Larvatus Prodeo is one of Australia's more prominent political blogs, and today it has some unkind things to say about the Lowy Institute's annual poll, released this morning. Specifically, the Institute is charged with push polling in regard to one question on climate change, which included the phrase, 'Until we are sure that global warming is really a problem, we should not take any steps that would have economic costs.' Larvatus Prodeo says:

The Lowy pollsters can’t even point to Climate Tragic Michael Costa to justify this anymore. Is this duplicity or just plain laziness?

Since Costa is known as something of a climate change denialist, let's first deal with the implication that the Lowy Institute has a climate change denialist agenda. More...

Kien Choong sets me straight: 

Mr Roggeveen's post suggests that he hasn't read the Garnaut draft report. Chapter 16 explains why public funding for R&D, particularly for clean coal technology, is appropriate.  If I can attempt to summarise the rationale, the benefits of finding a way to commercialise clean coal technology will be enjoyed by all coal generators. It is a public benefit. If a single coal generator were to invest in clean coal technology, other coal generators will benefit or 'free-ride'. The private incentives to develop clean coal technology are therefore too weak from a social view point.

Of all the nations of the world, Australia will arguably benefit the most if the coal generators overseas also adopt clean coal technology. For example, if China introduces emissions trading, it will cut back on purchasing coal from Australia if its coal generators must purchase carbon emission permits. This applies to all other countries importing coal for electricity generation and which introduce emissions trading (or other carbon reduction schemes).

I might add that the Garnaut draft report also mentioned that local communities that depend on the coal generators for their economic survival could incur significant adaptation costs if Australia did not find a way to make coal generation under an emissions trading scheme. That too, is a social cost not taken into account by private investors deciding whether to invest in commercialising clean coal technology.

When those with a free market orientation talk about how governments should tackle climate change, they tend to argue that the best thing is to create the right incentives for the private sector to act responsibly. If governments have to take direct action, it should only be to invest in basic research that business and industry would not themselves have any reason to pay for. Any more than that, and the government is 'picking winners', and interfering in the market. For instance, It seems pretty self-evident that the $35 million gift to Toyota to encourage it to build hybrid cars in Australia falls squarely into the 'picking winners' category. It's a subsidy, pure and simple, and does not meet the simplest test of economic logic.

So what about this newly-announced clean coal plan? It does seem to have the same flaws. After all, if there was a price on carbon, wouldn't the coal and energy industries have plenty of incentive to invest in this technology themselves? The counter-argument would seem to be that government has to offer subsidies as an incentive for those industries to stay, because the carbon price would otherwise encourage them to move to countries without a price on carbon. But how do you ship a powerplant and a coal mine overseas?

Photo by Flickr user Dallas75, used under a Creative Commons license.

Thank you to the Sun-Herald of 17 August for a memory jogger with the latest goss on what’s happening with the International Commission on Nuclear Non-Proliferation and Disarmament-ICNND for short-until someone can find a catchier name. It reports (no link available) on the 'new mini-empire' that an emaciated DFAT has been forced to establish and staff to cater for its needs.  

It’s a worry to think that the Commission’s Secretariat is being financed from within (none) existing DFAT resources, on which we have signalled our concern in previous blog posts.

On the positive side of the ledger, the system seems to be gearing up to get the work of the Commission rolling, even though we do not yet know who the members of the International Commission are More...

Jim Manzi, who authored the piece that started our climate change thread (and who blogs at The American Scene) responds to Dominic Meagher's critique of his article:

I would like to make a few quick comments in response to Mr Meagher’s letter:

1. He may be well aware of the facts of the properties of CO2, and of the purpose and stature of the IPCC, but I did not want to assume that all readers had this knowledge.
2. The IPCC projects a 2.8C increase in global temperatures by 2095 as a result of the A1B SRES scenario, often used as a reference case scenario, as per table SPM.3 in this IPCC Summary for Policymakers (see p.13). In the same table you will find also a range of six marker scenarios that are between 1.4C to 4C. The straight average of these scenarios is also 2.8C warming by 2095. This is why I used 3C as warming 'under a reasonable scenario' by 2100. I think this is a fair representation of the IPCC scenario-based projection results. 
3. The IPCC estimates that warming of 4C should reduce global economic output by 1- 5% (see p.17). 
4. The reason I was careful not to make a more precise statement about when in the 22nd century we would reach 4C of warming if we had reached 3C of warming by 2100 is precisely because of the non-linearity of climate response.

