The Long and Costly War on Carbon: Viv Forbes

The Australian government claims that next month’s tax on carbon dioxide cannot be blamed for today’s soaring costs of living.

This tax, however, is just their latest assault in the decades-long war on carbon that is already inflating the cost of everything.

For at least a decade, power companies have been obliged to source 10-15% of their power at inflated prices from costly and unreliable sources like wind and solar. And for every wind or solar plant built, a duplicate backup gas facility is needed, increasing the demand and price for backup gas, hitting other gas consumers. Moreover, the threat of more carbon taxes has deterred the construction of efficient new coal-burning power plants. Rising electricity costs feed into the cost of everything from public transport to building materials.

The climatists are also responsible for numerous policies pushing up the price of food. These include the ethanol/biofuel madness, the restrictions on the fishing industry, the Kyoto scrub clearing bans, the spread of carbon-credit forests over farming and grazing land, the never ending war on irrigators, and the virtual ban on building new water-supply dams.

Then we have all the hidden costs of the climate industry. Thousands of our smartest graduates are lured into well-paid dead-end desk jobs in the overheads industry devoted to climate red tape, while real entrepreneurs are unable to find workers to develop our continent of under-utilised resources. There is an overpaid bureaucracy devoted to climate “research”, alternate energy, international junkets, Kyoto give-aways, and administration, auditing, enforcement, accounting, law and propaganda for their empire of climate taxes and subsidies.

Finally we have income tax implications from all the money being flung around to bribe people to accept their carbon tax? Every Australian will get these bills somewhere, sometime. And who pays for the hundreds of millions poured down subsidy rat-holes like carbon capture, solar panels, pink bats and the IPCC?

Australia’s crippling carbon tax is but the latest symptom of the costly Climate Madness infecting the well-fed elite of the western world.

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Text from Viv Forbes, photograph from Jennifer Marohasy taken near Lithgow, NSW

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23 Responses to The Long and Costly War on Carbon: Viv Forbes

  1. val majkus June 23, 2012 at 2:50 pm #

    another good post by Viv
    I’ve been checking out E M Smith’s blog and like this article on How to sell Skepticism to Congress

    might help us with parliamentarians
    http://chiefio.wordpress.com/2012/06/09/how-to-explain-skepticism/

    he’s quoting here but good summary
    MK: So let’s say you were a scientist, and you were planning to make a pilgrimage to D.C. and go have your 15‑minute meeting with your representative. How would you make a good impression?

    RW: Well, first of all to recognize that most members of Congress don’t serve on Committees that have a science orientation. So you have to make the presentation in a form that is understandable to a guy who is not going to be looking at the subject matter in any depth. Congressmen just don’t have the bandwidth in order to do things in depth. So if you want to get it across take your best punch line‑‑what it is you’d like to see as the end product, why you think it’s important‑‑and then be excited about the fact that if Congress actually did it, that it would make a difference.

    That’s what members of Congress want to hear. They don’t want to hear about the bench tests. They don’t need a lesson in all of the physics theories or chemical theories that go into it. What they need to know is why it’s important, what needs to be done in order to bring it to fruition, and why that would be an exciting outcome.’

    I’ll remember that when writing to parliamentarians … ‘just don’t have the bandwidth to do things in depth’

  2. Pikey June 23, 2012 at 3:48 pm #

    Well written Viv.
    Stating what should have been obvious to most people for years.
    But how are we going to overthrow this madness that is truncating our stansard of living?
    Sadly, very sadly we have at all three levels of Government, elected representatives who pay more attention to and are more concerned with the sensationalist media than they are with practical advice and comment from their masters – the majority of Australian people.

    Prior to gaining Government most of these people seem rational and determined to change policy for the better.
    But on gaining power, at all three levels, the Green Sir Humphrey Appleby’s take over their brain and common sense is lost in an ever growing bureaucracy hell bent on maintaining control and growing ever larger and more costly.

