revenue will in the long run depend mostly on other factors (i.e. mainly the government expenditure and dominating political attitudes) than the structure of taxation. Thus I do believe that the other factors will ultimately make the introduction of carbon tax essentially revenue neutral. In the short term governments may introduce new taxes to increase revenue as the politicians may favor that in comparison with increases in other taxes or reductions in expenditure, but as I wrote above, I do think that in long term this effect disappears.

      All taxes have distributional effects and the distributional effects are the real reason for favoring some taxes over others. The carbon tax is introduced to favor those who have a small “carbon footprint” over those who have a larger one when other factors influencing the taxation lead to equal taxes. That’s the whole idea.

      • Pekka Pirila,

        You are repeating what you said previously, frequently, and I refuted each time, for example on this thread (and also on other threads each time you raised these same arguments for fuel taxes as an alternative to carbon taxes of ETS): https://judithcurry.com/2012/07/10/between-tribalism-and-trust/#comment-218186

        You continue to miss some key points:

        1. Fuel taxes are not carbon taxes and cannot substitute for carbon taxes as a means to reduce global emissions. To reduce global emissions using carbon pricing mechanisms, carbon taxes or ETS has to be applied global and properly coordinated. That is well known frequently made clear. We’ve covered the reasons for those statements on earlier threads.

        2. The compliance cost for a Carbon tax or ETS would be hugely costly and, therefore, hugely wasteful (see my previous comment on this thread https://judithcurry.com/2012/09/12/the-costs-of-tackling-or-not-tackling-anthropogenic-global-warming/#comment-239037 )

        Thus I do believe that the other factors will ultimately make the introduction of carbon tax essentially revenue neutral.

        3. This statement ignores the fact that the compliance cost for measuring and monitoring CO2-eq emissions will be hugely expensive (as explained in the comment linked in #2 above). Therefore, it cannot be revenue neutral. In the limit the, the compliance cost equals or exceeds the revenue. How can that be revenue neutral? It is just a great big fat tax on the economy for no benefit/ It is massively destructive.

      • Peter

        You seem to be the only one who cannot accept that compliance costs need not be large. That they need not be is shown by very wide experience, your contrary arguments have been and continue to be totally unjustified.

      • The link I posted above is near the start of our argument on that thread. I meant to post the the link to a comment near the end of that thread (the argument continued on other threads too). Here is the link I meant to post:
        https://judithcurry.com/2012/07/10/between-tribalism-and-trust/#comment-218778

      • Pekka Pirila,

        That they need not be is shown by very wide experience,

        Rubbish!.

        There is no international CO2 tax or ETS. The fact it has not been implemented after over 20 years of international negotiations and there is no sign of it being implemented demonstrates that those actually making policy have a far better understanding of the realities than you do.

        Furthermore, you have previously acknowledged that ETS and CO2 taxes are unworkable in reality, so you back-peddaled and began advocating fuel taxes instead (using Finland as an example). However, no country in the world is seriously advocating fuel taxes to do the job carbon pricing is intended to do (other than a few on the fringe who haven” much of a clue).

      • Pekka Pirila,

        That they need not be is shown by very wide experience,

        Rubbish!.

        There is no international CO2 tax or ETS. The fact it has not been implemented after over 20 years of international negotiations and there is no sign of it being implemented demonstrates that those actually making policy have a far better understanding of the realities than you do.

        Furthermore, you have previously acknowledged that ETS and CO2 taxes are unworkable in reality, so you back-peddaled and began advocating fuel taxes instead (using Finland as an example). However, no country in the world is seriously advocating fuel taxes to do the job carbon pricing is intended to do (other than a few on the fringe who haven” much of a clue).

      • Pekka @ 1.52, off the top of my head (I’m a bit too tired to chase the evidence), I’d say that there is a widespread long-term tendency for governments to ratchet up their share of GDP. If they find a justification for raising revenue, as in the CAGW case, I would be very surprised if it were fully offset by cuts in other revenue sources or programs. The Scandinavian governments have particularly high shares. In Australia, the last three Labor governments (1972-75, 1983-96, 2007-on) have left (or will leave) a massive increase in government debt, with all that entails, as well as higher shares of GDP of government revenue and spending. They then bagged the successor government for taking necessary corrective action. (In fairness, the 92-96 rise was post-Bob Hawke; and the Coalition let things blow out in the mid-00s).

        The propensity of politicians and bureaucrats is to extend their empires, those who see virtue in reducing the size of government tend to suffer for it.

      • Faustino,
        It’s certainly true that the share of government expenditure varies greatly from country to country as does the share of income transfers which are also largely funded by taxes. It’s also true that there’s all the time pressure to allocate more funds to a wide list of “absolutely necessary services”. The Nordic governments have, however, in recent years understood that this trend must be stopped and also been rather successful in fighting the tendency of only adding and never cutting expenditure.

        Politicians and the government must find ways to fund the expenditure and the transfers and there are limits on how much funds can be collected. The question is then whether the ultimate limit applies rather to the total or specifically to some forms of taxation.

        My view is that the limit comes ultimately from the total amount and that the politicians and officials will find some way to allocate that to the variety of taxes and charges. They can reach and ultimately will reach the same overall level with carbon tax and without. I don’t claim that this is the only possibility but that’s the way I see as likely to materialize.

      • Faustino and Pekka

        Here is one study of US GDP vs. government spending, showing that this has increased from around 7% to over 40% over the period 1903-2012:
        http://www.usgovernmentspending.com/us_20th_century_chart.html

        This chart shows where the money is going
        http://www.usgovernmentspending.com/percent_gdp

        In the UK this has been between 40 and 50% of GDP since the 1960s, reaching around 47% today.
        http://www.guardian.co.uk/news/datablog/2010/apr/25/uk-public-spending-1963

        UK figures include regional and local spending, which is excluded in USA figures.

        Breakdown (excluding regional/local to put both on same basis):

        Total government spending (excl. local/regional):
        USA 3,800 B$ UK 620 B£
        as % of GDP USA 40% UK 47%
        as % of govt. spending
        welfare/govt. pensions USA 28% UK 26%
        health USA 18% UK 17%
        education USA 15% UK 9%
        defense USA 15% UK 6%
        interest on debt USA 5% UK 7%

        The individual categories may be slightly different for the two nations, but apparent is that the USA spends more on “defense” and “education” than the UK.

        The largest spending in both countries goes to “welfare/govt. pensions” and “health”.

        Max

      • judith curry

        Someone “locked in” the italics button upthread.

        Can this be “undone”?

        Thanks

        Max

      • A fan of *MORE* discourse

        It appears that the HTML problems of this thread originate in malformed HTML code within the 6:29 am comment by Ralph I Ellison; this comment probably needs to be fixed or deleted (along with its 6:31 am duplicate).

      • If carbon taxes are used to fund subsidies for capital improvements that reduces energy use and funds zero carbon energy projects, then only about 75% (25% to admin and 50% to political crony corruption) will be wasted instead of 100%.

        With the crony bribes funneled back into the right mix of political campaigns, then the carbon tax just might be sustainable.

  57. So Stern’s only error is to variously over- and under-estimate by factors of hundreds in order to reach his desired advocacy conclusions. Oh, and taking as a given the advocacy science of the IPCC.

  58. A few points apropos the discussion here:

    First, it would seem pointless to be considering carbon taxes when the last thing any society needs is more taxes – more money to the bureaucratic kleptocracy and the AGW profiteers and (political action, not research) grant farmers . We are already taxed far more than enough to cripple our woeld economy and create needless hardships for billions of people. If nothing else, if taxes were cut severely enough, priorities might force the AGW “researchers:” to look elsewhere for their living, as opposed ro robbing the taxpayere-slaves so they can live high on the hog from their political action (NOT research) grants. If we could CUT taxes enough there could be no support for the sort of twaddle represented by AGW.

    Excessive taxation, which we are already well into without adding more with a carbon tax, effectively makes people the slaves of the grasping, power-rabid bureaucracy. The mentality of the people who want to do these things is no diufferent from that of the slave masters of the past: You earn the fruits of your labor, and I’ll take them and use them for my own frivolous and perverse purposes (such as chasing the CO2 bogeyman, and in the meantime wrecking the economy and condemning millions of people in poorer countries to avoidable deaths).

    Incidentally, those “liberals” (translate REACTIONARIES) who want to raise taxes to the stratosphere contrast most notably again with the true liberals of the US Civil Rights era – remember, JFK cut taxes, rather than rasing them. That’s true liberalism – letting the people keep as much as possible of the fruits of their labor.

    Let’s all stop wasting time talking about how to chase the CO2 bogeyman – e.g., carbon taxes – and get up on our hind legs and take a firm stand against this malicious and destructive nonsense that is the AGW “theory”.

    Dr Curry – I fail to see what is off topic when what we are really talking about here is politics, not science, with respect to global warming. There IS NO SCIENCE for global warming – ithere is only the worst, most hypocritical sort of bull@#$%&*!! having the effrontery to call itself “science.”

    You can kick me off this blog if you like for saying this – there are plenty of other places I can go with my message on AGW – but I repeat my earlier comment that I believe you are doing a disservice by being equivocal about the falsity of AGW. It is too obvious that you do know it is false, and I think it is incumbent upon you to use your position of authority to take a firm stand and be one of the leaders against the evil crusade of AGW and the evil empire of its scaremongering exponents.

    There is no middle ground here – either one wants to preserve and extend liberty and prosperity, or one wants to do away with them – as the AGW crows is all too obviously intent on doing. Being neutral is objectively pro-doing away with them.

    Sincerely,
    Chad Wozniak, PhD, MBA

    • Chad, the Australian government is increasingly handicapping productive industry while offering more and more (so far unfunded) sops to non-productive voters. I had a letter on this in The Australian 0n 29 Sept:

      Economic prosperity depends on facilitating competitive industries, not propping-up non-viable ones. Yet government policy is often perverse. We see in the case of mining that the government, rather than ask how it can foster mining investment and output, has impeded it with excessive environmental, planning and industrial relations regulations while seeking to use it as a cash-cow to fund unproductive spending such as car industry subsidies and costly, inappropriate, school buildings (“A pity prosperity depends on mining,” 27/8).

      Governments do not create wealth, but the services they choose to provide depend on wealth creation. If you want resources to look after the poor and unwell, you must first ensure that you look after the wealth-creators rather than handicap them.

