Putting the ETS “on hold”?

Question time yesterday gleaned a little more information about the Government’s plans for the ETS – and showed the full extent of their ignorance of how the scheme works.Many people have been wondering what John Key meant when he said he would “put the ETS on hold” while it was reviewed. We now know it didn’t mean anything, but there is still a lot of uncertainty for business.

I had to ask three times what the practical effect would be of the statement in National’s confidence and supply agreement with Act, that the Government would pass “an amendment to the ETS delaying its implementation”.

First time he avoided the question and told us – again – about the select committee review.

The second time, he told us “no element” will be currently affected because the legislation will not begin until 2010 when energy comes in.

Only when I asked him directly about the effects on forestry, which came in almost a year ago and is expecting to claim credits in January for its 2008 carbon capture, did he say that the current rules about deforestation stay in place, pending the outcome of the select committee.

He didn’t actually say that foresters will retain their legal right to credits in January; however he can’t legally confiscate those without legislation, which he clearly isn’t planning before the those credits become due.

What was clear is that he had not thought at all about the effects of his statement on the forestry sector, who have been as puzzled as I have, and he confirmed that he has not talked to them.

So it seems we have established that foresters will be able to apply under the existing Act, which will not be “on hold” in any way at all, for credits to be transferred to their account in the NZ inventory, some time in January. But this is only step one.

There will be no market for those credits, at least for a year and maybe much longer, as he intends to amend the legislation before the end of 2009, and if obligations are removed the market for those credits will also be removed.

Let’s not be surprised if no-one plants anything more.

77 thoughts on “Putting the ETS “on hold”?

  1. I was wondering how they could put a law “on hold” without passing any changes to it. Maybe this is Key’s way of buying time while leaving the law on the books. Maybe……and maybe not. But if they did want to make changes they would have a repeal or changes under urgency……..and instead they are going about as slow as they can go on this one (compared to their speed on other issues).

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  2. “Brace for some bad news. The Treasury will announce today updated forecasts expected to show unemployment soaring and a sea of red ink in the Government’s accounts for years to come.”

    We have no money for ETS, or any other rort.

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  3. Did I hear on the news that National are scrapping the ban on incandescent light bulbs, preferring to leave it up to the consumer? (But not providing the consumer with any efficiency information or bulb lifetimes of course.)

    Trevor.

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  4. Great stuff.

    It should be up to the consumer to decide. For example, I have specialty lamps that require incandescent to achieve their effect, and the outdoor lamps that light the dark paths need to be at full strength the moment you turn them on.

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  5. As a significant investor in forestry let me say that I am quite happy with what is going on. My investment made sense without any ‘credit’ beyond that accruing to the sale of the trees. While I was dismayed at the idea that I would be charged for producing carbon dioxide but not paid to remove it (typical socialism there – get someone else to pay for everything) the current legislation was at least fair to both sides. However, I don’t believe we, as a country, should be contributing to the balance of trade of others through our ‘co2 surplus’ until the WHOLE WORLD is involved in that trade.

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  6. Come on Jeanette, putting the ETS on hold is a smart thing to do given the current economic climate.

    You may also have noted that most of Europe has put climate change issues to one side while they try and save their economies, it would be fiscal suicide for us to keep on with an ETS while this is happening.

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  7. ignoring climate change is the most short sighted reaction to the economic situation… we can’t just put them to ‘one side’. Surely thats the easy cop out way to deal with things. Dealing with climate change and addressing the economic situation go hand in hand.

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  8. “You may also have noted that most of Europe has put climate change issues to one side while they try and save their economies”

    Yup, never mind the planet, we’ve got the Economy (Peace Be Upon It) to worry about. The goverment should legislate to stop climate change interfering with the functioning of the free market.

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  9. “ignoring climate change is the most short sighted reaction”

    “Yup, never mind the planet, we’ve got the Economy”

    What’s the matter chaps?, are you scared that ten years worth of lying and bluster is about to go down the drain?
    It might be time to face the truth, the world is waking up to the climate change con, the only thing we can thank the economic crisis for is the way it has forced certain world leaders to face the truth.

    I guess its back to the drawing board for you guys, its time to invent another “crisis” that can only be saved by socialism.

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  10. i’m not sure where in my post you read anything about socialism? but then again you seem to be able to misread many things.

    But please, enlighten me… tell me which world leaders have said ‘there is no man made climate change”? (Rodney doesn’t count sorry)

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  11. yes Jeanette – interesting developments.

    There are some emitters out there who know the ETS will be retained and they want to buy credits now given prcies are cheap.

    Forest owners could therefore sell “forward credits” to emitters who want to forward purchase

    Please keep chipping away on this one in question time Jeanette – it appears its still :game on”

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  12. “tell me which world leaders have said ‘there is no man made climate change”? (Rodney doesn’t count sorry)”

    The Prez of Czech Republic or something (maybe he’s a scientist like Rodney!)

