Not so long ago WUWT ran a piece by a guest contributor about how the Chinese were buying up tracts of Australian farming land, and that suggested to him that the Chinese were worried more about cooling than warming. I didn’t think much of the post, and nor did some others, the chief point being that the Chinese have so much money in their reserves that buying up land almost anywhere is a decent investment.
As so often in these websites, the comments section moved into more interesting matters, and drew what I thought was a marvellous long post from a commenter called ‘rgbatduke’, which is worth reading in its entirety. ‘Rgb’ is at Duke University in North Carolina, and I read with interest everything he writes, because it seems sensible to me and he writes well.
He began his essay with an explanation of how he had renovated his house to make his use of energy more efficient. If he had $20,000 lying around he would invest in solar energy as well, but he wouldn’t borrow the money, because the rate of return would be too low. Now read on.
I’m not contemplating solar on my house to save the world, because I am not convinced it needs saving. I’m contemplating solar on my house because it is a decent investment, just as were my high-efficiency furnaces. My house is easily $2000-3000/year cheaper to run than it was with the old furnaces, cheap windows, etc, and I’ll recover a bunch of the capital investment if/when I sell on top of that as I sell the savings to the next owners. In the next couple of decades, the economics of doing this will be overwhelming — reasonably efficient solar cells are (IMO) likely to go down to less than $0.25/watt within 20 years, and the electronics required to use them efficiently are getting cheaper as well. There isn’t any need for carbon trading to make that happen, and very little that the government does (but fund research into better solar technology) will make it go faster or slower than it already is.
The same thing is true for things like improved batteries — everybody knows there are billions on the table for better batteries. There is fame, fortune, Nobel prizes for the inventor of a high-energy density super battery, especially one that can be mass produced cheaply without using e.g. rare earths or exotic, toxic and scarce elements… There are non-battery ideas that might eventually prove to be cost-effective. Carbon trading and panic won’t make the search go any faster, but the day that somebody perfects e.g. a zinc-oxide battery that is rechargeable 1000 times without significant degradation and that can hold energy at anything like the energy density of gasoline, the battery will be put to immediate use in a dozen venues all of which will drop fossil fuel consumption — buffering large scale solar, electric cars, buffering non solar resources (just as important for keeping the costs of building new plants down) and hey, maybe we can build a laptop that actually runs for days per charge instead of hours per charge…
We have learned nothing from the incredible discoveries of the 19th and 20th centuries. People always make predictions as if the technology and economy they had yesterday is the technology that will be dominant in 20 years, and then wonder why catastrophic predictions made on the basis of that technology or economy fail. The population bomb was defused by the green revolution. Widespread stories of “the end of oil” proved premature. The cold war continued right up to the day it more or less abruptly ended. My cell phone would have been classified as an “armament” by the US government a mere twenty years ago, and my laptop would have been worth a billion dollars twenty five years ago — people would have killed to possess it, governments would have fought wars to keep it out of “the wrong hands” with its dual core gigaflop scale CPUs, its terabyte scale storage, its gigabytes of RAM, its uber-fast network.
In twenty years we may have stopped burning energy that is currently being utterly wasted. Smart lights that only turn on when there is somebody there to use the light. AC that knows when you are home and adjusts accordingly. A smart energy grid. LED based light instead of hot filament based light. Cars that store and recover most of their kinetic energy when braking. We don’t really need additional incentive to develop these things — energy is expensive and is the fundamental scarce resource so it is always going to be to our advantage to make it as cheap as possible to enable us to accomplish “anything”. We won’t do it to avoid the spectre of an ill-defined global catastrophe. We’ll do it for the same reason we do many things — to make money, or spend less money, so we have more money to use on the things we want to use money for.
No idea, no technology before its time, to be sure, but understand — the technologies that will be available in twenty years are hardly imaginable today! At least if the future is anything like the present or the past. Not even (most) science fiction authors foresaw the internet. I’ve been a computer geek more or less my whole life, but have had a hard time seeing more than five years into the future of computing along the way (and five years is a lot, in the computing business!).
Here is one lesson I learned, repeatedly, the hard way, from computing. If what you want to do is barely possible, at enormous expense, today, just wait. In a year, two years, ten years, you can do it cheaply. I’ve run code at enormous expense and difficulty on supercomputers or huge distributed parallel compute clusters — back in the 90?s — that my current aging laptop could complete in half the time. Cars that once upon a time were lucky to come with a seat belt now come with seat belts with shoulder harnesses, air bags, antilock brakes and positraction systems, and more. Central air furnaces used to be 30-50% efficient — most of the energy you bought went straight up the flue. My furnaces now are between 90 and 95% efficient — their exhaust is barely warm, and most of the energy I buy to heat my home ends up in my house and stays there for much longer.
