climate economics
stoat | October 6, 2007Interesting post on this over at James Empty Blog. So: Weitzmans basic thesis is: the PDF of the climate sensitivity has a long fat tail; the cost diminishes less quickly; so the "expected utility", which is the integral of the two, is divergent. This has echoes of mt's arguments, which he has been making for some time. But mt didn't wrap his arguments up in a pile of maths, so of course he gets ignored.
There, I've given away what I think: this is a pretty piece of maths (or it may be: I can't say I've read it all through in detail) but it has precious little relevance to the real world. For…
stoat | September 5, 2007Interesting post over at Green Business News, suggesting an imbalance. In fact there are two possible balances: between green taxes and green spending, and the taxes and the social costs. It would seem neat that the taxes ought to balance the social costs (but they don't in other areas) but since we don't know the costs this is hard to do. Certainly the article seems to suggest that the taxes are likely higher than the costs (a theme close to Tim Worstall's heart), and that even so they have little effect on behaviour. And since the taxes appear to be far higher than the green spending, there…
stoat | June 18, 2007A colleague told me about an interesting article I'd missing in the grauniad: The inconvenient truth about the carbon offset industry. Which I fear merely confirms my lack of trust of these things.
The main point was that a number of companies are doing offsetting by buying up EU emissions credits and then retiring them. However, since these things are in surplus the prices are very low and retiring them does nothing useful. Other than make money for the middleman, presumably. And, if you don't inquire to closely, allowing you to wipe away your guilt.
An amusing side-issue in the article…
stoat | May 21, 2007The IEA are the Institute for Economic Affairs. The quote on their mainpage shows what they think of themselves The price of economic freedom is eternal vigilance, and as long as the IEA is around, we may be sure that the forces of regulation and state control will have a formidable obstacle in their path. Long may it flourish.
Almost inevitably, this kind of attitude translates into skepticism on global warming. The illogical argument is, roughly, "we're for economic freedom and low taxes and against government interference. GW, if real, will probably require state intervention to fix it.…
stoat | May 1, 2007UBS to launch first Global Warming index says the FT (just next to an advert about high net worth individuals designed to annoy scientists...).
Its not perfectly clear what its doing (I'm hoping James will investigate!). They say
Retail and institutional investors will also be able to buy exposure to, or short sell, the index in much the same way they would with the FTSE or Dow Jones stock indices. If temperatures rise, so will the value of the index. Ilija Murisic, executive director of hybrid derivatives trading at UBS, said the impact of global warming had brought explosive growth in the…
stoat | January 12, 2007The question is... are carbon offsets OK? Can you throw away your guilt/sins about a jet-setting lifestyle by spending a few extra dollars on carbon offsetting? The answer is, I don't know (refernces: my review of AIT (which was intended to be ab out science but got a bit sidetracked) and BS's defence of Gore.
I find myself concerned about how well/honestly these offsets work. BS says I expect the market for voluntary purchases of emission credits will be driven by quality, and chintzy frauds will find themselves exposed by their competitors which I don't find too convincing. Are there really…
stoat | January 8, 2007Stern (presumably to inflate his damage estimates (or am I being unfair? After all, climate change will continue beyond 2100...) runs scenarios out to 2200 (see fig 6.5).
But if you look at those pics, the lines are suspiciously straight from 2100 to 2200. So they are interpolated. But from what? SRES only runs out to 2100 (doesn't it?). Do they assume constant CO2 emissions, or levels, from 2100 on?
In short, can anyone tell me what fig 6.5 is based on?
stoat | January 3, 2007James Annan makes two good points in a comment, which I'll reproduce here:
Actually, it looks like Stern chose a rather optimistic cost of stabilisation, 1/3 of the cost that JQ estimated, although of course JQ does his best to backtrack and excuse Stern on that score.
I wonder how things look if instead of a single figure, Stern had used a probabilistic range a la climate sensitivity pdf. Using the methods in widespread use for sensitivity, I bet it would be easy to conclude that "it cannot be ruled out" that stabilisation would be catastrophic for the economy, even if this is not considered…
stoat | December 21, 2006... as said by the wise CIP in the comments. Although I wasn't quite sure how to interpret it. BTW, this is yet more Stern stuff - sorry.
So the first thing to say is... I'm not really happy expressing all this in terms of GDP. We could all be a lot happier on lower incomes if... well, if I was dictator of the world. If we hadn't wasted billions invading Iraq and on the Child Support Agency and... I hope you get the point. Money isn't everything.
But if we *are* discussing it all in terms of money, then we ought to notice the point that Tim Worstall has made - that the differences between A2…
stoat | December 19, 2006OK, I'm desperately trying to understand Stern, and failing. Things just don't seem to connect together properly. Possibly if I actually read the entire thing carefully... but who has the time. So, if anyone can explain to me:
Stern sez: Using the results from formal economic models, the Review estimates that if we don't act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. But if you look at the…
stoat | December 1, 2006The Cambridge Energy Forum organised a day-conference on Sustainable Energy - 1 Dec.2006. Sadly I had a program meeting in the morning and children to pick up after school so I only got to go to bits of it: which was: Mr Karl Carter Director of Operations, British Sugar and Biofuels; and Professor Trevor J T Whittaker Professor of Coastal Engineering Queen's, University of Belfast on Tide, Wave and Offshore Wind.
