Climate change issues have to be dealt with on a policy level by economists and not climate scientists. The role for climate scientists is to measure what is happening with as much accuracy as is possible but not to design and implement policy.
Policies have to be measured as to what sort of impact they have on society and the single best way to measure the impact on society is to measure the economic costs and benefits. Every policy has an impact and it needs to be quantified. Not doing something will in some cases be cheaper than doing something. All the policy options can not be enacted, so they need to be measured against each other and the ones that make the most sense are the ones that need to be enacted.
There needs to be an active international process to measure the policies. There is nothing better than using something like the Copenhagen consensus. An active debate before a panel to try and come to some agreement as to the best course is a good way.
More regulation and an attempt to reduce consumption is not going to bring positive results. Most policies are oriented towards these directions and are doomed to failure and cause more problems than they solve.
Solutions have to be focused on what will increase GDP, they have to be ones that can show measurable benefits to society. Everything says that the only real solution is to price green house gasses.
Pricing green house gasses is the only way to go that makes any rational economic sense. By putting a price on C02 of $30 to $60 a tonne, $700 to $1500 a tonne for methane and $9000 to $20 000 per tonne of nitrous oxide. Putting these sort of dollar figures on production of the gasses will make a significant difference to the cost of production of many things. The cost added to a pound of beef would be about 17 cents.
Adding the costs to the products by charging for the GHG emisions will cause businesses to figure out how not to emit them, consumers will seek lower priced alternatives.
If there is then a market for people to get paid for removing CO2 and other GHGs, there will be businesses working on how to capture and store the CO2. The more companies doing it, the better the technology and the cheaper the prices will get.
Monday, November 24, 2008
Tuesday, November 18, 2008
How many more cars are coming?
The November 15th issue of The Economist has a 20 age centre section on cars in emerging markets. If you can get a copy to read, do so as it is illuminating.
Here are some factoids that come out of it.
What policy wonks and activists have to understand is that people want to own cars. To pretend that people in Chennai or Perm are not going to want to own cars as much as we do is folly. The new Tata Motors Nano is about 1/3 the price of the next cheapest car with a sales price of CDN$3000 each. It will be on the market in the next 12 months and will have a huge impact on car sales in India.
Anyone talking about climate change needs to work with the idea that there will be a lot more cars in the world. The solution has to be to work quickly towards cars that are very low or no emission vehicles.
The encouraging sign is that the battery technology needed for cars is a rapidly improving and getting to a point where fully electric vehicles is realistically in the next five years. The first generation were the hybrids like the Prius, the next generation is something like the Chevy Volt where the gasoline engine is only there as a generator to recharge the batteries.
The era of the gasoline powered car is coming to an end, in ten to fifteen years gas stations are going to start disappearing as demand drops. The era of cars is not only not coming to end, it is entering a new and bigger golden age.
Here are some factoids that come out of it.
- Even though 2008 is likely to be the worst year for total cars sold in the US since 1982, it will still set a global record for cars sold of about 59 000 000 cars.
- Total cars sales in the BRIC countries (Brazil, Russia, India and China) will equal US sales this year at 14 000 000. In 2001 total sales in the BRICs was 4 000 000 cars.
- There were 600 million cars on the road in 2005. In 2020 this will be 1.1 billion, 2030 it will be 1.5 billion and in 2050 it will be 2.6 billion cars. Details in this IMF report.
What policy wonks and activists have to understand is that people want to own cars. To pretend that people in Chennai or Perm are not going to want to own cars as much as we do is folly. The new Tata Motors Nano is about 1/3 the price of the next cheapest car with a sales price of CDN$3000 each. It will be on the market in the next 12 months and will have a huge impact on car sales in India.
Anyone talking about climate change needs to work with the idea that there will be a lot more cars in the world. The solution has to be to work quickly towards cars that are very low or no emission vehicles.
The encouraging sign is that the battery technology needed for cars is a rapidly improving and getting to a point where fully electric vehicles is realistically in the next five years. The first generation were the hybrids like the Prius, the next generation is something like the Chevy Volt where the gasoline engine is only there as a generator to recharge the batteries.
The era of the gasoline powered car is coming to an end, in ten to fifteen years gas stations are going to start disappearing as demand drops. The era of cars is not only not coming to end, it is entering a new and bigger golden age.
