PC Report endorses carbon pricing

The much anticipated Productivity Report into carbon pricing is out. The full executive suymmary is available here. I will provide full analysis tomorrow. In the mean time, The Australian  reports that:

The report found Australia is currently spending between $44 and $99 per tonne on carbon abatement policies in the electricity generation sector.

…“As a proportion of GDP (gross domestic product), Germany was found to have allocated more resources than other countries to abatement policies in the electricity generation sector, followed by the United Kingdom, with Australia, China and the US mid-range,” the commission’s report states.

In most countries examined, carbon abatement measures had led to relatively small reductions in electricity consumption.

The key exceptions were Germany and the United Kingdom, where emissions-reduction policies had boosted electricity prices by 12 and 17 per cent and reduced emissions by 3 and 19 per cent respectively.

And AAP/Business Spectator that:

Germany spends $137 to $178 a tonne, the United States $43 to $50, the United Kingdom $75 to $198, Japan $156 to $287, South Korea $225 to $401, New Zealand $7 to $8 and China $35 to $57.

Germany is spending 0.28 to 0.33 per cent of its GDP on efforts to cut dangerous pollution. The United Kingdom is spending up to 0.1 per cent, while Australia is allocating up to 0.5 per cent of GDP.

China’s contribution is up to 0.4 per cent while the US and Japan are at 0.2 per cent.

And here are the key findings:

CARBON EMISSION POLICIES IN KEY ECONOMIES

  • More than 1000 carbon policy measures were identified in the nine countries studied, ranging from (limited) emissions trading schemes to policies that support particular types of abatement technology.
  • As policies have been particularly targeted at electricity generation and road transport emissions, the Commission analysed major measures in these sectors.
  • While these disparate measures cannot be expressed as an equivalent single price on greenhouse gas emissions, all policies impose costs that someone must pay. The Commission has interpreted .‘effective.’ carbon prices broadly to mean the cost of reducing greenhouse gas emissions .— the .‘price.’ of abatement achieved by particular policies.
  • The Commission.’s estimates essentially provide a snapshot of the current cost and cost effectiveness of major carbon policies.
  • The subsidy equivalent, abatement achieved and implicit abatement subsidy have been calculated for policies and aggregated by sector in each country.
  • As a proportion of GDP, Germany was found to have allocated more resources than other countries to abatement policies in the electricity generation sector, followed by the UK, with Australia, China and the US mid-range.
  • Estimates of abatement relative to counterfactual emissions in the electricity generation sector followed a similar ordering, with Germany significantly ahead, followed by the UK, then Australia, the US and China.
  • The estimated cost per unit of abatement achieved varied widely, both across programs within each country and in aggregate across countries.
  • Emissions trading schemes were found to be relatively cost effective, while policies encouraging small-scale renewable generation and biofuels have generated little abatement for substantially higher cost.
  • The relative cost effectiveness of price-based approaches is illustrated for Australia by stylised modelling that suggests that the abatement from existing policies for electricity could have been achieved at a fraction of the cost.
  • However, the estimates cannot be used to determine the appropriate starting price of a broadly-based carbon pricing scheme.
  • The estimated price effects of supply-side policies have generally been modest, other than for electricity in Germany and the UK.
  • Such price uplifts are of some relevance to assessing carbon leakage and competitiveness impacts, but are very preliminary and substantially more information would be required.

 

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Comments

  1. Err, this endorses carbon pricing, how?

    “In most countries examined, carbon abatement measures had led to relatively small reductions in electricity consumption.

    The key exceptions were Germany and the United Kingdom, where emissions-reduction policies had boosted electricity prices by 12 and 17 per cent and reduced emissions by 3 and 19 per cent respectively.”

    Seems pretty damning to me. And this is a report commissioned by the government. Hardly an objective source.

    • Carbon E Coyote

      You get no reductions in consumption where you don’t price carbon, but if you do price carbon you get emission reductions.

      How is that damning?

      • It’s damning because there are almost no reduction in emissions but prices skyrocketed. And that’s accepting that the emission reductions are reported accurately, which I would be shocked if they are.

