The Economic Consensus

Another day, another Rabett dropping. Today's one has been specially selected to drive the entire climate denial industry triskaidekaphobic.

Another list.

• Joseph Aldy, Resources for the Future
• James Edmonds, Pacific Northwest National Laboratory
• Richard Howarth, Dartmouth College
• Bruce McCarl, Texas A&M University
• Robert Mendelsohn, Yale University
• William Nordhaus, Yale University S
• ergey Paltsev, Massachusetts Institute of Technology
• William Pizer, Resources for the Future
• David Popp, Syracuse University
• John Reilly, Massachusetts Institute of Technology
• Roger Sedjo, Resources for the Future
• Kathleen Segerson, University of Connecticut
• Brent Sohngen, Ohio State University
• Robert Stavins, Harvard University
• Richard Tol, Economic and Social Research Institute
• Martin Weitzman, Harvard University
• Peter Wilcoxen, Syracuse University
• Gary Yohe, Wesleyan University

So what do they have in common??

So, find out.


Global Warning Climate Change Energy

To fight climate change grow by 0.1 per cent less

Is it my maths or his? Terry McCrann of The Australian thinks the cost of 0.1 per cent of GDP until 2050 to cut emissions by 50% is way too much to bear.

Now the cost, the very real cost of cutting emissions, tends to be airily dismissed as minor. So it might knock 0.1 per cent off our growth rate, perhaps even 0.2 per cent. But you'd hardly notice.

[...]

Aggressive emission cuts had been modelled to suggest that 2050 GDP (gross domestic product) would as a consequence be 5 per cent less than otherwise.

That's another of those "minor" numbers. Especially as it would be 5 per cent off a much bigger economy than now. But another way of looking at it, according to Switkowski, is that 5 per cent would represent about a $120 billion reduction in the size of the economy.

Even more critical, is the cumulative losses over the 43 years to 2050. Add them all up and you get around $1 trillion or $1000 billion. That was a serious amount of money, Switkowski added.

Now this is not a criticism, but Switkowski seriously understated the cost. A reduced growth path that ended up being 5% per cent below potential in 2050 would actually cost closer to $3 trillion - $3000 billion all-up.

To add some critical context. The Australian economy today is just a tick over $1 trillion - $1000 billion. So that would be tantamount to closing it down, completely, for three years.

As my table shows, even a seemingly completely unnoticeable 0.1 per cent reduction in the annual growth rate, from 3 per cent to 2.9 per cent, would mean GDP in 2050 - to stress again, in today's dollars - would be $145 billion less than otherwise.

But the cumulative loss over the 43 years would add up to $2220 billion - the equivalent of two of today's economy.

The hardly more noticeable reduction in growth to 2.8 per cent a year would cost $4390 billion of lost production.

The tyranny of big numbers. I failed to find a figure for the size of the Australian economy in say, 1950, using Google. But I established we lost 1.6% of GDP growth over the last 54 years since 2000.

Taking McCrann's figure for The Australian economy measuring $1 trillion - $1000 billion, I estimated the size of the economy in 1946 was between $113.84 billion and $116 billion, or 11.38% of size the today's. About nine times smaller.

I'm sure the good folk of 1946 would have accepted a growth rate of 0.1% less to ensure we had a stable, robust climate and a clean environment now, had they known about global warming. They were the war generation after-all, and they knew how to fight for their children's democratic future.

How soft have we become? We now know we have a new, unforgiving enemy - are we going to throw away the sacrifices and gains of our grandparents' past as well as our grandchildren right to a stable climate by taking this Neville Chamberlain policy of appeasement to greenhouse gas emissions?

Global Warning Climate Change Energy

Upbeat IPCC report points to an energy revolution.

In its third and final key findings, the IPCC panel reports:

■ A cost of $US20-50 a tonne of atmospheric carbon would have a big impact on cutting harmful emissions. "It could lead to a power generation sector with low greenhouse gas emission by 2050."

■ This would allow renewable energy to have a 30 to 35 per cent share of total electricity supply by 2030.

