This page is for discussion of economic aspects of global warming.

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163 Thoughts on “Economics

  1. THREAD on 17/10/2010 at 3:52 am said:


    • THREAD on 17/10/2010 at 3:58 am said:

      Aviation deal clears way for emissions scheme: EU

    • Richard C (NZ) on 14/05/2011 at 10:00 pm said:

      European Union tax on carbon to push up airfares

      * From: The Australian
      * May 14, 2011 12:00AM

      QANTAS will be forced to lift international airfares to Europe from next January after being slapped with a penalty by the European Union because Australia does not have a price on greenhouse gas emissions.

      The national carrier told business leaders at a meeting in Canberra this week that under changes to the EU’s emissions trading scheme, Qantas would be forced to pay a tax on 15 per cent of its carbon emissions from its nearest port of call.

      This would mean the tax would be payable from emissions incurred by flights from ports as far as Singapore and Bangkok under a “border tax” adjustment contained in the EU scheme.

      Government sources believe US airlines, which will also face the EU carbon impost, are likely to challenge its validity in the World Trade Organisation.

      Qantas confirmed it would be hit by the impost and told The Weekend Australian it was still calculating the likely impact on ticket prices. A spokeswoman said it would face a second carbon hit on flights into Britain when Britain’s “green tax” took effect.

      Qantas would be faced with the impost because it is headquartered in Australia, which does not currently have a price on carbon. The charge would be levied on the airline’s last port of departure which in Qantas’s case would be Bangkok or Singapore.

      The government will seize on the fact that Qantas will face the impost to back its argument that, if the nation doesn’t move, Australian businesses could eventually be penalised by carbon border adjustments and airline passengers will be first to suffer.


      Meanwhile, the car industry stepped up its warnings on the impact of the tax. Federal Chamber of Automotive Industries chief executive Andrew McKellar said the tax must not undermine the competitiveness of the industry’s supply chain and that increased costs relative to the rest of the world needed to be fully offset. A rise in costs also risked reducing local content in the industry in the future. He said the FCAI believed the government should establish a low fixed price of $10 a tonne or less rather than the $20-$30 a tonne recommended by climate adviser Ross Garnaut.

    • Richard C (NZ) on 05/07/2011 at 6:21 pm said:

      Canada’s airlines fight EU carbon tax

      Jul 4, 2011

      Canadian airlines have joined the fight opposing the European Union’s plan to include the aviation industry in its emissions trading plan at the start of next year.

      Under terms of the EU strategy, any airline flying in or out of Europe would be forced to buy carbon permits for 15% of their emissions based on 2010 levels. They would also be required to reduce their carbon dioxide emissions by 3% in 2012, and by 5% from 2013 onward, based on their average emissions between 2004 and 2006.

      The National Airlines Council of Canada, which represents the country’s largest carriers, including Air Canada and Air Transat, has lent its support to a legal challenge being mounted against the plan, which will be heard by the EU’s high court in Luxembourg Tuesday.


      The industry argues that inclusion of airlines in the emissions system will cost global airlines about ¤1-billion ($1.4-billion) collectively in 2012 before “skyrocketing” to ¤4-billion by 2020.

      They also argue the plan violates fundamental principles of several international treaties, including the Chicago Convention, the EU-U.S. Open Skies Agreement, the Canada-EU Air Transport Agreement and the Kyoto Protocol.

      George Petsikas, NACC’s president, said that under the terms of those treaties no state has the right to regulate activities outside its own borders………….

    • Richard C (NZ) on 29/09/2011 at 6:59 pm said:

      China, Russia unite to oppose EU ETS; global approach needed to reduce aviation emissions

      September 29, 2011

      China and Arab apply heat to EU ETS

      August 15, 2011

      H/T Gary

    • Richard C (NZ) on 01/10/2011 at 5:39 pm said:

      EU hands airlines 85 per cent free emissions permits

      Level will drop to 82 per cent in 2013, a year after aviation comes under the EU’s emissions trading scheme


      Plans to bring aviation into EU ETS have been fiercely opposed by airlines, which insist that charging per tonne of CO2 emitted for every flight in and out of Europe will add €1.1bn onto their operating costs in 2012 and €10.4bn through to 2020.


      Analysis by Thomson Reuter Point Carbon suggested the largest 10 airlines, including BA, Lufthansa and Virgin, will face a 30-million tonne shortfall in CO2 allowances in 2012.

      Andreas Arvanitakis, aviation analyst at Point Carbon, said the total cost for the top 10 carriers would be €360m next year.

      “The task now is to refine the carbon procurement and risk management strategies,” Arvanitakis said. “In such a keenly competitive industry, the emissions market may offer an advantage in terms of keeping costs below those of rival carriers.”

      Every year of the scheme will see 15 per cent of allowances auctioned, and from 2013 to 2020 the remaining three per cent will be set aside into a special reserve for new entrants and fast-growing airlines.

      The EU expects to save 72 million tonnes of CO2 per year by 2020 as a result of the scheme – a 26 per cent reduction on business as usual.

      However, Jean Leston, head of transport policy at WWF-UK, said more credits needed to be auctioned with the receipts funnelled towards efforts to combat climate change, such as the UN’s $100bn Green Climate Fund.


    • Richard C (NZ) on 11/10/2011 at 5:32 pm said:

      Europe’s airline emissions levy gains legal backing

      AIRLINES can be charged for their greenhouse gas emissions on flights to and from Europe, according to a landmark court ruling.

      The indicative ruling, by the advocate general of the European Court of Justice Juliane Kokott, is a blow to airlines and non-European governments that had hoped to escape from the extension of the European Union’s emissions trading scheme to cover air transport from next year.


      The Air Transport Association said: ”Today’s action is an important step in the court process, but as it is a non-binding preliminary opinion it does not mark the end of this case.

      ”The opinion will provide a basis on which the judges assigned to the case can further deliberate and come to a full and unanimous decision.

      ”In complex cases such as this one, it would not be unusual for the full court’s final opinion to vary from the preliminary opinion.”

      Read more:

    • Richard C (NZ) on 26/10/2011 at 6:40 pm said:

      EU to resist US pressure on airline emissions

      By Associated Press on October 25th, 2011

      BRUSSELS (AP) — The European Union insisted Tuesday it will enforce a new law that imposes an emissions cap-and-trade program on airlines flying to and from Europe, despite angry opposition from the U.S. Congress.


      On Monday, the U.S. House of Representatives voted to exclude U.S. airlines from participating in the EU program. The measure directs the transportation secretary to prohibit U.S. carriers flying to and from Europe from participating in the program if it is unilaterally imposed. It also tells other federal agencies to take steps necessary to ensure that U.S. carriers are not penalized by the emissions control scheme.

      The bill now goes to the Senate, where there is currently no companion legislation.

      American lawmakers described the program as a “tax grab” because it includes all carbon dioxide emissions from the airliner’s point of departure or arrival – including over the Western Hemisphere and the Atlantic Ocean – rather than just those in European airspace.


    • Richard C (NZ) on 08/11/2011 at 8:06 am said:

      Greenhouse-gas tax could inflate airfares

      by Bart Jansen on Oct. 31, 2011, under USA Today News

      # The meter starts running Jan. 1 on fees that U.S. airlines estimate will cost them $3.1 billion over the next decade.

      # The U.S. House voted Oct. 24 to prohibit airlines from participating in the program.

      # The International Civil Aviation Organization (ICAO) is expected to oppose the European scheme, amid growing outrage in China, Russia and India.

      What’s at stake

      At a Sept. 30 meeting, representatives of 20 other countries including India, Russia and China issued a joint statement opposing the European law and calling it inconsistent with international law.

      Luo Chaogeng, co-chairman of China Airlines, calls the scheme “a violation of human values” and promises “unremitting efforts” to oppose the program.

      Separately, even Italy has complained that short- and midrange routes are penalized in comparison with long-range flights and warned of possible retaliation from China and the United States.

      The cost

      Nailing down the cost to passengers isn’t easy.

      But Connie Hedegaard, the European Union’s commissioner for climate action, says the cost could range from 2 euros to 12 euros for each one-way trip across the Atlantic. At 1.42 euros to the dollar, that means $2.84 to $17 per ticket.

      As an example, she said a trip from Paris to Beijing would have 627 kilograms of carbon-dioxide emissions for each passenger. The cost at current carbon prices would be about $10.68.

      The prospect of higher prices hasn’t registered much in the U.S.

      Where does the money go?

      U.S. airlines note that Europeans aren’t promising to spend all the money on climate change.

      The European Union’s directive on the program says the money “should be used to tackle climate change” to reduce greenhouse-gas emissions, fund research and adapt to climate changes.

      But each country will decide how to spend its share. The directive says, “Decisions on national public expenditure are a matter for member states.”

      “Considering the state of the European economy and the debt problems that many European countries face, at this point we’ve got to believe this money is going to go to the general fund to try to bail out some of these European economies,” says Steve Lott, a spokesman for the Air Transport Association.


    • Richard C (NZ) on 22/12/2011 at 10:07 am said:

      EU wins court green light to start airline emissions charges

      Text and Picture Copyright 2011 AFP. All other Copyright 2011 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.

      Links to Judgement of the European Court of Justice in Case C-366/10 – The Air Transport Association of America and Others – full texts

      Describes looming trade war (Airbus has already lost sales due to China cancellations)

    • Richard C (NZ) on 23/09/2012 at 10:08 am said:

      Senate votes to shield U.S. airlines from EU’s carbon scheme

      (Reuters) – The Senate unanimously passed a bill on Saturday that would shield U.S. airlines from paying for their carbon emissions on European flights, pressuring the European Union to back down from applying its emissions law to foreign carriers.

      The European Commission has been enforcing its law since January to make all airlines take part in its Emissions Trading Scheme to combat global warming, prompting threats of a trade fight.

      The Senate approved the bill shortly after midnight, as it scrambled to complete business to recess ahead of the November 6 congressional and presidential elections.

      Republican Senator John Thune, a sponsor of the measure, said it sent a “strong message” to the EU that it cannot impose taxes on the United States.

      “The Senate’s action today will help ensure that U.S. air carriers and passengers will not be paying down European debt through this illegal tax and can instead be investing in creating jobs and stimulating our own economy,” Thune said in a statement.


    • Richard C (NZ) on 13/11/2012 at 8:17 am said:

      EU suspends aircraft emissions trading rules

      The European Union has agreed to suspend its rules that require airlines flying to and from airports in the EU to pay for their carbon emissions.

      The rules had been unpopular with countries outside Europe such as the US, China and India.

      Climate commissioner Connie Hedegaard said she had proposed “stopping the clock for one year”.

      She said the suspension was due to progress being made in negotiations on a global emissions deal.

      But she added that if the International Civil Aviation Organization (ICAO) did not make progress towards a global deal by this time next year the European tax would be reintroduced.


    • Richard C (NZ) on 01/12/2012 at 8:27 pm said:

      Obama shields U.S. airlines from EU carbon fees

      (Reuters) – President Barack Obama signed a bill on Tuesday shielding U.S. airlines from paying for each ton of carbon their planes emit flying into and out of Europe, despite a recent move by Europe to suspend its proposed measure for one year.


    • THREAD on 17/10/2010 at 4:01 am said:
    • THREAD on 17/10/2010 at 7:30 am said:

      Cancel all your European travel and vacation plans – carbon trading extortion is here

    • Richard C (NZ) on 14/12/2010 at 9:00 pm said:

      Seen at JoNova
      Fred Firth:
      December 14th, 2010 at 5:32 pm

      I imagine Heathrow and Gatwick will be fairly quiet soon. I was about to book a flight to London and wondered why is was suddenly a lot cheaper to fly to Paris. It used to cost the same. Just found out that since November 2010, premium flights to/from Australia are subject to carbon tax of GBP170. So it’s Paris and the Eurostar for me.

      The U.K government must have employed the social enginering experts from South Australia for their advice.

    • THREAD on 17/10/2010 at 7:32 am said:

      Climate Wars: EU Threatens Rest Of The World With Flight Ban

    • Andy on 17/10/2010 at 8:48 am said:

      Britain’s climate change laws and their huge expense –

      Booker in the Telegraph:

      Ed Miliband is the costliest politician in British history

    • Richard C (NZ) on 19/10/2010 at 9:11 am said:

      Mike Jowsey says:
      October 19, 2010 at 6:13 am

      Christopher Monkton talking about world government (and taxation), communism and climate fraud. Very eloquent, informative and disturbing.

    • THREAD on 26/10/2010 at 1:55 pm said:

      Wind power reduces the value of homes

      Swedish Wind Energy appears in a new increase in the deliberate attempt to conceal the fact that properties near wind turbines drop significantly in value, among others, writes Elisabeth von Brömsen, Föreningen Svenskt Landskapsskydd. Confederation of Swedish Landscape Protection.

      [Wait 10 secs – Google Translate]

    • THREAD on 26/10/2010 at 2:37 pm said:

      Sunday, October 10, 2010

      EPA sued by over 90 entities for ‘Greenhouse’ Gas Regulations

      According to The Wall Street Journal, the Obama administration’s move to curb ‘greenhouse gases’ using the Environmental Protection Agency has drawn legal challenges from more than 90 companies and trade associations. This could be very interesting since any of these legal challenges conceivably might result in subpoenas issued for infamous warmists such as James Hansen and Michael Mann, forcing them to provide documents and prove their flimsy AGW theory under cross-examination in a court of law. Here’s what happened when James Hansen was ‘boxed in’ on the witness stand once before, dumbfounded when cross-examined and asked to name just one other scientist who agreed with his assertion that sea levels would rise more than 1 meter this century, stating “I could not, instantly.”

      Dr. Roy Spencer appears well prepared as an expert witness for the plantiffs.

    • THREAD on 26/10/2010 at 7:35 pm said:

      Decarbonising Australia

      By 2020, power bills will shock

      Once the carbon tiger’s tail is grasped, there is no letting go.

    • THREAD on 28/10/2010 at 11:12 am said:

      Greens accuse gas industry of hiding real effect of carbon emissions

      Tim Lester National Bureau Chief, October 27, 2010 – smh

      The Greens have accused Australia’s gas industry of ‘cooking the books’ to hide a huge carbon emissions problem.

      WA Greens Senator Scott Ludlam says a new analysis of publicly available industry figures, reveals “a massive expansion in Australian greenhouse gas emissions within six years if all proposed new LNG projects go ahead.”

      The claims have opened up a war of words with the gas industry. It has hit back, accusing the Greens of “in essence declaring their support for coal to continue to dominate electricity generation.”

      According to Senator Ludlam “the companies behind these gas projects claim that gas is a clean energy, but they don’t talk about the massive emissions that are caused when gas from high-CO2 gas fields is processed and that CO2 is stripped out and vented to the atmosphere.”

      The Greens claim one joint venture alone, James Price Point hub, near Broome, will emit 32 million tonnes a year of greenhouse gases – equal to five per cent of Australia’s current greenhouse gas emissions, or all of New Zealand’s total annual greenhouse gas emissions.

    • Richard C (NZ) on 31/10/2010 at 8:39 am said:

      The Future of Energy in Australia

      David Archibald 20thJuly 2009

      •The Oil Price Driver
      •Electric Power
      •Liquid Fuels
      •Convergence through Plug-in Hybrid

      See – “Energy and Fuel” Decarbonizing Australia

    • Richard C (NZ) on 31/10/2010 at 8:45 pm said:

      Solar flare-up will burn a hole in every pocket

      Brian Robins and Tim Barlass October 31, 2010 – smh


      HOUSEHOLDS will pay an extra $600 on their electricity bill over six years to cover the $2 billion cost of the failure of the state government’s overly generous solar power scheme.

      If elected in March, the opposition will have the scheme, which runs to the end of 2016, reviewed by the auditor-general so that it can decide on its future.

      From midnight last Wednesday, the government slashed from 60¢ to 20¢ per kilowatt hour the tariff paid to households installing solar panel systems because the surging number of applications has blown out the scheme’s cost.

      In reports tabled in Parliament last week, the government disclosed that it had been advised that even after slashing the tariff for solar panels, it anticipated 777 megawatts of solar panels would be installed by the time the scheme closed.

      Already, 200 megawatts of capacity has either been installed or ordered.

      The reports detailed the total cost to households is forecast to reach $1975 million by 2017, placing a burden on homes at a time when power prices are rising sharply already

    • Richard C (NZ) on 21/12/2010 at 12:27 pm said:

      NSW power prices will rise again

      # From: The Daily Telegraph
      # December 21, 2010

      HOUSEHOLDS face even higher power prices from January 1 as electricity retailers recover the $360 million cost of the federal renewable energy scheme.

      About 370,000 AGL electricity customers will be the first hit.

      From next week a 3.8 per cent increase in charges will push up customers’ annual bills by $54.

      It’s the first case of a NSW provider jacking up charges to recoup the cost of buying small-scale technology certificates, or STCs, which the Federal Government is introducing to help fund a shift towards green energy.


    • Richard C (NZ) on 31/03/2011 at 1:02 pm said:

      Carbon-tax pain played down

      Tuesday Mar 29, 2011 – smh

      Australian steel and cement makers’ profits may be squeezed if the Government’s proposed carbon tax is introduced, but most industries will stay profitable, experts say.

      Treasury Secretary Martin Parkinson last week signalled the carbon tax, to begin on July 1 next year, was likely to start at about A$26 ($35.50) a tonne.

      That’s A$4 higher than the price charged in the EU, which will enter phase two of its cap-and-trade scheme next year, says Professor John Foster of the University of Queensland.


    • Richard C (NZ) on 14/06/2011 at 9:31 pm said:

      Joining the dots on carbon

      * Michael Stutchbury
      * From: The Australian
      * June 14, 2011

      ROSS Garnaut’s caustic appraisal that Australia’s political culture is reverting to its pre-reform era is tied to his bracing view of the economy’s productivity slump and our “boom bust” mining prospects. And it connects further to the Productivity Commission’s carbon price endorsement.


      After Wayne Swan’s bungled mining tax, business is rationally responding to the increased returns to political rent-seeking and the reduced payoff from pushing for good policy.

      Moreover, the Productivity Commission highlights how rent-seeking extends to the global explosion in green protectionism.

      Australia and our biggest trading partners already are devoting tens of billions of dollars each year to green industries with little to show in lower carbon emissions.

      Mandatory renewable energy targets act like the import quotas of trade protectionism. They encourage rent-seeking, drain productivity and push up costs for the rest of the economy, including industries most squeezed by the mining boom. The Greens’ push for “clean” industry development echoes the old rationale for protecting so-called infant manufacturing industries.

      The retort is the same. Whatever the rest of the world does, Australia could more cheaply reduce our emissions by replacing green protectionism with a simple carbon price. Extending such market-based reform would help entrench the prosperity from Australia’s mining boom luck rather than fritter it away.

    • Richard C (NZ) on 26/10/2010 at 9:09 pm said:

      Emissions Trading Scheme Economic Model – Google scholar search

    • Richard C (NZ) on 26/10/2010 at 9:12 pm said:

      New Zealand Australia Emissions Trading Scheme Economic Model – Google scholar search

    • Richard C (NZ) on 26/10/2010 at 9:25 pm said:



      International Association for Energy Economics (IAEE)

      Introduction and Overview

      by John P. Weyant and Jennifer Hill (Energy Modeling Forum, Stanford University)

      This Special Issue of The Energy Journal represents the first comprehensive report on a comparative set of modeling analyses of the economic and energy sector impacts of the Kyoto Protocol on Climate Change. Organized by the Stanford Energy Modeling Forum (EMF), the objectives of this study were the same as for previous EMF studies: (1) identifying policy-relevant insights and analyses that are robust across a wide range of models, (2) providing explanations for differences in results from different models, and (3) identifying high priority areas for future research. This study has produced a particularly rich set of results in all three areas, which is a tribute to the active participation of the modeling teams and the care each team took in preparing its paper. The volume consists of a paper by each modeling team on what it did and what it concluded from the model runs that were undertaken, proceeded by this introduction and summary paper. This summary focuses on the motivation for the study, the design of the study scenarios, and the interpretation of results for the four core scenarios, which all the teams ran. Each succeeding chapter contains ideas and insights drawn by the modeling teams from applying their models to issues they were able to address selected from a small set of important areas on which the group had mutually agreed to focus.

