Archive for June, 2011

20 thoughts on “The cost of climate change… NIMBY!”

June 19, 2011

 I have been conversing with Reflexio at http://reflexioixelfer.wordpress.com/2011/05/10/the-cost-of-climate-change-nimby/

Quite a good conversation really although he is late in addressing my last comment.

I will certainly post that here if it comes.

The main thought that I always push comes through here.

Everyone from the garbage man to the top scientist needs to think for himself on the issue of anthropogenic global warming. You do not need to be a scientist to be able to see if the logic is reasonable and consistant.

Neither can politicians be trusted!  In my experience, politicians are out there to gain votes. They will do anything and profess to believe anything to get those votes. In other words they will simply respond to whatever the most vociferous section of the electorate is demanding of them. So it is up to us!

  • rogerthesurf on May 10, 2011 at 5:09 pm said:

    Carbon tax will just be a beginning.

    Here is what I think!

    I think that we are in the grip of the biggest and most insane hoax in history, and unless the public get wise to it soon, we will all be parted from what wealth we have.

    Lets take a simple economic view of what is likely to happen.

    In the absence of sufficient alternative solutions/technologies, the only way western countries can ever attain the IPCC demands of CO2 emissions reduced to 40% below 1990 levels, (thats about 60% below todays) is to machine restrictions on the use of fossil fuels. Emission Trading schemes are an example.

    As the use of fossil fuels is roughly linear with anthropogenic CO2 emissions, to attain a 60% reduction of emissions , means about the same proportion of reduction of fossil fuel usage, including petrol, diesel, heating oil, not to mention coal and other types including propane etc.

    No matter how a restriction on the use of these is implemented, even a 10% decrease will make the price of petrol go sky high. In otherwords, (and petrol is just one example) we can expect, if the IPCC has its way, a price rise on petrol of greater than 500%.
    First of all, for all normal people, this will make the family car impossible to use. Worse than that though, the transport industry will also have to deal with this as well and they will need to pass the cost on to the consumer. Simple things like food will get prohibitively expensive. Manufacturers who need fossil energy to produce will either pass the cost on to the consumer or go out of business. If you live further than walking distance from work, you will be in trouble.
    All this leads to an economic crash of terrible proportions as unemployment rises and poverty spreads.
    I believe that this will be the effect of bowing to the IPCC and the AGW lobby. AND as AGW is a hoax it will be all in vain. The world will continue to do what it has always done while normal people starve and others at the top (including energy/oil companies and emission traders) will enjoy the high prices.

    Neither this scenario nor any analysis of the cost of CO2 emission reductions is included in IPCC literature, and the Stern report which claims economic expansion is simply not obeying economic logic as it is known in todays academic world.

    The fact that the emission reduction cost issue is not discussed, leads me to believe that there is a deliberate cover up of this issue. Fairly obviously the possibility of starvation will hardly appeal to the masses.

    AGW is baloney anyway.

    How much would YOU pay to “address” climate change?

    Perhaps some actual proof that Anthropgenic Climate Change is actually fact might also help ones decision.

    http://www.examiner.com/seminole-county-environmental-news-in-orlando/global-warming-scare-industry-suppresses-benefits-of-co2

    http://rogerfromnewzealand.files.wordpress.com/2010/01/lindzen_testimony_11-17-2010.pdf

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

    • Hi Roger

      I am not a climate change scientist and I am prepaed to accept the balance of world scientific opinion. I am not sure of your qualifications. I looked at your blog, I am sure I could find as many and more data and charts to support the opposite view.

      To use the word hoax suggests some conspiracy, and I think this is unfair. The pro climate change scientists may have their facts wrong (although I dought that), but to suggest a conspiracy is a stretch and scaremongering that does not add value to the debate.

       

  • rogerthesurf on May 14, 2011 at 4:45 pm said:

    reflexio,

    One does not need to be a climate scientist to smell the rat in the so called evidence for the unproven “Anthropogenic CO2 causes Global Warming” hypothesis.

    I think it is especially important that everyone learns to think for themselves in this matter, else we will open ourselves to being led astray and used, like the sheep in Orwells “Animal Farm”.