  59. Tomas Milanovic

    The discount rate in Stern’s study failed because it had to fail.
    One has just to look at the history of the discount rate and where are the domains where it is useful.

    The discount rate was introduced in investment decisions to measure the preference for the present. It was a constant in human economy that a gold piece today was worth more than a gold piece tomorrow and the close cousin of the discount rate which is the interest rate has existed probably since the moment when 2 stone age men decided to trade an axe today against a deer tomorrow.

    That’s why the common definition of a discount rate is the long term bond interest plus inflation plus risk premium.
    In this definition one clearly understands what factors one has to take in account in order to obtain a numerical value.

    – long term bond interest is perfefectly defined and massively traded. This is however the only factor of the discount rate which is so objective. Of particular interest is that about 20 years is the maximum horizon. On top different countries have different interests what automatically leads to different discount rates.

    – inflation is an unsolved problem. It has not a crisp unique definition and it is impossible to forcast inflation rates for many years ahead. Here too it varies wildly from one country to the other.

    – risk premium is the most arbitrary one. There is little litterature but international companies always define a matrix of risk premium by country. Here the idea is that Iraq has a high premium while Switzerland has a low one.

    From this short reminder how the discount rate is defined and used in practice for REAL investment decisions in the REAL world with REAL money it appears clearly why Stern failed.

    Nobody has ever used a discount rate for very long periods and a century or more is definitely absurd.
    A single universal discount rate doesn’t exist. On the contrary it varies with the country.
    So supposing that we talk about US “investors” putting money on a project in Bangladesh (to prevent sea rise in 1 century), taking 1% discount rate means that a 100 year bond would bear 1% of interest, inflation is 0 during 100 years and the risk premium (e.g the risk that the forecast is wrong) is also 0.
    This is clearly absurd.

    An interesting book going over 2000 years of interest rates and investments is : http://www.amazon.ca/History-Interest-Rates-Sidney-Homer/dp/0471732834
    It is readable by non specialists but is not a 20 pages paper so needs some time to invest.

    • Thanks, Tomas, very clear, and I’ll follow-up the link.

    • Thanks, Tomas. This is a great refresher for me.

      Readers should note that after spending a long time condensing complex issues into short and simple briefs for politicians, my posts tend to lack exposition and tact. I am always grateful for the work of posters like Tomas and Faustino and Peter, who supply the foundations for my ‘headlines’. But, I have done the work previously, and greatly appreciate the patience and thoroughness of posters whose style and content is different to mine.

  60. A fan of *MORE* discourse

    Tomas Milanovic “It was a constant in human economy that a gold piece today was worth more than a gold piece tomorrow”

    Tomas, is that not why President Abraham Lincoln was wise to appreciate, as early as 1864, that Yosemite Valley tomorrow is worth more than Yosemite Valley today?

    That is why we now appreciate that high future discount rates are stupid, even disaster-inducing, eh?

    Thank you for helping Climate Etc folks to appreciate this, Tomas Milanovic!   :)   :)   :)

  61. A fan of *MORE* discourse

    Judith, your recent predictions are being lumped together with those of Joe Bastardi and Anthony Watts in a scathing analysis on Neven’s Arctic Sea Ice (ASI) weblog titled Joe Bastardi found a cherry.

    It is evident that the 2012 ice-melt was shocking large, and that the 2012 freeze-up will be shockingly late, and consequently that the Climate Etc prediction of August 25 “there will be an earlier than usual sea ice minimum this year, with the minimum not getting much lower” was entirely wrong.

    A stark difference is, that the Climate Etc wrong prediction was founded upon reasoned skepticism, whereas for reasons that ASI discusses, Joe Bastardi’s and Anthony Watt’s wrong predictions were founded upon unreasoned (neo)denialism.

    There’s a big difference, eh? And the reasoned skepticism of Climate Etc (and the graceful expression of that skepticism) is greatly appreciated … even when that skepticism proves to be wrong!   :)   :)   :)

    • The Skeptical Warmist (aka R. Gates)

      Fan, your comments are on target, and while I did spend some time blasting what I call the “Three Arctic Sea Ice Stooges” (Bastardi, Goddard and Watts) over at Neven’s site, I specifically did not mention Judith, because she certainly knows far more about the Arctic then the Three Stooges combined, and thus at least her skepticism has a scientific foundation. That she was wrong about how she expected the remainder of the melt season to progress after the end of August is not surprising, as few would have expected what we witnessed this year.

      • I did not make a prediction about the arctic sea ice. I have a comprehensive post on this coming next week.

      • The Skeptical Warmist (aka R. Gates)

        Looking forward to that post. But you should be aware that some people are interpreting what you said back on August 25th as a prediction when you said:

        “So I would suspect that there will be an earlier than usual sea ice minimum this year, with the minimum not getting much lower.”

        Of course we now know this was quite wrong, but again, my posting at Neven’s was not about your comments, but about the real nonsense that Goddard, Watts, and Bastardi are posting.

        I do look forward to seeing what you have to say about the what has transpired in the Arctic this summer. I hope you speak at least a bit to the importance of the confirmation of PIOMAS volume estimates by CryoSat-2’s data this summer and the critical role that the very thin ice and low volume has played in this summer’s dynamics. We know that the big cyclone back in early August was able to chew up the ice pretty well because it was so thin and also brought a lot of warmer and saltier water up from deeper levels. But to be clear, the sea ice was running low before unusually strong summer Arctic cyclone ever hit.

        Finally, it would be interesting to get your perception of the “so what” of it all, especially perhaps your thoughts of the research that Dr. Francis is doing at Rutgers related to the effects of low sea ice on weather patterns blocking events, etc. and perhaps even some thoughts about the effects on methane releases.

      • “Of course we now know this was quite wrong, ”

        What was the date of that quote?

      • ???

        What was the date of the comment she made on August 25th?

      • A fan of *MORE* discourse

        Here is what happened on-and-after August 25 (day 238)  …

        (note that the graphic is mouse-over interactive)

        Day 238:  2.59 x 10^6 km^2
        Day 255:  2.24 x 10^6 km^2

        An astounding decline, eh? And *still* trending-down (as of today).   :shock:   :oops:   :shock:

      • fan

        Summer is the warm season.

        Always has been.

        Some are warmer than others locally.

        Always have been.

        Max

      • curryja | September 14, 2012 at 9:59 am |

        People must be used by now to having their statements about the Arctic and forecasting misquoted.

        Remember where Girma | May 13, 2012 at 10:40 am | linked to the outright lie at WUWT that claimed Mark Serreze forecast an ice-free Arctic by the end of September 2012, when all Serreze really did was assert that we may see the 2007 record substantially beat?

        (Normally, I don’t give WUWT my own traffic, but when someone disguises the link it’s hard to avoid that den of infamy, error, blatant falsehood and illogic, and I can’t stop others who enjoy wallowing in that sort of thing from going.)

  62. And on the topic of not tackling AGW: here’s an older clip from Canada — which can hold a federal election fifty times faster than the USA — about its own dithering. http://www.youtube.com/watch?v=KnKYFo12njQ

    If a country 50 times more efficient at running elections than the USA can squander time and resources on climate policy so absurdly, what hope is there for paralysis-by-analysis congressionally-constipated America?

    Throw the issue to the people directly, on the daily level. Privatize the carbon cycle, and let the people vote with their purchases and the fees they demand for CO2 use as to what price they put on their own air.

    We can guesstimate that’s at about the $300/ton level, and we can figure that the average US citizen is being robbed of over $200 a week from the dividends of their share of the carbon cycle.

    The cost is very real, and hits your wallet enormously. Someone’s getting away with your money. That someone has already gotten rich doing it for decades. Are you going to keep laying down for that, like a doormat?

    • This Canadian sees it different. 50 years ago the world had a lot of trouble feeding 3 billion people. Today we are feeding 7 billion and doing a much better job of it.

      The only thing that can be said about CO2 is that we should be very thankful it has warmed the planet and made plants grow faster, because otherwise the 4+ billion people that have been born* over the past 50 years would not have had enough food to survive. (*actually closer to 7 billion births in 50 years once deaths are considered)

      If you have been born in the last 50 years, then you very likely owe your existence to CO2. Without the added CO2, there would not have been enough food to feed you and you would not be here creating more CO2.

      • fredberple

        You make a good point.

        On another thread this topic was discussed.

        Over the period 1970-2010 we had the following observed changes:

        1970
        Population: 3.7 billion
        Global temperature (HadCRUT3 anomaly, 10-year average): -0.12 °C
        Atmospheric CO2: 324 ppmv
        Global yields of major crops (million tons corn/wheat/rice): 788

        2010
        Population: 7.0 billion (up 1.9x)
        Global temperature: +0.42 °C (up 0.54 °C)
        Atmospheric CO2: 390 ppmv (up 66 ppmv or 20%)
        Global yields of major crops (million tons): 1912 (up 1124 Mt or 2.4x)
        In addition, global starvation rates were down significantly (and life expectancy statistics showed a global increase).

        So your statement appears to be spot on.

        Max

      • Oddly, one could attribute these improvements to the ‘ban on DDT’ that coincided with this same period, and with as much plausibility.

        Waving around correlations and jumping up and down as if one has proven anything is poppycock.

        We don’t accept it in climatology.

        We don’t accept it in physics.

        Why do you embrace it so enthusiastically?

        http://www.youtube.com/watch?v=bIf3oxjZESM

      • Bart R

        Attributing higher life expectancy to the DDT ban is about the silliest thing I have ever heard.

        It is generally known that the DDT ban in 1972 resulted in a sharp increase in infant mortality from malaria, with an estimated 50 to 60 million total deaths from the disease after the ban. The ban has since been lifted by WHO.

        Come up with a less absurd example, Bart. This one has zero “plausibility”.

        Max

      • Bart R

        Further to my earlier post.

        Since WHO lifted the ban on DDT in 2006, its use has again increased (and malaria deaths have decreased in those regions, where DDT has been reintroduced).

        From the 2011 world malaria report of the WHO:
        http://www.who.int/malaria/world_malaria_report_2011/9789241564403_eng.pdf

        IRS [indoor residual spraying] with WHO-approved chemicals (including DDT) remains one of the main interventions for reducing and interrupting malaria transmission through vector control in all epidemiological settings. In 2010, 73 countries, including 36 in the African Region, recommended IRS for malaria control and 13 countries reported using DDT for IRS.

