Catallaxy Files

From the WSJ.

Mercantilist strategies have undoubtedly brought sweeping benefits to Asian nations. But they cannot go on forever. In the past few years, there has been growing discussion over the downsides of such policies—the unnatural effect on U.S. interest rates, the overdependence on exports, the trade tensions, the handicap to domestic consumption. Less apparent is the moral-hazard risk, but it is no less a danger. This is especially true in the case of China. With such a huge pile of “free money,” bureaucrats and special interests will increasingly clamor for allocations to spend in ways that could ultimately obstruct its goal to reform its banking system and professionalize its corporate culture.

Check out Bjorn Lomborg’s position on climate choices in the current Policy. Check out all the other articles as well.

He does not dispute that there is climate change with temperature trending up enough to cost 3% of GDP by the end of the century. I am prepared to be sceptical about that but the important thing is to look at the strategies that he suggests to handle the situation.

The Copenhagen Consensus on Climate findings showed that even with the best way to apply carbon taxes every dollar spent probably will end up avoiding only two cents of climate damage. That’s a bad deal. On the other hand, every dollar spent on R&D in green energy technologies will probably end up avoiding $11 worth of climate damage. That’s 500 times better. So do what’s good and what’s likely to happen rather than what’s dumb and, as we have now seen for the last 18 years, is not going to happen.

It is not about doing things that cost huge amounts of money and deliver gains that are scarcely measurable. It is about doing smart things that pay off in the medium to long term without cramping the legitimate desires of the poor people of the world to live more like us. It is certainly not about scare tactics and slanting results, like the Stern Report, or making absurd claims about sea levels, like Al Gore.

The Stern Review did not conduct any new studies; instead, it did exactly what its title says— review the existing economic studies. All these studies agree that the cost of global warming is going to be about 3% of GDP or thereabouts by the end of the century. Now that’s not a trivial amount, but it is certainly not the end of the world either. Nicholas Stern re-estimated that number up to 5–20%. Most estimates show that the cost of tackling climate change could easily escalate to 5% or more of GDP. Stern re-estimated that down to 1–2%. Essentially, Stern took the existing evidence and skewed it in such a way that it made for a conclusion that was not warranted by the economic analysis. I think Jeffery Sachs vacillates between many different positions. It’s often quite hard to see what he indeed does believe.

The UK Parliament has released the results of its recent inquiry. It does seem to me to be somewhat of a squib although the conclusions are a bit more damning than the executive summary suggests. Quite rightly, they find that the use of the word ‘trick’ isn’t problematic, but I’m not convinced by the ‘hide the decline’ finding and especially why the two combined is ever acceptable.

In addition, insofar as we have been able to consider accusations of dishonesty—for example, Professor Jones’s alleged attempt to “hide the decline”—we consider that there is no case to answer. Within our limited inquiry and the evidence we took, the scientific reputation of Professor Jones and CRU remains intact.

But the committee isn’t really in a position to decide that point one way or the other as you notice from the disclaimer.

Where the inquiry was damning is on the Freedom of Information issue.

There is prima facie evidence that CRU has breached the Freedom of Information Act 2000. It would, however, be premature, without a thorough investigation affording each party the opportunity to make representations, to conclude that UEA was in breach of the Act. In our view, it is unsatisfactory to leave the matter unresolved simply because of the operation of the six-month time limit on the initiation of prosecutions. Much of the reputation of CRU hangs on the issue. We conclude that the matter needs to be resolved conclusively—either by the Independent Climate Change Email Review or by the Information Commissioner.
…
We cannot reach a firm conclusion on the basis of the evidence we took but we must put on record our concern about the manner in which UEA allowed CRU to handle FOIA requests. Further, we found prima facie evidence to suggest that the UEA found ways to support the culture at CRU of resisting disclosure of information to climate change sceptics. The failure of UEA to grasp fully the potential damage to CRU and UEA by the non-disclosure of FOIA requests was regrettable. UEA needs to review its policy towards FOIA and re-assess how it can support academics whose expertise in this area is limited.

It is clear that the CRU and UEA are not out of the woods on that issue. Basically the Inquiry is recommending that charges be brought if possible.

While many will interpret the result of this inquiry as a vindication I’m not so sure. First the committee point to additional inquiries that are ongoing and second make this point.

Reputation does not, however, rest solely on the quality of work as it should. It also depends on perception. It is self-evident that the disclosure of the CRU e-mails has damaged the reputation of UK climate science and, as views on global warming have become polarised, any deviation from the highest scientific standards will be pounced on. As we explained in chapter 2, the practices and methods of climate science are a key issue. If the practices of CRU are found to be in line with the rest of climate science, the question would arise whether climate science methods of operation need to change. In this event we would recommend that the scientific community should consider changing those practices to ensure greater transparency.

