Regular guest contributer James Glover (@zebra) takes a closer look at the Coalitions climate change policy.

Malcolm Turnbull, an Australian MP, did a rare and risky thing last week. He actually broke away from the political spin-cycle and explained some figures underlying the cost of the Coalition’s “Real Action on Climate Change” policy. Naturally he was attacked by both the Labor government, who are having trouble selling their own Carbon Tax policy, and his own party colleagues who were horrified that he didn’t stay “on message”. The Coalition quickly bunkered down under orders from the top to avoid discussing Turnbull’s “outburst”. So what was he saying anyway and why was it so controversial?

To see why we need to explain the difference between the Labor Party and conservative Coalition’s policies. There are really only two broad differences. Both policies recognise that anthropogenic climate change is scientific fact, not speculative political fiction. Both recognise the need for action (ie. spending money) on combating climate change. But where they differ is in how global warming should be reversed and how to raise the money to do so. It is not commonly understood but the real difference between the policies is the former.

The Carbon Tax (or its close relative the CPRS) aims to reduce carbon emissions by making carbon pollution relatively more expensive than cleaner, alternate sources of power (and really it’s all about power generation). In order to do this they need to raise the price of carbon powered energy sufficiently to tip the balance in favour of wind, wave, geothermal, biofuels or solar energy (as explained in a recent post here on the Mule). Of the money raised by the Carbon Tax, about half goes back to subsidising the increased power bills of the less well-off. Of the remainder, most goes to developing cleaner sources of energy at lower cost. As explained in the earlier post, when there is no more carbon pollution then there is no more carbon tax to distribute. So ultimately, unless the cost of alternate energy comes down to the levels currently enjoyed by coal, gas or oil based power, in the long run the less well off will be much less well off.

While the Coalition’s “Real Action on Climate Change” has more than a whiff of policy-on-the-run, it can be presented as a respectable alternative. It says that we should ignore the fruitless and expensive attempt to cheapen alternative power and accept carbon pollution as a fact of life. In order to mitigate the effects of carbon pollution, though, we need to remove it from the atmosphere after the pollution has occurred, not at the source. This will cost money. A lot of money. Australia alone currently produces about 0.2 billion tonnes of carbon (not C02) each year. That’s a cubic block of carbon approximately 500m x 500m x 500m*. Each year. Anybody who thinks sequestration is the answer has to find somewhere to put all that carbon for a start. Or plant several million trees a year. The only hope for this reactive approach to reducing carbon is that some method is found which removes large amounts of carbon from the atmosphere at a relatively small cost: and much smaller than the likely Carbon Tax price of $20-40 per tonne. While such methods are conjectured, for example spreading iron filings in the ocean to increase carbon uptake by marine organisms, to say they are untested is an understatement. Equally we could allow carbon to increase in the atmosphere but mitigate the effects of global warming by using giant sunlight reflecting shields. Or paint the Sahara Desert white. Hey, stranger things have happened. But at the moment all these methods remain firmly in the province of science fiction.

So what did Malcolm Turnbull actually say that was so exciting to friend and foe alike? Well, using Treasury forecasts of population and economic growth, that 500m carbon cube will have grown to 850m wide by 2050 (650m tonnes) if we do nothing. Assuming we can mitigate the effects of carbon pollution, or pay someone else to do it for us, the cost could be as low as $15 per tonne or $18bn per year. Assuming the population has doubled by 2050 that’s about $500 per person, or an extra $50 per week on the average household tax bill. Given the extreme rubberiness (definitely not vulcanised rubber) of these figures, that’s pretty much what the Carbon Tax will cost as well. If the initial price of the Carbon Tax is set at $30 per tonne, then over time this should come down as alternate energy becomes actually cheaper due to technology improvements and economies of scale, not just relatively cheaper. Indeed if the Real Action plan involves buying permits from other countries who have set up some sort of CPRS and use alternate energy sources, then the equilibrium cost of both plans is probably pretty much the same, i.e. $15 per tonne. The real action policy really only comes out ahead if one of the fanciful ideas for removing carbon en masse, post production, pays off.

Of course the Coalition’s policy has to be funded somehow, and herein lies the second difference between the two. The Coalition’s policy will involve raising taxes, and probably income taxes as opposed to the Carbon Tax favoured by Labor. So any claim on the Coalition’s part (a point made by Mr Turnbull) that the major benefit of their policy is that it won’t raise electricity prices is totally spurious. Both policies will lessen household discretional spending. By the same amount. That’s all voters ultimately care about. Turnbull also claimed that their policy had the advantage that if “climate change is crap” as Tony Abbot famously is purported to have said, then it can all be dismantled without much cost. For that statement alone, sending a dog-whistle to his party’s climate skeptic supporters, Mr Turnbull deserved the public flaying he got, if not for the right reason.

