Earlier this week I watched the Four Corners story, Against the Wind, on the alleged health impacts of wind turbines and came away wondering just what the point of the program was. Based on what I saw, my clear impression is there’s no issue here – there’s simply no hard evidence of the supposed health dangers of turbines*. The allegations remind me of the scare-mongering around the dangers of winds turbines to birds, which I’ve discussed before.
But I was horrified (no doubt unintentionally) by the vision of rural landscapes blighted by row upon row of giant white robots stretching along the tops of the hills. An occasional turbine is novel, even an object of beauty, but to my sensibilities a massed army of towers is a scar on the countryside.
I know they’re not being erected in pristine bushland, but the sort of sweeping pastoral panoramas in the regions filmed by Four Corners – with green meadows, stands of trees and occasional rustic buildings – are extraordinarily beautiful. It’s a different aesthetic to natural bushland, but no less valuable for that.
As if we haven’t done enough visual damage by permitting ad hoc development on the urban fringe, now we want to make the country look like Texas’s endless oil derricks. We fight tooth and nail to protect the beauty of streetscapes in the cities (admittedly not always successfully), but the defacing of farming landscapes on a grand scale goes on with hardly a murmur of protest.
It’s true we urgently need to reduce carbon emissions but I don’t think it’s obvious we need to pollute the countryside to achieve that goal. That seems a ludicrous price to pay, effectively substituting one form of environmental damage with another.
Wind isn’t the only option we have to address climate change. Wind just happens to be the cheapest form of renewable power – with subsidy – we currently have available. However that calculation doesn’t account for the long-term damage done to scenic landscapes. Just as historically we’ve done with cars, we’re failing to price the negative externalities. Read the rest of this entry »
Given Australia already has a large excise tax on petrol, exempting automotive fuel bought by “families, tradies and small businesses” from the Gillard Government’s carbon tax is not the disaster some would have us believe.
Australia has a minority government so compromise was inevitable – two of the independents, Tony Windsor and Rob Oakeshott, wouldn’t be party to any increase in the price of fuel for their country constituents. It was either put a price on most but not all sources of greenhouse gas, or have the whole idea shot down yet again.
The exemption is expected to apply to petrol, diesel and LPG. Were the tax to apply to petrol, the impact would be modest – a $25/tonne tax is generally estimated to increase the price at the pump by around $0.06 per litre. The CSIRO calculates that even a $40/tonne tax would only raise the price of petrol by about ten cents per litre.
These amounts are much less than motorists already pay via the $0.38 per litre excise tax on petrol and diesel (there’s no excise on LPG). While it might have a “sin tax” dimension in relation to cigarettes and alcohol, in the case of automotive fuel the excise is not aimed at making motorists pay for roads or for the external costs of petrol – it’s just a convenient way of raising revenue (although it’s not as good as it used to be since John Howard abolished automatic indexation of the price in 2001).
Nevertheless the excise tax is a serious deterrent to driving. The Productivity Commission’s recent report, Carbon emission policies in key economies, calculates that “in 2009-10, fuel taxes reduced emissions from road transport by 8 to 23 percent in Australia at an average cost of $57-$59 per tonne of CO2-e”. Although not put in place with the purpose of abating emissions, the excise already has a much more significant effect on driving than any level of carbon price that’s been seriously touted in the political debate. Based on the CSIRO’s estimates, it could be argued its effect is equivalent to a carbon tax of over $100 per tonne (the relationship isn’t linear – there’re diminishing returns from a marginal increase as the fuel tax gets bigger).
Thus there’s a good argument that automotive fuel is one of the few areas where consumers already pay a high level of tax over and above the GST. Indeed, if it were so minded, the Government could’ve imposed the new carbon tax on petrol and diesel and simply provided an equal offsetting reduction in the level of the existing fuel excise tax. There wouldn’t be a lot of political or economic sense in that, but it illustrates the principle. Read the rest of this entry »
The Productivity Commission’s new research report, Carbon emission policies in key economies, has important implications for the way emissions are managed, but it also has some key lessons for urban and transport policy (and other areas of policy, for that matter).
The report should remove any doubt that a price on carbon is far and away the most efficient and least-cost means of reducing emissions. The report’s findings are damning of so-called direct action policies and make it clear that “the abatement from existing policies could have been achieved at a fraction of the cost” if a carbon tax or emissions trading price were in place.
The Commission estimates Australia’s key supply side programs to reduce emission in the electricity sector — principally Renewable Energy Targets and solar feed-in tariffs — cost on average $44-$99 per tonne of CO2 abated. Electricity generated from solar photovoltaic cells is very expensive, costing between $431 and $1,043/t CO2 and contributing little to overall emissions reduction.
