Symbolic Climate Policies, part III: how to produce climate public goods?

(see here for part one and two and here for even earlier posts)

Where we economists are most useful in climate change discussions is the question of how to change the behaviour of humans and how to organise the production of public goods. Because the climate is a world public good, individual behaviour that affects it involves an externality and our training as economists leads us to particular answers as to what can be done about this externality. One of the main things that economists brought to the climate change debate early on is that in an ideal world, you would want to price the externality via taxes or trading schemes, rather than mandate behaviour directly.

There are three more things that economists know about public good provision that are absent from current climate change debates. The first is that when there are many players who have strong incentives to free-ride, then you will need punishment to induce cooperative behaviour. Voluntary sustained cooperation in the case that there is a clear gain of defecting is simply not going to happen. The second thing we economists know is that monitoring and taxation activities within countries and between them will be gamed, particularly by big business. What cannot be well-measured and taxed will be very hard to affect. The final thing we economists know is that public goods are more likely to be produced by agents with something to gain from it, which in the case of climate change means big countries negatively affected by climate change. Let us take each of these three in turn and show how the basic economics of public goods makes you look very differently at the issue of climate change from the way the debate rages in the mainstream.

Economists know almost everything there is to know about free-riding. We have tonnes of experimental data on it from games played amongst students and practitioners, and we have the whole history of taxation, public goods provision, and international cooperation at our fingertips, as well as the theoretical apparatus of cost-benefit analysis to explain that history. A brief look at history and at how things are organised within countries now tells you what you need to know regarding how to set up public goods, and it also tells you how likely it is that a world coalition will emerge to seriously curtail greenhouse emissions in every country.

Do we rely at the country level on kindness and generosity to fund our education, health, and defence spending, which are all public goods? No we don’t. We rely on tax obligations, with associated punishment for those who do not comply.

Do we then rely at the village level on the joint pride of the villagers to ensure that they bring their garbage to the dumps, that they abide by the traffick rules, and in other ways maintain levels of public goods? No, we don’t. We organise garbage collection so that it is free of charge to the individual villagers to have their garbage collection, and we have village cops who now and then monitor the traffick rules and punish the deviants. Social norms are definitely important, but punishment helps maintain social norms.

Do we rely at the international level on the sympathy of dictators in order to motivate them to stop abusing their populations, whilst giving the right example in our own countries? No, we don’t. We have international courts, UN security councils, coalitions of the willing, etc., with the explicit intend to punish wrongdoers.

Hence why on earth would we think that in the case of climate change, we are going to get a world coalition whereby all the major players are going to constrain themselves in order to seriously reduce emissions? Which historical examples can we point to where you get big behavioural changes amongst 200 players with huge free-riding incentives just on the basis of appealing to their morality? I can think of no example. The only examples of coordination I can think of were either when there was little incentive to free-ride (such as in the case of the ozon treaty), or only a few countries affected (such as with landmines). To believe appeals to morality will work when the desire for more wealth creates huge incentives to free-ride within every country is essentially the mistake of the socialist experiment all over again in that socialism too started out with the belief that you can organise cooperation by appealing solely to morality. It is the sort of folly we pretend to believe on Sunday mornings in the church, not in the bright light of day.

This first piece of knowledge of economists about public goods thus points to the crucial role of some sort of real punishment of major countries that do not cooperate, or else some solution that can be implemented by a smaller group of countries who individually stand to lose from climate change. What is on the table – small promises by a few countries – is not going to work (which is why I keep calling the current policies symbolic).

The second thing we economists know is the importance of measurement. When it is impossible to measure an activity to any reasonable degree, then people will avoid taxation on it. This is why we don’t tax home production, even though it theoretically should be taxed. This is why we do not apply small taxes to the littering of public parks, but rather use inordinately large fines to compensate for the fact we don’t measure it with high probability, and we pay people to clean up the parks every day. Similarly, we do not tax noise pollution or people who piss in the ocean because it is too hard to measure, and instead we creates spaces where it is easier to monitor noise and effluence. Similarly, we often try not to tax for road use because there is a large cost in toll booths and electronic systems to monitor the use of roads. Instead, we pay roads from general taxation and live with the fact that some people get more benefit out of them than others. As a rule of thumb, if we cant monitor it well, we look to the government to produce some public good rather than attempt to control individual behaviour.