I don’t know, precisely, how things will change to defeat CAGW if the hypothesis proves to be true and the climate eventually shows signs of continuing heating at a rate that might be catastrophic. I do, however, have a lot of faith that technologies that we can barely imagine today will render the whole question moot long before we reach any sort of catastrophic point if the hypothesis itself isn’t just plain false. Those technologies will all be sensible things to pursue independent of the possibility of catastrophe and need no further motivation than the enrichment of their developers (including e.g. the US government and people as funded by public money) to happen. I’m all for research. Not so much for subsidy of immature technologies to somebody’s direct enrichment when that somebody is not me.
I agree. It’s a great exposition, isn’t it.
No.
The underlying economic issues are completely different. An issue like the “Green revolution” relates to the economic problem of scarcity, while the issue of global warming concerns externalities.
It’s certainly a very thoughtful article. I have often thought how poor I have been in guessing the future for information technology and its handmaiden communications, despite entering the game in the latter half of the 1960s. You can imagine the change over that time, from sequential tape-based files, where disk storage of a couple of 3 mb drives with disks (they were always spelt “disks”) larger than LP platters, was considered to be quite substantial when they first appeared. Main memory used “core”, where wires were threaded carefully by deft fingers through little magnetic cores, each core a bit, zero or one in value.
It is surprising how easily people forget the technological change they’ve seen over their own lifetimes, even if they look back over the recent mobile phone phenomenon. Gosh, even Sydney’s train carriages are way better than the old rattletraps. But some do forget, and many who are concerned about CAGW find it difficult to accept that we will develop all kinds of technology to bring to bear on new challenges, be it a climate significantly colder, warmer or much the same.
I’m personally assuming a slightly cooler few decades primarily because of a weakening sun, with all of its side effects on heating in the UV range, and aerosol development for formation of water droplets from water vapour. We should be paying more attention to our solar cycles of 11, 22, 87, 210, and also the 1000 and 2300 Earth years (we’re just about to start sliding down from the 1000 year Eddy cycle). And then there’s the Milankovitch cycles, with our changing orbit around our sun, the shifting tilt of the axis, and the gyroscopic wobble, all making it an interesting exercise in planetary motion.
Recently I’ve started asking people what triggers an ice age. I think it’s a question not many think about. But mulling over it I find useful; it puts a lot of the angst over real climate change into perspective.
On a separate meander, the readiness with which my tertiary-educated friends accept what they hear on CAGW etc, makes me wonder how much they and I readily accept the public voices of authority on all kinds of matters, rather than doing some simple investigation ourselves. We are dependent thinkers, and that takes us collectively forward. But when there is significant dispute, why don’t we shift to independent mode?
Peter we are inevitably getting closer to the next ice age it is only a question of when. The current interglacial is 11600 years long. We are most likely close to the end since the last three were less than 10000 years. Some say humans are extending this interglacial but it is significantly cooler than the last four. It has had warm periods but each of those was cooler than the one before so the trend is on a down hill path. My comments are based on the Vostok ice core. More information can be found at http://www.climate4you.com/ the big picture.
Yes, when I first leaned about ice ages in 5th class in primary school, I wondered how long before the next. It was not a question our teacher raised, but it could have been very productive to have had such a broader discussion, giving us more context about our place in the universe, and opening our minds to exploring beyond our preconceptions about a stable and static world around us.
Yes, very well put.
In 1985, I looked at the BIE’s 1975 predictions of which industries would grow fastest in the next decade. In the event, none of the fastest-growing industries – all involving microelectronics – existed in 1975. The main thing we know about the future is that it will surprise us. That is why policies which foster our capacity to deal well with whatever befalls are superior to those which seek to defend the status quo or project a continuation of what is. So whether or not there may be global warming, the best policies are not GW-specific, but those which enhance innovative, entrepreneurial, flexible enterprises and individual self-reliance and initiative, rather than seek to protect existing vested interests or implement a government “vision” (the latter being perhaps a contradiction in terms).
Re the Chinese buying farming land, the issue for them is a growing population with rising living standards, and ensuring that they have access to adequate food supplies. I don’t think that it has anything to do with potential climate change.
