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Climate Change - The Economic Debate

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Started 1 year ago by rockabye
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rockabye
Member

It is important to separate climate change science from the economic effects of policy based on climate predictions. We now have the head of BHP Billiton saying we need a carbon tax, along with many other business groups.

So maybe big business is sensing an opportunity to make money out of the uncertainty. Of course he was happy to admit he won't be paying. Quote "And in the end, Mr Kloppers argues it is household consumers who will have to pay the bill."

Looks like we better get used to the idea.

Posted Thursday 16 Sep 2010 @ 3:08:22 am from IP #
Karl
Member

They're in business to make a profit (which isn't a bad thing; so are 'green' energy providers/suppliers), so would you expect them to absorb the costs themselves? If they did, it'd effect their margin / share price, which in turn ultimately effects the consumer.

One way of reducing the impact of it is to 'consume' less.

Posted Thursday 16 Sep 2010 @ 5:13:13 am from IP #
Jeffbloggs
Member

If 0% fossil emissions = 0% fossil fuel consumption = Zero fossil "powered" economy
Then:
1) What will become the dominant replacement energy commodity? Biomass? Wind? Solar?
2) If any of these become the predominate energy source, will these naturally occurring "free" energy resources need to be taxed (similar to fuel excise) in order for government to continue expenditure in public infrastructure?

rockbye
It would seem to be another day in the speculators office, to greedily profit from fear.

Karl
In regards to your comment "which in turn ultimately effects the consumer", I'd like to add "only if you are a shareholder of that company". In a free market the consumer can choose to purchase from another supplier and therefore wouldn't necessarily be effected by the lack of profit from the firm's margin/share price. Also to make a profit only a good thing (or not a bad thing) would be subjective to the nature of the transactions made ie products sold from slave labour vs products sold from fair employment. In regards to the profit of BHP and the likes, I believe that it is only a short term profit, in the long run it will be a cost, that future generations will have to pay, for our relentless resource consumption.

Posted Thursday 16 Sep 2010 @ 5:35:23 pm from IP #
rockabye
Member

Jeff,

Like you I wanted to shift/separate the science from the emotion in the CC debate. Why, because there is going to be a 'price' to pay for our excessive use of fossil fuels one way or another. It is interesting to see the greens and BHP agreeing on something.

In my view we are already starting to pay extra for resources by indirect means. A tax is just one way, increased prices for food and services are others. The only thing an individual can do is try and allocate their own resources in the best way possible. In other threads I've mentioned a change to excessive discretionary spending as one way of 'paying' for the increased cost of power for example.

The easy pickings in our economy are alcohol, smoking and gambling. Looking inward, I calculated in my own case that I spend about the same amount each year on alcohol and gambling as I do on electricity. As I don't smoke I can't 'save' any money there. Apart from that spending on non essential consumer items shows a lot of potential for future cost savings. Fear is used everyday to get me to spend, my insurance bills are probably the highest single item of expenditure after food in my household.

I agree with the greed/profit motives but have no idea how to address this. At the end of the day people tend to be reactive and if you pump up the price of anything, like energy, you tend to reduce 'consumption'. Hence the tax is coming, like it or not.

The other fear I have is that people less fortunate than I am will be unable to deal with steep rises in essentials with unintended consequences such as poverty and increased crime as a result.

Posted Thursday 16 Sep 2010 @ 6:35:04 pm from IP #
Karl
Member

G'Day Jeff,

Yes, I agree that "profits ain't profits" but putting the morality aside, all business is out there to make one, good or bad. I totally agree that we need to consume less, and that it'll be the future generations that pay for our greed. I'd like to see though people in general taking a fair share of the responsibility rather than just blaming 'business'. If a business is 'greedy' then we as consumers have the ability to not buy their product, or not invest in their company. I'm always amazed at how many people I hear slamming big business, but then crying when they can't get easily accessible cheap 'stuff'.

I partly agre wih your comment about "only if you are a shareholder of that company". Unfortunately most people's Super would include these companies, an so they are effectvely shareholders.