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  13. >>we can’t just put them to ‘one side’.

    Yes we can. The ETS in NZ was never supposed to make any difference to global temperature. It was at best a symbolic act of participation, and at worst, a rort.

    >>Surely thats the easy cop out way to deal with things. Dealing with climate change and addressing the economic situation go hand in hand.

    But it wasn’t dealing with climate change. It would have had as much effect as dancing to make it rain. And it came with a massive price tag.

    We can’t afford the price tag for symbolic acts. Those days are gone – they ended when the market crashed.

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  14. BB,
    well technically the most popular approaches to controling climate change are capitalist rather than socialist. :P

    “The prince”, huh? Does this mean that I now have a new machiavellian counterpart?

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  15. Icebaby… i was responding to Big Bro’s comments about europe putting climate change to one side… not the ETS specifically.

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  16. stephen r… the same czech president who has a book out which was paid for by the countrys biggest Oil company Luxoil?

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  17. prince,

    I don’t particularly care who paid for it, but yeah sounds like the same guy.

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  18. Do you think that in 2009 the Greens might come up with a new smear for anybody who dares speak out against the climate change con?

    The old “funded/backed/supported by Exxon” is wearing a bit thin.

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  19. Brian Fallow, in the NZ Herald says:
    “At least the Australians have an intermediate target. We have none. At least they have a climate change policy. Ours is in shambolic limbo.” and “But while Rudd is taking at least baby steps in that direction, Key is performing some kind of pirouette.”
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10548594

    Nice to know that it is not only us Greens that notice these things.

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  20. GOOD

    the new religion of global warming is losing convents as the economic reality of the ETS lunacy becomes better known

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  21. If you think an economic recession is bad – then consider a climatic event?

    Are you prepared to take a risk that human induced climate change is a myth and do nothing?

    I’ve stated this before – but look at these 4 scenarios and choose which one you want:

    1) Do nothing – AGW is a hoax – its costs us nothing other than continuing to use black energy.

    2) do something – AGW is a hoax – it costs us $$

    3) Do nothing – AGW is real – human catastrophe

    4) Do something – AGW is real – we win.

    Point 1, and 3 require too much risk

    Point 4 is the only option IMO – too much to lose otherwise.

    In any event – GW or no GW – we should be investing in renewable energies rather than digging and drilling holes in the planet and sending money to regimes that basically hate us.

    Point 2 is not a loss – it’s an investment in us and those that follow us.

    Think about the generations to come rather than your own.

    IMO – The ETS is the best mechanism to enforce change and get us investing in and using smarter energy sources.

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  22. That’s Pascals Wager.

    The problem with 4) is that you assume doing “something” makes a difference. It may not, in which case you’ve wasted money, which will cost lives.

    If a man has gangreen in his leg, you could say to him “here’s an asprin”. You charge him $100,000 for it. You’ve done something, but that something was ineffective, expensive and presented a huge opportunity cost.

    Any move we make in NZ will not prevent catastrophe, even if there is one, which is debatable. One good thing we could do is develop energy independence, but that doesn’t require us to buy into AGW.

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  23. panda – if we’re talking in religious terms here, I would rather have a religion based on good, solid science and risk analysis than the utopian worship of endless, unlimited economic growth, which has no basis in reality.

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  24. Prince – you are referring to Vaclav Klaus the current President of the Cech republic. The book is his own. You use a vicious slander by saying it is oil sponsored. This suggest an extreme lack of political and economic understanding on your part. But something worthy of the communist totalitarian rulers of chechoslovakia until the Velvet revolution – you clearly keep good company. Machiavelli preferred to be feared than to be loved. Now what is the biggest fear generating machine of today – hmm.

    For a politics wannabe you need to do a lot better.

    Now back to the issues – thanks Strings for backing up my comments in the previous entry “John Keys uncertainty principle”. If it is a good business decision people will invest, changes to tax or subsidies encourage speculative entry. Good business people are better than that (though at the same time keeping an eye out for oportunity if someone is going to be foolish enough to hand out money for nothing.)

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  25. Frog – good solid science and risk analysis is the path to growth. Economics is about empirically based real evidence which advises that grwoth is good.

    You really need to understand the economics has scarce resources as a key aspect. You appear react against economics automatically suggesting you have a strong confirmatory bias to your viewpoint. Something that results in overconfidence in your risk assessment

    This might really help you formulate better policy – Economics is not out to get you, its a tool to understand why people do the voodoo they do so well.

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  26. thats correct – Pascals wager

    but herein lies the rub IB – you are talking about “may” and “if” – are you prepared to gamble everything in the hope disaster doesn’t happen? Or take some action and try and head it off. Personallly – I would rather err on the side of doing something even if it is fruitless as opposed to doing nothing.

