Phat Dragon sees a huge pick-up in Chinese railway construction

Phat Dragon noted with great interest a Caixin report that cited a MOR official indicating that it plans to pursue a 5,400km expansion of the rail network in 2013. If that raw number means nothing to you, tweet your local news provider and ask why no genuine context is ever provided for ‘big number’ headlines.

Anyway, to put it in context, if achieved that would represent the third largest incremental increase in China’s rail network ever, taking the bronze behind the stimulus years of 2009 & 2010. It would also represent more work than was completed in both 2011 and 2012 combined. All  very exciting to be sure…

Phat Dragon’s Weekly Chronicle of the Chinese Economy (25 January 2013)

49 Responses to “ “Phat Dragon sees a huge pick-up in Chinese railway construction”

  1. dam says:

    That will make FMG quite happy, more Ore needed, 180 ?

    • You never know. But there is still only one engine running at former revs in China – infrastructure. Realty construction and manufacturing will need to fire up if we’re going to $180. Or, the global economy accelerate from here, which I still think is unlikely.

      I think PD’s diagnosis of a Chinese inventory cycle counts worldwide. My view therefore is we it will all settle within a few months.

      Sell in May and go away might be a good one again this year. Though it’s so popular now perhaps April is better!

      But this news is more support for the second half to mitigate ore falls…

  2. MJV says:

    I hope readers have this week learned the value in reading Caixin.

  3. V says:

    Law of diminishing returns.

  4. GSM says:

    And after the railroads will come the highways, then the towns and cities, the bridges and the utilities and services etc etc..

    This fits exactly with the new Premier’s stated plans to bring higher standards of living to the undeveloped countryside of China. Not while the East stands still either.

    Good support for base metals all up I’d say.

    • Yep, but that’s not good enough if demand doesn’t grow well above 5% per annum. The supply deluge is here.

      Do you think that roads and railways can expand ad inifintum?

      • PhilBest says:

        Actually, the highways are already coming. I am sure I read somewhere that China already has more kilometers of highways than the USA.

        I think there is some merit in what China is doing. It is very hard to add capacity later, after a region is “built out” and congestion is a problem, along with economic land rent in the lucky locations where the highest income economic sectors have ended up agglomerating.

        Decentralisation of urban economic activity is as much an evolutionary force as agglomeration is. Few economists realise this.

        The net benefit of agglomeration economies over congestion diseconomies and “economic land rent” diseconomies, is maximised when agglomerations of different types (there are many) are able to locate separately to each other, even if they remain in the same “greater” urban area.

        Urban planners and their models utterly fail to grasp this reality. In their models, “agglomeration” economies are one homogenous lump for the whole city. Even the “leading” urban economic modelers have failed to realise that they are nowhere near representing reality, and their models grossly understate the trend to dispersion and the fact that it is positively correlated to productivity.

        So far, this understanding has not penetrated beyond intuitive observations being made by rare geniuses like Prof. Peter Gordon.

        Another common mistake being made, is that agglomeration economies require totally adjacent proximity of the participants. They do not, even if this factor is helpful at the margins in some industries. “Access” is sufficient, eg a short car drive serves for participants in the agglomeration of Silicon Valley, just as well as “being in a skyscraper” does for Wall Street.

        I personally believe that communications technology has the GREATEST promise to substitute for proximity, in the very sectors in which proximity is traditionally held to be most important.

      • The Lorax says:

        I am sure I read somewhere that China already has more kilometers of highways than the USA.

        Paved roads per car (metres)

        China 60 metres of road per car, USA less than 20. But hey, I’m sure they need more.

      • PhilBest says:

        Most certainly they will.

        Vehicle Ownership and Income Growth, Worldwide: 1960-2030

        Joyce Dargay, Dermot Gately and Martin Sommer

        January 2007


        The speed of vehicle ownership expansion in emerging market and developing countries
        has important implications for transport and environmental policies, as well as the global
        oil market. The literature remains divided on the issue of whether the vehicle ownership
        rates will ever catch up to the levels common in the advanced economies. This paper
        contributes to the debate by building a model that explicitly models the vehicle saturation
        level as a function of observable country characteristics: urbanization and population
        density. Our model is estimated on the basis of pooled time-series (1960-2002) and crosssection data for 45 countries that include 75 percent of the world’s population.

