climate economics
stoat | November 1, 2014 Or so energylivenews says (thanks to J). Their text is:
Governor of the Bank of England Mark Carney appears to agree most fossil fuels can’t be used if the world is to avoid climate change. At a World Bank event on Friday, he is quoted as saying: “The vast majority of reserves are unburnable.” This is a reference to the idea of a so-called carbon bubble – when investors in oil, gas or coal suppliers lose out on money because the reserves can’t be used.
I've bolded his words, the rest is editorial interpolation. I find this particularly irritating. If I'm reading about what Carney thinks, I…
stoat | December 21, 2013 Well, of course, this is trivially true, in the sense that $0 is "up to $1bn" and the report doesn't suggest that it could be more than $1bn. I got this from the Graun which continues to irritate by pointlessly and stupidly failing to link to the original study. I assume they do this because, like the mediaeval church, they regard themselves as gatekeepers and priests of knowledge: we should only be allowed their interpretation, and not see the original for ourselves. But enough ranting.
There's a note at the bottom which says This headline on this article was amended on 21 December 2013 to…
stoat | December 4, 2013Prompted by PB I read Gambling with Civilization by Paul Krugman, which is a review of The Climate Casino: Risk, Uncertainty, and Economics for a Warming World by William D. Nordhaus. I haven't read the latter.
The Climate Casino is in no sense the work of someone skeptical about either the reality of global warming or the need to act now. He more or less ridicules claims that climate change isn’t happening or that it isn’t the result of human activity. And he calls for strong action: his best estimate of what we should be doing involves placing a substantial immediate tax on carbon, one that…
stoat | August 15, 2013Quite a lot really. Unless, of course, you're looking at the wrong models in the wrong way. As Robert S. Pindyck does. I do have some sympathy for the paper, but its badly written, somewhat confused, and the author has failed to emphasise some key distinctions.
To begin with where I agree, I'm fairly happy with his assertion that "certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the [social cost of carbon] estimates". I'm only "fairly" happy, because to say that the discount rate is "arbitrary" is stupid (which is probably a hint that this thing hasn't been peer…
stoat | August 13, 2013 I follow David Hone, though not the details. He's really keen on CCS, and has (I think) a strong commercial interest in it succeeding. But there is no real answer to "its not commercially viable" - and I think it remains non-viable even at plausible CO2-price levels ($80 / tonne is Sternish, no?). So, inevitably, sigh, the talk turns to regulation (um. Does that ring any bells?).
The latest is Can a technology specific policy exist in a carbon market? I didn't have the patience to read it all. Just reading a little bit of it is enough to convince me that this is not the right way to go. What…
stoat | July 24, 2013 Says Aunty. And the Graun says "Arctic thawing could cost the world $60tn, scientists say". $60tn is a big number. But lets not trouble ourselves with the popular press: lets go straight to the source, which is Nature ("Vast costs of Arctic change", by Gail Whiteman, Chris Hope and Peter Wadhams). Is that an impeccable source? Weeell, not quite. Nature whores after big-impact studies in a rather regrettable way, and more importantly this is but a "Comment" not (as far as I can tell) a proper peer-reviewed article.
You'd certainly hope it wasn't peer reviewed, because some of it is dodgy,…
stoat | June 28, 2013 Says the Economist.
THIS is an unusually busy moment in the unhappy history of efforts to curb climate change. In two weeks at the end of June the world’s three biggest polluters unveiled carbon-reducing measures. In China and America these are more ambitious than previous policies. But they fall far short of what is needed to rein in the relentless rise in global carbon emissions... Many of the American and Chinese moves are of the command-and-control variety... In China there is a public-health justification for this sort of approach. Beijing suffered an “airpocalypse” in January, with…
stoat | May 6, 2013That's over at P3. But I've seen it elsewhere. The idea is that because we'll need to keep unburnt oil in the ground to hit (or rather, to not hit) a 2 oC commitment, a pile of oil companies are wildly overvalued, leading to... well, who cares what it leads to, because it doesn't matter.
Via AS I find Tol saying
As soon as the “market” expects that new regulation will seriously devalue an asset, its price drops. Bubbles only arise if the “market” is misinformed. The “market” is by no means infallible when it comes to pricing risk, but an expectation of “not much climate policy any time soon…
stoat | April 21, 2013 Answer: both are complex disciplines. But because they deal with every-day events, amateurs regularly assume that they know enough to dismiss the entire field.
Suppose you wanted to know what was wrong with climatology: how far is it really understood, what can it usefully describe and what not, what can it usefully predict: who would you ask? Not, I hope, one of the many "climate skeptics" whose meaningless ranting echoes around the wub. If you really wanted to know, you need to ask a climatologist. Preferrably, I'd admit, one slightly outside the mainstream and prepared to be forthright.…
stoat | April 12, 2013As regular readers will be aware, I think the ETS is stupid, and we should be imposing a carbon price via carbon taxes instead (Time for carbon taxes? and refs therein, if you're interested in the history).