    If we do something and nothing happens – we end up with cheap if not free energy sources (which in itself is not waste but investment) as opposed to doing nothing and potentially invite possible catastrophe at which point – nothing can be done.

    I’d prefer to err on the sdie of caution because I see it as win/win (or is that wind/wind :-))

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  27. >>would rather err on the side of doing something even if it is fruitless as opposed to doing nothing.

    But there is a significant opportunity cost attached. People will die. For example, nations may have less to spend on health and welfare because those funds have been diverted to the Gaia-botherers. Is it better to give to “the Church” (taxes) in the hope that “God” (nature) will save us, or feed those starving people in the streets?

    >>we end up with cheap if not free energy sources

    We should develop those regardless. Your AGW schemes might ensure we don’t end up with better energy generation, because we may have to send money to Russia, via Al Gore.

    >>I’d prefer to err on the sdie of caution

    I prefer to identify real problems and devise appropriate solutions. I do not feel we should burn money in honor of the weather Gods.

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  28. interesting points – I disagree with this:

    ****************************************************
    But there is a significant opportunity cost attached. People will die. For example, nations may have less to spend on health and welfare because those funds have been diverted to the Gaia-botherers. Is it better to give to “the Church” (taxes) in the hope that “God” (nature) will save us, or feed those starving people in the streets
    ******************************************************

    I think thats a trite statement – goverments have to invest in utilities such as power generation whether private or public as the population grows. At present – we import oil and coal and pay with overseas currency (an outflow) – would it not make more sense to “borrow” and invest in renewable energies given the returns such investments would make – that in turn woukd mean, in time, there is more to invest in health and welfare.

    Given the world is heading to hell in a handbasket next year because the recession is really going to bite hard (you ain’t seen nothing yet) – then investing in these industries is good for the economy/employment as well

    In regard to your last comment – that will never happen – humans have always been a “trial and error” species – its better to point people in the “right” direction and make changes/tweaks as we go.

    Hence – bring in an ETS – make dirty energy pay.

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  29. What would Hayek say Says:
    December 18th, 2008 at 12:55 pm

    “Prince – you are referring to Vaclav Klaus the current President of the Cech republic. The book is his own. You use a vicious slander by saying it is oil sponsored. This suggest an extreme lack of political and economic understanding on your part.”

    I have nothing against the man personally but Vaclav Klaus is not a climate scientist. He is an economist and he may well know what he does in that field but he is not in a position to make authorative pronouncements on climate science. He further seems to keep company with the usual AGW denier crowd. So, it is certainly correct that here is an example of a national leader that denies AGW. It is however misleading to regard him as an authority on climate science or to treat his pronouncements on AGW as anything but a layperson’s opinion.
    http://en.wikipedia.org/wiki/V%C3%A1clav_Klaus#Dispute_of_global_warming

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  30. Johan – What does not being a climate scientist have to do with writing a book on economics? Your appears to restrict ownership of the solutions to problem of scare resources to “approved persons being climate scientists”.

    Where economics does interact with climate science in particular is on modelling and forecasting. Much of the debate is based on forecasting. Forecasting is not a skill of biologists, ocean and atmosphiric scientists. Forecasting is a discipline (tool) in itself utilised by economists, engineers and scientists. So it is not unreasonable for an economist with a strong background in modelling and forecasting to question the assumptions used in the model. The assumptions matter, if you disagree then I’m sure a number of failed hedge funds and investment banks would be willing to hire you.

    Johan – you are attacking the person rather than the issues. Something that is used in debate generally when you lack substance to your arguments. My original comment was about the slander by Prince and you seem quite happy to reinforce that slander, this does not speak well of your tolerance for alternative hypothesis or a willingness to look at new information.

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  31. Hayek – I have no problem with economics whatsoever, just your myopic brand of it, which you revere with religious intensity. I’m not afraid to question my economics or yours.

    Please do show me where science proves that growth is good. Do show me the physics that says we can live in a world of infinite substitution and growth, where the science and math used to solve/model the economic problem don’t matter, as long as the result “makes sense”. This is the Friedman neoliberal dogma that I reject as the mutterings of a madman.

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  32. Frog,
    I have never seen proposed, by any real economist, that infinate growth is a possibility. Nor do i beleive that anyone with a slight understanding of physics would beleive as such.
    Economics has long recognised the limits imposed by the natural world, infact the most central of economic concepts and the first taught to any student of economics, even at high school level, is the scarcity of resources; the very recognition of limited means. Economics has been defined as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses”.
    It is also common to recognise that nature itself has economic value, the assertion that it does not is much more that of a politician than of a scientist.