      [359 Citations]

    • Richard C (NZ) on 26/10/2010 at 9:40 pm said:

      Forestry and the carbon market response to stabilize climate

      Massimo Tavoni*, Brent Sohngen#, Valentina Bosetti*

      This paper investigates the potential contribution of forestry management in meeting a CO2 stabilization policy of 550 ppmv by 2100. In order to assess the optimal response of the carbon market to forest sequestration we couple two global models. An energy-economy-climate model for the study of climate policies is linked with a detailed forestry model through an iterative procedure to provide the optimal abatement strategy. Results show that forestry is a determinant abatement option and could lead to significantly lower policy costs if included. Linking forestry management to the carbon market has the potential to delay the policy burden, and is expected to reduce the price of carbon of 40% by 2050. Biological sequestration will mostly come from avoided deforestation in tropical forests rich countries. The inclusion of this mitigation option is demonstrated to crowd out some of the traditional abatement in the energy sector and to lessen induced technological change in clean technologies.

    • Richard C (NZ) on 26/10/2010 at 9:55 pm said:

      CO2 emissions limits: Economic adjustments and the distribution of burdens.

      Jacoby, Henry D. Reiner, David M.

      Energy Journal; 1997, Vol. 18 Issue 3,

      Subject Terms: *EMISSIONS trading CARBON dioxide — Environmental aspects

      Abstract: Explores the consequences of policies under consideration within the Climate Convention imposing carbon dioxide controls on a subset of nations. Distribution of economic burdens among nations; Influence of emissions trading on policy costs.

    • Richard C (NZ) on 08/11/2010 at 9:59 am said:

      Carbon Trade Ends on Quiet Death of Chicago Climate Exchange

      Published Nov 7, 2010

      Republican mid-term election joy deals financial uncertainty among green investors as the Chicago Climate Exchange announces the end of U.S. carbon trading.

      The Chicago Climate Exchange (CCX) announced on October 21, 2010 that it will cease carbon trading this year. However, Steve Milloy reporting on (November 6, 2010) finds this huge story strangely unreported by the mainstream media.

      To some key analysts the collapse of the CCX appears to show that international carbon trading is “dying a quiet death.” Yet Milloy finds that such a major business failure has drawn no interest at all from the mainstream media. Milloy noted that a “Nexis search conducted a week after CCX’s announcement revealed no news articles published about its demise.”

      Not until November 02, 2010 had the story even been picked up briefly and that was by (Crain’s). Reporter, Paul Merrion appeared to find some comfort that while CCX will cease all trading of new emission allowances at the end of the year, “it will continue trading carbon offsets generated by projects that consume greenhouse gases, such as planting trees.”

    • Richard C (NZ) on 27/10/2010 at 10:30 am said:

      Penn State University – Economics and Climate Change Category

    • THREAD on 28/10/2010 at 9:40 am said:

      ETS Fuel Levy – Google Search

    • Richard C (NZ) on 30/10/2010 at 8:34 pm said:

      California could feel Spain’s pain

      Tuesday, October 26, 2010

      This article from the Orange County Register is by Dr. Gabriel Calzada, professor of applied environmental economics in Spain and lead author of a 2009 study detailing the economic costs of Spain’s experiment with the green economy.

    • Richard C (NZ) on 08/12/2010 at 11:34 am said:

      UN Continues Push for Global Carbon Tax at Climate Confab

      Written by William F. Jasper, New American | 07 December 2010

      s a global “carbon tax” still in the works, even though political support, as well as scientific support, has been steadily plummeting for legislative and regulatory regimes aimed at dealing with global warming?

      The failure to produce a binding agreement at last year’s United Nations climate conference in Copenhagen has led many observers to view the current summit in Cancun, Mexico, as an anti-climactic event that is unlikely to produce anything of substance.

      However, Cathie Adams, who is in Cancun covering the conference, reports that many of the official delegates and non-governmental organization (NGO) activists there are pushing ahead with plans for global taxation. Adams, who has covered many UN summits over the years as a reporter for USA Radio Network, has posted a series of daily reports here providing information and perspective not available through most of the major media coverage.

      In her December 2 report, “Global Taxation Being Discussed at the UNFCCC COP 16 in Cancun, Mexico,” Adams reminds readers:

      Last year in Copenhagen, President Obama sent Secretary of State Hillary Clinton to the UNFCCC COP 15 to commit $30 billion to a new Fast Start fund by 2012 with a follow-up goal to raise $100 billion annually from developed nations for a new Green Fund by 2020.

      One year later in Cancun, the U.N. is prodding nations to create the infrastructure for the new Green Fund that would not be limited to $100 billion.

      Adams further notes:

      Panelists from the Climate Action Network on Wednesday revealed that nations are discussing new taxes either on international monetary transactions or preferably on international shipping and aviation.

      The U.N. does not currently have the authority to tax, but it is guiding negotiations to accept “monitoring, reporting and verification” from some taxing authority for money received from the new Green Fund. The new tax assessor-collector could possibly be the International Maritime Organization, which is a U.N. affiliate.

      Soros Green for the Green Lobby
      Enter George Soros, billionaire green activist and champion of global government. Soros was among the elite glamour contingent that swarmed into Copenhagen on private luxury jets last December and debarked from stretch limos at the climate conference to deliver harangues calling for the peoples of the developed countries to sacrifice, change their lifestyles, and decrease their consumption in order to save Mother Earth. Soros was appointed to the UN’s High Level Advisory Group on Climate Finance, which was tasked with coming up with the ways and means for reaching “the goal of mobilizing US$100 billion annually for climate actions in developing countries by 2020.”

      The Advisory Group issued its report on November 5, 2010, just a little more than three weeks before the start of the Cancun conference. Among the proposals put forward by group are taxes on aviation jet fuel, airline passenger tickets, and “bunker fuel,” the heavy diesel fuel used by maritime shippers. The report states:

      Revenues generated from taxes on international aviation and shipping: this would either involve some levy on maritime bunker/aviation jet fuels for international voyages or a separate emissions trading scheme for these activities, or a levy on passenger tickets of international flights;

      Revenues from carbon taxes: this is based on a tax on carbon emissions in developed countries raised on a per-ton-emitted basis;

      But in the current economic recession, and with a new U.S. Congress recently chastened by voters angry over huge deficits and wild spending, can the climate activists truly expect to win approval of any kind of carbon tax? Apparently so; it seems the tax on “bunker fuel” is one of the most popular proposals, perhaps because it affects the 90 percent of world trade that moves via maritime shipping and could raise hundreds of billions of dollars. However, consumers — who ultimately would pay the tax passed along by shippers — would be less likely to revolt against this kind of indirect tax spread invisibly over virtually everything they consume, as opposed to an income tax hike or an additional sales tax at the supermarket or gas pump.


    • Richard C (NZ) on 01/10/2011 at 5:25 pm said:

      Fuel levy best way to sink shipping emissions, say green groups

      WWF and Oxfam claim tax of $25 per tonne would generate over $10bn a year to help poorer nations deal with climate change

      Adding a $25 tax to each tonne of shipping fuel is the simplest way to cut emissions in the sector and help developing countries finance programmes combating climate change, green groups will say today.

      A report to be published by WWF and Oxfam said that imposing the levy would tackle the 3.3 per cent of global emissions generated by shipping, emissions which are predicted to rise by between 150 and 250 per cent by 2050.


      However, David Balston, director of safety and environment at industry body the UK Chamber of Shipping, told BusinessGreen that the potential inclusion of shipping in the EU’s emissions trading scheme (EU ETS) from 2013 created the possibility that the industry would end up being over taxed.

      “We believe shipping should pay in accordance with its level of carbon emissions [and] 3.3 per cent of £100bn is £3.3bn, not $10bn, so that level seems disproportionate,” he said. “And if one bears in mind the potential inclusion in the EU ETS and other market-based measures [under the IMO] it looks dangerously like a triple tax.”


      Also see:-

      Shipping and aviation carbon pricing could finance $100bn climate fund

      EU finance ministers have proposed that a system of carbon pricing [levies] for the shipping and aviation industries could pay for the $100bn a year climate fund agreed at last year’s Cancun summit.

    • Richard C (NZ) on 10/12/2010 at 11:21 am said:

      Green fund for poor nations major focus of climate talks

      5:30 AM Friday Dec 10, 2010 – NZH

      CANCUN – Should airline passengers pay a small tax to help out? How about global money dealers? Or perhaps governments should take what they spend on subsidising petrol prices and put it towards the climate cause.

      Delegates to the United Nations climate conference hope to agree in its final days on setting up a new “green fund” to help poorer countries grapple with global warming. Then the real arguments will begin – over where the cash will come from.

      UN Secretary-General Ban Ki Moon stepped into the middle of the debate earlier this year by enlisting a high-level group of international political and financial leaders to offer advice.

      Ban yesterday said it would be “challenging but feasible” to raise US$100 billion ($133 billion) a year by 2020, as promised by richer nations at last year’s climate conference in Copenhagen.

      Besides the green fund, the meeting of parties to the 193-nation UN climate treaty may also agree on ways to make it easier for poorer nations to obtain patented green technology.

      But negotiators won’t produce a sweeping deal to succeed the relatively modest Kyoto Protocol after 2012, one that would slash greenhouse gases to curb climate change.

      The US has long refused to join Kyoto, which mandates limited emissions reductions by richer nations.

      The green fund would be considered a key success for Cancun, but many details would remain to be worked out later.

      The financing would help developing nations buy advanced technology to reduce emissions, and to adapt to climate change, such as building seawalls against rising seas.

      Behind closed doors, haggling over proposed decisions, delegates duelled over what developing nations considered an inadequate goal – the US$100 billion a year by 2020.

      The developing south views such finance not as aid but as compensation for the looming damage from two centuries of northern industrial emissions, and propose that the richer countries commit 1.5 per cent of their annual gross domestic product – today roughly US$600 billion a year.

      Northern delegations resisted such ambitious targets.

      In the Cancun talks, northern delegations leaned towards the conclusions of Ban’s advisory group as the basis for the inevitably intense debate over funding.

      The group’s final report last month said the greatest contributions should come from private investment and from “carbon pricing,” either a direct tax broadly on emissions tonnage from power plants and other industrial sources or a system of auctioning off emissions allowances that could be traded among industrial emitters.

      The UN advisers also see possible revenue sources in a tax or trading system for fuel emissions of international airliners and merchant ships, or a fee on air tickets, with a potential for US$10 billion a year.

      They also suggested a levy on foreign-exchange transactions, producing possibly another US$10 billion, and removal of government subsidies of fossil fuels, with the money redirected to a climate fund.

      – AP
      By Charles Hanley

    • Richard C (NZ) on 01/10/2011 at 5:02 pm said:

      Shipping and aviation carbon pricing could finance $100bn climate fund

      EU finance ministers have proposed that a system of carbon pricing [levies] for the shipping and aviation industries could pay for the $100bn a year climate fund agreed at last year’s Cancun summit.


      Climate commissioner Connie Hedegaard said last month that the EU would not wait much longer for International Maritime Organisation (IMO) and International Civil Aviation Organisation (ICAO) to develop voluntary mechanisms for cutting emissions.

      She added that the EU would push for shipping and aviation to be high up the agenda at the Durban climate summit in November and in any successor treaty to the Kyoto Protocol.

      Despite the ICAO’s pledge to establish a global framework for market-based mechanisms such as emissions trading by 2013, all flights to and from Europe will be brought into the EU’s emissions trading scheme from next year, pending ongoing legal challenges.

      The EU has threatened to extend the programme to cover shipping if a deal is not struck by the end of this year – a proposal that has divided the industry.

      So. If you don’t do it voluntarily, the EU will force you.

      And. Just what the UN climate doctor ordered (see previous comment).

    • Richard C (NZ) on 13/12/2010 at 8:52 am said:

      Analysis: Carbon markets to struggle after Cancun

      CANCUN, Mexico | Sun Dec 12, 2010 12:06pm EST

      (Reuters) – Global carbon markets will struggle after the deal reached at annual U.N. climate talks did little to ensure mandatory emissions caps would be extended next year.

      The modest deal forged after two weeks of talks in Cancun commits rich countries, from 2020, to finance $100 billion a year in climate aid for poor countries. It also sets a target to limit the rise in average world temperatures to less than 2 degrees Celsius (3.6 degrees Fahrenheit).

      But it delayed the extremely difficult task of extending the 1997 Kyoto Protocol until next year’s talks in South Africa. In Cancun, Japan, Canada and Russia said they would not support a second phase of Kyoto if it did not include caps on the United States and rapidly developing countries like China.

      Kyoto, which expires in 2012, obliges all developed countries — except the United States, which never ratified it — to cut emissions blamed for warming the planet or face penalties.

      It was the pact’s binding emissions cuts, and expectations of tougher ones after a first phase, that gave birth to the European Union’s Emissions Trading Scheme, the world’s only carbon market that operates at national levels, as a way for businesses to meet mandatory caps.

      “The outcome of Cancun does not change the fact that most of the important work of cutting emissions will be driven outside the U.N. process,” said Michael Levi of the Council on Foreign Relations in New York.

      But after a bleak year, carbon markets will not do that work either.

      Banks let go many emissions traders even before the U.S. climate bill failed in July. Canada’s Senate failed to pass a climate bill, Australia postponed legislation and Japan is struggling to set up a cap-and-trade market.

      The Cancun agreement locked into the U.N. process a pledge last year by China to reduce its emissions intensity, or amount of carbon released for every unit of economic output. But it paved no path for the world’s largest coal producer and greenhouse gas emitter to embark on mandatory emissions targets.

      Cancun also did little to cheer bankers and brokers trying to build a global carbon market who had hoped the world would now be on its way to a trillion dollars or more per year of emissions transactions.

      If carbon markets remain weak and fragmented, they will do little to tackle global warming because they fail to push the price on carbon high enough to force emitters to make billion-dollar clean energy investments vast wind and solar farms, nuclear energy and carbon capture and sequestration (CCS).


      The U.N. deal provided some bright spots for carbon markets, like taking steps to reform the Clean Development Mechanism, in which polluters in the EU market pay for emissions-cutting projects, known as offsets, in developing countries to get credit at home.

      The deal also allowed CCS to be counted as an offset, which could lead to advances in the technology where carbon is siphoned from coal plants and factories and buried underground in hopes it will never reach the atmosphere.

      And advances were made in reducing emissions from forest degradation and deforestation, or REDD, an U.N. offset program.

    • Richard C (NZ) on 19/12/2010 at 11:37 am said:

      Carbon Trading Schemes in Trouble and Ignored

      By Jack Dini Friday, December 17, 2010

      Why are carbon trading issues that have gone awry ignored by the media? Two examples: 1-scam artists from around the world, capitalizing on lax regulations at the Danish emissions trading registry have made off with an estimated $7-billion over the last two years, and 2- the Chicago Climate Exchange (CCX) announced that it will be ending carbon trading this year. Both of these have been underreported (ignored?) by most media.


      Denmark isn’t the only place where carbon folks have been in bed with organized crime. A probe in Germany, where the total damage is estimated at 80 million Euros followed investigations in Britain, France, Spain, Norway and the Netherlands over carbon fraud over the past year.

    • Richard C (NZ) on 01/03/2011 at 9:06 am said:

      Carbon Taxes Force IT Changes

      Data centers and IT operations across Australia and New Zealand will soon need to face a heavy overhaul and upgrade, in order to address the possibility of a new carbon tax.

      At the Kickstart Forum held over the weekend in Queensland, representatives of IT companies in Australia and New Zealand indicated that the possibility of carbon taxes is causing a reevaluation of the operation and planning of datacenter.

    • Andy on 01/03/2011 at 10:40 am said:

      Easy solution: offshore it.

      Datacentres will move to countries with cheaper energy and no carbon taxes. It’s just the cost of hosting the centre offshore versus the bandwidth of the long distance internet connection.

    • Richard C (NZ) on 11/09/2011 at 2:15 pm said:

      What Bryan Walker at Hot Topic wants for NZ exporters:-
      Breaking the deadlock on shipping emissions

      by Bryan Walker on September 11, 2011


      WWF and Oxfam have issued a briefing which explores how a proposed deal can overcome the impasse, drive emissions down and deliver much needed funds to the Green Climate Fund established at Cancun to assist developing countries in climate change mitigation and adaptation projects. The proposal they support is for a fuel levy or auction of emissions allowances. At $25 per tonne of carbon dioxide this could raise around $25bn per year, of which at least $10bn should be directed to the Green Climate Fund.

      Such a carbon price would only increase the costs of global trade by 0.2 per cent – equivalent to just $2 for every $1000 traded. Developing countries could be compensated for the effects on their economies, and it is calculated that up to 40 percent of the $25bn raised would be needed for this purpose. South Africa, for example, whose import costs are projected to increase by 0.14 per cent as a result, would receive compensation of approximately $200 million per year while Bangladesh, whose import costs are projected to increase by 0.19 per cent, would receive $40 million per year, in addition to any revenues received from the Green Climate Fund. The briefing considers that revenues provided to developing countries as rebates should be spent on building the resilience of their most vulnerable citizens, especially women, against the much larger rises and high volatility of commodity prices they are facing.


      Champions for such a deal are emerging. As G20 chair, France has made innovative financing for climate change and development a high priority for the summit in Cannes in November 2011 on the eve of the Durban COP. France and Germany both called this July for revenues from a carbon price for ships to be used to compensate developing countries and as climate finance…………


      Barry Coates, Executive Director of Oxfam New Zealand, urges New Zealand government support for the proposed scheme……..

      Isn’t it wonderful to have WWF and Oxfam tacking the lead on behalf of the rest of us and useful idiots standing by ready to help them in any way possible.

      What a leftist dream come true (if it does). Clip the tickets ($2 for every $1000 traded) and all that wonderful free money ($25bn per year) spills into their hands to be allocated at their whim. Being perceived to be the provider of it just makes it all the more salivating I’m sure.

    • Richard C (NZ) on 05/03/2012 at 10:07 am said:

      IMO set to collide with EU over vessel CO2 emissions

      The International Maritime Organization (IMO) is making little headway on market-based measures to curb carbon dioxide emissions from international shipping, putting it on a policy collision course with the European Union, observers said.


  2. THREAD on 17/10/2010 at 7:34 am said:

    Global Cooling – Economic Impacts

    • Richard C (NZ) on 31/10/2010 at 7:44 am said:


      Geologic Evidence for Prolonged Cooling Ahead and its Impacts

      Prof. Don J. Easterbrook

      Dept. of geology, Western Washington University


    • Richard C (NZ) on 31/10/2010 at 8:11 am said:

      Solar Cycle 24: Implications for the United States

      David Archibald

      International Conference on Climate Change March, 2008

      Do we live in a special time in which the laws of physics and nature are suspended? No, we do not. Can we expect relationships between the Sun’s activity and climate, that we can see in data going back several hundred years, to continue for at least another 20 years? With absolute certainty.

      In this presentation, I will demonstrate that the Sun drives climate, and use that demonstrated relationship to predict the Earth’s climate to 2030. It is a prediction that differs from most in the public domain. It is a prediction of imminent cooling.

    • Richard C (NZ) on 31/10/2010 at 8:21 am said:

      Quantifying the US Agricultural Productivity Response to Solar Cycle 24

      David Archibald 30th December, 2008

      Assuming that two thirds of the productivity increase in mid-western states from 1990 to 2004 was climatically driven, then the productivity decline in this region due to Solar Cycle 24 is expected to be of the order of 30%. The total US agricultural productivity decrease would be less than that at possibly 20%, equating to the export share of US agricultural production.