Don this is total waffle
“We don’t really need additional incentive to develop these things — energy is expensive and is the fundamental scarce resource so it is always going to be to our advantage to make it as cheap as possible to enable us to accomplish “anything”. We won’t do it to avoid the spectre of an ill-defined global catastrophe. We’ll do it for the same reason we do many things — to make money, or spend less money, so we have more money to use on the things we want to use money for.”
You will not find an economist anywhere who would agree with a statement like this!
Competition is the incentive; I thought the author assumed that as the fundamental driver for technological advancement; another driver is curiosity. If economic theory can’t take those two basic characteristics into account, then the theory needs substantial expansion.
I enjoyed reading this post by rgbatduke that you have rendered here. Thank you for that.
I have just recently noticed his posts, and I do not read all comments as I tend to scan.
I earnestly hope that I will not recognise the technologies of 20 years hence.
Indeed, though I would add that technologies to harvest energy or produce it must depend on the location as well, since circumstances differ widely across the globe. Whereas solar, for example, makes perfect sense in Australia, it makes little sense in Norway, where it’s usually overcast and cold, and where daylight is scarce in winter. Also, where you have copious snow fall in winter, to put anything on the roof and punch holes through it for cables or pipes, always risks leaks and roof problems down the road.
Over the decades past we developed the idea that certain things are best produced by utilities, e.g., power companies, in whichever way they want (after all, don’t they know best?), and delivered to your home over the cables and pipelines that run underground. This is a good way of doing things and it relieves households from having to worry about it. Is there really any advantage in scattering energy harvesting over individual households’ roofs? Probably not in major cities, where you may have a large number of energy consumers, families and offices, in high-rises under a relatively small amount of roof!
There are certain basic economies that are always valid and you ignore them at your peril. For example, energy is best produced or harvested close to where it is going to be used, because it costs money to transport it and it requires extensive infrastructure to do so.
People often accuse Americans of energy waste because they fly so much between cities instead of taking a train. Well, there are no trains throughout most of the US to be taken. But a train requires expensive infrastructure not only in the cities, but in the first place in between, where it travels, whereas plane needs none, other than the airport. Furthermore, whereas a plane burns more fuel per hour than a train does, it completes the journey much faster, so, in the end, it is not at all obvious that to fly is any worse. This is a yet another example, where the economy dictates the best ways to do things.
Energy is important. It is fundamental to the economy, because it makes everything move. The fundamental difference between developed and undeveloped societies is in the amount of energy they have available to individuals and companies. No policy is more cruel, more colonial and more effective in entrenching poverty than to impose energy restrictions on the societies, for example, by blocking loans for power plants under the fabricated excuse of “climate change.”
Gus solar does not work well here (Australia) because our population centres do not lend to it. We have also discovered that the wind does not blow all the time. If the environmentalist was honest or not ignorant they would pushing for nuclear it is a technological answer which is here now. We could build a power station for each of our coastal cities. Transmission costs here are at least double the generation cost here.
I remember, when I lived in Western Australia in the early 80s, there were solar water heaters on nearly every roof. They were relatively compact, not taking over the whole roof, as you’d have to do with solar cell panels. Yet they were so very effective. This is a very good example of utilizing solar energy. It doesn’t have to be electricity generation. The reason for the efficiency and effectiveness of these devices was their simplicity. And the fact that you converted the incident energy directly into heat at quite high efficiency, higher than is possible with photovoltaics.
Nuclear: I believe there’s been a change of heart about this even in Australia. There’s an article in World Nuclear News, dated April 7th, about a poll in South Australia that shows 48% of respondents in favor of nuclear energy, opposed by 33% only, with 19% undecided. In the context of “climate change” (Gawd! will this fraud ever die) 63% supported inclusion of nuclear into the energy mix, 23% opposed.
Nuclear energy, of course, has its risks. If it is to be done at all, it must be done meticulously, with great attention paid to safety and every possible emergency that may arise. This, more than anything else, makes it expensive. But the present day engineering is getting there. The new designs for the Westinghouse AP1000 are much improved. Also, there are some new interesting ideas regarding molten thorium salt reactors and such, based around passive safety and automatic recycling outright.
And then, there’s fusion. Lockheed Skunkworks promised to demonstrate a small working fusion reactor by 2017, sic! It’s just 3 years from now.
The Westinghouse AP1000 sounds exciting. A tax on CO2 will accelerate its development.
“The Westinghouse AP1000 sounds exciting. A tax on CO2 will accelerate its development.”
No, it won’t, because none of this and even related R and D work is being done in Australia. AP1000 is already being commissioned in China, and they have commenced work on CAP1500, a larger version of AP1000, which they developed themselves with some help from Westinghouse.
