Writing in the aftermath of the 2009 floods, I warned that flood and emergency management needed an overhaul lest the waters return. I prefer to be wrong.

The economic damage of the 2011 floods will probably be smaller than in 2009. But this time, two people died. Ciaran Jones was a hero who put himself in harm’s way to help others. Cecilia de Jesus drowned in her home. Why is there no gauge on the Poddle linked to an evacuation alarm?

Flood management is about the prevention of floods. No flood management system is perfect, so emergency management is needed to manage the residual risk. Last Monday, both flood and emergency management failed Dublin.

Ireland is behind schedule to meet its EU obligations to assess flood risks and develop management plans. But why do we need the EU to tell us to protect our property and life? Flood protection design standards are low compared to other countries, and once-in-fifty-year defenses are breached remarkably often. Cities abroad are working hard to create retention basins and drainage channels for storm water. Dublin, a spacious and green city by comparison, has not done so.

Preliminary analysis by Met Eireann shows that the rainfall of the 24^th October in Dublin was not unprecedented. More rain fell on 11^th June 1963 and on 11^th June 1993. A city like Dublin should be robust to events like that.

People have short memories, and politicians even shorter. After each flood, there is a call for better protection. That fades as the waters retract. Priorities change. The recent protest against the Clontarf flood defenses is a good example.

Last Monday also say failures in emergency management. Met Eireann issued a severe weather warning on Saturday. It was not accurate but extreme rainfall is fiendishly hard to predict. The warnings were actually fairly close to what came to pass. But while we have a tried and tested system for real-time weather prediction, we do not have a system that tells us where the water is likely to go once it has hit the ground. In fact, there are few gauges on rivers and streams. For instance, the OPW collection of hydrometric data omits the rivers Dodder, Poddle and Slang, where most of the mayhem was concentrated. The gauges that are there, are not linked to an early warning system.

A gauge on the Poddle would have warned that the water was rising dangerously high. The alarm could have been raised in Harold’s Cross. Celia may have had a chance with a few minutes warning.

A number of county councils now use MapAlerter, a service that sends out email and SMS messages to everybody in a particular area in case of emergency. Dublin does not use this system or any other.

Met Eireann issued a severe weather warning on Saturday. 48 hours later, the keys to flood gates and sand bags were still missing. That is just not good enough. Local flooding occurred to the untrained eye around 5 pm. The weather radar showed more rain coming. The emergency plan was invoked at 9 pm only, less than one-and-a-half hour before high tide. Why so late?

Water moves fast and with force. You have to act before the flood barrier breaks. In 2011, as in 2009, emergency workers followed the water. They did all they could, but there is little that can be done at that stage. Barriers need to be reinforced before they break. People need to be evacuated before the water reaches them.

In Cork and elsewhere, locals have done much to prevent a recurrence of the awful events of 2009. The national government has been less forthcoming. Dublin did not learn from what happened in Cork. The response to the 2009 floods was hampered by the Byzantine structure of flood management at the national level. The 2011 floods were local, and the line of command clear.

And now? Media attention will wane. There will be a few angry debates in the councils and the Dail. We will wonder why a shopping centre was build in a flood plain. We will wring our hands about the lack of accountability in the civil service. A committee will investigate and make sensible recommendations that will be ignored. Instead of waiting for those wise words, it is obvious what needs to done and now is the time to do it.

Early warning systems need to be put in place as a matter of urgency. That is fairly cheap and does not require intrusive intervention to awake the NIMBYs. The government should stop dragging its feet on the catchment flood risk assessment and management programme. Real-time hydrological prediction models must be developed, and not just for fluvial floods.

All this costs money. But Science Foundation Ireland has a large budget, not all of which is spent wisely. Let it fund the best hydrologists in the world to study Ireland. There are harebrained government subsidies in the areas of energy, transport, sport and what not that can be transferred to flood management without any great loss except to the cronies of governments past.

Heavy rains are inevitable. Flood damage is not.

In Nov and Dec 2009, Ireland was hit by extensive floods. Last night, there were floods in Dublin. The damage is probably smaller, but this time a life seems to have been lost.

After the 2009 floods, a number of deficiencies in flood control and emergency management were noted. See Hickey (behind paywall), Oireachtas, Tol. However, as I noted last year, this was not translated into action. More money has been allocated to flood control, but the institutional structures that failed in 2009 have been left unreformed.

In 2009, there were issues with emergency management too. They showed up again last night. There was local flooding from five o’clock onwards, and more rain predicted, but the emergency plan was not invoked until nine o’clock, when river banks had already been burst and with less than one-and-a-half hour to go till high tide. Warnings to the public were late, and little information was provided about what to expect where and when. Twitter was the best source of information, although facts were freely mixed with spoofs, jokes, and bitter disputes about the correct spelling of fliuch.

After the 2009 floods, a number of conferences were organized with speakers from Great Britain on the state of the art in the urban management of pluvial floods. No lessons seem to have been learned.

Anticipation is key in emergency management. If you know where the water will go next, you can move people, goods, and traffic out of harm’s way before damage is done. If all you can do is react, chaos will ensue and damages are unnecessarily high.

The Guardian reports that electric cars are not selling well in the UK.

The CSO does not report sales of electric cars, but it does report “other fuel types” which, by elimination, must mean electric. In 2008, 6 such cars were registered, or 0.004% of all new cars. This rose to 9 (0.017%) in 2009, 23 (0.027%) in 2010 and 45 (0.054%) in the first nine months of 2011.

Hybrids are doing better: 2,600 were sold in 2008-2011, or 0.7%.