So where does this leave us? On very narrow grounds Jones, the CRU and UEA are cleared (by this inquiry) but the FOI problem hasn’t gone away. I am surprised by the argument/finding that Jones didn’t subvert the peer-review process and that releasing data and code is not standard practice.
(HT: Wattsupwiththat).

Update: Guardian coverage here.
Update II: Fred Pearce at the Guardian has an interesting take.

UEA is rightly in deep doo-doo. The MPs find that its information officers colluded with CRU to subvert legitimate freedom of information requests, and “found ways to support” the culture of secrecy. In a key statement that not even the proliferation of acronyms can disguise, they say: “We must put on record our concern about the manner in which UEA allowed CRU to handle FOIA requests.”

He also points out that the Parliamentary Committee has provided the internal UEA inquiry with a to-do list.

Barnaby Joyce says it how he sees it. Yesterday he made, I thought, a very funny comment.

THESE [farmers on the Murray Darling] actually do read the Productivity Commission reports. I don’t know, I use them when I run out of toilet paper. Maybe that is how [Labor is] going to reboot the economy, maybe if they burn down enough houses, we can reboot the economy by building them again.This just amazes me. This is just, it confounds me, $16.2 billion on glorified garden sheds.

This has given rise to an outbreak of indignation. How dare anyone criticise the Productivity Commission?

SAMANTHA HAWLEY: Well, why did you make that comment? Why did you say that you don’t read them? You use them as toilet paper. Why did you say that?

I’m sure young Barnaby hasn’t been hectored like that since he was in primary school. The answer is quite simple – the PC is not a popular organisation amongst many segments of the population. I’m sure the audience at yesterday’s lunch where Barnaby spoke loathe the PC. So too do the left-wing of the current government. Doug Cameron, for example, wanted to know the educational background (as a proxy for social class)of the PC staff a few weeks ago. I have yet to see the ABC broadcast that story, or ask Cameron – a government senator about that – but they are more than happy to hector an opposition senator who chooses not to believe everything he reads in a PC report.

As far as I can see Barnaby is the only person out there criticising the stimulus package

maybe if they burn down enough houses, we can reboot the economy by building them again.

and he was the only person talking about the problem of public debt. What has been the consequence?

SAMANTHA HAWLEY: It was this kind of talk from you though that lost you the finance job, wasn’t it. So will you be refining your language in any way?

It probably was. The government and the media went to town on Barnaby. Sure he is a loose cannon, but he has been good on the issues that are important; government waste and public debt. From where I sit I see no coalition politician filling that gap, and I see the progressive left have marginalised and shut down a voice making important criticisms of government.

Alan Moran has a piece up at The Drum putting the boot into the public service.

This raises the issue of just what do public servants contribute. Mark Steyn has commented that, “The new class war in the Western world is between ‘public servants’ and the rest of us.” The struggle is between those who earn income from supplying goods and services which people will willingly pay for, and those whose income depends on revenues forcibly extracted from taxpayers.

Unfortunately the electorate is unaware of this struggle. Thus, in the Rudd/Abbott health debate Mr. Rudd’s favourability soared whenever he said the government will work to fix the health problem and used homespun phrases like “little one” or “mums and dads want practical action now”. It mattered little that Mr Rudd’s proposals simply mean shuffling the funding from state to Commonwealth bureaucrats and in the process further duplicating areas of bureaucracy.

Though few people want to interest themselves in politics they believe that government can fix problems nagging at them. Even the recent pink batts and school buildings fiascos have not persuaded them of the innate inefficiency of politically and bureaucratically operated activities.

Ted Nordhaus and Michael Shellenberger have an interesting take on the relationship between climate science and energy policy development. Their bottom line is that the two should part company.

Now is the time to free energy policy from climate science. In recent years, bipartisan agreement has grown on the need to decarbonize our energy supply through the expansion of renewables, nuclear power, and natural gas, as well as increased funding of research and development of new energy technologies.

They obvously think energy security and sustainability are too important to go down with the AGW ship. They are correct. So too is concern for the environment.

Efforts to use climate science to threaten an apocalyptic future should we fail to embrace green proposals, and to characterize present-day natural disasters as terrifying previews of an impending day of reckoning, have only served to undermine the credibility of both climate science and progressive energy policy.
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The result is that the use, and misuse, of climate science by advocates began to wash back into the science itself.

Read the whole thing.
(HT: Pielke)

Some of the comments to my post about our duties to our grandchilden got me thinking about optimism and pessimism.