        A total of 185 million people were protected by IRS in 2010, representing 6% of the global population at risk. The number of people protected by IRS in the African Region increased from 10 million in 2005 to 78 million in 2010.

        Just to clear up your apparent confusion on DDT and malaria.

        Max

      • Max, the WHO has never lifted any ban on DDT because it never had one in the first place! It has always taken the position that DDT is the cheapest way of controlling malaria where it is prevalent, while warning of its considerable hazards and recommending minimizing its use.

        Regarding the 1972 ban you’re talking about, that ban has never been lifted either. On the EPA’s website is an ancient (1972) article DDT Ban Takes Effect. It says,

        “The peak year for [DDT] use in the United States was 1959 when nearly 80 million pounds were applied. From that high point, usage declined steadily to about 13 million pounds in 1971, most of it applied to cotton. The decline was attributed to a number of factors including increased insect resistance, development of more effective alternative pesticides, growing public and user concern over adverse environmental side effects–and governmental restriction on DDT use since 1969.”

        (So DDT use was already declining dramatically over the decade 1959-1969 without any government intervention. On February 10th, 1970, almost a year before he founded the EPA, President Nixon announced, “we have taken action to phase out the use of DDT and other hard pesticides.” So the decision to phase out DDT in the US was taken even before the EPA existed, and moreover by a Republican president.)

        Earlier in that 1972 EPA article:

        “An end to the continued domestic usage of the pesticide was decreed on June 14, 1972, when William D. Ruckelshaus, Administrator of the Environmental Protection Agency, issued an order finally cancelling nearly all remaining Federal registrations of DDT products. Public health, quarantine, and a few minor crop uses were excepted, as well as export of the material.”

        (What I couldn’t tell from this is whether “public health” included use of DDT to control malaria in the US. But since malaria wasn’t a US problem anyway, the question is moot.)

        As a fount of information, Max, you’re reliably unreliable.

      • Vaughan –

        (What I couldn’t tell from this is whether “public health” included use of DDT to control malaria in the US. But since malaria wasn’t a US problem anyway, the question is moot.)

        Malaria was mostly stamped out in the US prior to the use of DDT. Use for vector control was not banned. The ban was for use for agricultural purposes – because it was well recognized that there were significant problems associated with that usage.

        That Max would call himself a “rational skeptic” and still push the meme about a DDT ban “killing tens of millions” is rather amusing.

      • @Joshua: That Max would call himself a “rational skeptic” and still push the meme about a DDT ban “killing tens of millions” is rather amusing.

        To give Max some credit, I overstated “reliably unreliable.” Although the US continued to export DDT it failed to make clear that other countries should not follow its example in banning it where malaria was prevalent.

        Many countries where it was prevalent failed to realize that the appropriate cost-benefit analysis showed DDT to be what they needed. Imitating the greatly admired US, they condemned many millions to death.

        Several decades ago my sister and her husband both came within a hair’s breadth of dying of malaria after returning to Australia from a malaria-ridden country. They lay in bed in NSW getting progressively weaker, thinking they’d come down with the flu and that they’d get over it soon enough. Eventually my mother in QLD, a doctor who’d travelled to malaria-ridden countries, realized they had a more serious problem than the flu, flew down to NSW and whisked them off to a hospital. The hospital said they’d have been dead within two days. They are still alive today.

        Who to blame? The US? The countries that felt they should always imitate the US? The WHO for not recognizing the problem and taking a stronger stand from the outset on the acceptability of DDT as the only effective control on malaria?

        I have no idea. In a situation like that it’s hard to apportion blame.

      • Vaughan –

        Many countries where it was prevalent failed to realize that the appropriate cost-benefit analysis showed DDT to be what they needed. Imitating the greatly admired US, they condemned many millions to death.

        I’m getting kind of tired of arguing about this. If someone investigates this issue thoroughly, he/she will quickly first run up against the problem of mosquito resistance that was already shown to exist before international agreements were signed to eliminate usage of DDT for agricultural purposes – which had a well-established track record of comprising basically indiscriminate usage in harmful ways.

        In fact, it was more than just a more benign influence of US policy – there is also some evidence of funding withheld unless DDT usage was stopped, but all of this lies on top of the ramifications of continued misuse leading to widespread resistance.

        In order for DDT to be used to good effect, it has to be used carefully within a well-established public health infrastructure. Many of the countries that we’re speaking about lacked such resources. There were countries where widespread spraying of DDT continued and malaria rates remained high. There are a variety of factors that contribute to varying levels of efficacy of DDT usage depending on a number of relevant variables. Even the deterrent effects of DDT are complicated by various contradictory pluses and minuses.

        The “deaths of millions” meme is facile. If you, or anyone, can show me an analysis that controls for the effect of resistance – bring it on. Despite engaging with people many times on this issue, not one person has shown me that sort of controlled study. In fact, I remember reading an epidemiological analysis (I can’t find it again) that showed that the resistance aspect may well have led to more deaths if usage had continued as it had prior to the supposed “ban.”

        All of this does a real disservice to what could be learned by the real mistakes and untended consequences of the policies related to DDT and other similar public health policy debates or perhaps even policy debates related to other issues.

        If the issue were truly about deaths due to malaria, if there really were the political will to get things done, providing funds for proper housing, education, draining swamps, etc – the practices that eliminated malaria in the US, would be paramount, along with properly controlled usage of DDT and other forms of vector control appropriately targeted to specific areas. DDT was not a magic bullet – except in the arguments of people who seek to exploit the “deaths of tens of millions” to score points in blog wars or as a proxy for other political battles.

        Those people are not “rational skeptics.” Far from it. A “rational skeptics” would step up and deal with such an obvious issues as the aspect of mosquito resistance before reaching facile conclusions. The invitation is open to any “rational skeptic” who wants to step up to the plate.

      • Robert I Ellison

        Seriously – you need to do a little more than rewriting history. DDT is a long lived organic – and should never be used outside. But is not a threat to people at all.

        ‘15 September 2006 | Washington, D.C. -Nearly thirty years after phasing out the widespread use of indoor spraying with DDT and other insecticides to control malaria, the World Health Organization (WHO) today announced that this intervention will once again play a major role in its efforts to fight the disease. WHO is now recommending the use of indoor residual spraying (IRS) not only in epidemic areas but also in areas with constant and high malaria transmission, including throughout Africa.’

        http://www.who.int/mediacentre/news/releases/2006/pr50/en/

        ‘CDC’s predecessor, the Office of Malaria Control in War Areas, had been established in 1942 to limit the impact of malaria and other vector-borne diseases (such as murine typhus) during World War II around military training bases in the southern United States and its territories, where malaria was still problematic. The center was located in Atlanta (rather than Washington, DC) because the South was the area of the country with the most malaria transmission.

        These efforts were so successful that at the end of the war and at the founding of CDC, one of the initial tasks was to oversee the completion of the elimination of malaria as a major public health problem.

        The National Malaria Eradication Program was a cooperative undertaking by state and local health agencies of 13 southeastern states and the Communicable Disease Center of the U. S. Public Health Service, originally proposed by Dr. L. L. Williams. The program commenced operations on July 1, 1947. It consisted primarily of DDT application to the interior surfaces of rural homes or entire premises in counties where malaria was reported to have been prevalent in recent years. By the end of 1949, more than 4,650,000 house spray applications had been made. It also included drainage, removal of mosquito breeding sites, and spraying (occasionally from aircrafts) of insecticides. Total elimination of transmission was slowly achieved. In 1949, the country was declared free of malaria as a significant public health problem. By 1951, CDC gradually withdrew from active participation in the operational phases of the program and shifted its interest to surveillance, and in 1952, CDC participation in operations ceased altogether.’

        http://www.cdc.gov/malaria/about/history/elimination_us.html

      • Malaria was largely wiped out in the US before DDT was used. Draining swamps and building housing had a significant impact.

        DDT for indoor usage is not without problems. In addition to the aforementioned complications about the deterrent effect, there have also been problems with people not wanting to spray DDT in their homes.

        As one of a variety of tools, it is no doubt effective. I think there is little doubt that mistakes made led to under-usage. The question is what would have happened absent the supposed “bans,” – because that is the basis of the “killed tens of millions” claims. Those claims are made to exploit the deaths of millions to score cheap political points.

        Again – the invitation goes out to anyone who wants to show freakin’ evidence about what would have happened absent the supposed “bans,” with controlling for the reality of resistance.

      • Robert I Ellison

        I don’t know Joshua – I wasn’t there. What the CDC said was. ‘The program commenced operations on July 1, 1947. ‘It consisted primarily of DDT application to the interior surfaces of rural homes or entire premises in counties where malaria was reported to have been prevalent in recent years. By the end of 1949, more than 4,650,000 house spray applications had been made’. So really it proved effective in one country – and resistance is begging the question. If resistance was not a problem in the US – why would it be elsewhere? But perhaps your question is possible to answer since its re-endorsement by the WHO in 2006 – we shall see what the renewed application will bring. We are obviously much better at managing resistance these days.

        The the political point is that a effective, cheap and safe insecticide was stopped for reasons to do with the 1st overwhelming success of the benighted green movement. Worth pointing out that Rachel Carson was almost totally wrong on the science?

      • Joshua, are you saying that if the US had not banned DDT, malaria-ridden countries would not have followed the US example of using DDT to bring malaria under control?

        Swiss scientist Paul Müller won the Nobel prize in 1948 “for his discovery of the high efficiency of DDT as a contact poison against several arthropods.”

        The elimination of malaria in the US (1947-1951) was largely accomplished by aerial spraying of DDT. “By 1951, CDC gradually withdrew from active participation in the operational phases of the program and shifted its interest to surveillance, and in 1952, CDC participation in operations ceased altogether.”

        If not genocide, it is at least extreme cruelty to imply to other countries that just because you no longer need DDT, having successfully used it to eliminate malaria, therefore neither do they today even though they have not yet eliminated malaria.

        The big tragedy is that no one intentionally conveyed this message. It was a misunderstanding on a planetary scale.

      • @RIE: Worth pointing out that Rachel Carson was almost totally wrong on the science?