Biofuels from British Sugar: what I remember was: will only account for maybe 10% at very most, due to the land required and needs to be done properly to get any kind of CO2 payback…
stoat | November 22, 2006Via Prometheus, I find a review of Stern by Nordhaus. First an aside: N is the first mainstream commentator I've seen to point out that the Great War on Terror was undertaken "with no discernible economic analysis"... as I've pointed out, both Lomborgs "Consensus" and Pielkes recent re-run have shied away from considering the economics of said War.
N points out what others have: that Sterns results are dramatically different from earlier economic models that use the same basic data and analytical structure. N does what S should have done: point out why this difference exists.
N appears to…
stoat | October 31, 2006It looks now rather unlikely that I'll bother read much more Stern, and will instead lazily rely on others. Tim Worstall seems to be doing some reading, and (surprise!) doesn't believe Sterns economic numbers.
SR is getting lots of good press at the moment. I do rather wonder if it will survive in the long term, though.
stoat | October 30, 2006Though of course I havent read the whole thing or anywhere close. I wonder if anyone ever will. Maybe it will be fun reading for Christmas! Or maybe not...
Looking at Part I. First science nugget: "a doubling of pre-industrial levels of greenhouse gases is very likely to commit the Earth to a rise of between 2 - 5°C in global mean temperatures." Hmmm - where does that come from? 1.5-4.5 is the conventional range, has Stern rounded it up? Or is that IPCC 2007? And "Several new studies suggest up to a 20% chance that warming could be greater than 5°C." - hmmm, sounds like James stuff. Perhaps…
stoat | October 29, 2006It seems to be open season on pre-posts on the Stern Review, so I'll pick some bits out of the Beebs coverage. To start with:
Even worse, these costs will not be shared evenly. There will be a disproportionate burden on the poorest countries.
I'm sure this is meant to make us all feel guilty. But I can't help suspecting that some people will happily say "oh good, not on me...". And at the end we have there is a strong moral obligation on the richer countries... so we're doomed. But on to his estimates... Having fed the probabilities of the various different degrees of global warming into his…
stoat | October 26, 2006Don't you just hate it when the newspapers write up something based on selective leaks and insider info, and then fail to properly report on the real thing because its been done already? Well, I'm not going to do that to the Stern Review (side note: if you look up Stern report on google, I'm one of the top hits - but only because its real name is S review...). The SR, you'll recall, was a report commissioned by the UK govt into the economics of climate change.
Now the Grauniad says: Tackle climate change or face deep recession, world's leaders warned based on All of [Stern's] detailed…
stoat | October 9, 2006Apparently (this from listening to the 10 o'clock news on radio 4) there was a brief moment recently when gas prices in the UK were negative... due to mild weather, and new pipelines, and no capacity to store the stuff, people were being paid to take gas off traders hands. Weird or what. Anybody got a proper ref for that?
And from the Economist, a week or so ago: some hedge fund got burned of $6n (out of $9b under management; ouch) when one of their traders bet on a continuing trend of increasing gas prices; but they went down. He got a $95m bonus last year for being right with the same bet;…
stoat | September 21, 2006A thing called the U.S. Climate Change Technology Program Strategic Plan has been released (thanks to commenters at RC for the link). It seems (of course, I haven't read the whole thing...) to be a set of options for reducing CO2 emissions. All very splendid. But what is missing is... *why* would you want to reduce CO2? Of course, we all know the answer - climate change, but (presumably for politicial reasons) they can't say that or give any details.
The document appears to be an exercise in dancing around the point: Although scientific understanding of climate change continues to evolve, the…
stoat | September 17, 2006Says the Guardian. The full report is here (by the Tyndall follk) but the summary (by FOE/Coop) is here. There is a clear void between the scale of the problem and the actual policy mechanisms proposed well I can agree with that, but from there on...
"...the report says that 90% cuts are achievable if measures are taken within four years to stabilise emissions. Beyond 2010, it says, annual cuts of 9% will be needed for the next 20 years. If the measures are not introduced urgently, say the authors, much more drastic and much less manageable cuts will be needed later. The authors say that…
stoat | September 3, 2006Gas prices are currently high and have been rising in the UK... however, British Gas is running adverts in UK newspapers offering "Fixed prices that fall in December 2007". This might or might not show you the advert, depending on when they update it.
Which lead me to wonder if they knew something that no-one else does. However, looking at the small print Fix and Fall rates are at our current new standard variable prices from date of registration until the 3 September 2006. New standard variable rates apply from 4 September 2006. From this date or date of registration if later, until 30…