Comments on: Don’t Ditch Cattle Yet, Science Isn’t ‘Settled’

By: Tim Curtin

Tim Curtin — Fri, 21 Nov 2008 11:39:31 +0000

Helen: I know it beggars belief, but the Garnaut ETS requires emitters to purchase permits for 100% of their CO2 emissions. For Rio’s aluminium operations, the full year’s cost would be up to US$8 billion (depending on the exchange rate) over a full year, or 66% of its Al. gross sales revenue, i.e. before taking into account operating costs. As aluminium is laregely exported, Rio cannot pass on permit costs to its customers escept in the EU, nor to its local customers as they can buy from China or Japan. The Garnaut report gives no indication that this would be tax deductible, and I think we can assume not, since that would dilute the intention, which is indeed, as Garnaut specifically admits, to drive all aluminium production here offshore (to Kinshasa is the great man’s suggestion). Now your business probably does not emit as much per dollar of gross sales as Rio’s Al., but the principle is the same, the costs of ETS permits are a tax like council rates except that evidently they are not a tax deductible expense. You can avoid them by passing on the cost to your buyers, by not buying any energy, or by generating your own solar and wind power, since for many years to come most grid power and fuel will still be carbon emitting, or by closing down. You sound surprised, evidently you are not aware Ms Wong and all the green NGOs want you to close down unless you decarbonise and soon. And please do not mention net profit again, at least not in front of Luke, NT, and the children, as that is climate porn.

By: Helen Mahar

Helen Mahar — Fri, 21 Nov 2008 10:57:12 +0000

Tim, excuse me while I pick my jaw up from the floor. There, now, that’s better. Take a deep breath …
Garnaut may be an economist, but does he understand anything whatsoever about basic accounting/bookkeeping?

A very simple explanation of terms for readers who have never had to run a business …

Gross margin is revenue (gross sales) less actual costs of production. Both sales and costs of production vary according to how many widgets are made, acres cropped, livestock run etc, and how much product is sold at what price.

Then the fixed costs and overheads are deducted like Council rates, govt charges, office, advertising, accountancy, depreciation, Insurance, etc, etc, to get net profit.

With the financial crisis and sales dropping, many businesses are already struggling to make any net profit. These businesses have to cut costs to survive – eg dismissing employees.

The ATO goes after net profit. You are telling us that an ETS would go after gross sales??? That WILL close down businesses – and jobs, wholesale. And fast. Hellishing fast.

By: Tim Curtin

Tim Curtin — Fri, 21 Nov 2008 04:55:29 +0000

NT, I should amend my penultimate sentence, it is activities whose emissions in tonnes per $1 million are more than 6,670 who incur an ETS tax of 30% of revenue, so in effect 100% of gross margin if that is 30%. This applies to aluminium and beef cattle. For other sectors, such as cement, sheep, and dairy cattle, the ETS doubles their current corporate tax to all-in 60%. For all whose emissions exceed 1500 tonnes per $1 million of sales, the all-in tax rate becomes over 50% on gross margins of 30% or more. As New Zealand has discovered most tree planting is disallowed under Kyoto. Rio Tinto, one of Australia’s top ten companies, had operating profit at 32% of gross sales of US$30 billion in six months to end June 2008. Aluminium accounted for 40% of gross sales and would be liable to ETS of A$4 billion (at the near parity USD/A$ rate at that time), or 40% of its total operating profit, without taking into account the emissions of its other operations. When I speak of the Rudd war on employment I am not joking.

By: Tim Curtin

Tim Curtin — Fri, 21 Nov 2008 02:58:22 +0000

Hi NT, we may be at cross purposes, but we are talking about the Garnaut ETS which is aimed at ending livestock raising in Australia and worldwide, in favour of kangaroos. See The Australian, 1st October 2008, “Eat Kangaroo to help combat climate change”: “[Garnaut cites researchers who] conclude that by 2020, beef cattle and sheep numbers in the rangelands could be reduced by seven million and 36 million respectively, and that this would create the opportunity for an increase in kangaroo numbers from 34 million today to 240million by 2020”. The Report did not mention the impact of these reductions on Australia’s exports of beef (which account for two-thirds of total production), wool, and sheep. The same applies to all others covered by the ETS. They can only profit by themselves developing energy sources that emit less than grid electricity or ‘fossil” fuels, as that is the only way to earn by selling un-needed permits. In reality most EITE firms (ie either exporting or exposed to imports) will be driven out of business by the de facto carbon tax – which is what ETS really is – since that is likely to settle at $45 per tonne, which for the industries listed in the Appendix to the Green Paper, amounts to an effective additional profits tax of 100% for all whose emissions amount to 30% or more per $1 million of gross sales (since most firms are lucky if they achieve gross margins of 30% of sales). Sadly, since the Australian public service and Reserve Bank became branches of the ALP some 25 years ago, none of them know the difference between sales and profits, as shown so brilliantly by the Green Paper and Garnaut Report (he is a lifelong affiliate of the ALP).