Posted Thursday 16 Sep 2010 @ 9:55:59 pm from IP #
Jeffbloggs
Member

Hey there
Just wondering if there were any opinions on my point 1) & 2) above?
I'm curious if I'm seeing this side of the RE economics correctly.

Posted Friday 17 Sep 2010 @ 8:27:30 am from IP #
dymonite69
Member

The only way that business can be hurt by a carbon tax is if increasing end-user costs reduce demand.

There probably won't be dominant primary energy source due to geographical variations and the fact that not one type of energy can supply all our energy needs

There is nothing intrinsic about RE that would make it not subject to tax.

Posted Friday 17 Sep 2010 @ 9:55:06 am from IP #
thatmosis
Member

In answer to Q 1 the predominate power source has to be Nuclear as the 3 that you mentioned are way to far from being able to sustain a city or even a small town without a backup system. Wind power is jst becoming useful but the expense will in the future unless subsidized heavily by Government collapse under the economic costs involved in setting up and ongoing maintainance.Solar has a way to go before it is a viable alternative as peak load power is a problem that will take immense amounts technological effort to overcome. The cost fro a single home on Solar at the rate power is used in the burbs would be around $100,000 to $200,000 if a stand alone which is the ultimate preference. Bio mass has not been on the readar so much but methane can be obtained from this method although a 2 ton pile of mass produces about 100litres of methane and will heat your hot water for a few months. Nuclear is a clean efficient and mostly trouble free power that has unfortunatley a by product that must be stored but it is still the best the world has to offer at the moment.
If and a big IF the whole country went Solar for example the Government would by necessity charge people via a meter for the power they use. The Victorian Government tried to Tax the amount of water that Victorian Farmers held in their own dams so it is no stretch of the imagination to see the meter readers out and about and the power bills continueing to come in and probably indexed to the Cost of Living index. I have a meter on my solar and every couple of months the Government wants to know how much I use, and I see this as a prelude to being charged for the power.

Posted Saturday 18 Sep 2010 @ 2:20:51 am from IP #
dymonite69
Member

And what happens when we hit peak uranium? And we don't mine enough to currently supply the world's energy needs.

Regarding this constant reference to 'baseload'. Exactly how much is consumed when the sun isn't shining or the wind isn't blowing. Can someone actually quantify this for me? 20%? 50%? 75%?

Posted Saturday 18 Sep 2010 @ 4:21:11 am from IP #
thatmosis
Member

The base load for homes rises at about 3.30pm and stays steady until about 7.30 where it drops somewhat as people settle in for the night. It peaks again from about 5.00am and doesnt start decreasing until about 9.00am. Business then takes over and we have about 8 hours of needed base load power during that time. The sun has lost its ability to produce power from about 4.00pm and doesnt come online until about 7.00am During this time you either have a huge battery bank or go to a generating system like coal fired or nuclear. Up our way the wind dies at 4.00pm most days and doesnt start agian till early morning so this also excludes wind power for the base load times for households. The average household in the suburbs uses about 12 to 14 KWHs per day which is a lot of power. We use about 2.5KWH per day and our system can handle it satisfactorily but after 3 days of no sun we have to go to Generator power to top up the batteries.

Posted Sunday 19 Sep 2010 @ 5:13:11 am from IP #
dymonite69
Member

So what fraction is this of total consumption when you also consider the commercial sector operating during the day.

Posted Sunday 19 Sep 2010 @ 5:16:20 am from IP #
rockabye
Member

Some views from the ABC

Australian households and businesses should start preparing for a steep increase in electricity prices starting next year.

And after all more than half of Australia's greenhouse gas emissions result from coal-fire electricity generation, as a result of which this country is the highest per capita emitter in the OECD and one of the half-dozen highest in the world.