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  33. I have never seen proposed, by any real economist, that infinate growth is a possibility.

    I wonder if you omitted Julian Simon as ‘a real economist’ on purpose… ;-)

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  34. Frog – I do not revere “my brand” of economics whatsoever. You are inferring, again you look like your confirmatory bias is preventing you from looking at different information.

    The science of growth is good – well first we need a definition definition of good. I’ll use improving human well being as a definition of good. A simple metric such as life years whilst a broad metric provides a useful point to assess how much good has been improved.

    Do you really want me to continue, because even in your blinkered world your going to loose this debate, unless your defintion of good excludes people. Now if it does there is a definition for people with that worldview. Its not one thats very flattering.

    So to continue on the growth and good discussion. Pre industrial revolution the average life span was below 40. Today approx 70+ for men and women in developed countries. Countries that have not had growth have average life spans of approx 40 still. In fact the latest data in Zimbabwe (an extreme example with multiple problems) is that a lack of growth show life span is decreasing rapidly with the average now pushing 30 years for those that still life there. So just on life years growth is good.

    I really advise you to widen your reading on economics, even looking at few good blogs might help you. Try the beckett/posner blog, marginal revolution by tyler cown, the visible hand in economics and one of my personal favourites “the undercover economist http://www.timharford.com“.

    To repeat Economics is as much about scarce resources and how to allocate resources efficiently.

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  35. Hayek
    Ouch, talk about the the pot calling the kettle black. Show me where I attacked him personally? You are very quick to make accusations about my level of tolerance and ascribing prejudice to me – you are the one taking this to a personality level, not me.

    I accept your statement about Klaus’ use of modelling in his own field and accept that his views of economics represents a certain approach -I am not expressing an opinion about that approach. I don’t accept for a moment that Klaus’ abilities in this regard places him in any position to realistically criticise the scientific work of the IPCC or other climate scientists at all. Do you accept that there is a difference in the quality of the debate between experts on a subject when discussing contentious issues even if they disagree and the discourse between the experts and lay people on the same subject? I do. I do not deny the lay person his/her view but question the authority of their opinions on a subject they are not knowledgable about. I am doubtful that Klaus is able to make authoritative statements on climate change regardless of his ability to do modeling and forecasting simply because the data needs interpretation and analysis using expertise, which he does not have in this field.

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  36. opps that should be becker/posner. I hope Gary Becker is tolerant of my spelling error.

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  37. Johan – Prince made the original personal attack and you waded in to support Prince’s comments therefore you aided and abetted the actions of Prince.

    I support your statement about the quality of debate between experts. What you miss is that most of the economist issues with the IPCC is arguments about modelling and forecasting. That is a legitimate field of debate and I would not call a capable modeller who is an economist a layperson. Mostly they are human slide rulers but that a different issue. Saying someone is only a layperson because they are an economist (with modelling expertise) is an approach is to exclude other participants who have legitimate authority (in the field of modelling/forecasting) from the debate.

    For the record most scientist and many economist are not forecasters or modellers. So we should not be closing down any one group because those that do are a scarce human resource.

    The risk of closing down debates on modelling is that essentially you can then produce any result you want it to have. You might want to read the work of Nassim Taleb author of black swans to understand the limitations of modelling and the risks.

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  38. So what you are saying Sapient, is what I said originally. Friedman is was madman, as he postulates that perpetual economic growth is not only possible, but desirable. Did you ever read his Phd thesis? If you had, you would understand how neoliberal economics took hold, in spite of good science and math, not because of them.

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  39. Stephen,
    Indeed. Being a cornucopian and being a scientist are mutually exclusive.
    That said; many, if not most, of the theories hold their water well.

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  40. Hayek
    Point taken and I will do some of the reading you suggested.

    While I agree that we should not close down any one group etc as you state, we should not be blind to the limitations that each of the participants to the discussion have. While Klaus (for example) may be a valid participant due to certain expertise he has, he lacks expertise on other fronts and all his statements therefore do not have equal value – please accept that I am not attacking him personally – I am using him as an example – which holds true for all participants. But as the discussion is about AGW I place more reliance on climate scientists to interpret the data.

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  41. Happy to accept that Johan – you are right that we need to consider the limits of our participation and not all statements have equal value. I accept you place more reliance on climate scientists to interpret the data which is your right to do so. Enjoy the reading I know I did and I consider there is still so much more I am yet to learn.

    I am less worried about whether climate change is happening or not. I am more interested in the best use of resources. Where many climate scientist have gone with there data interpretation is to make pronoucements about the best use of resources and in there they have got themselves into significant difficulty. Like engineers, scientists have a bias to cool toys (apologies to bjchip) but sometimes when your building bridge (whether a technology bridge to span gap of uncertainty or a real one over a river) you don’t need to spend lots and lots of money which could be better used to improve education, health etc. Classic example is Nasa pens that write in space. A lead pencil costs next to nothing in comparison and you then can use resources for other activities. This is also much of the story of productivity which economists mutter from time to time.