Gus where in
“The Westinghouse AP1000 sounds exciting. A tax on CO2 will accelerate its development.”
did I mention Australia?
Westinghouse, although headquartered in Pennsylvania, is owned by Toshiba (87%). Kazatomprom of Kazakhstan owns 10%. The remaining 3% belongs to IHI, another Japanese company. It is doubtful that any money the US would collect from a “carbon tax” would find its way to Westinghouse. And, frankly, most Americans don’t want their companies to be dependent in any way on government hand-outs and favors. Such deals only make them weaker.
The chance for a “carbon tax” or any other financial form of carbon control in the US is nil anyway, in view of there being no bipartisan agreement on anything related to the so called “climate change.” GOP will not support it.
Japan currently has various levies imposed on the use of fossil fuels and plant to phase in “carbon tax” over the next 5 years. But the government in Japan does not contribute much to R and D. Most R and D is funded by companies themselves. The collection of additional monies from the companies, as “carbon tax,” is only likely to limit their R and D pool.
Gus your comment is incoherent except for your last sentence, which is incorrect.
So, in your opinion, if you tax companies more, they’ll end up with *more* money for R and D? How is this “coherent?”
My argument is that if we tax on CO2 emissions then
companies will have an incentive to direct their R&D towards developing technologies to reduce their CO2 emissions and therefore reduce their tax liability.
They can offset the tax in many ways, including passing the costs to the customers.
Say, you are a power company, and you use coal to generate electricity. You may choose to switch to natural gas, because gas (in the US) is cheaper and you can refurbish your turbines to burn it at a relatively low cost. You gain, because you save money on such a transformation. This is why so many US utilities switched to gas already, without any “carbon tax” or “carbon trading” prompting.
But note that power companies do not really do much of their own R and D, because they are not in this business. They deploy whatever technology is available, this being developed by the likes of GE or Westinghouse or Siemens.
So, “carbon tax” hits the wrong guy. It will not make them do more R and D. GE and Westinghouse, in turn, don’t emit carbon, well not any more than is absolutely necessary: their manufacturing facilities, if they have any, run on electricity, which they buy from power companies.
Gus try of stay focused on the big picture instead of allowing your analysis to become mired in the detail.
If you levy a CO2 tax on a large power company, they may purchase a more efficient form of insulation from a sub-contractor who has invested in the R&D to develop the new product.
Insulation for what? For their turbine room?
Why this obsession with taxing and telling companies what to do? They know themselves what to do better than any government bureaucrat. Every tax imposed on the society is a yet another burden that slows the economy and feeds more bureaucrats. There is no gain in it other than for parasites shuffling papers at the tax office.
In other words David, you burden companies (and wider economy) by making cheap power more expensive then hope someone under an increased tax burden will then spend more money out of their decreased profits (unless they pass it on to the consumers who correspondingly use less of their product dragging profits down further) to then stump more money for risky R&D to ameliorate the unfair tax burden.
No, all this does is encourage them to take their bat and move their operation in lower tax jurisdiction.
Taxing CO2 is a naive loony left greenie policy whose sole aim is to shut down industry, it has little or nothing to do with saving the planet
A few years ago I voted Green and was a warmist (almost alarmist) – I don’t buy their policies any more and started to see what they truly stood for.
I am not young and would like a dollar for every time fusion being just around the corner. It is a bit like the demise of the Great Barrier Reef, it has been destroyed at least six times at last count. All schemes of “alternative energy” are only viable because of government subsidy so an individual may benefit but the taxpayer loses overall.
There are extremely safe reactors such as https://en.wikipedia.org/wiki/Pebble-bed_reactor Despite that and the fact in terms of recorded deaths and health problems it is extremely safe the hysteria continues. So I say again there is a technological answer to the fears of the dreaded CO2 but environmentalism is against it WHY? The only answer I see is it will not cause billions of human deaths.
The main reason why fusion progress has been so slow was because it was all being done by academia or national labs in various countries. Anyone, who has ever been involved with either, will attest to their poor ability, even lack of will sometimes, to deliver anything that actually works. In the case of fusion, only a major program like the Manhattan Project could be effective, if it was to be done by governments. Enter Lockheed Martin, a *private* company that designed and built Trident missiles, F-22 Raptor and F-117 Nighthawk, the Titan rocket, Hubble Space Telescope, Mars Global Surveyor… If anyone can do it, quickly, it’s them, not government labs.