    • Richard C (NZ) on 16/12/2010 at 1:18 pm said:

      UK fears worst winter weather since 1963

      #, Wednesday 15 December 2010 19.58 GMT

      Transport secretary calls summit as Met Office predicts return of icy temperatures, further snow and transport disruption


      Businesses have also clamoured for “effective and resilient measures” to avoid further damage to the economic recovery, which took an estimated hit of £4.8bn in the late November snow, according to insurers. The company RSA warned that similar disruption in the coming freeze could nearly triple that to £13bn, compounded if the last nine days of Christmas shopping were hit.

    • Richard C (NZ) on 16/12/2010 at 4:21 pm said:

      Energy bills could double to pay for green power as ministers plan minimum carbon price

      Last updated at 1:26 AM on 16th December 2010 – MailOnline

      Energy bills are set to rocket to pay for wind turbines and wave power as the Government announces a shake-up of ­electricity prices today.

      Energy and Climate Change Secretary Chris Huhne is paving the way for a minimum price for carbon generated by coal-fired and gas-fuelled power stations.

      Energy firms will have to stump up for the cost of the carbon they use – but they are set to pass the burden on to consumers.

      Proponents of the scheme insist the carbon ‘floor price’ is meant to reflect pollution caused by fossil fuels, and will encourage investors to pour their money into ‘green’ energy instead.

      But experts warned it could lead to a doubling of energy bills, hitting the poor and elderly the hardest.

      There was a separate warning yesterday that winter energy bills are already at a record high of £630 for the average family after most suppliers hiked prices.

      Website said families have been hit by a combination of higher tariffs and plunging temperatures and face an average gas bill for heating and hot water of £509.80, with electricity at about £120.

      Mr Huhne will admit to MPs today that the up-front costs of moving to cleaner energy are high but his aides insist it will give consumers more protection from wildly fluctuating energy prices.

      But Matthew Sinclair of the TaxPayers’ Alliance said: ‘It could mean a doubling of costs. The elderly, poor and those on fixed incomes will be hit disproportionately hard by this.’

      Mr Huhne will today also introduce a ban on building new coal power stations unless they are fitted with greener technology.

    • Richard C (NZ) on 16/12/2010 at 4:37 pm said:


      Sunday December 5,2010 – Express UK

      The winter death toll is set to rise steeply as official figures show that nine elderly people died every hour because of cold-related illnesses last year. The number of deaths linked to cold over the four months of last ­winter reached nearly 28,000.

      Charities claim this country has the highest winter death rate in northern Europe, worse than colder nations such as Finland and Sweden.

      About half of the people forced to spend over 10 per cent of their income on energy bills – the official definition of fuel poverty – are aged over 60.

      But working families also face a tough time meeting the cost of keeping the central heating turned on as fuel prices continue to rise.

      Ann Robinson, director of ­consumer policy at price ­comparison service, said: “Middle-class households are now in fuel poverty.”

      ­National Energy Action estimates that 5.5 million households will have plunged into fuel poverty by early next year due to price rises.

      This is up 400,000 on the group’s last estimate and represents 21 per cent of the UK’s 26 million households.

      The last official figures, for 2008, showed there were 4.5 million fuel-poor households in the UK. On Friday, British Gas will raise prices for eight million customers. Millions more customers of Scottish & Southern Energy and ­ScottishPower have already been hit by price rises.

      Last winter 70 per cent of household were forced to cut down or ration their energy use because of cost.

    • Richard C (NZ) on 17/12/2010 at 9:21 pm said:

      £2,000,000,000 price of Scotland’s ice age

      Published Date: 17 December 2010 –

      THE big freeze could end up costing the Scottish economy £2 billion by the end of the year, analysts have warned.

      Disruption caused by severe snow and ice has already cost an estimated £424m, but with more bad weather forecast there are warnings that many businesses may not be able to cope with further losses in income.

      Overwhelmed courier companies have admitted that hundreds of thousands of presents ordered by Scots online may not arrive in time for Christmas.

      New figures yesterday showed that although retailers enjoyed a good start to the Christmas trading season in November, the widespread disruption caused by recent weather is likely to cancel it out.

      According to insurance company RSA, the Scottish economy is set to lose a further £371m in the run-up to Christmas as heavy snowfall is set to return over the weekend.

      The cost covers a range of factors, such as people being unable to make it to their place of work, retailers losing trade, local authorities carrying out repairs, accidents, and damage to properties caused by the weather.


    • Richard C (NZ) on 16/12/2010 at 4:27 pm said:

      Cold weather pushes oil price to two-year high

      03 Dec 2010 – Telegraph UK

      Oil traded at a two-year high above $90 per barrel for most of Friday, as JP Morgan predicted that the price will be $120 per barrel within two years.

      The cold weather and surging demand have sent Brent crude for January delivery to $89.44 per barrel in London. at the close on Friday.

      “Brighter sentiment on financial markets, friendly equity markets and the stronger euro have all helped to push crude oil prices up further,” said analysts at Commerzbank. “The cold weather in Europe is allowing the price gap to widen in Brent’s favour [against US prices] to almost $3.”

      Analysts say it will now be crucial to see whether the Organisation of Petroleum Exporting Countries (OPEC), the cartel in control of 40pc of the world’s oil, raises its output. The latest report from JP Morgan predicted that OPEC will hold out for $100 before increasing production

  3. Mike Jowsey on 21/10/2010 at 3:00 pm said:

    Speech by President of Czech Republic : Climate Control or Freedom?

    “The current debate is a public policy debate with enormous implications.[3] It is no longer about climate. It is about the government, the politicians, their scribes and the lobbyists who want to get more decision making and power for themselves. It seems to me that the widespread acceptance of the global warming dogma has become one of the main, most costly and most undemocratic public policy mistakes in generations. The previous one was communism.”

    (Have also posted this under Europe & Economics)

    • Richard C (NZ) on 22/10/2010 at 1:28 pm said:

      Of the various forms of transport examined by the researchers, shipping is the other one most markedly affected by short-term climate impacts. Here, however, everything is in reverse because the major short-term effect of shipping is sulfate aerosol pollution. While they remain in the air, these aerosol particles bounce sunlight away from the earth and therefore cause cooling rather than warming. The extent of this effect is amazing: if I’m understanding the numbers correctly, over a five-year time frame the world’s ships cause enough cooling to offset the total warming caused by every car, plane and bus combined.

      Even over a 20-year time frame, shipping pollution still contributes an overall cooling effect – as do electric trains, due to the aerosol pollution kicked out from coal-fired power stations. This throws up a tricky issue for policy makers and industry. If we clean up some kinds of air pollution for the benefit of environmental and human health, then we stand to significantly accelerate global warming in the near-term.

    • THREAD on 22/10/2010 at 1:29 pm said:

      Even over a 20-year time frame, shipping pollution still contributes an overall cooling effect – as do electric trains, due to the aerosol pollution kicked out from coal-fired power stations.

    • Richard C (NZ) on 22/10/2010 at 1:30 pm said:


    • THREAD on 22/10/2010 at 1:30 pm said:

      Even over a 20-year time frame, shipping pollution still contributes an overall cooling effect – as do electric trains, due to the aerosol pollution kicked out from coal-fired power stations.

  4. THREAD on 23/10/2010 at 7:14 pm said:

    First carbon victim is the truth – smh

    See “Australia”

    “Cutting through the climate change rhetoric has been Elaine Prior, the senior environment, social and governance analyst at Citigroup.

    Last week, in the wake of a Greenpeace report on lending to the coal industry in Australia (covered previously here), Prior and her colleagues tried to quantify the exposure of our big four banks if a price on carbon were to wipe out the value of their loans to coal-fired power stations.

    This is not far-fetched. The banks are definitely worried – especially in the Latrobe Valley of Victoria, where the first plant shutdowns are expected.

    Bank shareholders are worried too. ”Investors, including super funds, have expressed concern about bank exposures to coal-fired power,” Prior says, ”more than about the banks’ internal carbon footprint.””

  5. THREAD on 23/10/2010 at 7:38 pm said:

    As one drought ends, hope dries up in west

    See “Australia”

    • Richard C (NZ) on 25/10/2010 at 6:01 pm said:

      Amazing to me that CSIRO-BoM publish these reports via CAWCR Research Letters (Rainfall-Drought specific in bold):-

      Evaluation of low latitude cloud properties in ACCESS and HadGEM AMIP simulations, C. Franklin and M. Dix

      Real-time seasonal SST predictions for the Great Barrier Reef during the summer of 2009/2010, C. Spillman, D. Hudson and O. Alves

      A discussion on aspects of the seasonality of the rainfall decline in South-Eastern Australia
      , B. Timbal

      Evaluation of ACCESS-A Clouds and Convection using Near Real-Time CloudSat-CALIPSO Observations, A. Protat, L. Rikus, S. Young, J. Le Marshall, P. May, and M. Whimpey

      Available here – [PDF] from

      Then make this disclamer:

      CSIRO and the Bureau of Meteorology advise that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CSIRO and the Bureau of Meteorology (including each of its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it.

    • THREAD on 25/10/2010 at 8:28 pm said:

      Beware of false phrophets in a scientific guise – The Australian

      THE angst in Murray-Darling Basin communities about proposed water regime changes belies Australian farmers’ record in adopting research.

    • Richard C (NZ) on 25/10/2010 at 8:53 pm said:

      Re: “As one drought ends, hope dries up in west “

      Please go to the “Australia” thread to discuss the Economic aspect of the WA drought

      That will leave this thread for Research – Legislation – Economic Impact discussion in regard to the CSIRO-BoM drought-rainfall reports.

    • THREAD on 26/10/2010 at 1:00 pm said:

      Climate model abuse

      Roger Pielke Sr. reviews another very important new paper showing the abuse of models.

      In the opinion of the editor Kundzewicz (who has served prominently on the IPCC), climate models were only designed to provide a broad assessment of the response of the global climate system to greenhouse gas (GHG) forcings, and to serve as the basis for devising a set of GHG emissions policies. They were not designed for regional adaptation studies.

      To expect more from these models is simply unrealistic, at least for direct application to regional water management problems. The Anagnostopoulos et al conclusions negate the value of spending so much money on regional climate predictions decades into the future, for example on the South Eastern Australian Climate Initiative and the Queensland Climate Change Centre of Excellence.

    • Richard C (NZ) on 05/12/2010 at 12:25 am said:

      Rain swamps rural recovery

      # From: The Australian
      # December 04, 2010 12:00AM

      The big wet along Australia’s eastern and southern agricultural belts is devastating the current winter grain harvest, with rain delaying harvesting and turning prime food-quality wheat worth $300 a tonne into $170-a-tonne wheat suitable only for feed.

      There are projections that NSW and Victoria could sustain losses to the value of wheat, barley and canola crops of more than $1bn. In the nation’s west, the continuing drought is expected to slash $3bn off farm and farm industry incomes.

      The La Nina rainfall pattern is also causing havoc for the coal industry, with the owners of one Queensland mine warning severe weather could put further upward pressure on coal

  6. THREAD on 25/10/2010 at 4:50 pm said:

    Errors in global precipitation measurement – Economic Impacts

  7. THREAD on 26/10/2010 at 8:50 am said:

    Numerical Models, Integrated Circuits and Global Warming Theory

    The practical experience of numerical modeling in allied fields such as semiconductor process modeling should cause us to question the claimed accuracy for Global Climate Models. The UN’s distortion of historical climate data should further undermine our faith in climate models because such models can only be “tested” against accurate historical data.

    In my view, we should adopt the private sector’s practice of placing extremely limited reliance on numerical models for major investment decisions in the absence of confirming test data, that is, climate data which can be easily collected just by waiting.

    See also Climate Science “Complexity Theory”

  8. THREAD on 26/10/2010 at 12:02 pm said:

    MIT Warmist Throws in the Towel!

    ‘Global warming not worth the fight; ‘Costs of mitigating climate exceed benefits’ — ‘There is little point in surrendering our national economy to green adventures’

  9. THREAD on 26/10/2010 at 2:03 pm said:

    Climate Activists learn their ‘solutions’ are absurd

    Bjørn Lomborg, Sunday, October 24, 2010

    Although some activists still rely on scare tactics – witness the launch of an advertisement depicting the bombing of anybody who is hesitant to embrace carbon cuts – many activists now spend more time highlighting the “benefits” of their policy prescription. They no longer dwell on impending climate doom, but on the economic windfall that will result from embracing the “green” economy.

    You can find examples all over the world, but one of the best is in my home country, Denmark, where a government-appointed committee of academics recently presented their suggestions for how the country could go it alone and become “fossil fuel-free” in 40 years. The goal is breathtaking: more than 80% of Denmark’s energy supply comes from fossil fuels, which are dramatically cheaper and more reliable than any green energy source.

  10. THREAD on 26/10/2010 at 6:43 pm said:

    The New Zealand Emissions Trading Scheme

    See – ETS and carbon taxes

    • THREAD on 26/10/2010 at 8:18 pm said:

      NZ ETS Economic Research

    • THREAD on 26/10/2010 at 8:34 pm said:

      New Zealand’s Emissions Trading Scheme

      Nan Jiang, Basil Sharp* and Mingyue Sheng

      Department of Economics, The University of Auckland, New Zealand

      1. Introduction
      The schematic framework of climate change used by the Intergovernmental Panel of Climate Change (IPCC) has the following four components: climate process, climate change, impacts and vulnerability, and socio-economic development (IPCC, 2007). Beginning with climate process, two undisputed facts are evident.

      First, the role that greenhouse gases (GHG) play in trapping energy and making the atmosphere warmer is not disputed.

      Second, evidence shows that the atmospheric concentration of many GHG has increased markedly as a result of human activity. Global GHG emissions increased by 70% over 1970-2004 and carbon dioxide (CO2) is the most important GHG and accounted for around 77% of global GHG emissions in 2004 (IPCC, 2007). Other GHG include methane and nitrous oxide. To account for differences in their warming potential gases are expressed through a common metric based on CO2 viz. carbon dioxide equivalent (CO2-e). For example, methane – which is of particular relevance to New Zealand (NZ) – has a warming potential 21 times that of CO2.

      Beyond these two facts uncertainty arises. Warming of the climate system is evident from observations on increases in global air and ocean temperatures, and rising global average sea level (IPCC, 2007). One uncertainty is associated with the scientific challenge of identifying, and controlling for, natural vis-à-vis anthropogenic drivers of climate change. While the likely consequences of global warming are becoming more clear the frequency, and changes in the spatial patterns, of adverse climate events is uncertain. For example, extreme weather events, such as heat waves, are likely to become more frequent and more intense (IPCC, 2007). The degree of uncertainty further increases as climate change is mapped into impacts on ecosystems, food production, health, coastal settlements, water, and regions. In the case of New Zealand, the Ministry for the Environment reports that it is most likely that: sea level will rise by 30-50cm by 2010, leading to increased coastal erosion, coastal flooding, and salt water intrusion; average temperature is expected to increase by 1o C by 2030; less rain will fall on the east coast resulting in an increase in demand for water; and, westerly winds will become more prevalent (Ministry for the Environment, 2007). The main feature of the Kyoto Protocol adopted in 1997 is that it set binding targets for 37 industrialised countries and the European Union (EU) for reducing GHG. While instrument choice is a matter for sovereign governments to decide the Protocol does offer three market-based measures: emissions trading, clean development mechanisms (CDM), and joint implementation (JI) projects. Country-level emissions are monitored and recorded, emission reductions achieved through CDM and JI projects are verified, and an international transaction log tracks trades that occur. New Zealand ratified the Kyoto Protocol in 2002 committing it to reducing average net emissions of GHG over the first commitment period (CP1) 2008-2012 to 1990 levels or to take responsibility for the difference. As at October 2008 New Zealand’s obligation was $NZ 593 million (Treasury, 2008).

    • THREAD on 26/10/2010 at 8:55 pm said:

      Economic modelling of New Zealand climate change policy

      Report to Ministry for the Environment

      20 May 2009

      Executive summary
      Objectives of report

      This report examines the macroeconomic effects of policy options for climate change mitigation in New Zealand. We examine the short run (to 2012) and long run (to 2025) impacts of a number of possible scenarios. These scenarios include an Emissions Trading Scheme (ETS) as previously proposed and various carbon tax alternatives. We consider the effects on economic welfare measures of issues such as different domestic carbon price levels, whether the rest of the world prices carbon; the free allocation of emissions permits to certain trade-exposed, emissions-intensive sectors; and technological change.

      Modelling approach

      We use static computable general equilibrium (CGE) modelling to assess the economic effects of climate change mitigation policies. CGE models are generally accepted as being an appropriate tool for such analysis as they track the reactions of firms, households and government to changes in policy settings by considering how resources are reallocated between sectors and factor markets.
      Due to the theoretical equivalence of cap and trade systems and carbon taxes in achieving a given level of emissions reduction, we model an ETS as a carbon tax. In practice, there are differences such as the impact of price and quantity certainty, complexity, measurement and administration costs, and ease of linkages to the international market, although we cannot accurately capture such differences in our CGE modelling framework.
      We have modelled a number of scenarios. This is necessary due to the inherent uncertainty around many of the central drivers of the domestic economic impacts of climate change mitigation policies such as:
      the world carbon price1
      abatement technology opportunities
      the role of land use changes and forestry
      the approach taken by New Zealand’s trading partners.

    • Richard C (NZ) on 26/10/2010 at 8:57 pm said:

      NZ Emissions Trading Scheme Economic Model – Google Search

    • Richard C (NZ) on 26/10/2010 at 9:02 pm said:

      Reports on the Emissions Trading Scheme

      Climate change information, New Zealand.

    • Richard C (NZ) on 19/12/2010 at 4:00 pm said:

      Green taxes: a brief overview

      Parliamentary support, Research papers

      Andrew Morrison
      Economist, Parliamentary Library
      February 1996

      Executive Summary

      • Green taxes are one of a variety of policy measures designed to control activities which affect the environment.

      • They consist of charges on pollution or on whatever causes the pollution, paid for by producers and/or consumers.

      • These charges act as an incentive on producers and consumers to reduce their dependence on the taxed item.

      • Other environmental policy measures include regulatory instruments, suasive instruments and economic instruments besides green taxes.

      • These policy measures can be evaluated in terms of their environmental effectiveness, economic efficiency, equity and acceptability.

      • Most economists believe that green taxes and other economic instruments generally achieve environmental objectives more cost-effectively than regulatory instruments.

      • However, exceptions exist, and detailed study is required to determine the optimal policy for any specific environmental problem.

      • Furthermore, empirical evidence is inconclusive. This is the result of limited data and the fact that most green taxes are secondary parts of wider regulatory structures and have charges set too low to have any marked effects on incentives.

      • Green taxes and other economic instruments have been the subject of considerable political and analytical interest over the last few years, and work is being produced which should be of more practical use to policy-makers.

    • Richard C (NZ) on 21/12/2010 at 2:10 pm said:

      Free Allocation in the New Zealand Emissions Trading Scheme A Critical Analysis

      Christina Hood

      Policy Quarterly – Volume 6, Issue 2 – February 2010

      In November 2009 the government passed significant amendments to New Zealand’s emissions trading scheme (ETS), barely two months after the legislation was introduced. Submitters were given two weeks to make written submissions, and some were asked to appear for oral submissions with only a few hours notice. Very little economic analysis of the legislation was released by the government at the time or has been since.


      The value of free allocation
      Under the 2008 legislation, free allocation would have phased out quickly, leaving the government with surplus units after 2020. These could have been sold to fund tax changes, debt reduction or climate programmes. With the 2009 amendments, the government has instead chosen to allocate virtually all NZUs for free to industry and agriculture.

