Thursday, 28 May 2009

Economic impacts of carbon pricing

How much extra will putting a price on carbon add to the household power bill?
The result of course depends on what price is set for carbon by the Federal Government. Currently this is $10 per tonne, although a recent report suggests the price is not expected to remain at this level. But even at $25 per tonne, the Government's fact sheet estimates a rise of, on average, $4 per week for electricity and $2 per week for gas and other household fuels.

Sean Casten has done some calculations for US electricity prices. The result? $13.60/MWh, or 1.4 cents/kWh. Given that the average price for electricity in the USA is 9.75 cents/kWh, this amounts to a 14% rate increase. (The US prices carbon at $20/ton.)

However, as he points out, electricity prices vary between states; this increase amounts to the difference between Maine (13.9 cents/kWh) and Massachusetts (15.3). On this basis, saying that Australia would be disadvantaged by setting a carbon price is like saying that Massachusetts would lose its industry to Maine because of this price differential. (As a recent post to this blog pointed out too, changeover costs tend to be overestimated because they don't take implementation efficiencies into account.)

Prince Charles is a greenie!

There may not be a huge number of royalists in the Australian environmental movement (although as an issue, the environment cuts across party lines). But when establishment figures like Prince Charles urge action on climate change, I think two things happen. First, and obviously, it gets the issue into the media, at least in Britain. Second, Charles has a history of using his profile for commenting on social issues. His comments normalise the issue; it's more difficult now to portray concern about climate change as alarmist or the preserve of a radical minority.

Excerpt from this BBC story: 'Hesitation over tackling climate change could be catastrophic, Prince Charles has told global warming experts. Speaking at St James' Palace, in London, the prince said: "It seems to me that in many ways we already have some of the answers to hand. "We know about energy efficiency, renewable energy, and how to reduce deforestation... but we seem strangely reluctant to apply them," he went on.' Read the full story.

Wednesday, 27 May 2009

Cap & trade: Carbon tax or wealth transfer?

Excerpt from this article by Sean Casten:
"It’s an article of faith that cap-and-trade will raise our energy costs, but it’s not necessarily true.

The ubiquity of this faith makes clear that the Smart People who write, talk, and vote about CO2 policy don’t really understand the issues. A quick discussion, and then some math to clarify.

There are two core problems with the theory that carbon pricing schemes will raise energy costs:
  1. We habitually confuse sector-specific wealth transfers with economy-wide pain; the two are not necessarily the same.
  2. Rather than admit our failure to imagine how the world would adapt to carbon pricing, we tend to assume stasis, thereby overstating the costs of compliance. "

Tim Flannery makes a similar observation in The weather makers. The rest of this article discusses both these points is well worth reading.

Tuesday, 26 May 2009

New web site about economics of climate change

Excerpt from a Dot Earth post:
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There’s a new star out there in the online constellation of viewpoints, a Web site called RealClimateEconomics.org. [ ... ] The people involved with the new economics Web site have a strongly stated point of view: “The peer-reviewed literature demonstrates that there is rigorous economic support for immediate, large-scale policy responses to the climate crisis.” They note that three themes reverberate through their work, all of which have been explored at one point or another on Dot Earth (the links in their statement are to relevant posts):
  • Risk and uncertainty are fundamental to the climate problem; the magnitude and the irreversibility of uncertain, but possible, worst-case climate impacts dominate the analysis of policy options.
  • Ethics and equity are inseparable from economic analysis; there are deep questions of fairness between rich and poor today, and between present and future generations, at stake in the debate.
  • The severity of the problem and the scope of the required response are so great that marginal analysis of small changes and modest adjustments of market-based instruments are inadequate to the task of understanding and protecting the earth’s climate.