The government still aims for one in ten all-electric by 2020 (on the road, not new sales; see Hennessy and Tol (2011, Fig 10) for an estimate of the impact on carbon dioxide emissions). That is roughly 230,000 cars. We’ve bought the first 83. Only 229,917 to go. (The target for 2012 is a more modest 6,000.) .

The ESB has put up a good few charging points. Initially, power was given away for free, but I can’t find evidence that that is still the case. There is a purchase subsidy of 5,000 euro per car, and a zero VRT. The motor tax is 146 euro per year.

Car buyers are apparently not impressed by the subsidies and tax breaks on offer, and the exchequer is not losing any money on this scheme. However, the investment by the ESB is pointless. Instead, they could have paid the money as a dividend to the government.

I was struck by the amount of press coverage of the Cycle to Work scheme (C2W). The Irish Bicycle Business Association (IBBA, which seems to have no website) launched a report (which cannot be found online) praising the virtues of C2W.

The report in the Irish Times is brief. 90,000 bikes have been sold since the scheme was introduced. There is no estimate of how many bikes would have been sold without C2W. The IBBA spokesperson claimed that “cycling journeys have increased by more than 50 per cent”, which may or may not be due to C2W, and may not be true as Irish data on travel and transport are sparse. The Dublin Canal Crossing counts (h/t Ossian Smyth) surely do not support a 50% increase.

RTE, BusinessWorld and the Irish Examiner add that 50 new bicycle shops have been established, and 767 new jobs created. They note the increase in the number of bike-based charitable events. And they cite the example of Temple Street Children’s University Hospital, which apparently has kept excellent records of how its employees travel to work.

SiliconRepublic has the most extensive story. It cites a LSE study that shows the commuting by bike improves your health. Such studies are plagued by endogeneity: Are cycling people fit, or do fit people cycle? McNabola et al. (2008) show, for Dublin, that cyclists (who breathe differently) are particularly exposed to PM2.5 and VOC.

The Irish Independent interviewed a bike shop owner. He notes that, since C2W, people buy more expensive bikes and that the success of his business is due to C2W.

C2W is a subsidy on the purchase of a new bicycle. You would indeed expect that people would then buy more and more expensive bikes, which is good for bike shop owners. C2W was one of the first policies introduced by then-Minister Eamon Ryan, who once owned a bike shop (see here).

C2W is unrelated to the use of the bike. Even without the C2W, bicycles beat cars on cost. I find it hard to believe that C2W has induced many to cycle to work instead, but I am aware that there no data to support this.

Slí Eile asserts that the culture of secrecy is alive and well in policy making in Ireland. Here’s the full essay.

The rest of this post is about a related topic, and the about an irregular commentator to this blog: Pat Swords.

Once upon a time, Pat asked the relevant authorities in Ireland for the benefit-cost analysis that underpins the public investment in wind power in Ireland. This is a perfectly reasonable request, as the public investment is substantial. There are three sources of money: tax revenue, reinvestment of profits by state-owned companies (which could have been paid in dividend to the owners aka the tax payer), and public services obligations (i.e., levies on electricity that are not quite taxes but feel the same way).

Pat’s request was refused, and so started a protracted legal battle, involving the Department of Energy, various other government bodies in Ireland, DG Environment, the European Ombudsperson, and the UN Economic Commission for Europe. There are a number of complications. Pat asked for information that probably should exist but as far as I know does not. Pat requested information under the Aarhus Convention, a UN treaty that was not ratified by Ireland. However, it was ratified by the EU, and Ireland has transposed the corresponding directive. Ireland’s renewable target is similarly derived from EU targets, the justification and even documentation of which leaves much to be desired. Europe part-funded some of the infrastructure that underpins the expansion of renewables. And there are other parts of the Acquis that may pertain to this case.

I’m no lawyer so I will not opine on the likely outcome of the case. I would have used less abrasive language than Pat is wont to. I agree with Pat that the renewables targets are expensive. I fail to understand that there are any benefits from having such a target. I am aware of the long list of wonderful things that are claimed to be benefits of renewable energy. I do not think any of them stacks up.

Most importantly, I think that a democratic government should be open and transparent, and be able to explain how and why it spends our taxes or implements costly regulation. There is often a good reason, or matters may be beyond our control.

If Pat wins this case, the ramifications could be widespread. Renewable energy is surely not the only area in which the Irish government has made dodgy and badly documented decisions. The Aarhus convention only applies, however, to policies that touch the environment.

Here’s the full story. It’s long, complicated, and occasionally intemperate.

The SEAI has released its cost-benefit analysis of the Home Energy Saving scheme, which concludes that for every euro invested, five euros were earned. More money to the SEAI so, and the economic crisis will soon be over.

Intriguingly, the results for the HES are in sharp contrast to the evaluation of the Warmer Homes Scheme — which found that the subsidies had no statistically significant impact on behaviour — and the evaluation of the Green Homes Scheme — which found net losses.

The evaluation of the HES leaves some things to be desired. For optical reasons, it may be better to commission an independent outsider to do the evaluation. Instead, SEAI staff evaluated an SEAI programme.

The cost is assumed to equal the sum of the public and private expenditure. The HES is a price subsidy. It increases the consumer surplus, by less than the total subsidy. The net cost is the difference. Private expenditure does not enter that calculation.

The study ignores changes in producer surplus. These are probably small, if we assume that investment is displaced.