Yesterday I invited commentary on a Cato Institute article advocating a 'do very little' approach to climate change. I'm grateful to Peregrine for taking up that invitation, but I confess I'm only a little wiser after reading Peregrine's posting.

Peregrine first argues that differences among economists as to how serious climate change is depends on the discount rate they apply. But Peregrine does not go on to offer grounds for prefering one discount rate over another, so it's not clear why the 'do very little' school is wrong. Peregrine then argues that the 'do very little' analysis assumes high costs from carbon trading and moving to low carbon power generation, but discounts the 'surge' in renewables we'd get. If true, that seems a pretty serious omission.

The third argument is an odd one. Peregrine says that when uncertain projections about the future speed and magnitude of climate change are fed into economic theories of discount and growth, they produce 'statistical lies' that support a no-action policy agenda. Does Peregrine mean that all attempts to analyse climate change in these terms are bogus? And if so, what's the alternative?

Some weeks ago Peter Drysdale at East Asia Forum gave me a gentle slap on the wrist for being too cautious in my support for higher carbon prices to spur development of low carbon technology. 'A higher carbon price is central to getting incentives right to encourage the massive investment in carbon fuel alternatives', said Peter.

Now today I read this piece from the free market Cato Institute, which struck me as the most compelling case I have seen for the 'do nothing' (or at least 'do very little') school of climate change. And in it, author Jim Manzi pans the argument that we ought to create an artificial scarcity for carbon to incentivise development of low carbon technology. He says any carbon tax would be 'insanely expensive' yet still not high enough to work as an incentive for new technology. Trouble is, Manzi never says exactly why he thinks that's the case, though he does warn that much of the revenue from a carbon tax could be wasted on industry policy.

The whole article is worth a read, though below is a neat summary that Manzi himself provides. I'd love to hear arguments explaining why this is wrong:

In summary, then, the best available models indicate that 1) global warming is a problem that is expected to have only a limited impact on the world economy and 2) it is economically rational only to reduce slightly this marginal impact through global carbon taxes. Further, practical knowledge of the world indicates that 1) such a global carbon-tax regime would be very unlikely ever to be implemented, and 2) even if it were implemented, the theoretical benefits it might create would almost certainly be more than offset by the economic drag such a regime would produce.

Tim Dunlop is right on the money with his latest commentary on selling climate change to the public. In fact, Shadow Treasurer Malcolm Turnbull made a similar argument on Q&A last night: you don't actually need to believe that climate change is happening or even to invoke climate change to agree that reducing pollution and conserving energy are good things. So let's do those things, and if climate change turns out to be the biggest hoax since War of the Worlds, we'll still be better off.

Selling environmentalism should be easy in our political climate, and Tim notes the high level of public goodwill. But there is a danger that relentless environmental doomsaying will undermine that goodwill by creating fatalism or cynicism when the promised apocalypse does not arrive. If I had my pick of environmental activists, I'd sooner the Arnold Schwarzenegger model than that of Al Gore. Arnie is an optimist; Al is a scold. Al thinks we're doomed if we don't act; Arnie thinks lasting political movements are built on hope, not fear.

At the moment, I'd say our government is a little too Al. Perhaps the opposition's niche lies in being more Arnie.

UPDATE: Al Gore places infant son in rocket to escape dying planet.

Andrew Ure has this contribution to our New Voices thread:

Susan Park's thought-provoking article on global environmental governance raised the notion of private sector environmental standards, which can be highly effective.