        Well, it’s true that DDT thins the eggs of gallinaceous birds less than of raptors, because the former are both heavier (takes longer to absorb DDT) and shorter-lived (not enough time to absorb a dangerous amount of DDT). The “disproofs” of her “science” were done on gallinaceous birds. Got any other examples?

      • Robert –

        I don’t know Joshua – I wasn’t there.

        Put your skeptical thinking cap on. What were the trends in malaria prevalence, and the geographical areas where malaria was widespread, prior to the introduction of DDT?Counting the number of households eventually spayed with DDT does not address those questions. One would think that as a skeptic, you would consider those questions before you draw conclusions about the degree to which usage of DDT was responsible for eradication of malaria in the US.

        DDT was used primarily in the US in a limited area, concurrent with troops returning from the war. It was an very effective tool as used in the US – but there were other tools that were crucial as well. The point is that the usage of DDT in the US has become a talking point often mischaracterized by “skeptics” as they exploit the “deaths of tens of millions” to score cheap political points.

      • Vaughan –

        Joshua, are you saying that if the US had not banned DDT, malaria-ridden countries would not have followed the US example of using DDT to bring malaria under control?

        No. That is not what I’m saying. I am saying that countries followed the US’s practices of banning use for agricultural purposes, and not for vector control, for solid reasons. I’m also saying that those policies had some unfortunate consequences w/r/t usage for vector control – partly because other countries were “following” the US – but also for more direct reasons, such as problems with funding if countries continued to use DDT or agricultural purposes.

        None of this speaks to the cynical exploitation about projections about what might had happened if the practice of largely indiscriminate spraying in countries that lacked the proper infrastructure and resources had continued – without controlling for the issue of mosquito resistance.

        If not genocide, it is at least extreme cruelty to imply to other countries that just because you no longer need DDT, having successfully used it to eliminate malaria, therefore neither do they today even though they have not yet eliminated malaria.

        This statement reflects ignorance of what was or wasn’t “implied.” The international agreements were focused on the use of DDT for agricultural spraying, not vector control. Your logic is also predicated on a misunderstanding about all of the factors that resulted in eradication of malaria in the US, and how the full picture distorts a view of what would have produced better results in other countries. While DDT could certainly have been used more effectively than it was used, it was never a magic bullet. Considering effective policies w/r/t DDT usage would require consideration for a variety of factors – for example, the relative effectiveness of DDT as a magic bullet as opposed to helping countries drain swamps, build better housing, etc. Remember, you can’t spray the walls of houses that don’t have walls.

        There are many factors that contributed to the spread of malaria. Under-use of DDT was one of them. The question is what would have happened if poor usage of DDT – such as was prevalent prior to the international treaties limiting its usage – had continued? You simply can’t answer that question if you don’t control for the reality of mosquito resistance. Any attempts to draw conclusions about the counterfactual of what would have happened if things were different are, by definition, facile if they don’t include such considerations. Why does this need to be pointed out over and over?

      • @Joshua: The international agreements were focused on the use of DDT for agricultural spraying, not vector control.

        Clearly the local governments should all have familiarized themselves with the international agreements. What are the odds even today?

      • Joshua, you may have a better big picture of DDT than me—it certainly seems like you’ve thought about it a lot. Wikipedia would appear to support your viewpoint in this article, which says “By the time DDT was introduced in the U.S., the disease had already been brought under control by a variety of other means. One CDC physician involved in the United States’ DDT spraying campaign said of the effort that ‘we kicked a dying dog.’ ”

        As a Wikipedia editor myself with some 5000 edits under my belt, I’m well aware of how warring factions on Wikipedia can sway back and forth, with one side of an argument getting the upper hand for a while. In this case my reference above to the article Elimination of Malaria in the United States (1947 — 1951) came not from Wikipedia but from CDC’s own website, which I consider a more reliable source than the one-sentence opinion of a single CDC physician quoted in a Wikipedia article. Here’s what the CDC itself has to say about its own program.

        CDC’s predecessor, the Office of Malaria Control in War Areas, had been established in 1942 to limit the impact of malaria and other vector-borne diseases (such as murine typhus) during World War II around military training bases in the southern United States and its territories, where malaria was still problematic.The center was located in Atlanta (rather than Washington, DC) because the South was the area of the country with the most malaria transmission. These efforts were so successful that at the end of the war and at the founding of CDC, one of the initial tasks was to oversee the completion of the elimination of malaria as a major public health problem. The National Malaria Eradication Program was a cooperative undertaking by state and local health agencies of 13 southeastern states and the Communicable Disease Center of the U. S. Public Health Service, originally proposed by Dr. L. L. Williams. The program commenced operations on July 1, 1947. It consisted primarily of DDT application to the interior surfaces of rural homes or entire premises in counties where malaria was reported to have been prevalent in recent years. By the end of 1949, more than 4,650,000 house spray applications had been made. It also included drainage, removal of mosquito breeding sites, and spraying (occasionally from aircrafts) of insecticides. Total elimination of transmission was slowly achieved. In 1949, the country was declared free of malaria as a significant public health problem. By 1951, CDC gradually withdrew from active participation in the operational phases of the program and shifted its interest to surveillance, and in 1952, CDC participation in operations ceased altogether.

        So the question might be phrased, is nearly five million house spray applications over a 30 month period involving 13 southeastern states “kicking a dying dog”? In the movies the dying bad guy often turns out to be dangerously alive after all and could use another five million bullets. Similarly for a cancer supposedly in remission. Arguably the “dying dog” analogy is biased to the left.

      • @Joshua: If the issue were truly about deaths due to malaria, if there really were the political will to get things done, providing funds for proper housing, education, draining swamps, etc – the practices that eliminated malaria in the US, would be paramount, along with properly controlled usage of DDT and other forms of vector control appropriately targeted to specific areas.

        This is an excellent point, more so I think than your arguments about resistance or your “DDT was not a magic bullet” which WHO would dispute, given that it’s their favorite chemical vector control for mosquitoes.

        A “rational skeptic” would step up and deal with such an obvious issue as the aspect of mosquito resistance before reaching facile conclusions. The invitation is open to any “rational skeptic” who wants to step up to the plate.

        Well, according to Peter Lang I’m an irrational ideologue, but I’ll try to step up to the wicket anyway.

        If someone investigates this issue thoroughly, he/she will quickly first run up against the problem of mosquito resistance that was already shown to exist before international agreements were signed to eliminate usage of DDT for agricultural purposes.

        The article DDT Highly Effective Against Resistant Mosquitoes, which appeared in Medical News Today in 2007, summarizes a just-published study by the Public Library of Science. The study compared three residual insecticides, DDT, alphacypermethrin, and dieldrin, for three factors: as an insecticide, an irritant, and a repellant.

        Dieldrin was found to be the most effective insectide, killing 92% of mosquitoes that made contact. However it had no action as either an irritant or a repellant. But natural selection ensures rapid build-up of resistance to such an effective insecticide, rapidly undermining its effectiveness given that its toxicity is all it has to work with.

        Alphacypermethrin both kills and irritates mosquitoes. Natural selection quickly builds resistance to the killing action, but much more slowly to the irritation action which doesn’t bias selection as much as killing does. Irritants cause the irritated mosquito to beat a hasty exit.

        DDT is all three: an insecticide, an irritant, and a repellant. As a repellant, the first whiff discourages the mosquito from even entering the hut, making DDT a kind of chemical mosquito net. To quote from the article (boldface mine),

        Even where resistance to its toxic action exists, DDT still provides protection through its repellent and irritant actions. These findings have implications for controlling malaria, the biggest killer of African children. Most malaria infections are acquired when Anopheles mosquitoes enter homes at night and bite people. Anopheles mosquitoes are known to exhibit stronger behavioral responses to DDT and other chemicals than Aedes aegypti, so the transmission protection DDT provides against malaria is likely to be greater than 73%.

        Furthermore, because it irritates and repels, it would seem to me that it may spare many a mosquito from an untimely death, which itself can slow the rate of build-up of resistance.

        Those are my principles, if you don’t like them I have others. (G.Marx)

      • Vaughan –

        Your cautions about using Wikipedia as a definitive source are well-taken. As was the other main point of that last post.

        I have read from other sources, as well, that malaria was substantially marginalized in the US prior to the use of DDT. That doesn’t mean, however, that without the use of DDT – particularly given the issues surrounding military camps and returning vets post-war – the prevalence rates would have dropped as they did from the period post-1947.

        But that was never my intent. My point was that to say that DDT usage eradicated malaria in the US is facile. It is more complicated than that. Similarly, saying that international treaties limiting DDT usage to vector control resulted in the “deaths of tens of millions” is facile. And to use that claim as a cudgel with with to bang an anti-enviromentalist drum is exploitative of the deaths of tens of millions for the sake of partisan/political expediency.

        IMO, there are lessons to be learned about over-reach w/r/t DDT policy. There are cautionary lessons about the unintended consequences of regulatory action. Those are perfectly valid points. But those valid points get lost in the tribal bickering, and those lessons can’t be effectively leveraged if they go along with a binary mentality that leads people to conclude that because there are some unintended consequences from regulatory schemes, all regulation is bad. All actions are likely to have unintended consequences. Getting stuck on that fact as a fundamental ideological focus seems banal to me – so I like to deepen discussions when it seems that ideology is bubbling to the surface.

      • @Joshua: I like to deepen discussions when it seems that ideology is bubbling to the surface.

        How has that worked for you?

      • How has that worked for you?

        It works fine for me.Sometimes it provides amusement. Sometimes I learn something. Sometimes it has lead to interesting discussions. Most of the time it generates hostile responses. I expect that. It is no different with the issue of climate science than it is with any other political controversy.

        Regardless of the quality of the responses, I get to explore my own thinking, find holes in my reasoning or my opinions, etc.

  63. Where is the proposed $300/ton going to go? Who’s pockets are going to be filled by this money? Does everyone on the planet pay $300? What about those that make less than $300/year? Who will collect the money? Who will make sure that corruption doesn’t take hold?

    What about the folks in Africa and other dirt poor places? Will they have to pay $300/ton to burn coal to try and lift themselves out of the stone age? Won’t this pretty much ensure that they will live their lives in poverty?

    What about those companies and politicians using REDD to grab land in Africa and other 3rd world locations? They will want to be paid $300/ton to capture CO2 with their forests. Then they will turn around and sell the trees, paid for by us. All the while the extra CO2 is helping the trees grow.

