Jim D
I can’t find the reference to 3% GDP you mentioned. Would you mind pointing me to the quotes so I can put the sentences into context. Thanks.
Comment on A precautionary tale: more sorry than safe(?) by nottawa rafter
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Comment on A precautionary tale: more sorry than safe(?) by Peter Lang
Excellent responses by HAS and very informative. Thank you.
I’ll give an example to support this statement by HAS:
NW – the curious thing is that a regulation that is capricious, even if in the interests of giving certainty, ends up creating uncertainty (e.g. from regulatory risk), and this kills markets for the asset and hence causes loss of value.
Regulatory ratcheting has raised the cost of nuclear power, slowed its development, slowed the rate of licencing and approvals, extended the construction period, greatly increased the financial risk for investors and made them not economic in may countries.
The consequences of this are:
1. Many fatalities are being caused by not using nuclear power instead of fossil fuels
2. global GHG emissions are 10% to 20% higher now than they would have been if not for the impediments imposed on its development.
3. the rate of future GHG emissions reductions will be much slower than if nuclear was being rolled out much faster than it is,
4.. The available technologies are less mature than they would be if the 1970-80s growth rate had continued
5. nuclear would be even safer than it already is.
That is the net of the ill-informed regulations. As you said: “the curious thing is that a regulation that is capricious, even if in the interests of giving certainty, ends up creating uncertainty (e.g. from regulatory risk), and this kills markets for the asset and hence causes loss of value.“
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Comment on A precautionary tale: more sorry than safe(?) by Faustino
No, he wrote that over ten years ago.
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Comment on A precautionary tale: more sorry than safe(?) by Faustino
Fan, you quote “Often, there is good reason for the government to be involved.” Less often, in my experience, than government believes. But even if there are grounds for government involvement, that is not sufficient. The track record of government intervention and regulation is appalling. If for some reason markets are not working optimally [and if they aren’t, it is often because of poor government regulation], that is not sufficient. Government must demonstrate that it can improve outcomes. Here’s something I published on this ten years ago:
Market failure and government failure
Markets are very efficient devices for providing and processing information, for organising production and distribution of goods and services so as to allocate resources to their highest valued use and thus maximise community income. Their superiority to central planning is well attested.
There may, however, be cases where markets do not produce the most efficient outcome, where there is “market failure.” This tends to arise in particular circumstances, for example when there is a natural monopoly, where externalities are not taken into account, where there is information asymmetry or in the case of public goods. (There is extensive literature on the issue for those who seek more detail.)
The identification of market failure alone is not, however, sufficient reason for government intervention. There can be no presumption that governments outperform markets: indeed, “government failure” is more common. The World Bank advised that “the countless cases of unsuccessful intervention suggest the need for caution. To justify intervention it is not enough to know that the market is failing; it is also necessary to be confident that the government can do better.” A Bureau of Industry Economics paper assessing the 15 major interventionist policies of the Commonwealth Government from 1970-85 found no positive outcomes: 13 had negative returns, while for two the net outcome was unclear.
Should the cost to the community of market failure be significant, government should first see whether it is possible to improve the workings of the market. If not, it must assess its capacity to produce a better outcome, and the costs and benefits of any intervention. Given that a number of studies have found administrative costs of around 15-50 per cent in government industry support programs, the prospect of a net benefit from intervention must be considered doubtful.
Within the Queensland system, the term market failure has rarely been used in its true economic sense. It tends to be shorthand for “We think that certain opportunities for which there is no commercial support should in fact be pursued, with government funding.” That is, picking winners again.
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Imperfect government: “The skills of government in addressing market failure are often exaggerated. Government intervention must overcome three formidable difficulties: the tendency of regulated firms to “capture” their regulators, weak incentives for efficiency within the public sector, and missing information (where markets lack it, governments are likely to lack it as well). … The record of intervention is poor … history suggests that the burden of proof should lie with those who would extend the government’s role.” The Economist, 17/2/96.