But here’s the money shot – the Commission calculates that the same level of carbon abatement produced by these supply side measures could have been obtained with a $9/tonne price on carbon! The report goes on:
This equates to about 11 per cent of the almost A$500 million estimated cost of the existing policies. Alternatively, for the same aggregate cost, more than twice the abatement could be achieved. One of the reasons an explicit carbon price would be expected to be more cost effective at such low levels of abatement is that, as modelled, it captures a considerable amount of low-cost abatement on the demand side.
The research also examined the use of bio-fuels in the transport sector. The implicit cost of carbon abatement from existing bio-fuels programs, both in Australia and overseas, is much higher than it is for electricity generation. The Commission estimates the cost of programs in Australia is $364/t CO2 but it is $600 – $700/t CO2 in Japan and the USA. It’s estimated that it is costing $6,105 to abate a tonne of CO2 in China using ethanol.
The accompanying exhibit illustrates notionally how Australia – and the other countries examined by the Commission – are tending to favour high cost abatement initiatives (the shaded bars) and ignore others that cost less per tonne and mostly yield more abatement.
Regrettably, there are many parallels with the way we go about designing policy for our cities. For example, I think it would be much more cost-effective to abate carbon (or reduce oil consumption) in the urban passenger transport sector by introducing policies such as road pricing or more fuel-efficient vehicles, than it would be to (say) build a rail line to Doncaster. Or, were the objective to increase the mobility of those without access to a car, spending funds on buses and better service coordination rather than on extensions to the rail network, would give a more cost-effective outcome.
The good news though is there might be grounds to be optimistic that PV module prices are starting to fall.
One of the themes I’ve consistently emphasised when discussing looming threats like peak oil is that policy responses must take account of the adaptability of markets and consumers. Drivers will respond to higher petrol prices by, for example, travelling less, changing to smaller fuel-efficient cars and moving to more accessible locations. Manufacturers will respond by producing vehicles that use less fuel and/or alternative fuels.
One of Australia’s leading public intellectuals, left-leaning economist Professor John Quiggin, reckons that “peak gasoline” has in fact already happened. He points to the 8% decline in petrol consumption in the US since 2006 (per capita consumption declined by more than 10%) and, prospectively, to even tighter standards requiring a 40 per cent improvement in the average efficiency of new cars, relative to the existing fleet, by 2016. I’ve previously discussed how the rate of growth in per capita car travel has been slowing for some time in Australia (and other western countries) and has actually declined in recent years.
We know that motorists respond to price increases by reducing petrol consumption. One estimate of the elasticity of demand for petrol in Australia with respect to price is around -0.1 in the short term and -0.3 in the longer term i.e. a 10% increase in the pump price of petrol would initially reduce demand for petrol by
10% 1% and, in the longer run, by 30% 3%. Some of this reduction comes via higher public transport patronage but the vast bulk comes from car-related adaptations like more efficient trip-making and smaller, lighter and more fuel-efficient vehicle.
In the US, this review of hundreds of elasticity coefficients found that the in the short-run, “estimates for the demand for gasoline range from 0 to -1.36, averaging -0.26 with a median of -0.23 for the studies included here. Long-run price elasticity estimates range from 0 to -2.72, averaging -0.58 with a median of -0.43”. So in the longer term (more than a year), US drivers respond to a 10% increase in price by reducing their consumption of petrol, on average, by
Professor Quiggin allows that the GFC has had an effect on travel behaviour in recent years (petrol consumption tends to rise and fall with income) but still thinks that estimates of elasticities for the US are conservative:
I suspect that the full long-run elasticity, including induced innovation, is near 1, meaning that if current real prices are sustained, consumption could fall as much as 70 per cent below the level that would be expected if prices had remained at the 2000 level.
For my money, where the “peak gasoline” hypothesis gets really interesting is his argument that per capita global oil production peaked in 1979, but per capita output of goods and services nevertheless increased substantially over the subsequent 30 years, with the fastest increases in the developed world. In other words, personal living standards increased while personal oil consumption declined. “That seems pretty conclusive as far as apocalyptic versions of the Peak Oil hypothesis are concerned”, he says. Read the rest of this entry »
Herald Sun journalist Andrew Bolt glosses easily over the potential negative health implications of the troubled Fukushima Dai-Ichi nuclear reactor in Japan. He says too much emphasis is given to the Chernobyl disaster because, contrary to received wisdom, he maintains only 65 deaths are associated with this accident. But there’s more to it than that.
