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“Direct action”: The coalition’s voluntary approach to environmental policy - part 1

The Coalition has repeatedly stated that the carbon pricing scheme will be repealed should it win office. Given recent polls, the alternative policy they propose must be scrutinised and despite their attempt to avoid this interpretation, they advocate a voluntary approach to environmental policy.

Assuming a Coalition government would replace the carbon price with their 2010 “direct action” proposal, at first glance this appears to be an incentive-based policy instrument. Indeed, this is how the Coalition would like it to be interpreted. For example, in the 2010 document they emphasise: “We are committed to incentives rather than penalties”; and “Australia needs a scheme that will provide the incentive for firms to reduce their carbon emissions”.

Yet, ironically, the carbon pricing mechanism it would replace is the archetype of incentive-based policy instruments, albeit a much compromised one due to industry concessions. The incentive arises because firms are punished for polluting and households bear the environmental cost of consuming emission-intensive goods.

It is true that providing subsidies to firms to reduce emissions, as the Coalition proposes, also incentivises emission reductions but this is generally regarded to be morally unacceptable because it rewards industry for doing something they should be doing in the first place – that is, reducing the social impact arising from their pursuit of profits.

However, the Coalition’s proposal actually resembles a ‘voluntary approach’ to environmental policy. Business can continue to emit without cost and are only invited to participate.

Three policy approaches

‘Voluntary approaches’ are the third wave of environmental policy instruments after ‘regulatory instruments’ dominated from the 1960s to 1980s and ‘incentive-based mechanisms’ have dominated since.

Regulatory instruments such as technology or emission standards can achieve efficient pollution levels but because, from a practical standpoint, they require uniform emission reductions across different types of firms, they are not the ‘least-cost’ solution. That is, ‘high-cost abaters’ must reduce pollution by the same percentage as ‘low-cost abaters’ and this increases the total cost of abatement.

In theory, incentive-based mechanisms achieve efficient and least-cost emission reductions because each firm only abates until their own particular marginal cost of abatement equals the price they must pay (carbon permit price or tax level) for emissions. Thus, high-cost abaters abate less than low-cost abaters.

The third wave of environmental policy instruments - voluntary approaches - are not conceived in, or prescribed by, economic theory, except those resulting from efficient bargains between individual polluters and their pollution sufferers. Efficient bargains require a very local form of pollution, zero transaction costs – the costs of bargaining, establishing, and enforcing contracts – and neutral power relations between polluter and sufferer which is obviously not the case here.

Aside from these ‘private agreements’, voluntary approaches generally come from ‘unilateral commitments’ made by polluters for corporate social responsibility reasons, ‘negotiated agreements’ – contracts between public authorities and industry to achieve environmental targets – and ‘public voluntary programs’ where industry is invited to participate in a program developed by public authorities.

‘Direct action’ is a public voluntary program

The Coalition’s policy resembles a combination of these last two kinds and particularly a public voluntary program. They propose to utilise the existing National Greenhouse and Energy Reporting Scheme – which requires firms of a certain size and emissions intensity to report their emissions – to set ‘baseline’ and ‘proposed emission reduction’ levels for individual firms.

The baseline or ‘business as usual’ emission profile would have economic growth projections built in and will therefore allow a higher level of emissions through time. It is not clear – that is, the language is ambiguous – whether the baseline will also incorporate a natural “trend toward lower emissions-intensive activity” which would reduce baseline emissions somewhat.

The ‘proposed emission reductions’ for each firm could be determined in a number of ways but presumably these are based on the Coalition’s target for carbon emission reductions, which are identical to the Government’s for 2020 – that is, 5% below 2000 levels by 2020. However, there appears to be a significant degree of flexibility for individual firms to bargain for higher or lower levels and this invites wasteful ‘rent seeking’ by firms – that is, the resources used to lobby governments to maintain extraordinary profit levels could be used elsewhere and achieve a greater social benefit.

The plan then relies on the following mechanism. If firms emit more than their business-as-usual level, they will be punished (with the penalty “set in consultation with industry”; see part 2). If they achieve lower emissions within their ‘proposed emission reduction’ levels, they “will be able to offer this CO2 abatement for sale to the government”.

Thus, the Coalition would set up a program and invite industry to participate, the definition of a ‘public voluntary program’. There is no requirement to participate and no cost to continuing at business as usual levels. This suggests the Coalition’s policy is subject to ‘regulatory capture’ which occurs when there is essentially no regulatory cost to firms.

Other factors suggest that the policy is a voluntary approach. For example, small business can ‘opt in’, and new entrants to an industry or business expansion at ‘best practice’ will not be penalised.

As discussed in the following post (part 2), amongst other issues, such voluntary approaches cannot achieve efficient pollution levels in theory unless there is a significant threat of stricter policy should the voluntary action fail to achieve the target. Ironically, this is in contrast to the Coalition’s starting point of repealing the carbon price.

Join the conversation

142 Comments sorted by

  1. Felix MacNeill

    Environmental Manager

    Given that the 'Liberal' Party has been taken over by the DLP, and this approach could have been dictated from the grave by B. A. Santamaria, why is anyone surprised?

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    1. John C Smith

      Auditor

      In reply to Felix MacNeill

      By dying he must have added to the carbon and carbon related emissions. At least he not using much energy anymore other than, may be a light shining on his grave.
      Let us use less energy and cycle along puffing out CO2 for the trees to grow along the road.

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    2. Ken Swanson

      Geologist

      In reply to Felix MacNeill

      "...the Liberal Party has been taken over by the DLP, and this approach could have been dictated from the grave by B. A. Santamaria, why is anyone surprised?"

      Like most posts Felix your assertions here lack any factual basis.

      Please provide the evidence for this stupid comment.

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    3. Mike Hansen

      Mr.

      In reply to Ken Swanson

      @Ken Swanson

      You really have no idea do you?

      "Health Minister Tony Abbott will today tell a Melbourne book launch that with eight Catholics now in Federal Cabinet, BA Santamaria's DLP is still alive inside the Liberal Party..."

      "Mr Abbott said that he was under Mr Santamaria's "spell" and knew him as a friend for the last 22 years of his life."

      http://www.cathnews.com.au/article.aspx?aeid=4132

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    4. Ken Swanson

      Geologist

      In reply to Mike Hansen

      The comment from Alex was that the LNP climate policy had been directed from the grave by B A Santamaria. And Mr Santamaria's policy towards CO2 emissions was?

      Bill Shorten claimed yesterday he supported the activities of the Maritime Union. These activities include violent protest and industry disruption. Does Bill Shorten therefore advocate for industrial violence?

      Julia Gillard was a member of the Socialist Forum and the Fabian Society a few years back. Does this make her a devotee of communist principles to the extent that her private leanings dictate her government's economic policies?

      It is you who have not got a clue Mike!

      What have you got against Catholics anyway?

      Also I still have not had a response from you from last week on your definition of "rich" in family income terms. You dodged that one. Let me know.

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    5. Mike Hansen

      Mr.

      In reply to Ken Swanson

      Ken Swanson employs his usual tactic when shown to be completely clueless ( a frequent occurrence)

      "Look over there - a wombat"

      And Ken - you were not discussing family income with me.

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    6. Ken Swanson

      Geologist

      In reply to Mike Hansen

      What climate policy would BAS be advocating from beyond the grave? That was the point of my post. Do not distract and avoid Mike. It happens too often with you.

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    7. Felix MacNeill

      Environmental Manager

      In reply to Ken Swanson

      Ken, unless you've been living under a rock for many years, it's no secret that Abbott was deeply devoted to B. A. Santamaria and freely admits to having been strongly influenced by him and his views and values. That's pretty much from the horse's mouth I'd say.