    What about the dirt poor folks in Africa and the rest of the world that are getting throw off their land as a result of REDD? Paying people $300/ton to capture carbon is an huge incentive to steal land from indigenous peoples. Their homelands suddenly becomes very valuable to the unscrupulous.

    While else do you think REDD is being heavily promotes by politicians and the UN? Well connected folks stand to make trillions of dollars, while the poor lose their homelands. Same process that displaced the North American Indian, carried out on a global scale, all paid for with CO2 blood money.

  64. the initial price would be closer $300/tonne

    A simple rule of thumb is $20/ton for coal yields a fuel cost of about 1 cent/KWh. The differential between the ‘levelized cost’ of the cheapest energy generation method(Combined Cycle Gas)) and solar PV is about 15 cents. The difference between coal and solar PV is 12 cents/KWh.

    What purpose does a $300/ton carbon tax serve other then to generate tax revenue?

    http://www.eia.gov/oiaf/aeo/electricity_generation.html

    *There are regional differences.

    • harrywr2 | September 14, 2012 at 8:01 pm |

      Yeah, as a tax that would be a terrible and pointless thing.

      As a price paid directly to the owners of the carbon cycle determined by the law of supply and demand, per capita, in paychecks by reversing payroll deduction for instance as http://www.youtube.com/watch?v=ntGvDSh97sA explains is their stance, it’s called privatization, it brings the nation back to the idea of Market Capitalism, it reduces the government’s interference in the democratic decision-making of individuals, and it stops the free riding theft of value from all citizens.

      What is it about capitalism, democracy and reducing government that you hate?

    • harrywr2,

      The effect of the Australian carbon price (carbon tax to 2015 then ETS thereafter) is shown very clearly for each technology in the charts here (one chart for each technology; for 40 renewable, nuclear and fossil fuel technologies):
      http://bree.gov.au/publications/micro/index.html
      The charts show the projected LCOE with and without the projected Australian carbon price. See figure 4.9 for example:
      Figure 4.9: Pulverised coal supercritical plant based on bituminous coal, LCOE, NSW

    • harrywr2,

      I posted a response (question) regarding your statement: “A simple rule of thumb is $20/ton for coal yields a fuel cost of about 1 cent/KWh.” here:
      https://judithcurry.com/2012/09/12/the-costs-of-tackling-or-not-tackling-anthropogenic-global-warming/#comment-239657

  65. Faustino –
    You couldn’t be more right about what makes for prosperity – and for improving the lot of the less fortunate among us. Unfortunately, this sort of economic literacy is a rare thing these days, what with the preachings of CRL to tax, suppress, de-develop and undo and destroy the achievements of the last 236 years.

    harrywr2 –
    The purpose of the $300/t carbon tax is to steal more of the fruits of their labor from productive people, and to finance the machinery of regulatory oppression.

  66. Harrywr2,

    A simple rule of thumb is $20/ton for coal yields a fuel cost of about 1 cent/KWh.

    Could you please explain the calculation of that figure?

    My simple calculation is $20/tonne for coal yields a fuel cost of $20/MWh (2c/kWh) (based on an emissions intensity of 1 t CO2/MWh.

    Australia’s existing black coal fired power stations have an emissions intensity of around 1 t/MWh (sent out) and the brown coal fired power stations about 1.4 t/MWh (sent out). Here are some examples from the larger power stations in NSW and Victoria
    http://www.aemo.com.au/en/Electricity/Settlements/Carbon-Dioxide-Equivalent-Intensity-Index :

    Black coal (NSW):
    Bayswater = 0.992
    Erraring = 0.999
    Liddell = 1.081
    Mt Piper = 0.935
    Vales Point = 1.032
    Wallerawang = 1.045

    Brown Coal (Victoria):
    Hazelwood = 1.527
    Loyang A = 1.215
    Loyang = 1.242
    Yallourn = 1.422

    Therefore, taking Yallourn for example and applying a carbon tax of $20.t CO2 would increase the wholesale price of electricity by 1.422 t/MWh x $20/t = $28.44/MWh

    That is the wholesale cost A round rule of thumb for Australia is that the average retail price would increase by about 1.5x the increase in the wholesale price. So a carbon tax of $20/tonne could be expected to increase the average retail price by about 1.5 x $28.44/MWh = ~$43/MWh

    • Peter Lang | September 15, 2012 at 2:01 am |

      Yeah. The whole tax thing is a bad deal. I really feel for Australians struggling under their tax burdens.

      However, as a fee and dividend, your calculations are overly simplistic and unrealistic.

      You’re discounting, for example, that 70% of Australian consumers would come out ahead with a fee-and-dividend system immediately on the imposition of fees and the payout to each Australian per capita of dividends.

      You’re missing that coal is much more expensive for consumers than the price signal indicates, so consumers are making an undemocratic decision with every buying decision because the Australian government is hiding that data at the point of sale. How do we feel about hiding data?

      You’re leaving out the progressive creep of Free Riding as cycle after cycle the detriment of this arrangement to the Commons increments and the money stolen by Free Riders compounds.

      And let’s face it, wind is cheap in Australia, and technology like http://www.makanipower.com is just around the corner. Plus solar, likely moreso.

      • No one is seriously considering James Hansen’s ‘fee and dividend’ idea – except a few people who know little about the matter but who will happily pontificate on subjects outside their area of expertise (e.g. James Hansen).

        The issue of the compliance cost, including the cost of emissions measurement and reporting, doesn’t go away whether you use carbon tax, ETS, ‘fee and dividend’ or any variations of these.

        Have you estimated what the compliance cost of any of the carbon pricing schemes will be if implemented globally to the standard that will ultimately be required? If not, you might get some hints here: http://www.onlineopinion.com.au/view.asp?article=13578

      • Your comments about renewable energy display ignorance of the subject. I know you are an ideologue, so nothing can be explained to you unless it supports the beliefs of your ideology.

      • Bart has been harping on about ‘the carbon cycle’ as though it is a real thing, like a rock or a river, for ages. It only exists in his fevered brain. It is a concept, with no intrinsic value. The only way it can have value is by coercive measures, like fictitious ‘carbon credits’, which had to be legislated into existence – because they don’t exist in any other sense.

      • johanna: Bart has been harping on about ‘the carbon cycle’ as though it is a real thing, like a rock or a river, for ages. It only exists in his fevered brain. It is a concept, with no intrinsic value.

        The fevered brain of Wikipedia is yet another ideologue that thinks the carbon cycle has enough value to be worth mentioning.

        OMG, ideologues are coming out of the woodwork: the US National Aeronautics and Space Administration seems to believe this crap. Fancy that: the organization that landed people on the Moon turns out on more careful inspection to be just a bunch of ideologues. Who’d have guessed?

        We’re all caught up in a huge conspiracy run by The Matrix. Run for your lives, take shelter below, take revenge later. Illegitimi non carborundum

      • Bart and Wikipedia believe that ‘the carbon cycle’ exists outside someone’s fevered brain and is worth money? Well, then QED.

        The stupid, it hurts.

      • @johanna: Bart and Wikipedia believe that ‘the carbon cycle’ exists outside someone’s fevered brain and is worth money? Well, then QED.

        You left out NASA. NASA is stupid, QED

      • Robert I Ellison

        Yes we struggle under our 30% tax take. At least we don’t have 33% and a trillion dollas deficit. And don’t forget that the revenue neutral carbon tax is predicated on the US joinong us by 2016. WTF you say? How can they be such idiots?

      • RIE: How can they be such idiots?

        By reelecting Obama?

        RIE: At least we don’t have 33% and a trillion dollars deficit.

        Lucky country.

        (But this is just another example of what social critic Donald Horne was referring to when he wrote, “I have had to sit through the most appalling rubbish as successive generations misapplied this phrase.” I’m one generation behind Horne, misapplying it here.)

    • I;m referring to fuel cost.

      1 ton of coal = approx 20 million BTU’s…in the US it ranges from 17MMBtu/ton to 26MMBtu/ton. So the fuel cost at $20/ton = $1/MMBtu.

      Average coal fuel coal in the US is about $45/ton. But the range is from $17/ton(Wyoming) to $90/ton(Florida) depending on distance from Gillette,Wyoming where the coal is laying a few feet below the surface.

      1,000,000Btu/3413 BTU = 292 KWh thermal x 35% efficiency = 102 KWh electrical.

      CO2 emissions in the US average about 210 lbs per MMBtu of coal. b So bout 4,000 pounds or two tons of CO2 per ton of coal burned.

      We also have to be careful on our wording of ‘carbon tax’…I.E. Does it refer to carbon content of CO2 content. If it’s carbon then about 60% carbon content in a ton of coal.

      Of course my original comment was meant to display that a $300/ton Carbon tax would grossly increase the price of electricity, well beyond what is needed to ‘stimulate alternative energy investment’.

      • Harrywr2,

        Thank you for replying. I certainly agree with your comment in your final paragraph. However, I don’t follow the rather complicated calculations.

        You say

        I’m referring to fuel cost.

        and

        We also have to be careful on our wording of ‘carbon tax’…I.E. Does it refer to carbon content of CO2 content. If it’s carbon then about 60% carbon content in a ton of coal.

        I am referring to the cost per tonne of CO2 ($/t CO2). To give this some perspective, the Australian Carbon tax is starting at $23/t CO2 and will increase each year to 2015 when it will become an ETS partly tied to the EU ETS.

        Currently, the EU carbon price is about $10/t CO2.

        [$10/t CO2 = $36.66/t C]

        Where you say “I’m referring to fuel cost.” are you referring to $/ton CO2 as I am or to something different?

        My rule of thumb for Australia is:

        My simple calculation is $20/tonne for coal yields a fuel cost of $20/MWh (2c/kWh) (based on an emissions intensity of 1 t CO2/MWh.

        However, I made that up myself in replying to your comment above, so it my be wrong. I’d appreciate you checking it for me. I haven’t seen anyone else say it. But I have checked it against the tables in this report and it seems to be correct:

        ACIL-Tasman (2009) Fuel resource, new entry and generation costs in the NEM
        http://www.aemo.com.au/~/media/Files/Other/planning/419-0035%20pdf.pdf

        Table 5: Assumed emission permit prices (p23)

        Table 41 Emission intensity for new entrant technologies (tonnes CO2-e
        per MWh sent-out) (p63)

        Table 50 Projected SRMC for new entrant technologies excluding carbon costs (Real 2009-10 $/MWh as generated) (p77)

        Table 51 Projected SRMC for new entrant technologies including carbon costs (Real 2009-10 $/MWh as generated) (p79)

        Could you please say if you concur with my rule of thumb:

        $20/tonne for coal yields a fuel cost of $20/MWh (2c/kWh) (based on an emissions intensity of 1 t CO2/MWh.

