Circus time in Kopenhagen

Kopenhagen is currently witnessing two comic relief shows. One is regularly seen in the amusement area known as Tivoli, and the other is the climate change conference. The core element of pure humour in the second circus is that the actions of many governments are diametrically opposed to their words, mainly for the benefit of a watching population that wants tough words but no real action. It is like watching one clown after the other pretending to be sad whilst laughing if the rest of the clowns backs are turned.

Let us over the fold once more review the core elements of the actions and the words in this debate, and let us start at home.


The actions of the Australian Federal and State governments are to prepare for more energy use in the future. Highways are being broadened around the country, tunnels are dug in Brisbane and elsewhere, and low petrol prices are being lauded as a good thing. Note for instance what the Australian Institute of Petroleum argues: Australian consumers clearly benefit from our highly competitive fuel market where retail petrol and diesel prices are among the lowest in the developed world. These highways are not just built for tomorrow: they are built to accommodate the expected increased traffic flow for the next 20 years. With the current technology this inevitably means more energy usage: whether they run on oil, benzene, gas, or electricity, they ultimately produce carbon emissions because even the electricity is generated by fossil fuels. If a decision were made to go nuclear, this wouldnt change the energy mix in use the next 10 years at least because it simply takes a long time for these reactors to be built. According to ANSTO (Australian Nuclear Science and Technology Organisation) Researcher Pat Mahony, given the long construction times required for nuclear power plants, as well as the time required to find a suitable site, conduct rigorous environmental impact studies, etc, it is unlikely that Australia would have a functioning nuclear power plant until at least 2025.
It is not just in infrastructure that we are preparing to use more energy. The desalination plant in Tugun, a major electricity guzzler, is now all but ready to start using more fossil-fuel generated power. According to the Federal Department of the Environment, Water, Heritage and the Arts a desalination plant similar to Perth’s, even with energy recovery capability, will consume about 24 megawatts of electricity to produce about 45 gigalitres of water per year. This represents about 185,000 megawatt hours of energy per year. Desalination plants are also on the table or already being build in various other states, with proposals to build plants in Sydney, Wollongong, Melbourne and Adelaide and a plant under construction at Kwinana.
What goes for energy usage via water and roads, also goes for most other areas of major energy use: airconditioning is only going to be used more in the future since more houses are built in the warm north rather than the cooler south. Agriculture is in no way facing the threat of constraints to keep generating emissions. Airports are planning expansion, not reduction. Industry too has now been all but promised that it wont have to do much.
So where is the action in terms of emissions reduction? In what should be termed pure window-dressing areas, such as solar panels on the roofs of urban households. Large subsidies are used to put these solar panels up, even though urban private household energy consumption consists of only10% of total energy usage in Australia. According to the ABS total energy usage in Australia has increased by 15 per cent over the last six years (roughly in line with GDP which is set to double again the next 30 years), and households account for 12 per cent of our country’s energy usage.
The main con trick that Australian politicians are playing at the moment is of course to pretend that it is none of our business that much of the planned additional energy consumption of the rest of the world would happen in the shape of burning Australian coal. If Australian politicians (or its public) were serious about wanting to do something about climate change via emission reductions, then the number one thing it can implement tomorrow is to ban the export of coal and coal related products. This would quite probably increase the world price of coal and other fuels (which are substitutes), leading to higher incentives for other countries to truly reduce their usage of energy. That would consistitute ‘doing our bit’ and could be sold as ‘helping other countries reduce their dependency on coal’. It wouldnt even cost Australia that much because the total export of coal is worth only around 3% of total GDP. Better still, one could see it as a form of savings because it keeps the coal in the ground for the future. There are thus plenty of good environmental and economic reasons to simply stop exporting coal. Hence, you should understand the eagerness of the government to be seen to support an ETS more as a smokescreen to protect the coal exports rather than as a genuine attempt to help the planet, though I doubt very much that the involved government ministers realise that this is the actual effect of their actions. They probably truly believe they are trying to do the right thing.
What goes for Australia is true around the world. My country of birth, the Netherlands, pays tomes of lip service to the idea of emission reductions but is meanwhile planning 4 more coal-fired power stations to fuel the economic growth its public is still eager on! China is building roads, air conditioning, airports, and coal-fired power stations like there is no tomorrow. India and the other rapidly growing major states of Asia are close behind, and much of the coal they plan to burn to fuel their economies is expected to be dug up here. The idea that all these long-term investments into future energy consumption are going to be undone any time soon belongs to fantasy land.
Hence, what is really driving the agenda at Kopenhagen? The main thing to note is that world opinion has been convinced that emissions are something to be feared and that humanity should do something about it. Yet world opinion does not really translate into green votes. One might naively think that the strong public support for ETS schemes means the population really wants to reduce their personal energy usage and that of the country as a whole, but woe betide any mainstream politician who doesnt promise more growth and doesnt support planned increases in energy use! The same people who claim to worry about climate change have 4-wheel cars, fly around, have extensive air conditioning, and vote for politicians who promise to get them out of recession and into more energy usage. Hence the realist should drily note that there is a great demand amongst the general populace (seemingly around the world, not just in the Western countries) to pretend to do something about emissions, whilst the support to truly reduce emissions is minimal. We are in the fairly incredible situation where the world population virtually demands that their politicians perform a ritualistic rain dance in favour of emission reductions as long as nothing truly changes.
Hence the circus we now see in Kopenhagen. The watching public gets what it demands of the politicians: American, Chinese, and other ministers are making beautiful speeches about the need to preserve the planet and the dire consequences if real action is not decided upon now. Some of the small Island nation ministers actually seem to mean it too. Yet the big governments are at this very moment planning ever more emissions for the next 20 years. It is a circus show solely meant for the consumption of the home viewers who clearly demand a circus show. I challenge anyone who believes that the world will truly reduce emissions (whether a half-baked agreement is reached or not) to a bet on the actual growth of emissions in the next 15 years.