Thursday, November 6, 2008
The Price of Oil
Over the last year or two I have been telling people that the price of oil would head back down again, a long way down. People did not listen, they assumed that the trend was one way and that this meant up with no end. People believed that this price rise meant we were dealing with peak oil and that the economy based on oil was coming to an end.
The reality is that demand for oil rose faster than the supply could keep up with. It is not that there was no potential for more oil to come onto to the market, it was simply an issue of the lag between the demand rising and the time for new supply to come online.
The higher price of oil has reduced demand, a natural part of the economic process. This has occurred as the supply has been rising. We are also now seeing a drop in demand because of the economic uncertainty in the world.
New technologies also come into play, as an example, the production of the ethanol is now equal to about 1.9 millions barrels of oil per day. I am assuming 20 gallons of gasoline produced from each barrel of oil, if assume that you need one barrel of ethanol to equal one barrel of oil, then it is only 900 000 barrels a day. This is about 1-2% of the global oil demand. As the technology gets better and the organic material used is not corn but something more productive, in ten years would could easily see 20 million barrel of oil equivalents of ethanol being produced, or about 20% of world demand.
The problem a lot of people have had when looking at the oil prices is that they do not apply any economic analysis to the situation.
The latest spike in oil prices have pushed innovation, but it has also pushed the tar sands in Alberta. Year in and year out there are going to more development of the tar sands. Only a long period of the price of oil being below $20 a barrel will halt the expansion.
The oil era is not at an end, the only thing that can be done at this time is for governments to price the cost of removing the CO2 from oil production and oil use. A carbon tax is the way forward and is a tool that will make business more efficient. Strong price signals will impact the supply and demand for oil. Nothing else will work.
BC is the leader in this. Opposition to the carbon tax in BC only makes sense if you do not believe there is an issue with global warming. I will admit I am not entirely convinced of the case for global warming or at all convinced that global warming will have as negative impact as people are saying.
You can take action by supporting the carbon tax on this facebook group.
The reality is that demand for oil rose faster than the supply could keep up with. It is not that there was no potential for more oil to come onto to the market, it was simply an issue of the lag between the demand rising and the time for new supply to come online.
The higher price of oil has reduced demand, a natural part of the economic process. This has occurred as the supply has been rising. We are also now seeing a drop in demand because of the economic uncertainty in the world.
New technologies also come into play, as an example, the production of the ethanol is now equal to about 1.9 millions barrels of oil per day. I am assuming 20 gallons of gasoline produced from each barrel of oil, if assume that you need one barrel of ethanol to equal one barrel of oil, then it is only 900 000 barrels a day. This is about 1-2% of the global oil demand. As the technology gets better and the organic material used is not corn but something more productive, in ten years would could easily see 20 million barrel of oil equivalents of ethanol being produced, or about 20% of world demand.
The problem a lot of people have had when looking at the oil prices is that they do not apply any economic analysis to the situation.
The latest spike in oil prices have pushed innovation, but it has also pushed the tar sands in Alberta. Year in and year out there are going to more development of the tar sands. Only a long period of the price of oil being below $20 a barrel will halt the expansion.
The oil era is not at an end, the only thing that can be done at this time is for governments to price the cost of removing the CO2 from oil production and oil use. A carbon tax is the way forward and is a tool that will make business more efficient. Strong price signals will impact the supply and demand for oil. Nothing else will work.
BC is the leader in this. Opposition to the carbon tax in BC only makes sense if you do not believe there is an issue with global warming. I will admit I am not entirely convinced of the case for global warming or at all convinced that global warming will have as negative impact as people are saying.
You can take action by supporting the carbon tax on this facebook group.
Thursday, August 28, 2008
The Carbon Tax - Political Suicide?
The NDP is hammering the government in Victoria over the carbon tax. Initially the public seemed well dispossed to the idea of a carbon tax, but with some fanning of the flames, the NDP has developed a dislike for the carbon tax.
Federally the Liberals have also proposed a carbon tax and they are being beaten up by the Conservatives about it. Certainly the issue is not looking good as a federal election issue and may push the federal Liberals further down in the polls.
The public likes the idea of the environment, but it does not want to pay for it. It is inevitable that carbon taxes are coming, that there will be some sort of system to attach a price or cost to carbon emissions, but it is not going to be popular and the people bringing it in will be lauded in the future but not now.
Federally the Liberals have also proposed a carbon tax and they are being beaten up by the Conservatives about it. Certainly the issue is not looking good as a federal election issue and may push the federal Liberals further down in the polls.