        We project that the total vehicle stock will increase from about 800 million in 2002 to over 2
        billion units in 2030. By this time, 56% of the world’s vehicles will be owned by non-OECD countries, compared with 24% in 2002. In particular, China’s vehicle stock will
        increase nearly twenty-fold, to 390 million in 2030……

      • The Claw says:

        China 60 metres of road per car, USA less than 20. But hey, I’m sure they need more.

        That reminds me of one I heard the other day: What do you get when you connect a fool to the Internet?

      • The Lorax says:

        China’s vehicle stock will
        increase nearly twenty-fold, to 390 million in 2030

        I’m sorry but that just isn’t going to happen. The US has around 260 million vehicles, and the world simply doesn’t have enough oil production capacity to support another 1.5 USAs, regardless of what you think of the climate change implications.

        Go long oil, short humanity.

      • PhilBest says:

        No fossil fuel doomsayer has been right yet. Technology optimists (including improved resource extraction methods) are in the minority but they are the rational, objective, scientific people in this debate, and have been proved right again and again.

        I confidently predict that no-one alive today will see the end of personal powered mobility, unless for purely political reasons.

        Mass public transport is a dinosaur on political life support. The fact that so many resource doomsayers argue FOR high density living and mass public transport shows what a pack of irrational idiots they are. The lifestyle block survivalists might be just as wrong about resource runout, but they are at least intelligent enough to work out that a post-resources economy is NOT an “urban” one, PERIOD.

      • The Lorax says:

        What do the “rational, objective, scientific people” have to say about the climate change implications of 390 million cars in China?

        (not to mention 1.3 billion Chinese endeavouring to live a first world lifestyle supported by fossil fuel energy)

      • Alex Heyworth says:

        What do the “rational, objective, scientific people” have to say about the climate change implications of 390 million cars in China?

        (not to mention 1.3 billion Chinese endeavouring to live a first world lifestyle supported by fossil fuel energy)

        Not sure if there are actually any people in that category, Lorax, although there might be few who think they are.

        FWIW, although I make no claims to be rational etc, my answers to your questions would be (1) depends on how they are powered and (2) this will only happen if the majority of the fossil fuel is gas – the carbon production will be much lower than for other fossil fuels.

      • cyrusp says:

        “I’m sorry but that just isn’t going to happen. The US has around 260 million vehicles, and the world simply doesn’t have enough oil production capacity to support another 1.5 USAs”

        It’s possible.

        It will probably entail massive demand destruction and depression in the West which transfers demand to China.

      • Pfh007 says:

        Exactly !

        It will be interesting to see the approach China takes to micro planning along the routes of these railways and highways.

        The key issue that planners (in fact most people) struggle with is the idea that the growth of human populations is a very organic and complex process that reflects the complete environment facing the community through time as the population grows.

        Changes in technology (especially transport), changes in wealth, changes in expectations and of course changes in population growth rates are all drivers for how a city grows.

        The trap the planner falls into is believing:

        (a) They can accurately predict those forces

        (b) They should shape those forces

        (c) They can shape those forces effectively.

        The look at an ancient/old city (pre 1930s) and think –

        “If only they had planners they could have done it so much better”

        This doesn’t mean that planning has no role but it does mean that it has limits that are much more significant than are usually accepted.

        For example:

        Railways and highways are wonderful technologies that as made a huge difference to the world. There is a role for planning what might be the best route for a railway or a highway but that is about it.

        Decide the best route, the most likely locations for stations/exits etc and build it.

        Then let the evolutionary development forces do the rest along the route.

        The development of retail / industry / residential along the route should be allowed as much freedom as possible.

        If a developer wishes to create a garden suburb behind a main street of shops and protect it with binding covenants on the blocks let them. That may add to the value of the land but may detract if people hope to later subdivide their block.

        Preservation of old parts of cities is a separate issue. As that is not really planning at all.

        That is simply deciding to remove a part of the fabric of the city from the ongoing evolutionary forces of a city’s development. In a sense create a small historical theme park because we are wealthy enough to absorb the costs of preserving such spaces and forcing the development that may have taken place elsewhere.