        This shows that any ‘price’ on carbon is bad for the economy.

        • Carbon E Coyote

          MattR, this is ridiculous. You describe an up to 19% reduction in emissions as “almost none” but a 12% rise in prices as a “skyrocket”.

          The point of the PC report is that pricing carbon is a way more efficienct than the myriad of other policies in place.

          • /sigh indeed

            Let’s average this out.

            A 14.5% increase in electricity prices saw an 11% reduction in emissions, at a time when the economy is falling.

            Hardly something to yell and scream about.

          • Then there’s this:

            “Germany spends $137 to $178 a tonne, the United States $43 to $50, the United Kingdom $75 to $198”

            What a collosal waste of money.

          • you missed the point – those prices per tonne are NOT for a carbon price method, they are for Direct methods just like Tony plans ….

          • Yes, I know. My second comment in this reply tile was pointing out how much has been wasted so far.

            I think that any price above $0 is too high.

          • Do german reductions represent a genuine reduction or merely the closing down or inefficient east german industry post unification.
            Was Nuclear involved with either reduction?

            When the worst case cost of global warming is estimated at the equivalent of $2-$12 per tonne, how is this cost effective?

      • Yeah, But having fun with it, and You’d
        Jump-out of your skin ,should
        Everyone stop re-charging their mobile phones
        Drop the Foxxy-Auzzy and go free-view
        Turned off the Net,that’s right..n,then gave up junk food and started growing fruit and veg for food and fuel.
        Bought, motor bikes and trikes,mores and fours.
        Installed fireplaces ,in tune with
        Cranking the BBQ each night..couplea reds..might
        even get a bit of folk-dancing going ,lift the population … just
        need a bit of cheap meat herding around ?
        know what I mean,arr
        if not NZ can simply send more with the canned beans…

        Not bad in short, for the environment/socially
        and a power bill ,in this a
        HyperPTvoidiance chase….
        yeah,the kids still get the computers at education..and
        Papers may still have a hard-time…But Land-lines and Tomato sauce might be good stocks if it ever did ,turn-out

        Sorry for going off,track..as it all seems to be gaining support ,as reported… Thanks CeC…JR

    • Outsidetrader

      To be fair – I think the PC’s done a pretty good job of being impartial on this one.

      The Government really wanted them to write a report saying that policies in other countries already imposed a high implicit carbon price and that Australia had fallen behind. Instead, the PC correctly flagged that it’s impossible to infer an implicit carbon price in other countries. Instead the PC looked at abatement outcomes, and found Australia is in the middle of the pack, and not at the back.

      The PC’s point about a carbon price being the most cost effective way of reducing emissions is nothing new – but it is good to see this point reaffirmed.

    • “Emissions trading schemes were found to be relatively cost effective”

      “The relative cost effectiveness of price-based approaches is illustrated for Australia by stylised modelling that suggests that the abatement from existing policies for electricity could have been achieved at a fraction of the cost.”

      • You mean a report commissioned by the government are taking the opinion that government policy is correct? I’m shocked.

        Like I said to CeC, this report does nothing but prove that carbon dioxide abatement is not worth the cost, not by a long shot.

        • so… any report which supports GW, the govt, on in fact anything that doesn’t support your position is

          a) Fraud
          b) Wrong
          c) Greenie leftist propaganda
          d) all of the above…. and wrong

          you might be happier reading this http://www.dailymail.co.uk/ you will find that you are in the company of like minded friends …

        • OK MattR, we get your point:
          a)you don’t trust the PC to provide an independent assessment and
          b)no price is good the economy

          If there’s nothing else, thanks.

          • Sorry for not agreeing with the all powerful.

            B) Is accruate, no price is worth spending.

            A) No I don’t trust any report commissioned by this government. No matter how ‘independent’ the body it is still funded by the goverment thus simply cannot be objective.

          • H&H how is it harping? If you don’t want people talking about the same topic, don’t have a blogger who consistently posts about it. CeC made a post, I am presenting a contrary argument.

            If I didn’t have to repeat myself I wouldn’t.