So just as the resources tax cash grab is focused on the two richest mineral exports - coal and iron ore - carbon abatement will focus on electricity.

http://www.abc.net.au/news/stories/2010/09/20/3016065.htm?site=thedrum

Posted Monday 20 Sep 2010 @ 12:47:33 am from IP #
thatmosis
Member

"So what fraction is this of total consumption when you also consider the commercial sector operating during the day."
?? cant quite make out the question here. Business does take up most of the base load power consumption during the day as it requires a lot to keep industry going. I would say about 75% of the base load power would be attributed to industry but this reverses during the evening when people get home and all the appliances start going on. The lull period at night from about 9.00pm to 5.00am requires very little power in realtive terms but these are also the times when solar and wind are not working to their full potential and when the morning rush starts the amount of power if stored somehow would not be able to handle this surge.

Posted Monday 20 Sep 2010 @ 1:30:13 am from IP #
dymonite69
Member

Let me reverse the question. How much energy needs to be generated for the period when you can't power with renewables?

Posted Monday 20 Sep 2010 @ 1:54:29 am from IP #
sun2steam
Member

There is not any time of the day when you cannot power with renewable energy.

Solar heat can be stored during the day, water can be pumped into storage uphill during the day (this does exist already in Australia as part of the Snowy hydro scheme). These energies can be released during the night as required. And soon we should have geothermal power plants that can provide the same amount of energy 27/7 - the ideal base load power.

This discussion of base load power has been introduced by the power industry and especially by the lobby groups for nuclear power in order to make renewable energy look bad. But you only have to look at your electricity bill in order to see that we have more than enough base load power available. Or why else would off-peak electricity cost only about 1/3 of the normal retail price? This is certainly not because the energy producers are a charity. It is because coal fired power plants work best if they run continuously without change in power output.

And as we are changing to renewable energy over time, there will still some coal fired power plants be active for years to come. Plenty of time to establish sustainable base load power.

Posted Monday 20 Sep 2010 @ 2:12:29 am from IP #
rockabye
Member

A more balanced debate on the impact of a carbon tax can be found here. Looks like we can learn a lot from what's already happened in Europe.

http://www.abc.net.au/rn/rearvision/stories/2010/2977448.htm

Posted Monday 20 Sep 2010 @ 2:55:22 am from IP #
Jeffbloggs
Member

Dym69

"The only way that business can be hurt by a carbon tax is if increasing end-user costs reduce demand."

This is obviously the only reason for a carbon tax ie reduce fossil consumption+emissions/kill fossil based business and derived tax revenue ie profit/GST tax. Carbon tax will kill fossil based products and "should" do the same for demand of these products. What products will be left, which will be replaced, and how will these create enough revenue for government expenditure as we know it?

"There probably won't be dominant primary energy source due to geographical variations and the fact that not one type of energy can supply all our energy needs"

This might be true, however as you pointed out, baseload will still be required. In my view, Hydro and biomass (possibly location dependant geothermal) are the only ones that will be able to provide this effectively in the short term. Wouldn't it be wise to find a RE solution that is directly a part of the natural earthly carbon cycle, and the resource consumption of humans? Biomass has always fit this description, and I expect it always will. After all even fossils are claimed to have come from biomass.

BTW follow this link for some info on the baseload in WA, and fuel source distribution. http://www.imowa.com.au/n2703,8.html
I would expect ES to be similar, world wide would differ greatly.
It obviously doesn't offer any insight into a predominately RE fuelled energy market, but it should help to get a "feel" for the energy demand times etc.

"There is nothing intrinsic about RE that would make it not subject to tax."

So does this mean we have "no problem" in accepting that the government tax "free" natural energy resources? So how will the tax work? Tax rainfall for hydro? Tax air flow for turbines? Tax sunlight absorption? Or a shading tax?
Maybe by metering kWh? Good job Edison invented electricity meters so that corporations/governments can measure the "single" electron that coexists everywhere in space...
Maybe thats why Tesla had a problem working for Edison?
Tesla humanist vs Edison capitalist.
I suppose it's no different from the good old English tax on windows...there it did the same I suppose, and drove us to live in miserable, dark and gloomy dungeons..;)

Our capitalist fossil driven economies must change, otherwise it will change us into something we don't want to be. But wait...hasn't that already happened?

