Last Tuesday Matthew Warren [reported] in the Australian:
Labor plans to rid Australian homes of off-peak electric hot water systems, in a move it claims will cut Australia's greenhouse gas emissions by 7.5million tonnes each year. ...
Labor will keep existing rebates to encourage take-up of alternatives and believes its plan can save households $300 a year.
Pretty straight forward reporting. But then on Saturday he wrote another story about the Labor plan. This one ended on the front page, under the headline "Garrett's $6.5bn hot water bill":
Households will have to pay up to $6.5 billion extra from 2012 to replace their electric hot water systems under a Labor plan to impose an effective ban on the appliances as part of its strategy to cut greenhouse emissions. ...
Each solar hot water system will cost about $2800 more than a standard electric system replacement.
Labor will offset this higher cost by extending the $1000 solar rebate already promised by the Howard Government. It will also offer low-interest loans in the hope that projected energy savings of up to $300 a year will help households pay for the transition. ...
Every year there are about 800,000 hot water system replacements in Australia, with about 45,000 of these new solar systems.
About 5 per cent of Australian households have solar hot water installed, while about 40per cent are able to install gas hot water systems that will comply with Labor's new energy efficiency standards.
Taking into account homes exempt from the ban -- such as some apartments -- and the solar rebate, it will still cost households up to $650 million a year to switch over to solar energy. It will take about 10 years to replace the entire stock of electric water heaters.
So, did you notice what Warren just did there?
To come with his $6.5 billion figure he just counted the cost after the rebate of $1800. He ignored the $300 a year saving in electricity. Over 10 years that comes to $3000, more than paying for the solar water heater. So, on net, the solar heaters save a household $1200 rather than cost it $1800. The headline should have said "Garrett plan to save families $4.3 billion".
And even this understates things. According to this site, solar water heaters only cost $1000 after the rebate, last 15 years and save $400 a year, giving a net saving of $5000. Maybe the headline should have been "Garrett plan to save families $17 billion"? No, wait, those figures are from solar industry PR, so are probably optimistic, just as the numbers from a former coal industry PR man like Matthew Warren are pessimistic. I'll bet the saving from Garrett's plan is somewhare between $4.3 billion and $17 billion.
Tim
What's the comparatve cost of solar pre -rebate?
It's not clear how numerate would be the editorial talent at The Daily Rupert's Bugle.
If the (old electric) heaters are replaced as they wear out, then the homeowner would have had to buy a replacement anyway, so only the cost differential between solar, and electric should be counted.
He also assumed replacement of electric with solar, instead of with gas.
Tim:
Solar will cost $2,800 more to install.
The so called savings of $300 will, actually take about 10 years to claw back not 3 as you suggest.
2,800/300 = 9.3 years..
That's about the entire life of the panel, so it's a bad deal.
In fact it is a rotten deal from a cost perspective as there is no savings at all. Garret is just frontloading costs with an expensive appliance at the very beginning without a positive outcome.
I don't understand how anyone would think this is a great deal.
It would be far better puting the money towards two nuke reactors that pump out cleaner energy through tax holidays for investors.
The real problem is not Warren, it's Garret as he way above his intellectual station.
Moreover is is not properly discounting untility and human time preference.
Human bings would not choose to get their money back over a 10 year period. A person would want the front-end savings today. Only a bone head would choose to claw back the savings over a 10 year period.
No wonder they would have to leglistate electric systems out of existence. it would only be through compulsion that solar would be introduced.
JC, consumers get $1000 immediately from the rebate, and then save $300 per year, so it pays for itself after six years, not 9.3. (And that's using coal PR guy's figures.) As for whether you prefer the money now or later, there is something called a loan that lets you choose whichever one you prefer.
Tim
But you re ignoring the fact that the rebate is also money that needs to be accounted for. You can't ignore it as the rebate is a cost. Cost's have trade offs.
By my quick calculation the cost of the entire plan is about $3,000 more.
I use a discount factor of 8% (10 years) and take into account the $300 in annual savings.
Punters and the nation would be about $3,000 better off per unit not going with the plan.
$300 in 2007 + $300 in 2008 + ... != $3000 in 2007. Depending on how much less valuable money tomorrow is, it could be as low as $1954 in 2007.
If it were really such a good deal, far more than 6% (45 of 800 thousand) of installations would be solar.
Anthony, But your calculation is missing the fact that the price of electricity will definitely rise with inflation, and might well start to rise quicker than that, so after 10 years, you'll be saving a lot more than 300 dollars.
JC, What are you on about? You seem to be arguing that if I offer you a rebate of $1000 on an $800 dollar product, you wouldn't take it...
Anyway, everyone seems to be missing Tim's main point, which is that these figures are from the coal industry. If you use the figures from a solar PR guy, solar heating starts to look really attractive. If you use some figures in the middle (likely to be closer to the truth), solar still wins.
doormat
don't be such a walk over. The rebate is not free money! We paid for it. You can't exclude the rebate from the cost calculations as though it's found money.
The subsidy has a carryng cost as well as trade off issues. Jeesh.
"[Ten years is] about the entire life of the panel, so it's a bad deal."
False. Twenty years, maybe longer, would be a more realistic lifetime. Having had two solar hot water systems, I can speak from personal experience. They are one of the best options we have for energy efficiency savings in buildings, along with improved insulation. Virtually every house in the tropical north of Australia has one.
Note that Warren just multiplied 650 million by 10 to get his cost -- he didn't discount future expenses. It's likely that solar heaters would get cheaper once they are made in larger quantities. My calculations assume that electricity prices will increase at exactly the discount rate.
JC, the cost of the rebates does need to be considered, but it's not a direct cost to the purchaser. Since the $1000 rebate was introduced by the Liberals, there is no difference between the parties on this cost.
I'm not sure who's introduced the rebate Tim. But Garret has sure introduced compulsion into the badly thought out policy. Rebates are bad policy as any subsidies are whether labor or conservatives introduce it. However it takes on new meaning when the former rock singer thinks he knows what's best for us and compels us into making an expensive purchase.
The cost of the rebate has to be and must be considered from an economic perspective when creating policy. It's obvious the former rock singer doesn't even know what a cost benefit analysis is if he fell over it otherwise he would have quickly realized that the policy is unjustifiable from any reasonable perspective. There would be better ways of applying the money.... such as.... reducing the cost of imported cars to equal the cost of SUV's that don't attract the duties imported sedans do. This policy alone could to more to help the AGW issue than a silly thoughtless compulsion soaked policy. That's the problem with bringing in candidates for their star quality like Garret. This is not deciding on another wedding gig.
Examination of trade offs is vital is these issues to ensure we end up with optimum policy mixes. The SUV/sedan trade off could very well have been a win win for the country. We raise our standard of living while making a better choice for the environment. That's just an example by the way.
Ob...Says:
"Twenty years, maybe longer, would be a more realistic lifetime. Having had two solar hot water systems, I can speak from personal experience."
So you say you have had a solar panel since 1987. No wait you say you have had two of them which may infer you have had them for 40 years. Yea? You selling the Brooklyn bridge there, Ob?
It's likely that solar heaters would get cheaper once they are made in larger quantities.
Yes that's very true and I hope they do for all our sake.
----------------------
"My calculations assume that electricity prices will increase at exactly the discount rate."
I assumed the mortgage rate as the discount rate simply because it would be more relavant. There was no PhD ecomonics involved. Close enough is good enough in this instance.
Power prices on their haven't benn going up 8% per year.
"So you say you have had a solar panel since 1987. No wait you say you have had two of them which may infer you have had them for 40 years. Yea? You selling the Brooklyn bridge there, Ob?"
Hee, hee, hee...
That's staggeringly stupid even for you JC.
Class, can anyone explain to JC the difference between a "solar panel" and a "solar hot water system"?
I'm more and more driven to suspect JC is a clever satire of libertarian stupidity.
"No wait you say you have had two of them which may infer you have had them for 40 years."
Pretty close. Just about to get my third.
One additional little detail. The cost of replacement solar hot water units is less than the first one, because the plumbing and electrical (a significant part of the first installation cost) is already in place.
Oh, and sneering dismissive arrogance is no substitute for a decent evidence based argument, JC. I know my facts, you clearly don't know yours.
Have a nice day.
Seems to me the rebate pays for itself by eliminating the need for building new power plants etc.
Ian G Trot...
Stop being so toxic. We're talking about hot water heating systems. pool heaters are a different issue not being raised.
you have anything new to add on the numbers?
---------------
"One additional little detail. The cost of replacement solar hot water units is less than the first one, because the plumbing and electrical (a significant part of the first installation cost) is already in place."
Really? And I guess plumbing and electrics donýt apply to electric hot water systems?
"Oh, and sneering dismissive arrogance is no substitute for a decent evidence based argument, JC. I know my facts, you clearly don't know yours."
I'm not sneering, I just have difficult time believing you're on your third solar system while telling us how magnificently durable they are.
Seems to me the rebate pays for itself by eliminating the need for building new power plants etc.
no Eli! there never was any subsidies in coal or oil or nuclear power!
and Jc will soon clarify his calculation by including those tiny amounts of help the other energy source got in the past...
;)
"Seems to me the rebate pays for itself by eliminating the need for building new power plants etc."
Ummm Eli, Western governments generally don't build power plants these days as they let private utilities do that.
It looks to me that it would be far more cost effective to simply allow:
1. A utility to build a nuke plant and
2. give the propsed subsidy back as a tax cut.
But then I'm not expert blogger on these issue like you are so maybe you could fire up all those pistons in your head and give us the numbers as evidence for your assertion.
sod
What subsidies are are energy producers getting now? List them!
Look guys I'd be happy if energy was produced out of thin air and we didn't have these arguments.
However bad policy is bad policy no matter whichever way you cut the cake. Garret's policy is rotten as it further distorts the economic landscape and lowers the standard of living.
What we all want is a rising standard of living and reduced emissions. We don't want stupid policy clogging u the works.
Warren was right about the cost being high; he just doesn't know how to get there.
But he was right by his inference that this is a stupid policy. There are better alternatives to lowering emissions that don't affect our standard of living.
Our car industry is essentially based on 60's type engine technology. Euro and Japanese carmakers make far more efficient cars. Equalizing tariffs for SUV's and sedans to zero would go some way towards reducing emissions. Allowing nuke power plants would help solve the problem by not having to compel people.
There are far superior ways of getting to the optimum policy mix without having to resort to bloody senseless and stupid subsidies.
AGW from a risk mamagement prespective is real, however most of the mitigation policies thrown around are asinine.
"Really? And I guess plumbing and electrics donýt apply to electric hot water systems?"
Most electric hot water systems are not on the roof, where considerable additional installation costs are incurred.
"I'm not sneering, I just have difficult time believing you're on your third solar system while telling us how magnificently durable they are."
I said they last around twenty years, I have been using them for nearly forty years, and I am coming up to my third one. Simple numbers, that add up.
Had enough of your ignorant ideologically driven sarcasm.
Bye.
My parents replaced their solar hot water system this year after 17 good years. It put up with Dad, Mum and four kids using up all the hot water as fast as possible.
JC, I am not sure you addressed Ian's and Obdulantist's point. You did change the term from "solar hot water systems" to "solar panel". To me it looks like you did not realize that Obdulantist was talking about a solar water heater as opposed to a solar electric type of system. Solar hot water heating has been around since the 1920's in the US and 40 years ago 20% of Israel has them. These are household systems, not pool systems.
John
sod
What subsidies are are energy producers getting now? List them!
sorry, i m slightly busy. so i just copy pasted your question into google.
these were the top 2 results:
Estimates of global subsidies for fossil fuels and nuclear power taken from UNEP & IEA (2002). Also, Johansson and Turkenburg2004 say "at present, subsidies to conventional energy are on the order of $250 billion per year" (p.29). Earthtrack (earthtrack.net) has a comprehensive set of references on subsidy policies and estimates.
http://gsr.ren21.net/index.php?title=Note_16
and
# Provides incentives to companies drilling for oil in the Gulf of Mexico;
# Exempts oil and gas producers from certain requirements of the Safe Drinking Water Act;
and
# Authorizes cost-overrun support of up to $2 billion total for up to six new nuclear power plants;
# Authorizes a production tax credit of up to $125 million total per year, estimated at 1.8 US¢/kWh during the first eight years of operation for the first 6.000 MW of capacity[2] ; consistent with renewables;
# Authorizes $1.25 billion for the Department of Energy to build a nuclear reactor to generate both electricity and hydrogen;
http://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005
Urck, the original article really sucked. After the quote above, it then went on to say "The cost to households may be reduced by the extension of existing state and local government rebates for solar systems. The national solar rebate proposed by Labor could cost the commonwealth up to $4 billion over the life of the scheme, with other subsidies only transferring more cost from households to taxpayers. " A simple person would then assume total cost = $6.5 + $4 billion = $10.5billion, but that double counts the cost of the subsidy. Not good reporting.