    The profileration of uneconomic green schemes and green tape that is now restricting everything we do in this country seems incapable of being tackled by our Politicians.
    They are using nail scissors to prune the all invasive green vine when a chainsaw and machette are required.
    Politicians will only listen when we shout loud enough and demonstrate that we will no longer accept lack of action.
    I have now spent over five years fighting for some rational water policy in Australia and in spite of many meetings and presentations with Politicians of both sides and at both State and Federal level we have only convinced a minority that present policy is irrational, impractical, hugly costly and counter-productive.
    They just don’t get it.
    Truth and the National interest policy that can flow from its dissemination gets drowned by environmental sensationalism trumpeted by a third estate that does not deserve the name.
    Thank goodness for blogs such as this and others that at least allow for some rational debate.
    Keep it up Guys it is great to see.
    Pikey.

  3. Pikey June 23, 2012 at 3:51 pm #

    Sorry Guys.
    Obviously I meant “Fourth Estate.”
    Must learn to proof read.

    Pikey.

  4. Debbie June 23, 2012 at 5:02 pm #

    http://www.guardian.co.uk/environment/2012/jun/22/uk-climate-policy-risk-government?newsfeed=true

    And every single day there is at least one of these floating around as mainstream news.
    We still have those warnings and veiled threats….and the fear of being ‘left behind’….even though it’s quite obvious that countries like China are not going to play.
    How similar does this sound to what gets dished up to us ad nauseum?

    “In 2004 the government’s then chief scientist, Professor Sir David King, made headlines around the world when he declared that climate change was “the most severe problem we are facing today, more serious even than the threat of terrorism”.

    or this?

    Ashton also told MPs that far from leading the world, the UK was falling behind important economic competitors such as Germany, Korea, China and Japan in some of the big future industries such as offshore wind energy and carbon capture and storage systems for gas and coal power stations.

    “Internationally we must resolve the false choice, exacerbated by the current crisis, between economic security and climate security,” said Ashton. “A rapid shift to low carbon growth is essential for security, competitiveness and prosperity, not an intolerable risk to competitiveness, jobs and growth.”

  5. Robert June 23, 2012 at 5:29 pm #

    I truly believe the Guardian exists only to make the NYT and Fairfax press appear vaguely adult by comparison.

    I once browsed the environment section of the Guardian and copied these extracts. None of this is satirical or tongue-in-cheek, and it all comes from a single issue.

    _______________________________________

    ‘Tory madrasa’…Candidates trained by rightwing group that rubbishes NHS, dismisses global warming and backs waterboarding

    ***

    Bird Friendly Hamper
    Tasty treats for our feathered friends, plus some wool for nesting and a snug nest pocket, all presented in a FSC certified timber box.

    ***

    David Wood, a spokesperson for EcoBuild accepted that some stands were overly wasteful, but added: “The more important thing is that it stimulates the industry rather than the fact that there are a few light-bulbs on.” He also rejected the suggestion that they should require the stall-holders to reach certain minimum eco-standards, saying that this would restrict exhibitors’ ability to market themselves

    ***

    Made from soft microfibre faux leather by ‘happy workers’ in Portugal. “Footwear for the Ethically Conscious” is embossed on the sole of each shoe.
    Brown lace-up boots, £95.50

    ***

    I am quite tempted sometimes to be a calamatist. There is something intellectually delicious about all that super-pessimism.

    ***

    Heat sensitive CO2 Mug
    The colours change to reveal the world’s most severe carbon footprint offenders!

    ***

    But there was one glorious island of eco-sainthood in the middle of all this consumer madness and that was the UK Green Building Council, whose stand was lit by a tiny 40 watts in total, using four energy efficient lights. They were so proud of how green their stand was; they even had a handout that explained it all. There was natural renewable flooring made of rubber, logos and lettering made from recycled yogurt-pot plastic, re-used steel joints supporting the floor, hemp cushion covers and organic stuffing and so on

    ***

    An ambitious project to encourage an island community to dramatically cut its electricity use for one day was hindered by bad weather – and a school’s decision to bake scones, organisers said today.