    Frog does not help these debates when calling nobel prize winners madmen. There maybe some truth about winners of nobel prizes being slightly unhinged, but that would be a fascinating study and make interesting debates about the value of melancoly in the process of creative/new thinking. Now where is my joy division CD.

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  42. There maybe some truth about winners of nobel prizes being slightly unhinged, but that would be a fascinating study and make interesting debates about the value of melancoly in the process of creative/new thinking. Now where is my joy division CD.

    The world would be a dire place without melancholy. Excellent posts by the way, always good to have someone who can eloquently explain certain fields of endeavour on teh blogz. I await frog or toad’s reply/s

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  43. thanks StephenR – I appreciate your contributions even on the occassions when I disagree. I’m still learning and accept that style tone of comments may need some improvement, so hopefully I am less rough to opponents and leave them with some honour on the field.

    I’m now off to speculate on the value of good bottle of red wine. Is my marginal utlility enhanced more by letting it age a bit more or has it now reached an optimal point and any further waiting result in a diminishing return?

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  44. WWHS,
    Accually NASA used pencils just like the ruskies; the pen was developed by a private company and then promoted through the space program :P

    Frog,
    Rereading your statement i guess i misread it initially. By no means am i neo-liberal, if anything im closer to the third-way practiced by lab/nats.
    I have not read his thesis nor, do i have the time to do so. I agree with his views as to the nature of money and i like his concept of negitive income tax, but past that our agreement is somewhat limited.

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  45. But there is a significant opportunity cost attached. People will die. For example, nations may have less to spend on health and welfare because those funds have been diverted to the Gaia-botherers. Is it better to give to “the Church” (taxes) in the hope that “God” (nature) will save us, or feed those starving people in the streets?

    There is opportunity cost associated with a lot of things. .. but don’t even begin to pretend that the multiple trillions of dollars already soaked up by the fraudulent banks, the irresponsible wars and the rest of the “economic” community come anywhere near being relevant. How many people could we have fed with that? How many solar panels could we have built? How much insulation could we have installed? How many electric cars could we have…. I am sure the point is clear.

    The cost of course, is not nearly as clear, as the resource depletion exercise that we are embarked on as a result of our excessive population and ambitions for each member of every society, guarantees that efforts to make THIS society sustainable have real pay-offs rather than being simply costs.

    Which isn’t to say that there aren’t costs or won’t be, just that it seems to me that your fear is overstating them somewhat… and at the same time minimizing the potential for damage to human civilization.

    WWHS — I reckon that economists are not all THAT good at modeling and forecasting, or they are serving us all as a good negative example which DOES bear some thinking on :-). The models and modelers in climate are not all cut of the same cloth… and the IPCC takes the output of the entire collection of models into account as it attempts to forecast the future. None of those models has any understanding of the possible positive feedbacks or the possible negative feedbacks that are not included in its input set. That’s normal for any model. GIGO.

    However, all of them come to the same brutal conclusion about AGW. That it is real and it is (largely) us. So looking at this tends to make me even less optimistic than usual…

    http://climateprogress.org/2008/12/16/sorry-deniers-hadley-center-and-wmo-say-2000s-are-easily-the-hottest-decade-in-recorded-history/

    Just another way of looking at things… all the people telling me how it is all getting cooler…. seem to be making a bit of a mistake… and this is with us at a full solar minimum. Scary.

    Now…. the question is what we are risking (on behalf of our kids) vs what we might have to pay for (ourselves, so we can’t spend it on other stuff and don’t lie about we can’t spend it on the kids… we’re handing it over to bankers and con-artists so they can pretend that they didn’t fnck up so completely that god would have a hard time fixing it).

    Like I said, the banking/investment community does make a good negative example. The economists models didn’t predict what was about to happen… Debt-based, fractional-reserve, fiat currency bnllsh!t!!!

    I predicted it from basic engineering principles. A few others over on METAR (a Motley Fool board) predicted it as well. The Austrian school predicted it. The quants and hedgies messed up big time.

    Which isn’t the point. The point is the question of risk management/abatement and we aren’t doing a good job here.

    This guy makes it simple.

    http://www.youtube.com/watch?v=mF_anaVcCXg#

    This government clearly intends to do nothing, mean nothing and be good for nothing on current form. I can’t even hope that they’ll get the financial end correct. After all, Key comes out of the investment banking community, which has basically lost/wasted an amount of money roughly equivalent to everything that everyone on the planet has.

    Scary.