        An example of this is the desire to preserve 19th century Victorian wedding cake terrace suburbs (often built on demolished Georgian suburbs) close to the CBD. Nothing wrong with doing that provided there is a clear acknowledgement of the substantial costs of doing so.

        Interestingly, as PhilBest has noted, the desire to demolish those old inner urban street scapes and then the need to preserve them, ironically may be due to the urban growth policies that are designed to force the intensification of brownfield areas.

        I don’t have a fixed view about intensification other than that a lot of low cost intensification can be achieved in Sydney simply by allowing more readily the subdivision of existing 1/4 acre blocks into terraces or townhouses.

        Turning 1 household space into 3 would be a massive increase in available land between Blacktown and the CBD.

      • PhilBest says:



        I am coming to realise that you are a kindred spirit.

        “…..Railways and highways are wonderful technologies that as made a huge difference to the world. There is a role for planning what might be the best route for a railway or a highway but that is about it.Decide the best route, the most likely locations for stations/exits etc and build it. Then let the evolutionary development forces do the rest along the route…..”

        Exactly. This is what two of the urban economics specialists who I most respect, Alain Bertaud and Shlomo Angel, have been saying in their published literature over the last decade or so.

        Even if you do not actually build the highways or drainage systems or whatever “in advance”, for Pete’s sake impose “rights of way” and powers of pre-emption and so on, so they can be done later as cost effectively as possible when they are needed.

        Possibly the single biggest obstacle to “intensification” being “more cost effective” than “sprawl” (90% of the time it is NOT), is that the city has just grown like Topsy and the spots that desperately need capacity increases are so built out that the cost of disruption and the cost of acquisition of land means that nothing ever gets done.

        Alex Anas (Prof at SUNY Buffalo) has suggested in one of his amazing papers, that planners should just start from scratch on greenfields, planning “edge cities” and DOING IT RIGHT THIS TIME, and letting this suck economic activity out of the congested, economic-rent-strangled “old city” until things find their own level.

        Ironically, an academic paper a few years ago that DID suggest that “intensification” WAS occurring cost-effectively in contrast to “sprawl”, was seized on by all the usual smart growth advocates and trumpeted all over the world. Guess what city the data was from? Phoenix, Arizona. One of the lowest density cities in the USA, let alone the world.

        So yes, going from “very low” density to “not quite so low” density is indeed quite cost effective. This is certainly not remotely true in, say, Sydney.

      • Pfh007 says:

        Definitely kindred

        I should clarify that allowing people to subdivide their 1/4 acre blocks is not a substitute for a change of policy on the fringe.

        Both are required.

        It would be interesting to see if demand for sub- divided blocks in the inner areas persists in the event of more rational policies on the fringes.

        It may be that as development occurs more organically and rationally on the fringes people will choose to avoid the more congested and more heavily subdivided areas.

        The key of course is choice.

        The more choice and flexibility that is allowed the more likely it is that our cities will evolve to reflect our current and changing needs.

        And that includes environmental considerations as people are quite capable of reflecting those concerns in the decisions they make.

        Those who believe the future of private transport is bleak will choose to live close to transport hubs and increase demand for suitable accommodation in those places. Those that are bullish will live in places that require private forms of transport.

        I cant see a future that doesnt involve private transport that will allow low density living. At worst people might ride mopeds and other low energy devices if oil prices become too great to run the SUV beasts that seem popular with many.

    • GSM says:

      To answer your question – No. However over the next 2-5 years I expect that these activities in China, expanding urbanisation, will provide reaonable support to base metal prices. Meaning, I dont see massive declines in metal prices. Some may even improve markedly, with all the QE cash floating about.

  5. Hellenomania says:

    railway is not that good for ore is it ? Constructions is way better.

    I have also heard this is in response to the train disasters which have occurred over the last few years making people wary of the super fast trains.

    I know they tested the longest track of super fast train in history – however there are real concerns over the current system.

    Further, most of the workers in China are migratory workers – they move from rural to urban areas sending money back to their agrarian families.

    There has been a marked slow down of consumption in the west, which is set to continue – and worsen looking at Europe.