      The forgone revenue to the government resulting from the change has been estimated by the Treasury to be $110 billion to 2050, assuming a modest emissions price of NZ$50 per tonne (Treasury, 2009). With a more plausible (IPCC, 2007; OECD, 2009; Australian Treasury, 2008) emissions price rising to NZ$100 by 2050, the cost to the government approaches $200 billion.

      Christina Hood is an energy and climate change policy analyst. She worked as a policy adviser to the minister for energy and climate change issues during 2002–2005, and is the co-author (with Colin James) of Making Energy Work: a sustainable energy future for New Zealand (Institute of Policy Studies, 2007). She won the Prince of Wales Prize for the best science student at the University of Otago in 1993 and holds a PhD in physics from the California Institute of Technology.

    • THREAD on 28/10/2010 at 9:49 am said:

      New Zealand ETS Fuel Levy – Google Search

    • THREAD on 28/10/2010 at 10:06 am said:

      Pacifica Shipping

      Emissions Trading Scheme (ETS) and Levy

      From 1 July, 2010, Pacifica Shipping added an ETS Levy to its freight rates to cover the cost of the Emissions Trading Scheme (ETS) imposed on domestic transport operators. It is important to note the Levy is applied in accordance with New Zealand statutory provisions of the ETS

      Using the capped $25 rate for example, Pacifica’s obligations would be calculated as follows:

      Fuel Type Carbon Credit Cost CO2 Emissions Obligation per MT
      _______________(Per MT)_________Factor__________(Less 50%)

      HFO Fuel Oil______$25.00__________3.015___________$37.69

      Pacifica has calculated its ETS Levy by multiplying actual fuel tonnage usage by the ETS obligations per tonne as above, then dividing by the number of TEUs moved.

      Currently the ETS Levy added by Pacifica is $6 per TEU (Twenty-foot Equivalent Unit), based on the $25 New Zealand unit price.

    • THREAD on 28/10/2010 at 10:11 am said:

      The Rising Costs of Driving – AA New Zealand

      Emissions Trading Scheme

      As of July 1 2010, New Zealand has joined the handful of nations that has imposed a charge for carbon emissions in its fuel costs. Although technically it is not a tax, it will effectively behave like one until 2013.

    • THREAD on 28/10/2010 at 10:35 am said:

      Introduction to the Vehicle Economy Standard – NZ MoT

      February 2009

      Why are we proposing a Vehicle Economy Standard?

      * Evidence indicates the climate is changing.
      * New Zealand’s greenhouse gas emissions are growing.
      * Transport is a significant contributor to New Zealand’s emissions footprint.
      * The New Zealand Government takes climate change and sustainability very seriously.
      * Reflected in the targets contained in the NZES and the NZEECS.
      * Reflected in the “Sustainable Transport” documaent.
      * Emissions Trading Scheme will help but…

      Evidence indicates the climate is changing: IPCC 2007.

    • Richard C (NZ) on 29/01/2011 at 6:00 pm said:

      New Zealand spot carbon price rebounds as CERs rise

      Fri Jan 28, 2011 – Reuters

      WELLINGTON Jan 28 (Reuters) – New Zealand carbon prices ended a month-long slide to trade higher this week, tracking a recovery in European carbon prices.

      Spot permits under New Zealand’s emissions trading scheme were trading at NZ$19.30 ($14.85), according to calculations by Thomson Reuters subsidiary Point Carbon, up 20 cents on a week ago.


      Forwards also rallied in line with European prices, with the March 2012 contract valued at NZ$20.60, up from NZ$19.90 a week ago.

      December CERs closed on Thursday at 11.15 euros , according to Reuters Data. The contract gained as much as 3.4 percent this week, before retreating on profit-taking.


      Brokers say there is no reason for NZUs to trade at a premium given the large volume of CERs available in the international market. So CERs are setting the tone of pricing in the New Zealand market at present.


    • Richard C (NZ) on 11/08/2012 at 8:44 pm said:

      Wind Integration – the long view (NZ)

      Consider the 2 graphs:

      Generation Expansion Model Long Run Marginal Cost – Carbon charge = 0 $/t (page 4 pdf)

      Generation Expansion Model Long Run Marginal Cost – Carbon charge = 100 $/t (page 4 pdf)
      0$ carbon charge ranking as MW increase (rough guessing from stupid colour code):-

      1 CCGT
      2 Geothermal
      3 Either – Hydro Peaking or Minor Coal or IGCC/CCS or Lignite
      4 CCGT/CCS

      5000 MW
      5 Major Coal
      6 Minor Wind, Geothermal, Hydro ROR and one of the 3rd rank

      10,000 MW
      7 Major Wind
      8 Minor Lignite, IGCC/CCS, Coal Dry Years
      9 Either – Hydro Peaking, Minor Coal, IGCC/CCS, Lignite
      10 Fast Start Gas Fired Peaker
      11 Minor Wind
      12 Major Lignite
      13 Diesel Peaker
      14 Minor one of the 3rd rank
      15 Major Hydro Pumped Storage
      100$ carbon charge ranking as MW increase (rough guessing from stupid colour code):-

      1 Minor Geothermal, Either – Hydro Peaking or Minor Coal, IGCC/CCS or Lignite, Hydro ROR

      2000 MW
      2 Major Wind, Geothermal, Either – Hydro Peaking or Minor Coal or IGCC/CCS or Lignite, Gas Peaker
      3 Either – Hydro Peaking or Minor Coal or IGCC/CCS or Lignite, Minor Wind

      25,000 MW
      4 CCGT/CCS, Major Coal, CCGT
      5 Lignite, Either – Hydro Peaking or Minor Coal or IGCC/CCS
      6 CCGT
      7 Either – Hydro Peaking or Minor Coal or IGCC/CCS or Lignite
      8 Diesel Peaker, Hydro Pumped Storage

    • Richard C (NZ) on 19/08/2012 at 2:01 pm said:

      Economics of wind development in New Zealand

      Prepared for the NZ Wind Energy Association

      Deloitte 2011


      1. Executive Summary

      The long run marginal cost (LRMC) of a particular wind energy project needs to be compared to the expected future wholesale electricity price to provide an indication of whether the project is likely to be viable. It also needs to be compared to the LRMC of competing technologies to assess the risk of wholesale prices being determined by other technologies and leaving wind investments unable to achieve an adequate return over time.

      [Note: carbon charge NOT considered except for Projects to Reduce Emissions (PRE) scheme 2003 and 2004 dealt with separately in section 2. To ascertain wind’s economic ranking, the economics of the emitter generators wrt carbon price must be considered instead to determine wind’s economic ranking]

      2. Wind development in NZ

      2.1. Operational wind farms

      Recent wind farm development in New Zealand is unusual in the global context as it has proceeded in the absence of government subsidies and tariff support mechanisms. A number of earlier developments did however receive Government support through the Projects to Reduce Emissions (PRE)3 scheme in 2003 and 2004.

      Projects to Reduce Emissions

      The table below sets out an estimate of the potential financial support the projects received based on the volume of credits allocated in the initial tenders. These figures while based on estimates and assumptions, do provide some context for the next wave of construction of wind farms which occurred in 2003 and 2004 with the construction Hau Nui II, Tararua II and Te Apiti. In 2006/2007 wind farms constructed which also received support from the PRE scheme included Te Rere Hau, White Hill and, Tararua III. It is very difficult to determine the impact the allocation of these carbon credits had on the overall LRMC of these projects as the timing and quantum of the cash flows received from the sale of credits is unknown.

      Since 2004 there has been a relatively steady increase in the level of installed capacity in New Zealand with the construction of 124 wind farms with over 440MW of capacity. Of these, 3 (186MW) received credits through the PRE scheme representing slightly under half the total wind capacity developed since that date. The remaining 9 (250MW) have been built without any form of direct subsidy or support.

      [@ $14/t, $20/t, subsidy % of capital]

      2.3. New Zealand specific issues

      Lack of long term Power Purchase Agreements by international standards

      Electricity generation and retail in New Zealand is dominated by the vertically integrated generator retailers. Historically there has been little appetite for long term electricity off take contract or power purchase agreement (PPA) which is in part due to the integrated nature of the electricity market in New Zealand. Where contracts have been written they have tended to reflect prevailing wholesale electricity prices which have been below the level required to make wind generation economic.

      In most other countries investment in wind energy is facilitated by the ability to contract for output for up to 20 years at subsidised prices.

      Emissions Trading Scheme

      After December 2012, businesses will need to surrender one NZU for every one tonne of emissions. In addition a review is being undertaken and due to be completed by the end of 2011…..The review will ….look at whether the transition measures described above should end as scheduled and the ETS scale up to a full obligation after 2012.

      In the long term, the price of CO2 equivalent emissions is expected to drive up wholesale electricity prices by influencing the long run marginal cost of generation projects which have an emissions profile. As prices increase the range of more expensive renewable generation technologies which become viable will increase

      [IMO the opposite is happening and that will continue down to 0$/t eventually i.e. complete CO2 price collapse unless there’s major international CO2 market intervention by govts such as adopting a fixed price as has AU]

      3. Key cost drivers

      3.4 Economies of scale in wind

      Capital cost

      In a more generic sense all generation projects which are able to connect to 33kV lines (such as at Te Uku, Mahinerangi and Mt Stuart) do not require the installation of a main transformer. Generation projects with an installed capacity of less than 60MW do not incur ancillary reserves charges and those without grid connections do not incur system charges. It should be noted that where a site has a greater potential these factors may contribute to the decision to constrain project size.

      [i.e. a huge advantage being embedded in a local distribution network therefore avoiding transmission costs]

      4. Modelling assumptions

      4.4 Transmission and connection

      Transmission and connection costs vary depending upon whether a project is connected to the grid system or local distribution network.

      5. Wind specific issues

      5.1 Variability of output

      Analysis of specific wind farms in New Zealand has observed that wind plants tend to earn a discount to the long term average price, this is also know as a GWAP/ TWAP factor (generation weighted average price / time weighted average price). There are a range of explanations as to why this discount exists most of which relate to the intermittence of wind generation and the fact that it is not dispatchable. When wind generation is not running higher cost plant runs and sets the marginal price. When the wind blows wind plant is dispatched and displaces this higher cost plant reducing the price which would otherwise be set. Consequently wind plant tends to dampen prices when it runs. In addition there are other factors such as site wind profiles versus daily demand profiles and seasonal variability which can influence achieved GWAP/ TWAP factors.

      5.2 Cost of reserves

      The New Zealand electricity system operator maintains reserve capacity and allocates the cost of its provision to generators. Existing wind plant generally has average yield factors in the region of 40%. These yield factors are based on the installed capacity and reflect the total production against the total installed capacity. While these factors are calculated over a year wind plants in New Zealand operate around 85% of the time16. Despite this wind operates variably requiring backup firming capacity to be available when wind plants are operating. Currently the cost of this firming capacity is not charged directly to the operators of wind plant. The cost of providing this capacity is generally carried by the operators of controllable generation plant who may be able to use this ability to capture prices greater than the TWAP.

      The cost of this firming capacity has not been included in our LRMC analysis but it is clearly an overall cost to the market. Various studies have been carried out on the cost of this firming capacity which have estimated the current cost as being in the region of $2/MWh. The cost of firming capacity is expected to rise if wind plant grows to become a larger proportion of the overall generation capacity. As these costs grow there may be increasing pressure to tie them back more directly to the wind, or other non firm plant , which creates the need for them which is a risk which needs to be considered by investors in wind plant.

      5.3 Hydro firming

      The use of hydro plant to provide firm support capacity for wind has been considered in a number of investment cases. This has primarily revolved around the ability for hydro plant to firm wind but has also taken into consideration the fact that wind plant operation reduces the demand on hydro plant and has the potential to save water. This is discussed in more detail in the portfolio benefits in the following section.

      6. Investment criteria

      6.2 View of wholesale price

      Wind project investors view of the future wholesale price of electricity is probably the single most important factor in making an investment decision in wind or any other generation technology. The view also has to be taken over an extended period of up to 25 years however there is no observable forward market price beyond two to three years and the market within this limited timeframe is very thinly traded.

      A sufficiently aggressive view on future prices will justify virtually any investment however investors need to bear in mind that the higher the assumed price the greater the range of alternative technologies or projects which will be feasible at a lower price. The major risk to investors is that alternative competing technologies are brought into the market which can provide an adequate return to investors at a lower price and consequently the wholesale price never rises to the anticipated level leaving wind investors with stranded assets or facing substantial write downs in the value of wind assets already built. Wind assets have a low short run marginal cost (SMRC), i.e. no fuel or start-up costs and hence the likelihood of stranding, once built, is lower, however investment returns can still be below expectations. It is worth noting that alternative technologies also face varying risks for example carbon and fuel costs which can result in low actual returns when compared to expectations.

      [Carbon cost (higher or lower) is both a threat and an opportunity in an emitters SWOT analysis (strengths, weaknesses, opportunities and threats)]

    • Richard C (NZ) on 19/08/2012 at 3:33 pm said:

      7. Economics of wind projects in NZ

      7.4 Raw LRMC for actual projects in NZ

      The results of the analysis based on this modelling reveals a range of LRMC between $78 and $105 per MWh for the representative projects.known for individual projects.

      7.5 LRMC adjusted for identifiable investment case factors

      [Adjusted range of LRMC between $82 and $107 per MWh est from graph]

      The adjustments included in the LRMC figures presented in this section include adjustments for:

      Avoided Transmission Revenue:

      Where wind farms are partially or fully embedded into the local distribution network the owner may receive revenue from the relevant lines companies as the embedded generator reduces the level of Transpower charges paid by the line company by helping to reduce the peak demand levels. More recently we understand avoided transmission revenue has increased significantly as a result of a change in Transpower’s charging methodology. After 2007 Transpower began calculating transmission charges based on regional peaks rather than individual GXP peaks, and this has resulted in a step change in avoided transmission revenue.

      GWAP / TWAP:

      Generation Weighted Average Price / Time Weighted Average Price or peaking factor relates to a plant’s ability to capture greater than average wholesale prices and result from variability in generation volumes over time and wholesale price seasonality. This is discussed in section 5.1. Infratil recently released its own view of long term outlook for the New Zealand electricity market which outlines a view consistent with other market commentators views, including our own, that GWAP/TWAP is expected to fall to 90% or lower on strongly correlated sites 18. We note that some investment cases already assume these discounts exist. Ultimately any decrease from a GWAP/TWAP ratio of 100% will result in a higher LRMC as the project is effectively receiving a discount to the average electricity price. It is difficult to determine the impact on a specific project basis and as a result for illustrative purposes we include a GWAP/TWAP factor of 95% and show the impact above the adjusted LRMC. The LRMC is highly sensitive to changes in GWAP/TWAP and this change alone can more than offset gains from other adjustments.

      Carbon credits received from PRE scheme:

      As discussed in section 2.1 a number of the earlier constructed wind plants received carbon credits through the PRE scheme. We have adjusted the capital cost to reduce the upfront cost by the amount of potential sales proceeds (based on a $20 realised price). While there is more accurately a timing issue as the credits are earned over time, we believe the conservative price assumption for the Joint Initiative (JI) credits offsets this timing issue. As this adjustment is non-recurring for future projects we have calculated the impact separately and estimate the impact on LRMC of schemes awarded PRE credits to be between $4 and $8 per MWh.

      Ancillary services:

      The system operator typically contracts for ancillary services; these tend to be allocated to projects within an owner’s portfolio after payment from the system owner. These major services are:

      • Instantaneous Reserve. Instantaneous reserve or “spinning” reserve is necessary for the electricity system to provide immediate replacement generation in the event of a sudden unexpected shutdown of a generation unit. Instantaneous reserve costs are net of instantaneous reserve revenue received (if any) by offering reserve generation capacity.

      • Transmission Event/Frequency Keeping (less rebate). Transmission event charges are penalties paid by plant for sudden unexpected shutdown of a generation unit. Transmission event charges included in the valuation are net of Transpower rebates (relating to transmission events caused by other generators).

    • Richard C (NZ) on 19/08/2012 at 5:17 pm said:

      “The current electricity market arrangements in New Zealand require wind generators to offer their output at a price of $0 or $0.01 per MWh. This effectively results in wind generation being dispatched ahead of most other forms of generation, such that generation plant providing reactive support is displaced by minimum capability wind generation plant”.

      From Electricity Authority WGIP page 21 pdf:-

      ‘Effect of wind generation on small disturbance voltage stability’

      INVESTIGATION 6,2232192/24345_wgip-investigation-6.pdf

      The 9 part study of which the above link is part 6 was to identify wider power system and electricity market implications of additional wind generation and how these can be best resolved to enable the development of wind generation on a “level playing field” with other generation sources.

      I wonder what the resolution of the above situation (wind dispatch priority over “most other forms of generation”) was (or will be) from the Electricity Authority’s ‘Options analysis’? Link to that report here:-

    • Richard C (NZ) on 19/08/2012 at 9:54 pm said:

      Firming capacity wrt the WGIP Objectives:-

      “Rules and related arrangements that neither penalise nor favour wind generation, relative to its true system costs & benefits”

      * Introduction (Peter Harris) (71 KB)

      Deloitte 2012 report ‘Economics of wind development in New Zealand’ states

      The cost of providing this [firming] capacity is generally carried by the operators of controllable generation plant who may be able to use this ability to capture prices greater than the TWAP.

      Various studies have been carried out on the cost of this firming capacity which have estimated the current cost as being in the region of $2/MWh.

      Wiki tells us that In the 2011 calendar year, wind power produced 1,930,000 MWh of electricity so using that year, the wind sector avoids firming costs of $3.86m pa and $386m over 10 years.

      But (from Deloitte 2012):-

      “The cost of firming capacity is expected to rise if wind plant grows to become a larger proportion of the overall generation capacity. As these costs grow there may be increasing pressure to tie them back more directly to the wind, or other non firm plant”

    • Richard C (NZ) on 19/08/2012 at 11:19 pm said:

      Introducing the Electricity Demand and Generation Scenarios (EDGS)

      Discussion paper July 2012 PDF Document 639kb

      Proposed base capital cost assumptions for the EDGS 2012 Excel spreadsheet 136kb

      Scenario design rationale

      53. By focusing on the mix of renewable technologies (particularly wind and geothermal) and the quantity of thermal generation, the four proposed EDGS scenarios reflect the Ministry’s current understanding about technology costs and trade‐offs.

      54. Last year, in preparation for the EDGS, the Ministry commissioned Parsons Brinckerhoff (PB) to update the technical and capital cost assumptions for use in the Generation Expansion Model (GEM). The final report is published on the Ministry’s website at:

      55. Figure 3 shows the Long Run Marginal Cost (LRMC) of new generation projects using the PB report and the Energy Outlook 2011 Reference Scenario assumptions. The LRMC is a common measure used to compare the relative costs of new generation options.

      56. While there is a high level of uncertainty about the relative costs of each technology, Figure 3 indicates that geothermal may be the cheapest new generation option. The quantity of baseload thermal generation will be heavily influenced by gas resource availability and the price of carbon emissions. If there is sufficient affordable gas available, new gas combined cycle turbines (CCGTs) are likely to be built.

      57. The carbon price will also have a big impact on all existing and potential new thermal generation, particularly coal. Although the coal price is important and will be carefully considered, the carbon price will be used by the Ministry as the primary driver for coal investment, since a high carbon price will make new coal investment uneconomic.

      58. The Ministry is currently unaware of any generator proposals to build new coal fired electricity‐only plants in New Zealand; however there is technically a very large fuel resource available. New coal generation will be included in the assumption sets; however, it is unlikely to be built in scenarios with mid–high carbon prices (as shown in Figure 3). Other generation options such as hydro and cogeneration will also be represented in the assumption sets for all

      59. Table 2 summarises the potential new generation capacity (MW) by project stage for each of the dominant technologies currently being proposed by generators (excluding gas and diesel peakers). It is based on the PB report, with some revisions as new information has become available.