Global industry sector standards can often lead the way for the public sector. For instance, a number of key players in the international aluminium industry have adopted environmental standards for their sector that go beyond national requirements. Thus, while China has not, at this stage, agreed to any binding national commitments, some Chinese aluminium companies are already co-operating with other aluminium producers around the world to look at ways to reduce their emissions.

Voluntary agreements like this will likely never have the teeth to deliver the emissions reductions we need to avoid dangerous anthropogenic interference with our climate. However, they can help serve to guide policy-makers as they grapple with the broader problem. They should be encouraged.

All Roads Lead to China sees the modern China story played out in the pages of this new report by the Commission on Growth and Development, on how countries can achieve fast and sustainable growth. But the graph featured on All Roads, taken from that report, might also have some relevance for the climate change debate.

In particular, I'm thinking an interview with former Liberal Leader John Hewson on Radio National this morning. He argued that to to reach a 60% C02 reduction target by 2050, we'd have to move much faster on an interim 2020 target than either political party is contemplating. Hewson wants target of 40% reduction by 2020. He thinks the Government will go for a 20% target by 2020.

Now, take a look at this graph from the Growth Commission report: More...

Guest Blogger: Susan Park (pictured), a Lecturer in International Relations at the University of Sydney and a panellists at New Voices writes in with this contribution to the discussion kicked off yesterday.  

How will global environmental issues be addressed in the future? Steven Bernstein calls the current structure of global governance a 'compromise of liberal environmentalism' where environmental issues have been inadequately addressed within pre-existing economic structures. This comprises three components. First, state sovereignty. States determine if, when and how we address environmental problems through signing and ratifying international agreements and creating, monitoring and enforcing national policies. Climate change negotiations within the United Nations Framework Convention on Climate Change (UNFCCC) in Bali and preparations for Copenhagen are an obvious case in point. More...

Thanks to reader John Hannoush for pointing me to this, from Canberra press gallery veteran Laurie Oakes:

Republicans and Democrats I met in Washington recently told me Rudd can play a role in bringing the US and China together on climate change once George W. Bush is replaced in the White House by either Barack Obama or John McCain.

Rudd understands this, and is preparing to act as a go-between. It is a major reason he is attending the opening of the Olympic Games. He wants to keep his "in" with China's leadership so he can engage in effective climate change shuttle diplomacy between Beijing and Washington. But Rudd would have no credibility as an intermediary if Australia failed to show it was prepared to take action itself.

Meanwhile, I liked this line from Henry Ergas' op-ed on climate change in today's Australian:

Yet the policy decisions the report calls for are of huge consequence: they cannot be made on the basis of romanticism and generous impulses...That the Opposition has been debating these issues is therefore hardly worrying; what would be terrifying is if the Government were not to.

This hits on a real paradox about Australian politics. Journalists routinely complain that politicians never say anything interesting or spontaneous, yet when political leaders depart from the talking points to hint that — shock, horror — there might be some differences among their colleagues on a 'diabolical' policy issue like climate change, the Canberra press gallery punishes them ruthlessly with claims of 'division'. It's pathetic.

Yesterday Warwick McKibbin argued some countries which have set greenhouse gas reduction targets are not meeting them. That debate — and the related question of whether the Kyoto protocol is working in Europe — is continued on Global Dashboard, with a defence of Kyoto. Make sure you read down to the comments section of the post, which includes a reply from Kyoto critic Ted Nordhaus.

The Global Dashboard post also contains some good links; for instance, the broader question of whether a top-down target-based approach to emissions reduction works is addressed in an op-ed in Nature magazine, published last year.

I'm finding my thinking on this issue evolving rapidly over the last few weeks, towards a greater scepticism of large-scale, long-term initiatives like carbon trading. As the Nature op-ed recommends, the more effective answer might be a massive investment in clean energy R&D, though you could argue that a carbon price would be a good way to pay for such investment.

UPDATE: What he said.

The Garnaut review, based on targets and timetables for emission reduction, will delay action on climate change at the global level. Most of the world has no clear policy framework, and most countries are not taking on targets and timetables because they don't want to commit to a system without knowing the cost. Some countries that have taken targets (Japan, NZ, Canada) are not even close to hitting them because domestic politics is blocking action. Only the Europeans have a wide ranging ETS and it is full of holes and exemptions for political reasons.