*Note: in the above I have assumed that 1m cubed of carbon weighs 2 tonnes which is the density of graphite. It obviously depends on the form of carbon used. It is intended as an indicative figure only. Though I wish someone would actually build a structure of that size and point out to everyone this is how much carbon a year we are producing

My now traditional annual pilgrimage to the South coast of New South Wales saw the rainiest weather I can remember. While it was nothing on the scale seen in Queensland and Victoria over recent weeks, it did take its toll on some of the wildlife: we saw dozens of dead porcupine puffers washed up on the beach, apparently the victims of an algal bloom triggered by the rains. On the plus side, the lack of sunshine did help me to catch up on a bit of overdue reading, including a review copy of a Beginner’s Guide to R which you can expect to hear more about when I manage to finish writing the review.

I also read two books about climate change, which were very different in style and content.

Merchants of Doubt

The first was Erik Conway and Naomi Oreskes’ Merchants of Doubt (How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming). The book is not really about climate change per se, but rather the modus operandi of a number of key climate skeptics. In the process it sheds some interesting light on a question I considered here on the blog about a year ago: why does belief or disbelief in the reality of climate change tend to be polarised along political lines? Most of the protagonists in the Merchants of Doubt are scientists, many of whom were physicists involved in the original US nuclear weapons program. The thesis that Conway and Oreskes build is that these scientists were committed anti-Communists and as the Cold War began to thaw, they saw threats to freedom and capitalism in other places, particularly in the environmental movement. That, at least, is the explanation given as to why the same names appear in defence of Ronald Reagan’s “Star Wars” missile defence scheme, in defence of the tobacco industry (first arguing against claims about the health risks of smoking, later about the health risks of second-hand smoke), dismissing the idea of acid rain and finally casting doubt on claims of human-induced climate change.

While I would not expect the book to sway any climate change skeptic, it should at least encourage people to think a bit harder about messengers as well as the message. It certainly prompted me to do just that. When reading the chapter on the second-hand smoke controversy, I immediately thought of an episode of the Penn and Teller’s very entertaining pseudo-science debunking TV series Bullshit*. The episode in question, as I remembered it, did a convincing job of portraying the risks of second-hand smoke (SHS) as dubious at best. Watching it again was eye-opening. Looking past the scathing treatment of the anti-SHS activist, I focused instead on the credentials of the talking heads who were arguing that the science was not settled. The two main experts were Bob Levy from the Cato Institute, a libertarian think-tank, and Dr Elizabeth Whelan, the president of the American Council on Health and Science.

Levy’s voice immediately suggests he is a smoker, which does not, of course, disqualify him from questioning the science of SHS. More intriguing is the fact that the Cato Institute regularly appears as a company of interest in the Merchants of Doubt. Conway and Oreskes draw a number of links between the Cato Institute and both the defence of the tobacco industry and skepticism of global warming, particularly in the person of Steven Milloy who, before joining Cato, worked for a firm whose main claim to fame was to provide lobbying and public-relations support for tobacco giant Phillip Morris.

As for the American Council on Health and Science, it sounds at first like some kind of association of health professionals (which is presumably why Warren chose the name). It is in fact an industry-funded lobby group…sorry, I mean an independent, nonprofit, tax-exempt organisation. Exactly how much of their funding comes from where is now shrouded in mystery, but here are the details as of 1991.

Of course, scrutinising the backgrounds Levy and Whelan does not prove that their claims are wrong. It does, however, raise the question of why Penn and Teller did not interview anyone more independent, perhaps even a scientist, who expressed the same doubts.

What’s the Worst That Could Happen?

The second book on climate change that the rain helped me to read was Greg Craven’s book What’s the Worst That Could Happen?. I bought this after watching Craven’s amusing, if flawed, video “The Most Terrifying Video You Will Ever See”. Craven, a high-school science teacher in Oregon, has clearly workshopped the issue of climate change extensively with his students and the insight he wants to share in his videos and his book is essentially that the whole problem can be viewed from a game-theoretic perspective. Rather than trying to decide what is true or not (are the skeptics right or are the warmers right?), the important question is should we be acting or not.

Craven’s Global Warming Decision Grid

In his video, Craven uses an action versus outcome “decision grid” to argue that the consequences of not acting in the event that global warming turns out to be true are worse than the consequences of acting (i.e. economic costs) if it turns out to be false. The argument is entertaining, but unfortunately flawed. The problem is that it can be applied to any risk, however remote. As he writes in the book:

Simply insert any wildly speculative and really dangerous-sounding threat into the grid in place of global warming, and you’ll see the grid comes to the same conclusion–that we should do everything possible to stop the threat. Even if it’s something like giant mutant space hamsters (GMSHs).

The book is an attempt to rescue his idea by developing a series of tools to help sift through the arguments for and against climate change without having to actually understand the science. Along the way, he includes an extensive discussion of confirmation bias which I enjoyed as I am fascinated by cognitive biases. Ultimately though, his conclusions rest on an argument from authority. While he makes an excellent case for the important role that authority plays in science, this approach will not win over the skeptics I know: I can already hear their riposte in the form of the establishment’s rejection of Albert Wegener’s theory of continental drift.