      60. Table 2 shows there is a very large quantity of wind projects already fully consented compared with only a handful of geothermal proposals. Nearly two‐thirds of the around 1,600 MW of the geothermal resource available (and included on the previous LRMC chart) are generic plants that have not been publically proposed by generators. As well as this, many of these resources are greenfield or previously undeveloped resources.

      61. If geothermal resources prove to be plentiful (and cheap) then geothermal energy could dominate future baseload build. On the other hand, if the capital cost of wind technology falls (as some commentators expect) and geothermal resources are limited, then wind generation will be more prominent.

      62. While hydro is likely to always remain New Zealand’s dominant source of electricity generation, Figure 3 and Table 2 show it is not likely to dominate new generation development in the short to medium term. Large hydro developments are particularly difficult to consent and recent cost estimates put them as being more expensive than other generation options.
      Also see MED Technical Papers:-

    • Richard C (NZ) on 21/08/2012 at 3:14 pm said:

      New Zealand’s Energy Outlook

      Download the documents

      * Energy Outlook 2011 [902 KB PDF]
      * Energy Outlook 2011 Technical Guide [985 KB PDF]
      * Electricity generation and build [614 KB XLS]
      * Emissions [1.1 MB XLS]
      * Energy prices [399 KB XLS]
      * Energy supply and demand [1.2 MB XLS]

      From ‘Energy Outlook 2011’ pg 11:-

      Emissions Price Sensitivity Analysis

      The Reference Scenario assumes an emissions price of $25 per tonne of carbon dioxide equivalent (CO2-e) emitted from 2013. Two alternative sensitivities are considered, a no emissions price sensitivity case and a sensitivity case where the emission price rises to reach $100 per tonne by 2020 and remains at that level out to 2030.

      [Reference price is lower than the $50 per tonne assumed in Energy Outlook 2010, reflecting lower carbon prices worldwide (from pg 12)]


      >> In the high emissions price sensitivity case, wind generation increases by 80% while coal reduces by 36% relative to the Reference Scenario. The 250% (average) increase in the emissions price results in a 8% rise in the electricity price relative to the Reference Scenario.
      >> In the no emissions price sensitivity case, coal generation increases by 79% while wind falls by 25% relative to the Reference Scenario. A new 560 MW coal plant is built in 2028 and in the early 2020’s one of the Huntly units is refurbished and remains in operation until 2040 (in the Reference Scenario all the Huntly units are fully decommissioned by 2030).
      >> With no emissions price the electricity price is around 5% lower than in the Reference Scenario.

      So the ETS adds to a nominal no emissions electricity price as follows:

      $100 – no carbon charge

      $105 – $25 carbon charge ($5, 5% rise) [Reference Scenario]

      $113.40 – $100 carbon charge ($13.40, 13.4% rise)

      The ‘Electricity generation and build’ XLS spreadsheet makes it much easier to envisage what generation gets built and when using the emissions price Low/High tabs than do the LRMC graphs that are output from GEM.

      In the “Low” ($0/t) scenario, an 80 MW coal stn gets built in 2023 and a 560 MW coal stn gets built in 2028.

      In the “Ref” ($25/t) scenario, only an 80 MW coal stn gets built in 2021.

      In the “High” ($100/t) scenario, only an 80 MW coal stn gets built in 2020.

      In the “Low” (0$/t) scenario, no new wind plant gets built until 2023.

      In the “Ref” ($25/t) scenario, 284 MW of wind plant gets built before 2023.

      In the “High” ($100/t) scenario, 938 MW of wind plant gets built before 2023.

  11. THREAD on 28/10/2010 at 10:59 am said:

    New Zealand ETS Dairy Costs – Google Search

  12. THREAD on 30/10/2010 at 9:37 pm said:

    Andy says:
    October 30, 2010 at 9:09 pm

    Without the Hot Air

    Sustainable Energy – without the hot air

    Prof David J.C. MacKay

  13. Richard C (NZ) on 01/12/2010 at 7:17 pm said:

    Cancn and the new economics of climate change

    The US is out of step with the world on the science of global warming, but could be united by the economic case for tackling it, Tuesday 30 November 2010


    There are two battles over climate change. The legitimacy of climate science has been challenged in the media, but repeated reviews have found only scattered typographical errors in IPCC reports and other assessments. Last year’s theft of emails from climate scientists revealed the shocking news that leading researchers can be rude and competitive but not much else. While science-deniers remain prominent in US politics, most of the world has moved on.

    What the debate has moved on to, though, is concern about the costs of climate policies. Bjorn Lomborg, the poster child of climate scepticism, is no longer attacking the science; instead, he now claims that the damages from climate change would be small, while the costs of doing anything about it would be enormous. The new Lomborg (“Scepticism 2.0”) relies heavily on a few conservative economists, notably Richard Tol and William Nordhaus, to suggest that we can’t afford real climate solutions.

    Tol and Nordhaus are not on the fringes of their profession; they are well-known economists, publishing in peer-reviewed journals. Their work, however, reveals that economists often view climate change differently to scientists. Climate science is full of warnings about irreversible damages, which become increasingly hard to avoid as the world goes beyond 2C of warming. Indeed, the target of staying below 2C has been widely accepted outside of economics as necessary to avoid dangerous climate change.

    In economics, the first stages of warming often sound benign. Tol projects that the world will be better off as a result of the first 3C of warming; in his view, damages don’t become large until well beyond that. Nordhaus projects losses of only about 1% of GDP from 2C of warming. In either case whether 2C of warming causes net benefits, or small losses it doesn’t sound much like a threshold for dangerous changes.

    Other voices can be heard in economics. The Stern Review took a fresh look at the impacts of climate change. It concluded that business as usual could impose climate damages of 5% or more of GDP, almost all of which could be avoided by spending 1% of GDP on reducing emissions. Stern emphasised the rights of future generations (in the algebra of economics, this means a low discount rate), and the global inequality in climate impacts, which will hit poor countries first and hardest.

    Martin Weitzman, a Harvard University economist, has gone even further, showing that the inescapable uncertainty in climate science means that catastrophic economic losses cannot be ruled out. Policy should therefore be based on minimising the risk of worst-case outcomes, not on the most likely occurrences just as the purchase of fire insurance is motivated by worst-case risks, not average results.

    A new climate economics, breaking out of the bounds of the Nordhaus-Tol orthodoxy, is continuing to spread. The work of Economists for Equity and Environment, an American network of environmental economists, highlights much of the new research. Their recent studies include a review of the (quite affordable) costs of reaching an atmospheric CO2 concentration of 350ppm, and an examination of the wide variation in emissions among US states.


  14. Richard C (NZ) on 07/12/2010 at 10:00 am said:


    Sunday December 5,2010 – Express UK

    MIDDLE class families are among millions of Britons who cannot afford to heat their homes this winter, as elderly ride on buses all day to stay in the warm.

    After a week of snow and freezing temperatures a shocking picture has emerged of the bleak months ahead for 5.5 million households.

    Pensioners, who are among those most ­vulnerable to the cold, are resorting to ­extraordinary measures to keep warm.

    Many have been using their free travel ­passes to spend the day riding on buses while others are seeking refuge from the cold in libraries and shopping centres.

    Dot Gibson, spokeswoman for pressure group the National Pensioners’ Convention, said: “Now that we have one of the coldest winters, older people are going to have to make the unenviable decision whether or not to put the heating on. The Government should guarantee that they won’t cut the winter fuel allowance.”

    The death toll from the big freeze rose to seven yesterday. They included two men who were killed in a crash on the M62 in Humberside and two teenage girls who died when their car collided with a Royal Mail van in Cumbria.

    The winter death toll is set to rise steeply as official figures show that nine elderly people died every hour because of cold-related illnesses last year. The number of deaths linked to cold over the four months of last ­winter reached nearly 28,000.

    Charities claim this country has the highest winter death rate in northern Europe, worse than colder nations such as Finland and Sweden.

    About half of the people forced to spend over 10 per cent of their income on energy bills – the official definition of fuel poverty – are aged over 60.

    But working families also face a tough time meeting the cost of keeping the central heating turned on as fuel prices continue to rise.

    Ann Robinson, director of ­consumer policy at price ­comparison service, said: “Middle-class households are now in fuel poverty.”

    ­National Energy Action estimates that 5.5 million households will have plunged into fuel poverty by early next year due to price rises.

    This is up 400,000 on the group’s last estimate and represents 21 per cent of the UK’s 26 million households.

    The last official figures, for 2008, showed there were 4.5 million fuel-poor households in the UK. On Friday, British Gas will raise prices for eight million customers. Millions more customers of Scottish & Southern Energy and ­ScottishPower have already been hit by price rises.

    Last winter 70 per cent of household were forced to cut down or ration their energy use because of cost.

    Uswitch’s Ms Robinson, who advised Tony Blair’s government on energy policy, warned: “Winter price hikes will simply force even more people down this route.”

    Energy minister Greg Barker admitted last week that the system to deal with fuel poverty was “completely broken” and said he was “very worried” by the NEA figures.

    Charity Age UK estimates that nearly a third of pensioners have resorted to extreme measures to keep warm. The National Pensioners’ Convention has described the situation as “Dickensian”.

    Widow Rita Young, from Thorny, near Peterborough was struggling to stay warm last week. Mrs Young, 75, said: “I’ve worked all my life. It doesn’t feel fair.

    “People my age don’t want to put hats and scarves on in their homes, but there’s nothing we can do about it. I sit in a blanket put on a hat and sometimes go to bed at 7.30 in the evening.”

    Last week Lillian Jenkinson, 80, and William Wilson, 84, were found dead in the gardens of their homes 70 miles apart in Cumbria. Both are thought to have lain ­undetected in sub-zero temperatures for hours.

    On Thursday a driver who stopped to help a stranded motorist in the Yorkshire Dales was killed when he was struck by another vehicle.

    • Andy on 07/12/2010 at 10:10 am said:

      We should also mention that British Gas have put up their prices just before Christmas, even though wholesale gas prices have dropped.

    • Richard C (NZ) on 07/12/2010 at 11:09 am said:

      British Gas & Grinch – BGG Plc ?

    • Richard C (NZ) on 19/12/2010 at 1:25 pm said:

      Christopher Booker: Chris Huhne has a blueprint for a green, cold, dark Britain

      Saturday, December 18th 2010, 2:31 PM EST – Climate Realists

      The government’s new energy policy will lead to widespread power cuts and economic disaster,

      As much of the northern hemisphere last week froze under the snows of the fourth unusually cold winter in a row, our ministers, led by David Cameron and Chris Huhne, the Climate Change Secretary, laid out a blueprint that promises to inflict on Britain a social and economic catastrophe unique in the world. They chose this moment to announce what Mr Huhne called “a seismic shift” in Britain’s energy policy, the purpose of which, according to Mr Cameron, is to replace our “clapped-out” electricity supplies by making Britain “the greenest economy in the world”.

      The chief driving force of the policy is the EU’s requirement that, within 10 years, 30 per cent of our electricity must come from renewables, mainly through thousands more wind turbines. This would be so expensive that the Government accepts it could only be made economical by massively rigging the market against any form of electricity derived from fossil fuels, such as the coal and gas which were last week supplying more than 80 per cent of our electricity. By a complex new system of regulations, including what in effect will be a tax of £27 a ton on CO2 emissions, the Government thus hopes to make renewables “competitive” with conventional power.

      In addition, it will in effect make it impossible to replace the coal-fired power stations that will be forced to close in the next few years under an EU directive, while proposing a hidden subsidy to any new nuclear power stations. (Although, since the EU does not count carbon-free nuclear power as “renewable”, this may well fall foul of its ban on state aid.) All this, Mr Huhne assures us, might lead to a modest rise of £160 a year in the average household energy bill, but in the long run it will make electricity cheaper than if he had not intervened.

      So riddled with wishful thinking and contradictions are these proposals that one scarcely knows where to begin. For a start, even if we could hope to build enough windmills to provide, say, 25 per cent of our electricity (10 times the current proportion), this would require not the 10,000 turbines the Government talks of, but more like 25,000, costing well over £200 billion, plus another £100 billion to connect them up to the grid.

      At least the Government admits for the first time that the wind doesn’t always blow; so it proposes a Capacity Mechanism to subsidise the building of dozens of gas-fired power stations, to be kept running all the time, emitting CO2, just to provide instant back-up for when the wind drops. More than once on these recent cold, windless days, the contribution of wind to our electricity needs has been as low as 0.1 per cent – so the back-up to all those turbines will cost billions more, doing much to negate any CO2 savings from the turbines when they work. It does not take long to estimate that the capital cost of Mr Huhne’s new energy policy could well be more than £300 billion over 10 years, or £30 billion a year. Since the total wholesale cost of the electricity we used last year was only around £19 billion, this alone would be well on the way to tripling our bills by 2020.

      When Mr Cameron talks of wanting to replace our “clapped-out” power supplies, what he should have had in mind was the need to meet the terrifying shortfall due in a few years’ time when we lose those older nuclear and coal-fired power stations which currently suppply 40 per cent of our needs. In a sane world, the Government would be planning to get that infrastructure replaced as a matter of the highest national priority, at a cost of around £100 billion. Instead, it puts forward an incoherent farrago of uncosted policies which, even if they could be put into practice, would cost three times as much, paid for by all of us through our already soaring energy bills. They include no practical proposals to meet that fast-looming energy gap, without which, within five years, we face the prospect of wholesale power cuts, bringing much of Britain’s economy to a halt.

      No other country in the world has an energy policy so utterly mad and unworkable. Yet all our major political parties are equally locked into the same self-deceiving bubble of unreality. Any final hope that we might be saved from this absurdly unnecessary disaster seemed last week to vanish, even as the ice and the snow closed in.

      Source Link:

  15. Richard C (NZ) on 07/12/2010 at 6:19 pm said:

    Cold weather pushes oil price to two-year high

    03 Dec 2010 – Telegraph UK

    Oil traded at a two-year high above $90 per barrel for most of Friday, as JP Morgan predicted that the price will be $120 per barrel within two years.

    The cold weather and surging demand have sent Brent crude for January delivery to $89.44 per barrel in London. at the close on Friday.

    “Brighter sentiment on financial markets, friendly equity markets and the stronger euro have all helped to push crude oil prices up further,” said analysts at Commerzbank. “The cold weather in Europe is allowing the price gap to widen in Brent’s favour [against US prices] to almost $3.”

    Analysts say it will now be crucial to see whether the Organisation of Petroleum Exporting Countries (OPEC), the cartel in control of 40pc of the world’s oil, raises its output. The latest report from JP Morgan predicted that OPEC will hold out for $100 before increasing production.

    • Richard C (NZ) on 19/12/2010 at 2:28 pm said:

      The next oil shock?


      Parliamentary support, Research papers
      October 2010



      Oil market basics [Instructive graphics]


      Running out of low-cost oil

      Production constraints

      Geological constraints

      Infrastructure constraints

      Supply crunch/price spike

      Growing demand

      Decreasing supply buffer

      Economic implications

      New Zealand’s oil potential and domestic implications of oil shocks


      The global economy is heavily dependent on affordable oil.

      It may seem counter-intuitive that, when oil reserves and production capacity are higher than ever, the future of the oil market appears bleak. The problem is that production capacity is not expected to keep up with demand. That fact leads to severe economic consequences.

      To replace the declining production from existing oil wells and increase production, oil companies are forced to extract oil in more difficult and expensive conditions (deep-water, oil sands, lignite to liquids) from smaller, less favourable reserves. The marginal (price-setting) barrel of oil costs around US$75-$85 a barrel to produce. This will continue to rise with higher demand and exhaustion of reserves.

      Although there remain large reserves of oil which can be extracted, the world’s daily capacity to extract oil cannot keep increasing indefinitely. A point will be reached where it is not economically and physically feasible to replace the declining production from existing wells and add new production fast enough for total production capacity to increase. Projections from the IEA and other groups have this occurring, at least temporarily, as soon as 2012.

      The difference between the global capacity to produce oil and global demand is the supply buffer. When the supply buffer is large, oil prices will be low. When the supply buffer shrinks – due to demand rising faster than production capacity or production capacity falling – prices will rise as markets add in the risk that supply will not be available to meet demand at any given point in time.

      When a supply crunch forces oil prices beyond a certain point, the cost of oil forces consumers and businesses to cut other spending, inducing a recession. The recession destroys demand for oil, allowing prices to drop. Major international organisations are warning of another supply crunch as soon as 2012.

      The world may be entering an era defined by relatively short periods of economic growth terminating in oil price spikes and recession.

      New Zealand is not immune to the consequences of this situation. In fact, its dependency on bulk exports and tourism makes New Zealand very vulnerable to oil shocks.

      Clint Smith

      Research Analyst, Economics and Industry Team

      Parliamentary Library
      Copyright: © NZ Parliamentary Library, 2010

      Except for educational purposes permitted under the Copyright Act 1994, no part of this document may be reproduced or transmitted in any form or by any means…….

  16. Richard C (NZ) on 09/12/2010 at 11:57 am said:

    Cold Blast Strains Farmers

    * DECEMBER 8, 2010 – WSJ

    Early Frost Kills Crops in South, Drives Up Prices as Growers Try to Shield Produce

    An unusually early blast of cold air is cloaking the southeast, forcing farmers to toil through the night to save their livestock and crops of strawberries, tender green beans and sweet corn.

    In parts of Florida, hit Tuesday morning with a freeze not seen this early since 1937, some growers were already reporting severe frost burn and ruined plantings, reducing supply and driving up prices for winter vegetables amid the holiday season.

    Florida growers endured a freeze and difficult spell of weather in January, “but now, the timing is more unfortunate because we are gearing up to put vegetables out for peoples’ holiday meals,” said Lisa Lochridge, spokeswoman for the Florida Fruit & Vegetable Association. The association was still determining total loss on Tuesday.

    In Palm Beach County, the nation’s top producer of winter vegetables, the price of a bushel of green beans soared 62% Tuesday to between $24 and $26, compared to $14 to $16 over the weekend, said J.D. Poole, vice president of Pioneer Growers Cooperative in Belle Glade, Fla.

    Frigid air from Canada pushed into the southeast Monday, bringing snow to mountains in Tennessee and West Virginia, cancelling schools in parts of North Carolina, and ushering in temperatures 15 to 20 degrees below normal in some places. The National Weather Service issued a freeze warning through Wednesday morning for most of Florida, the southeast corner of Alabama and southern Georgia.

    While farming’s peak season is over in many regions of the country, it’s still in full swing throughout parts of the south—meaning farmers can get caught off guard by an early freeze. In Iron City, Ga., cattle farmer Yancy Trawick has erected a wall of hay in his field as a fort to protect his 75 newborn calves from the wind. “This is rough on them,” he said.

    In Loxahatchee, Fla., workers at Hundley Farms were up all night into Tuesday, running warm water between crops of sweet corn and green beans to fend off frost. Starting at 3:40 a.m., six helicopters flew at varying levels back and forth over Hundley’s fields an in attempt to push the layer of warm air down on the crops, said Tom Perryman, crop supervisor.

    Still, Tuesday morning revealed that about 30% of the crops were hurt by freeze, with delicate green beans the worse off, he said, adding, “And still have to get through tonight. I can’t remember a time when we had a freeze by Dec. 7,” he said.

    Ms. Lochridge, of the Florida Fruit & Vegetable Association, said Florida’s growers of heartier citrus fruits have so far escaped any notable freeze damage, while some growers of strawberries, tomatoes, green beans, and sweet corn were reporting the tell-tale signs of frost burn.

    In Belle Glade, fifth-generation farmer Stewart Stein said his sweet corn began “turning blackish green and slimy” right before his eyes Tuesday. As for his green beans, “the leaves will start drooping on the beans and wilting down,” he said.

    He estimates he lost 150 acres of corn and 45 acres of green beans to frost. “It’ll take the wind out of your sails, that’s for sure,” he said.

  17. Richard C (NZ) on 12/12/2010 at 8:01 pm said:

    COP16 to cut US$ 26 trillion energy costs by 2030?

