In the face of momentous events people who really ought to know better are saying silly things like "Shocking: So far, governments have largely failed to seize their chance to rearrange their energy supplies away from fossil fuels. Instead, we are witnessing a global “gold rush” for new fossil gas production". This comes from stuff like The world is going through a major energy crisis as a result of Russia’s invasion of Ukraine. So far, governments have largely failed to seize their chance to rearrange their energy supplies away from fossil fuels. But what is this "chance" that they are failing to seize? What the fuckwitted Pootin war has given the world is, at least for the moment, effectively a nice large carbon tax. It would be great if theses fools could at least celebrate that, but of course they are too dumb to do so.
But other than that, there's no great "chance" lying around to be seized. Solar and wind have got no cheaper.
Update: other dumb stuff
Climate risk is financial risk by - yes, you guessed it - that nice Gernot Wagner. It is more telling-other-people-how-to-do-their-jobs stuff: we have invented this brilliant new concept called GW that you've never heard of now you must use it for everything no not in that way; in the way we prescribe.
Refs
* AUDUBON SOCIETY ANNOUNCES NEW FIELD GUIDE TO THE PRONOUNS OF NORTH AMERICA by VVatts Up With That
* Biden's Short-termism Not Surprising by Pierre Lemieux
* Why are nuclear power construction costs so high? Part I by Brian Potter
* There is nothing so absurd, says Cicero, which has not sometimes been asserted by some philosophers: but where did I use the Orwell version, about common versus intellectuals? Aaahhh... it was wrt McTaggart.
* Some favourites from RMG.
* 30 Years as a Professional Archaeologist - Martin Rundkvist
From St. Petersburg, on the Baltic, to Sevastapol on the Black Sea, a Carbon Curtain has descended across Europe.
ReplyDeleteAnd always left unsaid is that electricity is less than a quarter of energy usage. So even if this supposed opportunity was grabbed with both hands by every government on the planet, fossil fuels would go from 75% to what? 74% of primary energy? As V Smil repeats ad nauseam, energy transitions are really really slow processes.
ReplyDelete@Anteros
ReplyDeleteAdd transportation and that's another 25%. Of that, light passenger vehicles and local delivery could be converted to electric at a net added cost that would be zero to negative.
Rail would be low total green premium. Long haul freight looks harder. Marine looks harder still. Aircraft look to be the hardest, perhaps a green premium of 600%. Would you pay about 6 times as much for an airline ticket?
The point is that by reducing CO2 where it is cheapest to do so should give society more time to solve the harder problems.
The carbon "tax" put on the world by Putin's war is widely unpopular. This points out that other policies equivalent to a carbon tax are both more popular and just as effective.
“Those who cannot remember the past are condemned to repeat it.” George Santayana
The tax rate equal to damages, the ideal Pigovian tax rate, will rise with increasing past releases of CO2. We really want to avoid replaying the Permian–Triassic extinction event. Remember that.
This idea that high oil/FF prices are effectively a carbon tax needs to go away. A key purpose of a carbon tax is to incentivise prospective energy producers to divest away from fossil fuels. Yes, consumer behaviour is affected the same and that will influence producers but there's a big difference when higher prices are collected by fossil fuel producers rather than governments. Financially, being a fossil fuel producer has rarely been as attractive as it is now, which will encourage more investment in the industry. That's the opposite of what a carbon tax is meant to do.
ReplyDeleteBut even with consumer behaviour, what the sustained high prices show is that people are paying those prices. Every last drop of oil, every last spec of coal available is getting bought and consumed. If fossil fuel consumption drops this year it wouldn't be because of high prices reducing demand. It would be because of a shortfall in supply, I guess for the first time in a very long time. The peakers are going to be unbearable.
> A key purpose of a carbon tax is to incentivise prospective energy producers to divest away from fossil fuels
ReplyDeleteI'm doubtful about that. Can you find a source saying so?
I think *the* key is to make consumers pay the "true" cost of their CO2 emissions. Obviously a quasi-random price increase isn't the "true" cost, but since we don't even know the true cost, I don't think that is a key objective.
I agree that, ideally, the revenue wouldn't flow to the FF companies: this is the wrong incentive. I'm just doubtful that this is key. Note BTW that lots of FF is produced by national companies.
> what the sustained high prices show is that people are paying those prices
In the short term yes: because they have no choice. You can't shift your energy infrastructure quickly. And because the prices are quasi-randlonly high, many may pay in the short term and hope prices subside in the longer term. Whereas a carbon tax would be a more reliable long-term guide (if out of the sticky paws of the pols, though how that could be so I don't know). I don't know if this would work economically but perhaps a carbon tax adjusted to smooth out fluctuations might work, in theory.
Infrastructure is shifting despite high current profits.
ReplyDeletehttps://wapo.st/3y8jCJJ
That's a mostly reasonable article. And people say that business isn't forward-looking; how wrong they are. Compare that to the reported pols flailing around in short-termism; see-also https://www.econlib.org/bidens-short-termism-not-surprising/.
ReplyDelete(note also the idiot pork-barrel ethanol mandate working its evil way in)
ReplyDeleteElections are won and lost in the short term. When you incentivize on a short term, expect actions and planning on a short term. Don't look across the aisle to find anything better, see Texas GOP platform for example. Proving again Churchill's law again: "democracy is the worst form of Government except for all those other forms that have been tried from time to time."
ReplyDeleteEthanol mandate is doubly evil now. Not only a waste, but a waste of food that is currently scarce because of the war. People will starve, but not those American Voters mad at high gasoline prices. So the starving people don't count, they don't have a vote.
Notice how this shows that a direct carbon tax at this time is politically impossible. We have one now, accidentally, and most of the voters hate it. 99% of cars burn petroleum, and changing that will take decades at best. And that's a use with a low to negative "green premium", think about airline travel.
Notice how the econolib points to something other than the largest fear of refiners. Technological change. Declining total market size is ugly for any business, far worse than just normal competition in a growing free market. This isn't a new thing, fuel economy standards date back to 1075, oddly just about the time the USA stopped building new refineries.
1975, typo.
ReplyDeleteExxon wants a higher carbon price... really. Err, maybe not really.
ReplyDeletehttps://www.cnbc.com/2022/06/24/exxon-mobil-ceo-darren-woods-wants-higher-price-on-carbon-emissions.html
Maybe only on greenwash like carbon capture and biofuels.
Well, I'm sure they would rather thave that than some of the alternatives. I still have a hard time seeing carbon capture make any sense, versus solar photovoltaics.
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