    As politicians nowadays, do not lead us but instead will do almost anything to gain votes, it is important that most people who are voters are able to make reasonable judgments based on the evidence available,(or the lack of it), instead of what people tell them.

    “. I looked at your blog, I am sure I could find as many and more data and charts to support the opposite view”

    Well I hope you read it. Do you think that the medieval warm period is a myth? History, geology, proxy analysis and archaeology are all telling us that the world has been warmer than present at least three times- IN HISTORICAL TIMES.

    I think these types of sources are the very best because;

    1. Most of them are researched before the current AGW hype.
    2. They have their own agendas and are not trying to prove anything about AGW one way or the other.

    So I put it to you: If the world has been warmer than present, at least three time in history, why are we blaming the current warming on that life giving gas, carbon dioxide?

    I have spent the last 18 months examining what academic papers I can and asking likely people for references to any paper that has a reasonable scientific proof of the “Anthropogenic CO2 causes Global Warming” hypothesis.
    There is none.
    Only a few correlations which are also disprovable.
    (I have to state here, (in case you have never studied statistics), that every freshman is told in his first class that correlations are NEVER proof. Only at best, a necessary condition for a proof.)

    Therefore the next question we need to ask is, why are we being encouraged to discard our wealth, health and well being by reducing CO2 emissions by at least 60% within about 20 years, when there is no scientific proof for Anthropogenic Global Warming in the first place?

    Well I dont like conspiracy theories any more than you do, but maybe following the money is not such a bad idea.

    Cheers

    Roger

    http://www.rogerfomnewzealand.wordpress.com

    • As I said, I am prepared to go with the balance of world scientific opinion. It would be pointless for me to show you my set of graphs, as you’ll have your set. To me, it is risk management. Given that many scientists agree AGW is not certain, but most likely, you need to deal with what is most likely. Ignoring what is most likely, against the potential impacts is lunacy.

      In the history of mankind there have been times when events have occurred to change markets and economies. Transport, the industrial revolution, computers, telecommunications and thousands of other inventions have shaped the economy in which we live.

      History has shown those people, communities, companies and countries that embrace the opportunity that comes with these changes are the ones that prosper.

      It is entirely evident the world is moving towards a low carbon economy, whether it be climate change or just good environmental sense. Remember, even if AGW is wrong, our high carbon economy is not good for the environment… no one disputes that (take a look at the biology cabinet you have cited). The sooner we embrace low carbon economy the better for our long term prosperity, even in the unlikely event AGW is proven to be false.

      Hey, the Chinese are embracing a low carbon economy, so we’d better not miss the boat!

      • rogerthesurf on May 15, 2011 at 10:24 am said:

        reflexio,

        It appears that you have not bothered to read my blog or take note of the points I am making.

        What you believe is your choice, but I believe you should have an informed choice, not follow along with what people tell you.

        ” The sooner we embrace low carbon economy the better for our long term prosperity, even in the unlikely event AGW is proven to be false.”

        This brings us back to my original point.

        Here you are spouting what someone has told you. Please use your own intelligence to analyse what is going on.
        What if the cost of moving to a low carbon economy is as I describe it in my first comment?
        Would you be happy to pay that much?
        Why is there no analysis of this important issue in the IPCC reports?

        Anyone who tells you that paying large increases in the cost of energy, either through taxes or directly, is good for the economy and our personal well being, is either trying to mislead you or is ignorant of basic economics.

        Please consider my question above “How much would YOU pay to “address” climate change?” which is the same question as “How much would YOU pay to embrace low carbon economy”. Do you have an answer?

        Cheers

        Roger

        http://www.rogerfromnewzealand.wordpress.com

         

         

  • Hey Roger, I have read quite a bit, including your blog. My point is that for every single point in your blog and those against action on climate change (by the way the Biology Cabinet may not be happy with you using their information), there is 5+ points from scientists with a contrary view.

    Take a look at the recent video from SWIPA, these are SCIENTISTS expressing their informed views based on the information / data collected.

    You question high electricity prices, I see that you are in NZ so I can’t comment on energy prices there. I previously worked in the electricity / gas generation, distribution and retail sector. Australia’s leading energy companies are in favour of climate change action and a price on carbon. One of the factors that has already led to a signifcant increase in power prices in Australia over the last 4-5 years is the lack of action on climate change.