A couple of points on the cost-benefit analysis.
1) you do really have to discount; and
2) you should not count the subsidy if you're worried about the policy; you should count the subsidy if you're worried about personal costs only.
So: assume extra cost of solar is $2800, assume a 6% real interest rate, assume no increase in the cost of the electricity saved from having solar over time and assume a 10 year investment horizon, you get - cost = $2800; benefit = 2340. If you increase the investment horizon to 15 years, benefit = 3088.
If the extra cost is only $1000, as suggested by the solar industry, this is obviously worthwhile on any cost-benefit grounds without the subsidy.
On whether the policy is efficient: it depends on the costs of generating the electricity, including GHG emissions cost, doesn't it? I don't know enough about electricity price regulation in Australia at the moment to know whether it's being sold at a discount to home owners or not. Assuming not, then all you should have to do is the same CBA as above - which suggests switching has a decent payoff. But there's no need for a subsidy in that case. If the new electricity is expected to come from GHG emitting sources, you'd want to include that too. That's the most likely justification for a subsidy. Esp if the electricity for heating is typically used at peak times (which I think it is?). If there is any implicit subsidy to electricity use (not necessarily to production), that is another reason for a subsidy to hot water heaters, though a better option may be to get rid of the subsidy. I suspect it's rather complicated to do a proper CBA on this, though.
I am, of course, talking about these, (as is Mr Lambert's original post).
http://en.wikipedia.org/wiki/Solar_hot_water
Note they say that some designs have a life span of up to 25 years, with minimal maintenance, and that they can pay back their energy production cost in about 18 months, and their financial cost in about 6 years.
This is a well developed and very effective and economical technology. Even as far south as Tasmania it can produce approx. 2/3 of your hot water. A major energy saving.
The sooner it is made compulsory the better.
Enough said.
Sure, just give in to the lobbyists for Big Sun.
"Stop being so toxic. We're talking about hot water heating systems. pool heaters are a different issue not being raised.
you have anything new to add on the numbers?"
And he still doesn't get it.
Tell you what, ring Solahart, who have been making solar hot water systems since at least the 1960's and ask them what sort of solar panels they use in their different models and how many watts they draw.
Then apologise to Obdantulist for calling him a liar.
"Our car industry is essentially based on 60's type engine technology."
Yet more bullshit.
Holden exports engines to GM subsidiaries world-wide.
http://en.wikipedia.org/wiki/GM_Family_II_engine
None of the payback calcs seen so far are very trustworthy. The payback of solar is dependent on a range of factors, and you really need to look at your own situation to work out whether it is viable.
The biggest factor that hasn't been thought of is hot water use. If you don't use much hot water, then the payback is much longer, because the savings each year are smaller.
Given that many households who install solar these days will have only 2 occupants, and also have water efficient fixtures (e.g. 3-star showerhead), endeavour to take shorter showers, have water efficient appliances (less hot water to heat) and wash their clothes in cold water, the payback for such houses is most likely over 10 years. I doubt the calcs above assume a water efficient household.
If you have more people in your household and you consume a lot of hot water, then the payback is probably well under 10 years.
You could buy a 1-panel system instead of the typical 2-panel if you are a low hot water user, or 3-panel if you are a big hot water user, which complicates the calcs further.
Also need to consider a range of other factors, such as:
* off peak or peak tariff in calculations
* when you take your showers (take showers in evening means more elec or gas boost overnight, and less solar contribution, though you can control this if you and your solar installer are smart)
* where you live (climate and tariff)
* what quality/efficiency system you get
* comparative warranties, replacement times
* and, of course, the rebates
-----------
Nobody responded to my point above - neither the govt or opposition are trying to phase out gas at this stage, and a good gas (continuous flow) system is almost as low greenhouse (sometimes lower) as a solar hot water system with electric boost. An efficient gas (storage tank) system is a marked improvement over any electric hot water system too.
This VIC Govt page will give you some idea of prices etc. It only covers VIC rebates though, not Australian Govt or other State Govt rebates.
http://www.sustainability.vic.gov.au/www/html/1379-rebate-eligible-sola…
If you think solar might be too expensive, or the payback might be too long, but you still want to do something then
a) reduce your hot water consumption as much as possible
b) switch to gas
c) buy some portion of Green Power to offset your electricity use
Gouldie
look you little trot do you even read your own links. It may not bhe the 60's but it is certainly the 70's. And it's one engine, there are several you dishonest little commie.
From the Gouldmeistr's link.
"The Family II is a straight-4 piston engine that was originally developed by Opel in late 1970s for use in the Opel Ascona B and Opel Kadett D."
"Tell you what, ring Solahart, who have been making solar hot water systems since at least the 1960's and ask them what sort of solar panels they use in their different models and how many watts they draw.
Then apologise to Obdantulist for calling him a liar."
I never called him a liar, you dishonest little sod.
No matter how you guys want to cake it, it still needs a subsidy to get it off the ground. It's inefficient based on compulsion policy.
Ob says:
The sooner it is made compulsory the better.
Enough said.
Yep, you're right Ob. Enough said alright.
Garret sure looks like he could wear the famous brown uniform and look the part.
Jc, I'm presuming you have tried to imagine Malcolm Turnbull in a brown shirt when he indicated the govt would ban incandescent lights (and probably halogen downlights) too? That policy more directly impacts peoples lives and lifestyles, and for lower emission reductions.
"Garret sure looks like he could wear the famous brown uniform and look the part."
Yay! I invoke Goodwin's law:
http://en.wikipedia.org/wiki/Goodwins_law#Corollaries_and_usage
Jc, you lose.
As an aside, I would add to Steve's list that the lattitude that you live at is also an important factor in determining your pay back time. However, I would also seek to add that as hot water accounts for 28% of energy use in the average Australian home, solar hot water systems have an important role to play in releasing pressure on the grid, particularly off-peak.
By the way, does anyone know what proportion of electric hot water systems installed are off-peak?
ChrisC
Godwins law is a lefty trick to stop debtate when lefties are caught out being to close to putting on the jackboot. Don't even try to lay that crap on.
Garret is attempting to compel people. One of his first acts would be compulsion. The totalitarian dumb bastard is quickly showing his true colors.
Steve:
That's true Turnbull is into that crap too, although I would hardly comapre the cost of a globe to the $3,000 the failed rock star is tryng to screw outta people.
Man, if his parliamentary performance is as bad as his singing we sure are in for it.
ChrisC
Not only that but it is dumb policy too. Instead of trying to hit a home run by cutting emissions and rasing living standards as I have shown you can do with decent policy mixes, the idiot goes for the quick fix. He has as much right to be a environmental spokesman as uncle A (from Iran) has for speaking on behalf of jews.
Except the hot water policy does not require you to purchase a $3000 hot water system jc. You can purchase a gas system. (and if you are into heavy discounting and preferencing up front cost over operating cost, even people in areas without reticulated gas can cost effectively do bottled LPG).
In terms of lifestyle, i think that the lightbulb change is much more significant than altering the way hot water is produced.
You seem quick to lay it on Garret, but Turnbull is just as bad according to the measure you claim to be applying (or are you just labor bashing?).
By the way, the cost of ripping out your halogen downlights and either:
* putting in standard compact fluoros (requires you redo the ceiling as different number of light fixtures) or
* switch your halogens to fluro or LED downlight replacements ($12-35 each for fluro, $50-120 for LED), not to mention getting an electrician to switch from DC wiring for halogens to 240AC for the fluoros).
can be very high indeed. Its not just one globe i'm afraid.
Did you know that any new 2-storey mcmansion built in the past 5 years probably has about 100 halogen downlights? Could be almost $1200 for replacing the light globes alone, then add the labour and wiring costs.
Even the compact terrace house i used to live in had 23 halogen downlights.
Steve:
Did you know that any new 2-storey mcmansion built in the past 5 years probably has about 100 halogen downlights?
What's wrong with large houses in the outer burbs? why refer to them as mcmansions. you prefer the gaudy houses built by the rich? Drive around the Sydney eastern burbs or places like toorak in melbourne and you see what bad taste and money can do.
Lot's of space is great thing. That's why people build large homes.
By the way, I am not sure Turnbull was talking about replacing down lights.
Hmm, sod answered jc 5 minutes before jc posted. Ah, the miracle of blogs.
In any case the costs of building plants is a real cost no matter who pays for it, whether there are subsidies or not.
Eli
Here's a definition of a subsidy in eco speak:
Subsidy
MONEY paid, usually by GOVERNMENT, to keep PRICES below what they would be in a free market, or to keep alive businesses that would otherwise go bust, or to make activities happen that otherwise would not take place. Subsidies can be a form of PROTECTIONISM by making domestic goods and SERVICES artificially competitive against IMPORTS. By distorting markets, they can impose large economic costs.
----------------------
It does damn well matter who pays for something Eli. A subsidy is distortive by definition. It misallocates scarce resources that would otherwise not make it in a free market.
there are better ways of reducing emissions that allow for superior outcomes.
To suggest:
In any case the costs of building plants is a real cost no matter who pays for it, whether there are subsidies or not.
is to ignore the fact that Soviet economics was a disgusting failure.
Subsidies do all sorts of malignat things to an economy. it's distorts the capial allocation process and play havoc with the price signal.
Moreover suggesting that it doesn't matter who pays is like implying it doesn't matter that you will pay my mortgage for the next 20 years. It's a silly comment and you ought to take it back.
ELI
Can i suggest something? You a scientist by training it seems. Would you ever try to expertly discuss an area of science you have no training in?
Why then do you discuss economic rerasoning that has been settled for over 150 years.
Subsidies are bad economics. It leads to bad outcomes.
Most of our emssions problems are the result of good intentions leading us along the yellow brick road to hell.
As an aside, I would add to Steve's list that the lattitude that you live at is also an important factor in determining your pay back time.
ChrisC
Latitude is the primary determinant of the effectiveness of a solar hot water system. But, as I mentioned before, even as far south as Tasmania (42º of latitude), you can get about 2/3 of your hot water from conventional solar hot water systems, and in the tropics it is around 90% +.
The newer evacuated tube panels are a major improvement in the efficiency of thermal collection, which should raise these figures even higher, especially in latitudes greater than about 25º.
So are you eagerly awaiting the subsidy, Ob?
Jc your subsidy talk is just a load of theoretical bollocks. I agree with what you say in theory, but in practice its pretty irrelevant. Subsidies are a fact of life, its more a choice of which subsidies are good (or least worst), rather than rabbiting on about subsidies being bad.
This is especially the case in the energy industry where the entire industry - not simply the green parts - is riddled with taxes and subsidies and rebates, exercise of market power, distortions due to half-done de-regulation, the fact that the construction of the whole power grid was built on govt support, and distortions due to the electricity market being an artificial market reliant on all sorts of rules and regs to exist in the way that it does.
I think it is arguable that if there was zero govt participation in the energy industry, then there would be no (or much much less) central electricity infrastructure or large power plants, and many would be running diesel gensets in backyards instead, and all using solar hot water or wood/coal-fired boilers for hot water.
AT the very least, the grid would be much less extensive, and if you lived outside a major city, it would be home generation for you.
I'm glad you've done economics-for-free-market-fanatics-101, but please, lets stay rooted in Australia's socio-political reality ok?
PS. You were right on the halogens:
A one liner i found on the AGO website suggested that 'low quality' halogens would be phased out, but you would still be able to find 'high quality' ones.
Jc your subsidy talk is just a load of theoretical bollocks.
No it's not. Subsidies cause market distortions and resource misallocation. I am not making this up as I go along. It's about as settled in economics debate as it could ever be. Perot efficiency best explains it. Here it is:
Given a set of alternative allocations and a set of individuals, a movement from one allocation to another that can make at least one individual better off, without making any other individual worse off, is called a Pareto improvement or Pareto optimization. An allocation of resources is Pareto efficient or Pareto optimal when no further Pareto improvements can be made.
I agree with what you say in theory, but in practice its pretty irrelevant. Subsidies are a fact of life, its more a choice of which subsidies are good (or least worst), rather than rabbiting on about subsidies being bad.
There is no such thing as a good subsidy. They all have trade offs and fail under the Peroto optimum.
