Category: Economics of mitigation

Categories
Australia Economics of mitigation

December 4, 1989 – first anti-climate action economic “modelling” released in Australia

On this day, December 4 in 1989, the first anti-climate action “economics modelling” in Australia came out, and was reported by the business press. Oddly, they neglected to mention that the funding for this “research” came from… a company that was digging up and selling coal.  Can only have been space constraints that stopped them mentioning it, oh yes….

Australia will have to suffer the consequences of reduced economic growth to achieve the proposed international goal of a 20 per cent reduction in greenhouse gas emissions over 15 years, according to a group of leading economists.

A paper to be presented to a conference entitled Greenhouse and Energy, which starts at Macquarie University in Sydney today, states that, among other effects, the fight against the greenhouse effect will result in increased electricity bills and reduced increases in real wages.

Lawson, M. 1989. Fighting Greenhouse has an economic cost. Australian Financial Review, 4 December.  

[The amount of carbon dioxide in the atmosphere was 353ppm. At time of writing it was 419ishppm- but for what it is now,well, see here for the latest.]

The context was this – 

Everyone was talking about emissions cuts and how much (earlier in the year the Thatcher government had shat all over the Toronto Target (see here).

Why this matters. 

The “models” do not “reflect” reality. They are just made up bullshit.

John Kenneth Galbraith said it best – “The only function of economic forecasting is to make astrology look respectable.”

What happened next?

Those who want to stop climate action – because it would cut their profits and/or power, because it offends them, will always find some shonky “modellers” to give them the answers they want. Then equally shonky “journalists” will uncritically run the crap on page 1, and it will get picked up by shonky politicians… and presto, “common sense” is created.

See also – May 13, 1992 – Australian business predicts economic armageddon if any greenhouse gas cuts made

Categories
Australia Economics of mitigation

November 26, 1996 – Australian climate modelling is ridiculed

On this day, November 26, 1996  an Australian politician ripped into the “official” modelling on which Australian governments (BOTH LABOR AND LIBERAL) had relied to say “oh, no, can’t do anything that might reduce the acceleration of our coal mining and coal exporting, or else the sky will fall.”

Leader of the Democrats, Senator Cheryl Kernot stated in the Senate:

“Let us not forget who ABARE is. It is the ideological cousin of the Industry Commission and it never misses an opportunity to slip the boot into environmental or social causes, churning out statistics from its largely discredited macro-economic modelling, showing how much better off we would all be if only we mined more coal, produced more electricity and puffed more carbon dioxide every day. I am willing to bet that if ABARE existed 150 years ago, it would have produced a whopping great spreadsheet proving that the economy could not afford to ban child labour in the coal mines”

(Senate Hansard 26.11.96 p 6014).

On ABARE, see also  “High and Dry” by Guy Pearse and “Scorcher” by Clive Hamilton.

On economic forecasting – I recently learnt the brilliant John Kenneth Galbraith quote – ““The  only function of economic forecasting is to make astrology look respectable,”

[The amount of carbon dioxide in the atmosphere was 362ppm. At time of writing it was 417ishppm- but for what it is now,well, see here for the latest.]

The context was this – 

Australian governments were looking for excuses to do nothing to slow down the acceleration of Australian coal exports. ABARE helped to provide those excuses.

Why this matters. 

The way economic modelling is used to justify all sorts of horror (usually the continued enrichment of the already filthy rich, and/or the galloping desolation of our being-murdered planet), is a) by now very obvious and b) never-ending, despite a).

What happened next?

ABARE and its “MEGABARE” nonsense was thoroughly exposed and discredited(see here). Which did nothing to stop the Howard Government from continuing to use it.

Categories
Economics of mitigation United Kingdom

October 30, 2006 – Stern Review publshed.

On this day, October 30 in 2006 the Stern Review was published. This had been commissioned by Gordon Brown, the United Kingdom “Chancellor of the Exchequer” (Treasurer) a year previously (see this blog post).

Nick Stern, a World Bank economist who could hardly be accused of being a swivel-eyed Luddite, argued that 

“This Review has assessed a wide range of evidence on the impacts of climate change and on the economic costs, and has used a number of different techniques to assess costs and risks. From all of these perspectives, the evidence gathered by the Review leads to a simple conclusion: the benefits of strong and early action far outweigh the economic costs of not acting.”

