I think part of the difficulty campaigners are having with changing from 550 ppm to 450 ppm and now to 325 – 350 ppm is the profound mental shift that is necessary to go from a position of “saving” the Earth and civilization from “dangerous” climate change, which is the way people seemed to buy into the 450 ppm target, to its too late already. Some people will have so much difficulty with this we can expect them to disappear for a while as they come to terms with it. There is too much greenhouse gas in the atmosphere now, the danger people were trying to avoid is “in the pipeline” already on its way, and the best that can be done now is to try to limit how dangerous things get, and we have no certainty anything meaningful can be done.

I was calling for returning the atmosphere to the preindustrial 280 ppm back in 1988 when I first discovered there was a concern over climate – so I had to face whatever was there for me in this respect, back then. I went through a profound depression lasting many months.

But, now, I have no problem with 325 – 350 ppm. Reversing what has happened to the atmosphere is the only target that ever made sense to me. I was the only delegate speaking at the historic Changing Atmosphere conference held in Toronto in 1988 who told them they should remove a phrase they were thinking of putting in their final statement which said the changes happening to the atmosphere could not be reversed. They took the words out. No one spoke in support of my position, but Canada’s Ambassador to the UN interrupted the final plenary to ask me to stand and be recognized for my contribution. What I wanted was on many minds.

I had stopped my activity on climate change for a number of years until I heard a note in Hansen’s voice during a radio interview that convinced me something had happened that was different. As I researched, I discovered he had announced a change in what he was willing to sign off on as of December 2007, i.e. the 325 – 350 ppm target, and I was reawakened. At last, people are talking some sense.

I agree with Hansen that we should avoid having politicans pick winners. I have concerns that there is the risk of this with Joe’s approach. I also have concerns that there is a risk of this if resources are overly directed to nuclear or CCS. I am more optimistic about enhanced geothermal systems, but I am not betting on this with other peoples money (only with my own). An approach that funds technology but avoids picking winners would be to have a body similar to the Australian Research Council that devotes resources to research on climate change and its mitigation.

Hansen is correct that a carbon tax is necessary but not sufficient. It is not sufficient because of the market failures mentioned before. Addressing many of these market failures will require the deployment of infrastructure, such as a better transmission network, public transport infrastructure, and retrofitting buildings. This will require funding. If funding is not available from auctioning permits or raising the tax (because of the dividend), then it will need to be raised from somewhere else.

On tax vs cap-and-trade, there are theoretical economic questions related to the economics of uncertainty; there are climate change specific issues; there are implementation practicalities and issues to do with rent-seeking; there are international issues; there are also macroeconomic issues. Ultimately, the level of the tax or cap is more important than whether a tax or a cap is used. There are also hybrid approaches, such as having cap-and-trade with a price cap, a price floor, or both. My favoured approach is to have cap-and-trade with a price floor. The price floor should be set to be equal to the social cost of carbon (so that it plays as much of a role as the cap). The cap should be consistent with 350 ppm. A floor could be maintained by have a reserve price for auctioning permits. Alternatively, firms could pay an extra fee when they exercise their permits, so that the carbon price becomes equal to the sum of the permit price and the extra fee.

I doubt that a hybrid approach would be significantly more complex or expensive than a tax, or cap-and-trade. The main transaction costs with carbon pricing are associated with measurement of emissions, rather than the price mechanism.

November 26, 2008

Chapel Hill(NC)News

http://www.chapelhillnews.com...

Billions end up paying for excesses of the wealthy on Wall St.

Our lexicon of business activities is being expanded daily, thanks to the “wonder boys” on Wall Street. We are learning about derivatives, collateralized debt obligations, credit default swaps, recapitalization, puts, short selling and so on. We are gaining a new vocabulary from the recent meltdown of the financial system and expected slowdown of the real economy worldwide.

Where did this debacle begin? Well, it began in the center of the human community’s banking and investment houses in the financial district of NYC. Supposedly, the “brightest and best” among us go to Wall Street, know what they are doing and do the right thing. Unfortunately, such assumptions turn out to be colossal mistakes.

How did this calamity occur and why is the human family in such dire economic straits? It appears that grotesque greed and a culture of corruption have come to dominate significant operating systems of the global political economy.

Powerful people in high offices within huge business institutions with access to great wealth are recklessly and deleteriously manipulating the unbridled expansion of the global economy in the small, finite planetary home God blesses us to inhabit.

Self-proclaimed Masters of the Universe have surreptitiously “manufactured” a subprime “asset bubble” and perversely fostered its uneconomic growth within the world economy. Not unexpectedly, this asset bubble did what bubbles do. The subprime bubble burst and made a mess. Global credit markets have frozen, stock prices are tumbling and the value of the dollar is gyrating.

Evidently organizers, managers and whiz kids overseeing the global economy, and the unraveling (i.e., deleveraging) of the worldwide subprime swindle are running the artificially designed financial system of the global economy as a pyramid scheme. This is to say that the international financial system is being operated so that most of the wealth funneled pyramidally into the hands of a small minority of people at the top of the world economy where this wealth is accumulated and consolidated. Note that 30 percent of annual corporate profits end up in the accounts of a tiny number of people. At the same time, the vast majority of people on Earth, near the bottom of the global economic pyramid, are left with very little wealth. Does the economy of the family of humanity exist primarily to provide wealth to the already stupendously wealthy? The “bankstas” among us evidently think so.