■ Nuclear power would provide only an additional 2 per cent of the world's electricity supply by 2030 because it is too expensive, and "safety, weapons proliferation and waste remain as constraints".

■ Clean coal technology has the potential to make an important contribution by 2030.

■ Improving efficiency of energy supply and use would play a key role in reducing emissions by up to 30 billion tonnes a year by 2030.

clipped from www.smh.com.au THE cost of saving the planet from catastrophic climate change will not be a major burden on the world economy, shaving only a small amount from global growth if governments act now, says a report by the United Nations expert panel on climate change. A former CSIRO climate chief, Dr Graeme Pearman, of Monash University, said the impact on a healthy economy would be small. "The cost of letting climate change happen is a lot more than the cost of mitigation." Stabilising greenhouse gas emissions at a level that can limit the temperature rise to 2 to 3 degrees would reduce annual gross domestic product growth rates by only 0.12 per cent, the report said. Global emissions would need to be slashed between 50 and 85 per cent by 2050 from levels in 2000.

Solomon needs his temple foundations examined

David Solomon needs to take great care with his statistical work, if he does not want to be tarred with the same 'Chicago school of economics' oily brush that brought us the Iran-Contra affair, the invasion of Iraq, and Paul Wolfowitz.

He doesn't take care, and so his latest work is gleefully used by Andrew Bolt to prove that activities directed towards 'global-cooling' are a waste of time. What results is an insight into the workings of noble-lie theory.

clipped from anonymouse.org Earth Hour made not even a minute difference 16 Comments | 0 Trackbacks | Permalink | Andrew Bolt Blog By Andrew Bolt, Wednesday, April 18, 2007 at 06:34am Sydney’s Earth Hour - in which global warming cultists turned off their lights to symbolise what green policies would mean to us - was claimed to have saved enough carbon emissions to offset, er, just four return flights to London. David Solomon of Chicago University’s Graduate School of Business checks the figures and works out that stunt was even more useless than that: ‘Earth Hour’ shows a decline of only 2.10%, statistically indistinguishable from zero… In terms of reducing electricity consumption, ‘Earth Hour’ was, statistically speaking, a failure.

Solomon's caveats in the conclusions of his work tell us the real story of not comparing apples to oranges:

It is nevertheless possible that ‘Earth Hour’ may have had a significant effect in a more localized area than New South Wales. The Energy Australia estimates were based on Sydney CBD only, and so may not be directly comparable.

Keep in mind that the majority of the 57% of sydneysiders who tuned-in and 'switched-off' would have necessarily been in the suburbs, because the CBD doesn't support 2.2 million people, except on NYE, and it certainly didn't that night.

Taking the point estimate of the EarthHour Dummy variable in the full specification after controlling for EarthDay fixed effects, the estimated impact of half of Sydney apparently sitting in darkness using no appliances was to reduce statewide electricity use by around 2.1%.

Here's Solomon's conclusion:

This is a useful, albeit rough, example of the potential economic cost of some currently debated policies that seek to reduce Australian greenhouse gas emissions by 60% by the year 2050.

All it tells us is that a 10.1% drop in electricity usage observed within the Sydney CBD and not the suburbs, results in a 2.1% drop in electricity being consumed in the state of New South Wales.

Is that useful? Solomon's right about it being rough, though.

Italics and bolding mine.
Global Warning Climate Change

Green-collar jobs - jobs of the future

Van Jones, a civil-rights lawyer, is founder and executive director of the Ella Baker Center for Human Rights, as I discovered from Dave Roberts' Grist.org article on the man.

In 2005, the center unveiled an initiative that would put it at the cutting edge of progressive activism: Reclaim the Future, a program aimed at ensuring that low-income and minority youth have access to the coming wave of "green-collar" jobs.

"Green-collar" jobs!