What forms of emissions are too hard to measure? Almost anything connected to agriculture, low-scale forestry, and small-business emissions is too hard to measure. So we don’t have taxation or emission markets for small-scale forestry, urban gardens, single-person firms, etc. Small users are all out of the taxation and emission loop, and we only get at them indirectly, for instance by changing the electricity price. But their emissions matter and if the incentives are high enough, they could start to by-pass the indirect taxation. Big firms can become small firms, or they can outsource their major emissions activities to small firms if the costs of being large start to include the fact that they then become large enough to be noticed and taxed for measured emissions. Farms and firms can switch to oil or coal generators that bypass the taxes on big electricity producers if the taxes are high enough.

This second piece of knowledge warns us about the limits of what can possibly be controlled in any emission-oriented scheme. Households can hide the emissions from their gardens, farms can hide them, small companies can hide them, large companies can hide them by becoming small or by moving to a country where they are not monitored, etc. This reality means that targeting emissions for taxation is going to be a very haphazard affair, very easily gamed. The best you might hope for is to target the places where there are a lot of concentrated emissions, like power stations, oil companies, or large forestry. Since it is perfectly possible to have smaller-scale usage of energy (including burning your own wood!), one should just from a measurement point of view be sceptical as to what governments who want to tax the externalities can achieve.

This second piece hence already points to the likely futility of trying to tax emissions, even if there would be a world coalition. It leaves you wondering whether there are other ways of influencing the climate that does not involve the measurement of emissions.

The final piece of knowledge concerns the question of what happens when there are many different players with differing incentives to produce public goods. From basic maximisation behaviour, we know it is the big players with a lot to gain individually who will make the largest effort to individually produce the public goods and to organise the rest. This is why the big shareholders monitor the boards of public companies. This is why the biggest mining companies spearhead the lobby against government action on climate change. This is why the countries with the most to gain from whaling spearhead campaign to broaden the hunt for whales. Etc.

This final piece of knowledge tells us where to look for possible action against climate change: amongst those countries who have the most to lose from climate change with the greatest resources to throw at it. In terms of agriculture, the losers are certainly not the US or Northern Europe (bar the low-lands), where agricultural yields are expected to increase. It is not places like Russia and China that you should look to either, because they too are projected to see increases in agricultural potential. Rather, it is places in low latitudes like Indonesia, Southern Asia, Southern Europe, and low-lying islands. They stand to lose the most in terms of agriculture.

Whether Australia is going to be a major loser is up for debate. Ocean warming and acidification is not likely to be good for us as it might destroy the Reef. In terms of agriculture, it is less clear. Despite what some academic papers have said about agriculture (Hennessey 2007), there will be areas where agriculture may prosper: things are like to get worse in the South-East but better in the North-West. Since we are talking about climate phenomena that take centuries to materialise, we should look at the effect over the whole country, in which case it is less clear cut than CSIRO reports would have us believe.

If you thus look at the likely winners and losers, as well as their resources, you will thus notice that the wrong countries are leading the current climate efforts. Indonesia, Polynesia, Micronesia, and India should be leading the way on this, not Australia and Europe. No wonder that the efforts to do something are so paltry: the effort at the moment is mainly for ‘feel-good’ reasons amongst players who might well secretly think they won’t individually lose all that much.

From basic economic history and theory you thus learn that the current mainstream debate misses the real issues. If you truly want a world coalition you have to talk about punishment of big countries who do not fall into line, which means you are talking about national sovereignty. If you don’t think that the punishment of countries like the US will ever be a realistic scenario, then you cannot talk about a world coalition. If you want to set incentives for emissions, you have to argue you can get to desired targets whilst having a leaking bucket in terms of many areas and players that cant be monitored. If you think the bucket is too leaky, you have to give up on emissions and look to something else that influences the climate. If you are looking to see who will lead the debate in the future, you have to concentrate on the big countries of low latitude or the low-lying islands in the world.

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33 Responses to Symbolic Climate Policies, part III: how to produce climate public goods?