Wishful thinking will not solve this problem but it will, and has, delayed action. Emissions are at the high end of the most pessimistic projections. We have had Kyoto for 11 years and we are in the first year of the binding period with no chance of hitting the Kyoto targets on average between 2008-2012. That is why there is so much debate about what to do post-2012. This is pretty strong evidence that we need to modify the approach in important ways and not promote a position in Australia that will actually delay action globally.

A better way is to have clear long term goals priced in transparent domestic markets and fixed short term carbon prices equal (where possible) across countries. The McKibbin Wilcoxen Hybrid  is a way to break the national and global political log jam because it deals with climate policy in the same way countries now run monetary policy (but with a different time frame).

Alex Evans from Global Dashboard is cautiously excited about the potential for electric cars to make a difference to carbon outputs, but he has two lingering doubts: (1) plug-in cars may overstretch the power grid, and (2) if the grid generates power from carbon-intensive sources, we may not make any carbon savings.

As it happens, both issues were addressed in a quirky American documentary screened on Australian TV last night. On the first, here's a quote from the program transcript:

Our existing electric utility system could handle tens of millions of plug-in hybrid vehicles if they would be recharged during off-peak times, such as at night.

And as for number two: More...

The science and policy of climate change is devilishly complex, and not just for the non-experts. As the newly released Garnaut report says:

Climate change is a diabolical policy problem. It is harder than any other issue of high importance that has come before our polity in living memory.

(Nb. I haven't read the whole thing; just this extract.)

As someone with a international security background and with only the vaguest grasp of the science, I've been struck by how reliant the policy prescriptions for dealing with climate change seem to be on scientific modeling of what our climate might be like in 2050 and beyond. I'm always wary of such long-term predictions in my own field. In fact, the evidence is pretty clear that political experts routinely make very bad predictions on subjects they know a lot about. More...

Colin writes in reponse to Fergus' post on climate change:

While 75 percent of us regard climate change as an important issue, according to a poll, we just don't think it should impact our need for speed, power and adulation from pedestrians as they desperately dodge and weave out of our prestigious vehicles' paths. But hey, if the billboard ads tell me what I need, who am I to argue?  'In 2007, sales of sports utility vehicles were up 16 per cent, with sales of other cars up more than 6 per cent. Gas-guzzling sports utilities now account for about a quarter of total car sales.' - Ross Gittins.

The fact that people respond to price signals by buying fast, powerful and inefficient cars does not make them stupid or gullible. And when those price signals change and we start buying smaller, more efficient cars, that won't be a sign of our environmental virtue, either. It's just markets at work.

There is simply no way we will address this problem by relying on people's good will to 'do the right thing'. Hectoring people about their environmental vandalism when all they are doing is enjoying the spoils of living in a free and prosperous society is an even worse idea.

Today and tomorrow look out for the battle of ideas taking place over Australian climate change policy. At 12.30 today, the Lowy Institute's Warwick McKibbin will be delivering an important speech at the ANU setting out his proposals for responding to climate change. His talk comes a day before a draft of the government-commissioned climate review by Ross Garnaut is released. As Warwick points out in an article today, he and Garnaut have different ideas about how to address climate change. For a range of reasons, Warwick opposes an EU-style cap and trade model, while Garnaut has publically opposed Warwick's proposal that is under consideration by a number of other governments.

As Lowy opinion polling has shown, 75 per cent of Australians see tackling climate change as a 'very important' foreign policy goal: ahead of combating international terrorism and preventing nuclear proliferation. More...

Interesting to see that a part-Australian-owned company is having some success in the US renewable energy market, opening its solar cell factory in Las Vegas recently. But Fortune magazine's green business blog reports that the venture is under a cloud because Congress has to agree to continue the current healthy tax breaks for the solar industry, which makes solar competitive with non-renewable power.

