Carbon policies as modern rain dances

Over at the Conversation I take up the task of once more explaining why the carbon policies of both major Australian political parties should be seen as great examples of posturing and symbolism.

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

16 thoughts on “Carbon policies as modern rain dances”

  1. So the implication is that we should do nothing? 

    Most of what you say is just factually wrong.  Of course setting carbon charges that will cut into emissions is a useful policy – Treasury and other modelling shows this. So too are renewable policies that encourage R&D and learning in this sector. Of course Australia must do its part even if we are a small part of the global picture – we don’t live in a simple world of Prisoners’ Dilemmas.

    Your post is a little like Stephen King’s recent effort. You woke up one morning and thought you would throw your hastily-considered 2 cents worth of wisdom into the ring. It is just irresponsible.  

    Geosequestration is a last ditch option if climate runs out of control –  I agree it should be thought of if we move to 10 degrees warning as Weitzman has suggested is possible with 5% probability. But there are much safer options.

    One of tour defenders at the Conversation site is Tim Curtin one of Australia’s climate change deniers.  Congratulations!


  2. Indeed! Just what is the point of this post? Do nothing and fiddle while Rome burns? Great Economics from a Professor. Maybe Tony Abbot is right – can’t expect anything from these guys. Cheers,


  3. Paul,
    The carbon price is being introduced gradually, so of course it won’t make much impact in its early years.  Are you suggesting that it should be introduced as a major step change?  Of course, not.  If that were proposed, you would be arguing (rightly) how stupid and unecessary that would be.
    No, you are just joining the conga line of contrarians (with Stephen King at the front) disingenuously arguing against a major and critical economic reform.  Really, have you nothing better to do?


  4. This is beyond pathetic. Geo-engineering is more pie in the sky with less proven results than renewables. Go look yourself in the mirror and ask yourself which is better – a) doing nothing or b) a carbon tax? Since you have failed to become PM those are your present options. If you think a carbon tax will either make zero impact to current behaviour or worse – increase carbon pollution then you are in the company of liars and fools.


  5. Not one of your better policy positions, Paul.  I won’t add to the general scorn here of your thoughts on engineering fixes, but I can’t let the other stuff pass.

    As you well know,the deadweight loss from current carbon pricing is very small (claims it will “destroy the economy”, or even any particular industry, are utterly laughable).  Indeed the DWL may well be negative compared to the deadweight loss from the income tax it replaces.  That’s why three decades ago, when AGW was still genuinely uncertain,  a carbon tax was promoted by many economists as a “no regrets” option – it’s a better tax than the ones it would replace anyway so we’d have no regrets if AGW had turned out be baseless.

    The costs of ignoring that advice (in the form of needing more ambitious emissions targets now and consequent increased incentives to freeriding) have already been very substantial – further delay will make them larger again.

    The highly imperfect distributional effects (ie the pork barrelling) of actually existing schemes is very much a second order issue – we are trying to save the bloody planet here, ferchrissakes.  Given the relative payoffs we only have to improve the chances of effective global action by a very small amount to make the whole thing extremely cost-effective for ourselves.  And having the largest per-capita emitter in the world onboard must surely help global action at the margin.

    Plus there’s a simple pragmatic thing – getting the framework operating in place in advance makes it much politically and administratively easier  to ramp it up if global agreement is in fact reached.


    DD and others,
    Let me respond firstly to those who think that the only safe form of geo-engineering is the reduction in greenhouse gasses. I will agree with them that attempting to control the earth’s weather is an uncertain trajectory, but I challenge anyone to give me a model under which carbon reductions will with certainty give us a particular outcome. The models used to predict climate change are dynamic models with both positive and negative feed-back loops. Once an equilibrium is perturbed (as it has been perturbed), there is no certainty about anything in such models, including the effect of greenhouse gas reduction. Even relative statements about certainty are very hard to make in such models. Hence those who pretend that carbon emission is a safe form of geo-engineering and the other types are unsafe are simply kidding. We are in unknown territory whatever we do or dont do (and of course climate change doesnt just come with losers. There will also be winners).
    The debate about geo-engineering is not taken as seriously in this country as it should. The Brits have been far more supportive of this stuff (see here: and even in Australia you have the odd desperate observer calling for these things once they realise our current plans amount to nothing (Tim Flannery, for instance). I had a go at reviewing this science here and have not seen much new stuff since then.
    Then the question as to whether the current plans are serious attempts to really do anything and whether it is realistic to expect much change in our trajectory. I could of course just hide behind Nicholas Stern’s dry observation that most of the policies on the table are largely symbolic, or even our own Ross Garnaut who in his 2011 update noted that ‘existing mitigating policies are hopelessly inadequate to meet even the lower end of our 2020 emissions target range’, or I could hide behind Colin Hunt who has made the same point this year and has called on the government to admit defeat regarding the 5% promised reduction.
    One should note hide behind others though. One thing to note is that the key election issue in the last 20 years has been economic growth and how to get more of it. Just watch the election slogans in the next election if you need more convincing that in any battle between climate and the economy, the latter will always win. I know the game ‘du jour’ is to pretend there is no trade-off but who believes that?
    You can however also simply watch what the hand of government is doing, rather than its mouth. Let me on that score re-iterate what I have observed on this the last 4 years, such as (from here):