  1. aidan says:

    This was very interesting, thanks.

    I’m not sure it is correct that China will be a net winner under a global warming scenario. From here:

    The coastline of China stretches for about 18,000 km. China’s coastal areas concentrate 70% of big cities and 41% of the total population of the nation. Fifty-five percent of the gross national product and 65% of the national industrial output are made in these areas. Although the areas occupy less than 1/7 of the total territory of China, they create more than half of the national wealth. China’s coastal areas can be acclaimed as China’s wealth-belt, lifeblood-belt. However, most of the areas are low-lying lands with relatively gentle topography. The possible harmful impact caused by the relative sea level rise on the area is studied. This study includes the increase in occurrence frequency of storm surge and flood; the extension of inundation of low-lying land; the acceleration of paralyzation of the existing drainage system; the intensification of erosion and retreat of sea shore; and the increase of the submergence of coastal areas, salt intrusion and the pollution of fresh water resources.

    I couldn’t access the whole article, but it isn’t a stretch to see that China has a great deal at stake.

    Effective sanctions for free-riding states would take the form of carbon-tariffs. It is impossible to implement such a scheme without first having a reasonable fraction of the world’s trade centres signed up to carbon pricing.

  2. aidan says:

    More on what China has to lose from sea level rise:

    http://www.china.org.cn/english/30646.htm

    140,000 km2 vulnerable to some degree

    http://wdc-d.coi.gov.cn/english/exxcp/ehjgb/epj1.htm

  3. Paul Frijters says:

    Hi Aidan,

    it is not clear at all that China is a net winner. It is only for agriculture that I could find some reasonable indications of which countries would win and lose.

    At epa.gov/climatechange/effects/coastal/SLRLandUse.html you will find a nice discussion of the likely impact of sea rises on coastal lands. As I understand it, sea level rises are gradual enough such that China should be able to protect places like Shanghai by means of dikes. Marshland adapts, but only if the rise is slow enough (which it probably wont be, so some engineering help is likely needed).

    How would you carbon-tariff China, which digs up most of the coal it uses itself? How would you carbon-tariff poor Africans burning local forests for firewood? You basically cant. The options for international carbon-tariffs to provide effective world control on emissions are exaggerated.

  4. Paul Montgomery says:

    I don’t think agriculture or sea levels are the only areas where there can be deleterious effects from climate change. Increased chances of major weather events is more relevant for those locations which are already prone to them, like the southern US in hurricane season. Conditions more conducive to infection and parasite-borne diseases will have their greatest impact in Africa. Exacerbation of El Nino and La Nina will have a big effect on India and South America. Increased air pollution will compound the growing problem in China.

  5. Patrick says:

    Do we rely at the international level on the sympathy of dictators in order to motivate them to stop abusing their populations, whilst giving the right example in our own countries? No, we don’t.

    Was that ‘no we don’t’ as in: ‘yes we do’?

    Also, I’m extremely sceptical about learning anything from experiments on the miniscule fraction of humanity that attends rich western universities, reads stupid posters, are interested in stupid experiments and actually turns up to them.

    Other than that I think that this is an excellent piece. I couldn’t agree more that there is nil prospect of realistic international action on carbon emissions reduction other than schemes such as REDD which fit broadly into that largely voluntary ‘feel-good’ paradigm you outline.

  6. aidan says:

    How would you carbon-tariff China, which digs up most of the coal it uses itself? How would you carbon-tariff poor Africans burning local forests for firewood? You basically cant.

    With all due respect, isn’t that what economists are for?

    To a first approximation you only do the big polluters, not poor african farmers burning local (renewable?) forests.

    As far as China goes, I guess you take an estimate of the carbon-intensiveness of their industries and slap a blanket tariff on everything at the same value. If they can prove it is lower in a more efficient sector of their economy then I guess it could be lowered for those goods.

    Like I said, this isn’t my thing, but it can’t be that hard can it?

    Surely, to a certain degree, it doesn’t even have to be that effective, just enough to make it easier to comply than not? You talk a great deal about regulation/fines to encourage beneficial social norms. Isn’t this the same?