[The amount of carbon dioxide in the atmosphere was 379.33ppm. At time of writing it was 421ishppm- but for what it is now,well, see here for the latest.]

The context was this – 

Why this matters. 

We knew. And we knew there was a “business case” for saving life on earth (the very words are bizarre, aren’t they?)

What happened next?

Oh, arguments about the “discount rate” (i.e. Stern was too optimistic)

A variety of “mini-Stern” reports, and for a while everyone using the language. Then nothing.

Fun fact – when Stern visited Australia, Prime Minister John Howard basically dismissed him as “English.”

Categories
Australia Carbon Pricing Economics of mitigation

September 6, 2000 – Emission scheme defeated, it’s time for a gloating press release… #Climate #auspol

On this day, September 6, 2000, South Australian Senator Nick Minchin puts out a press release… I know, hold the front page, right…

But the context is that the first attempt to introduce a national level emissions trading scheme had just been defeated – with Nick Minchin largely responsible.  This was the semi-gloating declaration of victory…

Below is a quote from the ever-reliable Jim Green, writing in “Green Left Weekly”

The federal Coalition government has taken a number of decisions to reassure big business that measures adopted to reduce greenhouse gas emissions will have little or no impact.

Federal minister for industry, science and resources Nick Minchin outlined “specific commitments” to industry in a September 6 press release. They were:

●        that a mandatory domestic greenhouse gas emissions trading scheme will not be introduced “prematurely”;

●        that the government “will involve industry from the inception through to the implementation phase of greenhouse gas abatement policies and strategies that impact on the industry”;

●        that the government will work internationally “to get Australia the best possible greenhouse position”;

●        that the government will assist in “minimising the burden of greenhouse measures on business         through cost-effective actions”; and

●        that the government will not “discriminate against particular projects or regions in greenhouse policies and programs”.

“What we are saying to industry is that in any decisions we make on greenhouse, we will work to maintain their international competitiveness. This is a framework for the government’s greenhouse policy processes. These are all common sense measures that will allow Australian industry to grow and meet our Kyoto commitments. It’s good news for industry, which has warmly welcomed the government’s commitments”, Minchin said.

The government’s “specific commitments” are noticeably lacking in specifics. Canberra’s primary aim is simply to reassure business interests that measures to curb escalating greenhouse gas emissions will have little or no impact on their activities.

Green, J. 2000. Business warms to greenhouse ‘commitments’. Green Left Weekly, 13 September.

https://www.greenleft.org.au/content/business-warms-greenhouse-commitments

On this day the PPM was 367.15 Now it is 421ish- but see here for the latest.

Why this matters. 

There is inertia in human systems, but that inertia is often helped on its way by intransigence.  And that intransigence is not “stupid”. Underestimate the opponents of action at your peril…

What happened next?

Prime Minister John Howard got away with it for two more elections. Only in 2006-7 did this unravel for him.

Categories
Denial Economics of mitigation Kyoto Protocol United States of America

June 8, 1997 – US oil and gas versus Kyoto Protocol, planet

On this day, 25 years ago, (June 8th 1997) US business interests went very public in their ongoing campaign against both domestic legislation but also international agreements on climate change.

The background, quickly – by 1989 US business interests were pushing back hard against (some) politicians concern about “the greenhouse effect.” They created a front group, with the typically misleading name “The Global Climate Coalition” to slow down (or ideally, from their perspective, stop) moves towards putting a price on carbon dioxide, encouraging renewables etc. They rendered the UNFCCC largely toothless, and they’d killed off President Clinton’s proposed BTU tax. But by 1997, pressure was growing. A big international meeting was to be held in December 1997, in Kyoto, at which rich countries were supposed to come up with plans not merely to stabilise emissions, but actually reduce them.

As per a very useful academic article (Levy and Egan, 2003) this – 

On 8 June 1997, the Business Roundtable sponsored full-page advertisements in the US press signed by 130 CEOs, arguing against mandatory emissions limitations at the forthcoming Kyoto conference. Eighty Business Roundtable members did not endorse the advertisements, however. Monsanto had led an unsuccessful effort to draft an alternative text, which acknowledged that sufficient scientific evidence had accumulated to warrant concern and industry’s engagement in developing precautionary measures. This dissenting view was brought to President Clinton’s attention at the June 1997 meeting of the President’s Council of Advisers for Science and Technology (PCAST). According to Jon Holdren, Harvard scientist and chair of the PCAST panel on energy, the President’s awareness of the minority industry faction had significant political ramifications: ‘We actually did get the President off the dime at that meeting. He mobilized an interagency task force, and started a process which eventually converged on a set of policy recommendations for Kyoto.’

