Climate bill (ctd)

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The Climate Change Response Bill was debated in the Seanad yesterday. You can read the various interventions here.

Minister Cuffe is not very clear on the 2020 target, but seems to argue that the climate bill does not go beyond the current EU obligations. He offers two arguments. Second, Ireland will overcomply on its ETS obligations, and this will count towards Ireland’s non-ETS obligations. This is an accounting gimmick. Ireland would export its excess ETS permits to offset undercompliance elsewhere in Europe; emissions would not fall. Note that Ireland will just about meet its ETS targets according to the EER2010.

Third, Minister Cuffe seems to use the EU accounting method for land use emissions in 2020, and the UN accounting method for 2008. The increase in the carbon sink is much smaller than the Minister suggests if one uses the same method for both years.

Senator Glynn of Fianna Fail states that “[t]he Bill does not impose any legal obligations on Government to achieve the emissions targets set in the Bill and it allows for these targets to be changed.” That’s a remarkable position.

IBEC has published its analysis of the climate bill, including an estimate of the costs. That cost estimate is exceedingly optimistic for the following reasons:

  1. IBEC assumes that emissions from land use are accounted for according to the yet-to-be-enacted EU rules.
  2. IBEC takes the EPA’s with-additional-measures scenario as its starting point. That scenario is rich in wishful thinking, and IBEC does not count the costs of the “additional measures”.
  3. IBEC’s numbers are based on an engineering model. Such models are notorious for underestimating the costs of emission reduction.
  4. IBEC assumes that the marginal cost of -30% by 2030 is the same as the marginal cost of -30% by 2020. This would be true if the capital stock has an average life time of one year.
  5. The cost estimate assumes that the emission reduction burden is shared optimally between ETS and non-ETS.  As I’ve argued before, the extra burden would fall on the non-ETS.
  6. The model covers emissions from energy only. The IBEC estimate therefore omits the costs of reducing non-energy emissions (methane from cattle).

Even so, IBEC reckons that the cost will run to €400 million per year. I do not know what the cost would be, but it would certainly be much higher than that.

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33 Responses to “Climate bill (ctd)”

  1. pongo Says:

    “Our temperate climate is seldom acknowledged as a national asset but the recent cold spell acted as a timely reminder of its importance to us as a society and an economy.” – Ciarán Cuffe (Green Party)

    For fecks sake! weather != climate

  2. Richard Tol Says:

    @pongo
    I had missed that one. The recent cold spell is indeed weather rather than climate, and contrary to what some journalists would like us to believe, it is inconsistent with the expected climate change. The consensus forecast for this part of the world is that winters will warm faster than summers.

  3. pongo Says:

    Yeh so much for those models, A good theory makes good predictions and can be verified via repeated experimentation.

    Anyways moving on a little later on in debate:

    “Some would argue that we should not be setting targets here that exceed our obligations, but this is being done in part in anticipation of the 30% EU target coming into effect in time.

    The Confederation of British Industry chairman, Sir Richard Lambert, has stated that the CBI will not allow uncertainty of global targets to stop British industry from moving ahead. We cannot be left trailing behind Great Britain and Northern Ireland in our readiness for the low carbon future with which this Bill provides us.” – Mark Dearey (Green Party)

    “They have nuclear energy.” – Paudie Coffey (Fine Gael)

    It seems the Greens want to follow Britain in order not to be “outdone” and look bad at the Green get-togethers :D
    Except meeting carbon targets is easy when you have no issues with nuclear power, and UK are well on their way of meeting their targets in part thanks to nuclear.

  4. Brian Woods Says:

    We need a ‘climate bill’ like we need a hole in the head. Its complete ideological claptrap.

    The two worst environmental polluters could not give a damn about the effects on their own citizens – so we here on the periphery are just disposable.

    What we need to do is give Chindia the Agincourt Salute, and slap a massive tariff on all goods and sevices emanating from any source that will not implement basic environmental protections. This will get their attention – maybe.

    Ireland is headed backwards (Regressing) economically. Having to bear utterly wasteful costs is just plain bonkers.

    BpW

  5. Richard Tol Says:

    @Brian
    We do need regulation of greenhouse gas emissions, if only to transpose international obligations into domestic legislation.

    It makes sense to go beyond 2020 (the final year of current obligations) to create regulatory certainty for investors and inventors.