Skeptics aside, What’s the Worst That Could Happen? is an extremely accessible book (perhaps even too folksy in its style for some) and is probably best read by those who are not already entrenched in one camp or another and are just sick of the whole shouting match.

* Long-time readers may remember that Bullshit has been mentioned on the blog before in this post about bottled water.

Regular Stubborn Mule guest James Glover (@zebra) turns his statistical expertise on some apparently contradictory polls gauging opinions on climate change.

Two polls came out today on the question of whether people believed climate change is real and if so whether it is caused by human activity. The first was a Newspoll published in The Australian and the second was by Essential Media and was commented upon by Essential’s Peter Lewis on ABC’s The Drum. Intriguingly, the Newspoll suggests 73% of Australians believe in climate change with a significant human contribution (so called Anthropogenic Global Warming or AGW). Now The Australian has copped a bit of flak lately for its alleged anti-climate change agenda, but leaving that aside this poll suggests that AGW should be practically a closed book politically as an overwhelming majority believe in it. Essential Media describes themselves as a research tool for progressive political campaigns. Essential’s poll indicates that only 45% of people believe in climate change caused by human activity. In the accepted narrative of such things the results would have been around the other way and the tweetsphere would be apoplectic accusing The Australian and News Corp of once again distorting Newspoll results for their own right-wing political agenda. So what is happening here?

First a note on sampling error. Essential polled 1896 people while Newspoll contacted 1,123 people. For polls where the expected split is approximately 50% a good rule of thumb for margin of error (MoE) is 1/√sample size. In the two polls here this gives MoEs of 2.2% and 3.0% respectively. MoE represents two standard deviations from the sample average so differences of 25% are extremely unlikely (like 10^-10 probability unlikely) to be explained by a unfortunate random choice of sample from the general population.

The most likely explanation is that one or both of these polls suffer from an underlying sampling bias. This would be easy enough to generate artificially—just poll people in Newtown if you want to get more people who believe in AGW or in Bob Katter’s seat for the opposite result (is this a little glib? Maybe, but you know I am right). But legitimate pollsters like Essential and Newspoll rely on the rigour of their sampling technique. Especially as every time you publish a controversial result, a large section of the population who disagree with it will accuse you of bias. There are a number of techniques to reduce bias—one is to ask coquestions whose population statistics are well accepted. For example if in your poll you found that 46% of the respondents were female and 54% were male you can readjust the result to reflect the actual population average of 51:49. I assume both polling organisations follow standard methodologies to minimise bias. Often though their actual methodologies are proprietary so question marks remain. A famous political polling agency was well know to always come up with polling results that reflected the political opinions of its founder after “adjustment for bias”.

Some indication that there isn’t an overwhelming bias are some additional questions about voting intention. Here are the results:

I would have to say that the differences in the numbers are on the borderline of being consistent with the MoEs I estimated. In any event the Newspoll which has a higher number believing in AGW has less Coalition voters (though about the same Labor+Green votes). It seems unlikely that the votes for Independents and other alone could account for the 28% difference in the polls on the question of AGW.

So that leaves us with the polls themselves. I have assumed so far that they asked the same questions, but there are major differences. Here are the actual questions and results:

Essential

Newspoll

Now what appears at first to be a headline difference between the polls is more subtle. It is quite hard (I tried) to map the answers between them exactly to compare the results. For example Essential doesn’t ask if the respondents directly if they don’t believe in climate change at all (18% in Newspoll) so presumably the climate skeptics get lumped under “Don’t know” (19%) which will also include those who believe in climate change but don’t know if it is caused by human activity or don’t know if climate change is real. That Newspoll total of “don’t knows” and skeptics is 23%, a bit higher than Essentials “Don’t know” of 19% but within the MoEs as reflected by the voting intention results.

However we can try to compare the two main results which boil down to “Believe climate change is real and human activity is significantly affecting it” of 73% (Newspoll’s headline result combining “solely” and “partly” caused by human activity) vs Essential’s “Climate change is happening and is caused by human activity” of 45%. The difference appears huge. The only thing I can think to explain this is that when not offered the choice of “solely” vs “partly” caused by human activity the Essential respondents threw their lot in with “caused by a normal fluctuation in the Earth’s climate”. In other words the results are consistent if most people who believe that “climate change is real” but don’t believe it is “solely caused by human activity” believe it is “partly caused by human activity” but mostly due to “natural fluctuations in the Earth’s climate”.

What is clear here is that the wording of polls is important and that both polls failed to tease out the subtle distinctions in people’s views on climate change (though Newspoll did a better job of this than Essential). There are also question marks about the sampling bias as shown in the voting intention results. But the headlines of both polls will superficially look like totally different results. And that is a problem when the results are used to support political rather than scientific views on anthropogenic global warming as fact or fiction.