    By WBRi IBNS Newswire on 07 December 2010

    Geneva (Switzerland), Dec 7 (IBNS) The sixteenth Conference of the Parties, COP16, aims to cut US$ 26 trillion energy costs by 2030, said a new World Economic Forum report on Tuesday.

    The report, developed in partnership with Accenture, was presented on Tuesday at the Green Solutions Event at COP16 in Cancun.

    ‘The Energy Efficiency: Accelerating the Agenda’ report emphasizes the urgent need for energy efficiency to be at the forefront of the global agenda.

    According to the report, energy demand is expected to increase by 40% by 2050. The estimated capital required to meet projected energy demand through to 2030 amount in cumulative terms to US$ 26 trillion.

    Of all the energy options, energy efficiency is able to provide the largest capacity for cutbacks in energy demand in the medium term. This potential can be measured in energy savings, cost savings and reduction in emissions.

    Research has identified that of the carbon abatement required, 57% could be achieved through implementation of energy efficiency measures by 2030.

    Despite commitments to energy efficiency made to date, there is a substantial gap between policy and implementation, challenging the concept of energy efficiency as “low hanging fruit”.

    ‘The Energy Efficiency: Accelerating the Agenda’ report sought the expertise from over 20 stakeholders across the public and private sectors to create a pulse check on where energy efficiency stands today and address solutions to bridge the gap.

    The report reveals reasons behind this gap range from market to institutional failures, which need to be overcome if energy efficiency is to be used to effectively meet rising energy demand, support economic development and meet the critical challenges of climate change, energy security and economic competitiveness.

    “Tapping into the largely unrealized potential of energy efficiency will be critical for us to meet growing energy demand of the 21st century without leading to water, food or social crises,” said Pawel Konzal, Head of the Oil & Gas Industry, World Economic Forum.

    The report focuses much more on the roles that the varying stakeholder groups can play rather than on identifying industry-specific recommendations in an effort to provide cross-sector market clarity and identify market accountability.

    “Energy efficiency remains a big prize, but it cannot be delivered by one set of stakeholders,” said Mark Spelman, Accenture’s Global Head of Strategy.

    “To create a step change and capture the potential of energy efficiency, we must ensure a more systematic and rigorous dialogue between the public and private sectors. The private sector can do more for its part by beginning to forge more innovative global alliances. New business models combined with new financing mechanisms to support global scale-up will demonstrate the positive business case for energy efficiency.”

    The report’s output formed an integral part of private sessions co-hosted by the World Economic Forum and the Mexican Government at Green Solutions alongside the COP16 negotiations in Cancun, with the ultimate objective to inspire concrete action across stakeholder groups throughout 2011.
    ‘The Energy Efficiency: Accelerating the Agenda’ – Report pdf

    • Richard C (NZ) on 13/12/2010 at 8:56 am said:

      Discussion at JoNova re this report
      Rereke Whaakaro:
      December 12th, 2010 at 6:39 pm

      Richard C (NZ): # 103

      I have worked with Accenture (Andersen Consulting) before. Their senior people close the deal, and in the process find out what the client wants to achieve – in most cases a laudable way of working, especially in company mergers, changes in strategic direction, et cetera.

      However, with something as contentious as climate whatever, they are just guns for hire, and will produce whatever is required to get the next engagement. They will not return anything that isn’t according to the briefing script. So the fact that they are involved detracts from the veracity of COP16, rather than enhancing it. They are there, so that people can say, “The consultant’s report details …”.

      The actual work is done by what we used to call “First Suiters”. In my day, they were armed with clipboards, now it is probably iPads. They wrote down what people told them, and that was what went onto the presentation slides, supported by incomprehensible graphs and diagrams to make it look “scientific”.

      I am very sceptical about this because they are saying that energy demand will go up by 40% by 2050 (a forty year horizon – not even Japanese industry plans that far out). They also claim that 57% of the carbon abatement required, can be achieved by energy efficiency by 2030 (a twenty year horizon with a projection of technology that hasn’t been invented yet).

      They are just making the numbers up. We don’t even know what the required carbon abatement is, or will be twenty years from now. And, “fifty-seven percent”? Why not “fifty to sixty percent”? Fifty-seven percent is a tad too precise for my liking. They are definitely making the numbers up.

      Also, improvements in efficiency has diminishing returns. Any efficiency measures that are possible today, will already be in use if they are cost justified. And, if you know of ways of making something more efficient, then patient it now, get it into production, and make a killing. Don’t wait twenty years to make a dramatic introduction and show a return on the investment.

      Worthless Weasel Words.
      Richard C (NZ):
      December 12th, 2010 at 10:04 pm

      Rere # 104

      Thanks for the response.

      I haven’t had time to look at the detail of the report and how realistic it is or not as you have done and I’m not sure yet if I will, I’m dissecting the Cancun Agreements first. I was looking at how it fits in the big picture though.

      What struck me was the thrust – “Accelerating the Agenda”

      And that it was the World Economic Forum moving it.

      Obviously there are huge opportunities for fee leverage and position building for consultants when “the Agenda” is global scale and what better way to profit than “Accelerating” it. But it is the climate-economic connection that is salient and we will be seeing more and more of in future. There will be IPCC AR5 climate-economic coupled model submissions for example.

      The economic community has not so far been a player of note in the climate change game but all that has changed with this type of report. The economic modelers would love to get some of the action that the climate modelers have been getting for years and the potential for policy influence from climate-economic coupled model output will be magnified considerably – and so will the miss-allocated resources.

      I see this (and other similar developments) as economics muscling in on the climate change action via:-

      # Energy
      # National economies
      # Modelling
      # Any other way possible

      The scope is enormous and of course the UN will be accommodating.

      Aside re your work with Accenture, I was working with a Power Board in NZ that was restructured to a Company back in the 80s. Arthur Young was engaged to facilitate the transition to the new organisation. It soon became apparent that they didn’t have a clue and that the new Company divisions did not match the anticipated environment. Sure enough, the Company had to be re-re-structured within 18 months and the CEO was “let go” not long after (went to a similar electricity transition at Newcastle).

      So the catch-cry around the corridors was:-

      “If you want to go bung – get Arthur Young”

  18. Richard C (NZ) on 16/12/2010 at 9:34 am said:

    High power prices cause business pain

    16 December 2010

    Major Energy Users Group says the Bluff aluminium smelter won’t be the only business cutting production due to high power costs


    © 2010 NZCity, NewsTalkZB

    High lake levels.

    Please explain.

    $1 million a week in lost export earnings

  19. Richard C (NZ) on 17/12/2010 at 6:02 pm said:

    Triple Crown of global cooling could pose serious threat to humanity

    * May 19th, 2010 2:31 pm ET

    * Seminole County Environmental News Examiner. Kirk Myers

    * Orlando

    “Global warming” may become one of those quaint cocktail party conversations of the past if three key climate drivers – cooling North Pacific sea surface temperatures, extremely low solar activity and increased volcanic eruptions – converge to form a “perfect storm” of plummeting temperatures that send our planet into a long-term cool-down lasting 20 or 30 years or longer.

    “There are some wild cards that are different from what we saw when we came out of the last warm PDO [Pacific Decadal Oscillation] and entered its cool phase [1947 to 1976]. Now we have a very weak solar cycle and the possibility of increased volcanic activity. Together, they would create what I call the ‘Triple Crown of Cooling,’” says Accuweather meteorologist Joe Bastardi.

    If all three climate-change ingredients come together, it would be a recipe for dangerously cold temperatures that would shorten the agricultural growing season in northern latitudes, crippling grain production in the wheat belts of the United States and Canada and triggering widespread food shortages and famine.

    Cool Pacific Decadal Oscillation

    The Pacific Decadal Oscillation refers to cyclical variations in sea surface temperatures that occur in the North Pacific Ocean. (The PDO is often described as a long-lived El Niño-like pattern.) PDO events usually persist for 20 to 30 years, alternating between warm and cool phases. During these long periods there are sometimes short-interval phase switches that can last several years.

    From 1977 to 1998, during the height of “global warming,” North America was in the midst of a warm PDO. Since then, we have experienced several short-duration PDO fluctuations between cool and warm.

    But the PDO has once again resumed its negative cool phase, and, as such, represents the first climate driver in the Triple Crown of Cooling. With the switch to a cool PDO, we’ve seen a change in the El Nino/Southern Oscillation (ENSO), which alternates between El Nino (warm phase) and La Nina (cool phase) every few years. The recent strong El Nino that began in July 2009 is now transitioning to a La Nina, a sign of cooler temperatures ahead.

    “We’re definitely headed towards La Nina conditions before summer is over, and we’re looking at a moderate to strong La Nina by fall and winter, which, as these La Ninas tend to persist in the cold PDO for two years, should bring us cooler temperatures over the next few years,” predicts Joe D’Aleo, founder of the International Climate and Environmental Change Assessment Project (ICECAP) and the first director of meteorology at the Weather Channel.

    He is not alone in his forecast. Bastardi also sees a La Nina just around the corner.

    “I’ve been saying since February that we’ll transition to La Nina by the middle of the hurricane season. I think we’re already seeing the atmosphere going into a La Nina state in advance of water temperatures. This will have interesting implications down the road. La Nina will dramatically cool off everything later this year and into next year, and it is a signal for strong hurricane activity,” Bastardi predicts.

    The difference in sea surface temperature between positive and negative PDO phases is not more than 1 to 2 degrees Celsius, but the affected area is huge. So the temperature changes can have a big impact on the climate in North America.

    In fact, as Dr. Roy Spencer points out, the warm-phase PDO lasting from 1977 to 1998 might explain most of the warming we experienced in the late 20th century.

    “This is because a change in weather circulation patterns can cause a small change in global-average cloudiness. And since clouds represent the single largest internal control on global temperatures (through their ability to reflect sunlight), a change in cloudiness associated with the PDO might explain most of the climate change we’ve seen in the last 100 years or more,” he writes.

    Declining solar activity

    Another real concern – and the second climate driver in the Triple Crown of Cooling – is the continued stretch of weak solar activity Earth is experiencing. We recently exited the longest solar minimum –12.7 years compared to the 11-year average – in 100 years. It was a historically inactive period in terms of sunspot numbers. During the minimum, which began in 2004, we have experienced 800 spotless days. A normal cycle averages 485 spotless days.

    In 2008, we experienced 265 days without a sunspot, the fourth-highest number of spotless days since continuous daily observations began in 1849. In 2009, the trend continued, with 261 spotless days, ranking it among the top five blank-sun years. Only 1878, 1901 and 1913 (the record-holder with 311 days) recorded more spotless days.

    In 2010, the sun continues to remain in a funk. There were 27 spotless days (according to Layman’s sunspot count) in April and, as of May 19, 12 days without a spot. Both months exhibited periods of inexplicably low solar activity during a time when the sun should be flexing its “solar muscle” and ramping up towards the next solar maximum.

    Why are sunspot numbers important? Very simple: there is a strong correlation between sunspot activity and global temperature. During the Dalton Minimum (1790 – 1830) and Maunder Minimum (1645 -1715), two periods with very low sunspot activity, temperatures in the Northern Hemisphere plummeted.

    During the Dalton Minimum, the abnormally cold weather destroyed crops in northern Europe, the northeastern United States and eastern Canada. Historian John D. Post called it “the last great subsistence crisis in the Western world.” The record cold intensified after the eruption of Mount Tambora in 1815, the largest volcanic eruption in more than 1,600 years (see details below).

    During the 70-year Maunder Minimum, astronomers at the time counted only a few dozen sunspots per year, thousands fewer than usual. As sunspots vanished, temperatures fell. The River Thames in London froze, sea ice was reported along the coasts of southeast England, and ice floes blocked many harbors. Agricultural production nose-dived as growing seasons became shorter, leading to lower crop yields, food shortages and famine.

    If the low levels of solar activity during the past three years continue through the current solar cycle (Solar Cycle 24), which is expected to peak in 2013, we could be facing a severe temperature decline within the next five to eight years as Earth’s climate begins to respond to the drop-off in solar activity.

    “The sun is behaving very quietly – like it did in the late 1700s during the transition from Solar Cycle 4 to Solar Cycle 5 – which was the start of the Dalton Minimum,” D’Aleo says. If the official sunspot number reaches only 40 or 50 – a low number indicating very weak solar energy levels – during the next solar maximum, we could be facing much lower global temperatures down the road.”

    Even NASA solar physicist David Hathaway has said this is “the quietest sun we’ve seen in almost a century.”

    “Since the Space Age began in the 1950s, solar activity has been generally high,” Hathaway told NASA Science News. “Five of the ten most intense solar cycles on record have occurred in the last 50 years. We’re just not used to this kind of deep calm.”

    Volcanic eruptions

    Although the eruption of Iceland’s Mount Eyjafjallajokull volcano continues to raise havoc with air travel, it remains a relatively minor event by volcanic standards. Much of its ash cloud has stayed out of the stratosphere, where it would reflect sunlight, bringing cooler temperatures to the northern hemisphere.

    Unfortunately, there is a very real chance Eyjafjallajokull’s much larger neighbor, the Katla volcano, could blow its top, creating the third-climate driver in the Triple Crown of Cooling. If Katla does erupt, it would send global temperatures into a nosedive, with a big assist from the cool PDO and a slumbering sun.

    The Katla caldera measures 42 square miles and has a magma chamber with a volume of around 2.4 cubic miles, enough to produce a Volcanic Explosivity Index (VEI) level-six eruption – an event ten times larger than Mount St. Helens.

    Katla erupts about every 70 years or so, most recently in 1918, often in tandem with neighboring Eyjafjallajokull, which is not a good sign.

    According to Bastardi, “The Katla volcano in Iceland is a game changer. If it erupts and sends plumes of ash and SO2 into the stratosphere, any cooling caused by the oceanic cycles would be strengthened and amplified.”

    Iceland’s President Olafur Grimsson says the eruption of Eyjafjallajoekull volcano is only a “small rehearsal.”

    “The time for Katla to erupt is coming close . . . I don’t say if, but I say when Katla will erupt,” Grimsson predicts. And when Katla finally erupts it will “create for a long period, extraordinary damage to modern advanced society.”

    Not a very encouraging outlook. Yet major eruptions throughout history bear witness to the deadly impact of volcanoes.

    The Tambora eruption in 1815, the largest in 1,600 years, sent the earth’s climate into a deep freeze, triggering “the year without a summer.” Columnist Art Horn, writing in the Energy Tribune, describes the impact:

    During early June of 1815, a foot of snow fell on Quebec City. In July and August, lake and river ice were observed as far south as Pennsylvania. Frost killed crops across New England with resulting famine. During the brutal winter of 1816/17, the temperature fell to -32 in New York City.”

    And Katla, with its large magma chamber, would register high on the Volcanic Explosivity Index, if it were to erupt. When it unleashed its fury in the 1700s, the volcano sent temperatures into a tailspin in North America.

    As Gary Hufford, a scientist with the Alaska Region of the National Weather Service, observes:

    “The Mississippi River froze just north of New Orleans and the East Coast, especially New England, had an extremely cold winter.

    “Katla could cause some serious weather changes. It depends on the duration of the eruption, and how high the ash gets blasted into the stratosphere.”

    Global cooling: a life-threatening event

    With the PDO now in its cool phase, solar activity the weakest in more than 100 years, and the prospect of a major climate-cooling volcanic eruption, actions to limit CO2 emissions should be shelved and preparations made for an extended period of global cooling that would pose far more danger to humankind than any real or imagined warming predicted by today’s climate models.

    Says D’Aleo: “Cold is far more threatening than the little extra warmth we experienced from 1977 to 1998 during the recent warm PDO. According to NASA, crop yield decreased 30 percent, and there was a 10 percent decrease in arable land during that period, which helped us feed many millions more of the earth’s population. A cooling down to Dalton Minimum temperatures or worse would lead to shortened growing seasons and large-scale crop failures. Food shortages would make worse the fact that more people die from cold than heat.”

  20. Richard C (NZ) on 25/08/2011 at 7:26 pm said:

    Weather derivatives (USA)

    Weather derivatives are financial instruments that can be used by organizations or individuals as part of a risk management strategy to reduce risk associated with adverse or unexpected weather conditions. The difference from other derivatives is that the underlying asset (rain/temperature/snow) has no direct value to price the weather derivative.

    Farmers can use weather derivatives to hedge against poor harvests caused by drought or frost; theme parks may want to insure against rainy weekends during peak summer seasons; and gas and power companies may use heating degree days (HDD) or cooling degree days (CDD) contracts to smooth earnings. A sports event managing company may wish to hedge the loss by entering into a weather derivative contract because if it rains the day of the sporting event, fewer tickets will be sold.

    Heating degree days are one of the most common types of weather derivative. Typical terms for an HDD contract could be: for the November to March period, for each day where the temperature rises above 18 degrees Celsius keep a cumulative count of the difference between 18 degrees and the average daily temperature. Depending upon whether the option is a put option or a call option, pay out a set amount per heating degree day that the actual count differs from the strike.

  21. Richard C (NZ) on 25/06/2012 at 2:51 pm said:

    UN-backed Principles for Responsible Investment.

    With the formal sustainable development agreement struck at the summit this week widely viewed as disappointingly weak, lobbyists are increasingly focussing on the private sector rather than waiting in vain for governments to strike an effective agreement for change.

    Greenpeace head Kumi Naidoo said government negotiators had failed at Rio and his organisation would target the financial sector, seeking to cut off capital to destructive industries and influence investment decisions.

    Some institutional investors are already changing how they make decisions. Investors managing more than $32 trillion will meet at a separate gathering in Rio de Janeiro next week, having signed the UN-backed Principles for Responsible Investment.

    PRI chairman Wolfgang Engshuber told the Herald his members would not be put off investing in Australia by the new carbon tax because ”we want social and environmental costs to become part of investment decisions … it shows us companies are equipped to deal with carbon in the medium and long term”.

    Read more:

    “destructive industries” – What would they be I wonder?


    “equipped to deal with carbon” – Huh?

    Weapons-grade drivel as Delingpole would put it.

  22. Richard C (NZ) on 04/09/2012 at 10:00 am said:

    Stern review on The Economics of Climate Change under fire in The Australian

    Costly decarbonisation of the economy is based on a flawed review

    Peter Lilley, British Conservative Party MP.

  23. Richard C (NZ) on 06/10/2012 at 6:57 pm said:

    Integrated Assessment Modeling

    10 Things to Know

    1. What is Integrated Assessment (IA)?
    2. What are Integrated Assessment Models (IAMs)?
    3. How do IAMs and GCMs differ?

    How do IAMs and GCMs differ?

    Integrated assessment models generally include both physical and social science models that consider demographic, political, and economic variables that affect greenhouse gas emission scenarios in addition to the physical climate system. General Circulation Models (GCMs), however, focus on the physical climate system alone. Many IAMs do include some form of climate modeling scheme in their routines, such as zero-dimensional or 2-dimensional energy balance models, but due to computing time limitations it is currently infeasible to integrate a full 3-dimensional GCM with a human dimensions model to create an IAM. Until computers become fast enough to significantly reduce computation times, IAMs will not be able to configure a full GCM into their model structure, and must rely on simpler forms of climate models to forecast changes in climate based on future scenarios of greenhouse gas emissions and other significant variables. For more information, see the Guide to General Circulation Models.

    [Heads-up for AR5]

    • Richard C (NZ) on 10/10/2012 at 9:10 pm said:

      Example of integrated assessment model (IAM) output:-

      ‘The Social Cost of CO2 from the PAGE09 Model’

      Chris Hope, 2011
      Cambridge Judge Business School, University of Cambridge

      See Bishop Hill for PAGE09 input issues:-

      ‘Climate sensitivity and the Stern report’

      H/t Andy.

