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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

assesssing the commentary on climate change « Previous | |Next »
July 4, 2008

Garnaut's report on climate change, judging from the leaks, favours compensating those regions hardest hit by the new emissions trading regime. The report canvasses "structural adjustment" compensation for regions such as the La Trobe Valley in Victoria and the Hunter Valley in NSW as well as providing government funding for industries investing in clean power so as to reward them. The principle is that all compensation paid should be for actually reducing emissions rather than compensating for so-called "stranded assets".

Hence all the dire warnings from electricity generators and those state premiers supporting dirty power about black-outs, bankruptcies (Enron-type collapse) spiralling power bills, and predictions of five years of economic growth being wiped from the economy. The end is nigh.

Kudelkaclimatechange.jpg Kudelka

In A Question of Balance: Weighing the Options on Global Warming Policies William Nordhaussays that the most important concern of any policy that aims to address climate change should be how to set the most efficient "carbon price," which he defines as "the market price or penalty that would be paid by those who use fossil fuels and thereby generate CO2 emissions."

He writes:

Whether someone is serious about tackling the global-warming problem can be readily gauged by listening to what he or she says about the carbon price. Suppose you hear a public figure who speaks eloquently of the perils of global warming and proposes that the nation should move urgently to slow climate change. Suppose that person proposes regulating the fuel efficiency of cars, or requiring high-efficiency lightbulbs, or subsidizing ethanol, or providing research support for solar power—but nowhere does the proposal raise the price of carbon. You should conclude that the proposal is not really serious and does not recognize the central economic message about how to slow climate change. To a first approximation, raising the price of carbon is a necessary and sufficient step for tackling global warming. The rest is at best rhetoric and may actually be harmful in inducing economic inefficiencies.

On this criteria most of the business commentary in The Australian and that from the NSW and Victorian state government's are not serious.

| Posted by Gary Sauer-Thompson at 6:39 AM | | Comments (5)


Freeman Dyson, in the above link to his review in the New York Review of Books has a strange understanding of environmentalism:

All the books that I have seen about the science and economics of global warming, including the two books under review, miss the main point. The main point is religious rather than scientific. There is a worldwide secular religion which we may call environmentalism, holding that we are stewards of the earth, that despoiling the planet with waste products of our luxurious living is a sin, and that the path of righteousness is to live as frugally as possible. The ethics of environmentalism are being taught to children in kindergartens, schools, and colleges all over the world.

Ethics is religion? Environmentalism as religion is the standard view of those, like Dyson, who reckon that the "fuss about global warming is grossly exaggerated" and who talk in terms of the true believers spreading the gospel of global warming

I followed your Freeman Dyson link ---the interview in Salon. He says this:

We have no reason to think that climate change is harmful if you look at the world as a whole. Most places, in fact, are better off being warmer than being colder. And historically, the really bad times for the environment and for people have been the cold periods rather than the warm periods. The fact that the climate is getting warmer doesn't scare me at all. There's no reason why one should be scared. The economic conditions in the world and the technology change much more rapidly than the climate, so I don't see any reason for being in a hurry.

I thought of the River Murray drying out and what that means when I read that. He obviously knows very little about ecology. What is he doing? Taking a God's eye view of earth?

"On this criteria most of the business commentary in The Australian and that from the NSW and Victorian state government's are not serious."

Surprise surprise.

Kevin Kelly has an interesting post on Dyson's book review up at the Long Now Foundation :

There are a number of ways to recast the same quandary. Is it okay to burn a lot of coal right now if it will lift millions out of poverty today, instead of burning less coal now and postponing poverty alleviation for later? Will prosperity/pollution today deliver more to future generations or will environmental health/poverty today deliver more? If you were to be born of a future generation, what would you want? To be born into poverty or to be born into a clean world?

Shouldn’t we pass on both, prosperity and health? Sure, that is the goal. But what Dyson’s explanation of the future discount makes clear, there will always be a tradeoff. Almost by definition we cannot absolutely satisfy both the present generation and future generations. The needs of each — present and future — may overlap but they don’t coincide.

There is a very definite time preference for individuals. Almost without exception a person would prefer to have $1,000 today rather than $1,000 in fifty years from now. But if you make the choice between $1,000 today and $30,000 fifty years from now, the two vie for preference. That difference between those two amounts — present and future — drives what we call interest — the amount of money someone will pay to have something now. Some people will pay too much for current rewards, and may get stuck in a position of never being able to pay off their interest. So the rate of interest and the discount rate for the future need to be set wisely.

Societies also seem to have a time preference. All things being equal they would like to have prosperity now rather than later. How much are they willing to pay to have their reward now? Would they pay the price of dirty air, and climate change, and long-term debt in order to gain prosperity right now? They may, and they may also be willing to pay too much. The “interest” rate for immediate prosperity might be something that no future generation could every repay.

Furthermore, the push of technology accentuates the weirdness of the future discount. In some projects delay vastly increases the cost in the future. Waiting to maintain infrastructure such as roads and bridges means it requires ever more money to upgrade them as decay breeds decay. Neglect can be self-accelerating so it becomes almost impossibly expensive to repair what is seriously neglected. On the other hand, take Moore’s Law. If computers are half as cheap and twice as fast every year into the future, then it makes sense to delay some very computational challenges.

"I thought of the River Murray drying out ..."
Looks like you are wrong Nan.
We all are, except these folks:
" A Myth Buster
Australia’s mighty River Murray is not dry.
It’s open for boating business. As usual."