The one interesting aspect that may come out of this circus is that some of the truly interested nations, i.e. the pacific island nations, may learn from this conference that they have been duped and that the rest of the world will happily see their islands sink beneath the rising ocean rather than truly change their own way of life in terms of energy usage. The interesting thing then will be if these pacific islands (and some other, more powerful countries with large areas of low-lying vulnerable coastland) will decide their only real chance is to implement some desperate technological plan to cool the planet down (see: here). It may seem far-fetched at the moment but I wouldnt be surprised if we would quite quickly see a push towards experimentation with geo-engineering initiated by the Association of Small Island States. As I argued before, geo-engineering is the only realistic way forward if you’re really worried about global warming.

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15 Responses to Circus time in Kopenhagen

  1. Jacques Chester says:

    The problem is that the small island states have approximately diddly and poop resources. That’s why they’ve been reduced to what amounts to begging and nagging. There’s no way they could realistically bankroll the kind of large science that geoengineering would need.

    Part of me thinks that funding research into geoengineering out of a tax on coal exports would be a neat way to tie the two ends together. Another part of me suspects it would grow into an unkillable white elephant. Yet another part at me baulks at the grossness of taxing exports.

  2. Hi Jacques,

    of course the small islands are the minnows of the science funding world. Yet, they could for instance offer themselves up as guinnea pigs for scientists from other areas wishing to experiment. If I were an engineering scientist who believed that chucking sulphur oxide into the atmosphere was the way to go (which I am not because I dont know enough about chemicals or the environment), then I’d be on the phone right now to the minister of some small island to ask if I can some and chuck some of this stuff into their atmosphere.

    Yeah, white elephants are definitely on the horizon in all of this. To be honest though, they are already there: you should see some of the ‘solar’ farms or ‘wind farms’ in Europe. They dont yield much useful electricity but they are big, expensive, and white.