      And this kind of semi-socialist state-interventionist approach, rather than the more economically rational and market-based approach of the carbon price legislation is also reminiscent of the DLP's approach.

      How's that for evidence for my stupid comment?

      Any chance of you taking your own medicine?

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  2. Gerard Dean

    Managing Director

    The article explains that the Coalition's approach to action on climate change is voluntary.

    I agree and furthermore put hat their policy closely mirrors what most Australians think about climate change. After all, many supporters volunteer the government and others to cut fossil fuel usage to combat climate change, but then volunteer to burn JetA1 fuel to fly to Europe for their holidays.

    I have raised this contradiction between the climate change enthusiasts public pronouncements and their private actions many times on The Conversation articles, but have thus far received no ethical justification for their duplicitous behaviour.

    Does any other commentator volunteer to provide one?

    Gerard Dean

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    1. David Arthur

      resistance gnome

      In reply to Gerard Dean

      Mr Dean, you claim that advocates of taking climate action fly places on holidays. Please provide evidence for this claim.

      When a detailed account is provided by yourself, I shall withdraw the charge of empty rhetorical posturing.

      By now, of course, you should be well-apprised of progress of R&D into non-fossil aviation fuels.

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    2. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Gerard Dean

      A small minority would seek very actively to reduce their emissions even at some considerable personal cost. A larger minority are spending up front on the low hanging fruit that will save them money in the long term or break even or not cost very much. I'm probably somewhere between these two and have not been on a plane for recreational purposes for many years.
      Then there is the majority of the population that will accept some penalty so long as they see it as fair. For most people relative status…

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    3. Robert McDougall

      Small Business Owner

      In reply to Gerard Dean

      i support reducing the use of fossil fuels and i don't go on overseas holidays so your generalisation is just that, a generalisation.

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    4. Felix MacNeill

      Environmental Manager

      In reply to Peter Campbell

      Thanks Peter - a very careful and lucid explanation - thanks for bothering - I was too impatient and lazy to outline in such detail what I would have hoped would be pretty obvious to most rational people, hence my rather terse initial comment which so upset Ken.

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    5. Gerard Dean

      Managing Director

      In reply to David Arthur

      Mr Arthur

      Empty rhetoric? Are you saying only proud deniers like myself burn JetA1 fuel to fly overseas! Rubbish. The Conversation has often claimed a majority of Australians believe in climate change and the need to address it's perceived outcomes.

      Based on that fact alone, the majority of people who choose to fly overseas for holidays believe in climate change which makes their choice hypocritical.

      I applaud R&D into non-fossil aviation fuels. Sadly, they are not available yet. Until they are, the only option is not to fly for pleasure.

      Again, no ethical justification has been offered. I will keep asking, but all I get is blather and bluster and mocking, but no ethical justification climate change believers choosing to fly for pleasure.

      Gerard Dean

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    6. Gerard Dean

      Managing Director

      In reply to Peter Campbell

      Mr Campbell,

      According to several articles on The Conversation in recent years, the majority of Australians believe in climate change and the need to address its perceived outcomes.That means the majority of Australians who chose to burn JetA1 fuel to fly overseas for holidays believe in climate change.

      What possible ethical viewpoint can explain their concern for public concern for the earth and its environment and their actions that damage that environment for their own PLEASURE.

      Mock me if you must but you know I am right. If you firmly believe in climate change and the need to cut fossil fuel usage, YOU MUST NOT FLY FOR PLEASURE.

      Gerard Dean

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    7. David Arthur

      resistance gnome

      In reply to Peter Campbell

      Fair enough comment, Mr Campbell, but there's a superior carbon pricing vehicle to emission trading, namely revenue-neutral fossil fuel consumption taxation (FFCT).

      Elsewhere on this page, I have outlined my preference for taxation over emission capping. A page search for "Shergold" will take you to that comment; I'd be interested in your views.

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    8. David Arthur

      resistance gnome

      In reply to Gerard Dean

      Mr Dean, you here proclaim yourself to be a proud denier.

      We have discussed climate science at 'The Conversation' in the past. I have taken you through the perfectly straightforward science, to the extent that you acknowledged that climate change is real, that fossil fuel use is driving it.

      So here, you proudly proclaim your adherence to an ill-founded ideology which you know to be false.

      I'm really not sure that you're in an ethical position from which aspersions can be cast.

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    9. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Gerard Dean

      Mr. Dean asks how the majority, who believe in climate change, can continue to fly for pleasure.
      As I wrote above, only a minority are likely to act so strongly on their convictions. A majority would consent to whatever contraints are required if everyone else is made to do the same. IE. they will grudgingly accept a carbon price as unfortunately necessary if everyone else is subject to the same penalty. The majority want to be assured that the government is 'doing something' about the problem…

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    10. Eric Ireland

      logged in via Facebook

      In reply to Peter Campbell

      Mr. Campbell, I have to say you have really hit the nail on the head when it comes to Mr. Dean's "argument". The world is awash with worthy causes to devote oneself to, but not many of us are willing to don the proverbial hair shirt for a lifetime. Obviously, we should all do our bit, and that includes avoiding air travel where possible, but demanding that no one should ever get on an aeroplane if they believe in global warming is unrealistic.

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    11. Peter Lang

      Retired geologist and engineer

      In reply to Gerard Dean

      >"Peter Lang has provided a devastating rebuttal of your comment here."

      That's a lie (from one of the Conversation's trolls as usual). I did not rebut the comment at all. I add to it. The people who argue we should cut out use of fossil fuels without offering a viable alternative are irrational.

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    12. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"For most people relative status matter more than absolute measures. If we all have to pay a bit more that is OK. If others are getting a free ride, they will object to even the slightest cost. "

      However, there are many people who feel zealots are trying to force their unsubstantiated, religious-like beliefs on the rest of us. I and many others object to that, as the polls clearly show.

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    13. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"If the coalition were serious they would support the cap and trade model that carbon pricing is supposed to become."

      That is a ridiculous statement. The ETS will cost a hell of a lot but do nothing to improve the climate or people's well being. To argue it is good policy is irrational. It is just Left Labor-Greens ideological nonsense.

      • Carbon pricing cannot work unless it is global
      • But global carbon pricing almost certainly cannot be achieved
      • Therefore, carbon pricing in Australia will not succeed
      • Therefore, the cost to Australia would be huge if it continued
      • Therefore it must be stopped asap.

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    14. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"The greatest virtue of the coalition proposal is that it can be used as a slush fund to give money to favoured businesses,"

      OMG,

      Does this love affair with Labor-Greens never end for the irrationals? Consider what Labor Greens have done in forcing us to pay through the nose for totally nonviable technologies (renewable energy), and waste on silly schemes like pink bats - i.e. "used as a slush fund to give money to favoured businesses". There is no end to the examples if you want to find them. This government has already committed Australians to pay $30 billion in subsidies for renewable energy to 2020. What an absolute waste of money. It will achieve nothing for global GHG emissions.

      Remove your ideological filters and get rational.

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    15. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"A majority would consent to whatever contraints are required if everyone else is made to do the same. IE. they will grudgingly accept a carbon price as unfortunately necessary if everyone else is subject to the same penalty."

      However, there are many people who feel zealots are trying to force their unsubstantiated, religious-like beliefs on the rest of us. I and many others object to that, as the polls clearly show. Furthermore, the majority recognise that ETS is very bad policy. It will costs us a lot, and do nothing to change the climate. It will not affect global GHG emissions. Importantly, there will be no international carbon pricing scheme so Australia's ETS will not last. In the words of the Loony-Left, it is not sustainable.