    ______________________________________

    I repeat: this is not satire. It’s normal fare for Guardian readers. If anyone wonders how some of the warmists who comment on this site can be such conceited nongs, just remember that the Guardian is regarded as a sophisticated journal of reference by our Green Betters.

  6. John Sayers June 23, 2012 at 7:11 pm #

    This mornings papers had Malcolm Fraser castigating both Juliar Gillard and Tony Abbott for the outcomes regarding the boats.

    No one is prepared to blame the Greens!!

    We all oppose the Carbon Tax.

    No one is prepared to blame the Greens!!

    We are being forced to sign up on Gay Marriage.

    No one is prepared to blame the Greens!!

    The Northern export cattle trade is in chaos.

    No one is prepared to blame the Greens!!

    The Northern fishing industry has been closed down due to marine parks.

    No one is prepared to blame the Greens!!

    The MDB is in chaos.

    No one is prepared to blame the Greens!!

    I could go on…………..

  7. el gordo June 23, 2012 at 8:42 pm #

    An article by Marcus Priest in the weekend Fin Review.

    ‘Coal power generators face low wholesale electricity prices, falling demand and a carbon price from July 1, forcing one major power company to pump in “rescue capital” to save its generation assets.

    ‘A survey by The Weekend Financial Review of generators that will pay about $4 billion of carbon tax next financial year reveals alarm about the effect of tough trading conditions and a carbon price of $23, way above the world price of $4.’

  8. Peter Lang June 23, 2012 at 9:00 pm #

    Q1. What will the Australian CO2 tax and ETS cost?

    Answer: $20,000 for every man, woman and child; $35,000 per worker (total to 2050 in present day dollars)

    Q2. What is the benefit?

    Answer: nothing. There is no benefit. CO2 tax and ETS will not change the climate and will not affect sea levels.

    More Detail:

    According to Treasury figures, the net cost, total to 2050, for Australia would be $1,345 billion (undiscounted), or $390 billion (discounted at 4.35% pa). http://www.skepticalscience.com/news.php?n=1325#80580

    However, that is probably an underestimate because the benefits are probably overstated the costs understated. Furthermore, the ultimate compliance cost has not been estimated or included http://www.onlineopinion.com.au/view.asp?article=13578&page=0

    Importantly, the benefits would only accrue if the whole world acts in unison, and if we (ridiculously) sum the benefits (estimated by climate alarmists) over the next 500 years and, of course, if the assumed damages would occur in the absence of the CO2 pricing policies.

    The assumptions that underpin the analyses (Nordhaus, Stern, Garnaut, etc) are:

    • Negligible leakage (of emissions between countries)

    • All emission sources are included (all countries and all emissions in each country)

    • Negligible compliance cost

    • Negligible fraud

    • An optimal carbon price

    • The whole world implements the optimal carbon price in unison

    • The whole world acts in unison to increase the optimal carbon price periodically

    • The whole world continues to maintain the carbon price at the optimal level for all of this century (and thereafter)

    If these assumptions are not met, the net benefits estimated by Nordhaus cannot be achieved. As Nordhaus says, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf p198

    “Moreover, the results here incorporate an estimate of the importance of participation for economic efficiency. Complete participation is important because the cost function for abatement appears to be highly convex. We preliminarily estimate that a participation rate of 50 percent instead of 100 percent will impose a cost penalty on abatement of 250 percent.”

    In other words, if only 50% of emissions are captured in the carbon pricing scheme, the cost penalty to the participants is 250%. The 50% participation could be achieved by, for example, 100% of countries participating in the scheme but only 50% of the emissions in total from within the countries are caught, or 50% of countries participate and 100% of the emissions within those countries are caught in the scheme (i.e. taxed or traded).

    Given the above, we can see that the assumptions are theoretical and totally impracticable. Can you imagine how Australia, for example, could capture in its CO2 tax and ETS 100% of emissions from 100% of emitters in Australia?

    Clearly there are enormous costs of the CO2 tax and ETS and no benefits for Australia unless the world acts in unison. And even then any benefits are contentious.