    …and it isn’t even Halloween

    respectfully
    BJ

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  46. Johan,

    You quote someone who wrote: “At least the Australians have an intermediate target. We have none. At least they have a climate change policy. Ours is in shambolic limbo.” and “But while Rudd is taking at least baby steps in that direction, Key is performing some kind of pirouette.”

    Here are some things you might like to know about Australia and Rudd’s government:

    1) Rudd plans to reduce CO2 emissions by 5% by 2020. Hardly impressive, and nowhere near enough to stop anthropogenic climate change. On top of that, Australia is already one of the worlds largest per capita emitters of CO2.

    2) The government is trying to stimulate the economy by investing in infrastructure. This includes improved railway lines to increase the amount of coal which can be transported to ports and then exported.

    3) The government is planning to “soften” the impact of an ETS on the public and industries as much as it can through various measures. If there is minimal economic impact, where is the incentive to reduce emissions?

    4) Upon its election, the Rudd government immediately cut funding to the public service, including the Bureau of Meteorology which is responsible for much of Australia’s climate research.

    Is this the sign of a government which is serious about climate change? Maybe Key is not as bad as you imagined?

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  47. Is it possible to somehow set up a feature on this blog whereby individual readers can choose not to see certain posters? Alternatively, is there some Firefox extension similar to the ad blocking extensions which will filter out posts by certain people?

    I don’t want to restrict anyone from posting, its just that I would personally not like to see certain peoples posts (of course I can always just close my eyes when I see certain names).

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  48. What would Hayek say : “You use a vicious “slander by saying it is oil sponsored.”. paid to be published by and the majority of PR paid for by still says alot. you still have to wonder who is scratching whose back there?

    He is not a climate scientist, this is true, which is why we should be azking WTF is he to do in this argument? A Gangater Capitalist is always going to take the side of the ” its not my fault, lets keep doing the do”

    i’m asking why, when THE REST OF THE WORLD is addressing climate change are we putting it aside. embarassing and shamefull on our part,

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  49. Samuela,
    In response to your comments about the Rudd government, have a look at this article in the Canberra Times – it makes the same points you have.
    http://www.canberratimes.com.au/news/opinion/editorial/general/rudds-green-fades-to-grey/1388181.aspx

    My earlier reference to Brian Fallow’s comments in the NZ Herald was simply to point out that even a business reporter was noting how NZ was now swimming against the tide, even compared to Aus. I was not singing the Rudd government’s praises regarding AGW. They have similarly backed down on their election rethoric about Japanese whaling.

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  50. I have just had sight of the following interesting e-mail from NZ Society of Local Government Managers:

    “Much has been made in media over the last month of the so-called ‘delay’ to the Emissions Trading Scheme while a Select Committee of Parliament reviews the scheme. Not surprisingly we have been fielding questions about this and the consequences for 2009-19 LTCCPs. Following discussions with the OAG and based on our read of the landscape we offer the following advice.

    The Prime Minister has signalled in a number of venues that the Government accepts there is a human induced element to climate change, further he has signalled some form of intervention will be undertaken (whether this is an ETS or an emissions tax, and the scale thereof is up for debate). In short some form of emissions charge will remain a feature of the policy landscape.

    There will be no legislation ‘delaying’ the scheme as such, the Prime Minister has signalled he expects legislation giving effect to recommendations out of the Committee to be enacted by 30 September 2009 (which means in all probability that any such legislation will come onto the radar screen in May/June).

    That means the present scheme remains in place as is until otherwise amended. For example, the forestry obligations are still ‘live’ (pardon the pun) and need to be taken account of.

    We therefore remain of the view that emissions charging cannot just be assumed away and therefore that local authorities would be wise to think about the implications this could have for costs and levels of service.

    We accept that there is some degree of uncertainty over the scheme and its impact. Nevertheless it is clear that there will be some from of charge for emissions and this will have an effect on your activities. Your LTCCPs should identify these impacts and make some allowance for the broader effects (including the advice from BERL on cost impacts). A best estimate of the impact (which is the basic test for robustness of LTCCPs) is unlikely to be zero for many councils. A local authority that does not consider the impact of emissions pricing may later find the introduction of emissions pricing gives rise to an LTCCP amendment under s97 (either through changes in cost or levels of service).

    Does this mean: “Do something, anything”?.

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  51. I have heard Vaclav speak and his main concern is that just having watched his country throw off the shackles of a government dedicated to the scientism (or historicism) of Marxist Leninism he does not want to see his people’s freedoms sacrificed to a set of theories which, in his opinion, are no more soundly based that those of Marxist Leninism.

    Totalitarian regimes have used pseudo science such as rascism, euthanasia, and of course Lysenko’s genetics to support their invasion of people’s lives.

    Regardless of your position on AGW it should be too difficult to have some sympathy for his position – a position I found shared by everyone I have met from the recently liberated Eastern Bloc. And in my travels I have met a fair number.