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    16. Chris O'Neill

      Retired Way Before 70

      In reply to Peter Lang

      "silly schemes like pink bats"

      Pink bats were not a silly scheme. You may be able to say foil insulation was a silly scheme but that was largely because the government exposed an industry that already had poor working standards before the government got involved.

      "Remove your ideological filters and get rational."

      Might be a good idea to take your own advice before giving it to anyone else.

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    17. David Arthur

      resistance gnome

      In reply to Gerard Dean

      A question Mr Dean:

      how do the choices of airline customers who are concerned about climate change compare
      with the attitudes of grandparents who claim to love their grandchildren, yet knowingly obfuscate and dissemble whenever presented with evidence that the climate change they know to be an unavoidable consequence of basic physics is proceeding even more rapidly than concerned scientists projected only a few years ago?

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  3. David Arthur

    resistance gnome

    So the Coalition's "policy" is all carrot, no stick?

    Who pays for that?

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    1. David Arthur

      resistance gnome

      In reply to John C Smith

      Mr Smith, as an auditor you should be able to work out that a policy that rewards decreases in fossil fuel consumption yet has no penalty for continuing fossil fuel use at present MUST extract the funds for the "rewards" from elsewhere in the Budget.

      Your remarks, however, suggest that you have not quite grasped this.

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    2. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to John C Smith

      Who pays?

      As things are now: I drive an electric car (DIY-converted) and purchase sufficient accredited GreenPower to match my consumption yet the base price of the electricity includes the carbon price. On the other hand petrol was excluded. IE I run a car on 100% renewable power yet pay the carbon price but if I had not converted the car and ran it on petrol I would not pay the carbon price for its emissions. Would the Libs change this anomaly? I doubt it.

      Actually, the problem with the coalition…

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    3. David Arthur

      resistance gnome

      In reply to Peter Campbell

      Good points Peter, but bear in mind that fuel excise (~38.14 c/L) already works out to $630 per tonne fossil carbon, ie $172 per tonne CO2.

      I agree it would have made sense if they'd included petroleum fuels in the carbon tax, and decreased excise by
      (38.14 x 23/172) = 5.1 c/L,
      ie decreased fuel excise to 33.14 c/L.

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    4. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"I drive an electric car (DIY-converted)"

      That explains a lot. A zealot for an irrational cause, indeed.

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    5. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      To Peter Lang who spots me as a zeolot for an irrational cause because I drive an electric car.
      Let's say I couldn't care less about running a car on renewable energy (even though that for me is the main point). Is is rational that I drive a car that costs me less to run than any available petrol car? It was a fun project and cost me no more than a relatively cheap new car. On top of that I have discovered my inner hoon. It has 50% more torque than the turbo petrol version had, and that is at zero revs. It takes off at the lights very smartly!
      Cake and eat it as far as I'm concerned! Every time I leave our petrol car at home I save money and have a more enjoyable drive.

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    6. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      I congratulate you for making what sounds like an excellent electric car. I'd encourage all people with hobbies to pursue them. That is how innovation was achieved in the past.

      There is a big difference between hobby and what is rationally economic for the country or for the world. But many people can't tell the difference.

      For example, it is rational for a home owner to buy solar panels if it works out to be financially beneficial for them. But it is very irrational for governments to be subsidising and mandating renewable energy.

      Electric cars are not rational unless they are economically viable.

      They are also not a low emissions technology (on a life cycle analysis basis).

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    7. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      Peter Lang wrote:
      "They are also not a low emissions technology (on a life cycle analysis basis)."
      Congratulations, one of the standard furphies. I guess you assume the battery wears out quickly yet mine shows no reduction from its performance when new 4 years and 40,000km ago. Modern LiFePO4 cells are good for 1000s of recharges. I expect at least a decade of use and it is then suitable for stationary applications when not quite as good as new and ultimately recyclable. The embodied energy etc in an electric motor is no more than a petrol engine. The rest of the car is much the same as a petrol car.

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    8. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"Congratulations, one of the standard furphies. ... The embodied energy etc in an electric motor is no more than a petrol engine. The rest of the car is much the same as a petrol car."

      If you want to convince me that standard production electric cars have lower life cycle GHG emissions than an equivalent petrol or diesel car, you need to substantiate your claim. But it will need to be to a report that is authoritative and impartial, not just a report by an advocacy group.

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    9. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      Do you have an authoritative, impartial report for your claim?
      The following are just what I could grab quickly and more on well to wheel analysis than the claims of higher embodied energy in an electric car vs. petrol. By way of an example of battery life, a few years ago Toyota had replaced only three batteries in their Prius and these had been used as taxis with 500,000km - 800,000km on the clock.
      This is from an EV producer but looks pretty reasonable to me:
      http://www.stanford.edu/group/greendorm/participate/cee124/TeslaReading.pdf

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    10. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      I have been looking at the Australian Government’s “Green Vehicle Guide” web site: http://www.greenvehicleguide.gov.au/GVGPublicUI/Information.aspx?type=Nonroademissions

      It includes this statement:

      >”At this stage, we are not aware of significant lifecycle data for pure electric vehicles or plug-in hybrids. More recent studies are indicating that the majority of primary energy consumption for electric vehicles also occurs during vehicle use.”

      This page http://www.greenvehicleguide.gov.au/GVGPublicUI/Search.aspx

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    11. Peter Lang

      Retired geologist and engineer

      In reply to Peter Lang

      Correction" the emissions for the Toyota Yaris and Ford Focus should be 144 g/km, not 134 g/km.

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    12. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      It would seem then we could almost be in furious agreement. The Vehicle Guide you quote thinks it likely that the majority of energy consumed is during vehicle use, not manufacturing. That accords with a rule of thumb I came across somewhere that had embodied energy of car at around 2 years of fuel use. I can't see where my motor or battery would have greatly more embodied energy than an aluminium ('congealed electricity') engine block. Meanwhile, on our coal-heavy grid they have and iMiev similar…

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    13. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      I think you are being rather optimistic and not very objective.

      1. The MiEV is a tiny car, and the Tesla even smaller. They are nothing like the size of the Focus and Yaris. So they are not comparable. For comparable size cars, the fuel emissions would increase for the electric vehicles

      2. The electric cars have a range of 130 km and 340 km. Nothing like the range of the petrol and diesel cars (about 700 km I expect, but not listed)

      3. You are optimistic about the emissions from…

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    14. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      "I think you are being ... not very objective."

      I would drawn reader's attention to the fact the numbers quoted by Mr. Lang as if equivalent are not from the same columns or same units and consequently misrepresent the statements of the government guide. I had assumed from Mr. Lang post that the GVG must be using the commonly assumed 1kg/kwh rule of thumb but that is not what the GVG says. If we do use that then the GVG stats are consistent with most other estimates I have seen that put an EV about on par with petrol where the grid is a coal-laden as ours.

      Mr. Lang also raises range. I'm not sure why but so what if I don't have a 700km range? My electric car replaced one of my family's two petrol cars, the one that never left town. It has enough range to get anywhere I care to drive around town. Plugging in at home takes less time than a detour to a petrol station.

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    15. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      PS. Why should I 'forget renewables'? Every electric vehicle driver I know purchases accredited, audited 'GreenPower'.
      http://www.greenpower.gov.au
      That is, the electricity retailer must purchase additional electricity from renewable sources equal to our consumption in addition to the amounts required by the renewable energy target. Even paying the marked-up retail price for the surrendered RECs, it is still cheaper to run an electric car than the petrol equivalent. This is available to us all to choose as consumers. If the renewable power were not being added to the grid the RECs would not exist to be surrendered.