    • Richard C (NZ) on 14/08/2013 at 2:31 pm said:

      ‘Scathing MIT Paper Blasts Obama’s Climate Models’

      Author:Robert Murphy


      Current Crop of Computer Models “Close to Useless”

      It is this second class of models, the economic/climate hybrids called Integrated Assessment Models, that Pindyck discusses. Pindyck’s paper is titled, “Climate Change Policy: What Do the Models Tell Us?” Here is his shocking answer, contained in the abstract:

      Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models’ descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading. [Bold added.]

      For those unfamiliar with academic prose, such inflammatory language is almost unheard-of, particularly for a politically sensitive topic such as climate change economics. Pindyck is here reaching the exact same conclusion that I gave in my recent testimony before Senator Barbara Boxer and other members of the Senate Environmental and Public Works Committee: The computer models used by the Obama Administration’s Working Group to estimate the so-called “social cost of carbon” should not be the basis of federal policy.

      After my prepared remarks during the hearing, Boxer and others dismissed my testimony as the product of willful ignorance of “the science,” yet I pointed out that it was she and her colleagues who were misinformed. The professional economists who specialize in climate change would know that every point of my testimony was accurate; indeed I was merely explaining to Senator Boxer et al. what the Obama’s Administration’s own Working Group was saying in their official report.


    • Richard C (NZ) on 24/08/2013 at 10:59 am said:

      Robert Murphy’s follow-up IER post:

      ‘MIT Economist on Bogus Climate Damage Functions’

      In my previous post, I summarized Robert S. Pindyck’s scathing paper on the computer models used by the Obama Administration for its estimates of the “social cost of carbon.” Pindyck’s critique is all the more compelling because he is a professor of economics and finance at MIT, with several decades’ experience publishing articles and books dealing with energy, and he is actually a proponent of a carbon tax. In the present article, I will explore a particular aspect of Pindyck’s critique that I skipped in the original post. Believe it or not, Pindyck explains that the allegedly state-of-the-art computer models that are now determining federal policy have damage functions that are literally made up. As I have been telling my economist colleagues for years, if they actually understood how these computer models were designed, they would have far less confidence in the “optimal carbon tax” numbers shooting out of the other end.


  24. Rob Taylor on 10/10/2012 at 9:17 pm said:

    Excuse me, RC, but I think you’re talking to yourself… why don’t you fix yourself a nice hot milk and go to bed – your imaginary audience will still be here in the morning.

  25. Richard C (NZ) on 18/04/2013 at 9:29 pm said:

    from BH – ‘Climate, ethics and democracy’

    The MIT Technology Review has a very interesting article about ethics and climate change and the knotty problem of discounting future costs:

    [quote re “Broome”] “But his larger point is, more simply, that even such quantitative economic evaluations need to fully incorporate moral principles.”

    You can see where this is leading. Market discount rates – the ones that people choose of their own volition – are wrong. The answer is not that the public should be persuaded to adopt a different approach to discounting the future but that a different discount rate must be imposed by unelected “experts”.

    I’m so glad there are unelected “experts” ready to override my free choice and dictate my “moral principles”.

  26. Richard C (NZ) on 02/07/2013 at 6:17 pm said:

    ‘The Social Cost of Carbon’

    [US Environmental Protection Agency (EPA)]

    Estimating the Benefits of Reducing Greenhouse Gas Emissions

    EPA and other federal agencies use the social cost of carbon (SCC) to estimate the climate benefits of rulemakings. The SCC is an estimate of the economic damages associated with a small increase in carbon dioxide (CO2) emissions, conventionally one metric ton, in a given year. This dollar figure also represents the value of damages avoided for a small emission reduction (i.e. the benefit of a CO2 reduction).

    The SCC is meant to be a comprehensive estimate of climate change damages and includes changes in net agricultural productivity, human health, and property damages from increased flood risk. However, it does not include all important damages and, as noted by the IPCC Fourth Assessment Report [link], it is “very likely that [SCC] underestimates” the damages. The models used to develop SCC estimates, known as integrated assessment models, do not assign value to all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature because of a lack of precise information on the nature of damages and because the science incorporated into these models lags behind the most recent research. Nonetheless, the SCC is a useful measure to assess the benefits of CO2 reductions. […]

    One of the most important factors influencing SCC estimates is the discount rate. [think Stern]

    […] The interagency group selected four SCC values for use in regulatory analyses. The first three values are based on the average SCC from the three integrated assessment models, at discount rates of 5, 3, and 2.5 percent. SCCs at several discount rates are included because the literature shows that the SCC is highly sensitive to discount rate and because no consensus exists on the appropriate rate to use for analyses spanning multiple generations. The fourth value is the 95th percentile of the SCC from all three models at a 3 percent discount rate, intended to show the potential for higher-than-average damages. The table below summarizes the four SCC estimates in certain years:

    Social Cost of CO2, 2015-2050 a (in 2007 Dollars)

    Discount Rate and Statistic
    Year 5% Average 3% Average 2.5% Average 3% 95th percentile
    2015 $6 $24 $38 $73 [revised $12, $38, $58, and $109, see below]
    2020 $7 $26 $42 $81
    2025 $8 $30 $46 $90
    2030 $10 $33 $50 $100
    2035 $11 $36 $54 $110
    2040 $13 $39 $58 $119
    2045 $14 $42 $62 $128
    2050 $16 $45 $65 $136

    [see the (radically revised) 2015 update from Climate Law Blog next article]


    ‘The ‘Social Cost of Carbon’ Gambit’ [WSJ]

    President Obama unveiled his vast new anticarbon-energy agenda this week, which he
    plans to impose by executive fiat. Crucial to pulling off this exercise is a decision the federal
    bureaucracy made last month to change the way it accounts for carbon emissions—a
    decision that received almost no media attention.

    In late May the Administration slipped this mickey into a new rule about efficiency
    standards for microwaves, significantly raising what it calls the “social cost of carbon.”
    Team Obama made no public notice and invited no comment on this change that will
    further tilt rule-making against products and industries that use carbon energy.

    Federal law requires the government to calculate the costs and benefits of its rules and
    projects. The regulatory agencies are expert at rigging these calculations, but even they
    haven’t been able to hide the enormous costs of President Obama’s regulations under
    traditional economic measurement. The Administration’s solution? Simply redefine the
    economic and social “benefits” of reducing carbon.

    And sure enough, in 2010 an interagency working group conjured a new way to goose the
    benefits of regulation. Every metric ton of carbon that was reduced by regulation would suddenly count for $21 in “social benefits.” This figure was derived by guesses about how more carbon in the atmosphere may harm everything from agricultural productivity to human health to flood risks. The government’s previous official estimate? $0.

    The Administration has now gone further as part of its microwave rule and raised its
    estimated benefit from carbon reduction to about $36 a metric ton. The Department of
    Energy explained that this “update” was the result of new assumptions based on “the best
    available science,” which means whatever science the feds decide to favor. The practical
    effect is to further inflate the supposed benefit of new rules, thereby offsetting the
    enormous economic costs.


    ‘Implications of a Revised, Higher Estimate of the Social Cost of Carbon’

    [Climate Law Blog, Columbia Law School, Centre For Climate Change Law]

    By Ifeoma Anunkor, Summer Legal Intern

    […] The updated estimates for the SCC in 2015 (based on 2007 dollars) are $12, $38, $58, and $109 per metric ton of carbon dioxide, depending on the stringency of the discount rate applied. Those estimates represent over a 60% increase from last year’s, which were $5.70, $23.80, $38.40, and $72.80, respectively. The new estimates are based on the updated versions of the three assessment models the U.S. government uses to estimate the SCC. Changes to the models reflect an updated, more complex carbon cycle, a more explicit representation of global sea level rise, updated damage functions for sea level rise impacts, agricultural impacts and changes in temperature caused by GHG concentrations, and updated adaptation assumptions and potential abrupt damages.


    See Southeastern Legal Foundation (SLF) et al’s Petition for a writ of certiorari to the US Supreme Court that includes a purely science argument developed to show that EPA’s CO2 Endangerment Finding (EF) should be vacated in the USA thread:

    • Richard C (NZ) on 02/07/2013 at 10:19 pm said:

      Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866

      Interagency Working Group on Social Cost of Carbon, United States Government

      With participation by

      �Council of Economic Advisers
      �Council on Environmental Quality
      �Department of Agriculture
      �Department of Commerce
      �Department of Energy
      �Department of Transportation
      �Environmental Protection Agency
      �National Economic Council
      �Office of Energy and Climate Change
      �Office of Management and Budget
      �Office of Science and Technology Policy
      �Department of the Treasury

      February 2010

      I. Monetizing Carbon Dioxide Emissions
      II. Social Cost of Carbon Values Used in Past Regulatory Analyses
      III. Approach and Key Assumptions

      A. Integrated Assessment Models
      The DICE Model
      The PAGE Model
      The FUND Model

      B. Global versus Domestic Measures of SCC
      Damage Functions
      Global SCC
      Domestic SCC

      C. Valuing Non-CO2 Emissions

      D. Equilibrium Climate Sensitivity
      Table 1: Summary Statistics for Four Calibrated Climate Sensitivity Distributions
      Figure 2: Estimates of the Probability Density Function for Equilibrium Climate Sensitivity (°C)

      E. Socio-Economic and Emissions Trajectories

      F. Discount Rate
      The Discount Rates Selected for Estimating SCC

      IV. Revised SCC Estimates
      Table 3: Disaggregated Social Cost of CO2 Values by Model, Socio-Economic Trajectory, and Discount Rate for 2010 (in 2007 dollars)
      Table 4: Social Cost of CO2, 2010 – 2050 (in 2007 dollars)

      V. Limitations of the Analysis

      V. A Further Discussion of Catastrophic Impacts and Damage Functions
      Table 6: Probabilities of Various Tipping Points from Expert Elicitation

      VI. Conclusion

    • Richard C (NZ) on 11/07/2013 at 11:40 am said:

      Obama’s Climate Action Plan: How it miscalculates the social cost of carbon. – Slate Magazine

      ‘Wrong Number’
      Obama’s new climate plan is based on a dubious calculation and falls woefully short.

      By Eric Posner

      […] Where does the SCC come from? In 2010, the White House convened a group of officials from across the government to calculate this number. The group used three computer models that estimate the economic impacts of climate change, the most famous of which was created by Yale economist William Nordhaus. In May, the group updated its analysis, yielding the $38 figure above. (There are other figures based on other assumptions, but $38 will most likely be the one the EPA and other agencies use.)

      Nordhaus’ model starts with the historic growth rate of the global economy and then estimates the amount that climate-related damage will reduce it. The problem, which Nordhaus candidly acknowledges, is that no one has any idea what the economic impact of climate change will be (other than that it will be very bad). So he waves his hands and makes a guess based on his reading of various climate studies. The key claim is that if mean global temperatures increase by 2.5 degrees, global GDP will decline 1.8 percent. If global temperatures rise more, the decline will increase quickly. But in no realistic scenario does the model predict that the harm from climate change will completely wipe out economic growth—global GDP never levels out and declines. […]

      As noted in an insightful new paper by my University of Chicago colleague David Weisbach and several co-authors called Climate Impacts on Economic Growth as Drivers of Uncertainty in the Social Cost of Carbon (unfortunately not yet online), the government’s assumptions lead to some bizarre conclusions. Because global GDP can only increase, and because 300 years is a very long time for the economy to grow, even at a low rate, people will be vastly wealthier in 2300 than they are now, according to the Nordhaus model, even if the government does nothing about climate change. In one scenario, temperatures rise 6 degrees (a level that some scientists believe would be cataclysmic), yet per capita income would be 30 times higher than what it is today—that is, $1.5 million per household in the United States rather than $50,000. Why should we incur costly regulation today to help remote descendants who will dine on caviar and travel by jetpack?

      The answer, according to Weisbach and his co-authors, is that they won’t. The problem lies with the models that assume that GDP won’t fall. But if climate change hurts productivity rather than just overall output, GDP could fall. And if it falls year by year, even by only a little bit, then 300 years from now people will eat grubs and live in caves.


    • Richard C (NZ) on 11/07/2013 at 11:46 am said:

      [Posner] – “The bottom line is this: The current SCC calculation embodies the worst of both worlds: too low from the standpoint of global well-being, too high from the standpoint of law. When power companies challenge the new climate regulations in court—we won’t have to wait long—they will argue that the rules fail a cost-benefit analysis. Courts don’t always demand cost-benefit analyses, but they sometimes do, and even if they don’t here, the arbitrary assumptions underlying the government’s number will bother them, as they should.”

    • Richard C (NZ) on 19/07/2013 at 11:17 am said:

      Surprising testimony of Robert Murphy at the U.S. Senate Hearing “Climate Change: It’s Happening Now”:

      “The American public and policymakers alike have been led to believe that the social cost of carbon is an objective scientific concept akin to the mass of the moon or the radius of the sun. However, although there are inputs from the physical sciences into the calculation, estimates of the social cost of carbon are heavily dependent on modeling assumptions. In particular, if the White House Working Group had followed OMB guidance on either the choice of discount rate or reporting from a domestic perspective, then the official estimates of the current SCC would probably be close to zero, or possibly even negative—a situation meaning that (within this context) the federal government should be subsidizing coal-fired power plants because their activities confer external benefits on humanity.”

    • Richard C (NZ) on 04/08/2013 at 4:46 pm said:

      ‘IER’s Robert Murphy on the Social Cost of Carbon’

      by Marlo Lewis


      Murphy challenges the intellectual bona fides of the Obama administration’s May 2013 Technical Support Document (TSD) on the social cost of carbon (SCC). Climate activists increasingly invoke SCC estimates to justify the imposition of carbon taxes, fuel economy mandates, Soviet-style production quota for wind farms, fracking bans, and other interventions to rig the marketplace against reliable, affordable, fossil energy. They speak as if SCC estimates disclose an objective reality like the boiling point of water or the specific gravity of iron. In fact, SCC estimates are assumption-driven hocus-pocus or, as my colleague Myron Ebell prefers to say, “hogwash.”


      The only point I would add to Murphy’s trenchant analysis is that even if (a) the climatological, meteorological, and technological forecasts underpinning SCC estimates were accurate, (b) agencies use appropriate discount rates, and (c) agencies use U.S. domestic SCC estimates in cost-benefit analysis, SCC analyses would still be one-sided and misleading.

      Even if scrupulously based on the best science and economics, SCC analyses would still ignore the social benefits — the positive externalities — of affordable, reliable, carbon-based energy. Consequently, such analyses turn a blind eye to the social costs — the adverse effects on public health and welfare – of the economic losses imposed by carbon mitigation schemes.

      Unless paired with a rigorous and thorough analysis of climate policy risk, SCC analyses are functionally biased and partisan. Will we ever get a fair and balanced assessment from SCC analysts? Fat chance.


    • Richard C (NZ) on 02/08/2013 at 12:28 pm said:

      ‘Lawmakers vote to thwart EPA move on ‘social cost of carbon’ ‘

      By Ben Geman and Pete Kasperowicz

      The House voted Thursday to block the Environmental Protection Agency from weighing the benefits of curbing carbon emissions when crafting major energy-related regulations.

      Lawmakers voted 234-178 for Rep. Tim Murphy’s (R-Pa.) amendment to prevent EPA from factoring the “social cost of carbon” into rules unless a federal law is enacted that allows its consideration.

      Fifteen Democrats voted with almost all Republicans for the amendment, while three Republicans opposed it.

      The amendment was tacked onto GOP legislation that allows the Energy Department to veto EPA rules with $1 billion or more in costs if the department determines they would harm the economy.


      The underlying bill is slated to clear the House Thursday afternoon but faces dim prospects in the Democrat-led Senate.

      Read more:

    • Richard C (NZ) on 01/08/2013 at 4:37 pm said:

      ‘A Closer Look at the Government’s Determination of the Social Costs of Carbon’

      By Patrick J. Michaels and Paul C. “Chip” Knappenberger

      “…..the government’s determination and use of the social cost of carbon is simply a bad idea. The extreme sensitivity to its input parameters means that the final answer is easily molded to be whatever the user desires it to be. And since the current government user desires a limit on carbon dioxide emissions, the SCC is positive and has gotten larger just in time for the new round of proposed regulations and executive actions—ignoring new climate science in the process.”

    • Richard C (NZ) on 01/08/2013 at 5:20 pm said:

      Michaels and Knappenberger:

      “The SCC is about 5 times greater using a 2.5 percent rate than a 5 percent rate. Murphy argues that by federal guidelines (OMB Circular A-4), the Interagency Working Group should also have considered the SCC under a 7 percent discount rate. And had they done so, they very likely would have found the SCC to be negative (i.e., that carbon emissions conferred a net benefit to society). But that would have been an inconvenient result, so the Interagency Working Group ignored that federal guideline.”

      “They also dismissed the directive to report the costs and benefits from a domestic perspective, where costs are only considered to be a fraction of the total global costs (according to the Interagency Working Group, between 7 percent and 23 percent). Considering a 7 percent discount rate and the new science indicating a lower climate sensitivity and almost assuredly, the domestic costs would approach zero (if not, in fact, be negative).”

      “We think the blunders the Obama administration has committed in setting their “price” of carbon dioxide and methane (as opposed to the silly “carbon”) may be actionable, action we’d be happy to contribute to.”

  27. Richard C (NZ) on 05/07/2013 at 7:17 pm said:


    Ross McKitrick

    I propose ……… that the best way to proceed would be to put a small tax on CO2
    emissions, and tie its subsequent evolution to a suitable measure of atmospheric
    temperatures. If temperatures go up, so does the tax. If they do not, the tax does
    not change. In this way everybody will expect to get the policy they think best, and
    whoever turns out to be right deserves to be so. Sceptics who do not believe in global
    warming will not expect the tax to go up, and might even expect it to go down. Those
    convinced we are in for rapid warming will expect the tax to rise quickly in the years
    ahead. Companies managing factories and power plants will have to figure out who is
    more likely to be right, because billions of dollars of potential tax liabilities will depend
    on what is going to happen. Nobody will benefit from using false or exaggerated
    science: instead the market will identify those who can prove they understand the
    climate well enough to make accurate forecasts. And policy-makers will be guaranteed
    that, whatever the tax does in the future, the policy will turn out to have been the right

  28. Richard C (NZ) on 11/07/2013 at 11:22 am said:

    Roger Pielke Jr. ‏@RogerPielkeJr 11h

    Here is the @LloydsofLondon 2013 Risk Index–> … On the index climate change at number 32, natural hazards in the 40s

    2013 RISKS (page 33)
    1 High taxation
    2 Loss of customers/cancelled orders
    3 Cyber risk
    4 Price of material inputs
    5 Excessively strict regulation
    6 Changing legislation
    7 Inflation
    8 Cost and availability of credit
    9 Rapid technological changes
    10 Currency fluctuation
    11 Interest rate change
    12 Talent and skills shortage
    13 Reputational risk
    14 Corporate liability
    15 Major asset price volatility
    16 Poor/incomplete regulation
    17 Government spending cuts
    18 Fraud and corruption
    19 Theft of assets/Intellectual Property
    20 Failed investment
    21 Corporate governance and internal
    oversight failure
    22 Critical infrastructure failure
    23 Supply chain failure
    24 Increased protectionism
    25 Insolvency risk
    26 Energy security
    27 Demographic shift
    28 Industrial/workplace accident
    29 Pollution and environmental liability
    30 Sovereign debt
    31 Piracy
    32 Climate change <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
    33 Water scarcity
    34 Strikes and industrial action
    35 Population growth
    36 Expropriation of assets
    37 Urbanisation
    38 Food security
    39 Harmful effects of new technology
    40 Pandemic
    41 Abrupt regime change
    42 Terrorism
    43 Riots and civil commotion
    44 Flooding
    45 Windstorm
    46 Drought
    47 Threats to biodiversity and conservation
    affecting our operations
    48 Earthquake
    49 Impact of space weather
    50 Volcanic eruption

    • Andy on 11/07/2013 at 11:27 am said:

      Interesting that earthquake is number 48. I suspect this list will be somewhat different for NZ.