We need a new economy structure (not capitalist) along with the RE engine, with a healthy dose of adequate, equitable and competent (government/corporate) driving, copy pasting what we are doing now won't help for long. The next crisis will just be "just around the corner". Foresight requires us looking outside of the vehicle to see were we are, and most importantly were we want to go from here. I suppose somewhere along the way we might have to ask if we are "worth" saving in the first place, given the way we treat our planet and fellow residents.

(PS Dym69, I'm not actually directly critising your comments, I'm merely trying to use them to display my views of the fossil to RE economic problems)

Posted Monday 20 Sep 2010 @ 2:03:33 pm from IP #
dymonite69
Member

Daily residential energy consumption (50 MJ/person/day)
Per capita energy use for agriculture (9 MJ/person/day)
Per capita energy use for industry (160 MJ/person/day)
Per capital energy use for commercial transport (34 MJ/person/day)
Daily petrol use - private car (140 MJ/car/day)

** Average daily energy intake of highly active person (8 MJ/day) **

It takes 7 elite cyclists operating dynamos to run our house.
It take another 15 labourer per person to power our industry every day.
It takes 17 rickshaw drivers to tow our car around each day.
It takes one subsistence farmer to feed each of us each day (as long as he doesn't feed himself)
It takes 4 people to transport all the goods we purchase to our doorstep each day.

So a Western family of four is served by about 90 energy slaves each day.

So if both run out of energy and wish to depopulate, what would life look like?

http://www.abs.gov.au/ausstats/abs@.nsf/2f762f95845417aeca25706c00834efa/bf60fce62cc84fceca256dea000539cf!OpenDocument

* Petrol = 35 MJ/litre

Posted Tuesday 21 Sep 2010 @ 11:47:28 am from IP #
Jeffbloggs
Member

Dym69
Awesome stats thx. So we enslave 22 people each, Just to perpetuate this "idiotic" capitalist lifestyle? Awesome
Now I'm really not a happy cucumber, as green as I might be...
Looks like we still can't "afford" feeding the poor...even despite the UN millennium goals
http://www.un.org/millenniumgoals/
Can't we just kill this capitalist thing along with fossils, before it kills us?
Anyone up for it?

Dym69 any luck with your min. RE distribution question? I would be interested if you find some info.

Posted Tuesday 21 Sep 2010 @ 12:22:14 pm from IP #
dymonite69
Member

Not far off from Admiral Rickover's estimation in 1957.

"With high energy consumption goes a high standard of living. Thus the enormous fossil energy which we in this country control feeds machines which make each of us master of an army of mechanical slaves. Man's muscle power is rated at 35 watts continuously, or one-twentieth horsepower. Machines therefore furnish every American industrial worker with energy equivalent to that of 244 men, while at least 2,000 men push his automobile along the road, and his family is supplied with 33 faithful household helpers. Each locomotive engineer controls energy equivalent to that of 100,000 men; each jet pilot of 700,000 men. Truly, the humblest American enjoys the services of more slaves than were once owned by the richest nobles, and lives better than most ancient kings. In retrospect, and despite wars, revolutions, and disasters, the hundred years just gone by may well seem like a Golden Age."

"Slave labor was necessary for the city-states and the empires of antiquity; they frequently had slave populations larger than their free citizenry. As long as slaves were abundant and no moral censure attached to their ownership, incentives to search for alternative sources of energy were lacking; this may well have been the single most important reason why engineering advanced very little in ancient times."

http://www.energybulletin.net/node/23151

NB Rickover talks of power (rate of energy used) vs total energy consumed.

Posted Tuesday 21 Sep 2010 @ 12:40:18 pm from IP #
rockabye
Member

Some ideas from think tanks overseas. Similar to what many are thinking here I believe.