    There has been NO significant investment in baseload power generation due to the uncertain market environment. Instead investment has been in the peaking and mid range power generation, which is a more attractive business case in the absence of baseload investment (supply / demand concept). The alternatives to baseload are expensive and that expense is passed onto consumers, via the individual State regulatory price-setting frameworks.

    So we can clearly see in Australia that power prices have already risen significantly due to a lack of action on pricing carbon. As a consumer of energy in Australia, I am already paying for a low carbon economy, we have low carbon policies (adopted by both political parties) that impact our economy (we are going Ok at the moment). Once the commercial model for Australia is announced, I’ll be able to make an informed view on the economics of low carbon economy, but I am certain it will be a better plan that we have now.

     

  • rogerthesurf on May 18, 2011 at 4:18 pm said:

    Reflexio,

    ” My point is that for every single point in your blog and those against action on climate change ”

    Sure, find me an academic paper (peer reviewed and pubished), showing reasonable proof of the “Anthropogenic CO2 causes Global Warming” hypothesis by at least one of the following methods.

    1 Empirical proof that shows the causation factor of CO2 with respect of Global Warming.

    2. Statistical proof of Anthropogenic CO2. In case you dont know it, correlations are never proof.

    3. Evidence for the “Anthropogenic CO2 causes Global Warming” hypothesis to be adopted over the null hypothesis?

    These are all methods used for scientific proof.

    If you can find such a paper, then all the relevant links in my blog are wrong, if you cant find even one such paper ….?

    Low carbon? you dont know anything yet mate. What percentage of emissions reduction does Australia target? They will be just giving you guys the thin end of the wedge so it dosn’t hurt too much to begin with.
    Just you wait till they get to 60% plus!

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

    • Wow, Roger you have been busy… I see you have raised the same points with many other people (blogs), including those with a climate science background… And I can also see that you have been given good answers to these (although I am sure you would beg to differ).

      One thought to consider… conspiracy theories that by their nature involve a large number of people, are not conspiracies (e.g. the moon landing was faked), because someone would eventually squeal to make a buck!

      • rogerthesurf on May 19, 2011 at 4:46 pm said:

        Fact is that no one has been able to produce an academic paper as I describe.

        Now that would be good answer.

        So what is your reply to my previous comment? Or are you unable to think of anything relevant?

        Cheers

        Roger

        http://www.rogerfromnewzealand.wordpress.com

         

         

      • Is that the level of carbon pollution reduction question… mate I don’t really know that, I can only rely on what I read, see and hear in the press that small targets will not be enough, so will it be the thin end of the wedge, probably. I see the conservative led UK government is targeting at 50% reduction (probably cause they are running out of fuel!).

        Look, I can see you have undertaken a lot of research, a lot more than I have, so I am not going to be able to trade blows with you on specific points. I see you you are very active in the blogo-shpere and have plenty of exchanges with climate scientists, so I will leave it to them to deal with you specific facts.

        One tip, if you consider the IPCC process a failure of proof, then don’t argue that the material you are using has the same rigour, it sort of undermines the credibility a little. I see you quoted some material that had been ‘peer reviewed’ and it clearly was not.

        From my perspective, and this is similar to a lot of other people, when 90% plus of credible scientists from all over the world say we have an issue, I am prepared to accept their advice. IMHO to back against that volume of opinion / fact, whatever you like to call it, is too high risk. It is that simple.

         

         

  • rogerthesurf on May 20, 2011 at 8:06 am said:

    No, my question is how much would you personally be prepared to pay to achieve a the IPCC emission reductions?

    Half your salary? your job? Starve to death? See your family starve?
    This is what I and other economists think is at stake.
    This is why the omission of the cost of meeting these measures in the IPCC reporting is so serious.

    If climate science itself was rigorous, there would be answers to my questions.

    Dont believe that 90% figure either. If you like I can discuss the two papers that came up with that result.