It used to be that those on the left were optimistic: Light on the Hill, New Jerusalem, confidence that with a bit of government coercion we could create a utopian society. Read some of the stuff by those who visited Stalin’s UUSR in the 30s – the Webbs, Shaw and many others. Read the Australians who followed Whitlam to China in the early 70s and who were impressed at the barefoot doctors, major surgery with acupuncture but who did not notice the Cultural Revolution. Most were deluded but they were optimistic about the future. There was a new world coming and it was going to be wonderful.

The conservatives on the other hand believed that any change was probably bad. They fought rearguard action against many examples of progress.

Now, it is pretty well reversed. The left are pessimistic about just about everything: technology growth, population growth, the economy. Read a cross section of the well known blogs from the left. There is hardly a positive, joyful or optimistic thought to be seen. “we’ll all be rooned” is the theme.

The right is now much more positive and optimistic. Those of us who live there have much greater faith in the abilities and fairness of our fellow man. Again, read the blogs.

Now perhaps something else has changed. Few on the right these days would consider themselves conservatives. Few have that instinctive distrust of change that true tories had. Perhaps the conservatives are found on the left now. Perhaps that is why Fraser seems more comfortable there now.

Those of us on the right prefer to call ourselves liberal (with or without a qualifying adjective) which in Australia connotes freedom, progress, optimism and belief in the common sense of most of mankind.

Not only is this territory a better place to be in economic and political terms but it is also a much happier place.

So everyone knows that David Frum left the AEI. So was he pushed, or did he jump, or what? Here is Charles Murray’s take.

I do not have any certain information to convey about David’s departure, except what Arthur Brooks has already said publicly: David resigned. He could have stayed. But I will tell what is common knowledge around AEI: David got a handsome salary but, for the last few years, has been invisible as a member of the institute. Being a scholar at a think tank (or any institution) is not just a matter of acknowledging your affiliation in your books and op-eds. It’s also a matter of blogging at the institute’s blog, not just your own blog (David had a grand total of 3 posts on AEI’s blog in the year since it began), reviewing colleagues’ drafts, reacting to their ideas, contributing chapters to their books, organizing scholarly events, participating on the institute’s panels, attending the institute’s conferences, helping out with fundraising, serving on in-house committees, giving in-house seminars, and mentoring junior staff. Different scholars are engaged in these activities to different degrees. Full disclosure: I’m on the left-hand side of that bell curve (I make the trek from Burkittsville so seldom that I don’t even have an office at AEI). But David was at the left-hand tail. If I had to guess — and that’s what I’m doing, guessing — David’s departure arose from something as simple as this: Management thinks that an employee is not as productive a member of the organization as management thinks he should be. The employee disagrees. They part company.

I get to see this a lot – you can’t have just one string to your bow.
(HT: Tony)

This is the scariest sentence I’ve read in a long time.

The Government is society’s parents

On another blog, there is a discussion of what we owe our grandchildren. I don’t comment there any more because any dissenting view is stomped on, chewed up and spat out by the blogger’s acolytes. I tell you, it’s even worse than this place.

But the subject is interesting. I think it takes a kind of arrogance for us to decide what kind of world our grandchildren will want. Mine are both under 5 so they will begin to grapple with the world in, say, 20 years. Look back 20 years: no internet, 5 TV channels in Australia, newspapers were fat and happy, China had prospects but nothing else, the Australian economy was being deregulated rapidly…When they will be reaching the peak of their careers in about 40 years, no one now can predict what things will be like. It’s lots of fun to try, of course, but the results  will be nonsense.

Going back, my grandparents had no idea at all what I would be doing or how I would be living or what i would need to live. They – and my parents – had left school at 14 and when I went overseas for postgraduate study my grandmother (both grandfathers had died by then as life expectancy tables predicted) I was the only person my grandmother had ever known who had travelled overseas voluntarily.  A few relatives had gone away during the War.

If my grandparents had, when I was 3, tried to make sure the world would be suitable for me when I grew up they would probably have kept some land on the family farm for me. They would probably also have tried to make sure I grew up knowing how to drive a horse and sulky.

It did not occur to them that it would be a good thing to keep Sydney Harbour clean for me. When that became important to us and the industry on the harbour had closed we fairly quickly cleaned up the water. That happened over the past 20 years or so and as a result the water is cleaner than it has been in the past 100 years. When the problem became important to us we fixed it.

And as many have pointed out, my grandparents’ generation did not decide to conserve whales because otherwise we would have no fuel for lighting.

So for me to try to preserve the world for the way I think my grandchildren will want it it foolish and mostly pointless. The world they will live in will be quite different to the one I know and they will be more than capable – and wealthy enough – to change  things to suit them.