Demonising Carbon

Published at the request of Viv Forbes:

“Demonising Carbon – a Death Wish?”

 
A statement by Viv Forbes, Chairman of the Carbon Sense Coalition.
9 March 2009
 
The Carbon Sense Coalition today called on all parties in the looming state election to make a clear statement on their policies regarding Emissions Trading and Carbon Taxes.
 
The Chairman of the Carbon Sense Coalition, Mr Viv Forbes, said that politicians in a state so overwhelmingly dependent on carbon energy, carbon food and taxes on carbon products can no longer hide behind hypothetical anti-carbon scare stories based on dubious climate forecasts for 100 years ahead.
 
 “We have a real present emergency with growing fear among investors and shareholders in anything associated with mining, power generation, tourism and farming – the backbone industries of Queensland.”
 
“Much of this fear is generated by an insane campaign to demonise carbon dioxide, the natural atmospheric gas on which all life depends.”
 
“There is growing scientific recognition that carbon dioxide does not control climate – rather the other way around – temperatures rise because of solar influences and those rising temperatures expel carbon dioxide from that great carbon storehouse – the oceans”.
 
“There is also growing recognition that current levels of carbon dioxide in the atmosphere are very low and the gradual increases occurring at present pose no threat to any life on earth. The reverse is true – all life will benefit from more carbon dioxide in the atmosphere, and the benefits will be increased by the slight warming experienced over the last one hundred years.
 
“We are supposed to panic over carbon dioxide levels of a miniscule 380 parts per million.
 
“Most life, plants and animals, probably developed with CO2 levels of about 1500 ppm – 400% above current levels. This fact is well understood by greenhouse operators who burn gas to increase CO2 levels to at least 1,000 ppm, 260% above current atmospheric levels.
 
“Inside populated buildings, CO2 levels of 3,000 ppm (770% above current levels) have been measured in homes, schools and offices with no ill effects. Even most Health and Safety people consider 5,000 ppm (1,300% above current levels) to be safe. Medical gas given to people with respiratory problems typically contains 50,000 ppm CO2 (13,000% above current levels) and our lung sacs retain about 65,000 ppm (16,800 % above current levels). Not until CO2 levels get to 100,000 ppm (260 times current levels) is there any concern about human health.
 
“All plant life will also benefit from increased carbon dioxide, and much of the extra food produced by the green revolution is the result of the warmer and more carbon-rich atmosphere.
 
“It seems that those who are trying to demonise carbon dioxide have a death wish for Queensland society. To achieve significant cuts in carbon emissions from man’s activities would requires massive destruction of our energy, farming, smelting, cement, transport and tourism industries, together with the jobs and prosperity of the populations that depend on them.
 
“The war against carbon is a war against coal, cattle, concrete, cars, electricity and breathing – who thinks Queensland can survive without these?
 
“It is time for the people of Queensland to be told which parties are supporting or condoning this reckless policy.”
 
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 For more information on the importance of carbon dioxide to human health see:
http://carbon-sense.com/
 
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John Coleman, an experienced meteorologist and founder of the Weather Channel has the last word:
“Global Warming: It is a hoax. It is bad science. It is high-jacking public policy. It is the greatest scam in history”.
Source:
http://www.kusi.com/weather/colemanscorner/38574742.html
 
————————————————————————————————-
 
Viv Forbes
Chairman
The Carbon Sense Coalition
MS 23  Rosewood        Qld      4340
0754 640 533
info@carbon-sense.com                                                          www.carbon-sense.com.
 
 
The Carbon Sense Coalition was formed in Queensland by Australians concerned at the baseless demonisation of carbon dioxide by an unholy alliance of green extremists, vested interests and political and media opportunists. Support for “Carbon Sense” is growing rapidly. The Coalition aims to expose the lack of scientific support for the anti-carbon campaign, and the real and present threat to our industries and jobs if any of the current proposals for Emissions Trading Taxes or Carbon Taxes are enacted.
 

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Coalition joins the climate change fight – but without an ETS?