  9. Tony O'Neill June 23, 2012 at 10:01 pm #

    Well said Viv – again

  10. spangled drongo June 24, 2012 at 7:50 am #

    Thanks Viv,

    Teys Brothers at Beenleigh have a solution which emphasizes the stupidity of this carbon tax:

    http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/global_warming_fixed_abbatoir_shut/

  11. Minister for Truth June 24, 2012 at 9:40 am #

    Thanks you Peter Lang for your work in ferreting out this information.

    I find it absolutely incredible that the MSM hasnt cottened onto this basic failure of pretty ALL the assumptions …. after the passsge of all this time.

    So one more time if I may:

    ” The assumptions that underpin the analyses (Nordhaus, Stern, Garnaut, etc) are:

    • Negligible leakage (of emissions between countries)… FAIL

    • All emission sources are included (all countries and all emissions in each country)… FAIL

    • Negligible compliance cost… (FAIL)

    • Negligible fraud… (FAIL, its already occurring)

    • An optimal carbon price… (FAIL, not possible because of other failures)

    • The whole world implements the optimal carbon price in unison… (FAIL, delusional to think that it would have been even remotely possible…given that the underlying science is so unreliable and seen as such by increasing numbers of o/s leaders)

    • The whole world acts in unison to increase the optimal carbon price periodically…(FAIL,impossible)

    • The whole world continues to maintain the carbon price at the optimal level for all of this century (and thereafter)….. (Undoubtedly it will fail as it should. Impossible anyway even if AGW was true which it aint)

    If these assumptions are not met, the net benefits estimated by Nordhaus cannot be achieved. As Nordhaus says, http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf p198″

    None of these assumptions have been met, and can in the future,be satisfied.

    So where does that leave all the Treasury/ Garnaut calculations …up S#T creek

    We are run by a collection of the greatest morons ever assembled under one roof ..and thats not including the dills who have been recently appointed to the CC Authority Board

    If this is an example of what underpins the analysis of the carbon tax, and the general calibre of the decision making in this country then we are done for.

  12. Ian Thomson June 24, 2012 at 12:18 pm #

    O/T, but if anyone has a low enough blood pressure this is on tonight.

    http://www.abc.net.au/tv/programs/sundaybest.htm?WT.svl=tv2

  13. cohenite June 24, 2012 at 1:37 pm #

    Peter, in respect of the cost of the CO2 tax you may be interested in this:

    http://www.abc.net.au/unleashed/113676.html

    In particular I am interested in this aspect:

    http://www.theaustralian.com.au/news/nation/ets-to-shrink-regional-growth/story-e6frg6nf-1225691476399

    This indicates that a CO2 tax/ETS would shrink the GDP by $2 trillion by 2050.

    There have been various ‘suggestions’ that this shrinkage of $2 trillion does not amount to much because properly discounted, as a % of GDP, per year it is insignificant relative to total GDP in any one year.

    Are you aware of any calculations which have arrived at a figure for the annual losses in the years from 2010 – 2050?

  14. val majkus June 24, 2012 at 1:45 pm #

    I know this is o/t but (thanks to sdog from Catallaxy) have a look at Henri
    http://www.anthropocon.com/2012/06/22/henri-the-brooding-french-existentialist-cat-returns/
    and here’s the two previous Henris
    http://www.youtube.com/watch?v=0M7ibPk37_U (no 1)
    http://www.youtube.com/watch?v=Q34z5dCmC4M (no 2)

  15. Peter Lang June 24, 2012 at 2:24 pm #

    Cohenite,

    Are you aware of any calculations which have arrived at a figure for the annual losses in the years from 2010 – 2050?

    Thank you for your question – I love it when people ask me questions I’ve already done the work o to answer 🙂 [and H/t Henry Ergas for getting me started on this and for providing his spreadsheet].

    Here are Treasury’s estimates of the net cost of the CO2 tax and ETS from 2012 to 2050. At the end I provide the total cost undiscounted and discounted at 4.35% (the default discount rate, in the Nordhaus RICE model 2012 update, for the USA for 2005 to 2050). The figures are based on the assumptions listed in my comment at June 23rd, 2012 at 9:00 pm.