Yesterday’s Sydney Morning Herald featured an opinion piece by Rodney Tiffen on Australia’s sluggish response to climate change. Deliberately provocative, the discussion was framed from the outset in the language of competition:

An international competition in self-righteousness would be closely fought. But Australia must be a strong contender.

Tiffen went on to draw on data from the International Energy Agency (IEA), but got his statistics slightly wrong in the process:

If we restrict the analysis to the most populous 130 countries, those with a population of 3.5 million or more, Australia is the world leader. Only a handful of small countries, especially oil producers such as Bahrain, Qatar and Kuwait, have higher per person emissions.

Australians may be disappointed to learn that we do not, in fact, take home the trophy in this competition. Both the United Arab Emirates and the United States have populations over 3.5 million and have higher per capita emissions than Australia at last count (2007). Nevertheless, coming in third place in this competition, Australia certainly punches above its weight, with per capita emissions running at 4.3 times the world average. Furthermore, as the chart below shows, we have been steadily catching up to the United States over the last 40 years. In fact, to give Tiffen the benefit of the doubt, the most recent IEA data is for 2007, so we may well be ahead of the USA by now.

CO2 emissions 1971-2007 (Source: IEA)

The reason Tiffen looks at per capita emissions is to ward off one common argument for inaction on climate change, namely that China and the United States are the only countries that can make a difference. There is no doubt that these two countries dominate the overall production of emissions. Throwing Canada and Mexico in with the United States brings North American emissions to almost one quarter of the world’s total. Add China and almost half the world’s emissions are accounted for.

Total CO2 emissions for 2007 (Source: IEA)

Nevertheless, if the aim is to attempt reductions in world emissions, Tiffen’s focus on per capita emissions is entirely appropriate. No-one would be convinced if the United States viewed its emissions along State lines, thereby arguing that their emissions were not so big by global standards after all (although, this defence would probably not be much use to California). While countries may be actors on the world stage through their political proxies at climate conferences, emissions are ultimately the product of people (both at home and at work) and not countries. Ranking countries by per capita emissions is thus useful as it gives some indication of where emission reductions may be more readily achieved. The chart below shows the top 25 (big and small) countries in terms of per capita emissions.

Top 25 per capita emitters for 2007 (Source: IEA)

Qatar ranks so high on this scale that it compresses the figures for all of the emitters below it, so here is the chart again with a somewhat truncated scale.

Top 25 per capita emitters for 2007 (Source: IEA)

There are certainly some small countries with high rates of carbon emissions per capita, but looking at a larger scale reveals that developed countries are the worst in per capita terms. It is worth noting, though, that Europe is doing better than the rest of the OECD and is also ahead of former members of the Soviet Union.

Per capita emissions by region for 2007 (Source: IEA)

Another useful approach is to consider emissions per dollar of economic output. This serves to highlight “inefficient” emitters, not to shame them but to identify where spending money on the problem is most likely to deliver significant results. It should come as no surprise that a league table of the highest emitters per dollar of gross domestic product (GDP) is a catalogue of troubled and/or small nations. Note that these figures are calculated based on conversion to US dollars using market exchange rates. Using purchasing power parity instead does reorder the list somewhat, but the names are largely the same.

Top 25 emitters by emissions/GDP for 2007 (Source: IEA)

This perspective suggests that when developed countries consider programs to assist developing countries to reduce their emissions, they could reasonably focus on significant but inefficient emitters. The chart below provides a possible target list, showing the 10 worst-performing countries in terms of emissions per dollar of economic output after restricting to countries with emissions of at least 150 million tons of C02 per annum.

Top 10 large emitters by emissions/GDP for 2007 (Source: IEA)

Earlier this week, @pureandapplied brought to my attention the emissions data that has been published by the Department of Climate Change in Australia. Their report comprises data for the 2008-09 reporting year provided to the Greenhouse and Energy Data Officer by corporations whose greenhouse gas emissions exceeded 125 kilotonnes*. A few corporations are missing from the list for a number of reasons, including failure to provide their data in time for the report’s publication (a sorry excuse indeed). Nevertheless, the data makes for some interesting reading. As @pureandapplied remarked, for example, Qantas was responsible for more emissions than Shell: those air points are producing a lot of CO2-equivalent emissions!

The data is reported in two categories, “Scope 1″ and “Scope 2″ emissions. The definitions of the two scopes are as follows:

Scope 1 emissions are the release of greenhouse gases into the atmosphere because of activities at a facility that is controlled by the corporation. An example of this would be gases emitted by burning coal to generate electricity at an electricity production facility (i.e. a power station).

Scope 2 emissions in relation to a facility, are the release of greenhouse gases emitted at a second facility because of the electricity, heating, cooling or steam that is consumed at the facility. An example of this would be greenhouse gases emitted to generate electricity, which is then transmitted to a car factory and used there to power the car factory’s lighting. The greenhouse gas emissions are part of the factory’s scope 2 emissions. It is important to recognise that scope 2 emissions from one facility are part of the scope 1 emissions from another facility.