The public likes the idea of the environment, but it does not want to pay for it. It is inevitable that carbon taxes are coming, that there will be some sort of system to attach a price or cost to carbon emissions, but it is not going to be popular and the people bringing it in will be lauded in the future but not now.
Monday, August 25, 2008
Natural Resources Canada: Government of Canada Invests in Renewable Energy in British Columbia
2008-08-20 11:00:00
Natural Resources Canada: Government of Canada Invests in Renewable Energy in British Columbia
The Honourable Gary Lunn, Minister of Natural Resources, today announced the first project, the Kwalsa low-impact hydro project near Harrison Lake, which will benefit from an investment of up to $35 million thanks to the Government of Canada.
"Our investment in the Kwalsa low-impact hydro project is another great example of how our government is delivering on its commitment to reducing emissions, increase the supply of clean, renewable energy for Canadians, and accelerate the development of a strong and competitive renewable energy industry," said Minister Lunn. "We need energy to power our economy, and we must have more clean energy to protect our health and our environment."
When it is complete, the Kwalsa Energy Project will have a total capacity of 90 megawatts from eight turbines operating on four waterways around Harrison Lake at Douglas, Fire, Stokke and Tipella Creeks. The peak electricity demands of more than 27,000 households can be met with that amount of clean electricity. The site is located about 90 kilometres northeast of Vancouver.
The project is owned by Harrison Hydro Limited Partnership, which is in turn owned by Cloudworks Energy Inc., a British Columbia-based energy firm specializing in run-of-river hydro development.
John Johnson, a principal of Cloudworks Energy Inc., was pleased that the Harrison Hydro Limited Partnership qualified for funding under the ecoENERGY for Renewable Power Initiative. "This federal program enables the Kwalsa Project to address not just the construction challenges related to building clean and renewable energy in the remote regions of this Province, but also to provide transmission grid access for the first time ever to our First Nations partners, the Douglas First Nation."
The Kwalsa Energy project has qualified for the one cent per kilowatt-hour incentive under the ecoENERGY for Renewable Power program, payable for up to 10 years to ensure the electricity it generates can be delivered to consumers at competitive rates.
Businesses, municipalities, institutions and organizations are eligible to apply for funding under ecoENERGY for Renewable Power. The program provides about $1.48 billion to increase Canada's supply of clean electricity from renewable sources such as wind, biomass, low-impact hydro, geothermal, solar photovoltaic and ocean energy. It will encourage the production of up to 4,000 megawatts of new electricity from renewable energy sources-enough electricity to power about one million homes.
FOR BROADCAST USE:
The Honourable Gary Lunn, Minister of Natural Resources Canada, has announced the Kwalsa low-impact hydro project near Harrison Lake, B.C. will receive an investment of up to $35 million thanks to the Government of Canada's ecoENERGY for Renewable Power program.
NRCan's news releases and backgrounders are available at www.nrcan.gc.ca/media.
Meet the team at Cloudworks : http://www.cloudworksenergy.com/section.php?s=13
Tuesday, July 22, 2008
2 interesting articles from the Goldstream Gazette
I find the increase in bus riders an interesting change. I wonder how this will pan out in the fall and how much of a change there is in Vancouver.
I also interested in knowing which routes in Victoria have had the biggest increase.
Fuel prices boost bus ridership
By Edward Hill - Goldstream News Gazette
Published: July 17, 2008 1:00 PM
High gas prices are finally prompting more people to hop the bus, says Ron Drolet, senior vice-president of BC Transit.
Transit saw a 11 per cent increase in ridership in late June as compared to a year earlier, after gas prices began their upward march in April. Typically, it takes a few months for pain at the pump to push people out of their cars — April only had a four per cent increase.
“We see growth every time there is a significant run up in retail gas, but there is a lag,” Drolet said. “(Early June) had normal weather. There was no intensive marketing. Obviously people are reacting to the retail prices. We’ll see if that holds true now that were at the lofty level of $1.50.”
BC Transit is planning to add 24 buses to the fleet and 60,000 service hours this September, the largest increase in Greater Victoria since the “heyday” of 1994 Commonwealth Games, Drolet said.
Where last year’s transit increases focuses on West Shore routes, this year it will be on the Saanich Peninsula, specifically the Royal Oak area.