    How is this expansion going to assist China ?

    They already have a shadow debt problem, while Japan is ramping up their easing as is the US. But what is far, far more troubling is the pull back from Chinese manufacturing western manufacturers are now displaying with many high tech companies including FOX CON moving to all robotic construction, or moving back to the united states.

    Wage pressure is also a mitigating factor.

    The general pathway from developing nations according to developmentalism is to move through low tech production like clothing etc, poorly constructed tech and electronic, then car, then high tech – you can see Japan, Taiwan, Sth Korea all as examples of this – China definitely appears to be moving into this mode where low cost high production is moving away from China due to wage, transport, manufacturing cost constraints push back against the country and move it to new developing regions – Vietnam, Bangladesh (I know people there right now) and of course as we are seeing Africa.

    Perhaps China is looking to redirect this transition back out to the more agrarian areas in an attempt to stave off having it move off shore to cheaper markets – by opening up cheaper markets.

    Either way – I really think they are going to take a massive hit from Japan, US currency wars and stimulus combined with Europe decline they are not going to compensate for their collapsing revenue. No way.

  6. douglasp says:

    It is hard to believe what is written here. China is a train wreck waiting to happen. It has wasted so much money building things for no reason but to keep jobs going. Endless spending has one result, bankruptcy.

    • The Claw says:

      It sounds like you really understand the situation. Let me ask you a few questions so I can do a calculation:

      1) At what rate is China spending it’s money?
      2) How much money does China have left?

      I am looking forward to your answer because I will be able to calculate exactly when China will run out of money. I will post the result for everyone to read.

  7. douglasp says:

    China’s true public debt increased by around 60% of GDP since 1967. It’s total debt is close to 200% of GDP, the level Japan reached around 1988, before its economy began its 20 year decline.

  8. PhilBest says:

    What I think WILL make the China miracle go smash big time, is the ridiculous levels of economic land rent being captured by well placed members of the CCP, in all urban development. This leads to gross inequality and migrants to urban areas being locked right out of modern “housing”, even the smallest apartments.

    No nation has broken through this impasse as it developed, without bringing vast amounts of land into “supply” in the urban economy via genuinely competitive automobile based development. If there is some other way to do it, no nation, including China, has discovered it yet. I suggest the vested interests are too great.

    The concentration of economic land rent around fixed rail routes, and under conditions of strict growth-containment “planning”, serves as a rationing mechanism for property, and the attributes of property such as access to amenities. “Automobile based development” and decentralised employment and amenities, is the ultimate “democratisation” of access to employment and urban amenity.

    It really matters what are the quantities of “entry and exit points” for each type of transport system, and the amount of land brought into “supply” by each type of transport system. Roads and cars might be the most expensive transport system, but such a system minimises wealth transfers via economic land rent to such an extent, that most people are better off. It is a reality that households “housing plus transport” costs (and the various options for the same) are far lower in the “automobile dependent”, unconstrained, low housing cost cities.

    If a city is to be planned around public transport rather than flexible mobility and land use, mechanisms have to be found to avoid the concentration of economic land rent under both the planning of the “transit oriented development” and the necessary prohibition on automobile based development (with which I do not believe mass public transport can possibly compete on a level economic playing field). The fact that so many people voluntarily pay even more than the total cost of “automobility” (the cars, the petrol, the insurance, the repairs and maintenance, taxes of a level more than necessary to pay for infrastructure and adjust for externalities) to be able to drive; while public transport riders have to have 50% to 95% of the system costs subsidised, or they will not use it; is evidence of massive “consumer surplus” to automobility, and none with mass public transport.

  9. GSM says:

    China’s “end” will be a political one. That would mean there is a better choice offered to the Chinese people than present. Looking about, I don’t see it yet or any time soon. Not within a decade at least.

    As long as lives generally improve and they maintain food security then the CCP will have power by consent, if not by force.

  10. The Claw says:

    What do the “rational, objective, scientific people” have to say about the climate change implications of 390 million cars in China?

    I reckon if they were all facing the same direction, and they all tried to take-off at the same time, then there might be earth rotation change implications.

    • PhilBest says:

      Thanks, Claw, the thread was getting a bit skinny up there where Lorax introduced the CAGW issue.

