One issue with “carbon taxes” hasn’t been touched (Unless my skimming of the post & responses has failed).
Once we’ve repented of our sinful ways, what happens next?
The UK Goverment has recently hit this problem.
Motor vehicle duties are based upon CO2 emission/km, 13 bands with higher bands attracting more tax, so called “Zero Emission Vehicles” have a zero cost.
http://www.direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012524
Now, us sinners have been repenting & thus the Government’s take from duty, has fallen.
Plans are now to tax previously zero rated vehicles & to increase rates for others.
Comment on The costs of tackling or not tackling anthropogenic global warming by Adam Gallon
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Comment on The costs of tackling or not tackling anthropogenic global warming by Peter Lang
Adam Gallon,
A somewhat similar thing happened in Germany. They have put a special tax on nuclear energy and are subsidising their coal mines.
Amazing what politicians can justify as sound policy, eh?
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Comment on The costs of tackling or not tackling anthropogenic global warming by johanna
VTG, you are running a circular argument here. You are saying that we should accurately predict the future, and then work backwards to determine the discount rate. But, since we can’t predict the future accurately (and we can’t), then we should just decide what we want and do it, ignoring the cost or bodging up a discount rate that fits. It’s nonsense.
For your thought bubble to make any sense, we would not only have to know exactly when the asteroid will hit and what the effects will be, we would need to know what the exact trajectory of scientific, technological and economic development over the next 100 years will be. Only then could we decide the best choice of what to do and when to do it.
That is precisely why Stern’s report is such bollocks. The hubris of someone who says we should deprive ourselves now so that people in the year 2800 will be better off is hard to fathom, even if you accept his tendentious views on climate change.
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Comment on The costs of tackling or not tackling anthropogenic global warming by VeryTallGuy
Peter,
yes, I agree, the choice by Stern of a low discount rate was a value judgement.
Equally, the choice of a 6% discount rate as advocated here is also a value judgement.
And here’s how I see those values differ qualitatively:
(1) Stern’s choice puts some value on the distant future
(2) Faustino’s choice allocates essentially zero value to the distant future.
Both theoretically (asteroid) and in reality (Lake District) we see that Faustino’s analysis does not put sufficient value on the distant future – beyond a short number of decades.
I’m open to, and ignorant of, what the best qualitative way to judge this.
Stern puts forward a low discount rate, Faustino suggests a cost benefit analysis, which I think is basically a subjective value judgement anyway.
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Comment on The costs of tackling or not tackling anthropogenic global warming by VeryTallGuy
Johanna,
it’s actually the choice of a 6% discount which is self fulfilling.
The simple maths of exponential decay means that this is, however couched in rational economic language, in reality a value judgement which deems all impacts beyond a few decades to be irrelevant.
That conflicts with my personal values. I can’t speak for yours.
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Comment on The costs of tackling or not tackling anthropogenic global warming by Peter Lang
VeryTallGuy,
I don’t agree that selection of discount rates are a value judgement when done objectively. You can see how they are done objectively in these reports (go to the sections the appropriate sections):
http://www.aemo.com.au/~/media/Files/Other/planning/419-0035%20pdf.pdf (p5 and 21):
Liabilities 100%
Debt 60%
Equity 40%
Risk free RoR 6.0%
Market risk premium 6.0%
Market RoR 12.0%
Corporate tax rate 30%
Effective tax rate 22.5%
Debt basis point premium 200
Cost of debt 8.0%
Gamma 0.50
Asset Beta 0.80
Debt Beta 0.16
Equity Beta 1.75
Required return on equity 16.5%
Inflation 2.50%
Equity Beta 1.75
Required return on equity
Inflation 2.50%
Another:
http://www.ret.gov.au/energy/Documents/AEGTC%202010.pdf (p5-6)
For example, in this study, the nominal before tax discount rate is calculated as:
(% debt) x (cost of debt) + (% equity) x (cost of equity) = discount rate
70% x 9%/year + 30% x 16%/year = 11.1%/year
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Comment on The costs of tackling or not tackling anthropogenic global warming by VeryTallGuy
Peter,
I disagree that the choice of discount rates beyond short term investments is not a value judgement, and I’ve given you examples to illustrate this.