The compact fluorescent light flashed on in my head and for a timeless moment I had a vision of the future economy where the green-collar workers contribute as significantly as white and blue collar ones. It's an evocative term with instant understanding. So what does Van Jones have to say:

We need to send hundreds of millions of dollars down to our public high schools, vocational colleges, and community colleges to begin training people in the green-collar work of the future -- things like solar-panel installation, retrofitting buildings that are leaking energy, wastewater reclamation, organic food, materials reuse and recycling.

All the big ideas for getting us onto a lower carbon trajectory involve a lot of people doing a lot of work, and that's been missing from the conversation. This is a great time to go to the next step and ask, well, who's going to do the work? Who's going to invest in the new technologies? What are ways to get communities wealth, improved health, and expanded job opportunities out of this improved transition?

That's one component: rather than creating job-training pipelines that put these kids at the back of the line for the last century's pollution-based jobs, we need to be creating opportunities for them to be at the front of the line for the new clean and green jobs.

Another piece is to go a step beyond job training and begin to think about reviving the old Civilian Conservation Corps that [Franklin D. Roosevelt] created during the environmental challenges of his day. Now we have a new set of environmental challenges. The national Apollo Alliance and the Campus Climate Challenge have been talking with us about creating what we would call an Energy Corps. It would be like the Peace Corps or AmeriCorps, but it would be focused on deploying people to begin retrofitting the U.S. economy, rebooting it based on clean energy.

The moral challenge of the century is this: We need to ensure that there's equal protection for everyone in the face of the perils of this new period, and equal access to the opportunities of this new period.

There you go, there's a man with a plan. He has more to say on the subject and it is stimulating reading. I am going to adopt and expand his term, "green-collar", because in my vision I also see that keeping up with a Joneses is out with sequestered dinosaurs, and that the new game in town will be keeping up with the Van Joneses.

One of Van Jones' strengths is that he connects the disparate global warming concerns of high and low income groups.

In terms of achieving the aims of his specific mission, 'working to prevent youth violence and incarceration' he is going to give affected communities the chance to buy into the sustainable economies of the future, a chance to get ahead of the curve, a slingshot forward.

The other thing to keep in mind is that people who have a lot of opportunity, the affluent, love to hear about this big crisis. Oh my god, global warming, we're all going to die. For people who have a lot of crisis already, they don't want to hear about another big crisis. They've got sick parents, no health care, all that kind of stuff -- they don't want to hear about it. The rhetoric has to change. For people with a bunch of opportunity, you tell them about the crisis. For people with a bunch of crisis, you tell about the opportunities.

When you start shutting down some of these dirty power plants and move to renewables, you reduce asthma by a certain percentage. That's important, because if you have one kid with asthma and you don't have health care, that's about $10,000 a year between inhalers, lost wages, and emergency room visits. So you're putting $10,000 per kid per year back into the pockets of poor people when you clean up the air. You save the polar bears and you save the black kids too.

That's got to be how we come at this: What are the jobs, wealth, and health benefits of being a part of this movement?

I'm arguing for a progressive eco-populism with an appropriate role for government, that rewards and helps the problem-solvers in the U.S. economy but taxes the hell out of the problem-makers. That can be a winning formula to realign U.S. politics and economics.

We have an obligation to recognize that we've entered a new period of real limits and real consequences. We need to be part of a conversation about how to limit the harm and spread out the hope.

Finally, his thoughts on the green-collar economy:

There's no way to get changes big enough to solve these problems without creating pathways out of poverty for millions of new green-collar workers. The renewable economy is more labor-intensive, less capital-intensive; therefore, there should be a net increase in jobs.

Global Warning Climate Change Environment Science CO2 Carbon Sink Earth Australia Kyoto Energy

AGL joins the Chicago Climate Exchange

Yes that is our AGL - Australian Gas and Light - and what are they doing in Chicago is looking for a mechanism whereby they can market their energy efficiencies and emissions savings to less efficient companies around the world. That's the beauty of global warming - abatement is an instantly globalised industry. :::[SMH: Energy giant embraces carbon trading]

THE energy giant AGL has said it will become the first big Australian company to join the Chicago Climate Exchange, a move that may embarrass the Federal Government as it wrangles over climate change.