"Environmentalists might even have better luck appealing to people's sense of community and collective justice, instead of their concern about green jobs or money, say behavioral economists. In fact, talking about cap-and-trade or gas taxes could actually turn people off."

"But from an economic perspective, cutting waste will always be a good thing — even if we just use it to buy more stuff. "There really is no downside to pursuing efficiency for business," says Daryl Dulaney, the U.S. CEO for Siemens Industry. "It's truly win-win." If we're really going to save the planet, however, we'll need to convince people not just to become more efficient, but to actually consume less. And that could take some powerful psychology."

http://www.time.com/time/specials/packages/article/0,28804,1972936_1973104,00.html

Posted Wednesday 22 Sep 2010 @ 1:04:21 am from IP #
dymonite69
Member

"But from an economic perspective, cutting waste will always be a good thing — even if we just use it to buy more stuff. "

To make stuff of questionable utility?

Posted Wednesday 22 Sep 2010 @ 2:56:27 am from IP #
rockabye
Member

Buying more "stuff" could be activities like education or conserving more native forests. There are lots of good ideas out there. We've got to be careful not to throw the baby out with the bathwater though.

Posted Wednesday 22 Sep 2010 @ 3:02:31 am from IP #
thatmosis
Member

Sorry sun2stream but I cant agree with your idea that renewable energy can be used at all times. Peak load times for industry are variable and with more and more heavy industry working 24/7 the load is still immense. Peak load for families is as I said before between 3.30pm and 7.30pm and 5.00am till about 9.00am. If you add this to the industry peak load you would realise that this would deplete any RE source quite quickly as the sun isnt shining and the wind usually doesnt blow as hard at night. As for pumping water up the hill and geo thermal well they are just pipe dreams at the moment and shouldnt be used in any equation on the amount of power that REs can produce at this time in history. Only on line systems that have been "proven" should be used to make assumptions on the workability or not of RE. A case in point- I have a good solar system that supplies power to my house on a daily basis and is quite adequate for that purpose, about $45,000 worth. If I go to my shed and build something requiring power tools, welders etc I have to run a generator or my batteries would be run flat in no time. If I wanted to run the tools as well as the house the cost of the solar installation would rise to $150,000 to $250,000. Taking my house as the typical home unit and my shed as industry it is easy to see that RE has great limitations unless you spend billions of dollars and subsidise every househols in Australia as the price of power would go up by at least 600%. Im not against RE but I am against the flippant ideas that are passed around as fact. Live on Solar, bought by yourself, for a year or two and then tell me if it is a viable alternative to nuclear or coal. Its not a cheap exercise and the upkeep althogh very minor tends to get larger as the system gets older and batteries etc start to fail.

Posted Wednesday 22 Sep 2010 @ 4:59:45 am from IP #
dymonite69
Member

"Buying more "stuff" could be activities like education or conserving more native forests. "

Why would we want that? How about a plasma TV for every man, woman and child by 2020?

Posted Wednesday 22 Sep 2010 @ 5:29:53 am from IP #
rockabye
Member

Well we could do that. I saw one today, 50" for $799. What a bargain. Those eco documentaries look amazing on a screen that size. But it wouldn't fit on my electric bike carry rack so I passed it up. I did think about buying one and leaving it in the box unused to prevent someone else from using it. That would save a lot of energy. Everyday's a chooseday.

Posted Wednesday 22 Sep 2010 @ 5:40:53 am from IP #
sun2steam
Member

thatmosis,
Can you give a reference for domestic peak load between 5 and 9 am? But well this is not so much the problem. The point is, we disagree if renewable energy can supply energy when the sun is not shining and the wind is not blowing.

Yes it can!

1) pumping water up the hill as energy storage is not a pipe dream but it is done world wide, even in Australia in 1973.
see http://en.wikipedia.org/wiki/Tumut_Hydroelectric_Power_Station "The power station was completed in 1973, and has 150.9 metres rated head. It was the first hydroelectric power station in NSW to employ pumped storage."