Mike
The reason nuclear power does not completely dominate coal as a source of energy is because it is more more expensive.
But note also in the quote from Wikipedia that they are run by state-owned or regulated monopolies.
“To date all operating nuclear power plants were developed by STATE-OWNED or REGULATED utility monopolies[4][5] where many of the risks associated with construction costs, operating performance, fuel price, and other factors were borne by consumers rather than suppliers.”
Nuclear might be a good source of energy as you say, but to date the free market has been unable to develop this source of power. Which is my point!
http://en.wikipedia.org/wiki/Economics_of_nuclear_power_plants
Don
This idea that technology will save us misses the point. I am going to explain to
you some Economics 102.
Economists will see AGW as a form of market failure due to a negative externality. My consumption of fossil fuel will impose a cost on the rest of the community due
to the warming it produces. Classically, there are three solutions to this type
of market failure.
1. Prohibition
2. A tax/(subsidy)
3. Establishment of property rights to enable a market in the externality to be created
You should note that there is no mention of “technology”. While improvement in technology may be helpful it is neither a necessary or sufficient condition for resolving this form of market failure. I will illustrate. Suppose for example you woke up one morning to see your neighbour had thrown all his/her rubbish on your front lawn. You could
A. Call the police to have him/her remove it, i.e. Prohibition
B. Ask the local council to fine him/her, i.e. a Tax.
C. Set up a small stall and try and either sell the rubbish to passers-by or pay
them to take it away i.e. Establish a market.
But simply inventing a better garbage truck is not, by itself, going to fix your problem.
Arguing that technology will save us is putting the cart before the horse. True new
ideas can occur spontaneously, like being hit on head by falling apple. However,
for a new idea to be incorporated into the market, there needs to be the right
economic incentives.
It is often argued that we need a tax on CO2 to reduce consumption of energy. But
that is only an interim step. The main reason why one would put a tax on CO2 is
to provide the incentives for industry to develop the technologies to reduce
the emissions of CO2.
As an economist, I do not “see AGW as a form of market failure due to a negative externality.” I have seen no convincing evidence of a net dis-benefit from any further
warming, nor any justification for emissions reductions. Even if you accept the prospect of catastrophic AGW, it is clear that measures taken to reduce GHG emissions have been extremely costly yet will have only a negligible impact on any warming which might occur. This is bad policy. See my post below.
“I do not ‘see AGW as a form of market failure due to a negative externality.'”
Precisely! Whereas tuberculosis is undoubtedly bad, because it kills people and spreads, thus killing even more, unless checked, there has never been any convincing proof delivered that human emissions of carbon dioxide are anything but benign. On the contrary, wherever you look, you see tangible benefits of it. For example, the planet has become greener by 14%. Crop yields have increased substantially. At the same time, there’s been no accelerated sea level rise (it seems to have slowed down lately), and no increase in the frequency and intensity of catastrophic weather events.
Consequently, if we are to consider “market externalities,” we should actually pay real money to carbon dioxide emitters, in return for their positive contribution.
David
Your post illustrates some of the problems in the discourse on AGW, as in so many issues of policy. The first problem lies in the assumptions behind an argument – are they correct, and are they sufficiently comprehensive? The second is to assume the applicability of some prior method for solving a particular kind of problem. So you assume that “consumption of fossil fuel will impose a cost on the rest of the community due to the warming it produces”, and that “classically, there are three solutions to this type of market failure”.
What, only three? So we may not consider devising further alternatives, such as technological advances? The major point of the article is that such advances are both unpredictable in nature and scope, with impacts we have difficulty imagining. (I’ll not spend time disagreeing with your primary assumption about the cost to the community, only to note the comment from Gus below about imposing energy restrictions on developing communities – that’s a real cost to health and survival of over a billion people, but we’ll ignore that, shall we?)
Treating AGW as an economic issue, or simply one of the physics of carbon dioxide and water vapour as observed in a laboratory, illustrates so well the narrow confines of analysis. We have made tremendous advances through concentration on specific areas, but frequently at the cost of synthesis. What I do like about rgb’s article, is that he applies synthesis in his discussion about power generation and storage, and of the kinds and scope of technological development we have seen over recent years.
Peter
Yes only three.
Any intermediate microeconomic text book will explain the theory to you.
Peter,
Ok longer comment. My whole response in this thread has been to Rgb’s claim that IF AGW is a problem THEN technology will resolve the issue. Please look at Rgb’s use of the word “IF”. I obviously do accept AGW, but my comments in this thread are focused on how AGW might be resolved IF it exists.