A cap-and-trade system on carbon emissions — which both Obama and McCain support, if in different versions — is designed to have much the same leveling effect, making it more attractive to invest in renewables. In fact, it would be better than targeted tax breaks in that the benefits of cap-and-trade wouldn't be confined to the solar industry, but would give every form of renewable energy a more even playing field in competing with coal and gas.

My assumption here is that, once cap-and-trade is in place, the subsidies and tax breaks will be stopped. It also assumes the US (and Australia) will be able to come up with a fair price for carbon emissions. Both are big political hurdles against entrenched interests.

You need to set up a free subscription to read this McKinsey report (h/t GSI online), but it's worth it. Here's the headline conclusion from McKinsey's study on what can be done to cut carbon emissions in four major economies; the US, UK, Germany and Australia:

...each of these four large economies can reduce its emissions by 25 percent below the levels they will reach in 2030 if nothing is done to abate emissions. In addition, such cuts can be achieved at relatively little or no cost and without significantly changing the lifestyles of these countries. In Australia, the potential is even bigger—a reduction of 70 percent at little or no cost.

What’s more, many of these opportunities are profitable. Most involve improved energy efficiency—in other words, investments in better insulation for buildings, energy-efficient appliances and machinery, and more energy-efficient heating and air-conditioning systems, all of which will pay off through reduced energy bills.

That second paragraph is important because it suggests a way past the climate change scepticism debate. If these emissions mitigation measures can actually turn a profit, why wouldn't you invest in them, even if you think climate change is a crock?

But the question begs: if it's profitable, why aren't we doing it already? The report suggests a range of reasons, but one is that consumers are apparently reluctant to invest in higher upfront costs if the payback time exceeds two years.

This seems like a pretty big deal. The world's biggest car maker, General Motors, has just announced a major shift away from large car production (it's closing four truck plants and reviewing its super SUV Hummer brand) and towards what Americans call 'compacts' (hatchbacks to us). The key line from GM boss Rick Wagoner was that this new direction was motivated by rises in oil prices that 'we believe are more structural than cyclical'. In other words, GM judges that higher fuel prices are here to stay.

Australians have tended to favour big six-cylinder saloons like the GM Holden Commodore and Ford Falcon. In America, they like their cars even bigger, and as I understand it, there has also been a very strong cultural prejudice against small cars, which we've never had here. But it seems market forces are changing preferences in both countries (see the latest issue of Open Road for their assessment of why the new Falcon might be the last), which is a win for the environment, at little or no cost to standards of living. Add it to our list of climate change 'low hanging fruit'.

Andrew Norton long ago put his finger on the real greenhouse denialism, which is again evident in our latest domestic phony war about petrol prices. Andrew cites public opinion research that, while showing record levels of awareness and concern about climate change, also shows low tolerance for the higher fuel and electricity prices needed to address it:

This is the greenhouse ‘denialist’ problem - not a few conservatives arguing that climate change is a left-wing conspiracy, but a public that accepts the theory but rejects the consequences of their beliefs.

Right on. Peter Hartcher drives this point home* in his SMH column today, but only in order to criticise the government and opposition for their populism. The awful truth is that they are pandering because we voters are ready to be pandered to. More...

This kind of talk from General Motors (GM) boss Bob Lutz will depress a lot of greens, and plays right into stereotypes about the American obsession with gas-guzzlers. But it's actually encouraging in its own way, because despite his personal beliefs, Lutz is still steering his company (or at least building some new models) in the direction of energy efficiency. That's free markets for you.

UPDATE: A counterpoint: will energy efficiency actually help us reduce energy use, or does it fall victim to the Jevons paradox?

Foreign Policy published this piece of contrarianism on its website in August last year, so I'm very late in linking to it, but it is nonetheless worth comparing what author Idean Salehyan says with the 2006 Lowy Institute Paper, Heating up the Planet: Climate Change and Security, by Alan Dupont and Graeme Pearman. Salehyan wants to question what he calls the conventional wisdom on climate change, which is that it will cause significant international security problems leading to civil and inter-state conflicts. He says such claims 'generally boil down to an argument about resource scarcity', and then makes a convincing case that resource scarcity probably won't lead to wars. More...