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

    • Hi Roger

      I’ll have to wait and see what the price is going to be, but the politics of reality will definitely intervene to ensure a minimal impact initially. At the end of the day, it is all abut the transition, if done well the impact will be minimised, if not it will be a bitter pill to swallow. I take it you are worried about the economics of the transition and not the actual end game, is that correct?

      If not 90%, what would you say it is?

       

  • rogerthesurf on May 21, 2011 at 6:22 pm said:

    “Is that the level of carbon pollution reduction question… mate I don’t really know that, I can only rely on what I read, see and hear in the press that small targets will not be enough, so will it be the thin end of the wedge, probably.”

    Yup the IPCC is demanding CO2 emission reductions of 40% below 1990 levels. A year ago I worked that out to be 57% below current emissions, but to say 60% is probably close enough.http://www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4-wg3-chapter13.pdf Page 776 Box 13.7

    “I see the conservative led UK government is targeting at 50% reduction (probably cause they are running out of fuel!).”

    I researched something previously about running out of fossil fuels. I repeat it below. Hopefully it is of some interest to you.

    There are various estimates of the time left until fossil fuels run out, and I take a fairly jaundiced view of the estimates having been through two “oil shocks” in the ”70′s and ’80′s where we were told that it was running out already.

    However the current estimates are about 40 years for oil, 62 years for natural gas and 224 years for coal. http://energysavingnow.com/energytoday/reserves.shtml

    If governments did nothing, and unfortunately governments have a way of exacerbating economic problems, (try reading Milton Friedman if you think that is too radical a statement), the price of fuel will rise steadily and I suspect converting coal to liquid fuel and gas will still be less expensive than any green technologies so far mooted, so the price will most likely rise and level out once this process becomes viable. (NB every rise in oil is currently reflected in just about every activity and product we consume)

    So we have at least 100 years to adjust to the rising price of energy.

    This is not to say that there will be no hardship or radical change in our civilisation.

    If the IPCC and governments have their way we have less than 20 years to curtail most fossil fuel usage. That gives us the scenario in my first comment.

    ” I see you quoted some material that had been ‘peer reviewed’ and it clearly was not.”

    I did? which are you refering to?

    ” I take it you are worried about the economics of the transition and not the actual end game, is that correct?”

    I think I would describe myself as worrying about blindly following the recommendations of the UN via the IPCC and it’s attending scientists when we are not told what the cost of it will be.
    If the cost is simply changing your light bulbs and using the bicycle when it is not raining, then who cares about the standard of proof offered by the UN and the IPCC – if the cost is cataclysmic, then I believe the standard of proof should be very high indeed.
    I and many economists believe the cost will be catastrophic, therefore, if the required reductions are neccesary to save the world, we believe that the standard of proof is not even close to the required standard. In fact as I have already pointed out, not even up to basic scientific standard. http://sciencespeak.com/MissingSignature.pdf

    “If not 90%, what would you say it is?”

    Some say less than 60% of CLIMATE scientists. http://www.nas.org/polPressReleases.cfm?Doc_Id=1729

    But the point is how many scientists who are quite qualified to look at the methods and conclusions of climate scientists and are ready to put their names in writing to the effect that they are considered inadequate.

    Let me give you some numbers.
    http://epw.senate.gov/public/index.cfm?FuseAction=Minority.SenateReport
    http://scienceandpublicpolicy.org/images/stories/papers/reprint/UN_open_letter.pdf
    http://www.climatescienceinternational.org/index.php?option=com_content&task=view&id=37&Itemid=54
    http://www.petitionproject.org/

    I have looked at the studies where this 90% figure of yours comes from. Here is what I said at the time.

    Doran and Zimmerman and Anderegg 2010
    Even I can see the flaws in the studies. These are not random samples but either self chosen as in an online survey, or the sample groups were chosen by the authors.
    There are problems with the questions although Anderegg 2010. does not appear to publish his questions.
    This commentator describes it better than I.
    http://climatequotes.com/2011/02/10/study-claiming-97-of-climate-scientists-agree-is-flawed/
    http://climatequotes.com/2011/03/27/is-it-97-or-66-of-climate-scientists-who-believe-in-agw/
    In any case, the studies are basically seeking out the converted and the deeply commited. One does not have to be a climate scientist to know whether scientific method is being followed. Therefore ALL scientists need to be polled if any meaningful result is to be obtained from such a survey.
    I also checked out Anderegg’s supporting documents and links. It is obvious which way he wants his results to turn out. Hardly a neutral stance.
    And of course, the number of scientists upset enough to put their names to public documents is not consistant with the results, even the results claimed by the authors of the above studies.