More on green jobs

Excerpt from AAP story:
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... Hoping to create a global carbon market, the organisers of a world business summit on climate change said 2 million new jobs would be created in the US alone if it increased its reliance on cleaner sources of energy.
The Copenhagen Climate Council study said the US would gain that many jobs, if its electricity use grew by just half of 1 per cent a year and a quarter of its electricity came from wind energy and other renewable sources.
EU Commission President Jose Manuel Barroso told the CEOs of major international corporations that similar investments could produce a million new jobs in European Union countries.
"Change also brings big economic opportunities," he said.
In 2007, EU leaders pledged that by 2020 the European Union would cut emissions of carbon dioxide and other major warming gases by at least 20 per cent from 1990 levels, and increase its reliance on renewable energy sources to one-fifth of all its energy used.
"Achieving a 20 per cent share for renewables, for example, could mean more than a million jobs in this industry by 2020," Barroso said. Such a plan must be joined, he said, by "a satisfactory international climate agreement in which other developed and developing countries contribute their fair share to the limiting global emissions."

Friday, 22 May 2009

Copenhagen climate agreement

We all know world leaders and their delegates will be grinding out a new global climate agreement this December in Copenhagen. But have you ever wondered what document they will be arguing over? This post from the Dot Earth blog includes some excerpts from the United Nations negotiating text for the 192 countries to meet in Copenhagen. There is also some commentary about the likely "pinch points" in the agreement.

Friday, 15 May 2009

Green David vs brown Goliath

Of course environmental groups can't outspend the energy bloc when it comes to lobbying government. However we can work smarter and arm ourselves with some effective arrows. A recent post by Billy Parish looked comes up with four strategies for the smaller dog in the fight:
  1. Make it a battle of wills, not a battle of skills
  2. Empower people to think and act in real time
  3. Attack where they are weak
  4. Defy social convention (and be ready to do what is socially horrifying)

The full article from the Grist web site is definitely food for thought.

Biggest global health threat of the 21st Century?

"Climate change is 'the biggest global health threat of the 21st Century', according to a leading medical journal. The Lancet, together with University College London researchers, has published a report outlining how public health services will need to adapt. It also highlights the consequences of climate-related mass migrations. The authors aim to add their voice to the call for carbon mitigation and will focus on making clear the ways in which climate change will affect health."

Read the full article from the BBC.

They're worried out there

We may read that climate change isn't of widespread concern out in voterland. A recent survey by professional pollsters in the United States, however, reveals most people perceived climate change as "a serious threat, particularly to future generations". If these feelings are similar in Australia, we need to go on supporting and creating events to tap into these concerns. The takeaway - don't get discouraged!

An excerpt from the full article:
"A survey we completed in March reveals that nearly eight in 10 voters believe global warming is either happening now or will happen in the future, with 53 percent seeing evidence that it is happening right now. Gallup uncovered similar attitudes, as 53 percent told them global warming has already begun, while just 16 percent are deniers, expecting it will never happe.Over two-thirds of the electorate believes global warming constitutes a serious threat. In response to a different question, posed by researchers from Yale and George Mason universities, a similar number said they “worry” about global warming. A third believes it will harm them, while 61 percent foresee harm to future generations.Perhaps more importantly, voters are demanding action to reduce the carbon pollution that causes global warming. In the Yale/George Mason poll, two-thirds urge Congress to do more on the issue, and in our survey, 77 percent favor action to reduce carbon emissions. In an April ABC/Washington Post poll, 75 percent supported federal regulations on the release of greenhouse gases.In short, a strong public consensus has emerged on the reality and severity of global warming, as well as on the need for federal action."

Wednesday, 13 May 2009

'Coral triangle' a global emergency

"Australian scientists are warning of the possibility of a future wave of economic refugees from south-east Asia and the Pacific if one of the world's most important marine ecosystems is devastated by climate change." Rest of this story from the ABC.

A story to remember the next time someone says they think climate change isn't such a big deal for Australia. This story should inform them that acting against climate change isn't just good for the planet, it's in our interests too.

Friday, 1 May 2009

'Safe' climate means 'no to coal'

About three-quarters of the world's fossil fuel reserves must be left unused if society is to avoid dangerous climate change, scientists warn.
More than 100 nations support the goal of keeping temperature rise below 2C.
But the scientists say that without major curbs on fossil fuel use, 2C will probably be reached by 2050.
Writing in Nature, they say politicians should focus on limiting humanity's total output of CO2 rather than setting a "safe" level for annual emissions.

Read the rest of this article via the BBC report.

Hope Kevin Rudd is reading this and has a re-think about "clean coal".