    Source:
    Treasury, “Strong Growth, Low Pollution future”, Chart 5:13
    http://archive.treasury.gov.au/carbonpricemodelling/content/chart_table_data/chapter5.asp

    Gross domestic product – Level (2010 $ billion)
    ‘Medium global action’ minus ‘SGLP core’
    year Net Cost
    2010 0
    2011 0
    2012 0
    2013 2
    2014 2
    2015 4
    2016 4
    2017 4
    2018 5
    2019 5
    2020 5
    2021 7
    2022 8
    2023 8
    2024 10
    2025 12
    2026 13
    2027 16
    2028 16
    2029 19
    2030 21
    2031 24
    2032 27
    2033 29
    2034 33
    2035 36
    2036 40
    2037 43
    2038 47
    2039 51
    2040 55
    2041 59
    2042 63
    2043 68
    2044 72
    2045 76
    2046 82
    2047 87
    2048 93
    2049 97
    2050 102
    Discount rate
    0% $1,345 undiscounted
    1.35% $897 Garnaut
    2.65% $617 Garnaut
    4.34% $390 Nordhaus

  16. Peter Lang June 24, 2012 at 2:56 pm #

    Correction: This statement is not strictly correct for the Treasury modelling:

    The figures are based on the assumptions listed in my comment at June 23rd, 2012 at 9:00 pm.

    The assuimptions I listed in the previous comment are my generalised summary of the assumptions that underpin the CO2 price modelling by the main research groups – such as Nordhaus’s RICE and DICE models. Treasury made various assumptions about the rate at which other countries would implement an ETS and the rate at which the whole world wouid move to implement a unified, global CO2 price.

  17. cohenite June 24, 2012 at 2:58 pm #

    So treasury get a GDP shrinkage by 2050 of just over $1 trillion. Am I reading that right? Which is less than that found by Frontier Economic Modelling.

  18. Peter Lang June 24, 2012 at 3:27 pm #

    Cohenhite,

    Yes. Treasury’s estimate is $1,345 billion (undiscounted). But talking about undiscounted figures makes no sense. We have to use the discounted figures. Then the argument becomes, what discount rate should we use. That’s another long argument – not resolved anywhere.

    However, I think what is important are the benefits and the totally unrealistic assumptions they are dependent on. So you can say no benefits.

    Also the costs. I believe the costs (loss of GDP gtrowth) are grossly underestimated. For example, I’d encourage readers to read or re-read “The ultimate compliance cost of the ETS“: http://www.onlineopinion.com.au/view.asp?article=13578&page=0.

    Using the Nordhaus discount rate, the estimated cost is $390 billion (if all the assumptions are correct). That works out to be $20,000 per person, or $35,000 per worker.

    $390 billon is ten times the cost of the NBN and we get absolutely sweet FA for it.

  19. spangled drongo June 24, 2012 at 4:59 pm #

    James Lovelock, scientist and one time darling of the green religion, bags them even further:

    http://www.torontosun.com/2012/06/22/green-drivel

    Is there hope for us yet?

  20. cohenite June 24, 2012 at 5:19 pm #

    “$390 billon is ten times the cost of the NBN and we get absolutely sweet FA for it.” Yes, in respect of the CO2 tax and the NBN.

    And of course, if the lights go out, the idea of a cost tends to fall by the wayside.

  21. Max June 25, 2012 at 9:18 am #

    This is one of the most informative posts to date about this lunacy of a Tax.

  22. Peter Lang June 25, 2012 at 12:39 pm #

    I’ve been in an unpleasant debate with the so called academics who blog at “The Conversation”. One Peter Ormonde, claims he is a farmer and an economist. He’s also admitted he’s a catastrophist. “It’s too late” – we’re all gonna die.

    In answer to one of his debating points – about sea levels – I provided a detailed answer with many useful references. I’ll post my comment below in case others here find some of the information and links useful.