      I have recently heard a few tales of retailers shutting up shop because they cannot afford the new insurance premiums and earthquake building codes.

    • Richard C (NZ) on 11/07/2013 at 1:37 pm said:

      I looked for NZ but we just get lumped into Asia-Pacific. There’s Chart 7 on page 23:

      ‘Natural hazards – priority and preparedness by region’

      And APPENDIX 2 Chart 8, page 34:

      ‘Top 50 priority risk scores in 2013 – Asia-Pacific’

      The earthquake ranking is up 3 from the global average to 45 in Asia-Pacific and the “preparedness” is much better than South Africa for example (natch). The climate change ranking is different for each region too e.g. varying 43 Europe to 30 Latin America (32 Asia-Pacific).

      The free mag ‘Tauranga & Rotorua Property investor’ May edition devoted 3 articles over 5 pages to seismic strengthening, The third one is:

      ‘Seismic strengthening – a disaster in its own right’ – “As more becomes known about the cost of seismic strengthening, some owners face losing all their equity”

      The risk for these people from retroactive earthquake mitigation is substantial and already realized, The risk from an actual earthquake is still in the future. A fellow I knew from my school days has a block in downtown Tauranga and was featured in the BOP Times saying he was just going to demolish and rebuild. That will displace the existing business tenents of course. Having been to San Francisco and seen the demolish-and-rebuild there even of historic buildings (replicas), I have to say I’m in favour of that. I don’t know why people are bothering trying to preserve the ChCh cathedral for example – just demolish and rebuild an earthquake-proof replica from photos, but it doesn’t have to be EXACTLY the same (think Napier too).

      In short, the Asia-Pacific (let alone NZ) climate change vs earthquake risk ranking (32 vs 45) is ludicrous. Even reversing it (32 earthquake, 45 climate change) is still unrealistic I think. Earthquake should be in the top half in a 1 – 50 NZ scale (along with volcanic eruption – at 50 by Lloyds in Asia-Pacific), and climate change at 50.

  29. Richard C (NZ) on 24/10/2013 at 8:47 pm said:

    ‘World Is Spending $1 Billion Per Day To Tackle Global Warming’

    * EurActiv

    The world invested almost a billion dollars a day in limiting global warming last year, but the total figure – $359 billion – was slightly down on last year, and barely half the $700 billion per year that the World Economic Forum has said is needed to tackle climate change.

    These are the findings spelled out in the latest Climate Policy Initiative (CPI) report. For the first time, it estimated global North-South cash flows at between $39 and $62 billion.

    But the total funding pot fell $5 billion from 2012, and remains just a tiny fraction of the $5 trillion that the International Energy Agency estimates is required by 2020 for clean energy projects alone, if rising temperatures are to be pegged at 2 degrees Celsius.


  30. Richard C (NZ) on 13/02/2014 at 7:38 am said:

    ‘Economist Says Best Climate Fix A Tough Sell, But Worth It’

    by Richard Harris | February 11, 2014

    We often talk about climate change as a matter of science. But the biggest questions are really about money. How much would it cost to fix the problem — and what price will we pay if we don’t?

    The man who invented the field of climate economics 40 years ago says there’s actually a straightforward way to solve the problem. William Nordhaus has written a book [‘Climate Casino’] that lays it out in simple terms.


    “Actually from an economic point of view, it’s a pretty simple problem,” he says.

    If people would simply pay the cost of using the atmosphere as a dump for carbon dioxide, that would create a powerful incentive to dump less and invest in cleaner ways to generate energy. But how do you do that?

    “We need to put a price on carbon, so that when anyone, anywhere, anytime does something that puts carbon dioxide in the atmosphere, there’s a price tag on that,” he says.

    His colleagues say that inspiration — now taken for granted — makes Nordhaus a prime candidate for a Nobel Prize. A lot of his work has been figuring out how big a price we should pay, and what form it should take.


    Nordhaus is hardly a saber rattler on this subject. Though he sees the potential for very serious problems down the road, he still says that some climate change can actually be good for agriculture — at least up to a point. And he says we shouldn’t do any more to address climate change than makes economic sense, even if that means letting the planet warm more than the international target of 2 degrees Celsius.

    His calm approach has at times infuriated environmental activists, who are dismayed at the pace of global action.


  31. Richard C (NZ) on 28/08/2014 at 2:07 pm said:

    ‘The crazy world of Renewable Energy Targets’

    JoNova, August 18th, 2014

    […] The RET scheme in Australian pays a subsidy to wind farms and solar installations. Below, Tom Quirk shows that this is effectively a carbon tax (but a lousy one), and it shifts supply — perversely taxing brown coal at $27/ton, black coal at $40/ton and gas at up to $100/ton. Because it’s applied to renewables rather than CO2 directly, it’s effectively a higher tax rate for the non-renewable but lower CO2 emitters. […]

    Renewable energy sources – Complications!

    Guest post by Tom Quirk

  32. Richard C (NZ) on 20/09/2014 at 12:34 pm said:

    The Hartwell Paper
    A new direction for climate policy after the crash of 2009
    May 2010

    The Kaya Identity page 27 pdf

  33. Richard C (NZ) on 20/09/2014 at 12:53 pm said:

    The Left vs. the Climate
    Why Progressives Should Reject Naomi Klein’s Pastoral Fantasy — and Embrace Our High-Energy Planet

    September 18, 2014 | Will Boisvert

  34. Richard C (NZ) on 20/09/2014 at 1:24 pm said:

    Stern’s Turn
    Posted by Ben Pile on September 16, 2014

    Stern presented the world with a stark choice: pay 1% of GDP to fix climate change now, or lose at least 5% of GDP in the future.

    It is a surprise then, to see Nicholas Stern in today’s Guardian, arguing that growth is now possible:………..

    • Mike Jowsey on 24/09/2014 at 3:35 pm said:

      Even our own Rod Oram is drinking the Stern koolaid…

      The next 15 years will see major structural transformations in the global economy,” the report says. “As population growth and urbanisation continue, global output is likely to increase by half or more. Rapid technological advances will continue to reshape production and consumption patterns.”

      But countries will miss these opportunities if they fail over the next few years to introduce policies and strategies to start shifting their economies to low carbon.

      This needs to happen very widely across the world because we have only 15 years or so to make big progress towards reducing greenhouse gases. If we don’t, we will suffer from devastating climate changes in the years beyond, the report warns.

    • Richard C (NZ) on 25/09/2014 at 10:02 am said:

      My reply to Mike went to moderation. Not sure how I became Richard+C+(NZ), I didn’t type that in. [That’s mysterious. Your original comment is still sitting there and it seems normal, except for the spurious characters. I’ve been carrying out some maintenance, so perhaps that affected something. Sorry about that. – RT]

    • Richard C (NZ) on 25/09/2014 at 10:07 am said:

      Difficulties posting (comment in Mods or disappeared and Name changed) so here’s my reply to Mike again:

      From the Oram article:

      “The report [Stern’s] says that beginning the shift to a low carbon global economy is the best way to overcome two chronic issues: developed countries are suffering from economic stagnation following the Global Financial Crisis; and developing countries are suffering from rapid deterioration of their air, land and water. For example air pollution is causing seven million premature deaths a year around the world. ”

      Except neither situation is climate change and carbon dioxide emissions aren’t causing premature deaths right now and never will. “[D]evastating climate changes” will only occur “in the years beyond” “15 years or so” according to Stern, not now and not of that type. Wont happen as a result of GHG warming of course, but solar cooling? I think so, but perhaps not devastating.

      If economic change is really all about “overcoming” those “two chronic [non-climatic economic] issues” (since when was this the issue?), the proposed solution (“the shift to a low carbon global economy”) which involves shutting down large sectors of the global economy will have the opposite effect i.e. negative growth, recession. massive drops in GDP, unemployment, less revenue for health and education, etc. There are no replacement activities for those sectors and workers, see (H/t BH) Paul Homewood’s article:

      ‘Where Did All The Green Jobs Go?’:

      Mixed and contradictory messages.

    • Richard C (NZ) on 25/09/2014 at 6:34 pm said:

      ‘Better Growth, Better Climate: The New Climate Economy Report’ (Stern 2.0) is from this outfit:

      The Global Commission on the Economy and Climate, commissioned by seven countries – Colombia, Ethiopia, Indonesia, Norway, South Korea, Sweden and the United Kingdom – as an independent initiative to report to the international community.

      The Global Commission (is it really?) includes Helen Clark, Administrator, UN Development Progamme, and former Prime Minister of New Zealand

      All built on a house of cards. My comment at Stuff:

      [Name still reverting to Richard+C+(NZ) RT, but I can edit that]

    • Richard C (NZ) on 25/09/2014 at 8:32 pm said:

      ‘Better Growth, Better Climate: The New Climate Economy Report’

      “Delay in managing climate risk only worsens the problem.”

      “Above all, a global transition to a low-carbon and climate-resilient development path will need to be underpinned by an international agreement committing countries to this collective economic future.”

      >”committing countries to this collective economic future” ?

      Hmmm………many, many, people (66 million in the USSR alone) have died in countries “committing” to “collective” economic futures:

      Collectivism – Politics

      According to Moyra Grant, in political philosophy “collectivism” refers to any philosophy or system that puts any kind of group (such as a class, nation, race, society, state, etc.) before the individual.[4] According to Encyclopædia Britannica, “collectivism has found varying degrees of expression in the 20th century in such movements as socialism, communism, and fascism. The least collectivist of these is social democracy, which seeks to reduce the assumed inequities of unrestrained capitalism by government regulation, redistribution of income, and varying degrees of planning and public ownership. In communist systems collectivist economics are carried to their furthest extreme, with a minimum of private ownership and a maximum of planned economy.”[5]

      What could possibly go wrong?

  35. Richard C (NZ) on 04/09/2015 at 9:40 pm said:

    ‘The New Grand Minimum’

    New Skills have been (sic) developed by actuaries if they are to understand the changes in risks that are occurring in the new solar grand minimum.

    Prepared by Brent Walker
    Presented to the Actuaries Institute
    Actuaries Summit
    20-21 May 2013

    Table of Contents
    Introduction …………………………………………………………………………………………………………………………. 3
    New Solar Grand Minimum …………………………………………………………………………………………………. 3
    History of Solar Activity over Last Millennium ………………………………………………………………………… 3
    International Panel on Climate Change View …………………………………………………………………………. 5
    Use of Predictive Models …………………………………………………………………………………………………….. 5
    The Little Ice-Age Climate Paradox ……………………………………………………………………………………….. 6
    Food Security a Concern ……………………………………………………………………………………………………… 7
    Summary ……………………………………………………………………………………………………………………………… 8
    Variations in the Sun’s Emissions ……………………………………………………………………………………………… 9
    Solar Cycles ………………………………………………………………………………………………………………………. 9
    Differences in Solar Emission Spectrum ………………………………………………………………………………… 9
    Solar Emissions and the Atmosphere ………………………………………………………………………………….. 11
    Sun Forces Climate Change ………………………………………………………………………………………………… 14
    Magnetic Portals between Sun and Earth ……………………………………………………………………………. 16
    Jet Streams, Polar Vortices and Coronal Mass Ejections ………………………………………………………… 16
    Other Natural Risks …………………………………………………………………………………………………………… 22
    Weather Extremes and Other Risks during Grand Minima ………………………………………………………… 24
    Dalton Minimum Weather Extremes …………………………………………………………………………………… 24
    Great Earthquakes ……………………………………………………………………………………………………………. 25
    Stratospheric Volcanic Eruptions ………………………………………………………………………………………… 25
    Appendix ……………………………………………………………………………………………………………………………. 27
    UK weather from 1780-1820 ……………………………………………………………………………………………… 27
    Australian Weather from 1788-1820 …………………………………………………………………………………… 32

    The intention of this paper is to update the information presented in the “Extra-Terrestrial
    Influences on Nature’s Risks” paper and explain how the decreased levels of sunspot activity that
    have already commenced will affect long-term weather risks as well as long-term earthquake and
    volcanic risks. Further, because of the effect on volcanic risks, there are feedbacks, which also
    increase the risks of weather extremes. This paper, and the earlier Extra-terrestrial Influences on
    Nature’s Risk paper, should encourage the actuarial profession to develop skills in space weather
    forecasting and understand the risk management activities that stem from such abilities. For
    example, this paper will help actuaries understand why, at certain times, when solar flares that hit
    Earth, they have the ability to temporarily significantly change climatic conditions, earthquake and
    volcanic risks. Understanding just these mechanisms should convince the profession to develop
    important real-time risk management tools and capabilities that can be applied in many areas of our
    expertise as well as in new areas where actuaries so far do not have a role. But there are many more
    space-age data sets and that we should understand and use. Failure to recognise these opportunities
    will be detrimental to the profession as others, much less trained in risk assessment and risk
    management, will take the initiative.

    It is not the intention of this paper to argue whether the International Panel on Climate Change is
    right or wrong. The intention of this paper is to show how natural forces (in particular the current
    prolonged low sunspot activity of the sun) affect a number of risks that should interest actuaries.
    These include human mortality, natural events such as major earthquakes and volcanic eruptions,
    direct weather related risks, in particular, from weather extremes. There are a second category of
    risks that are important. These include risks relating to food and energy security, the political risks
    arising from unaffordable increases in the price of these commodities, crop insurance and other
    forms of insurance that are affected by climatic extremes. There is also the risk that if our profession
    does not recognise the risk implications of these changes in the sun our reputation could be
    significantly impaired.

    Continues >>>>>>>

  36. Richard C (NZ) on 02/10/2015 at 2:37 pm said:

    Waiting for Collapse: USA Debt Bombs Bursting”

    by William Edstrom, September 23, 2015

    Via Debt Rattle

  37. Richard C (NZ) on 08/02/2016 at 9:52 am said:

    ‘$100 Trillion Up in Smoke’

    By John Mauldin February 6, 2016

    “Stop for a minute. Let that sink in. The total value of all the world’s oil reserves is over $100 trillion less than it was just a year and a half ago.”

    # # #

    Obama wants a $10 tax per barrel on US oil, doesn’t realize how much value has just been wiped in 18 months – $70 a barrel on 1700 billion barrels reserves worldwide.

  38. Richard C (NZ) on 09/02/2016 at 5:16 pm said:

    ‘Deutsche Bank is shaking to its foundations – is a new banking crisis around the corner?’

    6 February 2016

    Let’s now take a step back and explain why the problems at Deutsche Bank could have a huge negative impact on the world economy. Deutsche has a huge exposure to the derivatives market, and it’s impossible, and then we mean LITERALLY impossible for any government to bail out Deutsche Bank should things go terribly wrong.

    Keep in mind the exposure of Deutsche Bank to its derivatives portfolio is a stunning 55B EUR, which is almost 20 times (yes, twenty times) the GDP of Germany and roughly 5 times the GDP of the entire Eurozone!

    And to put things in perspective, the TOTAL government debt of the US government is less than 1/3rd of Deutsche Bank’s exposure.

    # # #

    Auf Wiedersehen Deutsche Bank

  39. Richard C (NZ) on 28/04/2016 at 11:42 am said:

    Sobering news from China and Europe:

    “The client [Chinese wine merchant] told the ship hands, just take the wine back to France,” Ms. Yang said. “Nobody wants it.”


    “It is the first time you see people in shipping being really scared,” said Basil Karatzas, of New York-based Karatzas Marine Advisors and Co.


    ‘Once Bustling Trade Ports in Asia and Europe Lose Steam’

    From Shanghai to Hamburg, container-shipping industry is gripped by economic undertow

    # # #

    Given CO2 emissions by container ships (far greater then national car fleets), this will show up in human emissions data and highlight the disconnect with atmospheric CO2 levels (already evident).

    Also possibly a precursor to the Revelation 18 prophecy:

    Rev 18:11 And the merchants of the earth shall weep and mourn over her [modern financial “Babylon”]; for no man buyeth their merchandise any more:


    Rev 18:17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,

    Rev 18:18 And cried when they saw the smoke of her [modern financial “Babylon’s”] burning, saying, What city is like unto this great city!

  40. Richard C (NZ) on 28/04/2016 at 11:59 am said:

    Also worth a read re China commodities trading in which traders appear to have gone full stupid:

    ‘China’s Commodity Frenzy Spurs New Crackdown From Exchanges’

    Goldman Sachs Group Inc. said this week it was concerned about the surge in speculative trading in iron ore, adding daily volumes were so large that they sometimes exceed annual imports. Ore prices have climbed 35 percent this year in Dalian, while steel reinforcement bar is up 40 percent in Shanghai. Morgan Stanley said the spike in speculative trading had stunned global markets, citing a jump in activity in everything from eggs to garlic and steel.

    The explosive growth in trading has stoked concerns that the frenzy was triggered by a credit-fueled surge in liquidity echoing the stock market bubble in 2015 and is destined for a similar bust, according to Zheng Ge, analyst at CEFC Wanda Futures Co. China’s investors have been honing in on raw materials amid signs of a pickup in demand after policy makers talked up growth, added stimulus and the property market rebounded.


    # # #

    Get that? – “…the surge in speculative trading in iron ore, adding daily volumes were so large that they sometimes exceed annual imports”

    China’s crash will be horrendous. Australia will hurt bad.

  41. Richard C (NZ) on 28/04/2016 at 12:27 pm said:

    >”China’s crash will be horrendous’

    China is on the verge of becoming Zespri’s largest market i.e. it’s greatest risk exposure:

    ‘Zespri launch biggest China season yet’

    HENRY COOKE, April 22 2016

    With thousands of Kiwifruit in port and Prime Minister John Key in town, New Zealand’s Zespri on Thursday launched what they say will be their biggest Chinese season yet.

    The kiwifruit exporter expects China to overtake Japan as its largest market by volume this season, which runs until November.

    Zespri projects China to account for just over a fifth of its total sales this year, with sales of about 24 million trays.

    This represents year-on-year growth of about 30 per cent, slightly downon 2015.

    Zespri chief operating officer Simon Limmer said: “China has been growing at a phenomenal rate, with a 50 per cent increase in volume last year”.

    “Most importantly, it’s going to become our most valuable market in the short term – this year or soon after. It’s going to be a value and volume market.”

    Europe and Japan continue as strong buyers, but China’s growing middle class is set to dominate sales.

    The Bay of Plenty-based company has the sole rights sell New Zealand kiwifruit outside of Australia or New Zealand.

    Key attended the launch in Shanghai as part of a week long trip around China.

    “China is Zespri’s largest market. I think that reflects the growth we see in the Chinese economy, and the size and scale of this economy,” Key said.

    # # #

    Literally tens of millions of dollars of investment has been pored into post harvest facilities in order to service this phenomenal market growth.

    Hoping of course that this wont happen (see upthread):

    “The client [Chinese wine merchant] told the ship hands, just take the wine back to France,” Ms. Yang said. “Nobody wants it.”

    Nutritious yes, but more than 90% of the weight of kiwifruit is water

    • Richard Treadgold on 30/04/2016 at 11:25 am said:


      “Also possibly a precursor to the Revelation 18 prophecy”

      You surprise me with this OT excursion. Not a big leap from emissions of GHG to economics and trade, but a huge leap to the Bible.

      Perhaps interesting to Bible scholars, Richard, but this blog does not currently and has no plans to appeal to them.

  42. Richard C (NZ) on 28/04/2016 at 6:13 pm said:

    >”Given CO2 emissions by container ships (far greater then national car fleets), this will show up in human emissions data”

    Wrong here, I was thinking terms of actual pollution. CO2 from shipping: 2.7% in 2007; vehicles accounted for about 7 percent of global greenhouse gas emissions in 2006.

    But given both a reduction in shipping AND the reduction in processing and burning of shipped commodities e.g. iron ore and coal, these reductions will certainly show up in emissions data. The last 3 years to 2015 were already flat i.e. no growth.

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