This is especially the case in the energy industry where the entire industry - not simply the green parts - is riddled with taxes and subsidies and rebates, exercise of market power, distortions due to half-done de-regulation, the fact that the construction of the whole power grid was built on govt support, and distortions due to the electricity market being an artificial market reliant on all sorts of rules and regs to exist in the way that it does.
Get rid of them and we may actually see emissions reductions on a large scale. There is no point adding even more.
I think it is arguable that if there was zero govt participation in the energy industry, then there would be no (or much much less) central electricity infrastructure or large power plants, and many would be running diesel gensets in backyards instead, and all using solar hot water or wood/coal-fired boilers for hot water.
I think it is arguable that we would still be living in the dark if the government didn't step in. In fact I find this a very troubling assertion.
AT the very least, the grid would be much less extensive, and if you lived outside a major city, it would be home generation for you.
Nonsense.
I'm glad you've done economics-for-free-market-fanatics-101, but please, lets stay rooted in Australia's socio-political reality ok?
I was taught economics, if you consider that to be beginners 101 fine with me. I attended most classes unless it upset my social demands.
Let me say this again. Subsidies are a bad way of reaching optimum effiicency. Subsidies will lower living standards and will also retard technological innvoation. You want the solar panel makers to be workng 24 hours shifts trying to bing the price down without the help of government preference.
I'll say this again, the very first thing we ought to do is strenghten property rights and remove all subsidies, tariffs and other restrictions before we do other things like impose further costs. We want to be raising the standard of living while reducing emissions.
"Can i suggest something? You a scientist by training it seems. Would you ever try to expertly discuss an area of science you have no training in?
Why then do you discuss economic rerasoning that has been settled for over 150 years.
Subsidies are bad economics. It leads to bad outcomes."
Oh God!
the man who called Paul Krugman a "failed economist" is using the argument from authority.
From the Gouldmeistr's link. "The Family II is a straight-4 piston engine that was originally developed by Opel in late 1970s for use in the Opel Ascona B and Opel Kadett D."
followed further down by:
The Ecotec name was adopted in 2000 for the new generation of Family II engines. The name was already used for the Opel Family 1 and Family 0 ranges. GM intends this new Ecotec to become its global 4-cylinder.
"The Ecotec Family II is a modern chain-driven DOHC 4-valve design with an aluminum block and head (L850 for 86mm bore applications, and L880 for 88mm bore), designed for displacements from 1.8 to 2.4 L. It was developed by an international team of engineers and technicians from Opel's International Technical Development Center in Rüsselsheim, Germany, GM Powertrain in Pontiac, Michigan, and Saab in Trollhättan, Sweden. Much of the development work on this project was carried out by Lotus Engineering, Hethel, United Kingdom. The engine uses aluminum pistons and cast iron cylinder liners. Vibration is reduced with twin balance shafts."
In other words, the design was totally revamped in 2002 and is the basis for all mid-sized GM motors world-wide - including the ones exported by Holdens to Daewoo which are re-exported worldwide in Daewoo vehicles.
Tell us again JC about how solar hot water systems use "solar panels".
JC (14) "So you say you have had a solar panel since 1987. No wait you say you have had two of them which may infer you have had them for 40 years. Yea? You selling the Brooklyn bridge there, Ob?"
JC (36)"I never called him a liar, you dishonest little sod."
Not in so many words but your meaning was cleare.
You really are a pathetic little creature aren't you?
There's so much stupid, it's hard to no where to start.
Okay here's one: all the cost estimates so far have effectively set the value of the avoided carbon dioxide emissions at zero.
http://www.yourecostore.com.au/epages/ecornerdemo1.sf/?ObjectPath=/Shop…
This link claims a 5 tonne annual carbon dioxide emission reduction.
So over a ten year period we're talking a 50 tonne reduction at a cost to the government of $1,000 or $20 per tonne.
Jc, most reasonable people will agree with what you say in theory, as i said. But the reality is that there are subsidies and distortions eveywhere, and saying they are no good isn't going to make them go away. That's what i mean by reality. If there were no subsidies or distortions, then sure it would be fine to argue that subsidies for solar hot water are no good. but given the current state of the market, that argument is not very helpful. And i cant see the labyrinth of tax breaks, support, subsidies and taxes that plague the australian fossil fuel and electricity industry being ended any time soon either. so take the step from theory to reality for me.
PS. If you are building a house in the bush today, and are only a kilometre or two from an existing power line, you will have to pay $20-$100k to have them build a connection to your house. The gvot won't pay that for you. That's why so many people in Australia actually do have $20,000 stand alone power systems, whether diesel or solar or whatever. Thousands and thousands of households. My girlfriend's parents have no grid connection and they live 5mins drive outside Wollombi, only a short drive from Sydney.
So don't try and tell me that we would have a grid in all or even most non-urban areas of australia without govt support. The existing grid was built on govt support, and wouldn't have happened without it.
Gouldie says:
"the man who called Paul Krugman a "failed economist" is using the argument from authority."
Of course he is, he doesn't believe in eh three priniciples of basic economics which is the hurdle I have set for anyone wanting to be called an economist.
He doesn't seemt to believe:
1. Demand curves slope downward
2. Prices are responsive to market forces
3. Motivations and intentions don't matter. Results do.
In other words he is either a total failure in not being unable to undersrtand the subject he teaches or he is an enabler like a drug dealer pushing heroine to users.
Either way he's bad news.
Then there Gouldie about car engines. Here he blows a gasket... pun intended of course.
Gouldie, you little trot. Australian car engines are basically 60/70's adaptations. There is no point talking about a 4 cyl. when we make a host of other engines.
The point that simply blew over you small head was that and effective dismantling of subsidies, taxes and tariffs would greatly assist in reducing emissions. For some reason this is totally lost on you. It's like a dog watching TV when it comes to these issues. LOL.
Gouldie says:
There's so much stupid, it's hard to no where to start
Now you know how everyone else feels when you turn up on site , gouldmeister.
Okay here's one: all the cost estimates so far have effectively set the value of the avoided carbon dioxide emissions at zero.
http://www.yourecostore.com.au/epages/ecornerdemo1.sf/?ObjectPath=/Shop…
This link claims a 5 tonne annual carbon dioxide emission reduction.
So over a ten year period we're talking a 50 tonne reduction at a cost to the government of $1,000 or $20 per tonne.
Here's gouldie pretending that 4 years of commie tree hugging school was not a lost cause.
Look, dude, you can pound on the keyboard as much as you like, but let me remind you that it was possibly the third lecture in eco 101 that taught people subsidies produce inferior outcomes. Have you forgotten?
I continue to maintain there are better ways to reduce emissions than applying subsidies. It's dumb economics and you even dumber for supporting it seeing you are supposed to be learned in the subject.
Answer this question Gouldmeister. Can you point to any serious economics faculty (I'm not talking about environmental economics by the way) that would argue subsidies produce superior outcomes? I will keep asking this question until you answer it and there is no use hiding underneath the desk hoping it will go away like you did last time.
Steve
Good policy that would dismnatle the tangled fishing line of bad ideas such as tariffs, subsidies, industry support and industry policy would go a long way to having us reduce emissions and making us wealthier.
There is no use arguing that becsue we continue to follow bad policy another layer won't matter, because that is what you are implying. It does matter.
Good policy that would dismnatle the tangled fishing line of bad ideas such as tariffs, subsidies, industry support and industry policy would go a long way to having us reduce emissions and making us wealthier.
yes. without any state disturbance, rules, taxes or susidies, world would be a paradise. we would all live in prosperity and there would be no ecological problem anywhere.
the market fixes everything!
without support from the government, solar power and hot water would be much more common and better developted today!
btw Jc, you asked be about subsidies for energy producers. i answered. did i miss your reply?
http://scienceblogs.com/deltoid/2007/08/maybe_the_australian_could_emp…
Jc,
Your economics, ummmmm, how do I sugar coat this... doesn't make any sense.
"Subsidies are bad economics. It leads to bad outcomes."
Subsidies are nothing of the sort. Subsidies are one of a number of weapons in the arsenal of governments to encourage or correct a market in order to achieve certain outcomes for society at large, such as stimulating an economy during a depression. Others include taxs/tax breaks, capital investment ect...
Since markets do not operate in a vacuum, independent from people, the environment etc... there are often times when a market needs to be encouraged or corrected when there is no price signal, or a lack of capital investment.
Say society A needs to replace all it's old gizmos with new thingamyjigs. However, society A doesn't have a thingamyjig factory. One way to acheive this outcome is to provide subsidies to get a factory/ies started.
Markets are not a means of their own. They are a means to an end.
I also remind you of buisness externaities (passing costs to others). Subsidies can help aleviate those costs.
"Why then do you discuss economic rerasoning (sic) that has been settled for over 150 years... It's about as settled in economics debate as it could ever be"
Settled? Have you been to an economics lecture in the last 150 years?
For one, Freidman and Hayek really kicked the liberal/neo liberal economic thought I think you are refering to in your posts in the late 1940s (Smith and Mill, while setting the groung work, never extended the idea as far as Hayek).
Secondly, have you read any Keynesian economic thoery? He's only one of the most influential economists in history. How about Galbraith? Both emphasised government participation in the economy, including the use of subsidies.
In fact, that governments should interveen to encourage market behaviour in certain circumstances is accepted by most (but not all) free market economists.
"There is no such thing as a good subsidy. They all have trade offs and fail under the Peroto (sic) optimum."
You have completly misunderstood Pareto efficiency. The theory states, clearly, that in order for a society to be Pareto efficient, any loser must be compensated. (Theoretically, if all exchanges were Pareto efficient, no one would enter such an exchange unless mutually benneficial). One way to achieve efficiency would be a subsidy.
Under certain conditions, a free-market does lead to a Pareto efficiency (first welfare theorem). However, this assumes no externalities, perfect competition, no transaction cost and many others. This does not, and can not apply in the real world.
"Can you point to any serious economics faculty (I'm not talking about environmental economics by the way) that would argue subsidies produce superior outcomes?"
London School of Economics.
http://search.lse.ac.uk/search?q=subsidies&x=0&y=0&ie=&site=systest&out…
Jc, I hate to break it to you, but your economic arguments are very weak. If you don't think that it's cost effective to replace electric with solar hot water systems, fine. But it's a long, long bow to draw on what you're arguing.
Here endeth rant.
Sod
I didn't miss it, i ignored it. My reference was to Australia not somewhere else.
Look Sod, you and the others fail to understand the shortcomings of the garret plan.
there are much better ways of attacking the emssions issue than just placing a blanket ban on electric water systems.
It's dumb policy which is what I would expect from a rock performer who couldn't sing.
Sequestration could be one answer and it would leave subsidies alone. In fact effective sequestration could make solar redundant in most areas.
this is a stupid policy that will only lower our standard of living. It's dumb.
JC (14) "So you say you have had a solar panel since 1987. No wait you say you have had two of them which may infer you have had them for 40 years. Yea? You selling the Brooklyn bridge there, Ob?"
I certainly took that as a clear accusation that I was 1) a liar, and 2) a charlatan.
Thanks to those who have supported me.
Your economics, ummmmm, how do I sugar coat this... doesn't make any sense.
"Subsidies are bad economics. It leads to bad outcomes."
Oh please. We're not going back to this re we?
----------------------------------
Subsidies are nothing of the sort. Subsidies are one of a number of weapons in the arsenal of governments to encourage or correct a market in order to achieve certain outcomes for society at large, such as stimulating an economy during a depression. Others include taxs/tax breaks, capital investment ect...
Ummm depression and recession are monetary events and only monetary stimulation can return economies to better health. The Japanese provided enough proof that fiscal stimulation does not work while monetary stimulus does.
-----------------------------
Since markets do not operate in a vacuum, independent from people, the environment etc... there are often times when a market needs to be encouraged or corrected when there is no price signal, or a lack of capital investment.
Oh yes, like our pathetic car, sugar and aluminium industries. Nice encouragement.
-------------------------
Say society A needs to replace all it's old gizmos with new thingamyjigs. However, society A doesn't have a thingamyjig factory. One way to acheive this outcome is to provide subsidies to get a factory/ies started.
Balls. That's not what the theory of comparative and absolute advantage taught. Industry policy is a disaster that will only lead to further resources misallocation and lowering the standard of living. It's about as axiomatic as you can get. Tell me if you think Rudd or anyone else should be picking winners after the next election as I would be interested in their method.
Markets are not a means of their own. They are a means to an end.