Benefits are the energy savings and the avoided carbon dioxide, . The study assumes that only 18% of the investment in energy saving would have been made without the subsidy. This is in contrast to the Greener Homes evaluation, which finds that roughly half of the investment would have been made anyway, and the Warmer Homes evaluation, which finds that almost all of the investment would have been made without the subsidy.

Energy saved and CO2 avoided are discounted at 4%. If only that were the opportunity cost of public investment.

The study accounts for the VAT paid on energy. Surprisingly, the carbon tax is omitted from the analysis. The HES subsidy is double regulation: Carbon dioxide emissions are taxed, and emission reductions are subsidized. In other sectors of the economy, there is single regulation (carbon tax, or ETS permit price). The HES subsidy thus introduces a distortion in Ireland’s CO2 abatement policy: We abate too much in home energy use and too little elsewhere. This distortion is not quantified in the study.

In sum, this CBA of the HES does not tell us much that is useful. Its conclusions are not supported.

One can assess the HES based on first principles. It is a second-best intervention: Carbon dioxide emission are regulated already. It is an inefficient intervention: It is a fixed subsidy on investment, unrelated to the emissions avoided. It may well be that the HES addresses some imperfection in the market for home improvement (e.g., constrained access to borrowing) but, if so, it is a second-best intervention in that problem too.

If the SEAI had concluded that there was a benefit of 80 cents for every euro invested, I probably would have believed them.

Good news is always welcome. Dublin is the 2nd most Intelligent Community. Who cares it’s Dublin, Ohio? There is a chuckle in the capital, an opportunity to bitch, and as not too many people know about the other Dublin, its reputation adds to ours.

Dublin (Ireland) is ranked 9th (out of 80) on the list of most Bicycle-Friendly Cities in the world. The Lord Mayor rightly called this astonishing. I agree. Any town (that I’ve visited) in Denmark, Germany, and the Netherlands is more friendly to cyclists, including Hamburg (ranked 13th).

The list was put together by Copenhagenize. They do not reveal their methods. Dublin got 12 bonus points for trying, without which it would not have been in the top 20. Dublin’s high ranking is explained by “a wildly successful bike share programme” (true), “visionary politicians” (since booted out of office) “who implemented bike lanes and 30 km/h zones” (although the 30 km/h zone is fiendishly hard to navigate by bike), and “a citizenry who have merely shrugged and gotten on with it” (although the few available statistics suggest that people cycle less and less).

Copenhagenize claims that “[t]he new cycle track along the [Grand] [C]anal is brilliant”. It sure looks shiny and new. It has a small ridge between the road and the cycle line, the sort that was abandoned elsewhere because if you’d hit it accidentally, you’d go head first into traffic. Right of way is confusing. I use one crossing of the new cycle lane on my way back from work. In the few months since it was opened, I’ve spend some 10 minutes there and witnessed four near misses as cars turn on bikes. Fortunately, Dublin bikes are equipped with above-average brakes.

Copenhagenize has used the old let’s-rank-something trick to generate publicity. Unfortunately, they did not add to our understanding of what makes a city friendly to cycling.

The proposed reform of waste collection policy was again in the news today.

The Examiner has a funny story. The proposed reform would cut costs (5,000 people less on the payroll) and increase charges at the same time. The Times is more thoughtful, although it is still curious. In our textbooks, regulators fight against market power. Here, the regulator wants to establish private monopolies and the companies that would likely obtain those are dead against.

Mr Kells issues an implicit threat of court action. Presumably, the companies would argue that they have a customary right and reasonable expectation to compete in any waste collection market.

A lot of the fuss is due to poor communication. As far as I know, the department wants to sell waste collection concessions to the highest bidder, rather than take waste collection back into the public sector (as the private waste companies seem to think).

Here is one way to get around this. Instead of auctioning concessions, they could be grandfathered.

AFAIK, there are four private waste collection companies in DLR. Counting bins on my way to work, I guess that one company has 50% of the market, two have 20%, and one has 10%. DLR should thus be carved into 10 concessions, with 5 going to company A, 2 to companies B and C, and 1 to company D. In two years time, the first concession should be auctioned, the second one two months later, and so on.

(more…)

My op-ed in yesterday’s Sunday Times (behind pay wall) expands on last week’s post. Here’s my version of the text:

The proposed reform of waste collection is a step in the right direction. Incineration is needed to meet our EU obligations. A few waste companies will lose money, but other companies and households will be better off.

The Department of the Environment is now moving to change the regulation of waste collection from “competition in the market” to “competition for the market”. Competition in the market does little for lower fees as few households shop around for the cheapest waste collector. Economies of density is another other reason to welcome this move. In my street, we have three bins (black, green, brown) and four companies collecting bins. Every fourth Monday, no less than 12 waste trucks drive up our road to the delight of the children and the annoyance of drivers. Three trucks (one company) could do the same work for a fraction of the cost, as they would spend less time driving and more time collecting waste.

That company would have a local monopoly. Monopolies charge more than competitive companies, but there would be cost savings for households too. Monopoly power is easily checked in this case. Waste collection concessions should be tendered, and granted to the company that guarantees the lowest fees for households. Such concessions should be renewed regularly, say every two years, to keep up competitive pressure.

The proposed change in regulation is a change for the good, therefore. It follows the recommendations in a number of reports, including the International Review of Waste Management Policy, commissioned by the previous Minister, and the Gorecki report of the ESRI.

A level-headed change in waste management is welcome in itself. The previous Minister openly campaigned against government waste policy, but did not change it. This was a source of much confusion and agitation. Investment and renewal in the waste sector ground to a halt. It can now start again.