Peter you say
“What I do like about rgb’s article, is that he applies synthesis in his discussion about power generation and storage, and of the
kinds and scope of technological development we have seen over recent years.”
Peter these are issues related to scarcity not externality. If I can invent a “better mousetrap” or power generation as the case maybe people will readily pay for power. Therefore the potential for profits will motivate R&D in these markets. However, people will not readily pay for reduction of CO2 becauseof free rider issues.
“Why should Australians pay $20 a ton for CO2 reduction when Europeans only pay $2 per ton?” Sound familiar ?
You are comparing apples and oranges.
David
Thank you for your replies above, which have explained your position very well for me. Your examples of externalities is useful. Incidentally, I quite understand that your current argument is based on the presumption that AGW is a problem, and while I myself don’t think it is, to further this discussion obviously I need to accept it as the basic assumption. I do have trouble with hard and fast distinctions between “externalities” and factors that are governed by market forces, but I understand that societies do make those distinctions implicitly, whenever they regulate some common aspect of life. But I guess that’s an argument to have with economists!
My reading of RGB’s article is that if AGW is a threat, technology will emerge to address the problem. Your argument is that we need to intervene, in case technology does not. This difference of approach is an excellent example of the classic left and right views of how we should operate. I use those terms not in a political sense (although I suspect that is their derivation) but rather to describe the two approaches in society – the left tends towards intervention by fiat, the right tends to let the organic nature of society sort it out through “market forces”. I think Gus gave a good example concerning strawberries etc for Easter Island; he also made the point that it would be very difficult indeed to devise such complex production and supply lines – and I can see that to do so would require a high level of prediction about production as well as supply lines. And predicting production might bring us back to the weather!
I’ve been asking myself why such a polarity emerges in our societies between intervention and “hands off”. I think it has its roots in our psychological make-up – but that’s perhaps another topic for one of Don’s posts – why do we think the way we think about such social questions?
The distinctions between left and right are in practice often blurred. And I don’t know anyone personally who is on the extreme left or extreme right. We do know that societies with high levels of central planning have not flourished (e.g. the former USSR), and societies that leave everyone to fend for themselves have been left behind millennia ago. But I think this different approach lies at the heart of the discussions on this post.
David,
It was kind of you to spell out your sense of the economics that underlies what you saw as AGW as market failure. I was going to respond about your assumptions, but others have done that effectively.
But I’ll add my tuppence worth on predicting the future, the subject of my next post. I was involved for a while in the Telecom 2000 study (http://donaitkin.com/what-is-our-energy-problem/), around 1970, I think, and one aspect of my involvement lay in my having to identify two desired and necessary innovations that would change Australia by 2000. My two were a really powerful fuel cell and cheap desalinated water. Neither had arrived by 2000, and what I had missed completely were the astonishing advances in communications and information technology.
At about the same time, or a little later, I became interested in the whole research funding/policy domain, first because I needed lots of money to do the research I wanted to do, and second because I was asked to join the ARGC and later ASTEC. The question of that time was whether or not money should rather go to applied research than to pure research. The pure research people had a great example. If we had put all the money into applied research with respect to poliomyelitis we would today have the finest iron lungs you could imagine. But by putting the money into pure research we got the Salk and Sabine vaccines instead. The iron lung is now a museum exhibit. I spent years in that debate, which has many sides and many contrasting examples. But this example once again suggests that we don’t have a good basis for predicting the future.
What is more, and this should really be part of a future post, the knowledge world is expanding, so that the speed with which new possibilities become available is also increasing. I have some confidence that humanity will have learned how to deal with the approach of the next ice age when it nears (and I’m not suggesting that it’s within my lifetime). So I do think, with some confidence also, that humanity will deal with the supposed problems of AGW, and without regulation or global treaties.
Don,
Infectious diseases such as TB are an excellent example of a negative externality. When some people choose not to be vaccinated for philosophical reasons they place other people in the community at risk of infection. Obviously, inventing a new vaccine is not going to resolve the issue, is it? So typically, health departments will address this issue through regulation, i.e. Option 1.
Perhaps TB is an example of a negative eternality, but as others have explained, and for good reason, global warming is not. So far, on all the evidence, it has been a positive, and the belief that it must produce negative outcomes relies on models and ‘climate sensitivity’. The former don’t have a good track record, and the latter is both conceptually foggy and empirically imprecise.
Don
Her is a quote from Rgb. When you re-read his quote and my response, you will notice I have capitalised the word “IF”. This is not a typo!. Every time you read the word “IF” please pause moment and then move on to the next phrase.