The Leader of the Opposition, Malcolm Turnbull, is quoted by The Australian as giving a speech which attacks the Australian Government’s malcolm-turnbullunbalanced focus on an emissions trading scheme as a means of addressing man’s influence on the climate. Instead Mr Turnbull states that a Coalition Government would focus on replacing old technology with new.

“An ETS is not an end to itself,” Mr Turnbull will argue. “It’s only part of the solution – one tool in the climate policy tool box and, in fact, no solution at all without new energy sources and new low-emissions technology.”

“Our Green Carbon Initiative will ensure Australia is able to achieve greater reductions in carbon dioxide than those proposed by Mr Rudd, at relatively low cost and with enormous additional benefits to our own country’s environment.”

Hooray! At least part of the message is getting through to the politicians. Also, thank you to readers who have sent copies of my posts to politicians. Suddenly there is a risk-management focus on the climate change debate….

But Mr Turnbull will assert that action on climate change is not a matter of belief or non-belief in the science but a wise exercise in risk-management.

Clever political move Mr Turnbull. Most Australians ARE concerned with the environment. With our abundance of open space, Australians are probably more environmentally aware than other people.

However, Australians are not convinced that another socialist experiment is in anyone’s best interests. The US sub-prime mortgage market was one such experiment, and that triggered the current global economic crisis.

I posted on a risk management view of an ETS in Australia headed for economic strife, but still wants a an Emissions Trading Scheme?

Personally, I support moves to actually protect our environment and have lower human impact on the world we live in – regardless of whether man-made CO2 is causing global warming. (And I still have stuff to readnsay on that topic too!)

Australia headed for economic strife, but still wants an emissions trading scheme?

The Australian economy has held up pretty well against the storm of the global financial crisis, but it appears the financial crisis is starting to bite here too. China’s economy is slowing, which will reduce our exports of resources. It is the resources boom which has insulated Australia from the bulk of the global economic storm so far.

I published this graph in a previous post, How an ETS would create economic chaos to indicate Australia’s recent dependence upon resource mining.

 australian-exports1

Any commercial enterprise with this type of graph of its product mix would have identified this as a commercial risk and acted to mitigate the risk of the main product line going sour for some reason. These actions might include investing in value adding from that product, increasing sales in other existing product lines, not locking in investment in this product line too far in the future, while ensuring that product can be supplied for as long as there is demand for it ……..

Another risk mitigation strategy would be to ensure that the business does not place critical reliance on the cash flow from this one major product. Australia has not made the most of any of these risk mitigating opportunities. Therefore as the demand for our resources slows, we are going to feel a bit of a pinch.

Fortunately this slow down shouldn’t last too long. The world’s financial industry is starting to settle in corrective and remedial action. This will take time to come around, but it will. The upturn will be gradual though, as finance and credit will become available again a bit at a time, not in one wave of a magic wand. In the meantime industry needs to slow activity until the financial markets get back onto firmer ground.

Imagine though if the downturn in industry was imposed for ten years? That is what Australia is facing with the cap, tax and (one day) trade Carbon Pollution Reduction Scheme. It is our boom and bread and butter industries – mining and agriculture – that will feel the main impacts. Industry will take time to implement the cleaner technologies, once they become technically realistic and cost effective.

Industry invests less in R&D and innovation in a downturn because most efforts and money are spent on ensuring survival. No sense investing heavily in next generation technology if the risk you won’t be around next year is getting uncomfortable.

Also, government invests less in innovation when tax revenue falls. Social security, health, education, policing and security are basic services expected of a government in a developed country. It is the other areas in which there is more flexibility in spending, and that is where the cuts will be made.

Hopefully the policy makers are reviewing their strategy regarding CPRS already.

 

What would you do if you were part of the government policy making team? What risk mitigation strategies and policy changes would you be taking now?

How an ETS would create economic chaos

The news is full of reports of demand for oil dropping and predictions that it will continue to fall during 2009 due to factory closedthe economic crisis, such as in Reuters 16 January 2009. The same economic factors are in play now as would be under a global emissions trading scheme, just the influence would be in a different direction. Do we want an emissions trading scheme which is the trigger for economic calamity?