Colwood OKs CRD climate plan
By Amy Dove - Goldstream News Gazette
Published: July 17, 2008 1:00 PM
With safeguards in place for taxpayers, Colwood council is officially supporting the Capital Regional District’s climate action plan.
The plan, which needs support from all 13 member municipalities, will see one person hired to oversee several projects.
These include a regional emission survey, ways to make buildings more energy efficient and assistance for smaller communities in finding grants.
Expected to cost $200,000 annually, Colwood councillors originally balked at the idea because it lacked an opt out clause if the service was unsatisfactory, as well as a cap on costs.
“Council unanimously supports this. We just wanted a few controls,” said Mayor Jody Twa.
“This shows we can have an opt out clause (on various CRD functions),” added Coun. Ernie Robertson.
The CRD board added Colwood’s requests to its climate action bylaw last week. In order for those two items to be added the rollout of the service has been delayed by at least six months, said Dwayne Kalynchuk, CRD environmental services general manager.
Each municipality will have to vote on the bylaw again before it can be enacted. Colwood was the only council which reserved support the first round.
reporter@goldstreamgazette.com
I also interested in knowing which routes in Victoria have had the biggest increase.
Fuel prices boost bus ridership
By Edward Hill - Goldstream News Gazette
Published: July 17, 2008 1:00 PM
High gas prices are finally prompting more people to hop the bus, says Ron Drolet, senior vice-president of BC Transit.
Transit saw a 11 per cent increase in ridership in late June as compared to a year earlier, after gas prices began their upward march in April. Typically, it takes a few months for pain at the pump to push people out of their cars — April only had a four per cent increase.
“We see growth every time there is a significant run up in retail gas, but there is a lag,” Drolet said. “(Early June) had normal weather. There was no intensive marketing. Obviously people are reacting to the retail prices. We’ll see if that holds true now that were at the lofty level of $1.50.”
BC Transit is planning to add 24 buses to the fleet and 60,000 service hours this September, the largest increase in Greater Victoria since the “heyday” of 1994 Commonwealth Games, Drolet said.
Where last year’s transit increases focuses on West Shore routes, this year it will be on the Saanich Peninsula, specifically the Royal Oak area.
Colwood OKs CRD climate plan
By Amy Dove - Goldstream News Gazette
Published: July 17, 2008 1:00 PM
With safeguards in place for taxpayers, Colwood council is officially supporting the Capital Regional District’s climate action plan.
The plan, which needs support from all 13 member municipalities, will see one person hired to oversee several projects.
These include a regional emission survey, ways to make buildings more energy efficient and assistance for smaller communities in finding grants.
Expected to cost $200,000 annually, Colwood councillors originally balked at the idea because it lacked an opt out clause if the service was unsatisfactory, as well as a cap on costs.
“Council unanimously supports this. We just wanted a few controls,” said Mayor Jody Twa.
“This shows we can have an opt out clause (on various CRD functions),” added Coun. Ernie Robertson.
The CRD board added Colwood’s requests to its climate action bylaw last week. In order for those two items to be added the rollout of the service has been delayed by at least six months, said Dwayne Kalynchuk, CRD environmental services general manager.
Each municipality will have to vote on the bylaw again before it can be enacted. Colwood was the only council which reserved support the first round.
reporter@goldstreamgazette.com
BC Goverment to be Carbon Neutral in 2 years
The current government in BC is moving light years ahead of anywhere else in North America in relation to climate change issues.
We have a carbon tax - though there is now a backlash against the tax from the left.
We have a comprehensive climate change plan - though once again, the left seems to dislike it
The government has given $90 000 000 to the Pacific Institute for Climate Solutions
And the government itself is preparing to be carbon neutral by 2010 - which means a market for 600 000 to 900 000 tonnes of CO2 offsets, a great kick start to the system of offsets sales here in BC.
What this all means is that Gordon Campbell is clearly the greenest major politician in Canadian history.
We have a carbon tax - though there is now a backlash against the tax from the left.
We have a comprehensive climate change plan - though once again, the left seems to dislike it
The government has given $90 000 000 to the Pacific Institute for Climate Solutions
And the government itself is preparing to be carbon neutral by 2010 - which means a market for 600 000 to 900 000 tonnes of CO2 offsets, a great kick start to the system of offsets sales here in BC.
What this all means is that Gordon Campbell is clearly the greenest major politician in Canadian history.
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