I never said they weren't. However they are the best way to allocate resources efficiently and provide the best outcomes for consumers. IF you know of any better let me know
I also remind you of buisness externaities (Sic) (passing costs to others). Subsidies can help aleviate those costs .
Ball. Subsidies are a cost.
"Why then do you discuss economic rerasoning (sic) that has been settled for over 150 years... It's about as settled in economics debate as it could ever be"
Settled? Have you been to an economics lecture in the last 150 years?
Sure it is. Any anyone who suggests otherwise should not call themselves economists. They are the equivalent of deniers.
For one, Freidman and Hayek really kicked the liberal/neo liberal economic thought I think you are refering to in your posts in the late 1940s (Smith and Mill, while setting the groung work, never extended the idea as far as Hayek).
Hayek wasn't the only one. Oh hang on he was a misogynistic racist according to Ian G trot.
Secondly, have you read any Keynesian economic thoery? He's only one of the most influential economists in history. How about Galbraith? Both emphasised government participation in the economy, including the use of subsidies.
Keynes and Ken were quacks.
In fact, that governments should interveen to encourage market behaviour in certain circumstances is accepted by most (but not all) free market economists.
Yea? Like when?
"There is no such thing as a good subsidy. They all have trade offs and fail under the Peroto (sic) optimum."
You have completely misunderstood Pareto efficiency. The theory states, clearly, that in order for a society to be Pareto efficient, any loser must be compensated. (Theoretically, if all exchanges were Pareto efficient, no one would enter such an exchange unless mutually benneficial). One way to achieve efficiency would be a subsidy.
No I haven't. I suggest you read it again. You simply putting you own personal preference in there hoping it will mean the same thing. It doesn't. You have completely misunderstood the meaning.
Under certain conditions, a free-market does lead to a Pareto efficiency (first welfare theorem).
You mean like always.
However, this assumes no externalities, perfect competition, no transaction cost and many others. This does not, and can not apply in the real world.
Oh nonsense. There is no such a perfect competition. It only exists in text books. Economics is the study of the real world.
"Can you point to any serious economics faculty (I'm not talking about environmental economics by the way) that would argue subsidies produce superior outcomes?"
London School of Economics.
I hate to break the news to you, but the London school is a mishmash of keynsian nonsense that no one should ever take seriously.
Jc, I hate to break it to you, but your economic arguments are very weak. If you don't think that it's cost effective to replace electric with solar hot water systems, fine. But it's a long, long bow to draw on what you're arguing.
Not really. I am simply explaining that there are far more effective ways of reducing emissions than what the rock star that can't sing has come up with.... I'm sorry "the star candidate".
That's about the entire life of the panel, so it's a bad deal.
Wait, back up. My understanding is that solar water heaters aren't based on solar panels, that they use some different technology. Am I confused or is JC?
What subsidies are are energy producers getting now? List them!
Wouldn't it be easier to just go type "oil subsidies" into google? I mean, I could go and do this and then summarize the first page of results in a comment here for you, but it seems like a waste of both my time and yours, plus I don't know what country you are expecting answers concerning (Australia?).
Sod I didn't miss it, i ignored it. My reference was to Australia not somewhere else.
hm. there is of course lot s of information on energy subsidies in australia as well.
you ll notice that they provide
incentives for petroleum exploration in frontier offshore areas as announced in the 2004-05 budget
in the very same way, as the US does.
http://en.wikipedia.org/wiki/Energy_policy_of_Australia
but of course it s completely useless to tell you this. as a fan of nuclear power:
It would be far better puting the money towards two nuke reactors that pump out cleaner energy through tax holidays for investors.
and if EVER there was a queen of subsidies, then it s this one!
Sequestration could be one answer and it would leave subsidies alone. In fact effective sequestration could make solar redundant in most areas.
who will do "effective sequestration"? there will be ZERO money needed? no subsidies at all? without any incentive, it will jump start tomorrow?
Jc, you were wrong on the calculations of the hot water installation. you claimed people were liars who educated you about the lifespan of those systems. you constantly mix it up with solar panels. you asked about subsidies, an answer was provided, you move the goal post. you asked about an economics department, an answer was provided, not enough for you.
looks like it s pretty mood to discus things with you, from my perspective..
one last piece of information:
states try to influence economics in points, that can t be fixed by the market.
states want an independent energy supply. a free market can t provide that.
states carry the cost for abuse of public goods. again, the market will not fix that.
states are bad at making longterm decisions. but the market is even worse. how you think the market can handle nuclear power, with it s possible consequences and log term effects, is beyond me.
The largest subsidy to the electricity industry is the right of way for power lines. Since the passive solar water heater eliminates the need for substantial lines. . . .
And yes, the stupidest arguments always have a libertarian component because the stupidest people are libertarian.
Jc,
Your economics is laughable, and you've shown yourself to be completely unaccepting of criticsm.
- Your argument against Keynesian economics is "he's a quack". It a silly argument, and in no way invalidates my claim that many economist and governments do not practice neo-liberal economics;
- You claim that a free market "alway" moves towards efficiency, when there are several assumptions clearly stated in first welfare theorem, most of which do not apply to the real world (such as perfect competition);
- You assume subsidies are always cost to buisness, when they are (they can be, but not in every situation);
- You claim LSE is Keynesian, when it's not. LSE hosted Hayek, Cambridge hosted Keynes. You claim no one takes it seriously. I beg to differ, based on the fact that it hosts or hosted 14 nobel prize winners, is always in the top five institutions in the UK, and was ranked by Yale in 1999 as being the best in the world for econometrics research.
Look, I'm not a fan of Garrett either. The man has been completely shackled by the ALP and is now about as useful as a ceramic duck, giving the ALP a face to woo the green vote while simultaneously giving the thumbs up to log old growth forest and delay making a dent in CO2 emissions. But your free-market/anti-subsidy gibber is misinformed to the point where I seriously wonder if you've actually studied economics.
There exist quasi-libertarians with a clue Eli. Also simply not reading Jc style, empty vessel loud noise comments works for me; I get enough flavour of them from others' educated responses to the nonsense. Tim could maybe ask his pal Jason to drop on by to lend an educating hand to Jc the one book fellow traveller, if only Jason cared enough (sob).
Wow
What have I unearthed here?
We have Eli telling us libertarians are dumb people. this is the guy who needs some serious remedial classes on the subject of economics.
Let's not forget waht he said:
In any case the costs of building plants is a real cost no matter who pays for it, whether there are subsidies or not.
Eli is a science worker just sore he doesn't know a lot about the subject.
Coin says:
Wouldn't it be easier to just go type "oil subsidies" into google? I mean, I could go and do this and then summarize the first page of results in a comment here for you, but it seems like a waste of both my time and yours, plus I don't know what country you are expecting answers concerning (Australia?).
No, not really. If someone makes an assertion tlike that, they ought to be able to back it up and not try to send people away with homework.
"Wait, back up. My understanding is that solar water heaters aren't based on solar panels, that they use some different technology. Am I confused or is JC?"
No, you are right on the money. Solar panels for generating electricity are completely different in operating and design principle from solar panels for heating water. One is photoelectric, and the other thermal. A simple and fundamental difference that some seem to be completely unable to grasp.
hm. there is of course lot s of information on energy subsidies in australia as well. you ll notice that they provide incentives for petroleum exploration in frontier offshore areas as announced in the 2004-05 budget in the very same way, as the US does.
Your link is crap, sod. It looks like it was written out of bob brown's office. There is nothing there that could be deemed to be worthwhile and you sent us on a wild goose chase. It's propaganda in serious need of editing.
and if EVER there was a queen of subsidies, then it s this one!
So stop the subsidies and raise a carbon tax. It's simple.
who will do "effective sequestration"? there will be ZERO money needed? no subsidies at all? without any incentive, it will jump start tomorrow?
So impose a carbon tax and see how all the cards fall.
how you think the market can handle nuclear power, with it s possible consequences and log term effects, is beyond me.
Oh how about the same way the warm and cuddly socialist Swedes and French do. Don't be scared, Sod. Don't b scared.
Your economics is laughable, and you've shown yourself to be completely unaccepting of criticsm.
Says you Chris. You have no understanding that a subsidy is a cost.
Your argument against Keynesian economics is "he's a quack".
Keynes was a quack, no question.
It a silly argument, and in no way invalidates my claim that many economist and governments do not practice neo-liberal economics;
Those economists who don't defer to the market are quacks or enablers. But I agree very few governments see the advantages on free market economics. There are a few that do however.
You claim that a free market "alway" moves towards efficiency, when there are several assumptions clearly stated in first welfare theorem, most of which do not apply to the real world (such as perfect competition)
Contestable markets are efficient. Period.
You assume subsidies are always cost to buisness, when they are (they can be, but not in every situation)
Not true. I don't assume susbsidies are a cost to business. I assume they are a cost to the nation. There's no such thing as a free lunch.
You claim LSE is Keynesian, when it's not. LSE hosted Hayek, Cambridge hosted Keynes. You claim no one takes it seriously. I beg to differ, based on the fact that it hosts or hosted 14 nobel prize winners, is always in the top five institutions in the UK, and was ranked by Yale in 1999 as being the best in the world for econometrics research.
Yes the LSE was ok during the time it hosted Hayek but then went downhill when it started preaching Keynes.
Look, I'm not a fan of Garrett either. The man has been completely shackled by the ALP and is now about as useful as a ceramic duck, giving the ALP a face to woo the green vote while simultaneously giving the thumbs up to log old growth forest and delay making a dent in CO2 emissions.
He missed his calling in life, which was scaring kids without wearing a mask.
But your free-market/anti-subsidy gibber is misinformed to the point where I seriously wonder if you've actually studied economics.
I maintain that subsidies are an expensive way of directing policy. Always has been and always will be.
"Wait, back up. My understanding is that solar water heaters aren't based on solar panels, that they use some different technology. Am I confused or is JC?"
No, you are right on the money. Solar panels for generating electricity are completely different in operating and design principle from solar panels for heating water. One is photoelectric, and the other thermal. A simple and fundamental difference that some seem to be completely unable to grasp.
So I am right, solar heating uses solar panels. You guys are walking round in circles trying to prove me wrong tripping over each other trying. lol
JC, a solar electric panel is based on photovoltaics, using silicon chips on some kind of substrate and with wiring to carry the generated electricity.
A solar water heating panel is essentially a bunch of black hose sitting on the roof, with a tiny pump circulating water.
The fact that both are assembled into flat packages known as "panels" doesnt mean they have a damn thing in common when it comes to economics, lifetimes, first dates of effective use, or much of anything else you've been arguing.
Lee
What are you telling me? tell the guys up the thread who seem to think that I when mentioned a solar panel I didn't mean solar heating panel.
You undertand that? I don't either.
As I said they're tripping over themselves in trying to prove me wrong that they've all fallen in a heap.
Gents:
Let get this straight.... Solar heating requires a panel. Let's move on.
Your link is crap, sod. It looks like it was written out of bob brown's office. There is nothing there that could be deemed to be worthwhile and you sent us on a wild goose chase. It's propaganda in serious need of editing.
sigh. Jc, finding excuses is stupid. here s a link to a government source, confirming the off shore oil incentives:
Chapter 3 - Schedule 5 - Incentives for petroleum exploration in Frontier areas
http://www.aph.gov.au/senate/committee/economics_ctte/tlab_7/report/c03…
i m looking forward to your next excuse, for not accepting this link or the subject..
So stop the subsidies and raise a carbon tax. It's simple.
i m all for a carbon tax. and i m sure you made some calculation about the "other" effects of a carbon tax, that would have a similar outcome for hot water systems.
i d love to see that "carbon tax" handling australian aluminium industry....
What are you telling me? tell the guys up the thread who seem to think that I when mentioned a solar panel I didn't mean solar heating panel.
let me sum you up:
1. you made a distinction between "solar panels" and pool heating systems.
2. then you made the claim, that the existance of "solar panels" 40 years ago was as likely as seeling the brooklyn bridge.
i see, you re using a mixture of the Alberto Gonzales and the Larry Craig defense!
so you can t remember, whether you re taking a "wide stance" or not?
btw, i d start ending subsidies by taking public support from economics departments, who deny any positive effect of subsidies in their teachings. i d love to see, how your "applied science" would react...
Jc, the pot calling the kettle black at comment number 72:
Jc (#76)
Your utterly shameless, dishonest games-with-words is appalling.
Sod
Excusing a rent tax to explore for oil is hardly the same as offering cash buy a water heater because the former rock star has banned electric heaters.
One is investment- oil exploration ......and the other is consumption. A rent tax holiday will improve our standard of living if they find oil or gas by multiples. Doling our cash to replace electric heaters will do reduce our standard of living.