The move will allow AGL to do something it cannot do at home: profit from cutting its greenhouse gas pollution in Australia.

It will help the company expand its renewable energy operations, including plans to build the largest wind farm in the southern hemisphere at Macarthur in Victoria. This will power about 190,000 homes.

AGL's managing director, Paul Anthony, told the Herald the company had invested almost $2 billion in renewable energy in the past 12 months. Mr Anthony said he hoped the board would soon agree to the big investment needed for the Macarthur wind farm. It has also just bought three "bio-mass" power stations in Queensland fired by, among other things, macadamia nuts.

This leave the Federal Liberal party, (the party of big business?) decidedly flat-footed.

For the past 10 years, the Howard Government has stalled on setting up a carbon trading scheme in Australia or ratifying the Kyoto Protocol on curbing greenhouse gas emissions, which would allow companies to trade in the European carbon market.

Now Australian companies have no real way to measure the cost of greenhouse gas pollution caused by carbon-intensive energy sources such as coal, oil and gas, except for the Chicago Climate Exchange, which puts the price at $US5 a tonne.

So if Australian companies cut their emissions and invest in renewable energy they can find it difficult to reap an immediate reward for their efforts, while polluting competitors who stick to coal-fired power are not penalised.

The good news is that there is an election coming up as soon as Howard announces. Then we can get on with our future.

Global Warning Climate Change

UK politics now just a climate change auction

I started blogging about global warming, I dunno, about 14 months ago. Mainly out of a sense of frustration born of the media and greater public attitudes towards climate change. The media reported a 'debate' on global warming, while science reporters (and I) knew there was no question in the climatology community that it was happening. Big time.

It was an awful time. The media gave 50% of time to the reporting the facts of global warming, and 50% of the time to skeptics making a living from disputing these facts on decidedly unscientific grounds. Thinking like, "It's sheer arrogance and utter hubris to think that man can affect the climate", became reported as if this was reasonable logic. I would not have believed it, other than the fact that I had just witnessed an uncritical media swallow all the stories the White House spun, whole, and end up embedded in a UN unsanctioned military adventure trying to relive the Ted Turner Gulf War I glory days. Any Orwellian bullshit was possible. I was staring at a future that that I had been warned about in fifth form English literature. So I blogged, inspired after reading Flannery's The Weather Makers.

But by now the harsh reality of Iraq rented the cosy fabric of this mediaverse, and all sorts of light is streaming in. An Inconvenient Truth has woken the globe to global warming, and The Stern Report gave a financial framework for us to contextualise the problem within. Al Gore has an Oscar and Tim Flannery is the Australian of the Year. Hard to believe.

And now UK politics is a law and order, war on terror, national security, climate change auction. The Tories, Labour and Lib Dems are scrapping it out to take the green crown ahead of the Climate Change Bill tomorrow. Hot button issues are green house gases, green taxes, nuclear power, renewable energy and recycling. The truth is the winner.

We live in interesting times. :::[The Independent: Which political party is the greenest?]


Global Warning Climate Change Environment Science CO2 Energy

Cheney's money talks of an inconvenient truth

Dick Cheney is a scary guy to boldly express dissent to — no matter who your are.

If you are swarthy and have a beard, you run the risk of being rendered by the bloke's private army. Even if you are a CIA agent, you're not safe . A newly discovered hazard of the job — like you need more problems in that role — is that you risk being outed on his instruction for something you didn't do.

Like Valerie Plame was.

So if you were his investment funds manager you would pretty much tell him what he wants to hear, right?

Not, it seems, if your name is Jeremy Grantham, who is basically Cheney's money - talking - and the topic is global warming. :::[AOL News]

Step forward, Jeremy Grantham -- Cheney's own investment manager. "What were we thinking?' Grantham demands in a four-page assault on U.S. energy policy mailed last week to all his clients, including the vice president.

Titled "While America Slept, 1982-2006: A Rant on Oil Dependency, Global Warming, and a Love of Feel-Good Data," Grantham's philippic^* adds up to an extraordinary critique of U.S. energy policy over the past two decades.