    “Peter Ormonde,

    One simple question first up: What were the sea levels in the last geological warm period to which you refer (Holocene) … a map would be helpful… what did Australia look like? Where was the East Coast?

    See it’s all very well to point out that in deep time it has been hotter – but we weren’t here then Pete. Neither was Sydney, Melbourne, Bangladesh, New York.

    What period are you asking about, and where? The land goes up and down. There are many places where sea level was higher and many where lower at any given time.

    For earlier periods the maps here http://www.scotese.com/earth.htm show where sea were and where continents were in the past. Click on each period listed on the left:

    The start of your second paragraph seems arrogant to me. It is also naive. The fact we weren’t here is irrelevant. We know life thrives when warmer and struggles when colder. We know humans struggles in cold times and thrived in warm times. Your comment is not about science. It is emotional, scaremongering talk.

    Do you realise that only 0.1% of world population and 0.1% of world production is below 1 m elevation? http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf Figure 7-5, p145.

    Figure 3 here http://www.springerlink.com/content/g02124153m05410k/fulltext.pdf shows the total population and assets exposed to extreme sea level rise is effectively zero for Australiasia.

    The DCCEE estimates are massive exaggerations and simply scaremongering as I’ve highlighted here: http://www.collide-a-scape.com/2012/06/05/conservatives-who-think-seriously-about-the-planet/#comment-112290

    Do you realise there is no persuasive evidence of catastrophic consequences of AGW? Nordhaus (2012) http://onlinelibrary.wiley.com/doi/10.1111/j.1467-9779.2011.01544.x/full says “Not so dismal conclusions” and “We conclude that a loaded gun of strong tail dominance has not been discovered to date.” I.e., not so scary after all, and not dangerous or catastrophic.

    What do you know about the estimated damage costs of sea level rise? Anthoff, Nichols and Tol (2010) “The economic impact of substantial sea-level change” http://www.springerlink.com/content/851112j434t26502/fulltext.pdf
    estimates the damage costs, for the whole world, for a 1 m sea level rise would be about $1 trillion (Figure 2). This is present value using a discount rate of about 2% (I think), being the sum of 1% ‘pure rate of time preference’ and (my rough estimate) 1% per capita growth rate of consumption (average for the world for the period 2005 to 2100) (see text and equation (6), p325).

    Let us compare this $1 trillion estimated damage cost for a 1 m sea level rise with world cumulative GDP from 2005 to 2100 (the same time period). First let’s calculate it without discounting, then we’ll discount. I’ll assume a world GDP growth rate of 3% pa and use constant 2011 dollars (standard practice).

    World GDP in 2011, according to IMF was $79 trillion.
    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
    World GDP in 2100, using 3% GDP growth rate, would be $1,095 trillion
    Cumulative world GDP for 2005 to 2100 would be $35,405 trillion

    If I apply a discount rate of 2%, the present value is $10,249 trillion
    I may have the discount rate wrong. Nordhaus (2007) in DICE model used a discount rate of 5.5%
    If I apply discount rate of 5.5% pa, the present value is $2,377 trillion.

    The estimated damage cost of $1 trillion for a 1 m sea level rise over a century, is negligible compared with the world GDP of $10,249 trillion (or even compared with $2,377 at 5.5% discount rate).

    I conclude: $1 trillion total cost to the whole world, spread over 95 years is absolutely trivial.

    Anthoff, Nichols and Tol (2010) language is more cautions; they state (p325):

    “While the damages from sea-level rise are substantial, they are small compared to the
    total economy, provided that coastal protection is built. This remains true for the largest 2-m rise scenario.

    I’d welcome corrections.

    Summary message: Cooling would be really catastrophic. Warming would not be catastrophic. Cooling is the real risk. Therefore, there is no justification for massively costly mitigation policies. Rational policy is adaptation to whatever happens, not mitigation. Furthermore, if you want mitigation then convince the loony Greens and socialists/progressives to get out of the way and stop blocking economically rational solutions.”

    https://theconversation.edu.au/why-the-global-environmental-movement-is-failing-7819

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