However, I’m open to being persuaded I’ll read the links you’ve posted and see what I can learn. If you can link anything on the choice of discount rates for long term decisionmaking – on the timescale of climate change – I’d be very interested.
I’m not able to contribute any further on this thread, thanks for your responses.
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Comment on The costs of tackling or not tackling anthropogenic global warming by johanna
VTG, it is impossible to calculate a discount rate beyond a few decades, let alone for centuries, because we can’t even come close to predicting the future that far ahead. It would be dishonest to even try. That is why the discount rate becomes, as you say, meaningless in the very long term.
I repeat, your premise is circular, and based on a fallacy.
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Comment on The costs of tackling or not tackling anthropogenic global warming by Faustino
VTG, @ 6.20 and 6.27, I didn’t actually advocate a discount rate, I noted the typical US and UK rates, and have talked elsewhere of a rate around 6%. That was based largely on a very extensive assessment manual put out Australia’s Department of Finance around the late-80s, perhaps early 90s. I don’t have the document to hand, but recall it as being very well-founded, and rates of around 6-7% have usually been used in government project and policy assessments in Australia, generally derived from that document. Such rates are also in line with real world interest rates by which people indicate their preference for current over future consumption – “revealed preference.” Would you lend money at 1.4% or lower interest?
Richard Tol, an expert (which I’m not) says @3.22 “I agree that the discount rate should be consistent across all aspects of public policy. Greenhouse gas emission reduction is but one investment in the future. Its importance should not be artificially boosted by a different treatment of risk, or futurity, or empathy.” That would, in my view, tend to favour the widely used 6-7% rates, which are an estimate of the actual cost of deferred consumption, of reducing your current options by locking money up in a loan. Using a consistent, defensible, rate allows you to make sound comparisons between alternatives.
But, as I’ve said in an earlier reply, the discount rate is one factor, it informs your decision but does not dictate it. It may be that other values, on which it is difficult to place a numerical cost or benefit, are deemed to outweigh what the numerical analysis suggests is optimal. Similarly to your Lakes example, there has been much discussion in Australia about the value of retaining Wilderness areas, e.g. in Tasmania and Northern Queensland. Decisions are not ultimately made on the measurable cost-benefit aspects of the analysis, but on the implicit weight given to non-quantified factors.
As regards that, I refer you again to Judith’s position quoted in Peter Lang’s 4.38 post, which to me is a very sensible stance regarding an uncertain future, which does not involve, as per my 2.11 post, over-committing resources on uncertain futures.
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Comment on Refocusing the debate about advocacy by Martha
“How can you make such a statement? ”
Hello Peter,
In the related post which I am discussing, the cited Hansen statements were: that if Canada proceeds with the Tar Sands he thinks it will be “game over” (for American efforts to reduce emissions); and “we’re toast if we don’t get on a very different path”. I said these particular cited statements are general positions, not specific policy positions, because that is what they are.
The reality and post-positivist ethical obligation (as I see it) that scientists take general positions, was what I was (still) discussing.
However, now that you are talking about e.g. his coal protests, or if you want to talk about his discussion of the option of ‘carbon fees’… that is more specific and I can see that you might say it goes beyond the ethical obligation to communicate a general position on issue(s). However, I have no problem with this, either, because — all things considered — I prefer to hear from scientists in the political process rather than leaving it to ‘experts’ in political process i.e. handlers.
That is just my preference, as a citizen.
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Comment on The weatherman is not a moron by steven
Bart R, I assumed you would come to the conclusion my breeze has no value. Waiting for the grandchildren of Chelsea before it matters? Perhaps globally but I don’t live globally, I live regionally.
http://earthsky.org/earth/nasa-study-texas-wind-farms-cause-local-warming
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Comment on The costs of tackling or not tackling anthropogenic global warming by Peter Lang
VeryTallGuy,
I disagree that the choice of discount rates beyond short term investments is not a value judgement, and I’ve given you examples to illustrate this.
What do you mean by :short term”? The discount rates I gave you are for the life of power plants. To me that is long term and as long or even longer than it makes any sense to project.
I suggest your examples are making value judgments but you are asserting that others who come up with a figure that does not give you the answer you want are making the value judgements. However, the figures I gave are objectively derived.