The report is very careful to note that these two scopes should be used warily. In fact, it warns that the two figures “should not be used individually, or added together” to estimate liabilities under any emissions abatement scheme. That is a red rag to a Mule, so I will indeed look at them individually and added together. The chart below shows the top 25 emitters in the Scope 1 category.

Top 25 Scope 1 Emitters

It should come as no surprise that the big Scope 1 emitters are primarily power generators, although there are a number of mining companies in there, along with Qantas thanks to its burning of jet fuel. Scope 2 tells a somewhat different story.

Top 25 Scope 2 Emitters

Here “poles and wires” make an appearance: Transgrid and the like, move energy from place to place that has been generated elsewhere. So, the Scope 1 emissions are counted by the generator, but the tranmission company wears the Scope 2 emissions. Woolworths manages an impressive fifth place, perhaps thanks to the lights in all of their supermarkets? Wesfarmers, the owners of the Coles supermarket chain, rank higher still.

Finally, here are the top 25 emitters by the combined total of Scope 1 and Scope 2 emissions. Not surprisingly, the generators dominate once more.

Top 25 Scope 1+2 Emitters

Also included in the data is the total amount of energy consumed by each corporation. It is in these numbers that I stumbled upon something of a puzzle. Envestra produced a reasonably sizeable 627,161 tonnes of Scope 2 CO2-equivalent, but had one of the lowest levels of total energy consumption at only 193 GJ. What have they been up to? Guesses are welcome!

* Also included are those corporations holding a reporting transfer certificate.

In today’s Sydney Morning Herald, Ross Gittins has an opinion piece entitled Mealy-mouthed pollies see voters as a bunch of suckers. In it he argues that politicians are not to be believed when they start talking about taxes: they are more interested in playing issues for their electoral effect than actually saying what they believe about a tax. After all, if Labor really believed all their arguments against the goods and services tax (GST) back in the days of Kim Beazley‘s 2001 “Rollback” campaign, wouldn’t you expect to hear something from the current Labor government about the GST?

Perhaps this goes some way to explain why no politician in Australia is brave enough to enunciate the unavoidable fact that if, as a nation, we want to reduce carbon emissions, there will be a cost.

This is true regardless of whether your scheme of choice be Labor’s proposed emissions trading scheme (ETS), a carbon tax or the latest offering from the coalition, an emissions reduction fund. The reason is simple. The bulk of Australia’s power generation is sourced from coal-burning power-stations and this is because coal is cheaper than any other source, including natural gas, solar, wind or geothermal. Achieving a meaningful reduction in Australia’s carbon emissions will require a gradual phasing out of coal-burning power stations, replacing those reaching the end of their life with generators using more expensive alternative sources. Ultimately someone, somewhere must bear this cost if the shift is to occur.

Some would argue that “the big polluters have to pay”. That is easier said than done: these polluters would want to preserve their profit margins and so in practice any additional costs imposed on power generators and other industrial polluters would be passed directly on to their customers anyway.

Others would prefer to rely on people opting to reduce their own emissions. One avenue for this currently open to Australians is provided by the GreenPower program. Established by Commonwealth Government in 1997, GreenPower allows energy retailers to provide their customers with an accredited “green” option. This allows households and businesses to buy some or all of their power from lower emission generation sources. Needless to say, these options cost more than the standard offering. According to the 2008 GreenPower audit, 947,268 customers were using a GreenPower product, representing around 10% of Australian households. While this may appear at first glance to be an impressive take-up in 10 years, digging into the figures a little deeper gives a different picture. For many of the retailers, close to 90% of the retail customers have elected to buy the cheapest GreenPower product which only sources 10% of the householder’s power from alternative sources. For businesses the number using the 10% option is even higher. So, relying on customer choice alone, the GreenPower program has only resulted in a shift to lower emission sources of about 1 or 2%.

Both emission trading schemes and carbon taxes aim to provide a far bigger shift by closing the price gap between cheap but carbon-intensive power sources and the more expensive alternatives. Economically the key difference between a tax and a trading scheme is that the cost of carbon imposed by a tax is fixed by the government, while the price imposed by a trading scheme would vary with supply and demand.

Most economists are attracted to trading schemes, pointing out that the problem with a tax aimed at reducing emissions is that you do not know how high to set the tax to get a desired reduction in emissions. While government can progressively tweak the tax to get to the target, it still requires significant guesswork. In contrast, under a trading scheme, the emissions target can be set in advance and then an appropriate number of “emissions permits” are issued (at which point, some environmentalists get queasy at the thought of providing business with the right to pollute, but that is an emotional distraction). These permits can be bought and sold, so any polluters unable to reduce their emissions to the level of the number of permits they have can purchase additional permits from others who can achieve greater reductions. In the process, the price should automatically adjust (thanks to the famous–or infamous–invisible hand of markets) to a level that achieves the desired reduction target. Any emissions not backed by permits are subject to punitive financial penalties set at a sufficiently high level to make the purchase of permits preferable.