World Bank (1991) (p 131), World Development Report: the challenge of development, OUP, Washington DC
Ralph Lattimore, BIE seminar paper, 1986 (unpublished).
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Comment on A precautionary tale: more sorry than safe(?) by AK
<blockquote> Investment bankers bundle mortgages into derivative investments — they get eaten by black swans.</blockquote>That wasn't a <i>"black swan"</i>, it was an eagle.
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Comment on A precautionary tale: more sorry than safe(?) by AK
<blockquote>No, the costs of doing nothing are reasonably well known and scary, even the unduly optimistic ones (Tol for example). See RCP 8.5 and the consequences as described in the AR5.</blockquote>That's not <i>"well known"</i>, that's fantasy. The <i>"costs of doing nothing"</i> are entirely speculative and the probabilities are beyond evaluation. They also aren't limited to climate (<i>e.g.</i> eco-catastrophe).
For all that, the opposite of <i>"doing nothing"</i> isn't doing what you (clearly, IMO) are pushing for. There are many ways the "problem" of increasing pCO2 could be solved without impacting the growth of cheap energy and other worthwhile development. Many would have similar time-frames to your urgent, immediate, and disastrous "mitigation" policies, while simply redirecting a bit of economic growth so as to achieve earlier implementation of (inevitable, IMO) extraction technologies.
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Comment on A precautionary tale: more sorry than safe(?) by Stephen Segrest
As usual, 99% of blogger comments have zero objectivity in their one-sided arguments or “staw-men” examples. Its always about those dog-gone “liberal socialists” and environmentalists worshiping “Mother Earth” trying to eliminate individual liberty and mess up the economy.
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Is the ozone hole an example of the “precautionary principle”? Here we had Nobel winning science (Molina). But as I remember, Molina (and others) had difficulty in “proving ozone depletion” outside the lab and modelling it. Many conservatives argued that the “science” did not justify the policy actions taken by President Reagan and the World. +20 years later, people like Fred Singer and conservative organizations like Heartland, Heritage, Cato still argue that this is bad policy based on highly questionable science.
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In the 1950’s, physician Alice Stewart “believed” she had a sound science basis of causal links between X-rays in pregnant women to childhood cancers. But, it took over 25 years to adequately “prove” this linkage. Should a “precautionary principle” been applied in this case?
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And one could go on and on with major modern day environmental issues such as acid rain, DDT, oxygenates in gasoline (and also MTBE), elimination of fluoride in drinking water — where the “science” is always “just not good enough” to justify policy actions of change.
Could it be that the so called radical environmentalists just have a view of the world as these NASA pictures show?:
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Comment on A precautionary tale: more sorry than safe(?) by curryja
Faustino, thanks for this link, agreed that another post on this topic would be worthwhile
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Comment on A precautionary tale: more sorry than safe(?) by curryja
Indur, thanks for these links to your papers
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Comment on A precautionary tale: more sorry than safe(?) by AK
I don't have time to dig up my comments here, but I once expounded on how the "free market" competition between nation-states (and their governments) in pre-modern western Europe led to the modern system of liberal/libertarian capitalism. The key point is that a system of <b>internal</b> free markets, especially including one in available investment capital, allowed a nascent government (of a forming nation-state) to achieve substantial <b>military superiority</b> compared to more poorly managed states.
In general, AFAIK, my comments simply extended the ideas of Adam Smith, although at least one "conservative" here dismissed it as <i>"neo-Marxist" "historical revisionism"</i> IIRC.
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Comment on A precautionary tale: more sorry than safe(?) by Faustino
Academic make-work, moso. Not everyone is inclined to be a doer like you, especially if they can be paid better for pontificating (I do it for free). But don’t take RE’s comment as an invitation for you to build your own backyard nuclear reactor, just keep burning the bamboo waste.
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Comment on A precautionary tale: more sorry than safe(?) by stevepostrel
Good catch, Joshua: “Finally, information on other adverse outcomes (such as head injuries, emergency room visits, and hospitalizations) would be necessary for a complete accounting of the costs and benefits of helmet laws.”