  7. aidan says:

    I couldn’t agree more that there is nil prospect of realistic international action on carbon emissions reduction other than schemes such as REDD which fit broadly into that largely voluntary ‘feel-good’ paradigm you outline.

    Perhaps you should entertain the notion that you are a sociopath, hence what you think about the motivations of others is, broadly speaking, not applicable?

  8. john walker says:

    Tend to agree about the ‘leaky’ problem. … But who knows?
    Two pernickety points
    Regarding agriculture, reliability (of climate) is very important to food production. Major ‘failures of the weather’ in the worlds major food baskets have been historically named events ;I.E Rare events usually called the great famine of ‘year x’.
    And
    Wood ,if collected properly, is a renewable non fossil carbon fuel. Black wattle (Acacia decurrens ) for example grows very rapidly , fixes nitrogen , is well suited to marginal/ degraded land , is dead in 12 years and is excellent firewood.

  9. Hi Aidan,

    let me get this right: you envisage taxing China by putting import tariffs on the goods China produces based on a guess of how much emissions are embedded in particular goods?

    Apart from the obvious problem of how to measure what goes on in a country reluctant to help you (and with high incentives to lie about this), you have huge free-riding issues here. It is not actually in the benefit of any individual country to collect those import tariffs, nor would such a scheme wash with existing tax treaties or WTO rules. And you would have to have all the other countries on board since otherwise the goods would come to you via some other country. So I would say forget about that idea. You cannot force big countries to comply with what you want them to do without some serious muscle on the table.

    As to punishment that reinforces social norms: once you get a world coalition that acquiesces to a world police, you will probably not have to invade that many countries to sustain the social norm of compliance with emission rules. It is getting to this point that is the impossibility.

  10. John,

    sure, weather reliability is important for agriculture, though I would say less so than in previous time periods because we are now in a world market, which means there is some degree of risk sharing (a disaster in place X no longer leads to a famine in place X because it imports from place Y where there was no disaster).
    Sure, wood is renewable from a long-run perspective, but it matters how big the stock of standing forest is. The more of the future forest that is floating around as CO2 now, the more the effect on climate….

  11. David Wilkie says:

    If we want really stunning solar power we would want huge mirrors to focus the suns light. To do this right we ought to have a sensationally cost-effective glass-making industry or its not going to work. And before we try any of this on we ought to rig things so that we run relentless trade surpluses.

  12. PSC says:

    Paul –

    For a tariff you face a similar problem with the carbon in goods as with an old-style tax depreciation schedule. No-one knows how long the goods last for. But the tax office used to draw up a big long list, and tell you how long you had to write the goods off. Yes it employed hordes of tax accountants who knew loopholes in the rules, but it mostly worked.

    You could do the same thing with imports. Have a schedule of goods and estimates of the emissions produced from manufacturing the goods. E.g. DVD player – 100g CO2. Sofa – 50gCO2 per kilo of sofa. Base it on a survey of observed production numbers. But also have an exception – if a good audit firm audits the production and discovers lower emissions, then they can use the lower numbers.

  13. Paul,

    Since we’re in realist rather than idealist mode here, how is it feasible for Indonesia and Micronesia to “lead the debate”?

    They have no significant leverage economically or militarily that I am aware of. Why wouldn’t all other countries just say “sucks to be you” and carry on merrily into a hothouse future?

  14. observa says:

    Well you put in more eloquent words than the rusty old observa can Paul, but there is another way. A third way. The exemplary approach, particularly one that is an offer the rest can’t refuse in the medium to longer term.

    As far as a treaty on global CO2 emissions was concerned, Copenhagen signalled the obvious with a global cap and trade scheme. However it may have been much more productive to pursue an agreement on a set CO2E tax regime for all countries, perhaps starting low with a set annual increment regime for all and leave individual countries to decide how or whether they wanted to adjust other forms of taxation to compensate.

    Now if you believe even that reform was too optimistic, the question arises could one country go it alone in an exemplary fashion? I think it could, albeit there is an obvious constraint with what others are doing at present. Still if there was another very positive spinoff they couldn’t ignore as a result, then you’d have them by the ghoulies and their hearts and minds would follow. I can envisage such a way and there may be a better way out there although I haven’t come across it. You simply start from assessing the maximum possible social pricing of CO2E and work backwards from there as intuition and experience tells you to do.