          • Carbon E Coyote

            MattR, I’m sure you wouldn’t be questioning their independence if they came up with a conclusion you agreed with. Only problem is that the facts and the analysis don’t support your propositions.

          • CeC I questioned the objectivity and pointed out that it actually agrees with me, the cost is too much.

            H&H whatever you think I did I apologies. Lol…

  2. Alex Heyworth

    I note that Australia is already spending a higher proportion of GDP on abatement than the other countries examined. Maybe we should wait for a few of them to catch up.

    • That’s because we’re spending the abatement money incredibly inefficiently — Abbott Style — instead of putting a price on carbon and being done with it.

      • Alex Heyworth

        No argument from me on that one. Solar panels and pink batts, for a start. Then there’s the MRET. At least we’ve been saved from cash for clunkers.

      • There is an interesting section in the report about electricity generation in the UK.

        “fuel switching through the incentives created by the European Union ETS (the
        low flat bar at A$29/t CO2) and a similar amount of abatement from its much
        higher cost Renewables Obligation (at A$176/t CO2).”

      • Actually Germany is probably the most expensive because it has such comprehensive support for small scale solar PV by far the least effective way of supplying power and cutting emissions.

        Using a carbon tax /level playing field, large wind and solar thermal become viable long before solar PV.

    • Outsidetrader

      That was my takeaway from the reading too Alex.
      Leaving aside the debate about the appropriate policy response to climate change (ETS vs direct action vs sticking your head in the sand), I think this report shows that the arguement that we need to act now in order to not be left behind is a furphy.

  3. Ok, just the report.

    “Emissions trading schemes were found to be relatively cost effective, while policies encouraging small-scale renewable generation and biofuels have generated little abatement for substantially higher cost.”

    ‘Emissions trading schemes were found to be relatively cost effective’ is rank tautology, completely meaningless and a _purely financial_ opinion is required.

    None was offered.

    “renewable generation and biofuels have generated little abatement for substantially higher cost”

    Little abatment for substantially higher cost. In a _purely financial_ sense, the only outcome can be to scrap it then. No call of this nature was made.

    “However, the estimates cannot be used to determine the appropriate starting price of a broadly-based carbon pricing scheme”

    An analysis should be attempted to why this inability exists. There seems to be an aparent lack of scrutiny.

    Seems to be at odds with “Australia’s best econobloggers offering no nonsense analysis of the big picture “. Big picture can’t offer a null statement.

    “Such price uplifts are of some relevance to assessing carbon leakage and competitiveness impacts,”

    Well ‘price uplifts’ is a statement, and obviously a vested outcome.

    I found no such analysis of this statement.

    “but are very preliminary and substantially more information would be required”

    I hope its financial information, because we can’t talk about any other type.

      • OK, I see his analysis will be tomorrow.

        A third black mark for MB can wait until then.

    • how is “Emissions trading schemes were found to be relatively cost effective” tautological ?

      • tau·tol·o·gy (tô-t l -j ).

        A tautology is a logical statement in which the conclusion is equivalent to the premise

          • Well for those who understand the mainstream science, any cost greater than zero to abate carbon dioxide is too much.

            But we can’t discuss that.

            Therefore any view opposing the mainstream science has to be prevailing.

            With the immature hysteria that surrounds this view than anything cost less than infinity is worth the abatement measures. This view fits in with the qualitive statement;

            “Emissions trading schemes were found to be relatively cost effective”

            It can ONLY be cost effective because to try and quantify the cost involves the science.

            We can’t talk about that here.

          • ah – so its not then.

            I am still waiting for you to link to any mainstream science that supports that view – any national academy will do … or even any governmental agency … anything mainstream in fact .

          • Outsidetrader

            Irrespective of whether abatement is good for the environment or not, a carbon price is relatively cost effective (when compared rebates and regulations).
            Ie the PC’s statement about relative cost is true regardless of the validity of climate science (ie tautological). Is that the point you were trying to make Rusty?

          • I hope that isn’t your idea of mainstream science … or am i attributing posts to the wrong discussion again cos we ran out of reply-depth …

          • You see, this is what happens when you present credible sources that go against the ‘consensus’. “Oh that’s not mainstream” “oh, they aren’t credible”.