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  52. The problem is that as we try to respond to climate change the costs appear and people say “there must be a better way”, but that doesn’t mean people are being persuaded it is a con or bad science:

    “National and international science academies and professional societies have assessed the current scientific opinion on climate change, in particular recent global warming. These assessments have largely followed or endorsed the IPCC position that “An increasing body of observations gives a collective picture of a warming world and other changes in the climate system… There is new and stronger evidence that most of the warming observed over the last 50 years is attributable to human activities.”[1]”

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

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  53. Should we (they) bail out the US car makers?

    Hint: The executives views probably similar to Big Bro and Owen McShanes.

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  54. We should not bail out the US car makers any more than we bailed out all those people who were in the horse and cart industry.
    The US automakers are the worst examples of crony capitalism unionism.
    How come the Japanese can afford to build cars in America while Americans claim they cannot.

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  55. jh

    Yes, Owen clearly knows little about this subject.

    The unions are largely to blame for the near death of the USA auto industry, the companies do carry some blame but the vast majority of the problems can be traced right back to the way the UAW have raped the big three.

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  56. Yep. Let the union infested cra*fest that is the US motor industry go to the wall. Horrible, overpriced cars – the prime example of what happens when you put workers before customers.

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  57. Bj

    Straw man. Where did I agree with the bail outs?

    My point is that if you’re going to spend, on anything, you need to show how you’re making a difference.

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  58. True BP… just because bankers and the economists they own and the governments they influence are getting money for nothing doesn’t mean that the environment our kids have to live in should get any consideration whatsoever. You got me on that…

    After all there is nothing in that for US….

    Basically the sort of thinking that makes me sick to my stomach.

    BJ

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  59. As for SHOWING that you make a difference… no, that isn’t required. My moral obligation to pick up my own trash isn’t predicated on the fact that as one person I have no measurable impact on the trash load on the street.

    Clearly yours must be, for the logic you apply to NZ and environmental action entails not giving a rats patootie unless you DO make a difference.

    This isn’t even an ideology… it is a pathology.

    BJ

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  60. BP said “Horrible, overpriced cars – the prime example of what happens when you put workers before customers.”

    What a laugh. Didn’t you mean to say; “Horrible, overpriced cars – the prime example of what happens when you give large government subsidies to the auto manufacturers in the form of tax breaks for only their horrible, overpriced models, while you break the unions and export their jobs over the border to Mexico via NAFTA.”

    I’m sure my version of the statement is much, much closer to the facts! Laying the problems at the feet of unions is totally disingenuous. I’m sure that the unions are not the ones making the tax breaks or the management decisions.

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  61. BP

    Frog has it mostly right, you have it mostly wrong. The US Auto Industry has lobbied for and gotten tax breaks on its “most profitable” products which are the largest trucks.

    It has favored the largest cars in its engineering efforts, it has given lip service to the goals of efficiency and alternative powertrains. It has pushed the production of economy models into other economies. Short. Sighted. Businessmen. It has geared itself to production levels that would replace every car in the country every 3-5 years. It has suffered at the hands of unions which demand a fair go. Toyota pays pretty much the same level of compensation to its workers that GM workers get. It is structured differently. Most of Toyota’s engineers and workers (in Japan) are provided with health-care as a matter of government policy.

    It IS different.

    BJ

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  62. It is on the record that the Unions have refused to even discuss changing their employment packages to help save their companies because: “We are confident the Government will not let the companies fail and will provide the necessary funding.”

    IT’s called moral hazard. IT now seems that the general population are so much against this bail out that they are now boycotting the industry and the collapse will only be faster and taking taxpayers’ money with it.
    When both the employers and the employees believe they have some god given right to survive any mismanagement then they are eventually doomed because they stop listening to their customers.

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  63. Got to agree with you there, Owen. If what you say is true, and both the parties are just begging the government without any real concessions, then they are doomed to fail. “Too big to fail” is indeed a moral hazard.

    I wonder who will blink first? What is interesting is that as BJ says, the foreign owned, mostly non-unionised factories pay about the same to workers as the unionised plants. So clearly it’s not a wages issue that makes the big three inefficient. Perhaps it was Bush’s subsidy of SUVs that is/was the ultimate nail in the coffin.

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  64. The hourly wage rates for US auto workers start at $14 and go as high as $28. When shift allowances and overtime rates are added the average hourly pay is $39. When group life insurance, disability benefits, and Supplemental Unemployment Benefits (SUB), Job Security (JOBS), pensions, unemployment compensation, Social Security taxes, and hospital, surgical, prescription drug, dental, and vision care benefits are added Toyota’s employee costs increase to $48 but GM’s increase to $73. That is what is being referred to as a legacy cost. It is the legacy of the UAW demanding generous pension plans but not demanding that the funds actually be set aside in a jointly GM/UAW administered trust fund.