See also the “Global Climate Information Project”

The kind of stuff that happened that year? Check out the youtube that climatefacts.org put up…

Global Climate Information Project ClimateFacts.org 1997 TV Ads

Why this matters. 

Splits within the business front (you go, Monsanto, you cuddly treehuggers you!) meant that President Clinton had a little more wiggle room.  For what THAT was worth. It’s worth pondering that, by the way – this often happens – different businesses/sectors, with different interests and vulnerabilities, perceive the best course of action differently. Trade associations/business groupings are often sites for those conflicts.

What happened next?

We shall come back to the Byrd-Hagel resolution soon… Kyoto got agreed, and signed. The US and Australia pulled out before ratifying. It became international law because the Russians wanted into the WTO. It was toothless, and not replaced at Copenhagen. Then in Paris… oh, blah blah blah. The. Emissions. Have. Kept. Climbing.

See also

  • Ross Gelbspan’s work
  • Oreskes and Conway (2010) The Merchants of Doubt
  • Robert Brulle‘s work
  • Riley Dunlap and Aaron McCright’s work on anti-reflexivity.
Categories
Australia Economics of mitigation

June 8, 1973 – Australian Treasury dismisses carbon dioxide build-up. Yes, 1973. 

On this day, June 8, 1973, the Australian Treasury released a report on economics and growth that even mentioned… climate change. Here’s a newspaper report first.

“The other difficulty in assessing resources policy is that the term first appeared in Australian Government circles last year from the Department of Foreign Affairs and was based on the assumption that resources were finite and therefore somebody should be thinking about the implications for the future and producing policies on development, use and sales.

“The Treasury Economic Paper No 2, ‘Economic Growth: Is it Worth Having?’, published today, pours a bucket of cold water on that ‘assumption, arguing that resources are not finite, that they are dynamic, growing in line with technology and demand. As an example it points out that back in the ’30s the iron ore at Pilbara was known, but it was not a resource because there was not the technology to mine it economically.

Davidson, G. 1973. Planning ahead for wise use of Australia’s resources. Canberra Times, 8 June, p.2. [Trove]

Here’s the cover,

The relevant bit of the report.

Why this matters

The economic language of “oh, it will be fine, we will innovate our way out of any problems” has been with us a very long time indeed, hasn’t it?

What happened next?

Treasury did not do a great deal of thinking about climate change for another 15 years or so, best I can tell.

Categories
Australia Carbon Pricing Economics of mitigation Politics

Jan 21 (2010) – The flub that sank a thousand policies #auspol

On this day, in 2010, – yes, another Australia one, but it “matters” –  Australian  Prime Minister Kevin Rudd, was caught out having to admit that his proposed “carbon pollution reduction scheme” was dead and that he was kicking the whole climate issue into the long legislative grass.

The CPRS was an insanely complex piece of legislation. Economist Ross Garnaut said of it in December 2008 that  “”Never in the history of Australian public finance has so much been given without public policy purpose, by so many, to so few,”“ – and that’s before the further watering down. Green groups had called it a give-away to the fossil fuel lobby, and the Green Party had refused to support it in parliament in late November 2009, meaning that it failed to become law.

Rudd was in Norwood, a leafy, and relatively affluent suburb of a large country town called Adelaide in South Australia.

As leader of the Australian Labor Party, Rudd had used climate change as a battering ram to differentiate himself from Prime Minister John Howard, and been elected to do something about the issue. As Prime Minister from late 2007, he had been playing chicken with the Liberal National Party, especially its leader Malcolm Turnbull, and had initially rejoiced when Turnbull was replaced by the dark horse (and subsequent wrecking ball) Tony Abbott. 