    The actions of the Australian Federal and State governments are to prepare for more energy use in the future. Highways are being broadened around the country, tunnels are dug in Brisbane and elsewhere, and low petrol prices are being lauded as a good thing. Note for instance what the Australian Institute of Petroleum argues: Australian consumers clearly benefit from our highly competitive fuel market where retail petrol and diesel prices are among the lowest in the developed world. These highways are not just built for tomorrow: they are built to accommodate the expected increased traffic flow for the next 20 years. With the current technology this inevitably means more energy usage: whether they run on oil, benzene, gas, or electricity, they ultimately produce carbon emissions because even the electricity is generated by fossil fuels. If a decision were made to go nuclear, this wouldnt change the energy mix in use the next 10 years at least because it simply takes a long time for these reactors to be built. According to ANSTO (Australian Nuclear Science and Technology Organisation) Researcher Pat Mahony, given the long construction times required for nuclear power plants, as well as the time required to find a suitable site, conduct rigorous environmental impact studies, etc, it is unlikely that Australia would have a functioning nuclear power plant until at least 2025.
    It is not just in infrastructure that we are preparing to use more energy. The desalination plant in Tugun, a major electricity guzzler, is now all but ready to start using more fossil-fuel generated power. According to the Federal Department of the Environment, Water, Heritage and the Arts a desalination plant similar to Perth’s, even with energy recovery capability, will consume about 24 megawatts of electricity to produce about 45 gigalitres of water per year. This represents about 185,000 megawatt hours of energy per year. Desalination plants are also on the table or already being build in various other states, with proposals to build plants in Sydney, Wollongong, Melbourne and Adelaide and a plant under construction at Kwinana.
    What goes for energy usage via water and roads, also goes for most other areas of major energy use: airconditioning is only going to be used more in the future since more houses are built in the warm north rather than the cooler south. Agriculture is in no way facing the threat of constraints to keep generating emissions. Airports are planning expansion, not reduction. Industry too has now been all but promised that it wont have to do much.”
    I find it fascinating to see the vehemence with which Frequent Flyers pretend they are saving the planet by supporting the symbolic policies of our major political parties.


  7. So, does the carbon tax preclude more discussions about geo-engineering? You have made a good case as to why things are going down the toilet, but you you haven’t refuted the point that the carbon tax, which maybe hopelessly inadequate, will nonetheless produce positive effects. 
    Many people have successfully reduced their carbon emissions, don’t fly all over the planet and these are the people that deserve to benefit from this tax. Many more people haven’t a clue where they are polluting, and they need a price mechanism to discover it. Our present tax system is so hopelessly compromised this can only be an improvement – even if it does create a bureaucracy.


  8. Michael,
    the benefit you point to is a symbolic one: once you agree that these policies (even heavily ramped up variants of them) are going to achieve approximately nothing, then what is gained by rewarding those who have been relatively more virtuous at the expense of those who have been relatively less virtuous? All you then have is the satisfaction of seeing some punishment and reward meted out for behaviour you approve of or condemn. If it in the scheme of things achieves nothing concrete though, then that is an instance of pure symbolism.


  9. Paul,
    “Ross Garnaut… in his 2011 update noted that ‘existing mitigating policies are hopelessly inadequate to meet even the lower end of our 2020 emissions target range’, [my emphasis]
    Existing Policies, not proposed policies, you pillock.  If existing policies were adequate, we wouldn’t need a carbon tax, would we?
    This is pathetic, Paul.