    A framework bill, like the climate bill, is also wise so as to clean up the mess that is current climate policy.

  6. Andrew S Says:

    I don’t see it just as a ‘cost’, or purely outflow/negative. I agree some of the greens policy is economically suspect on a national/international level, (subsidising imports like electric cars etc. to use electricity made with, err, coal and peat) but legislating in a progressive way a rebalancing of our energy usage and subsidising internal generative capacity along with efficiency is beneficial on all levels, for the current national accounting bottom line and the real one, our grand kids. That’s what this is all about at the end of the day, legacy.

    I wouldn’t worry about China, India, America and Europe are far and away the biggest polluters, as net users, of all the energy burned. Tariffs could help, especially if arranged via the WTO. No body can ‘get out of jail free’ on this one, not for long. It’s why accounting and oversight on carbon usage are such major (contentious) parts of the copenhagen, cancun etc. conferences. If we can count it fairly we can tax / tariff / subsidise and amortize it. all the manovering is for position in dominating the next 30 years. We’ve got (in Europe) most of the strongest technological and engineering cards, we need China to keep making stuff, just with something other than coal (70%).

  7. pongo Says:

    @Andrew

    Those wind generators with a “Made in China” stamp on the side are great for the environment > http://www.timesonline.co.uk/tol/news/world/asia/article6946038.ece

    @Tol
    Brian has a point, hes argument is very similar to Krugman’s (who we love so much around these parts :) )

  8. Edward Says:

    “The recent cold spell is indeed weather rather than climate, and contrary to what some journalists would like us to believe, it is inconsistent with the expected climate change. ”

    So Richard Tol believes that snow this year disproves AGW? That is the meaning of the word “inconsistent”. Does he even understand the difference between weather and climate, or does he just repeat popular memes from hot summers?

  9. Andrew S Says:

    True, that article backs my view that its here in Ireland/Europe here and now we should be moving towards environmentally sound options. Using supranational institutions (WTO, UN) to put the footing of world trade and (lets face it) continued international harmony on a more equal / multilateral basis.

    I’ve a problem with the way Chinese labour laws are configured.
    I’ve no problem with China using european technology to make turbines to generate electricity.
    I’ve a problem (as does our beloved ;) with China artificially keeping its currency undervalued, in order to sell such cruelly made turbines to us.

    There’s no question Krugman argues consistently for sustainable technology as a way of de-linking imbalances in trade and the injustices (war) it frequently brings.

  10. Andrew S Says:

    The 2.8 mtCo2e figure for sinks for Ireland from the EPA, is it possible to get their data / see how they arrived at that figure? I can’t find it on their datasets?

    http://www.epa.ie/news/pr/2010/name,28091,en.html

  11. Richard Tol Says:

    @Edward
    A cold winter does not prove or disprove anything. We can look forward to fewer such winters in the future.

    There are, however, a couple of fools who believe that a few cold winters in a row are a sure sign of global warming. Minister Cuffe has made approving noises about this hypothesis, and he refers to it in his speech.

  12. Richard Tol Says:

    @Andrew S
    The EPA uses the COFORD model. See http://www.coford.ie/iopen24/pub/Science%20Spin%2018.pdf

  13. Brian Woods Says:

    Hadn’t noticed I had views similar to Krugman. I have read his stuff – his books are OK, but the NYT op-ed stuff is somewhat parochial.

    My principle gripe is that we – Advanced Economies, need to ‘bend-over’ with respect to environmental concerns. We should indeed try to lower our emissions, but transitioning to ‘alternate energy sources’ toward some sort of ‘sustainable growth’ (a completely misunderstood construct) is simply not a runner – it will be very costly (in energy unit cost) as we would have to pull forward a significant proportion of our future energy use to build-out the new infrastructure. Not a runner!

    BpW

  14. pongo Says:

    @Brian
    Krugman had several articles about imposing tariffs on China in order to address “externalities”
    http://www.telegraph.co.uk/finance/comment/jeremy-warner/7483177/Paul-Krugman-the-Nobel-prize-winner-who-threatens-the-world.html

    Anyways I agree with you, since this economy has been setback easily a decade (or more) we should be re-examining all these targets, which smell too much like the old soviet gosplans anyways. I don’t understand what’s the rush to push this thru without stopping to think about the consequences? If CO2 is really such a threat then we could get rid of most our emmissions with a nuke plant or two in a 10-15 years, problem solved.