      This fraud is in its last death throes right now, I reckon. The shrillness of its supporters is a measure of their desperation, not their sincerity.

      But of course as the next mini ice age sets in due to solar minimums, “an overwhelming consensus of authoratative scientists” will be conjured up once again by the utopian political Left, to tell us that in some way “global capitalism” is responsible for this, too. Oh, and for earthquakes, volcanoes, tsunamis, asteroid strikes, what have you.

      I saw a cartoon recently that showed some anthropologists in the future discussing our civilisation, they were looking at “ancient records” and one was saying to the other, “it looks like they used to sacrifice a capitalist every time they thought their gods were angry”.

      • The Lorax says:

        Yeah whatever…

        Given that you guys hold very different views to me on this issue, I was wondering whether there was any common ground?

        FWIW, its long been my belief that the climate science community and the environmental movement has completely failed to prosecute the case for reducing carbon emissions, and I finally found someone who is talking sense on this issue. The authors of “The Death of Environmentalism” put forward a very compelling case that environmentalists should embrace technological solutions, nuclear energy, fracking etc and abandon Malthusian fear-mongering as the only realistic way forward.

        I’d appreciate it if you watched and posted your response:

      • Pfh007 says:

        Often people are not clear what they are sceptical about.

        My impression is that very few if anyone is sceptical that

        1. The quantity of ‘greenhouse’ gases in the environment is rising.

        2. It is the result of human activity

        There also appears to be little scepticism that a substantial increase in greenhouses gases is likely to have some sort of environmental or climatic impact.

        The scepticism appears to mainly focus on the following.

        1. The extent of that change and the rate at which it will occur.

        2. The implications of that change for

        (a) Humans

        (b) Plants and animals

        Considering the limits of our ability to predict the weather patterns for the next year or two some of the stuff that gets published as what will happen over the next 50 -100 years is clearly science fiction.

        Simply – no one really knows how the complex systems will interact and whether we will end up with a steamy wet greenhouse or a dry hot dessert. No precisely which places will be which.

        Every day we get some boofhead making claims that the weather today confirms XYZ.

        My recollection is that over the last few years even the El Nino / El Nina predictions have not been accurate until a few months before they actually happened.

        Nothing wrong with that but telling people that they are idiots if they see long time scale predictions for what they are – ie ‘scare mongering’ – does not help encourage people to take the issue of the human impact on the environment seriously.

        I should note that I think most people do take it seriously – even if they have not changed their behavior as much as people may wish (including me).

        IMHO – I suspect climate change will be less an issue for humans and more an issue for everything else that lives on the planet. Mainly because most other species have less ability to adapt to even minor changes in the climate and changes that occur quickly will probably be too much for them.

        Humans are pretty good at using technology to cope with climatic conditions.

        Keep in mind that even a doomsday 95% kill rate of the human population (6B approx) would still leaving a human breeding colony of 300M – roughly the world population at the end of the Roman Empire I think.

        The survivors could all cluster in the USA and turn the rest of the world into a large nature reserve. (I am only half joking about this)

        A population of 300M is plenty large enough to support all of the industry and technology required to sustain an advanced society.

        For me the issue is more about conserving non renewal resources whenever possible so they last as long as possible and restricting the human population of the petri dish called earth to some number that is unlikely to greatly limit the survival ability of most of the other specie on the planet.

        That probably makes me mildly misanthropic.

      • The Lorax says:

        I really didn’t want to have yet another discussion about climate science. I find these discussions descend into shouting matches and abuse, and are always a complete waste of time.

        What I really wanted to talk about is the failure of the environmental movement to convince the wider community to take action to reduce emissions, and what that action should be. The speakers in the video (linked above) suggest that the only way forward is massive technological investment in clean energy until we get to a point where clean energy is cheaper than fossil fuels.

      • Alex Heyworth says:

        James Lovelock now thinks that nuclear is the way forward. See Worth reading his letter in full.

      • The Lorax says:

        Lovelock has been a support of nuclear power since 2004.

      • Alex Heyworth says:

        Good. The more the better.

      • Pfh007 says:

        By the way thanks for that link to the video it was very interesting.