      It seems you wish to appear concerned that various policies are unlikely to work to address CO2 emissions and therefore we should not pursue them. However, in one post I got the distinct impression that you doubted the need to address emissions in any case, that you doubted the science. Is the latter where you are really coming from?

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    16. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"I would drawn reader's attention to the fact the numbers quoted by Mr. Lang as if equivalent are not from the same columns or same units and consequently misrepresent the statements of the government guide."

      I admit I have not read all the background in detail. But I do not understand why you say they are not the same units. If you are accusing me of misrepresentation you should explain what I've done wrong, otherwise I accuse you of being disingenuous.

      The petrol and diesel driven cars…

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    17. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Well, your either dumb or dishonest. The cars do not have equivalent utility. They are not comparable. And comparison has to be done on a properly comparable basis.

      The Tesla is a 2 seater, so lets ignore it. The Mitsubishi is a tiny claimed 2 seater but really just a 2+2. that has to be recharged every 150 km. It takes hours for a full recharge. That is just no practicable for most people unless there is a huge cost saving, and that is not the case - yet! There is also no CO2 saving - yet! And there wont be any significant CO2 savings while the renewable energy zealots continue to block real progress.

      The problem, Peter Campbell, is you are blinded by your beliefs. You are a zealot for a cause. It is impossible to have a rational debate with an ideologue.

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    18. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"PS. Why should I 'forget renewables'? Every electric vehicle driver I know purchases accredited, audited 'GreenPower'. "

      If you think "green power" is any greener than anyone else's power your really dumb. You should ask yourself: how are the green electrons separated from the non-green electrons so you buy only green electrons. If you think your power is coming from green generators, you should also ask yourself how you have power at night and when there is no wind.

      You say you are a scientists - what sort of scientist would that be? A social scientist, perhaps?

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    19. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      >"However, in one post I got the distinct impression that you doubted the need to address emissions in any case, that you doubted the science."

      1. I doubt the extremists' claims about catastrophic consequences of CO2 emissions and your claim of >95% sure CO2 is really bad. I answered your comment and you did not respond to that. I don't have a high opinion of your integrity at this stage.

      2. We have no idea of the damage function. You didn't even know what it means. Yet you say that you are >95% sure CO2 emissions will lead us to catastrophe (or whatever your words were). I could say more but what's the point. Your not rational. Your mind is closed. A zealot for a cause.

      3. I am strongly of the view that carbon pricing will not succeed (I've explained why in other comments). There is a better way that would be economically rational. But progress is blocked by the so called 'Progressives' and has been for decades.

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    20. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      Various of Mr. Lang's points and questions:
      -He wonders what sort of scientist I might be. As it happens I am a biochemist often using mass spectrometry to identify proteins and structural modifications of proteins, often but not exclusively from insects. If you care to see what I have published:
      http://www.researcherid.com/rid/B-7232-2008
      -Of course I know I am not getting specifically green electrons delivered to my house. Nonetheless, I have no reason to doubt that generation from renewable…

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    21. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Peter Campbell,

      Who are you writing to? me or an audience. The message I get is you are not to be trusted. You play childish games.

      And you make fundamental errors of fact, and I suspect you don't have that integrity to apologise when wrong.

      You said:
      >"Mr. Lang quoted the KWh/km numbers for the electric cars and the gCO2/km for the petrol cars but omitted the different units, implying these were directly comparable."

      I did nothing of the sort. You've made an error. I quoted from…

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    22. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Regarding renewable energy, this is my summary from a discussion underway with a renewable energy believer on another thread:

      We agree:

      1. Nuclear power is about the safest, or near the safest, way to generate electricity, at least in the large quantities demanded by modern society. http://nextbigfuture.com/2012/06/deaths-by-energy-source-in-forbes.html

      I hope you agree (or can explain why you don’t) (see my previous comment for substantiation of these points):

      2. Nuclear power is the…

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    23. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      Mr. Lang, please don't shout. I can see where the problem is now.
      I looked at the table again comparing the Ford Focus and the iMiev. If you just put in the two cars you get 144 g/km for the Ford and zero g/km for the iMiev. The iMiev, under kwh/km, has 135 and the Ford has N/A. Hence my comments above. The Green Vehicle Guide states that they assume renewable energy to charge on the page linked by Mr. Lang. However, I now notice they also have an option if you don't want to make that assumption…

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    24. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Unable to apologise, eh?

      You asked what would an irrational zealot know. The answer is only what he wants to believe. Facts that do not support his belief are irrelevant to an irrational zealot.

      That is clearly the case here. QED!

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    25. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Instead of that diatribe trying to justify your errore, all you had to do was say:

      "My mistake. Sorry. You, Peter Lang, were correct. The figures you, Peter Lang, quoted from the Australian Government Green Vehicles web site were correctly reported by you, Peter Lang. My apologies for suggesting you. Peter Lang, had misrepresented the figures".

      See, it's easy

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  4. Ronald Ostrowski

    logged in via Facebook

    As the rest of the world increasingly embraces an emmisions trading scheme, and has a more marure debate on man made climate change and what needs to be done about it, I wonder how an Abbott governed Australia will fare in the future global market?

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    1. Robert McDougall

      Small Business Owner

      In reply to Ronald Ostrowski

      Re a price on carbon, i suspect their shrill cries will undergo a miraculous transformation. Remember that the Coalition itself said that Carbon trading is the most efficient means to transition to a low carbon economy, but it's only good if the Coalition does it.

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    2. David Arthur

      resistance gnome

      In reply to Robert McDougall

      The coalition said an emission trading scheme is the most efficient means to a low-carbon economy? Well, that was the conclusion of Peter Shergold's Prime Ministerial Taskforce back in 2007.

      Shergold's terms of reference excluded
      consideration of a steadily increasing fossil fuel consumption tax (FFCT) was not even .

      What's remarkable about this absence is that the seminal work on economic/administrative measures to effect pollution control, Martin Weitzman's 1974 "Price vs Quantities…

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    3. Robert McDougall

      Small Business Owner

      In reply to David Arthur

      i suppose when you factor in how politically difficult that plan would be, particularly if you hoped to be re-elected, an ETS was the only feasible alternative.

      Can you imaging the howls from the Coalition, the Media and the Mining Industry if they HAD of tried that approach?

      Politics has a way of avoiding doing what really needs to be done with all too regular frequency and no particular breed of Politician has a monopoly on it.

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    4. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "The GFC is a demonstration of the economic destruction wrought by the extreme price volatility that is the inevitable result of derivative trading."

      It wasn't "volatility" that was the fundamental problem. The fundamental problem was over-rating the ability to re-pay loans. Founding derivatives on quicksand does not make them any more sound than quicksand.

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    5. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      In a way, we're both correct; while the ultimate cause of the GFC was ever-accumulating debt, the proximate trigger was volatility.

      To prevent the GFC, a lag on price volatility such as a Tobin Tax would have been an excellent start.

      What would then be required would be a fundamental realignment of how economic rewards are distributed. In the US, for example, it is possible to work full-time and fall into poverty; US economist Robert Reich argues that wages for most Americans are too low for them to fulfill their post-WW2 designated role as consumers - hence the accumulation of consumer debt that has ultimately proved so devastating.

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    6. David Arthur

      resistance gnome

      In reply to Robert McDougall

      Robert, the joy of creating a great big new tax (eg fossil fuel consumption tax) are the opportunities for great big new tax cuts elsewhere. I've found some information on Australian taxation revenues, so I'll get back to you in a few days and start spelling out some of the tax cuts that a fossil fuel consumption tax would fund.

      The thing that every one of these idiots who run our public affairs are avoiding is that a fossil fuel consumption tax would apply to the fuel oil used to import goods to Australia.