  15. Andrew S Says:

    @Brian

    fundamental transitory changes are hard, very hard, given all the path dependency issues with an oil/coal based society, but not impossible.

    As I hope Munster can prove again on Sunday “to the brave and the faithful nothing is impossible” ;)

    Personal view, we’re already in ‘wily coyote’ territory (pedalling legs, thin air, the cliff edge having passed). This is the “2C or 3C” ‘debate’. What happens in Ireland should concern us, we are a part of Europe, a clod in the sea perhaps, but there’s far more to gain via action than despair.

    Everything we do to get onto a low / quasi-zero carbon trajectory is money well spent, energy well used, an investment, not a cost. Tangible, knowable returns in actually useful energy, not ponzi financed mortgages via CDS and leverage (my current industry).

    My view is (with lefty flowers in my hair perhaps ;) that if we can wage wars, as a society, we can wage one against oil/coal dependency. No one can suggest cold turkey, and no one can suggest instant revolutionary / off the wall ‘don’t drive your car or eat meat’ stuff but doing nothing is not a runner either. Strategic, scientific, intelligent steps towards meeting/beating/profiting from European and global targets is what we’ve got to do, what we must do.

  16. Andrew S Says:

    Thanks Richard.

  17. pongo Says:

    @Brian

    Sorry posted wrong link earlier that time he was calling on tarrifs on China to stop its currency manipulation

    here is one of his articles regarding putting tariffs to address the “carbon” issue with China
    http://www.nytimes.com/2009/05/15/opinion/15krugman.html?_r=1

  18. Mark Dowling Says:

    The best argument in favour of low-carbon energy future is energy independence and consequent impact on balance of payments. The fact that AGW impact declines is a happy bonus. That said, there’s different ways to get to a low carbon future and it’s important that schemes be examined for vested interests (such as the SIMI).

  19. pongo Says:

    How does importing and relying on inter-connectors and UK/French nuclear industry when the wind stops blowing, leads to energy “independence”?

    I think it was Tol who mentioned Denmark having to rely on neighbours, export for free at times and still has one the highest electricity cost in Europe despite a multi-decade headstart.

  20. Mark Dowling Says:

    pongo – don’t mistake me for a wind-at-all-costs guy.

  21. Brian Woods Says:

    Thanks for the comments lads. This issue of emissions reduction and its relationship to GW is a good political ploy – but its just plain daft when you seriously consider the energy cost of any alternatives to our almost complete dependence on fossil fuesl (oil, gas and coal).

    I again stress the energy unit cost of alternatives. This will dictate what is feasible and what is not. The monetary cost is an accounting distraction and should be ignored. Unless you have actual access to the energy sources essential to build-out, maintain and replace your alternativs, your a dead duck! That is, the energy sources are yours, not a neighbours!

    Consider our current crop of politicians, legislators and bureacrats as being clueless about re-usable energy resource prevision and act accordingly. If I’m wrong about this, teriffic. If I’m not – I recommend you migrate to lat 35 N or thereabouts! Preferably close to water. Alternatively if you wish to remain here: get a farm!

    BpW

  22. denis Says:

    Extracting net energy, from low energy density natural energy flows, such as wind, moving water and sun, will very probably not give us even a small fraction of the energy that we now base our lives on, let alone have enough extra energy needed to build and maintain, the huge infrastructure required for even a modest “alternative” energy regime.

    Anyone wanting to understand, the energy problems that we are going to start to face probably very shortly, would be well advised to aquaint themselves with the concept of EROEI—energy return on energy invested.

    This concept, is going to rule the viability of all energy production systems from now on, and should be taught in our schools.

    From the energy policies that our Governments are promoting, it is quite obvious that they have never heard of EROEI, or if they have they just don`t understand it.

    For those who want to learn more, here is a primer —– http://www.jeffvail.net/2009/07/renewables-hump-8-concluding-thoughts.html. and http://www.theoildrum.com/story/2006//2/114144/2387

  23. denis Says:

    I might add, that Jeff Vail is an engineer, as well as an attorney, for those who might question the law`s knowledge about energy and climate science.