The current global financial crisis is spreading into an economic crisis which is slowing industrial demand for a number of inputs, including energy which includes oil. Oil prices are dropping dramatically due to decreased demand for oil. The causal relationship in the current economy looks like this:

access to finance/ credit shrinks -> industrial productivity drops -> consumption drops -> price of oil to the producer drops

Imagine a different trigger event to the finance/ credit crisis, such as an emissions trading scheme which taxes consumption of fossil fuels heavily. The causal relationship then would look like this:

massive tax on fossil fuel consumption -> cost of production increases -> demand for products drops -> industrial activity drops -> demand for fossil fuels drops -> price to the producer drops

In this scenario, everyone loses, including government revenue:

  • industrial production drops
  • company tax paid to the government drops
  • unemployment increases
  • taxes paid on wages drop
  • standard of living in the developed world drops
  • carbon emissions drop a little, but not much, because poor people use carbon based fuels for heat and cooking, they can’t afford swanky solar panels on their roof (if they have a roof), they collect wood and burn it
  • clean technology innovation slows because industry can’t afford R&D or upgrades when the economy slows
  • global climate keeps on doing what it was doing anyway because the solar cycle is not influenced by economics

What a great scenario. In the meantime, unemployment increases and gross domestic product decreases. A fall in GDP in two successive quarters is called a recession. A fall in GDP of more than 10% is called a depression. What some countries are experiencing currently is bordering on recession, or is recession.

An enforced emissions trading scheme could trigger a full blown depression – a la 1930’s style. The objective of reducing carbon emissions would be achieved only by default – due to a decline in economic activity

Emissions Trading Scheme Does Not Make Economic Sense

CPRS and You Booklet
CPRS and You Booklet

The Australian Treasury prepared a paper called Australia’s Low Pollution Future – The Economics of Climate Change Mitigation which was launched by the Treasurer on 30 October 2008.

This paper presents Treasury’s view that a switch to active measures to reduce Australia’s carbon emissions by 5%-15% from 2000 levels will have a net cost to Australians of only about 5% GDP in real terms. This aligns with IPCC’s economic forecasts which show that developed countries like Australia will mitigate the costs of adapting to reduced CO2 emissions by implementing an emissions trading scheme.

However there is one fundamental difference in the two calculations. Australian Treasury states the 5% reduction in GDP will commence almost from day 1 and continue past the date proposed for Australia to enter the international emissions trading market in the year 2020. IPCC’s economic forecasts show much greater reductions in GDP without engagement in the international emissions trading scheme and mitigation to a few percent if developed countries join in the international emissions trading scheme from the UN’s target date for implementation of 2010 – ten years before Australian Treasury proposes Australia join the international market.

One obvious problem with IPCC’s forecasts is that for the effect on GDP for developed counties to be mitigated by an emissions trading scheme, the developed countries must be getting a cash inflow from somewhere as a result of the trading scheme. From where? The developing countries? Do they think China and India are going to pay other countries for the right to continue to burn fossil fuels?

The problem with the Australian Treasury forecast is that although they state there will be a negative effect on the production of some industries, including coal, alumina and cattle, this will be compensated for by Australia developing greenhouse gas friendly industries. And what might these be? Australian Treasury shows only one industry with significant increasing contribution to GDP – forestry. As Treasury states that their forecast is based on “existing land area” this increase must be made up of a big jump in the value of carbon credits as well as the value of harvested timber. Will we be allowed to harvest the trees we grow?

Forestry is not a significant employer. Once the trees are established there is little activity in maintaining them. Therefore there will be very little economic input into the Australian economy from this industry. I suspect the flow on effects of changed employment levels and the resulting change in mix of economic multiplier effects have not been fully factored into the Australian Treasury forecasts.

Australia’s highest export earners are the resources sector. Australia’s economy is very heavily dependent upon primary industry – mining and agriculture. Take away coal, alumina and cattle and we have very little productive sector left!

Australian Exports
To sell an emissions trading scheme as morally correct and thus reduce the level of backlash for this new tax, the Australian Government has spun up a nice fuzzy name – Carbon Pollution Reduction Scheme.