Reducing taxes is not a subsidy
Nothwithstanding that i would prefer to see all land and sea bed privatized anyway.
"i'd love to see that "carbon tax" handling australian aluminium industry...."
So would I.
btw, i d start ending subsidies by taking public support from economics departments, who deny any positive effect of subsidies in their teachings. i d love to see, how your "applied science" would react...
Why not privatize all unis?
I notice SG is offering worthwhile discourse.
SG, I bet you're public servant of sorts?
Jc (#76)
Your utterly shameless, dishonest games-with-words is appalling.
Ob, you still haven't told us if you're going to put your hand up and ask for the cash rebate. Are you?
"there are much better ways of attacking the emssions issue than just placing a blanket ban on electric water systems."
According to The Age's Tim Colebatch, it is not a blanket ban. The ban only applies "where you can't get reticulated natural gas" or "in blocks of flats". So there's no way it would cost billions anyway. The ban would stop people from short-sightedly trying to save $250 by buying an electric hot water system instead of a gas one.
According to The Age's Tim Colebatch, it is not a blanket ban.
Aren't we lucky, the former rock singer has allowed these small indulgences.
The ban only applies "where you can't get reticulated natural gas" or "in blocks of flats".
Wow
The ban would stop people from short-sightedly trying to save $250 by buying an electric hot water system instead of a gas one.
Ah yes. Pate knows best.
The guy wanted to ban coal exports at one stage. This guy needs medical help.
Excusing a rent tax to explore for oil is hardly the same as offering cash buy a water heater because the former rock star has banned electric heaters.
may i remind you of your short question:
sod
What subsidies are are energy producers getting now? List them!
what you wanted were:
* australian only
* confirmed by a high end source
* and paid in EXACTLY the way, the ones for the hot water systems are.
so i guess you were showing real interest, when you asked about a sale of the brooklyn bridge?
One is investment- oil exploration ......and the other is consumption. A rent tax holiday will improve our standard of living if they find oil or gas by multiples. Doling our cash to replace electric heaters will do reduce our standard of living.
sorry, but "investing" $2800 ($1800, show me the company that will include a subsidy in costs..) to reduce costs by $300 for 10 to 20 years does sound like rather weird consumption to me.
the only way to do this, is by calling all household goods and services as such.
that would of course always make subsidies to "big oil" "GOOD" investment, while private (and more efficient) energy production/saving ens up as "BAD" consumption. nice.
It never seems to sink in with lefties that lower taxes aren't a subsidy. they are simply less taxes paid. period.
the best of all worlds is that the favoring doesn't happen and the tax cut is applied to all.
Sod...
tell us then personal tax rates go as high as 45% while corp tax atre 30%. you consider corps are receiving a tax subsidy?
JC's demonstrating some serious stupid here.
JC ... the Vernon of economics.
As someone familiar with failure modes in conventional water heaters but not solar, could someone tell me how they fail after 10 years?
IIRC, the bulk of the new system in a solar is copper pipe and a fancy solar collector. The expendable portion would be the storage tank, which would suffer from the same lifespan problems as a conventional tank.
A little more engineering, and you might be able to make the water heating system as durable as the walls.
It never seems to sink in with lefties that lower taxes aren't a subsidy. they are simply less taxes paid. period.
that s total nonsense.
so if the $1000 are not paid to them but instead subtracted from their taxes, it s no longer a subsidy?
if the money paid to them is instead given as a taxcut to off shore oil drilling, then it is not a subsidy?
total nonsense.
the best of all worlds is that the favoring doesn't happen and the tax cut is applied to all.
you mean to all off shore drilling?
what are you trying to imply again?
tell us then personal tax rates go as high as 45% while corp tax atre 30%. you consider corps are receiving a tax subsidy?
a pretty stupid question.
so if a person does not have to pay taxes due to a small income, do you call this a subsidy? how about negative income tax? a subsidy for the poor?
The coffin lid just opened and Hoggsie pops out. here he says:
"JC's demonstrating some serious stupid here.
JC ... the Vernon of economics."
Hoggsie I have been referring to solar as solar panels in an interchangeably. The kids were confused. please get back in the box and make sure you lock the lid in case your brother Ian G Trot pops out and really scares the children.
Sod
Let's not get ahead of ourselves here boyo. Let's do some mental excerise and see where we come out.
Corp tax is lower than personal taxes. Does that mean there is an inherent subsidy offered to corporations?
ummmmm
should be......
Hoggsie, I have been referring to solar as solar panels interchangeably
Corp tax is lower than personal taxes. Does that mean there is an inherent subsidy offered to corporations?
corporate taxes are lower, because the state wants to support them. this is sort of a subsidy.
still a very stupid question. you do realise that there are some differences between people and corporations?
Sod,
You're swaying again. This is the definition of a subsidy. Note it mentions the direct payment of money. A tax holiday is not a subsidy according to this definition. Please apply terms correctly in eco speak as terms do have meaning. A tax holiday to get oil flowing seeing the price is 70 bucks a barrel is not a subsidy. An old age pension is not a subsidy.
Subsidy MONEY paid, usually by GOVERNMENT, to keep PRICES below what they would be in a free market, or to keep alive businesses that would otherwise go bust, or to make activities happen that otherwise would not take place. Subsidies can be a form of PROTECTIONISM by making domestic goods and SERVICES artificially competitive against IMPORTS. By distorting markets, they can impose large economic costs.
Sod
Under your definition almost anything could be considered a subsidy
Generally, a payment or benefit made by the government for which there is no current charge. Subsidies are designed to support the conduct of an economic enterprise or activity, such as ship operations. They may also refer to provisions in the tax laws that provide certain tax expenditures and to the provisions of loans, goods, and services to the public at prices lower than market value, such as interest subsidies.
http://www.senate.michigan.gov/sfa/StateBudget/glossary.html
hint: there are more definitions out there, than the one that you learned in your neoliberal 101
but look, i followed your rather stupid question, pretty far away from the topic, (hot water systems...) to see to what great point you re leading me.
unfortunetely your arguments don t get any stronger.
""According to The Age's Tim Colebatch, it is not a blanket ban.""
Actually I should have written "except" "where you can't get reticulated natural gas" as well as "except in blocks of flats".
"Aren't we lucky, the former rock singer has allowed these small indulgences."
"Small" as in no-one has to use solar. Sure that's small, if Jc says so.
""The ban only applies "where you can't get reticulated natural gas" or "in blocks of flats".""
I should have said "doesn't apply" in these places.
""The ban would stop people from short-sightedly trying to save $250 by buying an electric hot water system instead of a gas one.""
"Ah yes. Pate knows best."
The government doesn't normally care about people trashing their own money but in this case there is an issue that affects everyone else as well, GHG emissions. The government's job is to act in the common interest.
It's not shortsighted to save $250 pr year. it's called time preference which is a well known area of economics that says people find more use in present goods (utility) than they do in future goods. It's a perfectly reasonable expectation.
The fact that people purchase more electric systems shows they place a higher utlity on the present value of the saving that ought not to be ignored
The government doesn't normally care about people trashing their own money but in this case there is an issue that affects everyone else as well, GHG emissions.
Which is why I have argued there are far more effective ways to reduce emissions than slapping a ban on electric systems. Moreover it demonstrates over and over again that this aging rock star has no place in setting policy. It's simplistic in the extreme, authoritarian and authored by someone who ought to be thinking he more about a future about scaring kids on Halloween as a second career than serious policy.
The government's job is to act in the common interest.
No it isn't. The job of government is to develop and implement the most effective policy. there is no such thing as the "common good" as it is a socialist contstruct.
jaycee must absolutely hate the US Constitution, then ...
Apparently the founders of the US who wrote our constitution were socialists, according to JC:
Promote the general welfare. An explicit goal of my government.
Maybe this is why JC lives in Oz?
Jc,
Air is the common good. Language is the common good. The public street is the common good. Comprehensive universal health-care and education are the common good. Egalitarian standards of justice are the common good. Open and fair markets are the common good. Markets don't exist without municipal, regional, national and international planning to provide public access, public security and rational infrastructure. Much of what government is, is a subsidy for business and commerce. What sane, real-world grounded, economic thinkers understand as a portion of externalized debt. What one doesn't have to pay for, that favors the success of one's enterprise, that can be pawned off as a regressive levy upon one's employees, is a subsidy that does have costs, but they are cultural, social, and environmental costs, which is of little consequence to simple-, single- and small-minded, anti-humanistic greed-heads who define the sublime wonder and infinite potentiality of human happiness as nothing more than 'economically satisfying' activity.
The game is fixed by them which has most of the marbles. Democracy is meant to be a counter to that oligarchic clustering of special privilege. Unfortunately, for those of us living in the 'developed' world, democracy is a concept reduced and redacted to only mean periodic elections contested exclusively by the best politicians Money can buy.
Everyone! Don't chastise Jc for his dim-witted, one footed troglodyte pattern of pseudo-conscious mimicking of rational thought, but pity the po' foo'. Like all of us, he just wants to be loved. He's just so dysfunctionally repressed, he is unable to express himself in manner that doesn't implicitly undermine and sabotage, with juvenile ridicule and gratuitous insult, his any success in finding a genuinely satisfying resolution to his inmost unconscious longings.
"That he's mad, 'tis true, 'tis true 'tis pity, And pity 'tis 'tis true."
Hoggise, you forgot to lock the coffin lid and its daytime. You be very careful now.
the term "common good" has taken on a slightly new meaning in modern days compared the founders time. The term has been raped by the left to the extent that it lost it's true meaning since those old codgers were around. It's similar to the world "Liberal" in the American sense. Also stolen and raped.
LB Says:
Air is the common good. Language is the common good.
I'm really not going to help you understand stuff by explaining it all to you when you begin with swill like those two sentences. I can't help you, Lb.
And then there's this.
Much of what government is, is a subsidy for business and commerce.
How ranker can it get? I suppose it could if Ian G trot showed up. Lol.
There is no common good. it is only individual interests that at times aligns for mutual benefit.
"I'm really not going to help you understand stuff by explaining it all to you when you begin with swill like those two sentences. I can't help you, Lb."
Welcoem to my world.
but at least he didn't call you a commie.
"solar heating panel"
God, make it stop. I'm laughing so hard I can't breathe.
moving on to pick out one tin speck of stupid from the heaping piles JC keeps supplying.
The Australian car manufacturing industry is made up entirely of subsidiaries of American and Japanese companies. They have access to the latest technology from their parents.
Which is why for example, Australian-made engines are used worldwide in GM cars.
So much for the idea that import tariffs result in Australian manufacturers using "1960's technology'.
The great irony here is that eliminating tariffs, which should have been decades ago and which both the government and the Opposition are both committed to doing, would have a bunch of benefits.
It'd probably result in better air quality as new cars got cheaper and old cars were retired more quickly.
Lower car prices would mean that real incomes would rise and people would have more money to spend on other goods and services probably resulting in higher total employment.
(Of course, the Free Trade agreements with the US, New Zealand and Thailand mean the effective average tariff level is considerably lower than the nominal rates so the benefits wouldn't be as great as you might think.)
About the only thing it WOULDN'T do is significantly reduce
carbon dioxide emissions. In the absence of stricter fuel efficiency standards for new cars, it'd probably just mean more cars and therefore higher total emissions.
But JC believes that all problems are solved by the market so it's like the old saying: "When all you have is a hammer, everything looks like a nail."
"Here's gouldie pretending that 4 years of commie tree hugging school was not a lost cause. Look, dude, you can pound on the keyboard as much as you like, but let me remind you that it was possibly the third lecture in eco 101 that taught people subsidies produce inferior outcomes. Have you forgotten?"
so that was the only lecture you actually stayed awake for I take it?
You obviously slept through the one lecture on public goods and environmental externalities they include in the short-bus economic course for business majors.
You know the one where they explain how subsidies are inefficient but externalities can result in even greater inefficiency meaning that subsidies to overcome externalities increase overall efficiency.
"Of course he is, he doesn't believe in eh three priniciples of basic economics which is the hurdle I have set for anyone wanting to be called an economist.
He doesn't seemt to believe:
1. Demand curves slope downward
2. Prices are responsive to market forces
3. Motivations and intentions don't matter. Results do."
So basically about 99% of all economists are "fai;ed economists.
You know half the problem we have is that you use words that don;t mean what you think they mean.
Like for example when you say "communist", "Marxist" and socialist" to mean "anyone who disagrees with me"/"the 99.9% of the human race who aren;t libertarians".