“I don’t know, precisely, how things will change to defeat CAGW IF the hypothesis proves to be true and the climate eventually shows signs of continuing heating at a rate that might be catastrophic. I do, however, have a lot of faith that technologies that we can barely imagine today will render the whole question moot long before we reach any sort of catastrophic point IF the hypothesis itself isn’t just plain false.”
So what RGB is saying is that IF CAGW is an issue then technology will resove the issue.
What I am saying is that, IF CAGW is an issue then
tecnological changes will not by themselves be enough to resolve the issue because the root cause of CAGW is related to incentives and behaviour. Therefore, IF CAGW is an issue we will be need to introduce measures to modify behaviour.
David,
The two IFs are really one, since each says what might happen If the CAGW hypothesis is/not true. As he point out, catastrophe seems a long way off at the moment (800 years to anything like a 2 degree C increase, on present indications), so there seems ample time to learn what might need to be done.
And as others have suggested we already have incentives in place, like competition for money, glory and the like, as well as curiosity. We don’t need even to tax anything to provide funds for research into climate variability. Taxing carbon dioxide emissions is futile, for all the reasons that have been set out here and elsewhere. And research funding doesn’t need squillions.
Don,
It is the “what might need to be done”, which is at the centre of
this discussion. Innovation verses incentives.
My suggestion to you is to spend some time reading some public economics and familiarise yourself with the underlying causes of the “tragedy of the common” and its solutions. Then spend some time thinking how they relate to AGW.
This will not lock you into a particular position on AGW but it will help you understand why Rgb’s analysis is deficient.
David, without wishing to be impolite, I suspect that Don has a far
better grasp of public policy economics than you do. In dealing with
externalities, you totally ignore Coase’s work. In his seminal 1960 work The Problem of Social Cost, he wrote:
The traditional approach has tended to obscure the nature of the choice that has to be made. The question is commonly thought of as one in which A inflicts harm on B and what has to be decided is: how should we restrain A? But this is wrong. We are
dealing with a problem of a reciprocal nature. To avoid the harm to B would inflict harm on A. The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A? The problem is to avoid the more serious harm. I instanced in my previous article the case of a
confectioner the noise and vibrations from whose machinery disturbed a doctor in his work. To avoid harming the doctor would inflict harm on the confectioner. The problem posed by this case was essentially whether it was worthwhile, as a result of restricting the methods of production which could be used by the confectioner, to secure more doctoring at the cost of a reduced
supply of confectionery products. Another example is afforded by the problem of straying cattle which destroy crops on neighbouring land. If it is inevitable that some cattle will stray, an increase in the supply of meat can only be obtained at the expense of a decrease in the supply of crops. The nature of the
choice is clear: meat or crops. What answer should be given is, of course, not clear unless we know the value of what is obtained as well as the value of what is sacrificed to obtain it. To give another example, Professor George J. Stigler instances the contamination of a stream. If we assume that the harmful
effect of the pollution is that it kills the fish, the question to be decided is: is the value of the fish lost greater or less than the value of the product which the contamination of the stream makes possible. It goes almost without saying that this problem has to be looked at in total and at the margin.
GenghisCunn.
Although interesting none of what you have written is relevant. Basically, what you have written is a long winded rebuttal of the AGW, hypothesis. That there are other costs, such as opportunity cost of energy to consider, etc and perhaps we should not intervene in the market. I agree with all that.
I will capitalise the some key words for your benefit too. As I pointed out above; Rgb argues IF AGW is an issue THEN technology will save the day.
What I am arguing, is that externalities are fundamentally an issue of incentives not a problem of technology.
David
I for one appreciate your patience in engaging. But it seems to me that you view the issues through a perspective primarily of economics. I note that there are a number of challenging questions put to you, that you do not answer, and I say that without criticism. However, I’m not satisfied that any discipline provides a sufficiently complete structure with which I might understand the workings of the world around me. I find I need to get some grasp across a range of disciplines including economics, which I do find offers a useful but broad-brush description of social interactions in financial terms.
I do get the impression that you are missing the whole point of rgb’s article, because you are working on the basis that while incentives drive much innovation, those incentives must be formalised primarily through government direction. My inference is that innovation arises through “market” incentives, and it is innovation that drives technological change. Am I misunderstanding you?
Peter,
Yes I do see the solution to AGW as an economic issue. I am happy to try and answer any unanswered question. So please feel free to point out where you feel I have not
responded. I do feel I usually do respond.