        Though I was slightly disturbed to be viewer 666 !! of the video. Shame gangnam style gets 1.2B views and an interesting video on a subject of significance gets less than 1000.

        PS: I wasn’t seeking to start one of those binary climate science debates. Rather just pointing out that while there are the outer fringes who completely disagree most of the debate seems to get bogged down because there is a distinction between what I would call climate science and climate science predictions.

        I think there is a quite a lot of agreement on basic climate science. The problem tends to arise in relation to climate science predictions.

        Probably because predictions by their nature allow more room for ‘faith’ claims and speculations fueled by broader philosophical perspectives.

        The more reasonable predictions to tend to get drowned out by the sensational.

        Their comments about how prediction is going to get harder and harder does not surprise me.

  11. 3d1k says:

    Lorax. Interesting talk, thanks. You will have recognised much of what they said as being unnervingly similar to my own (expressed from a mildly agnostic viewpoint) views on climate threads here at MB.

    Some points of note:

    – Abandon ‘small is beautiful’ thought. Abandon the dark zero-sum Malthusian visions and the idealised and nostalgic fantasies for a simpler and more bucolic past in which humans lived in harmony with nature.

    – The choice is not whether to constrain our growth, development and aspirations or die. It is whether we will continue to innovate and accelerate technological progress in order to thrive.

    – Green politics has embraced Malthusian premise despite the fact is has persistently failed for the better part of three centuries. Human technology and ingenuity have continually confounded Malthusian predictions yet Green ideology continues to cast a suspect eye toward the very technologies that have allowed us to avoid resource and ecological catastrophes.

    – Serial predictions of collapse/peak oil/ etc continue to fail.

    – Green ideology must accept an enormous expansion of nuclear power is necessary.

    – Soft energy path is a dead-end. The notion that the nation might meet it’s future energy needs by renewable energy or low cost energy efficiencies has defined green energy proposals since the 60s and has been codified into dogma. Renewables are expensive and difficult to scale.

    – Acknowledge reality: Rebuild the entire global energy system with technologies we mostly don’t have today in any form that could conceivably scale to meet the challenge [exactly as Foss says]

    – As climate science advances there will be greater uncertainty of impacts and anthropogenic causations more uncertain.

    – Greens have not toned down their rhetoric or reconsidered their agenda in a manner that might be more palatable to their opponents but rather by cranking-up apocalyptic claims about global warming – claims that were increasingly inconsistent,ironically, with the scientific consensus whose mantle the Greens claimed.

    Refreshing to have listen to a rational discussion of green politics and ideology by two individuals that obviously care. They see how the extreme or lunatic fringe has damaged the green agenda and are proposing a rational mature realistic approach the way forward. They even conceded to rubberyness of some climate science/economic models where if the result was not the one wanted, change parameters until the desired result is achieved!

    • The Lorax says:

      I’d agree with all those points except the last two. While the Greens apocalyptic claims about climate change aren’t helpful in convincing the mainstream of the need for action, the scientific consensus is firming (not weakening) and the climate is changing more rapidly than was forecast a decade ago.

      And yes, while uncertainties are inevitable in any scientific prediction, at no point do Nordhaus and Shellenberger dispute that the climate is changing, will continue to change, and the primary driving force is anthropogenic.

      But I largely agree with what you say, especially on nuclear power and innovation, and renewables not being able replace fossil fuels by themselves. I remain a Malthusian — because, after all, the Earth is finite — but I agree that scaring the public witless with visions of environmental catastrophe is counter productive.

      Question for you: Nordhaus and Shellenberger suggest that large government-funded investment in (and procurement of) promising technologies is absolutely necessary. Do you agree, or are you ideologically opposed to government’s picking winners?

      • 3d1k says:

        Whilst Nordhaus and Shellenberger obviously believe in anthropogenic induced climate change they caution that as the science evolves even more uncertainty in regard to impact and anthropogenic causation will arise. I interpreted this as fitting neatly with the rejection of the ‘extreme warning’ school – a preparedness on their part to allow good science to reveal the unexpected, to warn against continued extrapolation towards the most severe.