Or for that matter "libertarian" which you think means "the glorious coming super race of man-gods who will trample our enemies underfoot as we usher in a glorious thousand year Reich" and everyone else thinks means "those goofy guys who ran that blue guy for something or other in the US."
So I think what we need to do is start agreeing on new words for those words where the JC meaning differs from the normal meaning.
So for example we can call "economics" "thribdoodles" and "markets" "shrotsnuble".
So you would say, for example "All real thribdoodlists support free shrotsnubles".
I know this sounds a little strange at first but I can assure you such a statement makes just as much sense as most of what you write and I for one would take it just as seriously.
"Contestable markets are efficient. Period."
They're also a theoretical construct which doesn't exist in reality.
"There exist quasi-libertarians with a clue Eli."
Yes some of them even possess manners, a sense of humor and a measure of intellectual honesty.
A pity one of them can't somehow displace JC.
'Man, if his parliamentary performance is as bad as his singing we sure are in for it."
But... but... he sold hundreds of thousands of records.
Surely you aren't questioning the wisdom of the market?
"It never seems to sink in with lefties that lower taxes aren't a subsidy. they are simply less taxes paid. period."
So if the government says "I will give you $1.00 to do X" that's a subsidy but if the government says "I will give you a $1.00 deduction to do x" it isn't?
Did the Eco 101 lectures you managed to show up for cover the concept of fungibility?
Gouldie's back! This is like a part of Tales from the Crypt - Hoggise and Gouldie darting out of the coffin trying to frighten the viewer out of his/her wits.
Gouldmeister. I really, really liked the #103. It showed promise and a willingness to learn new ideas which for and old trot like you is tough. Now you almost got a B+ for that until we reach the last part and it really made me feel like I had just wasted my time teaching you all these new tricks. You flunked the exam, Gouldie with that last bit of slosh
Gouldie, we are possibly at saturation point when it comes to motor vehicles In other words the additional purchase of new cars by people who could afford them previously would be marginal at best. As a nation we have a pretty old car fleet, which means changing to newer models would be far less hostile to the environment than older cars. It would also greatly reduce the numbers of Suv's on the road thereby eliminating the arbitrage.
Welcoem to my world.
but at least he didn't call you a commie.
Lb is confused, Mr.Trot, but she isn't a commie.
You obviously slept through the one lecture on public goods and environmental externalities they include in the short-bus economic course for business majors.
yes, but I w wasn't snoring like you in the monetary economics lectures you made a hash of on an earlier post. You embarrassed yourself there, Gouldie. The profs would be in tears if they knew what you don't know.
You know the one where they explain how subsidies are inefficient but externalities can result in even greater inefficiency meaning that subsidies to overcome externalities increase overall efficiency.
Gouldie, Subsidies are a dumb way to curb emissions. You ought to know this by now seeing I have spent so much time teaching this to you. Spot hold up the class.
"It's not shortsighted to save $250 pr year. it's called time preference which is a well known area of economics that says people find more use in present goods (utility) than they do in future goods. It's a perfectly reasonable expectation.
The fact that people purchase more electric systems shows they place a higher utlity on the present value of the saving that ought not to be ignored"
No it's not it's an indication that MOST INDIVIDUAL ECONOMIC DECISIONS ARE NOT MADE RATIONALLY as assumed by your holy prophets Von Mises and Hayek.
As I've noted before economics has actually moved on in the past 50 years.
Actual real-world experiments show that people don't sit down and rationally calculate the expected utility of all possible actiosn as assumed in the old flat earth days you still cling to.
People use simplified algorithms and decision-making rules because they simply don't have the time or resources to do otherwise.
Your flat earth economics (sorry flat earth thribdoodles) assumes that hot water systems are purchased as discrete goods by the end-user.
By and large, except for the replacement market, they aren't.
Builders buy and instal hot water systems in new houses.
They don't pay the power bills on the houses so they have no incentive to minimise energy use in this area or any other in the absence of government regulation.
So the average builder will minimise their own investment and lower the headline sale price by opting for the cheaper option.
We know from studies that the time spent on selecting a new house is surprisingly short - on the order of six hours from being offered the house you end up buying to making the decision to purchase it.
In that interval people consider literally hundreds of factors - from color scheme; to what the neighbours look like to proximity to schools and shops to how far it is to drive to grandma's.
Surprisingly, few people take the time out during that time to calculate the marginal return on investment in different types of hot water system.
Now I know that basic libertarian thribdoodles say they should but you'll just have to until after the revolution to ship the recalcitrants off to the ministry of Freedom for re-education.
Ian
And let's take all that into account. let's say that what you say is true, which it isn't as I would like to see evidence of those assertions, such as people taking 6 hours to decide on a house..
By the way that doesn't take into account the long discussions that have gone on before that in terms of deciding what the parameters are before choosing.
Does that still require compulsion and banning? Espcially when there are better less compulsive ways to get to the end objective.
by the way it seems that the builders have made the right choice in the end as they seem to go for what is the most cost effective system around...
I also disagree with our utility preferences argument. People's preference is for present goods so that in itself asserts they are being rational.
Your assertions are also extremely simplistic. You seem to think that because peope don't spend too much time worrying about a water heater it is ipso facto proof positive they have really understood the process.
These days systems are so reliable and so standard that people wouldn't think twice about the brand etc. Most people would want to know the size and that's about it.
How many cars have you purchased and focused on the brand and type of tires? It's about the same thing. So stop being so anal rententive about everything, you worry wart.
Just to inform the discussion: the Labor policy is focussed more on existing homes, rather than new homes.
The reason for this is that new homes are already subject to energy efficiency regulation. QLD and NSW have practically disallowed the installation of electric hot water in new homes prior to this, and in VIC you have to either put in solar hot water or a rainwater tank when building a new home (and if you went the tank, you would probably still use gas hot water like most Victorians do).
Your assertions are also extremely simplistic.
Jc, the discussion with you makes little sense.
i answered your question, now why don t you answer mine?
1. will the $1000, if not paid directly but given out as a tax reduction no longer be a subsidy?
2. what do your calculation about the "consumption" of a hot water system say about the new life expectancy 15 years? 20 years?
3. give us your "new" definition on common goods, please.
4. how does a carbon tax fit into your "economics 101?
Ian Gould, I don't suppose you can point me towards a good book which explains what you have been saying? I am aware of the various terms being bandied about, and have some knowledge of it all, but as an amateur lack the background, so need something fairly simple to refer to.
Guthrie
Ask me, don't ask the Gouldster. He'll just send you off to read Das Capital and The Little Red School book. Pretty soon you'll end wanting to kill a few million poeople of your own.
Road to Surfdom is a good beginners book on why in a socialist system the worst always raise to the top ( people like Goldie). Read that one first and I'll give you some others to pick through once you have done that.
just messing about Ian. No offiense.
Sorry.... Gouldie.... didn't edit as usual.
. will the $1000, if not paid directly but given out as a tax reduction no longer be a subsidy?
Taxes are paid by the people. If the money is returned as a reduction in tax it can't by definition ever be thought of as a subsidy. It's the wrong term to use. Ask Gouldie as I think he would even agree with this one. Ian?
what do your calculation about the "consumption" of a hot water system say about the new life expectancy 15 years? 20 years?
look, people value present goods at a much higher rate than future goods. There's a good reason, we don't know how long we're going to live! Who know how long these systems will last anyway. So I believe people are behaving quite rationally as there's no point counting up the savings over 15 years if you may not live that long.
Give us your "new" definition on common goods, please.
Roads, public hospitals etc. They should all be privatised.
How does a carbon tax fit into your "economics 101?
It doesn't. It was a long time ago but I can't recall tax being a big issue in 101. A carbon tax is my preferred method to tackle the risk management issue of GW. It would put a price on carbon and one would therefore expect we develop tech improvements that would help us move away from C2 emissions over time.. There would be too much risk of cheating going on with a cap and trade. It also is a sledge hammer approach that would seem to suit the Gaia types that want to see drastic cuts in the standard of living. These are the Ted Kaczinski types.
Jc:
"Gouldie's back! This is like a part of Tales from the Crypt - Hoggise and Gouldie darting out of the coffin..."
Some of us, who live in the real world, have jobs and lives (for example, my indoor soccer team crashed to our third straight loss tonight, 8-10) and cannot spend every waking moment trying to teach you basic economics. You seem to be shifting goal posts all over the place.
- First you suggested Tim's calculations were wrong;
- after that got shot down, you went on some rant about Garett being a Nazi while claiming subsidies are some sort of communitst conspiracy (Commie-Nazis... oh my!);
- Now you seem to be arguing some poorly worded "time preference" argument;
Your arguments are simplistic and seem to be about high school level. I was never taught, both in university and in my years in the private sector, that subsidies are inefficient. Some subsidies can have good effects, such as this example of electrifying rural homes in India using (shock) solar energy:
http://www.hedon.info/goto.php/WhoBenefitsFromSolarHomeSystemsInIndia
Others don't, such as European and American farm subsidies. They are just one tool, of many, governments can use to influence market behaviour, including increasing demand and even stimulating entirely new markets.
Your time preference argument is also poor. People, particularly those who have disposable capital, often take short term losses for long term gains. Think of slow return investment portfolios, trust funds, superanuation, bonds, double friggin glazed windows. The problem is that these have often been the domain of the rich, the only people with the expendable capital.
The offering of a subsidy of solar hot water system helps make the long term savings accesable to more people. It also creates demand by reducing price, and stimulates and area of the economy with the general goal of increasing energy efficiency.
While we're talking up market distortions, have a thought about the distorting effects of large and expensive corporate externalities (such as pollution of the atmosphere by CO2). Obviously, the market has failed to adequately address this problem, despite 10 years of lead time. Surely it is time for governments to begin to channel the market to begin to obtain solutions for this problem? The free market alone has failed.
To return to our economic history lesson, I remind you of this comment:
"Those economists who don't defer to the market are quacks or enablers" in reference to Keynes and Galbraith.
No statement shows your ignorance of economics than this one. Both adovacted a mixed economy:
http://en.wikipedia.org/wiki/Mixed_economy
Both defered to market forces, as both realised the short comings of Laissez-faire economics in the real world. If you don't know at least these basics, if may be time to go back to school.
Taxes are paid by the people. If the money is returned as a reduction in tax it can't by definition ever be thought of as a subsidy. It's the wrong term to use. Ask Gouldie as I think he would even agree with this one. Ian?
i do not need to ask anyone. there are A LOT of definitions of subsidy out there, that INCLUDE tax cuts.
i gave you this one as an example before!
Generally, a payment or benefit made by the government for which there is no current charge. Subsidies are designed to support the conduct of an economic enterprise or activity, such as ship operations. They may also refer to provisions in the tax laws that provide certain tax expenditures and to the provisions of loans, goods, and services to the public at prices lower than market value, such as interest subsidies.
http://www.senate.michigan.gov/sfa/StateBudget/glossary.html
look, people value present goods at a much higher rate than future goods. There's a good reason, we don't know how long we're going to live! Who know how long these systems will last anyway. So I believe people are behaving quite rationally as there's no point counting up the savings over 15 years if you may not live that long.
ah, that s why people never ever safe any money! thanks for the explanation!
Roads, public hospitals etc. They should all be privatised.
have fun "privatising" the roads in most neighborhoods...
"by the way it seems that the builders have made the right choice in the end as they seem to go for what is the most cost effective system around."
No, they don't.
Invest an extra $1-2000 in a solar system and you'll get a 15-30% per annum return over the next decade.
JC (105):
1 Demand curves slope downward
2 Prices are responsive to market forces
JC: (110): we are possibly at saturation point when it comes to motor vehicles In other words the additional purchase of new cars by people who could afford them previously would be marginal at best.
So lower prices will always lead to increased demand, except when they don't.
Compare the car ownership levels in Australia and the US, JC, we're nowhere near saturation.
"Taxes are paid by the people. If the money is returned as a reduction in tax it can't by definition ever be thought of as a subsidy. It's the wrong term to use. Ask Gouldie as I think he would even agree with this one. Ian?"
There's a technical term here "tax expenditure".
A tax deduction that's conditional on specified behaviour is referred to as a tax expenditure and is generally regarded as a form of subsidy.
The old 150% tax deduction R&D and the various film tax schemes were examples of tax expenditure.
Governments like them because they lower the headline tax-to-GDP figure compared with using tax-raising and hand-out to achieve the same policy objectives.
Guthrie,
This is a pretty good grounder on behavioural economics.
http://www.neweconomics.org/gen/uploads/tfi0ypn1141p45zoi0mrrgf22209200…
(The NEF has written has truly wretched policy documents but gnis is pretty good stuff.)