      Make no mistake: the Inconvenient Truth that Dave Oliver is avoiding is that a fossil fuel consumption tax would be the biggest, simplest boost to Australian manufacturing possible without setting tariffs - but he can't argue for it, because it's not Party Policy.

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    7. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "the proximate trigger was volatility"

      No, the proximate trigger was the growth in loans being foreclosed because the number of such bad loans was getting larger and larger, as you would expect in a system that decided at some point to allow bad loans as accepted practice. Sooner or later, the accumulation of bad loans was going to break the system. A Tobin tax would not have put off the problem. It may actually have made it happen sooner.

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    8. Robert McDougall

      Small Business Owner

      In reply to David Arthur

      As I said, i personally like your plan, but also acknowledge the difficulties it would represent in being passed into law. Perhaps a good starting point is the removal of fossil fuel subsidies paid to the resources sector? A bit difficult to sell an increasing fossil fuel tax, when the government is subsidising the deisel fuel consumption of the wealthiest sector in the country other than banking.

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    9. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      Thanks for that, Chris.

      So why were so many loans going bad? Because ill-founded optimism set up an asset price bubble, so the loan amounts were larger than a realistic valuation of the underlying asset might justify.

      So why was there an asset price bubble?

      Regarding a Tobin Tax, recall that a Tobin Tax acts to discourage market "churn". When we recall that derivative trading activity is several times the size of world GDP, we recognise that the derivative market is driven by its own internal dynamics, and does not accurately mirror the underlying value of the real world assets on which it is purportedly based.

      In order for my contention, that derivative trading was the proximate trigger for for the GFC, to be reasonable, asset values assumed in derivative trading activity influenced asset values in the real world.

      There's a handy discussion at http://en.wikipedia.org/wiki/Causes_of_the_2007–2012_global_financial_crisis, which I shall read.

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    10. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "So why were so many loans going bad? Because ill-founded optimism set up an asset price bubble, so the loan amounts were larger than a realistic valuation of the underlying asset might justify."

      Ill-founded loans were set up before the bubble started and contributed to the bubble. An ill-founded loan is simply one where the borrower can't be expected to sustainably pay for it. One of the processes that contributed to this was honeymoon interest rates for the first two years of the loan which…

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    11. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      Thanks Chris.

      University of Warwick Mathematics Professor Ian Stewart has provided a handy primer on the relationship between misunderstanding of risk, volatility and the GFC in the UK Observer of 12 February 2012, "The mathematical equation that caused
      the banks to crash", http://www.guardian.co.uk/science/2012/feb/12/black-scholes-equation-credit-crunch.

      Prof Stewart explains how pre-GFC, world derivative trading volume exceeded the "real" economy several times over, due to widespread…

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    12. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "derivative market trading, which was deliberately creating volatility because through use of the Black-Scholes equation it was possible to make money irrespective of whether the asset price went up, or it went down."

      No they weren't deliberately creating volatility. In fact with options the more volatility there is, the harder it is to make a profit.

      "the derivative market tail wagged the real economy dog so vigorously that it fell over."

      That is just not the reason the real economy fell…

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    13. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      I withdraw the word "deliberately", and replace it with the word "inevitably". That is, increased volatility was an inevitable consequence of increased derivative trading - to the extent that derrivative traders knew this at the time, the term "deliberate" is applicable.

      "No they weren't deliberately creating volatility. In fact with options the more volatility there is, the harder it is to make a profit." So why have trading volumes expanded hyperbolically over the last few years? Sure, computers…

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    14. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "So why have trading volumes expanded hyperbolically over the last few years?"

      There's more than on way to skin a cat. And there's more than one possible reason for an increase in derivative trading.

      "it created demand for retail mortgages"

      You can't sell mortgages unless you have the money to loan. Derivates do not increase the amount of money available to loan. Lenders don't care what the institutions are doing with their money (like setting up derivatives) as long as they get it back. Have you (or anyone else) ever thought "I think I'll loan some money to this bank BECAUSE it's using it to buy shares on which to write Call options". I don't think so.

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    15. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      "You can't sell mortgages unless you have the money to loan."

      Err, not quite - institutions create money out of thin air every time they set up a mortgage. That's why their loan book is generally much larger than the sum total of deposits.

      My understanding is, you can sell mortgages so long as other institutions honour your cheques - I think the terminology is your liquidity is good.

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    16. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      "That's why their loan book is generally much larger than the sum total of deposits."

      No, their loan book is generally much larger than their retained deposits. Their loan book is similar to their total deposits.

      Also, trying to discourage the trade in derivatives would not make much difference to the motivation for creating derivatives in the first place.

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    17. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      Thanks Chris, I stand corrected about bank assets and liabilities.

      So if I open a bank, and Joe Boggs deposits $1000, I can loan $900 to Jim Coggs; fair enough. Now, so long as Joe Boggs leaves his money on deposit, and Jim Coggs gives no evidence that his loan is going bad, I can loan $1800 to Jack Doggs.

      Put another way, suppose I have a cat and you have a dog. I sell you my cat for $1 billion, you sell me your dog for $1 billion, and each of us is now an investment banker.

      There are various motives for creating derivatives - in the case of commodity futures it's an issue of producers and purchasers dealing with the ups and downs of uncertainty - eg better to lock in the earnings from the cabbage crop I've just planted rather than take my chances on an exceptional harvest.

      So what possible motive can there be for creating Collateralised Debt Obligations? Everybody in that trade was surely able to realise that it was a scam.

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    18. Chris O'Neill

      Retired Way Before 70

      In reply to David Arthur

      David, you can look up fractional banking: http://en.wikipedia.org/wiki/Fractional_reserve_banking

      "So what possible motive can there be for creating Collateralised Debt Obligations? Everybody in that trade was surely able to realise that it was a scam."

      Certainly the people who bought them and the ratings agencies didn't realise. Buyer beware failed in this case. The people writing them would have viewed them from an optimistic point of view and they were complex enough that if your judgment was slightly impaired then you would not realise their shortcomings.

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    19. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      Thanks Chris, but I don't buy your answer; I've heard sufficient anecdotes of people in the industry figuring out for themselves that it was a scam, long before the GFC gave these ratings agencies pause for reflection.

      As Prof Stewart describes, application of the Black-Scholes equation and other relationships afforded the instigators of these CDO's sufficient insight to realise how dodgy they were. What's more, many traders would have been quite well aware of the dodginess of CDO's still on their balance sheets when it all fell apart, and they incurred losses, but they wouldn't care too much because they always knew that the party would end some time but they would pocket huge amounts of money in the meantime.

      As I've written elsewhere about carbon emissions (another derivative, for goodness sake!) permit trading, every time there is a trade, a little million quid land in some broker's bank account.

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    20. David Arthur

      resistance gnome

      In reply to Robert McDougall

      Gday Robert, recall I wrote "... I'll get back to you in a few days and start spelling out some of the tax cuts that a fossil fuel consumption tax would fund"?

      In 2009-10, Australia emitted 375 Mt of CO2 from fossil fuel combustion (a further 41 Mt CO2-e from fugitive emissions). In that year, total Commonwealth tax take was $267,171 million, total State tax take was $54,536 million, and local government tax take was $11,481 million.

      All these could be replaced with a fossil fuel consumption…

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  5. Michael Shand

    Software Tester

    As much as we all know this wont work - now that the carbon price has been dropped to such a pathetic level it may as well not exist - what are we left with

    Neither major party takes this seriously

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    1. Peter Lang

      Retired geologist and engineer

      In reply to Michael Shand

      You ask: What are we left with?

      Dump it!