            “Mainstream science” doesn’t exist. There is only science, your hypothesis is either supported by evidence or it’s not. The person presenting the case is irrelevant.

            But hey, science discussions are not allowed. You asked for a source, I gave it to you.

          • If the topic has been framed where we can’t discuss the science, and that we have to abate carbon dioxide, then;

            “Emissions trading schemes” .. or the premise

            Can either be cost effective

            Or

            Not cost effective.

            “were found to be relatively cost effective”

            …is the conclusion.

            To be cost effective, we actually have to know the cost of carbon dioxide emmisions, or discuss the science.

            We can’t discuss the science.

            In the absence of discussing the science, the premise is equivalent to the conclusion.

            Now, mainstream proponents.

            Duke University Physics/U.S Army research office
            The Hebrew Univeristy of Jerusalem
            Various departments of the Russian Academy of sciences.

            It is mainstream science throughout much of Japan, Russia and Brazil. it is the only real science.

            The Ku Klux Klimate change side is only really prevalent, or reached *ahem* ‘consensus’ in the anglo-sphere.

            And with them, all they have in regards to science is;

            i) an observation of an increase in carbon dioxide concentration in the atmosphere.
            ii) there is a certain spectrum of Infra-red radiation that once reflected from the earths surface is trapped in carbon dioxide. The amount has yet to be quantified.

            There is no science beyond that.

            Nada. Zip.

            You can not point to any conclusion supported by scientific research

            There is hysterical dogma surrounding very tenuous correlations, and easily discredited temperature readings as the main points of support.

            Other than that, there is nothing else.

          • Now what you have their RP is individual papers or opionion pieces with results which go against the idea – I am not denying that. That is the basis of scentific endeavour.

            But in terms of claiming that the overall conclusion of “mainstream science” ( your words not mine ) you are slightly off the mark.

            oh and i think you can take the Hebrew university off your list
            http://www.huji.ac.il/cgi-bin/dovrut/dovrut_search_eng.pl?mesge129577444305872560

            “Global warming is already affecting the earth in a variety of ways that demand our attention.”

            and the Russian academy – signitory to this
            http://www.nationalacademies.org/onpi/06072005.pdf

          • Erhh no.

            The Hebrew University of Jerusalem, like many in the mainstream sciences, admit there has been global warming. I admit there has been global warming.

            That’s not the issue.

            The issue is whether man has made any material impact on this global warmth.

            The mainstream science says we haven’t, only the lunatic domatic fringe says we have.

            My caveat for the Russian academy of sciences was;

            ‘_Various departments_ of the Russian Academy of sciences’.

            The media department is prone the public sentiment, not science. Much like politicians.

            Those that pursue scienctific outcomes based on science will ignore sentiment if it is wrong, even if it puts one in a minority position.

            Circle jerking and calling it ‘scientific consensus’ may work on the ant-establishment types that watch Q&A, but please, some of demand a bit more rigour.

            Get anywhere beyond an observation of an increase in carbon dioxide levels and I may reconsider, but until then, it remains to be dismissed.

        • Outsidetrader

          Wikipedia, the font of all knowledge, describes redundant two-word phrases as tautologies – eg “very unique,” “added bonus,” or “free gift.”
          However, I can’t find an example of this in the PC quote?

  4. The report demonstrates the obvious: it is difficult to achieve significant carbon abatement. The measures that can be taken are expensive and inefficient and entail an increase in the cost of electricity.

    So it easy to oppose them and there are political rewards available to those who adopt obstructionist/ denialist tactics.

    While it is easy to make these observations, they are no comfort. Climate change is already a real phenomenon and we are most likely already well down the path to irreversible and calamitous climate change.

    We really urgently need to lift our effort to find technical solutions to our energy supply dilemma and we need to start to think much more about disaster response than prevention.

    • “Climate change is already a real phenomenon”

      It always has been.

      “and we are most likely already well down the path to irreversible and calamitous climate change.”

      Not related to the report. For this your post should be deleted.