But David Hone isn't, he likes the ETS, and nice person that he undoubtedly is, it cannot be mere coincidence that he has a strong financial interest in the trading scheme. Which is one of my objections to it - the inevitable parasitic class that grows up around it (and part of my despair - because carbon taxes are cleaner, they lack a similar parasitic class, and therefore semi-…
stoat | February 25, 2013Or so says Marginal Revolution (via Timmy). I repeat it here to wind up all the people who continually tell me how wonderful fuel efficiency standards are. Prediction: no-one will change their minds.
a gas tax provides immediate, direct incentives for drivers to reduce gasoline use, while the efficiency standards must squeeze the reduction out of new vehicles only. The new standards also encourage more driving, not less.
Context: people keep telling me, whenever the subject comes up "but look how fuel efficiency has increased over the last 2-3 decades, it must be due to fuel efficiency…
stoat | December 3, 2012 PAYING FOR IT by ELIZABETH KOLBERT in the shouty New Yorker suggests that carbon taxes may be back on the (US) agenda. It would be good if they were, but I'm dubious (am I ever anything else?). There are many reasons to be dubious. One is in the article: a carbon tax makes so much sense—researchers at M.I.T. recently described it as a possible “win-win-win” response to several of the country’s most pressing problems—economists on both ends of the political spectrum have championed it which has been true for years, to no avail. And Obama doesn't seem to be on board: We would never propose a…
stoat | June 4, 2012Or, Timmy in the Torygraph. Its a bit broken I'm afraid, though it manages to get some obvious things right. But before I start on the actual matter, we need to sweep away some of the dross.
It starts Perhaps we can sit down and discuss this climate change thing like the adults we are? Put the Delingpoles over here, the vilenesses that are Greenpeace... and the problem - repeated elsewhere - is the pretence of equal treatment of the two "extremes" whilst actually clearly favouring one side. The bias continues in the treatment of climate sensitivity, though for something appearing in the…
stoat | May 24, 2012Someone's PR folk mailed me CARE and climate change Into Unknown Territory: The limits to adaptation and reality of loss and damage from climate impacts, and the report itself. You know what its like: the first big pic is a poor person with a baby in a dry landscape with a dead cow skeleton; the next is a poor person up to her neck in water (although... there are some green shoots in the dry landscape, and green on the horizon. Never mind; you see what they are aiming at).
But I didn't get far before the language became odd: The World Bank estimates that even in a 2°C world, adaptation costs…
stoat | May 8, 2012Reading P3 and mt I got stuck at
...economics makes grandiose claims to be the science of collective behavior, or even the science of collective happiness. Yet it dismisses any philosophically interesting aspects of these questions in favor of counting dollar-denominated transactions. Nevertheless, it claims for itself a unique position among the sciences, as the crux, the central weighing mechanism, for all public decision-making.
Leaving to the side, if I can for the moment, the "philosophically interesting" aspects I'm interested in the "central weighing mechanism" point.
It isn't clear to…
stoat | April 13, 2012Or so says reuters and a whole host of others repeating the same story. The source is draft ELECTRICITY GENERATION POLICY STATEMENT from the shouty Scottish government. You won't be surprised to hear that I don't believe a word of it (I've been pretty sniffy before), but lets read on. Oh, but first, why so sniffy? Because, its not economic (if it was, we'd all be doing it, der). Nor do I see any sign of it becoming economic in the next 10-15-20 years. But who knows, I could be wrong. Lets read on...
They say: The Scottish Government's policy on electricity generation [nd: this is indeed about…
stoat | February 3, 2012CH has resigned as a minister (he was Secretary of State for Energy and Climate Change, often just reported as "energy secretary") after he was charged with asking his then-wife to take some speeding points for him; or, more formally, for "perverting the course of justice". And I think the reaction, certainly amongst his colleagues, has been "well that was inevitable, but its a shame cos he was good". Richard Black (beeb.env) says Chris Huhne's departure from the Department of Energy and Climate Change (Decc) sees the exit of a minister who is generally regarded as having fought tenaciously…
stoat | January 20, 2012And, since I've been cwuel to the septics, I suppose I ought to have a go at the greenies, for balance:
A false balance is abomination to the Lord: but a just weight is his delight.
-- Proverbs 11:1
So (h/t KZ) the Grauniad says:
Open letter to Sir Mervyn King says overexposure to high-carbon assets by London-listed companies risks creating a 'carbon bubble'... The huge reserves of coal, oil and gas held by companies listed in the City of London are "sub-prime" assets posing a systemic risk to economic stability, a high-profile coalition of investors, politicians and scientists has warned…
stoat | June 6, 2011 I've finally been provoked into writing this post. Though actually it is going to be about something slightly different, or at least I'm going to go through a long rambling diversion, inspired by Idiocy on carbon permits by Timmy.
But since I'm also rather conscious that many of my posts are (when looked back over the period of a couple of years) utterly incomprehensible due to lack of context, I'm going to do some context.
If you look at the problem of Global Warming from an Economics point of view, then it is a perfectly standard problem, that of uncosted Externalities. Which is to say,…
stoat | December 16, 2010 I largely ignored Copenhagen (the conference, not the city, I hasten to add: very nice place I'm sure and I mean no disrespect) and chose instead to push for Carbon Tax Now, though I felt obliged to read a little bit of what they had to say. But now we have Cancun. What to say about that, other than rather unoriginal puns?
Nothing but the obvious really: it was a total failure and it would have been better if it had never occurred. Cancun was the triumph of the negotiator-class: the parasites encouraged by all the process: yet another waste-of-time conference designed purely to generate…