For carbon taxes the price is known in advance, but the amount of reduction achieved is unknown. For a trading scheme, the reduction is known in advance, but the price is not.

That is the theory at least. In practice, both approaches have enormous practical complexities, not least the challenges of monitoring compliance. Furthermore, the trading scheme proposed by the Labor government, known as the Carbon Pollution Reduction Scheme (CPRS), is not quite as pure a trading model as economists would like since it comes with a price cap. This means that, while the market is allowed to determine the price of carbon, the price cannot trade above a pre-determined level. Under the proposal, the cap would be set at $40 per ton of carbon for the first few years. This means that if the market price of emissions was in fact higher than $40 per ton, the CPRS scheme would in fact operate more like a fixed-price carbon tax.

As for the coalition’s reduction fund, it resembles a carbon tax approach to some extent in that it does not impose a particular emissions target. But the key difference between the reduction fund and either a carbon tax or a trading scheme is that it would be up to the government to determine the most promising approaches to reducing emissions and offering financial inducements to pursue these approaches. So it involves the government “picking winners”, to use a phrase favoured by free-market enthusiasts who consider markets far more efficient than governments at making decisions about allocation of scarce resources and, presumably, the best approach to dealing with climate change. To see the Labor government advocating a market solution and the Liberal/National Party coalition advocating a government-led approach is perhaps the most peculiar aspect of the current climate change debate.

While there are many reasonable discussions that could be had about the relative merits of all of these schemes, sadly the debate driven by the politicians is far more likely to be which scheme is or is not a “great big new tax”. The fact that a trading scheme is not a carbon tax does not somehow mean than taxpayers and other consumers will not end up paying for the emissions reductions. Equally, the money in a reduction fund has to come from somewhere and, since the scheme is being advocated by a party with a deep-rooted fear of government deficits, it is safe to say that it will come from increased taxes, reduced public spending elsewhere or a combination of the two. Again, someone will pay.

The last Federal election and opinion polls held before and since then all suggest that, recent visits by Lord Monckton notwithstanding, the majority of Australians want something to be done about reducing our country’s emissions. Is it too much to ask of our politicians to stop shouting “It’s a tax!”, “No it’s not a tax, yours is!”? I hope it is not, but in the process, everyone else has to accept the fact that reducing our emissions will come at a cost and do not believe any politician who tries to claim otherwise.

In the wake of the singularly unproductive COP15 Climate Change conference in Copenhagen, I have been reflecting on the polarisation of views on climate change along political lines. Whether or not human activity is leading to climate change is a question of scientific fact: it is either happening or it is not. So knowing someone’s politics should not help to predict their attitudes towards climate change, and yet it does.

It is not conclusive of course. Most people do believe that climate change is occurring and this includes people of a full range of political views. But, climate change skeptics seem to sit overwhelmingly on the right side of the political spectrum, while those most concerned about the effects of climate change are largely left of centre. Why is this?

Some would offer conspiracy theories to explain the dichotomy. The Australian Liberal senator Nick Minchin is an outspoken critic of climate change and in November last year he claimed that the left has been intentionally stirring up fears about global warming. While his comments elicited a storm of angry responses, including from his then party leader, Malcolm Turnbull, these views are widely held among skeptics. Indeed the controversy about climate change within the Liberal Party and its coalition partner the National Party was an important contributing factor to the downfall of Turnbull from his leadership position a few weeks later. For another conspiratorial slant, Ian Plimer regularly argues that academics are pushing the idea of climate change simply to help boost their research grant money.

At the same time, many on the left of politics are convinced that climate change skeptics are all stooges of “Big Oil” and closely monitor the flow of money from oil companies to individuals and organisations associated with climate change skepticism. Ironically, conspiracy theories tend to generate new conspiracy theories and some skeptics are now arguing that Big Oil is behind moves around the world to introduce emissions trading schemes.

Whether or not any of these theories are plausible, they are ultimately inadequate to explain the degree of left/right polarisation in the climate change debate. Most of the people I know who are concerned about climate change are not academics and are sufficiently hard-headed to be unlikely to have simply succumbed to scare-mongering. Equally, none of the people I know personally who are skeptical about climate change have ever received a single dollar from an oil company. So there is something left to explain.

I came across one promising line of thought while reading Risk by Dan Gardner, which was kindly lent to me by fellow blogger Neerav Bhatt. The book, subtitled “why we fear the things we shouldn’t – and put ourselves in greater danger”, examines the way that many of the techniques humans have evolved to make rapid decisions can lead to biases. These techniques are subconscious rules-of-thumb which psychologists refer to as “heuristics”, the study of which was pioneered by Daniel Kahneman and Amos Tversky*, among others. Malcolm Gladwell’s book Blink also explores the same ground, albeit in somewhat less academic terms.