A newer paper: http://www.nber.org/papers/w18773 whose abstract says
“Cycling is popular among children, but results in thousands of injuries annually. In recent years, many states and localities have enacted bicycle helmet laws. We examine direct and indirect effects of these laws on injuries. Using hospital-level panel data and triple difference models, we find helmet laws are associated with reductions in bicycle-related head injuries among children. However, laws also are associated with decreases in non-head cycling injuries, as well as increases in head injuries from other wheeled sports. Thus, the observed reduction in bicycle-related head injuries may be due to reductions in bicycle riding induced by the laws.”
Note also the modesty of the authors in not drawing immediate policy conclusions “Get rid of helmet laws now!” while spending a lot of time explaining their statistical methods. Science without advocacy?
TO ME, these findings make the bicycle-helmet laws look like overreaching nannyism, in that the benefits from them are speculative and not very strong in the data while the costs in terms of reduced freedom (VALUES ALERT) are immediate and obvious. But regardless of one’s final policy conclusion, the main point holds that in doing the complete accounting you have to take into account the unintended effect of reducing cycling altogether (for good or ill).
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Comment on A precautionary tale: more sorry than safe(?) by Faustino
Captain, I just did a quick search in response to Joshua’s insinuation that it was not reasonable for me to accept the 20 million deaths figure. Thanks for the link, but I think that this sub-thread is played out.
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Comment on A precautionary tale: more sorry than safe(?) by k scott denison
I’ll bite Dave, please give us one example of a mitigation activity, its cost and benefits including how much it will,lower global temperature over what time frame. Thanks.
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Comment on A precautionary tale: more sorry than safe(?) by Rob Ellison
Oh Michael,
There is a difference between a Hail Mary.
And sticking the landing.
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Comment on A precautionary tale: more sorry than safe(?) by jim2
What was the name of that principle again?
From the article:
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India is ranked fifth in the world with 7 percent of the world’s coal reserves. Yet, its current coal output of about 566 million tons (mt) falls woefully short of the domestic demand, which, in 2013-14 was over 720 mt, and was growing steadily. India’s annual coal output is far behind its neighbor China’s and Australia, because its coal import bill has doubled in the past five years.
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Among the first steps in the possible coal reforms is allowing foreign firms to operate some of India’s coal mines, especially those currently under the state-run Coal India. This, feel many analysts, is an attempt to break the monopoly of Coal India in coal procurement.
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Goyal also said that the government had approved 15 projects for Coal India, with a total combined annual capacity of 136 million tons, for the five-year plan period of 2012-2017.
Like many other projects in India, its coal mining projects are caught in the deadly tangle of pending environmental clearances, land deals gone sour, lack of other government clearances and more. One example that highlights this: Of the 10 coal blocks allotted between 2008 and 2013 in the Indian province of Chhattisgarh, none have started production yet.
…
http://seekingalpha.com/article/2415275-indias-bjp-government-tries-to-fire-up-the-coal-locomotive
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Comment on A precautionary tale: more sorry than safe(?) by AK
@rls...<blockquote>Brings me to a thought I’ve had in recent years. Wall street used to reflect the health of American businesses. Is it now a casino?</blockquote><a href="http://www.thestreet.com/" rel="nofollow">Judge for Yourself!</a>
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Comment on A precautionary tale: more sorry than safe(?) by mosomoso
I visited Queensland once. It was full of retired Victorians in funny hats checking out coastal real estate – at low tide, of course.
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Comment on Week in review by Ted Carmichael
This is all a rather tedious argument over semantics, IMO. If you want to say “scenario” instead of “prediction,” fine. But I submit that, to the degree a scenario gives us information about what is expected to happen, it is a prediction; to the degree that it doesn’t give information about what is expected to happen, it’s f*$&^%# useless.
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Comment on A precautionary tale: more sorry than safe(?) by Michael
Faustino,
It’s not an insinuation.
The 500 million figure is a joke, it’s absurd, ‘not even wrong’.
Sceptics? Ha!!
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