      • RP, there is no doubt whatsoever that the climate is changing at an industrially turbo-charged pace. To say the climate has “always” been changing is to deliberately evade the logic of the situation. The pace of change is without precedent in the period since the rise of our species.

        You and other deniers can comfort yourselves by pretending it is not happening. But this is no comfort to others. Willful ignorance simply confirms that humans, having induced this calamity, lack the capacity to fix it.

        • You can’t say there is no doubt, there is extreme doubt about the rate of change of the climate.

          The KKKlimate-changers have zero integrity in their readings that it can only be doubtful.

          Well if it’s no comfort to you, then you reduce your emmissions.

          And as far as wilful ignorance, I started off in the camp of believing AGW. The science however doesn’t go anywhere near the claims.

  5. At its simplest, the cost/benefit equations that apply to CO2 abatement are problematic. Current emitters have to accept higher costs and make risky investments in order to create possible future benefits for an indeterminate class of other people who have not had to share current costs.

    It is a hard sell.

    And it is not wonder that the older people are, the less they wish to spend on abatement; and conversely, the younger people are, the more likely they are to want some action.

    I think the same set of behaviours that cause us to produce/consume high energy goods and services – and drive CO2 output – are also responsible for preventing measures to reduce emissions. People focus on the present and the very-near-term, and are generally incapable of making very long-term changes to their behaviour. Humans do not work this way. We are doomed to go on doing the same destructive things until we can no longer do them. It is just the way we are.

    In this case, the best thing to do is to find non-destructive ways of meeting our energy demand, with or without a carbon-reduction scheme.

  6. The title of the blog is not accurate. Nowhere does the report endorse the imposition of carbon pricing.
    The report considers the cost effectiveness of different carbon dioxide abatement methods. But the report does not endorse carbon dioxide abatement. Therefore it cannot be said be endorsing carbon pricing which is one method of abatement. It wasn’t asked to endorse or oppose carbon pricing. The desirability or not of carbon dioxide abatement was outside of the remit of the committee.

    • Agreed, it’s like saying apples taste better than oranges, therefore apples are the best food. What about other fruits? what about meat? etc…

      • Well, the PC may have been asked to study the most effective method of capital punishment and concluded that a firing squad is the most effective. A blog headline could then have been written “PC endorses the firing squad for criminals”.

        • Yes, but look on the bright-side ,SinBad we’re
          hand-chuffed not blind-folded…
          JR

  7. Basically the report says that if we are going to shoot ourselves in the foot then we should aim for the little toe!

  8. If the Productivity Commission says it then it must be true. Men in suits are easily the most productive people ever.

    I bet he is so productive that he produced a heap of stuff today.

      • I’ve just had a thought. Could an accurate measure of the state of the economy be derived from the proportion of the working age male population who wear suits & ties. You could possibly even include females these days.

      • Nah Nah nah
        The Good guy’s Dress in black,
        Remember that,
        Just in case we ever face to face
        and make contact…The title held by me…MiB
        Means what you think you saw,you didn’t see..
        So don’t Blink…..cos..MB’s
        Taken the i out n put’n it back in Koolin
        Freezn up the Flack…
        Black suit’s with the Ray Ban’s on
        Walk in shadows,move in silence,
        Guard against all kinds of defiance
        But yo we ain’t on no government list
        We straight don’t exist
        Big names and lots of Finger prints
        Saw something strange,We’ll watch your back
        Cause,MB’s… Freezn the Flack…

        check it…JR

    • Au contraire…I think it may be the dawning realisation that we are actually joined to the rest of the world….and I know that is unpalatable to many in fortress Oz.
      What I found most amusing today was the MSM revelations that according to the PC report it appears that ‘other countries’ are also wrestling with this problem….who would have thought it possible? Unfortunately no one has yet asked the MSM why they have not provided more information on what the rest of the world has been doing in respect of this issue…preferring instead to infer its only here that a mad minority government would contemplate such a thing?
      Murdoch and cronies have a lot to answer for.