What Cheney makes of it can only be imagined.

"Successive U.S. administrations have taken little interest in either oil substitution or climate change," he writes, "and the current one has even seemed to have a vested interest in the idea that the science of climate change is uncertain."

Yet "there is now nearly universal scientific agreement that fossil fuel use is causing a rise in global temperatures," he writes. "The U.S. is the only country in which environmental data is steadily attacked in a well-funded campaign of disinformation (funded mainly by one large oil company)."

That's Exxon Mobil.

As for Massachusetts Institute of Technology professor Richard Lindzen, who appears everywhere to question global warming, Grantham mocks him as "the solitary plausible academic [the skeptics] can dig up, out of hundreds working in the field."

And for those nonscientists who are still undecided about the issue, Grantham reminds them of an old logical principle known as Pascal's Paradox. It may be better known as the "what if we're wrong?" argument. If we act to stop global warming and we're wrong, well, we could waste some money. If we don't act, and we're wrong ... you get the picture.

As for the alleged economic costs of going "green," Grantham says that industrialized countries with better fuel efficiency have, on average, enjoyed faster economic growth over the past 50 years than the U.S.

Grantham says that other industrialized countries have far better energy productivity than the U.S. The GDP produced per unit of energy in Italy is 50% higher. Fifty percent. Japan: 60%.

And China "already has auto fuel efficiency standards well ahead of the U.S.!" he adds. You've probably heard about China's slow economic growth.

Grantham adds that past U.S. steps in this area, like sulfur dioxide caps adopted by the late President Gerald Ford, have done far more and cost far less than predicted. "Ingenuity sprung out of the woodwork when it was correctly motivated," he writes.

There is also a political and economic cost to our oil dependency, Grantham notes. Yet America could have eliminated its oil dependency on the Middle East years ago with just a "reasonable set of increased efficiencies." All it would take is 10% fewer vehicles, each driving 10% fewer miles and getting 50% more miles per gallon. Under that "sensible but still only moderately aggressive policy," he writes, "not one single barrel would have been needed from the Middle East." Not one.

I repeat: This is not some rainbow coalition. This is not even Al Gore. Grantham is the chairman of Boston-based fund management company Grantham, Mayo, Van Otterloo. He is British-born but has lived here since the early 1960s.

I love this bit: "What Cheney makes of it can only be imagined." Apoplexy anyone?

==

^*Global Warming Word Watch: Phi·lip·pic

n.

1. Any of the orations of Demosthenes against Philip of Macedon in the fourth century b.c.

2. Any of the orations of Cicero against Antony in 44 b.c.

3. philippic A verbal denunciation characterized by harsh, often insulting language; a tirade.

==

Other unflattering things I've said about Cheney

==

Global Warning Climate Change Environment Science Kyoto Energy

Stern view of global warming deniers after IPCC report

Sir Nicholas Stern take a dim view of the remaining global warming denial objections in the wake of the IPCC report. :::[SMH]

"I have heard three kinds of argument claiming that it is not necessary to combat climate change," Sir Nicholas told a conference in Paris on Friday."

Myth 1: The scientist are wrong about global warming

The assessment by the IPCC said global warming was almost certainly caused by humans, and carbon pollution disgorged this century would disrupt the climate system for a thousand years.

Myth Busted: The scientist are wrong about global warming

"After the report of the IPCC [UN's Intergovernmental Panel on Climate Change] released today, this position is untenable," the former World Bank chief economist said."

Myth 2: We needn't change because Science (clean-coal, saviour technology) will save us

The familiar logic of the favourite rationalisation of the adolescent smoker, that advances in medicine will save them from cancer in time, is recruited to carry this argument by such esteemed notables as our own prime minister, John Winston Howard. It's ironic that such science-defying thinking can place such faith in future science.

Myth Busted: We needn't change because Science (clean-coal, saviour technology) will save us

"That is an irresponsible position, because it does not take into account the real risks linked to a very high rise in temperatures, for example in the case of a world where temperatures rise by five or six degrees.", said Sir Nicholas. Five or six degrees Celsius is nine to 10.8 Fahrenheit.