  15. observa says:

    Oh and bearing in mind acutely what Paul has said.

  16. Patrick says:

    Paul’s response to Aidan is hilarious, but seems largely on the money. However, trying as I may to allow for my sociopathic nature I think you are, in 7 and 9 at least, talking past each other.

    Aidan is quite right assuming the world order that Paul rightly laughs off, Paul is quite right that such a world order seems a fairly remote possibility.

  17. wizofaus says:

    I’ve mentioned it a few times here already, but the example of British Columbia is worth repeating. They instituted a carbon tax some years ago, it has already had a measurable impact on their emissions, and B.C. has had the fastest growing economy of all Canadian provinces since the tax was introduced. Nobody’s seriously suggesting the tax itself is primarily responsible for this latter data point, but the point remains that a) the measure isn’t just symbolic and b) because it’s not measurably costing anything, there’s really no motivation for ‘free riding’ etc.

  18. Tel says:

    If anyone wants to check the graph from Mauna Loa, it is clearly evident that so far none of the government initiatives have achieved any observable deflection in CO2 increase (which is mildly and steadily accelerating). The seasonal wobble is still the most significant feature but if you average that out, even the “Global Financial Crisis” had no effect on CO2.

    Mind you, the inexorable rise of sea level has failed to send waterfront property prices crashing down (not to any level I can afford anyhow). Economists could no doubt explain why people who are willing to be radical with someone else’s money tend to also be remarkably conservative when it comes to their own money. Something about risk, incentives and believe systems, I suppose.

  19. aidan says:

    let me get this right: you envisage taxing China by putting import tariffs on the goods China produces based on a guess of how much emissions are embedded in particular goods?

    Yep.

    Apart from the obvious problem of how to measure what goes on in a country reluctant to help you (and with high incentives to lie about this), you have huge free-riding issues here. It is not actually in the benefit of any individual country to collect those import tariffs, nor would such a scheme wash with existing tax treaties or WTO rules. And you would have to have all the other countries on board since otherwise the goods would come to you via some other country. So I would say forget about that idea. You cannot force big countries to comply with what you want them to do without some serious muscle on the table.

    As I said, I’m not an economist, I don’t know the first thing about this stuff. Paul Krugman does, and he seems to think it is a go-er.

    I don’t think the impediments are so great as to render it not worth having a crack. Frankly the Chinese seem to be doing a great deal more than we are to contribute to a renewable energy future. We could be the ones facing carbon-tariffs if that boofhead Abbott is ever in control.

  20. aidan says:

    There is a mistake in that previous post, obviously I was quoting Paul.

  21. Patrick says:

    Aidan, it isn’t economics, it is international relations.Paul Krugman also thinks we are heading back to WWII so let’s hope he is wrong sometimes.

    Also, even Krugman, who you should realise mainly writes at that blog in his capacity as polemicist not as economist, doesn’t go nearly so far as to say that it is a goer. In fact his concluding remarks (same link as Aidan: if you can get past the absurd faux-naivete) give the game away:

    Why, oh, why, would Obama say “Ni”?

    Well, anyone care to guess? Paul Fritjers has had a stab, at 9 above ;)

    How much US Treasury debt does China hold these days? How much of US manufacturing depends on Chinese manufacturing? How stupid does Krugman think Obama is?

    (Also, I read the paper Krugman relies on. I am fairly confident that legislation such as envisaged would be challenged in the WTO, notwithstanding that there are pretty decent arguments for it, and even more confident that it is simply not going to be passed this decade (which you may have noticed, just started).)

  22. aidan says:

    same link as Aidan: if you can get past the absurd faux-naivete

    Are you saying it is my faux-naivete? If so, nothing could be further from the truth. It is 100% rinky-dinky naivete. I don’t know anything about economics (fairly happy about that) but was reassured by Paul who said that this is what economists are good at.

    How much US Treasury debt does China hold these days?

    If you believe this 8.4%. Three times more is held by “the public”, almost four times more by Social Security and other trust funds, The federal reserve has more than Mainland China.