    I am aware that the http://www.petitionproject.org/ “Oregon Petition” has attracted a lot of criticism but I believe it is quite reasonable for the following reasons.
    1. The statement signed is clear an unambiguous- no-one is going to misconstrue and sign that by mistake.
    2. A petition that large will certainly have the names of a few deceased. That is just because people do die.
    3. YOU DO NOT NEED TO BE A CLIMATE SCIENTIST TO RECOGNISE THE DEFICIENCIES OF GLOBAL WARMING CLAIMS. Any reasonably educated person can examine the method and conclusions for something outside their speciality. In fact that is a very good test of an academic paper because it constitutes an ABSOLUTELY UNBIASED review.
    4. A large petition like the Oregon Petition is likely to have a few bum entries and have a few people that change their minds.
    5. The number of criticisms by AGW believers supports the validity. If it was a bum study they could simply leave it.

    I hope that clears up your questions, now I am interested in your answer to my question.
    ” how much would you personally be prepared to pay to achieve the IPCC CO2 emission reduction demands?”

    Finally, please take the trouble to think for yourself in this matter. I do not expect you to immediately believe what I say, but I hope that our conversation will stimulate you to start using your own mind in this matter, rather than blindly trusting politicians, including the UN and the IPCC which are also political bodies.

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

     

  • Hi Roger, the driver is not that we will run out, Australia has 250 years of gas reserves. I was simply making the point that in the UK they are running out of fuel (North Sea) and that may drive them towards renewables and alternatives not solely because if AGW.

    The guy from NAS says “I would guess it is about 40% now”, so I think unless he has some facts, a guess is interesting but would be discarded.

    The Petition… I’ve seen this list before. I agree with you point about their is likely to be the odd flaw in such a large list, but the the real flaw is the fact that a lot of the people have NO education and credibility in climate science. A mechanical engineer is not a scientist, a GP does is not a scientist, he/she is a doctor.

    They have opened the field so wide (presumably to get bigger numbers)by using the term scientist too broadly. The list lacks credibility, given all your other arguments, I am surprised you’d quote the petition. Why not include school teachers, I have an MBA, why not me? Why not economists? :-) It would have been better to have a smaller list of people with credible backgrounds, as there are in the list.

    Quality not quantity is important.

    You might find this interesting to read, if you have not encountered it already.

    http://www.dbadvisors.com/content/_media/DBCCAColumbiaSkepticPaper090710.pdf

     

  • rogerthesurf on May 23, 2011 at 9:08 pm said:

    So you are saying that there is consensus among climate scientists? Well for one, consensus does not mean the truth is reveiled. I think 98% of the IPCC scientists may be in agreement but here are some who are not.

    http://rogerfromnewzealand.files.wordpress.com/2010/01/noevidence.pdf
    http://nzclimatescience.net/index.php?option=com_content&task=view&id=155&Itemid=1

    Do you seriously think any scientist working for the IPCC would keep his job if he came up with conclusions that contradict what the IPCC is asserting?

    Anyway I disagree with you completely about the need to be a climate scientist in order to have a valid opinion on climate change research. In fact one is likely to get a more balanced view from someone outside.

    Here is a sample of many hundreds of papers that contradict every conclusion that the IPCC makes.
    Even if these peer reviewed, scientific, published papers were by a very small minority, the IPCC should be obliged to include them in its analysis along with an explanation why they are are not valid. Of course it does not do this.

    Your link actually was irrelevant. Obviously if I am disputing the findings and methods of the IPCC and its scientists, a paper that uses these as references is a little pointless. I most certainly would take more notice of some independent analysis.

    Finally, I cannot seem to pin you down to answer any question of mine. Is the question so hard to answer?

    Given the current state of proof for AGW, how much would you personally be prepared to pay to achieve the required IPCC CO2 emission reductions, which we are told are necessary in order to save the world?