In the 1980s, this extremely inequitable method of distributing wealth and arranging business activities was called a “trickle-down” economy. We have been repeatedly told how this ‘rational’ economic scheme is good because it “raises all ships.” And yet, from my limited scope of observation, the billion people living on resources valued at less than one dollar per day and the additional 2.7 billion people being sustained on two dollars per day of resources now appear to be stuck in squalid conditions. The ‘ships’ carrying these billions of less fortunate people (i.e., more people than lived on Earth in the year of my birth) do not appear to be lifting them out of poverty.

Steven Earl Salmony

AWAREness Campaign on the Human Population,

established 2001

http://sustainabilitysoutheast.org/content.html?contentid=1176

Garnaut’s arguments in favour of a cap and trade system are convincing.

Some points:

I’m amazed that the cons listed for a cap-and trade system include the claim that it “requires army of bureaucrats”. Claims like his should be backed by estimates of numbers. Until then, this “army of bureaucrats” claims should be taken with a grain of salt.
Anyway, why would a tax require fewer bureacrats? With a cap-and-trade, there’s no tax to be collected every time there’s a transaction, just an auction for licenses every year and inspectors to make sure no-one’s cheating.

As for cap and trade enriching “middle men / brokers”. I have one word for you: tax accountant. OK that was two words. Soory. Anyway, with a cap-and-trade, you’d never have to deal with the ATO or the IRS or othe tsax agency. How could this not be a good thing?

Similarly, a cap-and trade is said to “encourages rent seeking” and is “easy to manipulate / distort to get perverse outcomes”, but why more so that a tax? Tax avodiance is a multi-billion dollar industry. Why would anywone think it would not gut a carbon tax in quick time?

At elast with cap and trade, if someone gets an exemption, we’d know exactly how much extra GHGs will be produced as a result, but if someone successfully lobbies for a lower tax rate, you won’t know for years, probably, how much damage it’s caused.

The real clincher for me is that a tax might do no more than increase the price of energy without generating the shift to non-greenouse alternatives. It depends on assumptions about behaviour of economic agents in response to price rises.

Without historical precedent, these will involve a lot of guesswork, but there is no reason to be optimistic. Have the big rises in coal and oil prices caused a significant change in energy production patterns, enough to give anyone confidence that price changes caused by a tax would have the desired effect? I don’t think so.

And would the tax be set according to what is needed, or according to political expediency?

No, just limit the amount of GHGs that can be produced, by law, and let the market (maybe with some help from the government to overcome inertia) sort out the best alternatives.

I agree with your critique of Joseph Romm’s comments, particularly your wider point that, “this a common theme – flaw – among environmental advocates – failing to recognise that the laws of physics and biology don’t compromise, and have no pity.”

It dismays me that major conservation groups such as WWF and ACF continue to support the 450 ppm / 2 degrees warming goal long after the science has been saying 2 degrees is too high for vulnerable ecosystems such as coral reefs. If major conservation groups don’t base their policies on the science and truly protecting the planet, rather than what is perceived to be reasonable and politically feasible, how can they expect governments to do it?

I note that “fat cat beurocrats get cash” not listed as a con of the tax either…

But for mine, if we expect the plans of climate scientists to be trusted, then climate scientists have to learn to trust the economists who tell us* the cheapest way to do it.

* this is a very liberal use of the word “us” as it implies I include myself:)

While I am not in a position to price ‘in situ’ enhanced mineral weathering (enhanced carbonate formation), this is, on the face of it, the most cost-effective way to permanently remove all of the yearly excess and pay down some of the backlog on the way to the 300 ppm CO2e which will eventually be required. Here are three links, in increasing order of technical content.

In situ peridotite weathering:

http://www.sciencedaily.com/releases/2008/11/081105180813.htm
http://www.technologyreview.com/energy/21629/?a=f
http://www.pnas.org/content/105/45/17295

One of the ‘ex situ’ techniques I can roughly price. It is no more expensive than the most optimistic estimates for more usually discussed forms of CCS. The price starts there, around $(US)40 per tonne of CO2 removed, and drops with experience, relocation, etc. to possibly as low as $(US)10 per tonne. (This is at least an order of magnitude more expensive than ‘in situ’ methods, assuming those actually work.) The ex situ rock flour method can be put into immediate practice; no further reasearch is required; the result of the weathering enhances the quality of the soils used. Other than the price, I should prefer this.

Ex situ olivine weathering:

ftp://ftp.geog.uu.nl/pub/posters/2008/Let_the_earth_help_us_to_save_the_earth-Schuiling_June2008.pdf
http://www.ecn.nl/docs/library/report/2003/c03016.pdf

See references 7, 8 and 9 in

http://en.wikipedia.org/wiki/Olivine

Finally, there is reworking mine tailings. This is probably quite inexpensive, but of only minor importance since there are not enough mine tailings to remove much CO2.

Mine tailings:

http://adsabs.harvard.edu/abs/2005AGUFM.B33A1014W