By: NT

NT — Fri, 21 Nov 2008 01:28:54 +0000

Tim, you must have me confused with someone else. I have never advocated the removal of livestock.
Helen Mahar asked some questions, which I attempted to answer. I also recommended she actually talk to people doing research.

“I see you implicitly left out graziers and dairy farmers from your listing of “all” beneficiaries of ETS. ”
I didn’t attempt to list all, that is something in your head. I simply pointed out there will be many ways for farmers to take advantage of the ETS.

The ETS is going to happen, don’t you think time would be better spent attempting to work out how to get farmers to profit from it rather than moaning.

By: Tim Curtin

Tim Curtin — Thu, 20 Nov 2008 10:26:12 +0000

I am pleased to note that Luke at last accepts my data on livestock emissions, but not as yet NT. Why do so many including all involved in the Garnaut report have such difficulty with gross and net concepts? Livestock’s gross emissions of CO2 and CH4 may seem big but are at most net zero and are in fact net negative once you do full carbon accounting taking into account total numbers (a concept too far for the DCC formerly AGO). Similarly Garnaut like Stern formally admits that there are uptakes and that emissions need only be reduced to that level, but to create maximum dislocation in furtherance of the Rudd-Wong war on employment he then wants global emissions to fall to less than 20% of current uptakes, on the specious and spurious grounds that all sinks are already saturated, so that any new tree planting etc must fail because of said saturation (see Canadell et al passim). But then Garnaut tells us that actually new forests can sequester carbon. This proves he has never read a word of his own report, put together as it was by a team of hired shonks, since that passage contradicts his own Fig.2.7. BTW, his estimate of CO2 reaching 1000 ppm by 2100 derives from the ultimate and chief shonk, Tom Wigley, who deftly doubled the actual rate of growth of atmospheric CO2 since 1958 of less than 0.5% pa. to 1% p.a. from now until 2100, which neatly produces 1000 ppm from today’s 385, a figure duly endorsed as gospel by the gullible Garnaut-Wong mobs. Never has there been a Report like Garnaut’s so demonstrably lacking in any due diligence with its vapid acceptance of any and all rubbish spouted by the Wigleys and Canadells and Karolys that are spreading across this pleasant land like the worst weeds. NT, I see you implicitly left out graziers and dairy farmers from your listing of “all” beneficiaries of ETS. What would the pastures be for in the absence of the livestock that the ETS is designed to eliminate?

By: NT

NT — Thu, 20 Nov 2008 09:24:26 +0000

Helen
So sorry for failing you in your quest for information. I did suggest you contact the agriculture dept of your nearest university, but I guess you didn’t.

Anyway, perhaps you could start with Wikipedia. I know a lot of people round here are edgy about Wikipedia, but generally it’ll get you started.

http://www.en.wikipedia.org/wiki/Methane

Or just go to Wikipedia and search on methane, it has answers to pretty much all your questions.

“Found no estimates of % ofdomestic ruminant contribution to atmospheric methane, nor any assessment of amount domestic ruminants are displacing termite methane production So, until told differently, I conclude any displacement factor is conveniently being ignored in the calculations for carbon debits to be attributed to domestic ruminants. I smell cooked books.”

Apparently ruminants are about 115 Tg/a whereas termites are 20Tg/a. Ruminants seem to be the second biggest single source.

I stress though, contact a university, don’t rely on the info you get here… It’ll be poor quality.

I don’t know if Termites were around in the Paleocene, but trees (as in the flowering kind we have in Australia) didn’t evolve into big things until sometime after the Cretaceous. So there may have been termites around. The methane in the Paleocene couldn’t have come from a biological origin, it was either from clathrates, a big volcanic event or from a large comet. Most likely clathrates.

“I conclude that Australian farmers are being set up to carry a hugely disproportionate cost for Australia’s compliance with the Kyoto agreement.

That septic set up is a good incentive for farmers to turn sceptic.”

I think you are missing what could be a gold mine. If anyone is set to take advantage of carbon credits, it’s farmers. Perrenial pastures, biofuels, tree farms… All will be advantaged.

People worst hit will be the coal and gas industries.