These accounts (here and here) from Wiki indicate there are wildly varying claims about the number of deaths associated with the accident. The World Health Organisation estimated deaths at 4,000; Greenpeace at 200,000; and this Russian report, translated in 2007, says there were one million deaths, 170,000 of them in North America.
However estimates of deaths by the UN Scientific Committee on the Effects of Radiation are broadly consistent with Andrew Bolt’s claims. But what Bolt fails to mention, and the UN draws attention to, is the long run health implications of the accident.
For example, by 2005 there were 6,000 diagnosed cases of thyroid cancer among residents of Belarus, Ukraine and proximate parts of Russia, who were children at the time of the accident. According to the UN, it is most likely that a large fraction of these cancer cases are attributable to radioiodine intake (fortunately, thyroid cancer is usually treatable – the 30 year survival rate is 92% – but it’s a gruelling experience).
Now a new study has drawn attention to the cognitive risks of radiation exposure. Douglas Almond, a Columbia University Professor, wrote to the New York Times earlier this month pointing out that even low levels of radiation can have severe consequences for unborn children. He and his collaborators recently published a study of the effect of fallout from Chernobyl on Swedish children.
Sweden experienced radiation levels from Chernobyl that were so low they were considered safe. Almond’s team confirms that this presumption was mostly right. However they found that “Swedish students who were in utero during the accident experienced significantly lower cognitive functions, as reflected in performance on standardised tests in middle school, especially those tests that correspond best to IQ”. Read the rest of this entry »
I regularly hear the argument that there’s no point in Australia putting a price on carbon because we’re so small it will mean jack shit at an international level. We’ll suffer the pain, so the argument goes, for no gain.
Australia is one of the world’s highest emitters of greenhouse gases on a per capita basis, but because we’re small, we only account for around 1.8% of world emissions. By 2020, our emissions are supposed to be 5% below what they were in 2000 – if we were to achieve that target it would, in quantitative terms, amount to an extremely small reduction in total world emissions (although on current policy settings we’ll actually be 24% over the target!).
It’s commonly argued that we should therefore hold off until the big emitters like the US and China take parallel action.
There are a number of reasons for not accepting the “we can’t act alone” argument. Some argue that action now will give us an early start on sustainable industries; some that a carbon price could foster a culture that is more receptive to the wider idea of sustainability; and some that a carbon price is a more efficient way of addressing climate change than direct expenditure.
But there are two arguments for rejecting the “we shouldn’t go it alone” thesis that particularly resonate with me.
The first one is an unashamedly moral argument – I think we should clean up after ourselves as a simple principle of ethical responsibility. If we despoil the quality of the world’s environment we should fix up the damage we create, independent of what other nations do. We should do the right thing.
The second reason is more instrumental. It’s in our interests to encourage the big emitters to take action because we all suffer from the build up of greenhouse gas. They’re hurting us so we should be prepared to accept some pain to try and make them change their ways. It’s worth it for us to show, by example, what needs to be done, how it can be done, and that some nations think it’s worth doing. In other words we’re not so much “going it alone” as “setting a good example”.
P.S. Here’s another version of the Time history of CO2 – it’s clearer, but no music.
Giant US department store chain Wal-Mart has some interesting initatives to promote sustainability and public health that the likes of Coles, Woolworths and Bunnings should be taking note of.
My interest in Wal-Mart was piqued by a large number of hits The Melbourne Urbanist received last month from the US on a piece I wrote about the value of ‘food miles’. The hits were generated by an article published in The Huffington Post and the Harvard Business Review.
Written by Andrew Winston, the article looked at Wal-Mart’s efforts to green its supply chain and linked to the analysis of whether or not ‘local food’ is more sustainable that I posted here back in July.
Andrew Winston says there are three initiatives in particular that demonstrate Wal-Mart’s strategic focus on sustainability.
First, it’s doubling the quantity of locally sourced food on its shelves; second, it’s reducing the amount of saturated fat, sugar and salt in its house brand products; and third, its donating $2 million to 16 food banks to help them lower their energy costs (food banks are non profits that distribute surplus food to the hungry).
I doubt there’s any sustainability dividend from buying locally (the point of my earlier piece on ‘food miles’), but apparently Wal-Mart believes it will lower supply costs. It should also help the company create a friendlier image with local communities.
The second initiative is the key one. It could potentially provide a better public health outcome for customers as well as reduce the environmental impact associated with complex inputs like saturated fat and sugar. It should improve Wal-Mart’s standing on health and environmental issues and thereby give it a continuing commercial incentive to keep up the good work. Read the rest of this entry »