And more could be done: http://bravenewclimate.com/2010/04/05/pumped-hydro-system-cost/

2) There has been a detailed and costed report presenting how all electrical energy in Australia could be created 100% from renewable resources within 10 years. This link shows just the summary:
http://media.beyondzeroemissions.org/ZCA2020_Stationary_Energy_Synopsis_v1.pdf
Of course it comes at a price. But no way near the scary figure of 600% electricity cost increase mentioned by thatmosis.

3) It is possible (and has been proven by computer modeling) to combine different renewable power plants to virtual power plants supplying 100% of the required electricity by following the demand pattern. http://www.solarserver.com/solarmagazin/anlagejanuar2008_e.html

4) There are solar thermal power plants running that have heat storage to cover about 7 hours without sunshine. http://en.wikipedia.org/wiki/Andasol_Solar_Power_Station

5) all these facts or ideas are certainly not more 'flippant' than carbon capture and storage or generation 4 nuclear power plants.

Posted Wednesday 22 Sep 2010 @ 6:25:40 am from IP #
dymonite69
Member

Whatever change will be made means will have less of something else to have more of RE plant.

The question is how much does aspirational Joe Average have to give up in the next 20 years to secure his grandchildren's future.

Posted Wednesday 22 Sep 2010 @ 6:35:33 am from IP #
thatmosis
Member

The Snowy hydro Electric scheme was a success but where in Australia have we the capacity to turn water into electricity and still leave enough for the population. Australia is one of the driest countries on earth and we are finding it extemely difficult to supply enough water to people without using it to make power. As for computer modelling everyone knows that computers do what they are programed to do and a good programer can program a computer to give the answer that is wanted by the client. I trust not computer programs that predict anything, just have a look at the number of times that the weather program gets it right, not often. I had a look at the Andasol power scheme and the claims that power would cost X amount and thought wow 200 hectares for 200,000 people, thats about 50,000 homes but doesnt say anywhere that it could support heavy industry. Have they factored in the ongoing costs of this installation as it is obvious to some that these panels will need continous cleaning in such an environment? What is the expected life of each panel? Is there enough suitable land for the huge sites that would be needed to run a small city? What if there is a series or rain periods where the heat tanks arent completely charged, do they fall back on generators or do people just go without electricity.As for the 100% RE in 10 years the cost of $370b, get a life. Thats at todays prices and bare no relation to the real costs involved. Their brief was also based upon the unproven claim that Man Made CO2 was the main problem and therefore is suspect from the beginning. They worked on an assumption that may be right but could be wrong and therefore their conclusions are biased towards their way of thinking. Add to this the considerable costs involved for the individual and the cost would be at least double. The whole thing hinges on the premise that people will convert to these so called energy efficient bits and pieces willingly or would you expect the Government of ther day to legislate itself out of power. Paek load for households only needs to be looked at from this point, people start coming home at about 3.00pm and turn on this and that to make life comfortable and cook meals, have a shower etc but it slowly levels out about 8.00pm tp 9.00pm when everyone is settled either in front of the TVor computer of reading. In the morning from about 5.00am people are starting to rise, have showers, cook meals, watch the news, ckeck their emails and power again rises until about 9.00 when most are at work ot school. As for the costs of electricity going up to the extent that I mentioned I draw your attention again to the costs of a simple solar unit and a unit that will do everything. $45,000 to $250,000 is about 5.5 times higher which puts it about right. You all talk the talk but how many actually walk the walk??? Facts and figures are okay but can be manipulated to suit who ever and whatever you want to prove, its only living with solar that you truely get a perspective of how different reality is to fantasy.

Posted Thursday 23 Sep 2010 @ 3:33:53 am from IP #
sun2steam
Member

To answer you first question: In the Snowy Mountains.
Also you should know that electricity schemes do not consume water, they just store it for a bit longer.

I could counter all your arguments, but I think I have to stop here as this discussion is sliding into a ranting competition.

Posted Thursday 23 Sep 2010 @ 3:49:47 am from IP #

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