The most urgent problem is that the European Union has put a cap on the amount of waste that can be landfilled. That cap has been in force for over a year now, but the government has yet to formulate a coherent plan on how to meet the target.

Incineration will be part of the solution. The proposed change in the rules for waste collection has been interpreted as a move to favour incineration. That is nonsense. The markets for waste collection and waste disposal are separate. Some people seem to think that waste collection and disposal must be done by the same company, but there is neither a legal nor an economic reason for this.

A number of Irish waste collectors have diversified into waste disposal, focusing on methods that curried political favour before the last election. Returns in waste collection are not great. Waste disposal looked more lucrative with the EU cap on landfill. That changed with the prospect of a large incinerator in Poolbeg. Incineration is, after landfill, the cheapest way to (legally) dispose of waste. Irish waste disposal companies have complained loudly about incineration – because they know they cannot compete. Waste collectors would be fools not to send their waste for incineration.

The Poolbeg incinerator is not without its faults. There would be few environmental or health concerns if it is properly run, but it is not sure that the Environmental Protection Agency has sharp enough teeth to stand up to a large, multinational company. The incinerator is financed through a mechanism that is, as far as I know, unique to Ireland. If the incinerator turns a profit, the spoils go to the shareholders. If it turns a loss, the taxpayer makes good the difference. The Poolbeg incinerator shares this peculiar model of privatizing gains and socializing losses with, among others, toll roads, renewable energy, and of course banks.

This does mean that the incinerator can charge lower fees if it needs to increase its market share. The Minister decided not to impose a levy on incineration. As there are small external costs from incineration, this is an implicit subsidy. The incinerator will therefore be a fierce competitor in the waste disposal market. Irish waste companies are right to be worried.

At the same time, the reform of waste collection is good news for them. Profit margins should be better if local monopolies are sold through a competitive tendering process.

The tender process should be well organized. That would be a task for the county councils. A number of county councils still run their own waste collection business. It is hard to see that tenders of private companies would get a fair hearing. The tendering should therefore be outsourced to an independent body or the public waste collection businesses should be privatized. The Commission for Utilities Regulation should oversee the tendering.

[UPDATE: See new CEPR paper; h/t Constantin Gurdgiev]

But if the new regulations are properly implemented, households and small companies should benefit. The government is working to reduce the costs of waste collection and waste disposal. Many things can still go wrong, but there is movement in the right direction.

There’s a peculiar piece in today’s Independent. The reports of the CER’s 18 month smart meter trial were published in May.

The trial found statistically and economically significant changes in consumer behaviour due to the introduction of time-of-day pricing, with cost savings for both producers and consumers that together more than offset the costs of metering (unless the wrong communication network is chosen).

The trial also found that in-house displays further modify electricity use, but insufficiently so to justify the additional cost.

Real-time pricing was not trialed, nor were smart devices, micro-generation, electric vehicles, and micro-storage.

Minister Rabbitte responds to an earlier piece by Fintan O’Toole in today’s Irish Times.

It may well be that there are large amounts of oil and gas off Ireland’s west coast. It may well be that, after rapid advances in exploration and exploitation technology, these fields can be developed commercially. That would boost the Irish economy in 15 years time or so.

None of that is certain. It is clear, however, that oil and gas exploration companies have renewed their interest in the Irish part of the Atlantic. The assessment of the 1970s showed that the Irish resources are hard to develop. 20 years of low oil prices and, more recently, the Corrib controversy did not help. But with the current high oil price, the success off Brazil and the promise off Angola, the Irish Atlantic is back into the picture.

This is good news. However, Mr O’Toole and Mary Lou McDonald TD seem to want to kill the goose before it has laid its first egg, perhaps golden. I agree with the Minister. No oil or gas has been struck and this is not the right time to spook companies with talk of high taxes and nationalization.

The Dept Environment is now moving to change the regulation of waste collection from “competition in the market” to “competition for the market”. The reason is simple: Economies of density. In my street, we have three bins (black, green, brown) and four companies collecting bins. Every fourth Monday, no less than 12 waste trucks drive up our road, to the delight of the children and the annoyance of drivers. Three trucks (one company) could do the same work for a little more than a quarter of the cost. Even after allowing for monopoly mark-ups, there would be cost savings for households. Market power would be limited if tendering is competitive and concessions are short (waste trucks are mobile).

A perfectly sensible move by the Department so.

In today’s Irish Times, this is spun (and again) as a way to promote incineration. This is nonsense. At the surface, “competition for the market” was a recommendation in the International Review commissioned by the previous minister, and in the Gorecki report of the ESRI.

The markets for waste collection and waste disposal are largely separated; economies of vertical integration are small. Nonetheless, Irish waste collectors have vertically integrated with waste disposal. The competition in waste collection is such that hardly any money is made. The market for waste disposal would be lucrative with the EU cap on landfill and without additional incineration, but the Poolbeg incinerator would undercut the price of any other disposal technology except landfill. If waste collection would be run as a profit center, waste would be sent for incineration.

Competition for the market will allow waste collectors to make money in their core business again.

I had an op-ed in the IT last Thursday. Discussion is not great on their site. Here’s my edit.

The government aims to create a national water utility to install water meters and charge for water use. The general thrust is commendable, but it may become an expensive failure.

Taxes will need to go up and public spending down to close the government deficit. This will hurt the economy. However, consumption taxes do less damage to growth than income taxes. The government is right to introduce water charges.