By: Helen Mahar

Helen Mahar — Thu, 20 Nov 2008 08:59:40 +0000

Back to the cows , methane, and the questions I asked. NT told me that atmospheric methane was so minute as to be measured in PPB. No thanks to NT. Tim told me that atmospheric methane was measured at 1.77 ppm, less than 0.5 % of atmospheric carbon – with a heat factor estimated about 21 times that of carbon. Thanks Tim.

NT provided a link that referred to a previous era when both temperature and methane levels were high. Termites were probably around then, but I am not sure about cows. Luke sent me to a heap of research papers about measuring methane production in cows and how to possibly reduce it. (What ARE they doing to those poor cows?).

Then further searches revealed an estimate for termites being responsible for about 20% of atmospheric methane. Found no estimates of % ofdomestic ruminant contribution to atmospheric methane, nor any assessment of amount domestic ruminants are displacing termite methane production So, until told differently, I conclude any displacement factor is conveniently being ignored in the calculations for carbon debits to be attributed to domestic ruminants. I smell cooked books.

Given that Australia is currently emitting about 29% carbon above the 1990 target, that the Australian Government is counting on carbon credits from the cessation of clearing to balance the books to date for all Australians (credits forcibly extracted from farmers), that farmer’s power usage will come under a cap and trade system, as will questionable methane estimates, I conclude that Australian farmers are being set up to carry a hugely disproportionate cost for Australia’s compliance with the Kyoto agreement.

That septic set up is a good incentive for farmers to turn sceptic.

By: Luke

Luke — Thu, 20 Nov 2008 05:19:43 +0000

What a load of drivel by our usual industry apologist with quickie back o’ the envelope. Loss of top soil is a well considered problem. Your knowledge of soil movement is landscapes is a giggle. I’m stunned – this is weak even by your standards.

So you think the soil must go right through a whole system from top of the catchment to the bottom.

And I love the shell game trick – oh look the soil has moved from there to here. But I wonder what “there” now looks like.

Google deposition ratio and particle size distribution and get back to us.

The Gascoyne being a good example. Do some research on the 50% reduction productivity in the 1930s. Or perhaps you’d like a few thousand photographs of the rest of Australia? Pretty hard to deny when you’re down to the B horizon mate.

Some lovely fenceline contrasts too. Flogging shows….

Of course you probably enjoy transferring your soil to your neighbours. Why visit the outback when you can sit on the beach and watch it wash past.

By: Ian Mott

Ian Mott — Thu, 20 Nov 2008 00:49:37 +0000

The problem with Luke’s sleazy departmental deception on soil loss in Australia is that so many of our rivers that drain agricultural land have Dams and impoundments on them that, if soil loss is anywhere near as bad as they claim, should have silted up long ago.

Indeed, The barrages have been in place at the mouth of the Murray for more than half a century and the depth of Lake Alexandrina has remained in the order of 3 metres during all this time. So where is all this soil being lost too?

The MDB drains an area of 100 million hectares so even if just one tonne of soil is lost each year, occupying a volume of 0.5m3 then some 50 million m3 should be laid down on the bottom of Lake Alexandrina each year. Divide that 50 million m3 by the 86,000ha of the lake and we get 581m3/ha of lake bottom or a 58mm layer of annual deposition. Multiply that by the 55 odd years of the barrage and we get a depth of 3.2 metres.

That is, Lake Alexandrina should be full to the brim with silt.

Do the same maths for the Beardmore Dam on the Condamine and it should be completely full of silt, as should every other storage in the system. But in fact, the “official line” is that soil loss of more than 10 tonnes/ha is very common in the basin. And poor old Luke has suggested that entire “A” horizons have gone. So lets take alook at this end of the deception.

Ten tonnes of soil is about 5m3 in volume. So divide this by the 10,000m2 in a hectare and we get a claimed annual loss of soil depth of, (wait for it) 0.5 of a millimetre. A one tonne annual loss would be only 0.05 of a millimetre each year. So even after 100 years of continuous cropping, a ten tonne annual soil loss will only lower the soil horizon by 50mm. Yet, most of our cropped soils are on deep aluvial flood plains with soil depth in excess of 100 metres.

With a one tonne annual soil loss the depth will drop by only 5mm over a century.

But even a one tonne/ha average annual soil loss is completely inconsistent with the recorded silt deposition rates in our key storage structures. Even a lowly 0.1 tonne/ha is not supported by the evidence of deposition, and that takes us back to only 0.5mm of lost depth in the paddock after a century of claimed degradation.

Of course, the missing element in this equation is the volume of deposition on land downstream. But this is likely to also be crop land on flood plains and they will actually be increasing in soil depth. Indeed, evidence of past fence lines being found completely covered by silt deposition are not unusual on down stream crop land.

As usual, the “official line” from the so-called “custodians” of the landscape just does not reconcile with the key evidence.