      • China Watcher

        The most glaring example is the divergence between MSM views that China is doing nothing, and the reality. When you actually talk to government, industry and everyday Chinese, you understand the emphasis being placed on shifting to a lower carbon economy. Carbon caps (and trade) are increasingly being rolled out across provinces with talk of ETS systems being trialled soon. Whowuddathunkit ?!!!

    • This country is going mad.

      Wrong.

      The country has already gone mad (for mining). Any move to price carbon is a move towards sanity.

      Lets hope the public mood turns strongly against the mining industry and we can start taxing the bejesus out of them.

    • Going mad, falling for spin, spouted by vested interests who’ve made an industry out of climate fear, aided and abetted by financial engineers and financially supported via the unwitting taxpayer.

      Carbon tax, keeping it simple:
      A tax we were assured would not happen.
      A tax that requires creation of a new bureaucracy.
      A tax that will have negligible impact in absolute reduction of global emissions.
      A tax that will be applied selectively, with a raft of political exemptions and exclusions.
      A tax that is disproportionately harmful to one sector (manufacturing) over another (services) – imposed at the very time the manufacturing sector is struggling for survival.
      A tax that in reality becomes simply another revenue stream for government – it’s supposed importance in reducing emissions lost on the fog of finance.
      A tax when morphed into an ETS becomes a plaything of financial markets…and then the penny drops…that’s what it was about all along.

      This country is going mad.

  9. China Watcher

    To all the climate change deniers out there. A question:

    Do you insure your house/possessions against fire damage?

    The reason I insure my house and possessions is not because I expect my house to burn down.

    But rather, if it did burn down (even if the likelihood is very close to zero), the consequences to me and my family would be catastrophic. I think this is more or less the general principle of insurance.

    Why/how is a price on carbon to mitigate climate change any different? Carbon is a known greenhouse gas (amont others). The costs of climate change might potentially be catastrophic for humans – locally and globally – so why not take out some insurance against this? And as pricing pollution is the classic example of a negative externality, it is economically efficient to price carbon.

    Indeed, there is sufficient uncertainty remaining around the science that surely this strengthens the imperative to take out insurance against potential catastrophic outcomes?

    • I am not a climate change denier, but my response to your challenge is that if you do not know the answers to your questions, and do not realize that this is a false analogy, you haven’t been paying attention. Time to repeat Climate Change 101.

    • To all the climate change deniers out there. A question:

      Do you insure your house/possessions against fire damage? ”

      Yep.

      “The reason I insure my house and possessions is not because I expect my house to burn down.
      But rather, if it did burn down (even if the likelihood is very close to zero), the consequences to me and my family would be catastrophic. I think this is more or less the general principle of insurance. ”

      Well the differnce is, fire is a real and known, and proven phenomenom.

      I however do not insure my house against Tyanosaurus Rex attack.

      The science in Jurrasic park has more credit than that of the science of AGW.

      “Why/how is a price on carbon to mitigate climate change any different? Carbon is a known greenhouse gas (amont others).”

      Well Carbon isn’t a gas. Carbon dioxide is. Small point, and I’ll place CO2 and an presumption going forward.

      However, that is a statement, not an argument. And this is where it all falls down.

      Climate realists accept Carbon Dioxide is a greenhouse gas. We know it captures a certain spectrum of Infra-Red radation.

      However the planets climate is a dynamic system that has dealt, and always deals with fluctuations in these levels. It is not a vacuum of just CO2.

      Now every time.. EVERY time the KKKlimate-changers have put forward a model to demonstrate ‘their understanding’ of the climate, they have got it wrong.

      They do not understand how the climate works, and a plethora of results have shown their biases frame assumptions to be of negative value in moving the science forward.

      The mainstream science is not pursuing Svalgaard’s theory of the fluctuation of solar activity. His theory is besically started 20 years after the Goddard institutes fraud but other than the reversed correlation of 1970-2000, the scientific observations are following the theory.

      Thus we have Duke and the U.S army now examining why the 30 years are out, and it appears to be the delayed thermal convection of oceans.

      “The costs of climate change might potentially be catastrophic for humans – locally and globally – so why not take out some insurance against this?”