A flat water charge would be unfair. Exemptions for those unable to pay are crude and expensive to administer. A flat water charge would not induce water conservation. We produce about 450 liters of drinking water per person per day (l/p/d). The average person probably uses some 150 l/p/d. It is not fully known what happens to the remaining 300 l/p/d. Part is lost through leaky mains, part is used illicitly, and part is lost through leaks in the house or garden. Experience in other countries, and in the group water schemes in Ireland, shows that water charges would substantially reduce household water use. People would also press the water providers to reduce wastage in the distribution network. As the number of meters increases, it will be easier to locate leaks and illicit use. The government is right, too, to introduce water meters.

The government wants to install water meters in 2012 and 2013. That is ambitious: 1.4 million meters in two years, 2800 meters per day. There is also a plan to replace all household electricity meters with so-called smart meters. This has been carefully planned and trialed over the last three years. The smart meter roll-out will be done by well-established companies. In contrast, the installation of water meters is to be led by Irish Water, a company that does not yet exist. I would be surprised if there will be a water meter in every home in Ireland by Christmas 2013. Flat charges may be with us for a long time.

In fact, there is a possibility that water meters will follow the path of voting machines, as learning from past mistakes is not the strongest point of the Irish government.

Water meters will be unpopular, as they remind people of water charges. Installers would need permission to put water meters in the home. Some homeowners will withhold such permission. The idea is therefore to install water meters just outside the property boundary. This is easier but much more expensive. 1.4 million connections will need to found, and 1.4 million holes dug. The water meters would be far from the smart electricity meters and therefore need a separate communications network. This may cost up to €800 per meter (€1.1 billion in total) according to one estimate.

There is a simpler and cheaper option that has worked well in other countries. Households can install water meters themselves, or ask their plumber to. Households with a meter would pay whatever water they use. Households without a meter would pay a flat charge. If the flat charge goes up over time, more and more households will install a meter. If the costs of water meters are a concern – a good plumber could install a certified meter for less than €200 – then Irish Water could give a voucher for €200 worth of free water upon registering the water meter.

The government has repeatedly promised that there would be free water allowances. Only excessive water use would be paid for. This is nonsense. It does not promote water conservation, and it is bad social policy. Like water, food is essential, but the government does not hand out sacks of potatoes. Instead, there are benefits for those without income and tax credits for those with. Benefits in cash are better than benefits in kind, because the household can choose what potatoes to buy, or pasta. Similarly, water should be charged from the first liter onwards. The revenue from the first 100 l/p/d or so should be used to increase benefits and tax credits.

The government may also seek to transfer the responsibility for drinking and sewage water from the county councils to a new, semi-state utility called Irish Water. There is merit in this too. Water treatment plants are largely build, designed and operated by private companies, but guidance and supervision by the county councils has not always been up to scratch. A new national water company would professionalize water management. If assets would be transferred from the counties, Irish Water should be able to borrow money at a lower rate than the government.

There are dangers too. In the past, semi-state monopolies have served their employees and their political masters well – but customers and owners got a raw deal. The government should create a Commission of Water Regulation at the same time as it creates Irish Water.

Or maybe sooner. The prospect of digging 1.4 million holes in the ground is great news for the construction industry – and a number of companies are actively trying to convince the government that this is the only option. It is not. It would be better if all options would be considered, and the best one selected after an open debate.

The fourth one day conference on Economics and Psychology will be held in the UCD Geary Institute on November 25th. The purpose of these sessions is to develop the link between Economics, Psychology and cognate disciplines in Ireland. A special theme of this year’s event will be the implications of behavioural economics for public policy. Abstracts (200-500 words) should be submitted before August 31st to Liam.Delaney@ucd.ie. Selected papers will feature in a special issue of the ESR policy section. Those wishing to have their paper considered should submit a draft before the November 25th session. Final drafts will be submitted for external peer review in January 2012.

The Dublin Kapuscinski Lecture – ‘Climate Change and Development’ on 31st May 2011 at 1700-1900 in the UCD John Hume Global Ireland Institute. R.S.V.P. to Jean.Brennan@ucd.ie 

Website: http://ec.europa.eu/development/services/events/kapuscinski, 

The series is named after Ryszard Kapuscinski, a Polish reporter and writer who was a “Voice of the Poor” in his famous reportages and books covering the developing world.  The lecture series is organized jointly by the European Commission, the United Nations Development Programme and partner universities, in this case TCD and UCD.   Ms Barbara Nolan, Director of the European Commission’s Representation in Ireland will open the Dublin Kapuscinski Lecture 2011 on ‘Climate Change and Development’.

 Professor Dirk Messner, German Development Institute, will deliver the keynote lecture.  “The global development panorama is changing dramatically. The challenges of security and poverty are more interwoven than ever before. Yet, two thirds of the global poor people are now living in middle income countries like China, India and Brazil. What does this new global poverty map imply for European development policies? Development trends are also embedded in an overall global development challenge: - climate change. The world needs to learn to decouple wealth creation from burning fossil fuels. A great transformation to a global low carbon economy is necessary during the decades to come in order to avoid major and dangerous changes in the Earths system. What do these global shifts imply for Europe s role in the world? Europe needs to define its global interests. And it needs to be part of a global governance strategy to shape global development trends.”

 A panel discussion will follow, chaired by Prof. Patrick Paul Walsh (UCD Chair of International Development Studies). Panellists include Francis Jacobs, (Head of the European Parliament Office in Ireland), Cliona Sharkey,  (Trócaire, Environmental Justice Policy Officer), Tara Shine,  (Head of Research and Development, Mary Robinson Climate Justice Foundation, Joseph K.Assan, (TCD-UCD MDP Lecturer in Development Practice) and  Frank Convery ,  (UCD Earth Sciences Institute).