But the climate conference in December 2009 in Copenhagen didn’t go well. And in the aftermath, Rudd ignored the urging of senior Labour Party members to call a snap election on the question of climate policy, and then didn’t even come up with a plan B. So he was caught on the hop. We know all of this because the period is intensely reported in the battle of the memoirs. And I’d alert you to Philip Chubb’s Power Failure. Julia Gillard’s My Story, Paul Kelly’s Triumph and Demise. 


What happened next?  Australia entered a period of extreme volatility about climate change that  has brought down successive prime ministers and left the country with enormous policy failures around climate, energy, renewables, you name it. If Rudd had had the courage of his convictions, or even just taken on the Green Party idea of a temporary carbon tax while an Emissions Trading Scheme was devised/an election held, none of this needed to have happened. And here we are. 

Why this matters? Because I think you can make an argument that Australia’s confusion and cynicism about climate change and politics is directly related to Rudd’s failure to pursue the climate agenda to the ballot box again, if needs be.,

Rudd had enjoyed going on and on about climate change as “the great moral challenge of our generation” (which it is). People believed him. Rudd’s popularity remained stratospheric. Then, when people decided that Rudd had been using climate as just another “positioning issue,” they felt cheated, betrayed, taken for fools. Rudd’s personal approval ratings took a massive hit. Climate was the only issue, but it certainly was the straw that broke the camel’s back. 

So if you, as a political leader, are going to use climate change as an issue, you better bring your A game and if your A game doesn’t work, you better switch to your B game, which is as good as your A game. And if you don’t, you will cause havoc. And it is now harder than in Rudd’s day, because everyone is cynical, everyone is kinda terrified, whether they can articulate it to themselves or not.

Categories
Economics of mitigation Predatory delay United States of America

1971, Jan 6: the whiff of sulphur (taxes) and 20 more years of #PredatoryDelay

On this day 51 years ago the idea of – gasp –  putting a tax on something that was causing environmental damage (cuh-razy communist idea) was kicked around within the Nixon administration.

We know this thanks to a really great book called Behind the Curve, by Joshua Howe, which looks at the climate issue before it became famous (see review in Environmental Politics here [paywalled]).

“As early as 1970 the Nixon administration considered levying a tax on SO2 tied to energy production from coal.”

(Howe, 2014:148)

And the footnote has it – John C. Whitaker to Ken Cole, memorandum, Jan 6 1971 “Sulfur Dioxide Emissions Charge,” memo for John B. Connally [sic] Jr. secretary of treasury, Nov. 11 1971. The tax was never implemented, in part because the Office of Management and Budget showed that it would work too well, taxing SO2 emissions out of existence before the program could generate enough revenue to meet Nixon’s pro-business political goals. (Howe, 2014:244) 

Why this matters – we are told that this is all impossible to do anything about – over-emphasised complexification, as part of the predatory delay.  Of course, climate is a much bigger/wider issue than acid rain, and carbon (in the form of fossil fuels) is far harder to replace in the production chain than CFCs or sulfur.  But the basic point – that you can put up taxes on things you are trying to discourage, as long as you think about/do something serious about  the distributional effects on the poorest and most vulnerable – should be entirely uncontroversial. As we will see, this has not been the case.

What happened next?

It would be another 20 years before anything substantive got done about sulphur in the US, with the 1990 Clean Air Act.  The question  of whether emissions trading mattered, or whether technological developments independent of a price-on-sulphur has given academics, activists and policymakers something to write and talk about too. 

Further reading

Bohr, J. (2016) The ‘climatism’ cartel: why climate change deniers oppose market-based mitigation policy. Environmental Politics, Vol. 25, 5.  https://doi.org/10.1080/09644016.2016.1156106

Brigham Daniels, Andrew P. Follett, and Joshua Davis, The Making of the Clean Air Act, 71 HASTINGS L.J. 901 (2020). Available at: https://repository.uchastings.edu/hastings_law_journal/vol71/iss4/3

Gabriel Chan, Robert Stavins, Robert Stowe, and Richard Sweeney (2012) THE SO2 ALLOWANCE-TRADING SYSTEM AND THE CLEAN AIR ACT AMENDMENTS OF 1990: REFLECTIONS ON 20 YEARS OF POLICY INNOVATION. National Tax Journal, 65 (2), 419–452


Lohmann, L. 2006. Carry On Polluting: Comment and analysis in New Scientist. The Cornerhouse, 2 December.