  24. denis Says:

    You have Brian Woods to blame, for getting me going. However, here is another short article on Net Energy—-don`t forget to read the comments !

    http://netenergy.theoildrum.com/node/6545—-and I,ll repeat the previous link that didn`t seem to work.

    http://www.theoildrum.com/story/2006/8/2/114144/2387

  25. EWI Says:

    I think it was Tol who mentioned Denmark having to rely on neighbours, export for free at times and still has one the highest electricity cost in Europe despite a multi-decade headstart.

    It is regrettable that Tol has seemingly never met a denialist meme that he hasn’t faithfully reported here, yet somehow never has the time for retractions or corrections:

    “A controversial report critical of the wind energy industry from conservative think tank CEPOS was commissioned and paid for by an American think tank with close ties to the coal and oil industries, according to trade journal Ingeniøren.

    The report, which was published last September and concluded that Danish wind energy figures were misleading, was taken by CEPOS members to the US media in the months leading up to the COP15 climate summit in Copenhagen. The message behind the report indicated that the Danish wind turbine industry model was not effective.

    Numerous experts have since strongly criticised the report’s conclusions, challenging many of the figures and the means in which those figures were obtained.

    But now it appears that the report was indirectly commissioned and paid for by the American coal and oil lobby.”

    http://www.cphpost.dk/business/119-business/48553-oil-industry-behind-critical-wind-energy-report.html

  26. Richard Tol Says:

    @EWI
    If you had bothered to check my remarks about wind power against the findings of the report you refer to, you would have noticed that they’re completely different.

  27. denis Says:

    If the American coal and oil lobby knew about EROEI, they would be delighted to see more wind turbines being deployed, for these monstrous machines are nothing more or less than huge energy sinks, and even if they were`nt, their relative puny output, could never mount any threat to our assured continued use of fossil fuels.

  28. Pidge Says:

    Pongo’s first comment doesn’t work. Cuffe said that the recent cold spell was a reminder of the importance of having a temperate climate. He didn’t point to it as evidence of climate change. He didn’t even imply it.

  29. Ossian Smyth Says:

    To the person who said “Denmark…still has one the highest electricity cost in Europe”, Eurostat thinks that Denmark’s household consumer electricity price is lower than the European average.
    http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=ten00115&plugin=1

    Also it is impossible to deduce from this:

    Our temperate climate is seldom acknowledged as a national asset but the recent cold spell acted as a timely reminder of its importance to us as a society and an economy

    that

    a few cold winters in a row are a sure sign of global warming.

  30. Richard Tol Says:

    @Ossian
    Let’s assume that Minister Cuffe is rational, and that he sought to convince the Seanad to accept the climate bill.

    If he believes that cold winters do damage and that they would become less frequent (that is, climate change is beneficial), he would not raise the issue.

    Minister Cuffe referred to the weather on Dec 23 as “frightful”. See http://twitter.com/#!/CiaranCuffe He also referred, without further comment, to Gibbons. See http://www.ciarancuffe.ie/cuffe_street_blog

  31. Brian J Goggin Says:

    In other news, we learn that the Department of Community, Equality and Gaeltacht Affairs, known to its fans as Craggy Island, is helping to subsidise electric cars for the inhabitants of, er, Craggy Island.

    http://www.irishtimes.com/newspaper/ireland/2011/0115/1224287577259.html

    bjg

  32. bg Says:

    @ossian smyth

    You provided a link to pre-tariff electricity prices.

    When you include electricity tax Denmark has by far the highest price to consumers in the EU (over 26.7euro/100kWh in 2010). Electricity taxes go back to subsidize the wind industry.

    http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-10-046/EN/KS-QA-10-046-EN.PDF

    Denmark is not a good example. She is a horrible warning.

  33. Ossian Smyth Says:

    You provided a link to pre-tariff electricity prices.

    No, these are post feed-in tariff but pre-tax prices.

    The feed-in tariff is paid by the Danish TSO and passed on to consumers in the pre-tax price which is in the Eurostat ten00115 report. The Danish government then chooses to add huge taxes on electricity which are paid to the Danish Exchequer. This is a policy decision which is unrelated to wind generation.

    Denmark is a high tax country with tax revenue equivalent to nearly 50% of GDP. A VW Golf is twice the price in Denmark as in Ireland but this is not due to subsidies to car manufacturers.

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