      • @PL: My rule of thumb for Australia is: My simple calculation is $20/tonne for coal yields a fuel cost of $20/MWh (2c/kWh) (based on an emissions intensity of 1 t CO2/MWh. However, I made that up myself in replying to your comment above, so it my be wrong. I’d appreciate you checking it for me.

        Hazelwood Power Station, which supplies a quarter of Victoria’s power, has an emissions intensity of 1.58 t CO2/MWh, but it’s notoriously inefficient, so 1 t CO2/MWh should be close enough for government work.

        But according to this site Australian thermal coal is currently trading at around US$90/tonne after a dramatic fall from $124 at the beginning of the year. Where are you getting your $20/tonne figure from?

      • Vaughan Pratt,

        Hazelwood Power Station, which supplies a quarter of Victoria’s power, has an emissions intensity of 1.58 t CO2/MWh, but it’s notoriously inefficient, so 1 t CO2/MWh should be close enough for government work.

        But according to this site Australian thermal coal is currently trading at around US$90/tonne after a dramatic fall from $124 at the beginning of the year. Where are you getting your $20/tonne figure from?

        The efficiency of the plant is irrelevant (it is included in the emissions intensity figure). The price of coal is irrelevant.

        Perhaps if you looked at the preceding comments, or the links, you wouldn’t ask such questions. See the comment at the top of this tree:
        https://judithcurry.com/2012/09/12/the-costs-of-tackling-or-not-tackling-anthropogenic-global-warming/#comment-239657. If you still don’t understand, ask again.

      • The efficiency of the plant is irrelevant (it is included in the emissions intensity figure).

        I would have thought that if you include efficiency in the emissions intensity figure (which I was assuming), then a more efficient plant would have a lower emissions intensity. Is that false?

        Perhaps if you looked at the preceding comments

        Sorry, my bad, I misunderstood that as total cost, not tax. Blush. Also overlooked your list of emissions intensities, deeper blush.

        Following your reasoning and taking 1 t CO2/MWh as typical of NSW (not having lived in VIC since 1944), your arithmetic gives an increase in average retail price of about 1.5 x 1 x $20 = $30/MWh, what on a US bill would show up as $0.03 per unit (kWh).

        Here in the SF bay area we pay $0.29 per unit between 1 pm and 7 pm at the Tier 1 rate. So if such a tax turned out to be about the same here that should bring it up to $0.32 per unit.

        The reason I care at all is that I hadn’t stopped to calculate what such a tax would do to my electric bill. Since we sell the electricity off our roof back to PG&E, if the retail price were to rise from 29 to 32 cents our solar panels would be netting us an extra 3 cents for every unit we sell back to PG&E thanks to the tax (which is how our annual electricity bill nets out to about 10% of what it used to be).

        I’d been assuming this tax just vanished into a black hole somewhere. It hadn’t occurred to me that I’d be part of that black hole! If they want an even bigger tax they’ll have my vote for sure.

      • The efficiency of the plant is irrelevant

        I just realized what you meant here: you’d already listed the emissions intensities for all plants, so that’s what makes it irrelevant. (It becomes relevant if all one has is Hazelwood plus the information that it’s very inefficient, when you want an estimate of the others.)

  67. See response to Professor John Quiggin comment here:
    https://judithcurry.com/2012/08/25/week-in-review-82512/#comment-239663
    The response is relevant to this thread.

  68. italics fixed; Chief was the culprit :)

  69. Pekka Pirila,
    @ September 14, 2012 at 2:52 am

    You seem to be the only one who cannot accept that compliance costs need not be large. That they need not be is shown by very wide experience, your contrary arguments have been and continue to be totally unjustified.

    We discussed this in many comments on a number of previous threads. I thought we’d discussed it to closure. Having initially defended CO2 tax and ETS, after some considerable debate, you acknowledged they are impracticable and realistically they cannot be implemented and sustained globally – which is essential if they are to work – in the real world. You then changed tack and advocated “but we can use fuel taxes instead and they have low compliance cost”. I agree fuel taxes have low compliance cost but they cannot substitute for a global carbon tax or ETS.

    If you want to debate this important issue, then I am happy to do so, but I doubt we could make much progress if you are not willing to concede when you are wrong – which is my experience from our disagreements on this and other issues we disagreed on previously (which included the cost of wind energy, the amount of CO2 avoided by wind energy, the CO2 abatement cost with wind energy, the proportion of Denmark’s wind generation actually consumed in Denmark and some of the usual anti-nuke arguments).

    If you want to debate this issue, are you willing to answer my direct questions with a straight answer – i.e. without long winded obfuscation and avoidance of my questions?

    Questions

    1. Do you agree that for carbon tax or ETS to effectively cut global emissions, the system must be implemented globally and maintained globally? (that is almost unanimously agreed)

    2. Do you agree that any system involving international trade, or even domestic trade or tax, will be required to have a robust emissions measurement and reporting system? (if not, please explain why this would not be required for CO2 emissions but is required for tax or trade of other commodities).

    3. Do you acknowledge that the USA EPA has estimated its costs for administering the CO2 monitoring and reporting requirements (i.e. just the EPA’s costs) would be $21 billion per year to comply with the current US legislation for CO2 emissions monitoring (EPA have got around that for now, but that is just a honeymoon rate and could not survive in the long run)?

    4. Do you recognise that the cost to business and industry would be far higher (perhaps orders of magnitude higher) than EPA’s costs?

    5. Do you acknowledge that, if a global ETS or carbon tax system is going to survive and be effective, it would need a system like the EPA’s but applied to all man-made emissions sources (all CO2 sources, all the other twenty-three Kyoto greenhouse gasses, from all countries)?

  70. CO2 emissions monitoring and reporting compliance cost

    Below is an example that throws some light on what the compliance cost would be for a medium sized business required to monitor and reports its CO2 emissions.

    I’ve retired from all that estimation but was involved when it started in NSW when I worked for a paint Company making some resins. The short answer is that we didn’t know what specific fuel types or amounts were combusted in our after burner (to reduce all emissions to CO2 and some nitrogen oxides).

    Firstly, a portion of the resin ingredients were chemically changed during reaction, and a mixture of the reactants and the changed substances went straight to the oil fired after burner. It was a complex and variable mixture, and analysing each reaction would have been a nightmare of complexity.
    Also into the afterburner went volatiles from the paint production. As there were over 6,000 products and hundreds of volatile ingredients it was impossible to calculate emissions.

    The 4 “methods” put forward by the public servants ranged from idiotic to bizarre. (No-one in the paint industry could supply the answer, but were threatened with fines if they didn’t).

    I moved on, thankfully, and my successor was a practical (unscrupulous) fellow who responded by generating a vast spread sheet of over 600MB. 16 pages of calculations, I’ve forgotten how many pages of information on composition, tonnage produced, batch sizes and frequency of manufacture. All in 10 point Arial font with no graphics. Factors were assumed and buried in obscure corners with no explanations.

    One resin might be spread over 200 products. And with 6000 rows and 120 columns on a page, try following through that, esp. with references from page to page to another page. It looked impressive, but trying to check it was nigh on impossible, but the public servants were pleased and even recommended that other paint companies consult him! His view was that he retired in 5 years and they wouldn’t figure it out in that time. His comment was “Brains baffle b*llsh*t”.

    This I add happened more than 5 years ago.

    http://forum.onlineopinion.com.au/thread.asp?article=13578#235297

    More comments on this follow:

    The CO2 emissions from the after burner were, as first comment above, impossible to measure. Installing a spectrophotometer 70’ up (as was suggested by the public servants) exposed to the weather and to 300ºC exhaust gases didn’t appeal as reliable.
    The point was that the highly variable flow of flammables from the resin plant and/or the paint factory was balanced by the oil firing to maintain the right temperature. Since we could only get an average figure for the oil consumption, and no figures at all for the flow of flammables, there was no way you could get the amount of CO2 emitted.

    The Government assumptions were from a paint plant with 2 bulk tanks (of water based resin) and 3 mixing tanks. They assumed that all paint companies were similar. We had over 200 tanks of varying sizes. Even the bulk holding tanks could hold different materials at different times of the year.

    Also, we had over 6,000 products. Classed into categories of similar composition, and in groups of 20 to 200 (roughly). The public servants came to a meeting and faced with arguments that their 4 suggested methods wouldn’t (and couldn’t) work, suggested that we install recording spectrophotometers at suitable points in the paint factory. We estimated we would need 112 measuring heads, and the figures would have been worthless without simultaneous air flow measurements.

    All the other paint companies were in the same position. One of the public servants got very agitated and arrogant about the lack of response (so much so that complaints from other companies resulted in him being disciplined and removed).

    As I said the two of us worked on it for solid weeks, then had 2 or 3 meetings with the public servants over about another 6 weeks. All up about 10 weeks work for nil result.

    The new engineer took that different approach. I think it took him 5-6 weeks to prepare the spreadsheet, which I think had to be copied onto a DVD to give to them.

    The public servants were delighted, they had numbers! Other paint companies got together with him, and prepared their own sets of figures. And I believe for some years these were up-dated annually (at a cost of 2 weeks work).
    As I indicated the figures were quite dubious, but that didn’t seem to matter. I have no doubt that figures like this were carefully integrated into their planning.

    I don’t believe that many companies can make accurate measurements of all the emissions which the public servants want. They seem to think that everything is measured as a matter of course, and that Companies employ lots of people to do that, regardless of cost.

    Personally I think the cost of accurate measurements will be beyond most companies resources, and an approach like the above will be adopted. After all, the public servants won’t be able to measure them anyway, even if they wanted to do so.

    http://forum.onlineopinion.com.au/thread.asp?article=13578#235391

    At the time it seemed a clash of cultures; there wanted something and couldn’t see why it wasn’t supplied a.s.a.p. The public servants weren’t interested in our difficulties, they expected us to drop everything and comply with their demands. Almost feudal, like a Baron addressing serfs.