      One reason is because the outcome might be beneficial for us. Even if mitigation was free, we may incur an opportunity cost.

      The only thing that says it will cost us is a bunch of lies spread by the junk scientists.

      “And as pricing pollution is the classic example of a negative externality, it is economically efficient to price carbon.”

      Carbon dioxide isn’t a pollutant, otherwise the other 97% of CO2 emited by nature would have had a significant impact on our health by now. You know how much ‘pollutants’ a volcano releases?

      “Indeed, there is sufficient uncertainty remaining around the science that surely this strengthens the imperative to take out insurance against potential catastrophic outcomes?”

      i) The science doesn’t say it’s catastrophic in all but the most hyperbolic claims. The moderate view of the wrong science says the migration of humans is the worst effect.

      ii) We have greater scientific understanding of an asteroid that would kill all mammalian life on earth, yet we do not invest in a weapons system to combat this threat. Would you be satisified to divert the sameamount of GDP into such a program?

      • China Watcher

        Hang on RP.
        “Well the differnce is, fire is a real and known, and proven phenomenom”.
        I thought that climate change events are historical fact?

        My point is this. The science has not proven with 100% certainty that human induced CO2 emissions influence climate change – I agree with you on this! But equally, the science has not proven with 100% certainty that human induced CO2 emissions DON’T influence climate change. So, as long as there is a non-zero probability that human induced CO2 emissions influence climate change, and that climate change will have costly consequences, shouldn’t we insure against these potential future costs?

        (Lloyds of London has been doing deep thinking around insurance and climate change risk for years and years now…)

        “Climate realists accept Carbon Dioxide is a greenhouse gas. We know it captures a certain spectrum of Infra-Red radation. However the planets climate is a dynamic system that has dealt, and always deals with fluctuations in these levels. It is not a vacuum of just CO2”.

        Agree. But no one has yet said, with 100% certainty, that the releasing of tens, if not hundreds of gigatonnes of carbon in the last 200-300 years (which took hundreds of millions of years to accummulate) will NOT place strain on the planet’s carbon cycle. I also agree that no one has stated with 100% certainty that it WILL place strain on the carbon cycle (although the speed of release relative to the speed of natural carbon cycle sequestration is anomylous by historical standards, I believe? And is also now being associated with changing sea chemistry eg: more acidity, etc).

        If the carbon cycle does become strained, the planet will seek some new equilibrium. Your point on benefits of climate change is fair (just ask Russia, they can’t wait for the permafrost to thaw, opening up Siberia to agriculture…..oh, and releasing billions of tonnes of methane….a far more potent GHG than CO2)…

        So my world is about insuring against potential costly consequences of climate change.

        RP, what would you have us do? Business as usual?

        • “So, as long as there is a non-zero probability that human induced CO2 emissions influence climate change, and that climate change will have costly consequences, shouldn’t we insure against these potential future costs”

          No.

          Firstly, it’s not the role of science to disprove a negative.

          Secondly we don’t even know if change will be costly, or at the very least cheaper than adaptation.

          “Lloyds of London has been doing deep thinking around insurance and climate change risk for years and years now”

          I work with insurance products, it is the ultimate rent-seeking industry and they will actually avoid covering risk with a high degree of probability.

          Try and get income protection insurance in a higk risk job, such as deep sea demolition. They will avoid assuming risk if it exists at abnormally high probability.

          Their model is about collecting premiums and not paying out. They frequently go to court to avoid paying out.

          “But no one has yet said, ….. will NOT place strain on the planet’s carbon cycle. I also agree that no one has stated with 100% certainty that it WILL place strain on the carbon cycle”

          The fact that carbon dioxide levels have been higher, and that the planet has been able to reverse these levels says it is a system that will adjust. A factor that the KKK’ers have completely ignored.

          “And is also now being associated with changing sea chemistry eg: more acidity”

          Not it hasn’t been associated. It’s an observed correlation with no scientific rigour on behalf of the KKK’ers.

          “RP, what would you have us do? Business as usual?”

          As long aas the real science points to it being a factor mostly associated with solar activity, then yes. i would do nothing.