    Your point?

    A carbon-war with China is just a hypothetical anyway, they are doing ok compared to the US and Australia.

  23. Patrick says:

    No Krugman’s; specifically the bit I quoted.

    I agree that this is just a hypothetical, though.

  24. David Wilkie says:

    “Where we economists are most useful in climate change discussions is the question of how to change the behaviour of humans and how to organise the production of public goods. Because the climate is a world public good, individual behaviour that affects it involves an externality and our training as economists leads us to particular answers as to what can be done about this externality. ”

    But are you using that training? Have you answered the following questions:

    1. What characteristics does the ideal climate of the earth have? How does that differ from the way the earth would change if carbon emissions had not been politicized?

    2. What is your preferred level of CO2 emissions? And if it is lower than 1600 parts per million, why are you opting for less net primary production?

    The other thing is that the Pigouvian model is just bad economics. Since Australian economists fail to define economics as the “science of wealth creation” they are short-sighted when vetting their models for inclusion of capital accumulation over time. They define economics as “the allocation of scarce resources” and are very quick to jump up and start attempting to do just that.

    The typical graph with curves, slopes, and regions, that would go with this externality business just does not show capital accumulation over time in response to policy. Which is always the key to wealth creation. We ought not be surprised to find out therefore, that taxing externalities does not ever come close to maximising welfare in the real world.

    Suppose a kid is creating noise pollution with his drumming and keyboard playing. The neighbour is a shift worker and is woken all the time. A third party taxes the kid and sends the money to the UN. The UN’s consultants gobble it up and no-one poor is helped. The kid loses his confidence in his ability to pursue music seriously but he still whacks out a beat when he knows the tax doesn’t apply. Which keeps the shift worker awake since he works odd hours. How is this welfare maximisation?

    Its very clear that compulsory savings for remedial investment is the better model. Here the kid puts away three times as much as what the tax was in a dedicated account. He decides to access it for a practice-pad, some headphones and some sound-proofing. You see these purchases are analogous to investments in remedial action. Later he still gets to on-sell these purchases when the reason he had to have a set-aside fund is no longer applicable. Its simply not true that taxing a problem and sending the funds to the UN is the best and cheapest option. You might think its true but its not. Not even where purely theoretical economics concerns are taken into consideration.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

    All problems require SPECIFIC knowledge and a strategic mindset.

    Public servants are always conflating their simplistic models with reality and they don’t review their training enough to see how applicable the models really are. Some knee-jerk reaction on this basis would be acceptable in 1990 when the issue was first put about in a big way. But there is really no excuse for an economist to be pretending that he does not need to know about the science or the energy industry or biology, insofar as these subjects relate to the controversy …. after all this time … and in 2011.

    If capital accumulation is the goal along with trying to make ambient CO2 less than some prescription. Or less above some prescribed optimum (an optimum MUST be named and justified) If this is the goal then the quickest way to achieve this goal is to always run surpluses at every branch of government, get rid of taxes on retained earnings ….. and crank up coal royalties for coal sold overseas.

    Very fast. It will work. And if there are no royalties on the locally used stuff, and huge royalties on the overseas sold gear, then that forms the basis for Australias re-industrialisation.

    The next thing is to bring biology and earth sciences into it. With regards to Australia we have so much desert land. Since water and CO2 form the basis of life, the quickest way to suck the CO2 out of the air is to bring fresh water to the deserts. So that the best solution for Australia is to set up a slowly growing series of covered (by ETFE) saltwater canals, that passively produce fresh water. The canals can also, of course, be used for transport. Therefore farms, towns and wlldlife areas ought spring up on either side were we to get the rules right.

    The key to making this cost effective is to look closely at the NBN and do everything the opposite way. Daily funding for this scheme ought never stress the capital accumulation needed such that costs are blown out. So you start painfully slowly and only pick up the pace when costs fall in response to you doing so.

    In summary the public servants train their underlings to compartmentalize everything. George Bernard Shaw said that all professionalism was a conspiracy against the laity or words to that effect. He also said that candy was dandy but liquor is quicker. So he knew what he was talking about. But the thing with this compartmentalization is that it often becomes akin to a old-fashioned demarcation arrangement in a too-millitant union. Or the four families dividing up a city on the basis of conducting criminal operations. Non-holistic solutions are no solutions at all. All aspects of the problem must be considered and then a creative solution has a chance at being arrived at.