    Half your salary? your job? Starve to death? See your family starve?

    Or do you still accept that changing lightbulbs and riding the bicycle will be all that is needed?

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

    • Hi Roger

      In you last reply, you indicated that scientists are employed by the IPCC, this is incorrect, the vast majority are employed by organisations within the member countries of the UN. See here for how the IPCC works
      and also here for a list of the 800 contributors to AR5. These scientists are not funded by the IPCC, they are funded by the member countries. Again, if there is a conspiracy, how can that be managed by such a large and eclectic group of conspirators… simple not possible, so not a conspiracy.

      How much would I pay, the talk here in Australia for the most immediate action is around $500 to $1000 a year. So I am OK with that. I take the long run view of a net economic benefit on this issue. So unlike you I don’t see starvation. I’d be interested to see you economic analysis that leads to this conclusion.

      Oh and don’t forget… my power bill is now around $2500 a year and by all accounts heading towards $5000 a year in the next 4 years, and a major part of this increase is a lack of investment in base load power generation due to uncertainty on addressing AGW.

       

    • BTW, David Evans is not a climate scientist and does not claim to be, his PHD is in electrical engineering. His work at the Australian Greenhouse Office was building a carbon accounting computer model, not conducting research into climate change.

       

  • rogerthesurf on May 30, 2011 at 5:23 pm said:

    Well if you think the IPCC contributors do all that work for no return, you are naive.
    Sorry about Evans, however if he has been writing software for models, he probably knows more about the models and methods than the climate scientist do. (I am a retired software man myself).
    If you have time you should watch this video. Takes quite a while I’m afraid, but it does feature at least two ex IPCC contributors, an ex official of Greenpeace and Dr Roy Spencer from NASA. Should make up for my mistake about Evans and you might even enjoy it.

    http://video.google.com/videoplay?docid=-5576670191369613647&ei=6KhjS9PZMJvu2ALEj6CjCA&q=the+great+global+warming+swindle#

    If you have an MBA, you must have at least a basic knowledge of economics.
    Therefore why dont you just deduce what will happen to the economy if the price of petrol for instance goes up in price by a factor of, lets say, ten. Bear in mind that the Great Depression of the 1930′s was the result of approximately a 30% slow down in economic activity.

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

    • I am not sure where you get a factor of 10 for petrol. I don’t believe that petrol is inelastic, I see higher prices have resulted in changed behaviour where I live in Adelaide. e.g. more use of public transport, walking, riding etc. Personally, we have reduced from 2 cars to 1 and I walk to work most days. Whilst it was not just the price of petrol alone that drove this decision, it was a factor.

      The Great Depression may well have been a 30% drop in economic activity, but as you would know (I recall you are an economist), this was an artificial high, created by unscrupulous people in unregulated markets. Some wealthy unscrupulous people significantly increased their wealthier during the depression by creating false markets and selling at the top.

      It is good that you raise the Depression, I would consider we are more at risk from US economic policy than we are from action on climate change… the GFC was a bees dick away from being a complete collapse of world financial system. Maybe that is an area you could focus some of your talent for research and argument.

      You don’t know me, but naive is not a word that I or others that know me would associate with me.

      Reply ↓rogerthesurf on June 5, 2011 at 1:35 pm said:

                        “I am not sure where you get a factor of 10 for  petrol.   I don’t believe that petrol is inelastic”

                          Well I had a scout around the net for price demand elasticity estimates for crude oil etc.

Here is an example http://15961.pbworks.com/f/Cooper.2003.OPECReview.PriceElasticityofDemandforCrudeOil.pdf

For Australia .034 for short term and .068 for long term both of which would be described as very inelastic indeed.
I imagine the long term estimate involves redesigning cities to minimise commuting times and in cold climates to pool heating/airconditioning resources etc, which would be a considerable time, but how much time is not clear.

Anyway with elasticities in that region, it is not hard to imagine the price of petrol rising by a factor of 10 if the supply is restricted artificially by the amounts the IPCC demands.