    The big three are all guilty of the same foolishness and even if Toyota has done the same thing it has only been doing it for twenty years which explains why those costs only average $19 per worker hour whereas GM’s are $39.

    There is a lengthy discussion of the media’s presentation of these “wage” costs here:
    http://mediamatters.org/items/200812060002

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  65. >>True BP… just because bankers and the economists they own and the governments they influence are getting money for nothing doesn’t mean that the environment our kids have to live in should get any consideration whatsoever. You got me on that…Basically the sort of thinking that makes me sick to my stomach.

    Please show me where I have agreed to any bailouts?

    We do have a duty to look after the environment. But you are not spending my money on actions that make no difference. They might make you feel good, they might forward the Greens political agenda, but if they do not drop the temperature significantly, then forget it.

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  66. BP said “Horrible, overpriced cars – the prime example of what happens when you put workers before customers.”

    It’s not all the unions, but they are a significant part of the problem. The cost of producing an American car is astronomical, and the industry as a whole aren’t focused on the customer.

    I had the displease of driving a Crysler rental recently. The thing was new and it was already falling to bits. Terrible handling, terrible performance, terrible fuel economy, and they were selling it for the same price as a mid-spec BMW. It’s not an isolated case, it’s the state of their industry.

    Let the lot go to the wall. They absolutely suck.

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  67. BP —- Parse that para again. You missed that I agreed that you had NOT agreed to the bailouts. Perhaps the inference wasn’t clear enough. I said that what you said was True. I try not to be excessively subtle.

    Of course, the logical difficulty of the rest of that paragraph is that I DID invert my argument. Not up to my usual standards.

    I still regard your refusal to allow NZ to take responsibility for cleaning up its small but real part of the mess as being the very essence of how “Moral Hazard” causes real damages.

    What part of this is difficult? A LOT of people are spending your money without your permission. Doing the same with mine. Mostly on stuff I disagree with too (housing policy for starters, wars when I was in the USA) … so the prospect of taking a 1%-2% bite for the future of the human species and actually doing SOME good as opposed to 4% or 5% of outright theft by people who are simply greedy, makes you raise your hackles and spit the dummy because we can’t PROVE that it would be good until you can see the damage occurring ? Cui Bono is a horrible thing on which to base a moral position unless you include your children and their children in the calculations.

    BJ

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  68. Mu understanding (based on reports not my own research) is that while the wages paid by Toyota etc are about the same the difference lies in the fringe benefits, special rates and all manner of other non labour costs of labour which make a huge difference to the productivity per worker.

    Probably about as much a factor as the obvious failing in management.
    About fifteen years ago I wrote a paper for my MBA students called “What has gone wrong with US big business?” It proved all too prescient.

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  69. A later version, “Those Twentieth Century Tribes” opened (If anyone want the rest email me):

    During the fifties and sixties the potency of “American know-how” dominated business thinking everywhere. American industry seemed invincible. It’s productive might overwhelmed its enemies during the War and in the post war boom time it was flooding the world with washing machines, radios, food-mixers, motor cars and all manner of consumer goods, as well as the machine tools which made them.

    And yet during the seventies ad eighties this Leviathan seemed to crumble before the onslaught of new consumer products designed and developed by the Japanese. Any observer of the fifties would have expected US companies to continue to dominate the world of consumer goods – especially the facsimile and the video recorder and electronics based products. After all Americans had invented them. And yet it was not to be.

    Many analysts have focused on the strengths of the Japanese in terms of management and production skills and how the American competition lost sight of quality control and customer service.
    But these studies overlook the fact that two major sectors of the American economy withstood the Japanese challenge. The entertainment industry continues to dominate the world and is America’s largest earner of overseas funds, while the high technology companies of Silicon Valley and elsewhere dominate biotechnology, and the leading edge of the software and hardware developments.

    During the seventies and eighties our admiration for American know-how was displaced by an equivalent admiration for American Management Marketing skills. American style MBA schools were set up everywhere – and students flocked to enrol in them and companies winningly employed them on graduation.

    The standard text of the eighties told these keen student that:

    * Technology based companies were beneath contempt; because they were “product driven” rather than market led – a mortal sin.

    * The entertainment industry was never mentioned at all or was dismissed for being driven by creative people and its lack of scientific marketing procedures – a grievous heresy.

    So the high tech and entertainment sectors were ignored by these MBA courses. And they went from strength to strength – they were immune to the MBA virus and remained robust and well equipped to withstand the Japanese assault.

    But did these self-immunised companies sleep-walk their way to victory or did they have particular skills of their own – skills which may be transferable to mainstream business and help ensure its future survival against future competitors?

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