 The lecture series offers citizens of the European Union an unprecedented opportunity to learn and discuss development, and issues related to development cooperation.

The OECD has launched a new index with the aim of facilitating comparisons of the quality of life across countries. You can find the country summaries here.

Ireland does quite well in the rankings, although the usual caveat about using GDP in an Irish context applies.  Moreover, the data used are mostly from 2008 and we have undoubtedly slipped towards the relegation zone since then.

In its latest Quarterly Bulletin, the BIS clarifies what can and cannot be learned from its data. You can read the note here.

A useful explanation of QE is available here.

The Sunday Business Post yesterday published an op-ed by me. It’s a shortened and updated version of last week’s blog, and it sketches emission reduction options in transport:

“There is already a carbon tax on fuel, while motor tax and vehicle registration tax favour low emission cars. There are strict European rules about the fuel efficiency of new cars. Fuels are blended with biofuels. Public transport is subsidised. If the economy returns to modest growth and policies continue as they are, but the carbon tax rises, then emissions from transport in 2020 would be roughly the same as they are today. (Transport emissions doubled between 1990 and 2000, and another 20 per cent was added between 2000 and 2010.) According to the climate bill, however, transport emissions should fall by 20 per cent.

How can this be achieved?  If we ignore all the evidence that biofuels are bad for the environment and bad for poor people, and we increase the mandatory blend from 3 per cent to 10 per cent (in energy terms), emissions fall by 7 per cent. If 10 per cent of cars were all-electric, emissions would fall by 2 per cent. (This is small because electric vehicles appeal primarily to urban households with two cars.)  Some 60 per cent of commutes by car are less than 10 km long. If half cycled to work instead, emissions would fall by 7 per cent. If the sale of two-litre cars is banned from 2012, emissions would fall by 2 per cent.

These four measures together reduce emissions by 18 per cent. Even this is not enough to meet the new targets.”

The SBP dropped a paragraph: “The climate bill would also establish a National Climate Change Expert Advisory Body, which would oversee the measures to reduce emissions taken by the various departments. This is welcome in principle. Like monetary policy, climate policy is best removed from day-to-day politics. The Expert Body would be like the Central Bank. Unfortunately, the Expert Body as foreseen in the climate bill is different. Any civil servant can be declared an expert, but others are excluded. Experts can be removed at will by the minister. And the government can block any publication by the Expert Body. The Expert Body would not have the required expertise or independence to do its job.”

The same edition carried another article on the climate bill, which cites the IFA and Teagasc. The IFA’s 4 billion euro is an estimate of the loss of export revenue; the cost would of course be much lower. It’s not clear where the number comes from. A 40% reduction in the herd size is probably much more than is needed to meet the 2020 target (although it is hard to imagine that the herd size would not be cut). I could not find a source for that number.

The IFA used to be firmly opposed to climate policy.  Over the last couple of years, their position has become milder as they realised that climate policy would bring new opportunities (carbon storage, bioenergy). In fact, Irish dairy is among the most climate-friendly in Europe, so EU policy might improve our competitive advantage. The publication of the climate bill seems to have reversed a positive trend.

Over at VoxEU, a bunch of economists challenge the current consensus in climate policy circles and suggest a range of policies that may actually reduce emissions.

In the forthcoming ESRI Research Bulletin, David Anthoff and I offer some thoughts on how a country may set a carbon tax.

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.

Irish legislators have a habit of amending bills but not consolidate. The Environment (Miscellaneous Provisions) Bill 2011 has been published. It’s a tough read but would allow the Minister for the Environment to put punitive levies on landfill and incineration. Strikingly, the bill was published even though the results of the consultation on the bill are still not public (UPDATE: See first comment).

I’ve posted on this before, and my opinion has not changed.

UPDATE: Submissions to the consultations are public at last. I’ve browsed through them. There is a range of opinions, as one would expect. I was reminded, however, that waste policy is so much broader than imposing levies on landfill and incineration. As it stands, the legacy of the current government may be:

1. the right to impose punitive levies on incineration — a right that the next Minister may choose not to exercise;
2. the right to impose punitive levies on landfill — whereas a system of tradable permits would be more appropriate given that the EU put a cap on the amount; and
3. the need to reform waste policy.

As the introduction of the climate bill may be imminent, I thought it would be appropriate to make public at least part of the consultation. Our latest draft is here. It omits one crucial part as we’re still trying to get our heads around estimating the costs of the proposed targets.

All comments are welcome.

This is the summary: [W]e are grateful for the opportunity to comment on the draft Climate Change Response Bill 2010. There are a few ambiguous statements in the draft bill that will need to be clarified in the next version, particularly with regard to the emissions target for 2020 and the definition of carbon sinks. A unilateral adoption of a 30% emission reduction target for 2020, as proposed in the draft bill, would be problematic, as EU legislation would oblige Ireland to bridge the gap between the EU target (-20%) and the Irish target (-30%) through emission reduction in the domestic non-ETS sectors (mostly agriculture, households, small and medium-sized enterprises, and transport). The proposed targets for 2030 and 2050 are extraordinarily ambitious. The draft bill omits to introduce an appropriate framework for policy measures to meet the proposed targets. The establishment of a National Climate Change Expert Advisory Body is a welcome proposal but the climate bill should guarantee that the people on the body are indeed experts and that the body is independent. The Regulatory Impact Assessment adds little to our understanding of the impact of the proposed climate bill.