  3. Edward Mariyani-Squire says:

    Paul:

    I’m not clear about this: “Better still, one could see it as a form of savings because it keeps the coal in the ground for the future.”

    I assume this is premised on the belief that the remaining unmined (“saved”) coal will in fact be used in the future. If, however, as a result of banning coal exports (obviously a tad pipe-dreamy), the higher world price of coal eventually drives a technological shift to non-fossil fuel energy production, wouldn’t that imply coal-based energy production would, in “the future”, be obsolete? If that is so, it’s hard to see how unmined coal would be a “saving” in any relevant sense of the word.

  4. Hi Edward,

    Sure, its possible that fossil fuels as the dominant fuel source would get replaced over time by something else, but the path towards it would include price increases for coal. Hence the basic idea would be to leave it in the ground for, say, 50 years, and then sell bits of it off at much higher prices than at present. You could even make the date at which you start selling again depend on the concentration of CO2 in the air. You could of course envisage a situation in which the world truly does find a non-fossil fuel alternative that turns out to be even cheaper than coal is now (hard to believe but you never know) making it impossible to sell the coal in the future. That would be a case of bad luck in which the only silver lining I could then hide behind would be the reduced degree to which the natural resource curse held sway over us :-)

    Of course banning coal is pure pipe-dreaming, but it is only pipe dreaming because of our inability to let go of the desire to become ever more wealthy as soon as possible (the topic of an earlier blog). A loss of 3% of our income would make us just as rich as we were in mid 2008. It says something about politics and our attachment as a population to growth that this minor price is already seen as a totally unacceptable move backwards.

  5. Edward Mariyani-Squire says:

    Paul:

    Clear now. In short, your answer is, ‘there will be demand for the unmined coal in the future’, despite technological change. If one had to guess, one would assume this demand would be coming predominantly from underdeveloped (“less developed”) countries. Then again, if we were thinking of a 50 year period, its obviously impossible to say anything confidently about a particular product or resource. Personal computers, anyone?

    RE: “Of course banning coal is pure pipe-dreaming, but it is only pipe dreaming because of our inability to let go of the desire to become ever more wealthy as soon as possible”

    Perhaps the “only” makes this too strong. I wonder what the following ratio is, compared to other industries?

    mining company donations as % total political donations
    ——————————————————-
    mining production as % of real GDP

  6. Jacques Chester says:

    Edward;

    At least one (speculative) future use for coal deposits will be as feedstock for molecular-level nanomanufacture (NMT). I vaguely recall at least one sci-fi story where the Sierra Club has started setting fire to abandoned coal mines to replace CO2 being taken out of the atmosphere by NMT.

  7. Edward,

    yep, exactly what I am thinking.

    Jacques,

    feeding the coal to microscopic robots? That’s what I call an outlandish solution!

  8. Edward Mariyani-Squire says:

    Jacques:

    At least one (speculative) future use for coal deposits will be as feedstock for molecular-level nanomanufacture

    That sounds even more pipe-dreamy than banning the export of coal in the first place … but then again, after reading some stuff on possible implications of quantum theory the other day, relatively speaking, it sounds eminently sensible.

  9. Tel_ says:

    We already have molecular-level nanomanufacture, going by the common name of agriculture, and yes it does slurp carbon out of the air. At the moment there’s a somewhat limited inventory available through this method but that is changing.

    Most agricultural products get burnt, or rot down (one way or another) so we would have to plant a lot of long-lived trees to make a detectable difference on atmospheric CO2 levels, but then we do have a lot of space available for planting. Sadly, the law is structured such that planting trees is a massive liability to landowners — one can only conclude this was done as a discouragement to ensure landowners avoid trees wherever possible.

    Of course, if someone found a tree that grew quickly, and was well adapted to filling the inland scrub areas of Australia, we would have all the hand wringing about changing the natural ecology and the importance of native trees only being planted, thus ensuring we perpetually get back to where we started, give or take a stone cave or grass hut.