        The other point (Green apocalyptic rhetoric not aligning with the science) was pretty much a direct quote from Nordhaus and Shellenberger and one that is becoming increasingly apparent (hence the point in the paragraph above?).

        Their call for massive government funded investment into energy technologies aligns with their ‘progressive’ political perspective. Funding along the lines they consider necessary is highly improbable. Simply too much scope for fiscal waste at taxpayer expense. Major scientific discoveries often follow a process of rigorous analysis and research however there are many discoveries that are serendipitous in nature and these arise in a more organic atmosphere. There is likely merit in government supporting these technologies upon discovery and development via regulatory/tax incentives and upon proof, adoption.

        I am not ideologically opposed to government picking winners. Good luck to them if they can – I reserve judgement in that regard.

      • The Lorax says:

        My interpretation is that the error bars are getting bigger, but the trend is irrefutable, and recent climate data has certainly been on the high side of predictions made a decade ago. But I don’t want to get into an argument about this, what’s important is that fear mongering hasn’t worked for 20 years, so its time for a new approach.

        Re: government investment:

        N&S made the point that venture capitalists expect a lot of failure, with perhaps 1 in 20 investments paying off. We accept this for VCs, but we don’t for government, when government can absorb more failure than anyone in the private sector. Why?

        N&S also attest that most big technological breakthroughs were made in government or military labs (e.g. the internet) and we really can’t expect major breakthroughs on clean energy without government investment.

      • Jackson says:

        Lorax, one the issues with tech breakthroughs is the need for “big science” to produce them. The days of Edison working on his own are gone, we’ve picked all the low hanging fruit tech-wise. No-one is going to crack the thorium reactor in a lab at USyd.

      • PhilBest says:

        I have revisited this thread a bit late. I would just like to comment that I am already familiar with Nordhaus and Shellenberger, and respect them. Lorax, were you disagreeing with 3d1k about the extreme, opportunistic, dogmatic nature of most of the Green movement? I would agree with him and disagree with you. If the entire Green movement was like Nordhaus and Shellenberger, we would not have all this unintended consequences nonsense like the global economy’s carbon intensity having ceased to reduce as fast as it was when left to its own devices. Refer Gwyn Prins and John Rayner, “The Wrong Trousers: Radically Rethinking Climate Policy”.

        I also respect Patrick Moore, and think his judgement of Greenpeace and the Green movement generally, is accurate. With the collapse of Communism, the Green movement was swamped with activists desperate to use any vehicle to attack “global capitalism”; and to hell with actual real life environmental outcomes.

        I strongly recommend the writings of Jesse Ausubel on the “decarbonisation of the global economy”. Heck, I recommend everything Ausubel writes. He is not just a technology optimist, he is a technology GENIUS; he KNOWS what the future already holds on the existing known trajectory of technology. Almost NO “Green” activists know ANYTHING on this score; they do not WANT to know, and any promising technological solutions will be strongly opposed by them. No nuclear! No gas fracking! No hydro dams! No fish farming! No GE! etc etc etc.

        I also strongly recommend Matt Ridley’s “The Rational Optimist” book and blog.

      • The Lorax says:

        Lorax, were you disagreeing with 3d1k about the extreme, opportunistic, dogmatic nature of most of the Green movement?

        I think he was agreeing with me that the Greens strategy of scaring people with visions of climate apocalypse have been counter-productive, and have not resulted in good outcomes for emissions reductions.

        Equally statements like this “This fraud is in its last death throes right now, I reckon. The shrillness of its supporters is a measure of their desperation, not their sincerity.” are completely counter productive.

        Frankly, when I see stuff like that I just stop reading and ignore everything you say.

    • The Lorax says:

      expressed from a mildly agnostic viewpoint

      Is that a joke, or are you serious?

    • cyrusp says:

      “Serial predictions of collapse/peak oil/ etc continue to fail.”

      Don’t confuse collapse predictions with peak oil predictions.

      Peak oil predictions are precise forecasts by geologists and have so far held up to rigorous peer review.

      King Hubbert, an oil geologist predicted that the USA would experience peak oil in 1970 and he was right on the money. ASPO (Association for the study of peak oil) forecasted an Australian peak around 2000 and they too were correct. Global peak oil is only a matter of time (if not already passed):