We recommend the following changes to the Climate Change Response Bill 2010:

• Adopt the EU target of a 20% emission reduction by 2020.
• After 2020, the target should be to intensify climate policy such that the (nominal) marginal abatement costs of emission reduction increases with the rate of discount (i.e., the nominal interest rate) until carbon dioxide emissions are zero.
• Create a framework for policy interventions of greenhouse gas emissions, with single regulation and equalization of marginal abatement costs as important criteria.
• Guarantee that the National Climate Change Expert Advisory Body is independent and has the required expertise.

Furthermore, we recommend that the impacts of the proposed climate bill will be assessed before the bill is introduced.

UPDATE: Interesting comments in today’s Irish Times. Ciaran Cuffe may need to check his math.

As another sign of the rushed introduction of the climate bill, the first estimates of the costs of the climate bill are published in a newspaper. O Gallachoir’s estimates are based on a model which is still under active development (rather than on a model which has been vetted and peer-reviewed — this is due to the starting date of the modelling project). Note that UCC is way ahead of the ESRI here: We still have to figure out how to estimate the economic impacts of targets this deep; the measures included in our model are not sufficient. The regulatory impact assessment has no cost estimates.

So, we are essentially asked to sign up to something we do not understand.

UPDATE: The IFA argues, rightly, that it is peculiar to introduce the climate bill next Wednesday when the public consultation is still ongoing. This reminds me of the waste bill, also imminent, for which the results of consultation are still not made public. Which is the party again that “believe[s] [...] in a political system that is transparent“? (Hint: click the link.)

In the Netherlands, if a government falls, it continues on as a caretaker government until the new government is formed. Any member of parliament can declare as controversial a particular piece of legislation and regulation, and the caretaker government cannot make any decisions on these subjects. If it tries nonetheless, the senate will block this — and if it doesn’t, the queen will.

Ireland is different. Just prior to electoral defeat, a number of initiatives are being rushed through. There should be checks and balances to prevent this sort of thing. I’ll return to the climate bill later this week.

Poolbeg is back in the news. Although the public consultation on waste policy is still so recent that the department has yet to publish the submissions (at least one of which raised fairly fundamental concerns), if the Irish Times is to believed, new legislation will be introduced this month that would give the Minister of the Environment the power to set punitive levies on incineration and landfill.

Instead, waste levies should reflect the externalities of waste disposal. The maximum incineration levy is much higher than the two available estimates of the external cost of incineration.

The draft waste policy was far from ready. Instead of rushing through immature legislation, the government should have the grace to pass this dossier to the next government. ATMs will continue to work.

UPDATE: The story heats up again. See Times, Independent, and Independent again (with a reference to the EER2010).

UPDATE2: The Times claims that the bill will be published today (Jan 7). At 8.44 am, the submissions to the public consultation are still not online.

This headline appeared in the Irish Times on 20^th December 2010. In the article that followed Frank McDonald admitted this was “paradoxical” but explained that recent research has linked severe winters in northern Europe to diminishing levels of ice in the Arctic sea. A more detailed account of the same reasoning is contained in this article published in the New York Times on December 26^th 2010.

This new view of the effects of global warming is quite an about-turn.

In 2009 the Irish Environmental Protection Agency (EPA) published a Summary of the State of Knowledge on Climate Change Impacts for Ireland. This document provides predictions for key climatic variables for the rest of 21^st century based on extrapolations of observed changes relative to the 1961-1991 averages. Here is how some key trends are summarized in Tables 2.1, 2.2, and 2.7.

“All seasons are warmer but more so in winter”

“Less frost; trend of decreasing frost nights and decrease in duration.”

“Less (sic) snow days”.

“Increases in Irish coastal water temperatures”.

“Drier summers”

All but the last of these generalizations were made with a “high degree of scientific confidence”. The deluges of the summers of 2007, 2008, and 2009 reduced the confidence attached to the last point to “medium”.

If instead of the the recent extreme weather events there had been comparable deviations in the other direction (dry, hot summers and mild, snow-less winters) confirmation bias would have led many commentators to view such events as strong support for the predictions contained in the EPA document. The same bias now leads commentators to label the actual recent pattern of extreme events “anomalies” and to offer ad hoc explanations for them. One has to wonder about a science that flip-flops from predicting one extreme to the other in so short a space of time. If climatologists are now saying that our winters may be  going to get colder rather than warmer, it will be very hard to test the various hypotheses associated with the idea of “global” warming.

A longer term perspective is needed if we are to talk about “climate” as opposed to “weather”. In an earlier post I drew attention to absence of a positive trend in the Dublin’s annual average temperature over the period 1958 to 2008.  Two more years of data have reinforced the main points I made in that contribution. In 2009 Dublin’s temperature was slightly below the long-term average, while 2010 was the coldest of the past 52 years, with an average temperature of 8.3º C - more than two standard deviations below the 1961-1991 average used by meteorologists to represent “the long run”. During last winter (December 2009 – February 2010) the average temperature was three standard deviations below the long-run winter average. It is very likely the winter of December 2010 – February 2011 will also be unusually cold.

However, it would be a mistake to believe that the recent downward trend in annual temperatures is due only to colder winters.  June and July were the only months of 2010 when Dublin temperatures were above their long-run averages.  The warmest year of the past half century was in 1989. The average temperature during the naughties was lower than during the 1990s

A longer term perspective is needed if we are to talk about “climate” as opposed to “weather”. The graph of Dublin’s annual average temperatures (below) does not convey an impression of a consistent upward trend in annual temperature since 1958. This is confirmed by standard statistical tests, which reveal that there has not been a significant trend (positive or negative) in the annual data over the entire 52-year period.  Nor has there been a consistent trend in temperature in any of the four seasons. More detailed investigation shows that there was a significant positive trend for some 30-year windows between 1958 and 1993, but for all such windows between 1971 and 2010 the trend has been negative although not statistically significant. The trend in Winter and Summer temperatures has been negative but not significant since the 1970s. Similar graphs of Dublin’s rainfall reveal no significant trends.