    I’d guess by now the reader might detect my dislike of the Luddite aspect of the Green Movement.

  10. Tel_ says:

    There’s been some mention of a worldwide tax on international travel and freight with the money going to poor starving Africans (care of the not so poor and not so starving African governments).

    I’d be interested to know what the Troppo Economists think of this idea… sounds a bit like protectionism all over again. Will nuclear ships get exemption?

  11. _Tel,

    the textbook answer to taxing travel is that it would be taxing the wrong thing: you’d want to tax the emissions coming from travel, not travel itself. Taxing the emissions gives incentives to find better propulsion technology, taxing travel does not.
    As a plan though, I am generally in favour of Tobin taxes and other international taxes for whatever excuse. Its a means of engendering an international monitoring system of financial and economic transactions that I think would be beneficial: it would make it easier to detect fraud, is a means to reduce the ability of individual countries to free-ride, etc.. However, these benefits are all indirect. The direct benefit of a travel tax would surely be minimal?

  12. observa says:

    It’s essentially Hansen’s view
    http://www.guardian.co.uk/commentisfree/2009/nov/29/copenhagen-summit-climate-change
    The question it immediately raises is what level of CO2E taxation would CCers be prepared to support? Notice coal might simply be added to the mix here rather than singled out for an outright ban. Personally I think Hansenites are a bit like placcy shopping bag banners amidst all the packaging we cart home from the supermarket, with their Hansonite ‘I don’t like it’ pecaddillo. As far as I’m concerned CO2E is CO2E whatever its source. That aside Hansenites have the whole gamut of taxation to replace with CO2E taxation and we could imagine the outcome. Insulation subsidies, solar feed-in tariffs, handouts to hybrid car Cos, geothermal pork, etc, etc would become superfluous, if not facile under such a regime and so they should be.

    Perhaps if some of our world renowned CC scientists could drag themselves away from working out whether we should be drinking instant instead of filter coffee, they might like to do some sums on that maxm hypothetical CO2E tax and intermediate steps. eg How much per tonne would it be to replace income and company tax and so on. What would be the likely income/price elasticities of demand of various tax mechanism tradeoffs to switch them to CO2E? I’m an agnostic on AGW but not on peak oil or the incredible ability of fossil fuels to turn our natural environment to our wants. It is the life blood of modern capital and the long reach of computerised logistics and all that comes with that (ultimately the dreaded ‘globalisation’ for so many enamoured of the small is beautiful ethos) Supposedly we’re all to get off our fat, remote controlled butts more in this new greener world and trickle down all that vast new green techno horizon to those with the least to sell in this currently constituted marketplace (ie their manual labour). What better way to facilitate that than abolish income/exertion tax and tax the life blood of capital we might well ask? Ask but you’ll get a stony embarrassed silence.

    I have long contemplated that maximum CO2E question and as Hansen points out it has some stunning attractions but I’m not quite convinced. For me you’d still want to tax other resource use, most notably land and water use, which really means a concern for the terrestial environment. This AGW agnostic is with the Hansenites but he’s got a much more balanced approach than their manic obsession with the atmosphere of late. The Bellamys and Walmesleys have a point and the blueprint widens in scope and then it leads you to consider how best to bring it all together. Keep trying, don’t get distracted by grand plans and vision splendids and you’ll get there. The third way.

  13. Tel_ says:

    It’s only a proposal, so all details are fuzzy and I suspect they grabbed something off the cuff, to avoid coming home completely empty handed. Certainly it has not been given a good thinking through:

    http://www.smh.com.au/travel/travel-news/aviation-tax-would-devastate-tourism-20091217-kzxi.html

    It was responding to a proposal floated at Copenhagen that a tax on international aviation would help poorer nations cope with climate change.

    “Any plan to tax aviation is ridiculous and would severely disadvantage Australia and its Pacific neighbours, which are reliant on tourism for their survival,” said the forum’s executive director, Brett Gale.

    Needless to say, the aviation industry is none too happy, no surprise!