      The sooner the better.

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    2. Michael Shand

      Software Tester

      In reply to Peter Lang

      Dump it doesnt solve the issue does it, the problem I described was that the Carbon price is so low it may as well not exist and neither party is planning to do anything about it

      Dumping the tax is about as useful as leaving it at its current rate - its not a solution - its the problem

      So when I state neither party is going to do anything useful - your suggestion to not do anything useful is suprise suprise not useful

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    3. Peter Lang

      Retired geologist and engineer

      In reply to Michael Shand

      Michael Shand,

      Thank you for your reply. However, I cannot agree with you that we should maintain the CO2 tax and ETS. If you want to persuade me you'd need to answer, persuasively and without spin, these questions:

      1. What difference will Australia's CO2 tax and ETS make to the climate and when?

      2. What is the probability a global carbon pricing system will be implemented and maintained for 100 years or whatever it takes to decarbonise the global economy? (hint: see my other comments…

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    4. Peter Lang

      Retired geologist and engineer

      In reply to Michael Shand

      Can you back that up with any sort of rational argument substantiated by facts?

      Why would you support a policy that won't work and will cost Australia dearly?

      Are you a locked in Labor Party or Greens supporter so that you simply support whatever policies they tell you to support without being able to analyse critically yourself?

      - Carbon pricing cannot work unless it is global
      - But global carbon pricing almost certainly cannot be achieved
      - Therefore, carbon pricing in Australia will not succeed
      - Therefore, the cost to Australia would be huge if it continued
      - Therefore it must be stopped asap.

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    5. Michael Shand

      Software Tester

      In reply to Peter Lang

      Evidence to back up my claim your talking shit mate, I would refer you to your own posts

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    6. Graham Palmer

      Retired

      In reply to Peter Lang

      Carbon pricing cannot work unless it is global
      - But global carbon pricing almost certainly cannot be achieved
      - Therefore, carbon pricing in Australia will not succeed
      - Therefore, the cost to Australia would be huge if it continued
      - Therefore it must be stopped asap.

      Therefore, unless everybody agrees to placing a cost on carbon, nobody should rationally start until they all do. Would anything get done on that basis?
      From what I understand from your posts everyone should get a free ride…

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    7. Chris O'Neill

      Retired Way Before 70

      In reply to Graham Palmer

      "Why not allow all producers of waste to dump it wherever it suits them? The previously mentioned and scoffed at 'privatisation of profits and socialisation of costs' still comes to mind as being appropriate as well as the tragedy of the commons."

      We are going to have demonstrated to us whether "tragedy of the commons" is a fallacy (or not as some people believe): http://www.pelicanweb.org/solisustv08n04page5.html :

      "The main error was to adopt a key proposition of the free market, and of Adam…

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    8. Peter Lang

      Retired geologist and engineer

      In reply to Graham Palmer

      >”Presumably if and when Peter Lang's view prevails it will be anything but a 'religious-like belief'.”

      Your sarcasm is noted.

      You presume correctly in this instance :) If the policies of rational people prevail we would get rational policy derived from rational analysis.

      >Therefore, unless everybody agrees to placing a cost on carbon, nobody should rationally start until they all do. Would anything get done on that basis?”

      Yes. We’d remove what is blocking real, economically rational…

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    9. Peter Lang

      Retired geologist and engineer

      In reply to Graham Palmer

      At 50% participation (that is 50% of manmade GHG emissions from all GHG gasses from all sources in all countries) the global cost would exceed the benefit (using William Nordhaus’s figures, Ch 6, pp116-122, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf ). Break even is about 62%.

      At 50% participation (50% of all man-caused GHG emissions are included in the global carbon pricing scheme), the cost penalty for the participants is about 250%. What chance is there of such an agreement ever…

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  6. Jeremy Tager

    Extispicist

    Behind the posturing around the carbon price and the direct action plan are the hidden incentives that neither major party wants to talk about - the 12 billion plus (12 billion is a profoundly conservative figure - only federal and only tax related) in fossil fuel subsidies - perverse and destructive forms of corporate welfare that militate against companies taking action on climate change. This welfare is direct (eg diesel fuel rebate) and indirect (government funded infrastructure, tax write offs, write downs and deductions) and indirect and buried - R&D, pre-commercial exploration, mixed use infrastructure (ports for instance). Until all governments stop propping up polluters, tepid initiatives on climate change may be worse than useless.

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    1. Craig Somerton

      IT Professional

      In reply to Jeremy Tager

      Abbott's visionary plan will undoubtedly add billions more to that obscene amount. Their aim seems to be to hand as much public money as possible directly to their corporate friends.

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    2. Chris Saunders

      retired

      In reply to Craig Somerton

      Such a pleasurable experience to read a real thinking and researched article. I truly thank Neil for this. One point I would like to make about the following discussion which again is fruitful and abstemious of too much rhetoric is that we know that there is little likelihood of Abbott doing anything about climate change. We all know he will follow typical liberal practice and declare his limitation on action because of the legacy of the present government’s fanciful financial ‘black hole’. And if his last pre-election figures with an 11 billion short fall are anything to go by, he hasn’t costed this anyway. So the direct action voluntary scheme will be no action.

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    3. David Arthur

      resistance gnome

      In reply to Jeremy Tager

      The mining tax was mucked up, to the tune of $2 billion. Mining industry receives ~$2 billion of taxpayer largesse each year, courtesy of diesel fuel excise rebate.

      They could do away with their mining tax altogether, and repair the hole in the Budget that the mining tax was intended to fill, just by cancelling mining industry entitlement to diesel fuel excise rebate.

      Are we the only people who can see this?

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    4. trevor prowse

      retired farmer

      In reply to David Arthur

      Grain farmers are being taxed on average $40,000 per farm through the present carbon tax and they can not pass that tax on to the world price we receive. No compensation is being given. In regards to the diesel fuel excise rebate, the reason it is rebated to grain growers is that their tractors are not on our roads, which was the initial reason for the rebate. If you are saying that there should be no rebate , then are you suggesting it should apply to farmers.

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    5. Robert McDougall

      Small Business Owner

      In reply to Craig Somerton

      theres that old cracker again "privatise the profits, socialise the costs"... sounds just like privatisation all over again.

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    6. Robert McDougall

      Small Business Owner

      In reply to David Arthur

      no, everyone sees it, just some people like to put their fingers in their ears and go "lalalalalalala"

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    7. Jeremy Tager

      Extispicist

      In reply to trevor prowse

      Trevor, the carbon tax does not apply to agricultural emissions so I'm wondering where your 40k figure comes from?

      Most calls for elimination of the diesel fuel rebate are directed at the mining sector - not at farmers. We know the miners can afford to pay for their own petrol.

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    8. Chris O'Neill

      Retired Way Before 70

      In reply to Jeremy Tager

      "the hidden incentives that neither major party wants to talk about"

      Perhaps the biggest escape from the Carbon tax is anything that plays a significant part in exports, e.g. Aluminium. The way world trade operates, nothing that is internationally traded will have Carbon pricing associated with it. For this to change, we first need to impose a Carbon price on the embodied Carbon emissions of imported goods. This isn't happening anytime soon.

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    9. Chris O'Neill

      Retired Way Before 70

      In reply to trevor prowse

      "Grain farmers are being taxed on average $40,000 per farm through the present carbon tax"

      So grain farms cause the generation of an average of 1,700 tonnes of taxed Carbon per year.

      Wow.

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    10. Felix MacNeill

      Environmental Manager

      In reply to Jeremy Tager

      Yeah - I agree about retaining the diesel rebate for farmers - that makes perfect sense - but I too was surprised by that $40k figure...