    The original demand came with a deadline, and threatened us with fines and/or imprisonment if we didn’t supply the information on time and guarantee its accuracy.

    I don’t think that the question of the costs of compliance ever crossed the minds of this government or its advisors. For over 50 years the amount of paperwork they’ve demanded from industry has grown and grown. Each Department assumes their demands are reasonable and not much work (forgetting that collecting data takes far more time than filing it) and not allowing for other departments demands.

    The howl from industry has been loud and clear for years, yet ignored. The burden is becoming too great,and will be resolved by either of two methods – that of the Israelites departing Egypt, or the French peasants revolting. For companies the first is in vogue.

    That we might have other priorities wasn’t considered, but even then the firm was trimming staff. We were down about 40 from 4 years before, and had about 170-180 working there.
    I lost contact but I know that there are now less than 50 there. Drastic cuts have been made because they are struggling to compete with overseas competitors, yet they were exporting quite large volumes when I was there.

    http://forum.onlineopinion.com.au/thread.asp?article=13578#235415

    The blame for the company’s decline will be put onto the high Aussie dollar, but that isn’t the only factor.

    As an example when it came to registering a new resin, the Yanks were amazed at what we had to go through. They sent off about a half a page of data, basically a trade name and composition, along with a $200 fee, and started making the resin. (This was for a resin considered non- hazardous).
    One of my submissions ran to 73 pages including a copy of the label, all sent in triplicate. The fees, and I use the plural advisedly, totaled $4700. There would follow a series of queries, most of which were nit-picking e.g. “on Page 14 you refer to ingredients in 1 tonne bulk bags, but on Page 27 you refer to ingredients in bulk bags. What size are these bulk bags”. Permission to produce the resin might take 10 months to arrive.

    http://forum.onlineopinion.com.au/thread.asp?article=13578#235417

    These comments reveal no only what the compliance cost would be for a medium sized business required to monitor and reports its CO2 emissions. They also give insight the enormous cost of regulation. Excessive regulation impacts on a country’s productivity, its international competitiveness and ultimately on the standard of living of the people in that country.

    • A fan of *MORE* discourse

      Articles like Exposure to Environmental Toxins in Mothers of Children with Autism Spectrum Disorder plainly illustrate the economic externality and fundamental immorality of the shocking corporate behaviours you describe, Latimer Alder!   :shock:   :oops:   :shock:

      Your willfully ignorant praise pellucidly illustrates the amoral elements of neodenialist cognition, eh?   :!:   :!:   :!:

      Simple Summary  Neodenialist economics yields evil fruits.

      • Fan, catch up. The whole debate is about CO2-eq and AGW. It’s not about toxic pollutants. No wonder you write such brain-dead comments. It’s apparent you haven’t ‘copped on’ to what the whole debate is about. You understand nothing. What a laugh. Here’s a smiley for you :) Take it to school and show your teacher. I’m sure she’ll be really impressed.

      • A fan of *MORE* discourse

        Peter Lang posts  “There were over 6,000 [chemical] products and hundreds of volatile ingredients.”

        Please get a clue, Peter Lang!   :shock:   :oops:   :shock:

        The amoral future discounting of neodenialist cognition, and the market-failure associated environmental externalities, are central *both* climate change *and* mind-altering toxins, eh?   :!:   :!:   :!:

        Simple Summary  Neodenialist economics yields evil fruits BECAUSE IT HARMS CHILDREN!   :shock:   :oops:   :shock:

  71. The Garnaut Climate Change Review http://www.garnautreview.org.au/index.html needs a thorough review and critique like Lilley did for the Stern Review.

    The Garnaut Review served a similar political purpose for the Australian Labor Party as the Stern Review served for the UK Labor Party. It is similarly a ‘policy driven science / economics study. Like the Stern Review for UK, the Garnaut Review has been used to justify very bad climate action policies in Australia.

    As Nordhaus says

    The major issue at this stage is that the database for impact studies continues to be relatively small.

    [Nordhaus (2007) ’Accompanying Notes and Documentation on Development of DICE-2007 Model’ http://nordhaus.econ.yale.edu/Accom_Notes_100507.pdf Section VII, p24, ’Lab notes for Impacts and Damage Function’ ]

    The lack of data for the damage function allows CAGW alarmist, like Ross Garnaut, a great deal of room to exaggerate and make alarmist pronouncements about the impacts of global warming. Ross Garnaut (and John Quiggin) overstated the impacts of warming in arguing the case for the Australian Labor Party’s carbon tax and ETS for Australia.

    The following is an example revealing how they exaggerated the impacts of sea level rise. (extracts from this:
    http://www.climatechange.gov.au/publications/coastline/climate-change-risks-to-australias-coasts.aspx )

    The report states that the high end of the IPCC’s AR4 estimate of sea level rise is 79 cm by 2100, but does not mention the central estimate. Then it says:

    There is an increasing recognition that sea-level rise of up to a metre or more this century is plausible,“

    It then says:

    Recent research, presented at the Copenhagen climate congress in March 2009, projected sea-level rise from 75 centimetres to 190 centimetres relative to 1990, with 110–120 centimetres the mid-range of the projection.

    Based on this recent science 1.1 metres was selected as a plausible value for sea-level rise for this risk assessment.“

    And says:

    “With a mid range sea-level rise of 0.5 metres in the 21st century, events that now happen every10 years would happen about every 10 days in 2100. The current 1-in-100 year event could occur several times a year.“

    But, there is no proper estimate of the damages, let alone proper discounting applying over 100 years, and no allowance for the fact that infrastructure is continually renewed, upgraded, adapted for changing conditions.

    The report was developed to justify the Australian carbon tax and ETS. It uses scaremongering and exaggeration. In this way it has followed the precedent set by the Stern Review for the UK Labor Party.

    The Garnaut Climate Change Review is a political document. It is a scaremongering document through and through. It should be dismissed.

    • The Garnaut Climate Change Review is a political document. It is a scaremongering document through and through. does not arrive at a conclusion we find politically acceptable. It should be dismissed.

  72. Tomas Milanovic

    Tomas, is that not why President Abraham Lincoln was wise to appreciate, as early as 1864, that Yosemite Valley tomorrow is worth more than Yosemite Valley today?

    That is why we now appreciate that high future discount rates are stupid, even disaster-inducing, eh?

    I will stay on topic which was Stern and discount rate.
    I am afraid Fan of discourse that you really understood absolutely nothing about REAL economy, REAL investment decisions and REAL discount rates.
    Note the plural “rates” because as I explained there is not a UNIQUE discount rate.

    Abraham Lincoln has certainly not understood anything about discount rates either.
    The notion of monetary “value” of Yosemite Park 150 years in the future is non sensical.
    If there should be a number (of course in today’s currency hence disount rate) then one would necessarily need to know the yearly cash flows over the whole 150 year period. This is something that nobody can do.
    But even if you make an (uneducated) guess, you will have then to decide about the discount rate.

    Why?
    Because investing real money in the Yosemit Park will be in competition with investing in something else and the money supply is not infinite to invest in everything.
    So what is a 150 year bond interest rate? You have not a clue? Normal because it doesn’t exist.
    What will be the inflation during 150 years? You have not a clue? Normal, nobody has.
    And what is the risk premium (e.g the risk that the cash flows that you anticipated don’t occur)? You have not a clue? Normal, nobody has. But it is certain that it won’t be 0.

    So any rational person in 1850 which is proposed to invest in Yosemite park for 150 years will invest in railroads, steel and power generation instead because, indeed, the only thing that can be said about a discount rate for 150 years is that it is not 0.
    And any hindsight analysis done today, would indeed show that a Yosemit Park investment in 1850 would be outperformed by about any alternative available at that time.
    I have visited Yosemit and it is quite nice but I would not invest a penny in it. Unless you hold a gun to my head of course.
    The very notion of “discount rate” over 100 years or worse (longer), is simply absurd as I already explained in the first post.

    Of course this rational approach to investments doesn’t always apply to Government spendings and subventions. Actually it rarely applies and that’s why companies are much better at generating wealth and growth than Governments because they apply rational approaches to investment decisions.
    In Government’s spending decisions the economy rarely plays a leading role, the political and ideological considerations do.
    So to finish with Lincoln – he was a politician so he may have decided spendings on political grounds but be very sure that no sane investor has ever freely invested REAL money in a project with a time of return of 150 years.

    Same of course applies to matters treated in the Stern report.

    Just try to sell to your neighbour a 100 years bond with interest rate of 1% :)
    This is called a serious fraud and you’d finish serving a long sentence beside Madoff who did the same thing in a slightly more sophisticated manner.

  73. A fan of *MORE* discourse

    A cynic is a person who knows the price of everything and the value of nothing.
       — Oscar Wilde

    What did Oscar Wilde mean by that, Tomas Milanovic?   :?:   :?:   :?:

    Did he mean that climate-change neodenialism advocates an ignorant disregard for the future that is rooted in an amoral, entirely selfish, short-sighted cynicism?   :?:   :?:   :?:

    The world wonders!   :)   :)   :)

    • He was talking about works of art. I had assumed until I saw your question that everyone knew what he meant. I have been educated.

  74. Tomas Milanovic

    Hmmm. After Lincoln, Oscar Wilde.
    As far as I know both totally ignorant of economy and of discount rates which were, or so I thought, the topic of this thread.
    What do you mean was Oscar Wilde’s opinion about discount rates, pray tell.
    Or better, don’t tell because it will be again irrelevant.

    I don’t know how it is for others readers but for me you come over as impressively ignorant. Actually this level of ignorance is world class.
    I don’t remember to have ever read your contributions in the past so you are perhaps a newcomer.
    And why do you clutter your messages with the yellow symbols? It is supposed to be funny?

    I also observe that you evade any serious and rational discussion by vague, wordy and rather meaningless sentences.
    “Neodenialism” made me splutter my coffee with laughter though.

    I leave you however one last chance to show that you understand at least some basics of what is the topic here.

    Just try to sell to your neighbour a 100 years bond with interest rate of 1%
    This is called a serious fraud and you’d finish serving a long sentence beside Madoff who did the same thing in a slightly more sophisticated manner.

    Discuss.