  10. Mr Unread,
    you should read Colin Hunt on Garnaut who observes (and I agree with him) that Garnaut has been very careful not to say that he believes any proposed policies will meet the 5% targets. With Colin, I infer that his failure to do so means you should revert to his statement about the existing policies (which in 2011 included a promised carbon tax). However, should Ross want to update his position, then I will update my beliefs on what his current position is too.
    Best not to make too much use of the word pathetic, Mr Unread.


  11. Roughly (according to Meinshausen et al, Stern) we have to restrict global emissions to 1000Gt CO2E between 2000 and 2050 to keep warming at 2 degrees C.

    Since 2000 we have already emitted about 280Gt leaving a carbon budget of 720GT to 2050.  With reasonable land use policies we should be able to restrict land use emissions to about 60Gt so we can emit just 660Gt CO2E over the next 40 years.  So it is simple, cobber. We need to reduce our carbon emissions drastically.  Roughly we need to get per capita emissions down to about 2t per capita globally by 2050 so countries like China need to cut their current emissions by more than half and Australia needs to cut its emissions by 91%. 

    Its true that even with 2 degrees warming we might have serious problems but it seems fanciful to set even tougher targets than these although these should be pursued if possible.

    These are tough targets whose achievement is not advanced by those making poorly-informed criticisms of taxes actively seeking to reduce emissions.  There is a time to get serious about the issue of climate change control.  

    This is not “rain -dancing” – it is an urgent call to listen to the well-developed body of science that has been developed and to the generally optimistic economic accounts of the possibilities for taking action. 

    It is useful to try to help this endeavour rather than to attempt a campaign of encouraging public cynicism toward it. It is tiresome partly because these sorts of objections have been recycled so repeatedly and rejected so forcefully. 


  12. Paul,
    I don’t know who Colin Hunt is, but Garnaut said in a statement  on the Clean Energy Future policy package:

    “This is a strong climate change policy package. It will allow Australia to do its fair share in an effective global effort to reduce the risks of climate change, and to do so at reasonable cost.”
    That looks like a pretty unambiguous endorsement, to me.  Not surprising really, since the package is substantially the same as the Garnaut review proposed. 
    (By the way, I accidentally used a different moniker “Dave” for an earlier comment I made on this thread.  Sorry about that.  “Dave” and “Incurious” are one and the same.


  13. Paul,
    I’ve just looked up that quote from Garnaut that you included in your comment above.  From Box 3 in Garnaut update paper 6, Box 3, isn’t it?  There is no way that Box 3 could possibly be read as including a carbon price as an “existing policy”.   There is no ambiguity at all.  If you have read the whole of Box 3, then you are simply being dishonest.  If you haven’t, then you are recklessly quoting Garnaut out of context and making up your own interpretation.


  14. In the linked article, you state: “the great advantage of such geo-engineering is that you don’t need a mythical world coalition to do it.”
    That is true – the cheaper forms of geoengineering are well within the unilateral reach of the world’s larger countries (or the quasi-national EU). 
    However, the effects of such geoengineering will be global, and will also not be a return to a pre-greenhouse global climate.  There will be winners and losers from geoengineering, and it is almost certain that if one major power unilaterally adopts a geoengineering program, they would structure it to benefit their own climate, not the wider world’s.  If you’re requiring agreement between the major powers, I do not see why this is significantly easier than getting agreement on carbon emissions reduction.
    I have argued myself in favour of research into geoengineering.  But the idea of avoiding action on emissions reduction and treating geoengineering as the option of first resort is insanely risky.


  15. “The idea that the likes of China and India, who emit far less than we do per person, are going to see the error of their ways and seriously constrain their growing economies after watching us make this token sacrifice is simply ludicrous.”
    What evidence do you have for that? Just thought so? Typical economist’s “assumption” to suit your argument?


  16. I’m glad Robert pointed out the contradiction in your argument regarding a coalition of the willing.


    Your demarcation of real and symbolic is equally shaky. Do you believe we are presently in a panglossian world which we will unbalance with a symbolic carbon tax? All kinds of economic policies depend on value judgements and symbolism. All kinds of economic activity is driven by symbolic things like status (fashion, luxury goods, first class airline seats, international holidays, private schools etc.), irrational fears and perceptions of safety (SUV’s) etc. The symbolism of the carbon tax will make carbon abatement an officially sanctioned goal and this will have an effect. Even a low initial carbon price will bring carbon pollution into the equation. At present it isn’t and this results in investment decisions that haven’t priced in the externalities of pollution.


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