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    11. trevor prowse

      retired farmer

      In reply to Chris O'Neill

      ABARE estimates that for a WA grain grower--- ,their costs of imputs will increase by 6.5% and if you spend $600,000 to finance the crop , then this works out at about $40,000.
      The costs will be higher when heavy haulage will have to pay a tax increase in 2014. Because farmers pay freight on imputs such as fertilizer etc and then pay freight on the grain to port , the carbon tax has a double effect. Other costs for farmers in general are refigeration on milk and fruit, water pumping, products like steel , cement and concrete and even down to increases in rates which on large farms is over $10,000 per year.
      When people make statements about taking the rebate off diesel , the general public do not think of the farmers who are put in the same statement as rich miners. Many farmers cost of production was equal to 6 bags of wheat per acre last year , and many did not get 5 bags per acre. So you can see that the cost increase of $40,000 has a huge effect on their profitability.

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    12. Chris O'Neill

      Retired Way Before 70

      In reply to trevor prowse

      "their costs of imputs will increase by 6.5%"

      Just like the Carbon tax was blamed for the entire increase in the cost of electricity.

      Heard it all before.

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    13. David Arthur

      resistance gnome

      In reply to trevor prowse

      Thanks Trevor, "cancelling mining industry entitlement to diesel fuel excise rebate" refers to mining industry - I don't know enough about agricultural industry to make any suggestions regarding its taxation.

      If carbon tax has left grain farmers an average of $40,000 worse off, then
      1) they'll be early adopters of any biofuel developments, and
      2) looks like they don't have either union or peak industry body to match the clout of Big Mining - or Big Finance, who will be absolutely rolling in it if emission trading ever happens.

      That said, I'm a bit worried about agriculture - I'd rather my food had minimal antibiotic residues, heavy metals and industrial chemicals in it, and would rather supermarkets not import cheap stuff from China.

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    14. Peter Lang

      Retired geologist and engineer

      In reply to trevor prowse

      Trevor Prowse,

      I am interested in your comments. Since the issue of biofuels has been mentioned, I have a question you may be able to provide a comment on. I am wondering how farmers in grain growing areas could be contracted so they would provide stubble from the grain crops for biofuels.

      I imagine the cost of the biomass would be high when the issue of seasonality is taken into account. Here is some of my thoughts you might be able to comment on.

      Farmers near the biofuel processing…

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    15. trevor prowse

      retired farmer

      In reply to Peter Lang

      As a back of an envelope answer----the minerals in the stubble are returned into the soil over the next two years and their value is almost equal to the price you are able to sell the straw. Almost all stubble is retained now with our no-till cropping systems. The only time we burn stubbles is when we have a very heavy crop of oats , or for cheaper weed control. I would say 90% do not burn their stubbles . The stubble retention helps water penetration and reduces evaporation. Alot of land has had 20 years of continuous crops and the yields are increasing. The worms are increasing as well as soil microbes. Sorry to dispel a nice thought

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    16. Peter Lang

      Retired geologist and engineer

      In reply to trevor prowse

      Trevor Prowse,

      Thank for your reply. Just to clarify, this is not my idea. It is an idea that is being promoted by renewable energy advocates. Dr. Mark Diesendorf, a well known TR advocate, has been very actively promoting it and arguing that it is feasible to provide Australia's electricity from 100% renewable energy. It requires biomass and he's based his analysis, I critiqued http://bravenewclimate.com/2012/02/09/100-renewable-electricity-for-australia-the-cost/, on using grain crop stubble…

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    17. David Arthur

      resistance gnome

      In reply to Chris O'Neill

      "... we first need to impose a Carbon price on the embodied Carbon emissions of imported goods" - that's what the border adjustment provisions of a fossil fuel consumption tax will achieve.

      "This isn't happening anytime soon." - Start asking inconvenient questions regarding the inadequacies of emission trading schemes of politicians, diplomats and academic adherents of EU orthodoxies, and maybe we'll get them to change their minds - or we just change them for more capable leaders.

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  7. Colin Creighton

    Chair, Climate adaptation, Marine Biodiversity and Fisheries

    Direct action or direct corruption?. The current scheme has the big polluters being compensated and then also charging the community for their pollution. Not flash. Then lets move to mitigation. The current scheme is wasting $m playing with soil carbon on farm when the outcome for mitigation is minuscule or is it just trying to buy farmer votes? About 1% of the Australian landscape - our coastal wetlands and sea grasses sequester about 39% of Australia's carbon but alas the current scheme does not foster wetland repair and all the flow on benefits for biodiversity and fisheries. Lets review and replace this inadequate response to climate change I say!

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  8. Peter Lang

    Retired geologist and engineer

    >"Yet, ironically, the carbon pricing mechanism it would replace is the archetype of incentive-based policy instruments, ..."

    You must be joking. It is a penalty scheme and almost certainly cannot succeed in the real world.

    Carbon pricing is highly unlikely to succeed in the real world.
    The Labor-Green government has implemented carbon pricing in Australia. This is bad policy. It will not survive, not just because the LNP Coalition will repeal the legislation (rightly, IMO), but more…

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    1. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      "...We have no idea of the ‘damage function’ (the net damages caused by warming). The damage function is highly uncertain..."
      Agreed. It might be as little as very bad but could be as much as catastrophic. Better not do anything till we are sure which it is.

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    2. Robert McDougall

      Small Business Owner

      In reply to Peter Lang

      We are dealing with the unknown, particularly when considering what is likely to happen in the future.

      I would suggest that the main role of the ETS (globally) is to raise the issue beyond the "Business as Usual" model, to encourage investment in the technology that leads to less carbon intensive economies. That is the pot of gold at the end of the rainbow.

      Just like a credit card, if all you pay back is the absolute minimum you have to, the cumulative debt will bury you in the long run.

      Given your concerns about ETS and its functionality in the real world, Is there, in your view, a more effective method by which we may de-carbonise the global economy?

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    3. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Peter Campbell,

      Uncertainty about the problem is a given; uncertainty about the chosen solution is inexcusable. This is to say, we should be confident that our solutions are going to be effective, and the more expensive the solution the more confident we should be.

      To illustrate what I mean, suppose we detect a large asteroid whose orbit will intersect Earth's, and on best estimates there is a 1% probability it will hit earth. Clearly, we wouldn't let uncertainty prevent us from reacting to the threat. One response might be to spend trillions of dollars to build a fleet of nuclear-tipped missiles to destroy or deflect the asteroid. Is this a good idea? Well, it depends on how certain we are that missiles will work. If there is only, say, a 5% chance, or worse we don't know the odds, then it is time to go back to the drawing board.

      In short, big responses require high levels of confidence that they will work.

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    4. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Peter Lang

      "big responses require high levels of confidence that they will work."
      OK, but we are not talking about 1% or 5% chances of something bad happening, climate change is a high probability of dire consequences (say 95%). That requires a big response even if it won't work as well as it might ideally do. I have little confidence that the Libs even have the will to try to do anything that might work even a little bit, let alone a proposal with a fair chance of success. Theirs is head in the sand, business…

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    5. Peter Lang

      Retired geologist and engineer

      In reply to Robert McDougall

      Robert McDougall,

      >"Given your concerns about ETS and its functionality in the real world, Is there, in your view, a more effective method by which we may de-carbonise the global economy?"

      IMO, Yes there is. But given the hatred of rational economics among the followers of this web site, we'd have to get there very slowly. There first step would be to define the requirements and get agreement to them. Would you like to lead off with that?

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    6. Peter Lang

      Retired geologist and engineer

      In reply to Peter Campbell

      Peter Campbell,

      I don't agree with you for several reasons.