To your comment
“…because you are working on the basis that while
incentives drive much innovation, those incentives must be formalised primarily through government direction. My inference is that innovation arises through “market” incentives, and it is innovation that drives technological
change. Am I misunderstanding you?”
No you are not misunderstanding me. To effectively internalize the costs of a negative externality there must be some government direction. I was beginning to lose faith in my ability to communicate. So thankyou! 🙂
But Peter by definition an externality is a cost of production or consumption that exists outside the influence of market. This is why they are a problem. So for example if some people choose not to vaccinate and thereby reducing herd immunity, simply inventing a new vaccine is not likely
to resolve the issue. Or if CFCs are shown to reduce ozone, simply inventing a HFC as a substitute for CFC will not resolve the problem unless there is some intervention
in market. The Europeans use prohibition and North Americans use an emissions trading scheme. Consider Rgb’s interest in IT. Inventing a faster CPU will not
resolve cyber bullying.
I’m not arguing that technology is totally irrelevant to
possible solutions. But the standard economic analysis of this issue implies that generally some intervention from the State is required.
Abbott and Hunt for example propose a subsidy to address AGW.
David
What happened to necessity is the mother of invention?
John go and do some reading.
David
It was not taxing horse manure or raising a levy on horses that solved the horse manure scare. It was the internal combustion engine. Technology without the assistance of punative taxes. I suggest you do some reading..
This line of argument makes me smile. The environmental damage of the motor car is far worse than the horse. This is like arguing the invention of the rifle has reduced injury from spears.
All that CO2 from the internal combustion engines contributed to “greening” the planet. Plants LOVE CO2. At 400 ppm they want even more. Strange isn’t it the Greens demonize CO2 which plants love and proliferate, they start to die when CO2 concentration drops below 200 ppm . Yes David, the planet is greener now than when CO2 was only 280 ppm (pre-industrial). Environmental damage due the motor car? Well not from its CO2 emissions.
but warmer, which is a net environmental loss.
David
There I must disagree. For an increase in 1 degree Celsius, the agricultural belt for cropping in the northern hemisphere moves 100 km northwards. Now as I’ve been a farmer, I know there’s more to it than that, such as rainfall and its timing, drought, winds, and storms; but I believe there is environmental gain. We do know from history the crop failures and starvation that occurred during the last Little Ice Age, for example.
From an agricultural point of view, warming is net environment gain. Sometimes I wish a (mild) ice age would descend upon us if nothing to stop this CAGW hysteria (hey my skiing season will extend and I will gt a lot more rent from my Snowy Mtns properties), but then I come to my senses – “Trust me, you don’t want an ice age, even a little one!” Life thrives when its warm, struggles when its cold
Exactly!
…..And until there is a price on CO2 there will be no necessity to invent a solution for AGW.
Don a technology answer to minimise CO2 is with us now it is called nuclear. Environmentalists fight it tooth and nail because it would probably work. They only support those things that would end our civilisation. The only problem for us is to separate the useful idiots from the core misanthropic leaders of the religion. One would have to be barking mad to end fossil fuel use and adopt feudal farming voluntarily.
I think that WUWT is an invaluable resource for checking on what is happening with the climate wars, but a lot of the guest posts do seem amateurish, misdirected and often factually incorrect. The nice thing is that if you plow through the trolls and cheerleaders, you can often find comments that are more informative than the original post. The recent post on methane is a good example.
RGB at Duke is one of those commentators who is often worth reading and I agree that his/her post makes some good points, but I don’t know if technology will continue the impressive rate of change it has maintained since WWII. Reactionary lobbies like the Greens and the CAGW crowd favour suppressing technology through regulation and misdirection of resources to crony technologies (e.g. wind, solar and electric cars) that lack the critical innovations to be successful. They really do not want people’s lives to improve: they’d prefer people (other than the select) disappeared. The mass media and what should be the progressive political parties (but are actually reactionaries in progressive clothing) are quite happy to use the facade of CAGW to accumulate power, enforce orthodoxy and squander resources. Is it reasonable to expect technological innovation to continue at its past rate when it largely depends on politically defined spending priorities?
It may be that good will continue to come out of bad policy and that unexpected innovations will be difficult for reactionary governments to predict and control. I hope so and I certainly agree that if industrially produced CO2 is really a threat, then innovation is the only logical way to deal with it. However, I think we need better political leadership, a break-up of the strange hold of the legacy media (perhaps the internet is doing this), and a reduction in government control for that to happen.