Nordhaus gives extensive discussion on discount rates for climate change cost benefit analyses here:
http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf
This recent presentation by Nordhaus says he is using a global average discount rate of 5.5% in his analyses for AR5: http://nordhaus.econ.yale.edu/documents/Prague_June2012_v4_color.pdf (Slide 31). This is close to the figure of 6% that Faustino is quoting from the 1980′s for Australia. However, the global average is a combination of lower discount rates in the developed countries and higher in the less developed countries.
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Comment on The weatherman is not a moron by manacker
Bart R
I’m not too interested in whether or not someone might consider Feynman to have been “a radical activist in his own right”.
I’m really just interested in his incisive statements on scientific honesty, which have been well documented.
On the second point, you apparently agree that “climatologists” also “skew” their numbers to “please” their audiences (just like “weathermen”).
Good.
That was simply my point.
To what extent this has resulted in a “skewed” viewpoint in the IPCC reports would appear to be an open point of discussion.
Some analyses, such as this one of AR4 (principally WG1), which was collected on a now-defunct ClimateAudit thread, appear to think the distortions are significant.
http://sites.google.com/site/globalwarmingquestions/ipcc
Max
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Comment on Refocusing the debate about advocacy by tempterrain
“Angels and ministers of grace defend us” (Hamlet) Another thread on advocacy!
Well at least it’s not on uncertainty 
I was thinking that surely Judith can’t possibly think up yet another angle on uncertainty, but I’ve just realised she’s not done advocacy and uncertainty together yet.
So we could have the ‘uncertainty of advocacy’ , or maybe the ‘advocacy of uncertainty’. What do you reckon?
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Comment on BS detectors by manacker
Bart R
Stephen Schneider also told scientists to weigh whether or not they should be “honest” or “effective”.
That what Rutan’s statements on BS detectors is all about: communicating “effectively” versus “honestly” in science.
Is that so hard for you to grasp?
Max.
Max
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Comment on BS detectors by David Springer
Joshua | September 16, 2012 at 7:50 am |
“Careful there, Judith – your double standard is showing again. You are beginning to look very much like just another Jell-O flinging tribalist – albeit one with much technical expertise in climate science, unlike many of the other tribalists.”
You’ve gone well beyond looking like a pooh-flinging anonymous coward.
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Comment on National Strategy for Advancing Climate Models by Paul Vaughan
vukcevic quoted:
“These longer fluctuations are too large to be explained by the motions of Earth’s atmosphere and ocean. Instead, they’re due to the flow of liquid iron within Earth’s outer core, where Earth’s magnetic field originates.
http://www.nasa.gov/topics/earth/features/earth20110309.html “
Something important was overlooked, but I suspect it may be a long time before this narrative gets changed (because it’s currently politically convenient).
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Comment on BS detectors by David Springer
stefanthedenier | September 15, 2012 at 10:04 pm | Reply
“3] satellite data is the most unreliable – otherwise they wouldn’t use 5000 people, to monitor on land.”
Satellites don’t measure temperature at ground level. They measure an average through a column a thousand meters in length. Ground stations measure more than just temperature.
Moron.
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Comment on The costs of tackling or not tackling anthropogenic global warming by manacker
Jacob
It’s very likely true that the “developed nations” cannot (and will not) reduce CO2 emissions by 50%.
But it’s not true that “it does not matter what China does”
Over the period 1990 to today, the major industrialized economies (USA, EU, Japan) combined have increased their annual CO2 emissions by a compounded rate of 0.57% per year.
Over this same period, China’s CO2 emissions have grown at a rate of 5.7% per year.
If these growth rates continue over the next 38 years (to year 2050) , China will have emitted 60% more cumulative CO2 (from today through 2050) than the major industrialized economies combined.
What will very likely happen is that ALL economies gradually shift away from a carbon base to something else as fossil fuels become more difficult and costly to extract and “something else” becomes more competitive (no “carbon tax” needed, thank you).
But that last part is admittedly just my guess (so don’t turn on your “BS meter”).
Max
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Comment on BS detectors by The Skeptical Warmist (aka R. Gates)
So Tomcat,
Since you seem to deny the validity of all the research and data that show ocean heat content to have been increasing for many decades, then what moniker shall we add to your name? Because we don’t know exactly how much the heat content has increased all the way to the bottom the world over and because uncertainty increases the deeper we go does not mean we don’t have a high degree of certainty in the trend.
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