So lower prices will always lead to increased demand, except when they don't.
Don't be bloody silly Gouldie, the elimination of all taxes and imposts would cause an explosion in demand for new cars but the size of the fleet would increase marginally. However the benefits of reduced emissions would be more than marginal. We have a pretty old car fleet. That is of course unless you come up with some silly idea that older cars are more efficient. You almost tried that with the engine debate.
Compare the car ownership levels in Australia and the US, JC, we're nowhere near saturation.
Gouldie, for Christ's sake allow for some differences. They have much bigger variation in weather than we do that makes the purchase of an Suv in addition to a sedan far more compelling. I would also hazard to guess that more Americans drive to work seeing they much less concentrated than we are. Think man think.
If you think they don't slope downward you may want to explain why.
Gouldie, you old trot, Sod asked a very siomple question.
"will the $1000, if not paid directly but given out as a tax reduction no longer be a subsidy?"
The answer is NO!
Stop confusing the poor kid with stuff about film tax write offs etc, you old bird brain. Stick to the issues and you will be ok. jessh, you have a meandering mind.
Let this sink in before we get to the harder stuff.
"If you think they don't slope downward you may want to explain why."
If the price of toilet paper halved would you buy more?
If it doubled would you buy less?
Chrisc
Sorry to hear about you soccer game loss. However I urge you to stop playing that bloody game. It's a horrible sport and reasonable people should not encourage a sport that causes untold deaths and misery by barbaric fans. If there was anything the Labor party ought to ban it is soccer! It's often has no winning side making it the ideal socialist sport. I despise soccer with every breath of my being.
To your points:
"Your arguments are simplistic and seem to be about high school level. I was never taught, both in university and in my years in the private sector, that subsidies are inefficient. Some subsidies can have good effects, such as this example of electrifying rural homes in India using (shock) solar energy:"
My argument is not simplistic. Subsidies are bad economic policy. Period. It allows for second-rate outcomes. You may see improvements as a result of subsidies but the damage is usually hidden. They act like tariffs and cause all sorts of distortions that aren't visible to the naked eye. There are far better policy alternatives to subsidies.
"Your time preference argument is also poor. People, particularly those who have disposable capital, often take short term losses for long term gains. Think of slow return investment portfolios, trust funds, superanuation, bonds, double friggin glazed windows. The problem is that these have often been the domain of the rich, the only people with the expendable capital."
Well of course the level of disposable income affects time preferences. I never said it didn't. Want do you want, a dissertation on the efficacy of time preference and income level. I ain't got the time. That's why the rich create trust funds etc. Jeesh!
. "The offering of a subsidy of solar hot water system helps make the long term savings accesable to more people. It also creates demand by reducing price, and stimulates and area of the economy with the general goal of increasing energy efficiency."
Bullshit, because you forgot to add a few little things. The rock star is also adding an extra 1,000 bucks to make up for the price difference in addition to forking out low cost loans.
"While we're talking up market distortions, have a thought about the distorting effects of large and expensive corporate externalities (such as pollution of the atmosphere by CO2). Obviously, the market has failed to adequately address this problem, despite 10 years of lead time. Surely it is time for governments to begin to channel the market to begin to obtain solutions for this problem? The free market alone has failed."
I disagree, but I am not going to go into that subject because it is too long and it will cause our commie friend to go ballistic and blow a gasket. He's long winded and highly strung at the best of times. Yes Ian, that's you I'm talking about.
Both were quacks. In fact Ken was a terrible economist, Even his obit on the NYTimes mentioned that he was a far better writer than he was an economist. He was a total joke as an economist. But a very nice person from what most people say.
As Mises said in his opus- Human Action.: there is no such thing as a mixed economy. There is the private economy and the public. Both live side by side.
"Both defered to market forces, as both realised the short comings of Laissez-faire economics in the real world."
The real problem was that neither understood their limitations which was that they didn't get economics..
"If you don't know at least these basics, if may be time to go back to school."
Why? To pick fight s with the profs? No as I think they couldn't hack it. I would have them all seeing shrinks by the time I was finished with that lot.
"If the price of toilet paper halved would you buy more?"
Possibly Ian. i'm sure someone would come out with a 4 and 5 ply. We originally started out with a one blade gillete razor and now they have four on the same blade.
"If it doubled would you buy less"
I wouldn't , but I recall reading that the poor once used to used old pohone books and newspapers.
Trust you to question 1+1=2
Doesn't this argument of yours totally trash this other comment you made about there being more cars on the road if we cut taxes.
gouldie, you're all over the map on this one.
And I was relying on your analytical skills about the certainty of AGW. You're starting to make we do a 180 after this. Seriously, you were my AGW guru.
More on the toilet paper issue. Globally a fall in the price of toilet paper would see a lot less people using their left hand as a wiping device. So yes the demand curve would slope downward.
More on the toilet paper issue
you know the times when wifey hasn't done her job and left extra rolls in the bathroom cabinet and you end up having to use tissues, right? You know those times.
Notice how smoothe and high quality the Kleenex are compared to dunny paper- even the expensive perfumed variety.
Well I would dare say that the qaulity of the paper would greatly improve if the price dropped. Volumes would increase as the paper density did also.
So yes we would use more paper in a sense. higher quality paper.
Jc,
You are a silly goose. Of course air is a common good. Consider the consequences of no air. It is not just a conditional contingency of mutually intersecting interests of economic players, but an always and everywhere underlying essential good for the existence of each and every living thing on the planet. There could be no more of a complete and universal common good.
A tax break is effectively equivalent to a subsidy as it effects the bottom line exactly the same as a hand-out, no matter what semantic, distinction without a difference, hand-waving one might employ in attempting to forcibly impose one's cock-eyed, self-justified definition.
I'm not in need of any help from you. Au contraire, I'm here to help you, buddy. The pain of your emotional and intellectual suffering is plainly evident. There is a hole in your psyche that no amount of money can fill. I don't propose to fulfill that neurotic sense of need, but if you let me, I can show you a way to overcome your false attachment to your externally re-enforced notion of self and release your mind from the intrinsic confusion and internal conflict your falsely self-justifying ideology generates.
It is simple really. Just quit trying to force everything into the tiny box of your narrow and limited intellectual comprehension and open your mind to the limitless wonder, imagination and curiosity of which it is naturally capable.
Simple, but not easy.
"You are a silly goose."
Ok, I can take a jab. But what's all this about?
"Of course air is a common good. Consider the consequences of no air."
It is not a common good in an economics sense LB. It's not a public good or a private good. It should be a private good though if we did the right thing and allocated property rights from the core to the heavens thereby strengthening possession rights that would go some way towards limiting things like emissions. That's beside the point though.
"It is not just a conditional contingency of mutually intersecting interests of economic players, but an always and everywhere underlying essential good for the existence of each and every living thing on the planet. There could be no more of a complete and universal common good."
You lost me on this one. It sounds like something out of the Australian Greens policy manual- total drivel cloaked up to sound good.
"A tax break is effectively equivalent to a subsidy as it effects the bottom line exactly the same as a hand-out, no matter what semantic, distinction without a difference, hand-waving one might employ in attempting to forcibly impose one's cock-eyed, self-justified definition."
But you're forgetting who earned the money in the first place. A tax cut is a return of money to its rightful owner. A subsidy is a sum of money going to a rent seeker. Far different.
"I'm not in need of any help from you. Au contraire, I'm here to help you, buddy. The pain of your emotional and intellectual suffering is plainly evident. There is a hole in your psyche that no amount of money can fill. I don't propose to fulfill that neurotic sense of need, but if you let me, I can show you a way to overcome your false attachment to your externally re-enforced notion of self and release your mind from the intrinsic confusion and internal conflict your falsely self-justifying ideology generates."
Tell me you're not some sort of scientologist or a new ager please!
It is simple really. Just quit trying to force everything into the tiny box of your narrow and limited intellectual comprehension and open your mind to the limitless wonder, imagination and curiosity of which it is naturally capable.
I am every day. I am always thinking of new trades to put on. I can't tell you what it feels like when I lose on a trade.
"Simple, but not easy."
Sure, That's easy to say for you who doesn't have 3 other greedy mouths to feed.
Jc,
Happy to oblige. No, I am not a scientologist or some sort of new-ager. It is not surprising that you would be lost by stating a simple physical fact that defines a common good beyond the narrow construct of your pseudo-philosophy.
Money is an artifice. An invented symbol intended and insufficient to approximate value. It is not properly anyone's possession. It is a public consensus derived from public confidence. It is not real, nor a marker for reality. Taxes are a convention invented to reinforce that mere psychological confidence, while theoretically providing for the public good. Too often though, that created to defend the public good is used to subsidize the most powerful minority of actors in the private sector in an unhealthy symbiosis that all the whacked quotes from Ludwig Von Mises will never disentangle.
An imagine constrained and delimited by mere economic considerations is less than no imagination at all. It is an imagination distorted and disfigured by unreal axiomatic assumptions.
LB
No offense, but I copuld go to Green left weekly and ge the same commentary.
Ask Ian waht he thinks about what you're saying.
Ian?
"It's not shortsighted to save $250 pr year."
Wake up and get your facts right, jc. It is not $250 "per year". It is $250 dearer up front for a gas heater than an ordinary electric heater. The gas heater then has a much lower operating cost than the ordinary electric heater. Also, of considerable interest to the world in general, the gas heater causes far less carbon emissions than the electric heater unless the electricity comes from a non-carbon-emitting source. I'd guess less than 25% of the carbon emissions.
""The government doesn't normally care about people trashing their own money but in this case there is an issue that affects everyone else as well, GHG emissions.""
"Which is why I have argued there are far more effective ways to reduce emissions than slapping a ban on electric systems."
I'd like to live in an ideal world too. But until the political will comes along for a carbon tax there's not a lot that can be done immediately.
""The government's job is to act in the common interest.""
"No it isn't. The job of government is to develop and implement the most effective policy."
which is based on the common interest.
BTW, I used the word "interest", not "good".
"I'd like to live in an ideal world too. But until the political will comes along for a carbon tax there's not a lot that can be done immediately."
Ah yes, we can't get the best option so we go with the worst. Yep, that about sums up the former rock star's mental processes.
Common interest sounds a ltitle better. Commone good sounds Stalinist.
Speaking of stalin, that reminds me, where's Ian G Trot when we need him.
Ian, LB wants to know if you agree with his/her analysis. Do you?
Thanks Ian, thats a start.
JC, I have a copy of Das Kapital at home, but couldn't get into it. From what else I have read, it seems MArx was broadly correct on quite a few things, and wrong on some others. Of course since then economics has developed rather a lot.
As for the worst people rising to the top, I see that in the company I work for. A private company, small, but with worldwide sales, we have clearly incompetent management. This has been the same in all the places I have worked, to a greater or lesser extent.
From what else I have read, it seems MArx was broadly correct on quite a few things, and wrong on some others,
Marx was a mediocrity. A broken clock is right twice a day too. The monster wrote the how to manual on how to kill in industrial numbers. He basically took Ricardo ignored the fact that Ricardo theory of profit and wages had been widely discredited and ran with it. There is nothing Marx taught us except how to kill and compel people.
As for the worst people rising to the top, I see that in the company I work for. A private company, small, but with worldwide sales, we have clearly incompetent management. This has been the same in all the places I have worked, to a greater or lesser extent.
Well mayebe you ought to go for the big job guthrie. no kidding . If you think you can achieve better results go for the big job or circulate your resume around. it wouldn't hurt. there's is plenty of demand for good managers and people that can put the runs on the board.
Well, you seem to have missed my point, which was that mediocrity is not down simply to "socialism".
As for manuals on killing people, you can't pin that on Marx, unless you simultaneously blame Christinaity for all the violence done in it's name, or indeed blame capitalism and the world bank for all the deaths in the developing world caused by their policies.
Well, you seem to have missed my point, which was that mediocrity is not down simply to "socialism".
I din't think you were making this silly point, Guthrie. The good thing about capitalism is thst firm won't last long if they hire too many silly people. They go broke. We also have the ability to get rid of bad governments through elections. Sorry, I thought you would have understood all that.
As for manuals on killing people, you can't pin that on Marx, unless you simultaneously blame Christinaity for all the violence done in it's name, or indeed blame capitalism and the world bank for all the deaths in the developing world caused by their policies.
Don't be bloody stupid. Communism was responsible for 200 million dead last century. comparing Christianity to that is about as dense as once could get.