  75. Lauri Heimonen

    In the thread ”Rhetoric and rafts” Judith Curry writes:

    ”We are operating under conditions of deep uncertainty. – – – ”

    The uncertainty is implied by Michael Cunningham (“Faustino”) in his questions, too:

    ”There are many issues of debate about global warming. Has there been warming this century? Will there be further warming? If so, will the cause be anthropogenic or other? What will be the impacts, both positive and negative? Should we take action to reduce emissions? How might we proceed, and what are the costs and benefits of various approaches?”

    Nearly all of the comments in this tread ‘The cost of tackling or not tackling antropogenic global warming’ are based on the same uncertainty as above. I understand that one regard as necessary to assess the risks between both of the options, whereas e.g. IPCC – in accordance with UN Conference 1992 in Rio – takes for granted that lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent anthropogenic warming.

    ‘Should we take action to reduce emissions?’ NO! No reductions of human CO2 emissions are needed on the basis of the recent climate warming. And the ‘deep uncertainty’ related to the issue can be deleted.too.

    In my view there are findings in reality adequately enough to conclude that anthropogenic CO2 emissions have had only minimal influence on the recent global warming. It is so minimal that you cannot find it by measurements in reality; you cannot find any warming caused by increase of CO2 content in atmosphere and even not any manmade influence on increase of CO2 content in atmosphere. Because under these circumstances the human caused global warming is impossible to be found in reality, there is no reason to take action to reduce CO2 emissions.That we have to make even decisionmakers understand. Otherwise, without understanding of their own, politicians have to believe what ‘uncertain’ authorities are saying.

    How can be made politicians as decisionmakers understand that the recent increase of CO2 content in atmosphere has been a result of warming and not vice versa? Look e.g. at comment https://judithcurry.com/2011/08/04/carbon-cycle-questions/#comment-198992 .

    1)At first one have to understand that, according to the natural law, all of the CO2 emissions to atmosphere and all of the absorptions from the atmosphere to the sinks together control the CO2 content in the atmosphere. All CO2 sinks together control how much from total emissions remains in the atmosphere. As nowadays the anthropogenic CO2 emissions are only about 4 % of the total CO2 emissions, in the recent CO2 content of 390 ppm of the atmosphere only about 16 ppm CO2 at the most is controlled by anthropogenic CO2 sources, and the recent yearly increase of 2 ppm CO2 in the atmophere contains only 0,08 ppm manmade CO2 at the most. The assumption of IPCC conflicts with this: without any proper evidence, there is assumed by IPCC that all the recent increase of CO2 in the atmosphere is anthropogenic.
    2)Further, instead of hypothetic parameters based on inverse calculations adopted by IPCC in its climate models, the most essential issues of mechanism related to changes of CO2 content in atmosphere on the complicated climate problems you must ascertain by means of empiric findings. According to measurements in reality, during the past latest three decades the increasing trend of CO2 content in atmosphere is dominated by rising global sea surface temperature, and the warming of this global sea surface is controlled by the trend of sea surface temperature on upper latitudes where sea surface sinks of CO2 are. As sea surface on these sink areas is warming, the partial pressure of CO2 dissolved in these surface waters is increasing which lessen the absorption of CO2 from atmosphere.to these sea suurface sinks. As a result of that the CO2 content in atmosphere is increasing until a new dynamic balance between CO2 sources and sinks are reached.

    The rising trend of global mean sea surface temperature takes place during periods of decades when El Niño events are dominating, but not during periods decades when La Niña events are dominating. So far these ENSO events can be explained only by activity changes of Sun in the present geological circumstances.

  76. Pingback: Fancy a Little High-brow Philosophy? « Greenhouse Bullcrap

  77. Handling Uncertainty

    The debate central to climate change response seems to hinge on how to handle uncertainty. The alarmists believe things might be much worse than the “best estimate” projections therefore the sky is falling; in contrast the sceptics feel that things won’t be as bad at the “best estimate” therefore no worries. It seems that both are missing the point.

    Uncertainty about the problem is a given; uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be.

    To illustrate what I mean, suppose we detect a large asteroid whose orbit will intersect Earth’s, and on best estimates there is a 1% probability it will hit earth. Clearly, we wouldn’t let uncertainty prevent us from reacting to the threat. One response might be to spend trillions of dollars to build a fleet of nuclear-tipped missiles to destroy or deflect the asteroid. Is this a good idea? Well, it depends on how certain we are that missiles will work. If there is only, say, a 5% chance, or worse we don’t know the odds, then it is time to go back to the drawing board.

    In short, big responses require high levels of confidence that they will work. I am not sure our C tax meets this test.

    Should we mitigate or adapt?

    A C-tax or an ETS seems to be the favoured mitigation method. But this is bound to be a low-confidence response. Such schemes are wide open to rorting and rent-seeking, they have high compliance costs, the chances of the world acting together are very low, and the technology is not yet sufficiently advanced to make large reductions at reasonable cost. Nor is there a shred of evidence that C taxes or ETS’s actually work. Even if they did work, it would only be partial mitigation.

    In contrast, adaptation is a high-confidence response. If we feel it is necessary to build dykes along Bangladesh coastline, we can be very confident that it can be done and what it will cost. As climate change advances, our responses can be tailored accordingly. It may (or may not) be very expensive, but we can be reasonably certain that the money spent will meet the objective.

    Another important point is that every trillion spent now on mitigation (when uncertainty is high) is a trillion that can’t be spent later on adaptation (when uncertainty is negligible).

    Further, early spending for mitigation raises three other problems.

    1. early spending is when the knowledge base is the weakest, because science advances and we’ll understand the issues much better in the future.

    2. early spending is when we can least afford it, because the world will be much wealthier in the future – consider that on past trends, global wealth will probably double in the next 20 years.

    3. early spending is massively expensive in terms of opportunity costs: a trillion not spent now (and sensibly invested at 5% real return) would be worth 12 trillion in 50 years time. That would buy a hell of a lot of adaptation.

  78. Below I provide a short summary of main the points I’ve been making on previous threads (all are substantiated in previous comments). The points are numbered to facilitate debate, but all should be read as one argument.

    1. Uncertainty about the problem (AGW) is a given; uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be. [1]

    2. The solutions most advocated are: carbon pricing (carbon tax and/or ETS), renewable energy (mandated and subsidised) and increased energy efficiency. However, these proposed policy ‘solutions’ have low probability of achieving the objective of mitigating AGW. These policies have very high uncertainty. This is inexcusable.

    3. Carbon tax and ETS will not work in the real world. [3]

    4. If CO2 tax and ETS policies are attempted, there is a high probability they will fail to cut emissions to the extent advocated. If they are ramped up high enough to cut emissions significantly there is a high probability doing so would cause significant economic damage and hardship, given that there is no viable alternative to fossil fuels. [4]

    5. Renewable energy is expensive, not likely to be viable in the foreseeable future, if ever, as a way to supply a large proportion of our energy, requires a lot of resources and avoids much less CO2 emissions than its advocates would like us to believe. Renewable energy is a high cost way to reduce emissions. It is economically irrational. It should not be mandated or subsidised. [5]

    6. A cost competitive alternative to fossil fuels is by far the least cost and by far the best way to reduce global emissions. The analyses published in Nordhaus (2008) [2] show the ‘cost competitive alternative to fossil fuels’ policy (called ‘Low-cost backstop’ policy) is far better than the ‘Optimal carbon price’ policy. In fact, it is better by 3 times, 5 times, 5 times and 49 times for Benefits, Abatement Cost, Net Benefit, and Implied Carbon Tax rate. Furthermore, CO2 emissions in 2100, CO2 concentration in 2100, Global temperature change to 2100 and abatement cost per $/°C avoided are all far lower with the ‘Cost competitive alternative to carbon pricing’ policy. [6]

    7. Nuclear power is nearly competitive with fossil fuels in developed countries now and is competitive in the large developing countries now. It could be far cheaper than it is. USA, with its knowledge and demonstrated capacity to innovate and meet engineering challenges could lead the way. This could provide an economically rational solution to cutting global CO2 emissions. [7]

    8. Nuclear power is the safest of all electricity generation technologies; it causes the least number of fatalities per TWh of energy supplied of all the electricity generation technologies. [8]

    9. Political ideology is delaying progress. The political so called ‘Progressives’ are blocking progress and have been for the past 50 years.

    10. The CAGW Alarmists are mostly of the ‘Progressive’ faith. If ‘Progressives’ and CAGW Alarmists are serious about wanting the world to cut CO2 emissions, they need to lead the way and remove the blocks they’ve placed on low emissions energy (i.e. nuclear). They need to convert their comrades from their irrational objection to nuclear power to becoming enthusiastic advocates for low cost nuclear power for all people of the world.

  79. “@VP: Let me add a fifth question. Whenever I point out that coal power stations are skyrocketing in cost while solar panels are plummeting in price, why do you always divert attention away from that very important point and refuse to address it?”

    I gather the fifth question has to do with idea that solar panels are getting cheaper. So:
    Japan Poised to Become Second-Biggest Market for Solar Power
    By BLOOMBERG NEWS
    Published: June 18, 2012
    ““The tariff is very attractive,” said Mina Sekiguchi, associate partner and head of energy and infrastructure at KPMG in Japan. “The rate reflects the government’s intention to set up many solar power stations very quickly.”

    “Under the new program, utilities will buy solar, biomass, wind, geothermal and hydro power. All costs will be passed on to consumers in surcharges, which the government estimates will average about ¥100 a month. ”

    “Utilities will pay ¥42, or about 53 cents, per kilowatt-hour for 20 years to solar power producers, almost twice the rate in Germany, the world’s biggest market by number of installations. The solar tariff was among incentive rates for clean energy announced Monday by the Ministry of Economy, Trade and Industry.”

    Japan plans to paid more than Germany did to get it’s solar panels.
    If solar panels were getting cheaper, the government would not need to pay more than Germany but instead less.

    • “its solar panels”. >:(

      It wouldn’t matter if solar panels were free. They cannot compete on a systemic or large scale. Ever. Irredeemable variability and transmission requirements from the (rare) remote locales ideal for installation ensure that. At 10% RE, grids begin to show strain. At 20% they become unmanageable.

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    • Hi, I’ve only just seen this, I assume it’s addressed to Judith – if so, probably best to e-mail her at Georgia Tech – if not, I’m happy for you to quote my article here and my responses to comments on it. Michael Cunningham

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