Psychologists have identified many heuristics, such as the “availability heuristic”, which Gardner calls the “example rule”. People use this heuristic to determine how common something is based on how easy it is to recall examples of that thing. The easier it is to recall, the more common it must be and vice versa. This is an extremely reasonable rule of thumb to have hard-wired into the brain and no doubt useful out on the savanna, but it can trip us up.

Kahneman and Tversky illustrated this in many studies, including one** in which students were asked to think about words used in novels. They were told that four pages of a typical novel would contain about 2,000 words. They were then asked to estimate on average how many words in those four pages would have the form _ _ _ _ ing. The average estimate was 13.4 words. Another group was asked the same question, but for words of the form _ _ _ _ _ n _. This time the average estimate was only 4.7 words. This result is illogical because words of the form  _ _ _ _ing comprise a subset of those of the form _ _ _ _ _ n _ and so should be less common not more so. The explanation lies in the fact that people find it far easier to recall words of the form _ _ _ _ing than words of the form _ _ _ _ _ n _. You can easily test this yourself by asking someone to think of as many _ _ _ _ _ n _ words as they can in 30 seconds and then do the same for _ _ _ _ing words. Odds are they will come up with far more the second time around.

So, this is a simple example of the availability heuristic leading us astray. Admittedly, it is an artificial example, tailor-made for the psychology laboratory. But there are many more practical examples of how the availability heuristic can lead to incorrect decisions. One example Gardner gives is the apparent paradox that in earthquake-prone regions many more people buy earthquake insurance when the odds of a quake are lowest (immediately after a quake when it is fresh in their memory) than when the odds are highest (when there has not been a quake to relieve the pressure for a long time).

The heuristic that may provide some insight into the polarisation of views on climate change is the “affect heuristic”. With this rule of thumb, we tend to associate good things with good things and bad things with bad things. Gardner calls the affect heuristic the “good-bad rule”. An example of the “bad” is the strong influence that the negative association many people have with nuclear weapons (particularly those who lived through the “mad” mutually assured destruction years of the cold war) has on the unpopularity of nuclear power. On the “good” side, people tend to associate sun-bathing with holidays, beaches and sun. This explains why it has proved so hard to get many people to have an aversion to tanning that in any way approaches the one that they have for nuclear power, despite the fact that far more people die from skin cancer than from nuclear accidents. The point here is not to argue in favour of nuclear power or to chastise those who like a little time in the sun. Rather, the affect heuristic explains how positive or negative associations can skew the assessment of risk.

So how can the affect heuristic help to explain attitudes to climate change? I would argue that a lot hinges on prior attitudes to a major source of carbon emissions: large-scale industry.

Even before the issue of climate change arose, many on the left, particularly those associated with the environmental movement, held a fairly dim view of big business, especially resources and power companies. If you were already suspicious of industrialisation, the first time you heard about climate change the affect heuristic would lead you to find it very likely that big business was messing up the world for everyone. On the other hand, people on the right of politics tend to hold the view that business is what has made human society as successful as it is today. All of the technology and other innovations that have delivered us our way of life have been stimulated by economic activity and, of course, much of that has been driven by large-scale industries. Needless to say, some personal enrichment whether through direct employment or investment in shares would also help to nurture a sanguine view of big business. Even without money channelled from Big Oil, the affect heuristic would tend to make such people far less receptive to the idea that the activity of industry could be harmful on a global scale.

People have many reasons for believing things, so this is unlikely to be the whole story. No doubt there are people on both sides of the debate whose motives and actions are not always pure. Nevertheless, for me the affect heuristic does provide a useful way of viewing the political polarisation of attitudes towards climate change.

* Kahneman and Tversky are best known for essentially inventing the fascinating field of behavioural economics, which I touched on in one of my earliest blog posts, “Why I Always Buy the Same Sandwich”.

** This study is described in Chapter 3 of Heuristics and Biases.

I’m hoping to try something a little bit different here on the Stubborn Mule: a guest post.

But first some background. Recently I came across this article in the Independent exploring the “dark side” of Dubai. It paints a very grim picture of massive crumbling developments, environmental degredation, Western ex-pats who either revel in luxury or are thrown into debtors prison and a society built on the backs of an immigrant sub-class of near slaves. I know very little about Dubai, or the rest of the United Arab Emirates (UAE) for that matter, but found the article a compelling read. So, as usual, I shared the link with my social networks on twitter* and Facebook. This drew an immediate response from a friend who has lived in the UAE who thought it painted a very distorted picture of Dubai. So, I have offered her a guest spot here on the Mule to present an alternative perspective.

So, with any luck you’ll be reading the first guest post here very soon.

UPDATE: the article is written, but waiting on clearance. Fingers crossed!

FURTHER UPDATE: sad to say it looks as though the piece is not going to see the light of day. My guest poster’s employer has ruled out any scope for publishing the piece, even if it is done anonymously. It was to have given a more positive picture of Dubai, but the experience suggests to me that on the score of openness at least, Dubai does not do well!