The fairest summary of this evidence would seem to be that Dublin’s climate has not changed significantly over the past half century.

The evidence for an upward trend in temperatures over the past half century is stronger for weather stations outside Dublin. Dublin has become colder than other parts of Ireland.  Belmullet, for example, shows strong evidence of a positive temperature trend for much of the period and the Dublin minus Belmullet differential widened markedly in the 1990s. But here, too, there is a puzzle: Belmullet’s temperature showed no positive trend between 1958 and the mid-1980s but for the next twenty years there was a strong positive trend, while the last three years have been cooling again.  Here, as for the other stations, the volatility of the data is very striking.

These small pieces of evidence may, of course, be dismissed as irrelevant to the “global warming” debate. But to adapt Tip O’Neill’s aphorism, all climate is local. The Dublin data draw attention to the fragility of some of the evidence on which recent predictions of climate change have been based.

Happy New Year!

The Climate Change Response Bill 2010 was published today for consultation, together with an explanatory memorandum.

Art 1-3 are preliminaries. Art 4 has the emission reduction targets:

• Emission reduction should be 2.5% per year on average between 2008 and 2020. The bill seems to say that 2020 emissions should be 28% below 2007 emissions (i.e., 52 mln tCO2eq). The memorandum says that 2020 emissions should be 26% below 2008 emissions (i.e., 50 mln tCO2eq).
• 2030 emissions should be 40% below 1990 emissions.
• 2050 emissions should be 80% below 1990 emissions.

(In fact, the base year is 1995 for the F-gases and 1990 for the other greenhouse gases. Between 1990 and 1995, emissions of F-gases rose from 0.06 mln tCO2eq to 0.20 mln tCO2eq so the dual base year just complicates things.)

The 2030 target seems to follow from the fact that 2030 is halfway between 2010 and 2050 and 40% is halfway between 0% and 80%. Annual emission reduction is to be 2.5% between 2010 and 2020, 3.9% between 2020 and 2030, and 5.3% between 2030 and 2050.

Art 5 creates a National Climate Change Plan. Art 6 establishes an annual statement to the Dail. Art 7-10 create a National Climate Change Expert Advisory Body. (The memorandum clarifies that no new expert will be hired.)

Art 11 orders public bodies to have regard for the climate bill and report progress to the Minister of the Environment.

Compared to the Oireachtas bill (discussed here), the Government bill creates much less bureaucracy. That is a good thing. Like the Oireachtas bill, the Government bill has nothing on how the targets are to achieved. This is a serious omissions. It is all good and well to announce a target, but there is more to policy.

The targets are very ambitious, as discussed here. Fortunately, the memorandum assures us that “[t]his Bill does not have immediate significant financial implications for the Exchequer.” The crucial word is “immediate”. The 2020 targets are notably more stringent than the EU targets, and we’re well on track to miss those (at least, according to the EER2010).

UPDATE:

ETS emissions are controlled by the EU rather than by the Irish government. That implies that the additional emission reduction effort for 2020 will fall entirely on the non-ETS sectors. The EU targets are to reduce ETS emissions by 21% in 2020 (relative to 2005) and non-ETS emissions by 20%. The government target is to reduce non-ETS emissions by 37% in 2020 (relative to 2005).

In 2008, non-ETS emissions were about 48 mln tCO2eq, 38% in agriculture, 30% in transport, 16% in households, 9% in services, and 7% in manufacturing.

Note that I assume throughout that LULUCF is as defined for the Kyoto Protocol. Note also that the climate bill is silent on this.

UPDATE 2: See Times, Independent, Examiner

UPDATE 3: There is a Regulatory Impact Assessment, which contains the gem that if you raise energy prices through a carbon tax it would affect the vulnerable and competitiveness, but if you raise energy prices through other means there would be no such impact.

McDermott, Verde, Laing and Mejean take on Lomborg in the Financial Times.

As I have argued before, Lomborg plays a useful role in cooling down the overly ambitious climate policies promoted by European leaders — but he also tends to get his details wrong.

Minister Gormley has announced new targets for greenhouse gas emission reduction: 2020 emissions are to be 10% below 1990 levels (29% below 2005 levels) , 2030 emissions 40% below 1990, and 2050 emissions 80% below 1990.

EU legislation has that Ireland should cut 2020 emissions by some 20% below 2005. The EU has committed itself to 30% if there is a meaningful global agreement on emission reduction (which is as unlikely as ever). The Environment Council has repeatedly tried to remove the conditionality of the 30%, but has been rebuffed by the European Council. The government now argues that Ireland should unilaterally adopt the 30% (well, 29%) target.

It will be hard enough to meet the EU target, as illustrated here (after Devitt et al., 2010). According to the low growth scenario, Ireland will fall short some 5.5 mln tonnes of CO2 equivalent of the EU target — and 13.5 mln tonnes of the new government target. Today’s permit price is 14 euro/tCO2. Under the EU target, Ireland would need to spend 80 million euro per year on importing permits (the model imposes a carbon tax equal to the permit price, so buying permits is cheaper than increasing domestic emission reduction). Under the new government target, this would by 190 mln euro.

The new government target is less stringent than that proposed by the Oireachtas Joint Committee on Climate Change and Energy Security.