Michael Fullilove's post got this reaction from Alex Avery:

Your comments about my father’s book are lacking in any substance whatsoever. Spelling errors and perceived lack of 'authoritative feeling' aside, where is any mention of the reams of cited peer-reviewed research indicating exactly what the title of the book states: global temperatures today are not historically unusual in comparison to relatively recent times (i.e. most recently the Medieval Warm Period) and the existence of a natural, roughly-1,500-year climate cycle? By all means, let’s ignore any and all substance and impugn motives instead. How noble. How enlightened. How . . . sad. More...

A few weeks ago I, along with most of my colleagues on the staff and the board of the Lowy Institute, received a complimentary copy of a book called 'Unstoppable Global Warming – Every 1,500 Years', by S. Fred Singer and Dennis T. Avery. When I arrived at work there was an enormous pile of these tomes sitting at the Institute’s reception.

The book appears to be a fairly standard example of the ‘climate change skeptic’ genre. Contrary to the overwhelming scientific consensus captured in the most recent report of the UN Intergovernmental Panel on Climate Change, the authors argue that most global warming is not caused by human activities but by a natural 1500-year climate cycle, and that it is not nearly as dangerous as the Al Gores of this world make out.

I regret to say that this book does not have an authoritative feeling about it, starting with the spelling error in the publisher’s name on the title page. More...

Low-hanging fruit is everywhere, with the juciest in the tropical developing countries. In Jakarta, every business, small or large, and many middle-class households, have their own small electricity generator, to cope with the frequent brown-outs. If the PLN (the state-owner electricity generator) could provide a reliable supply, the small inefficient generators would go, their capital cost would be saved, pollution (noise as well as fumes) reduced, fuel saved and climate change slowed a tiny bit.

1. US parcel service UPS claims it could save 3 million gallons of fuel a year with navigation software that reduces the number of left turns made by its fleet of delivery trucks (in the US, left turns go across traffic, meaning the trucks have to idle while they wait for a gap). Imagine the savings if every car had such software?
2. Airbus announced it wants aviation authorities to certify its new A350 so that it can fly up to 350 minutes from any airport. For safety reasons, twin-engined passenger jets are normally forced to fly much closer to en route airports, but engine reliability improvements mean the A350 may be able to fly more direct routes, saving fuel.

One of the toughest aspects of the global environmental debate is that when rich countries insist that developing countries must curb emissions and improve standards, it looks to those developing countries like the rich want to deny the poor the opportunity to improve their lot. Which is why it is so difficult for Westerners to question the thinking behind India's Tata Motors newly-released Nano, the cheapest car in the world, without sounding condescending and paternalistic. Its alright for us to have such luxuries, we imply, but for the sake of the globe, maybe Indians should stick to walking. More...

Via Foreign Policy's blog, Passport, I see that Denis Dutton, editor of the marvellous and popular Arts & Letter Daily, has developed a spin-off site devoted entirely to the climate change debate, Climate Debate Daily. It has a similar format to its parent site, with frequently updated links to scientific articles, news stories, economic studies, polemics, historical articles, PR releases, editorials, feature commentaries, and blog entries about climate change.

But the format is different in one important way, and those who argue global warming is man-made and represents a serious threat to humanity might not like it. The Climate Debate Daily site is divided down the middle, with links for 'calls to action' on one side and 'dissenting voices' on the other. The 'dissenting voices' crew have argued for years that their scepticism does not get equal billing in media debates, with 'calls to action' advocates saying this is just as it should be, given scientific opinion is weighted heavily against the sceptics.

Dutton says his site is neutral, but this format does seem to favour the sceptics, given their smaller number. On my observation of Arts & Letters Daily, this is not entirely surprising, as his article selections tend to favour the political right. But Arts & Letters Daily is always intelligent and humane and never dogmatic, so the advent of Climate Debate Daily is sure to be a good thing, no matter which side of the debate you are on.