    Bob Ellis came up with just such a creative solution on a small grab on a TV program. It consisted of diverting one river into another. It was indeed a fantastic solution but Penny Wong wasn’t the least bit interested. There just aren’t the Bob Ellis types around on the left any more.

  25. Paul Frijters says:

    David,

    most of your blog seems a little off topic to me, but I will answer your first two questions:

    1. (optimal climate). In terms of preserving biodiversity and having the least amount of adaptation problems, the optimal climate is the one you had the last few thousand years. Any move to any other climate in a quick space of time means a huge loss of species and distinct habitats, as well as mayor adaptation problems for humans. This of course doesnt mean that something else wont replace previous habitats if the climate changes. In terms of total biomass production, which is a measure of just how much ‘lives’ on this planet, you want both warming and more CO2 in the air. Yet, diversity is lost and replaced with fewer but highly successful species. And in the short run (decades) you can have large reductions in things we want (like fish). So on balance, I agree with people saying we want no change in climate if we can help it, but one of the clear winners of current climate change is ‘life’ if you define that in terms of volume.

    2. (preferred level of CO2). That level corresponding to 1. Hence we’d want to get back to the 280 parts per million or so from before the industrial revolution.

  26. David Wilkie says:

    “1. (optimal climate). In terms of preserving biodiversity and having the least amount of adaptation problems, the optimal climate is the one you had the last few thousand years.”

    So since you think CO2 increases temperature then surely you are looking for a lot more CO2 to stop the climate falling down its expected trajectory. If not why not?

  27. David Wilkie says:

    No you just not making any sense from an earth history or biological point of view. Clearly you haven’t thought about this matter seriously.

    Again: What CO2 level is your optimum. Or if you fancy that CO2 warms the climate. What climate is your optimum and how would you like the CO2 to bounce up and down to furnish this optimum, given your belief in this alleged warming effect?

    Are you optimizing for CO2 ….. Or are you optimizing for temperature? Or what muddle-headed thing are you doing?

  28. David Wilkie says:

    See we really need to know just what you are after. If you don’t know yourself then you are hardly in a position to chart the pathway consistent with near-maximum capital accumulation. In the long run cost amounts to resultant lack of accumulation in capital.

  29. observa says:

    “I’ve mentioned it a few times here already, but the example of British Columbia is worth repeating.”
    Yes Wizofaus, but Bolty put that one to bed by pointing out that BC obtained 92% of its power from hydro. Then I searched BC petrol prices only to find servos in Vancouver selling petrol for 99c CAD (admittedly at the bottom of the cycle)and that presumably with the 5c/L tax added on. At the time with CAD/AUD exchange rates that was a whopping 95cAUD per litre. Flog Canadian motorists with a feather carbon taxing and is it any wonder Julia and Co baulked at taxing fuel here? At least BC had a level playing field universal tax and not this awful concoction we’re being told is the best medicine to heal Gaia. Still we could run the green BC exemplar of hydro on the Franklin past the Brownshirts. You never know, being in Govt they might have come across the word ‘tradeoff’ by now.

  30. observa says:

    But not all market green agnostics eh? As I said there’s still very good reasons for considering level playing field CO2E taxing as a starting point for that tax reform process Oakeshott wants Abbott to be part of. Now if we can’t raise all taxation via CO2E tax, due to the science not exactly being settled just yet and others not rushing to do so of late, we have to rely on some other forms of level playing field taxes that point us all in the right direction environmentally. Now Julia reckons we need some other resource taxing and although that $18000 tax free threshold was a good move in the right direction, 100% exemption of income and company tax sounds much better for the obvious. So some CO2E taxing and some resource taxing but which resources and how, that was the next question?

  31. Pedro says:

    Patrick, I’ll worry about a return to WW2 when greeks turn into germans. At the moment it’s beyond hypothetical. But if you set your sights a bit lower and think 30 years war then maybe we are in hypothetical territory.

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