Let's stick to the electric kettle or solar kettle as your throwing the ball way off base.
"""Which is why I have argued there are far more effective ways to reduce emissions than slapping a ban on electric systems"""
when overall cheaper gas systems are available.
Sure there are far more effective ways but it's much better than nothing.
""I'd like to live in an ideal world too. But until the political will comes along for a carbon tax there's not a lot that can be done immediately.""
"Ah yes, we can't get the best option so we go with the worst."
No, the worst is leaving things the way they are. BTW, we don't live in an ideal world.
Actually Chris the option may really be to leave things alone and deal with the problems if and when they arise. It's not palatable to the western electorates so it is best to go with the better alternatives for the moment. Banning things isn't.
However even under Stern the option would be to do nothing.
Why?
Stern used a discount rate that was about 1/70 below the cost of captital in the real world.
Stern also said that we would lose about 20 % of our GDP by 2100
Stern wants us to spend 1% of GDP for mitigation.
We can therefore figure out from this information what is the best option in terms of unmolested GDP to 2087
20/70 = .28571
So
1.01-.28571=.72429%
* 1.01% was used assuming GDP as left unmolested over an 80 year time frame.
So we would be better off by .71429% if we do nothing even on Stern's scenarios. Note if he had used the proper discount rate it would have been even more comepelling to do nothing.
A PhD economist figured this out- Mark Hill- over at catallaxy.
"However even under Stern the option would be to do nothing."
I was talking about comparing doing nothing (i.e. continuing to install electric heaters) with installing gas heaters instead, not Stern's hypothetical. Thank you Mr. Strawman.
Marx' general theme was that capitalism/the more-or-less-free-market is a magnificent engine for building up industrial capacity and production, but in the end would have trouble allocating the benefits of said production satisfactorily. None of which I have seen disproved by current events, including the Soviet Union's disastrous decision to skip the capitalism/building industrial capacity step and go to the end game, or the US' current inability to increase the median income despite a "great economy". Whether or not his final prediction that the masses would thereupon rise up and wrest economic justice for themselves is a bit more open to debate, as yet.
"deal with the problems if and when they arise"
That's all very well but the only problem is that leaving any action until the problems start to arise will mean the problems continue to get worse even if the CO2 emissions are switched off immediately (which won't happen anyway). This is because of the thermal inertia of the oceans. e.g. we now have an observed warming of 0.7-0.8 deg C while the various forcings would produce 1.3-1.4 deg C of warming in steady state. The oceans are holding back about 0.6 deg C of warming but they're not going to do it forever.
Sounds like a marketing slogan from the tobacco industry...and equally valid.
Z
Marx' general theme was that capitalism/the more-or-less-free-market is a magnificent engine for building up industrial capacity and production, but in the end would have trouble allocating the benefits of said production satisfactorily.
Z I told you not to try this at home as it would end blowing up in your face. You should listen to grown ups.
Marx was a third rate economist who used Ricardo's discredited theories and ended up writing a how to manual on mass murder. There is nothing great about him and there was nothing he said that was new. Basically he was a big fat idiot.
None of which I have seen disproved by current events, including the Soviet Union's disastrous decision to skip the capitalism/building industrial capacity step and go to the end game, or the US' current inability to increase the median income despite a "great economy".
Oh please. The US's "inability" to see wages for the bottom 20 million rise is because of the little problem with the southern border. There are 11 million unskilled illegals pulling down on the wages of the bottom rung. If you want to see wages of unskilled Americans rise, get rid of those who shouldn't be there.
Whether or not his final prediction that the masses would thereupon rise up and wrest economic justice for themselves is a bit more open to debate, as yet.
You mean the mass murder always done in the name of the people? Stop it. I'm laughing myself to death. Pllleeaazzze.
That's all very well but the only problem is that leaving any action until the problems start to arise will mean the problems continue to get worse even if the CO2 emissions are switched off immediately (which won't happen anyway).
You need to qunatify this in order for people to make the proper assessments. No point in telling us what you think could happen.
We need probability scenarios along with time frame and the science has to have some credibilit. Sorry but I am not goign to take your word for it.
This is because of the thermal inertia of the oceans. e.g. we now have an observed warming of 0.7-0.8 deg C while the various forcings would produce 1.3-1.4 deg C of warming in steady state. The oceans are holding back about 0.6 deg C of warming but they're not going to do it forever.
So you think stern and the IPCC were understating things?
Evidence they were thanks
"deal with the problems if and when they arise"
Sounds like a marketing slogan from the tobacco industry...and equally valid.
No Hoggsie. It's called a cost benefit analysis. You need to quantify the risk in order to implement a risk management policy program.
You can't say there is global warming and we must do something about it without a reasonable risk assessment. Otherwise we just end up doing things the dumb way with someone ex-rock star banning things. It's dumb policy and only leads to a bad outcomes.
ummm
should read
with SOME ..........
"""deal with the problems if and when they arise"""
""That's all very well but the only problem is that leaving any action until the problems start to arise will mean the problems continue to get worse even if the CO2 emissions are switched off immediately (which won't happen anyway).""
"You need to qunatify this in order for people to make the proper assessments."
Sure, but that's beside the point about not doing anything until problems have actually started.
""This is because of the thermal inertia of the oceans. e.g. we now have an observed warming of 0.7-0.8 deg C while the various forcings would produce 1.3-1.4 deg C of warming in steady state. The oceans are holding back about 0.6 deg C of warming but they're not going to do it forever.""
"So you think stern and the IPCC were understating things?"
No, I'm using the same figures as the IPCC. If you're really interested in the sources for observations, you can check the NCDC's compilation, or GISS's, or HadCRU and for climate sensitivity you can start with Annan and Hargreaves.
Chris
This is not an AGW thread dispite trying turning into one. Do you agree with Stern's assessment or don't you? Please offer an explanation.
"Do you agree with Stern's assessment or don't you?"
This is rather spurious from the original point of forcing people to do things that are cheaper within a short period anyway. Stern's assessment was based on mitigation techniques that cost a lot of capital, unlike the few cheap (and negative cost over relatively short time frames) techniques such as installing gas heaters instead of electric.
Jc says:
Of course it is an AGW thread. It is all about carbon mitigation, which is a sub-set of purely AGW consequence.
Jc, why do libertarian fruit-cakes such as yourself always seek to define subjects with such exclusivity? In the real world all things are inter-related, inter-penetrating and inter-active. Making hard and fast distinctions between this and that and reasoning from simple first order logic on that basis leads to a demonstrably inaccurate perception of reality.
The reason why air is considered a pure public good, a sub-category of common goods, is because it is both non-rivalrous and non-excludable. That is its economic definition. However, common good is a term of art in philosophy, ethics, ecology and political science as well. A robust understanding of the term is contingent on all these differing approaches and not the sole provenance of any single discipline.
Certainly not the sole provenance of a contrarian sub-group of economically theorists, whose premises are both predicated on subjective judgments and abstracted on the basis of rejection of empirical evidence.
Above should read: economically dysfunctional theorists
"Marx... ended up writing a how to manual on mass murder"
Yes, well I must have missed that part; I'm sure that in your extended survey of his writings you noted wherein it may be found.
But Jc, I like to keep things simple.
You also seem unaware of the inefficiencies in "free" market economies, and that turkeys don;t vote for Christmas.
Presumably you also missed the "marxism- leninism" bit where Lenin basically took bits of Marx and re-arranged them to suit himself, and then Stalin took over and killed everyone who disagree with him, and without apparently actually doing anything Marx had suggested.
Christinaity meanwhile has only killed less people than state-capitalist dicatorships such as the USSR, because there were fewer people around when Christianity was one of the big excuses for killing people.
But I can agree about sticking to solar heating, that does seem simple enough.
Guthrie says:
"Christinaity meanwhile has only killed less people than state-capitalist dicatorships such as the USSR, because there were fewer people around when Christianity was one of the big excuses for killing people."
Not being religious myself......
Oh yes the if only excuse. If only there were more people.
If only there were more people your fellow atheists would have killed even more. Every single one of the big killers was an antheist, guthrie you dope.
LB
Seriously, I don't know what the hell you're trying to say.
Z forgives and forgets the tyrants of the 20 the century. Good for you , Z. That's that spirit.
Marx was just a misunderstood liberal democrat.
Meanwhile Chris O is comapring Stern to Gas heaters.
Pardon me if I am on the floor laughing hysterically about all you geniuses.
"Meanwhile Chris O is comapring Stern to Gas heaters"
Who was the one who first mentioned Stern? Little bit of hypocrisy going on here.
This is rather spurious from the original point of forcing people to do things that are cheaper within a short period anyway. Stern's assessment was based on mitigation techniques that cost a lot of capital, unlike the few cheap (and negative cost over relatively short time frames) techniques such as installing gas heaters instead of electric.
Here you comparing, Chris.
By the way it wouldn't be cheap to covert, that was the whole point of the discussion.
Odd argument you're trying to make to refute the point that xtian genocide killed fewer people because there were fewer people to kill.
JC - dumber than Vernon or not?
That's the REAL question of the day.
Hoggsie
What is exactly is the evidence that Christians would have killed more people some 500- 800 years ago compared to the 200 million slaughtered by your atheist "believers" only last century. Bullet points is fine.
Hoggise thinks marx was a liberal democrat. Hoggsie call other people stupid.
All we need now is Ian G Trot showing up and supporting Hoggsie.
What is exactly is the evidence that Christians would have killed more people some 500- 800 years ago compared to the 200 million slaughtered by your atheist "believers" only last century. Bullet points is fine.
sigh. Jc, you were not able to make a reasonable point about those hot water systems. now you changed subject and somehow manage to make EVEN LESS sense.
but for a start, you might want to take a look at population numbers around 1000 AD...
and how much marx exactly did you read?
"now you changed subject and somehow manage to make EVEN LESS sense."
I didn't , sod. Don't be so silly. the guthster brought bring that crap up. i was merely correcting him. Please keep up with the class!
"but for a start, you might want to take a look at population numbers around 1000 AD..."
What exectly happened around 1,000 AD, SOD?
Yes, those Christians were worse than Stalin every was .. even on a bad hair day.
"and how much marx exactly did you read?"
Das Kapital? All of it. It is the most boring plagarized heist I have ever read. he did't even copy Ricardo
well.
I'm glad you think highly of him!
""Who was the one who first mentioned Stern? Little bit of hypocrisy going on here.""
"Here you comparing, Chris."
More like contrasting than comparing but anyway, try using your browser to find the first occurrence of Stern. Something about "under Stern the option would be to do nothing" instead of "go with the worst" which is "slapping a ban on electric systems" which will usually mean gas.
"By the way it wouldn't be cheap to covert, that was the whole point of the discussion."
$250 is cheap compared with the additional operating cost of ordinary electric heaters compared with gas heaters.
So you have solar, Chris? You know there's that bag of loot just waiting for you in the locker at the train station.
Umm, JC, you seem now to be arguing that atheism leads to mass murder? Can you try and drag this thread any more off topic? It is clear enough from history that religion and economics and politics provide really good excuses to kill lots of people, irrespective of how correct or not the political or religious outlook being used as the excuse, is. Anyone who can't see that simple point probably shouldn't be arguing on the internet, and given the way previous posters have shown how your one dimensional black and white world view is inadequate, you probably should give up.
Umm, JC, you seem now to be arguing that atheism leads to mass murder?
Not at all, Guthrie seeing I am close to being one myself. I am agnostic which is a far more vituous position to hold.
I wan merely responding to the silly claim that Chritianity was the closest thing to the nazis in the old days, that's all.
"It is clear enough from history that religion and economics and politics provide really good excuses to kill lots of people, irrespective of how correct or not the political or religious outlook being used as the excuse, is."
Actually that's not clear at all and only a person with a limited understanding of history would make such a sweepingly silly comment.
"Anyone who can't see that simple point probably shouldn't be arguing on the internet...."
Exactly my thoughts too. So I guess it's adios amigo and great knowing you then.
"Seriously, I don't know what the hell you're trying to say."
Can you say 'clueless', Jc?
Can you say 'clueless', Jc?
I can LB, but then you would be calling me rude.
The coalition offer a subsidy and Labor, AKA Rudd, matches it. Labor also offer "low cost" finance, the major solar hot water company in Australia offers free finance (appears truly to be free, they will not give you a discount for cash, and there are no finance charges of any sort.
Frankly Labor is just "Me Too", they want to win an election and do not appear to have an original bone in their body.
As an aside I have had Solar Hot Water Systems on two properties since 1991 and ten years appears to be about how long they last.