Myth 3: Global warming is not our problem - it's a long way away

This is similar to the related 'global warming as plant fertiliser' myth that increased carbon dioxide will fuel increased crop growth. It also feeds myth 2.

Myth Busted: Global warming is not our problem - it's a long way away

Those who dismissed the consequences of global warming as a remote, long-term problem were "indefensible from an ethical point of view," he said.

In a report commissioned by the British government last year, Stern warned that without urgent action, the fallout of climate change could be on the scale of the two world wars and the Great Depression of the 1930s.

Singling out current and rising economic powerhouses the United States, China and India, he said the world must be prepared to pay now -- in the form of green taxes or emissions trading schemes -- to prevent economic disaster.

Global Warning Climate Change Environment Science CO2 Carbon Sink Earth Australia Kyoto Energy

Will Bush propose carbon dioxide emissions surge in State of the Union speech?

Chief executives from Alcoa Inc., PB America Inc., DuPont Co., Caterpillar Inc., General Electric Co., and Duke Energy Corp., and executives of Lehman Brothers, PG&E Corp., PNM Resources, FPL Group and four leading environmental organizations have signed a letter asking Bush to announce big emission cuts on the eve of his State of the Union address: :::[Yahoo! News]

WASHINGTON - The chief executives of 10 major corporations and business groups, on the eve of the State of the Union address, urged President Bush on Monday to support mandatory reductions in climate-changing pollution and establish reductions targets.

"We can and must take prompt action to establish a coordinated, economy-wide market-driven approach to climate protection," the executives from a broad range of industries said in a letter to the president.

Big business has the big picture. Does Bush? Or will he continue to regurgitate policy and climate-science formulations arrived at deep in the bowels of fossil-fuel funded thinktanks like the Competitive Enterprise Institute? Hmmm?

He shows no sign of learning from the Baker Report recommendations on an Iraq exit strategy and, in fact, is doing the opposite and proposing a surge of troops. So why should the Stern Report findings have sunk in for him? Sir Nicholas was only a World Bank economist and Chancelor of the Exchequer, after all.

Global Warning Climate Change Environment Kyoto Energy

British Treasury hard astern, Stern steams ahead.

Sir Nicholas Stern, the globally coolest economist and the author of the world's most influential recent report on climate change is exiting the good ship British Treasury. Clashes with Chancellor Gordon Brown have been rumoured. There seems to be something of principle at stake for Sir Nicholas Stern. :::[SMH]

The news came a day after Mr Brown made a pre-budget statement that embraced virtually none of the recommendations of the Stern report, and dashed hopes the Blair Government would move swiftly to a new environmental agenda.

Brown had been trying to sideline Stern by commissioning him to write the report, but this came back to bite him on the bum. There will be more in the future as the reality of global warming keeps bumping into the rhetoric of the denialist and skeptic.

Sir Nicholas issued a statement saying he had planned the move for some time and had hugely enjoyed working with Mr Brown. But relations between the two men are widely known to be tense, a Downing Street policy adviser said. It was understood that Mr Brown had initially asked Sir Nicholas to write his report in order to sideline him, and that it only achieved global prominence because of its timeliness.

The report says that fighting climate change will save, not cost, the global economy money, and has been hugely influential around the world. Many environment ministers quoted it in addresses to the global summit in Nairobi last month. The Guardian described Sir Nicholas, 60, as the first climate change rock star.

He will leave in March to take a chair at the London School of Economics. The Government lured him from the World Bank, where he was chief economist, in 2003.

The Stern report recommends using carbon and other green taxes as part of a comprehensive response to global warming. Its most significant finding is that the cost of effectively fighting climate change is just 1 percent of GDP. Just 1 percent.

Mr Brown's proposed new air tax on 75% of of flights increases amount to just 0.1 per cent of GDP. From £5 ($A12) to £10.

Global Warning Climate Change Global Economy The Stern Report UK Carbon Tax