    As a plan though, I am generally in favour of Tobin taxes and other international taxes for whatever excuse.

    Hmmm, “whatever excuse” sounds a bit too close to the rationalisation of recent wars for my liking — end justifies the means, so say anything right now and paper over the cracks later.

    I’m somewhat in favour of Tobin taxes too (on transactions, not travel), but if we were going to go down that path I’d like to see it presented forthrightly for due consideration by the electorate. Pushing a Tobin Trojan horse just sets the scene for bitterness and betrayal when the voters notice they’ve been had (yet again). It’s part of the reason why so few people trust anything remotely connected with government anymore (and since we were talking about the Copenhagen conference, there would be prime example of an instrument distrusted by both the true believer Green lobby and the Conservative/Skeptic side).

    Ultimately every national government is only in a position to tax its own people, so an international tax is really a treaty between a group of governments agreeing to each tax their own citizens in equal measure. This prevents the citizens shopping around for a better regime, and to some extent improves visibility detecting criminal activity (although I would hazard a guess that they guy with his undies full of cocaine is also probably not going to feel inclined to carefully document his transactions, nor pay tax in any form, so once again we have a scheme designed to catch the honest crooks).

    It makes more sense in my mind for a tax on contract enforcement that goes along these lines… a large bank in Australia makes a credit swap with a large overseas bank. Needless to say, a contract is involved and both parties expect that contract to be taken seriously, which implies that two governments are jointly expected to provide the service of enforcement. Not completely unreasonable for both governments to ask for the contract in question to be registered with them in advance (involving a small service fee) just in case anything goes wrong (perish the thought). Unregistered contracts simply would not legally exist so don’t bother waving an unregistered contract in court.

    This means that the Mafia, Yakuza, etc will skip the registration process, save a dollar, and never bother to go to court because they have way too much to hide — they are happy with their own enforcement system, and they are skilled professionals so this will happen regardless of how we legislate. Might as well build a bit of common sense into the process. Come to think of it, why not open the marketplace up so the gangs can offer contract enforcement services on an equal footing with governments? They are all in the same business after all, and higher diversity in the marketplace can only be of benefit to all parties.

    None of my suggestions relate to Carbon in any meaningful way :-) but then again, neither did Copenhagen ;-P. If any of the delegates were real believers they would have been riding around on bicycles and sitting in an unheated hall with a warm jacket rather than zooming in and out in private jets.

  14. observa says:

    “Ultimately every national government is only in a position to tax its own people, so an international tax is really a treaty between a group of governments agreeing to each tax their own citizens in equal measure.” And the supreme irony of Copenhagen was watching a bunch of amateur Western leftist dullards be so mortified that those inscrutable, pro Maoists would have none of their oversight or outsourced meddling. It’s like this chaps, it’s what REAL leftys do so well and if you’re on the outer, then tough tits morons. And they wonder why we freedom loving, market green men are like we are?

    Which raises an interesting insight into the overall trend for educated elites to become leftys. Not having to sing for their supper with the dollar voters it’s probably inevitable they’ll drink their own group bathwater and come to believe they’ll know what’s best for us all. That was the underlying lesson of Jones, Mann, et al and the whole IPCC, UN thingy. They end up being a bunch of upmarket Hansonites with letters after their name, parrotting the same ‘I don’t like it’ message with everything from plastic shopping bags to light bulbs, or the converse with subsidies from hybrids, solar panels to garden mulch and worm farms. It must be hard to resist the temptation not to have indefatigable faith in the ingenuity, industry and entrepreneurship of the little people, providing they’re given their fundamental human right to a level playing field on price. The only question then is how best for thinkers to constitute that level playing field, and then get out of their way. That’s not hard because there aren’t that many of the relevant dead ones about.

  15. observa says:

    Although perhaps those Western lefty dullard nanny staters will get you in the end me old China-
    http://www.news.com.au/adelaidenow/story/0,22606,26515152-5006368,00.html

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