Of some interest there is a model that one can play around with at http://www.physicsinsights.org/oil_price_model_1.php#model
To simulate a government deliberately restricting supply in order to meet IPCC demands, (and remember that a government cannot easily change demand), try entering negative figures in the “Supply growth, year on year (percent)” field.

As regards the great depression, in this case, we are talking about the effect of an economic slowdown here, which would be caused by balloning price of fuel.

I have studied the great depression to some length, and can tell you it was caused by governmental ineptness with money supply.
Why not read Milton Friedman “Free to Choose” if you are interested.

But yes, I am very afraid of economic collapse, as should we all, and the IPCC wants our governments to interfere with a very key thing in our economies.

After this comment Reflexio stopped answering. I thought he was a reasonably intelligent guy, but maybe my economics was a bit much for him.

By the way, I recommend a visit to the economic model above. I only know what I have read on that site, but entering a negative figure in the “Supply growth, year on year (percent)” field does give one an idea of how sensitive the price of fuel is to fluctuations/shortages of supply.

However with a Price Demand elasticity of between 0.035% and 0.068%  this is certainly of no surprise to any economist.

 

reflexio.com on June 19, 2011 at 11:28 pm said:

Hi Roger

I am not an economist, so I am not going to dazzle you with economic counter arguments. But from the deep dark distance of my MBA, I recall that substitutes need to be taken into account when looking at the impact of decreases in the supply of a product. The carbon tax will create substitutes. Electric cars and hydrogen cell technology for example. I recall we studied petrol being very inelastic, but my personal view is this analysis represents the current market and technology. At some point in time buying horses would have been inelastic, but motor cars changed all that!

Cheers, John

John

“I recall that substitutes need to be taken into account when looking at the impact of decreases in the supply of a product”

Absolutely correct, if the wheat falls in short supply and the price tends to rise, people will switch to rice or rye etc. If butter becomes short in supply, people switch to margarine. Therefore the research paper I cited and others like it would naturally take substitutes into account. Hence the short and long term numbers. Trouble is it appears that there are not that many viable substitutes and I like I said above, I believe the long term figure may well be arrived at mostly be peoples expected life style changes. Redesigning cities etc.
“The carbon tax will create substitutes. Electric cars and hydrogen cell technology for example.”

The carbon tax I believe, will do nothing at all except fill government coffers.

Electric cars simply move the CO2 production from the exhaust pipe to the smoke stack. Same with the hydrogen cell technology. Also bio fuels compete with the food supply etc.

One reason why I distrust government, especially in the AGW debate shows in this recent article in NZ news :-
 http://crasspoliticsnz.files.wordpress.com/2011/06/philgoff-and-ets.pdf

Here is the leader of the NZ Labour party (currently in opposition) saying that he is going to bring farmers into our ETS system and use that money for governmental purposes.

Somehow almost everyone has forgotten that the ETS is NOT  a tax (the money is supposed to be spent on carbon credits) and the government has no right to use that money!

Even more worrying is that the newspapers here and the current government did not pick up on that fact.

My conclusion on this article is that all politicians have always seen the ETS and other global warming things simply as a way to increase government revenue. i.e an excuse to tax! 

I hope but have very little faith that your government can do better than ours in terms of honesty.
If I were you I would fight that carbon tax tooth and nail.

If there are good viable alternatives to fossil fuels, governmental involvement would be entirely unnecessary. 

For example, did your government ever try to abolish horses?

Of course not. In some countries the horseless carriage was banned and I believe in Washington State or DC, the law requiring a person with a red flag to precede a motor vehicle still stands. http://www.stupidlaws.com/all-motor-vehicles-must-be-preceded-by-a-man-carrying-a-red-flag-daytime-or-a-red-lantern-nighttime-fifty-feet-in-front-of-said-vehicle/
The laws in UK were similar and some lasted well into the 20th century.
http://en.wikipedia.org/wiki/Locomotive_Acts
http://en.wikipedia.org/wiki/Locomotives_on_Highways_Act_1896 (See Notes)

Anyway in my opinion, all this points to the distinct likelihood of a premature cataclysmic hike in petrol/fuel oil prices.  The question is whether governments are foolish enough to heed the IPCC CO2 emission reduction demands.

Cheers

Roger

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