This article does not necessarily represent the views of all members.
Yes – I imagine so.
He is responding to a previous op-ed by Ian Plimer. Ian was making the argument that the 97% consensus figure is a nonsense number – “a zombie statistic”. Edwards concedes that the statistic is meaningless:
So what? The implications for policy would be almost the same if only half of scientists or even fewer agreed.
Indeed – but only if you assume that (1) climate change is happening, and (2) something should be done about it. The answer to (1) is a scientific question. It is either happening or it is not. Now bear in mind, it is not enough to simply claim that the climate continually changes. Or that humans are making some contribution to climate change. The Greenies must demonstrate that humans are predominantly the cause of climate change.
Let’s assume for argument sake that the answer to (1) is yes. Question (2) comes into play. At this point, however, we have run out of science. Addressing (2) is an economic, engineering, and ethical issue. Ethical questions revolve around whether we should do anything? Who are “we”? Engineering questions revolve around what can be done, if “we” decide to do anything. Finally economic evaluates the benefits and costs of doing something and suggests appropriate choices.
Edwards – like so many people – bypasses all the thorny ethical and engineering questions and jumps straight into the economics.
A prudent response also would identify no-regrets actions that would advance towards some worthwhile outcome even in the face of high uncertainty.
No regrets policy? High Uncertainty? It’s not clear to me that we do face high uncertainty – the IPCC and their fellow travellers have identified several scenarios and assigned probabilities and the like. Climate change is a risk not uncertain. Then which no-regrets policy is he implying? A maximin strategy would provide a different policy choice to a minimax strategy – so which decision rule is he calling for? We know which decision rule he has ruled out by omission – the value maximisation rule.
In identifying no-regrets actions, one should keep in mind that emissions of carbon dioxide — whether from industry, electricity generation, building construction or transport — are an indicator of waste. Once a fossil fuel is burned and its carbon, a carrier of energy, is converted to carbon dioxide, the stored energy is lost forever.
What a strange thing to say – when a fossil fuel is burnt its energy is not lost – it has been used. Presumably in the production of a good of service that will be sold at a profit or in some other way provide utility to humans. Carbon dioxide emissions are a by-product of an otherwise useful good. Unless you want to mount the argument that the optimal amount of waste is zero, his statement in that paragraph is incoherent. Now you may want to mount the argument that waste should be fully priced and as a result humans will find a profitable use for what is now waste. I am sympathetic to that particular argument as it calls for public policy that encourages entrepreneurship – lower taxes, lower regulations, less red tape, less green tape, etc. It also invites a debate around the value of the environment – somewhere between zero and infinity, and closer to zero than infinity. This is an argument our green friends want to avoid. One reason being that if you want to make the environment more valuable you need to follow policies that make human richer and not poorer. Again lower taxes, lower regulations, less red tape, less green tape, etc.
Whether the fossil fuel is abundant or scarce, and the carbon dioxide harmful or harmless, any cost-conscious industry or government should be seeking to squeeze as much value from its raw material as possible.
Indeed. Now watch the slight of hand.
Australian industry has been slow to improve the energy efficiency of its factories, and governments have failed to mandate building standards that include energy design, insulation and solar water heating.
Industry don’y know their own best interest? The argument that government has failed to mandate standards is simply false. Perhaps not the standards he would like – but that is a different argument.
Numerous no-regrets techniques that are easy to justify lie in reducing energy demand. Many demonstrate a payback of eight years or sooner, and many pay for themselves within two years. Here the myopia of polemicists such as Plimer, who claim that a transition to renewable energy will burden the economy, comes into stark view.
He advocates the payback rule? As a decision making technique? The payback rule is known to introduce short-term bias into decision making and is terrible at evaluating alternatives projects.
The laws of supply and demand predict that assigning a price to a consumable discourages use and encourages substitution. A high price would have encouraged industry and homeowners to replace inefficient plant with modern plant, to demand higher energy performance of buildings and appliances and to electrify gas and oil-powered processes. This cannot possibly be a burden to the economy.
He is confusing a market price here with an artificial price. Price floors and price ceilings distort production and consumption decisions. Taxes impose deadweight losses on the economy. Note here that his argument isn’t that those distortions and deadweight losses are somehow a good thing, but that they do not exist – “cannot possibly be a burden to the economy”. Not even the astonishingly dodgy modelling produced by Treasury made that claim. To the contrary, the costs to the economy were so great that they tried to hide it by obfuscation.
It’s called initial investment for long-term dividends.
Then why not undertake a value-maximisation decision rule? Certainly the payback rule won’t work here – yet he advocated it in the same paragraph.
The 2011 carbon price was a tax on waste. By eliminating that levy, the responsible government imposed a monumental financial burden on industry and householders.
Completely incoherent here.
Then the closing sentence:
We also expect them to recognise ideological crusades for what they are.
This is a game everyone can play.
Update: Andrew Bolt’s take here.