      >"climate change is a high probability of dire consequences (say 95%)."

      We don't know that. All the inputs are highly uncertain. Your statement is a statement of your belief. If you have no idea of the inputs (one of which is the damage function), how can you say there is high probability of dire consequences?

      >"That requires a big response even if it won't work as well as it might ideally do."

      That statement is wrong, IMO…

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    7. Robert McDougall

      Small Business Owner

      In reply to Peter Lang

      ok, requirements. In a broad sense, making more efficient use of our resources and mitigate the "profit at all costs" paradigm.

      i'd start of by looking at the way we set up our communties and the means of production.

      I.e. de-centralise populations, invest in railway infrastructure for commuting and freight and localise the production as much as possible.

      i'd also be investing heavily in renewable energies to diversify the generation base, invest in telecommunications tech removing the need for commuting, a much heavier emphasis on waste management and recycling, conduct consumer campaigns to reduce the level of red meat in our diets, build more highly energy efficient buildings and perhaps most importantly, we start building things to last again, as opposed to built in obsolescance.

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    8. Peter Lang

      Retired geologist and engineer

      In reply to Robert McDougall

      Robert McDougall,

      Those are not requirements. They are nothing more than a wish list of loony-Left ideological beliefs.

      They are the sought of ideological 'wants' that have underpinned the COP conferences for the past 20 years. The fact that this sort of nonsense is demanded by the Left explains why the COP conferences have failed.

      If you cannot define requirements properly, how do you expect to be able to make any progress?

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    9. Peter Lang

      Retired geologist and engineer

      In reply to Robert McDougall

      Requirements.

      [I didn’t expect we’d have to start at such a basic level]

      People want water, food, shelter … fulfilling life. They want Security, Health, Education, and opportunity to improve their standard of living.

      All we want depends on energy. It is one of the fundamental inputs to everything. So we need a secure and reliable supply of energy. And we need it at the lowest possible cost.

      [Yes, I know there is lot’s included in ‘secure and reliable energy at lowest possible cost’ (such as externalities) but let’s not get diverted before we get started.]

      Now take it from there – define the requirements.

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    10. Felix MacNeill

      Environmental Manager

      In reply to Peter Campbell

      And, of course, full certainty is inevitably a purely post hoc beastie, isn't it?

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    11. Felix MacNeill

      Environmental Manager

      In reply to Peter Lang

      Peter, once you start into the 'loony-Left ideological beliefs' all that anyobidy really thinks about your posts is to wonder how the shark looked to you as you flew overhead.

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    12. Felix MacNeill

      Environmental Manager

      In reply to Peter Lang

      Can I please see the certificate, signed by God, proving that it is an axiomatic and inviolable law of the universe that you can't make any progress if you can't define requirements fully?

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    13. Gary Murphy

      Independent Thinker

      In reply to Peter Lang

      So you are saying we need to make other forms of energy generation cost competitive with fossil fuels. Perhaps by putting a price on their CO2 emissions?

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    14. Robert McDougall

      Small Business Owner

      In reply to Peter Lang

      Sorry Peter, i mistook you for someone who wanted to have a genuine conversation without being insulting. My mistake.

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    15. Robert McDougall

      Small Business Owner

      In reply to Robert McDougall

      I also mistook you for Peter Lane, retired geologist and hydrogeologist whom i have a lot of respect for, but you and he are certainly very different creatures.

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    16. Peter Lang

      Retired geologist and engineer

      In reply to Robert McDougall

      Get used to it. It's the culture of The Conversation. Just look at the comments by the pack of loony-Left trolls who post there silly comments incessantly.

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    17. Robert McDougall

      Small Business Owner

      In reply to Peter Lang

      my, grumpy old git now arent wee? i can now legitimately treat you with the disrespect you deserve.

      Perhaps you'd feel more at home at the Australian, or join Andrew Bolts tweet club.

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  9. Riddley Walker

    .

    a voluntary approach to environmental policy... like self - regulation for media. Yep that should work well.

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  10. Peter Lang

    Retired geologist and engineer

    The world is very unlikely to implement carbon pricing.

    Policy makers understand that unless a carbon pricing scheme is implemented globally the cost penalty to the participants would be huge. Rational people know this so there will not be an agreement. Professor William Nordhaus (2008), p198, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf says:

    “Complete participation is important because the cost function for abatement appears to be highly convex. We preliminarily estimate that…

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    1. Michael Shand

      Software Tester

      In reply to Peter Lang

      Your argument is essentially unless we stop slavery everywhere in the world there is no point in stopping slavery here because others will still hold slaves - its asinine

      Those countries that facillitate a move to a low carbon economy sooner rather than later are going to do better than the others.

      I dont think you understand Climate Change and the effects it is going to have, your focusing on short term GDP instead of long term economic security.

      Regardless of Carbon Tax or no Carbon Tax we need to shift Australia to a zero carbon economy as soon as possible - this will benefit everyone including multinational companies

      the running costs of Solar Thermal for instance v the running costs of coal are stupifying mainly because you dont have to keep digging up coal

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    2. Peter Lang

      Retired geologist and engineer

      In reply to Michael Shand

      >"Your argument is essentially unless we stop slavery everywhere in the world there is no point in stopping slavery here because others will still hold slaves."

      Not at all. Your comment about slavery is irrelevant. CO2 is a global issue and must be addressed globally. it can be, but not the way it has been pursued in the UN negotiations. I urge you to read the Tol article I linked: http://www.voxeu.org/article/global-climate-talks-if-17th-you-don-t-succeed.

      Your comments about Australia should act on it s own and will gain by doing so are total nonsense. Your belief that unreliables can make any significant contribution is a demonstration of ignorance and ideological belief. But I can see from your comments there'd be no point in explaining that to you.

      Regarding the rest of your comment, I can see you are just an ideologue you run on belief, so no point continuing the disucsion.

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    3. Michael Shand

      Software Tester

      In reply to Peter Lang

      Projection is where you talk about your own deficits and issues as if these apply to the other person, your response makes no sense

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    4. Peter Lang

      Retired geologist and engineer

      In reply to Michael Shand

      I think you can work out the meaning, unless your not very bright.

      "You provided all the evidence needed to show you are an ideologue and have a closed mind"

      Can you understand that? (I expect not)

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    5. Michael Shand

      Software Tester

      In reply to Peter Lang

      "You provided all the evidence needed to show you are an ideologue and have a closed mind" - Yes, and I said your projecting

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  11. James Hill

    Industrial Designer

    Voluntary Emissions Trading Schemes.
    Compulsory Emissions Trading Schemes.
    The former have been going for a while.
    Apparently some individuals have been able to sequestre carbon and exchange same for money supplied by fossil fuel users who voluntarilly wish to reduce their carbon footprint in response to the approval of their customers and presumably their continuing custom.
    What part of "History" is beyond the consideration of debaters?
    Voluntary, money making, for several decades now?
    No bearing upon the future, even under a change of federal government?
    Am I missing something here?

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    1. Peter Lang

      Retired geologist and engineer

      In reply to James Hill

      One thing you are missing is scale. Provide figures to quantify what you are trying to say and provide context.

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  12. Peter Lang

    Retired geologist and engineer

    There is an excelelnt thread on Bishop Hill about the economics and IPCC WG3 here: http://www.bishop-hill.net/blog/2013/2/26/the-price-of-life-the-ipccs-first-and-forgotten-controversy.html?currentPage=2#comments

    Here is one of the comments:

    >"For once the comments threads are more enlightening than the original article. This is not due the original article is poor (it is excellent), but because two of the main characters in the story (Richard Tol and Aubrey Meyer) are here engaging in the…

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