* In fact, I suspect that I came across the article on twitter in the first place.

The third Earth Hour takes place tomorrow night and once again I have been asked about carbon emissions from candles. So, without wanting to be a party-pooper, I thought I would dig up some calculations from a year ago, courtesy of the friendly family power engineer (you know who you are!).

Tomorrow night, many people will turn off the lights for an hour and light up candles instead. Since the candles themselves emit carbon dioxide (CO2), the question is will we end up reducing emissions for the hour or not? Of course, it all depends on how many candles you light up and what sorts of lights you turn off.

Since candles don’t actually emit very much light, the temptation (particularly in bars and restaurants) is to light lots of candles.  To make it concrete, think of a 40 Watt (W) traditional incandescent light-bulb. Although a 40W light bulb is not very bright, it actually emits the equivalent light of around 40 candles. The amount of CO2 emitted is equivalent to at most 5 or 6 candles. So if you turn off one light and replace it with enough candles to generate an equivalent amount of light, you’d be emitting at least 7 times as much CO2 as using the light-bulb. So, the moral of the story is not to light too many candles!

The comparison gets worse if you use energy-saving compact fluorescent lamps (CFL) rather than incandescent bulbs. A 7W CFL bulb gives about the same amount of light as a 40W incandescent bulb or around 40 candles. However, the carbon emissions from this bulb is equivalent to one candle. Admittedly, this is a fairly dim bulb, so you’d be more likely to be using a brighter bulb. But even if we considered a 14W CFL bulb (equivalent to a traditional 75W bulb) this produces emissions equivalent to two candles but the light output of almost 80 candles.

So if it was just about reducing emissions, you would be far better off leaving on CFL bulbs (and switching as many of your old bulbs to CFL as possible) than lighting candles at home or in bars and restaurants. Of course, it’s more about the symolism than anything else. Furthermore, there is a real saving in commercial premises like office blocks where the lights are turned off and nothing is turned on in their place.

One final point people make is the source of the CO2. Coal-burning power stations release carbon that has been buried in the ground for a very long time, while beeswax candles release carbon that has only recently been captured (of course paraffin candles are just as bad as coal-fired power stations!). While this is true, the end result in terms of CO2 in the atmosphere is the same. Perhaps the best thing to do is to buy the candles and keep them in the bottom drawer for emergencies and keep the carbon captured, while lighting your house with CFL bulbs!

The (Optional) Details

For the brave of heart, here are some of the details used to calculate the figures discussed above.

The aim of these calculations is to compare the carbon emissions of candles, traditional incandescent light-bulbs and energy-saving compact fluorescent lamps (CFL). To make this comparison fair, we should take into account the fact that candles emit much less light than light bulbs. The traditional unit of brightness for candles is candlepower, so I will start with a hypothetical candle that emits one candlepower of light. In more moden units, this is a luminous intensity of 0.981 candela.

Now, to complicate matters, the light output of bulbs is typically quoted in terms of lumens, a measure of luminous flux. The relationship between flux and total intensity depends on the area over which the light is emitted (e.g. a pinhole light might have high flux, but not much total intensity). For our purposes, I will assume that we have an unshaded bulb which emits light in just about every direction.

According to wikipedia, a 40 Watt (W) bulb has an output of 500 lumens, which converts to an intensity of 39.8 candela or 40.6 candlepower. So, our relatively dim 40W bulb generates as much light as about 40 candles. While there is a fair amount of variation amongst CFL bulbs, a typical 14W CFL is equivalent to a 75W incandescent light bulb. To get to the equivalent of our 40W bulb, we would need a CFL of about 7W. To achieve the equivalent light intensity of a 40W incandescent bulb, it would therefore require 40 candles or one 7W CFL.

Each hour a small candle burns at least 2.5 grams of candlewax (most candles would be worse than this), which contains a little over 2 grams of carbon, producing 7 grams of CO2 emissions.  So 40 candles would produce about 280 grams of CO2 each hour. These figures are based on the Hex Jar burn time in this table of candle burn times, which burns 1.5 oz of candlewax in 12 hours. Many others in the list burn at a faster rate.

Coal-burning power stations typically emit CO2 at the rate of 1kg/kWh or 1 g/Wh (need to dig up a reference on this one) (US National Renewable Energy Laboratory figures of 1.114kg/lWh are quoted here). This means that the 40W incandescent bulb produces around 40 grams of CO2 emissions each hour, while the equivalent CFL bulb is only 7W, and so it produces only 7 grams of CO2 emissions each hour. Of course, if your power comes from renewable sources, the emissions of these bulbs may be lower.

Photo credit: Rickydavid on flickr (Creative Commons).

Australia’s Prime Minister, Kevin Rudd, triggered waves of protests from environmentalists this week when he annouced that Australia’s target for emissions for 2020 would be a mere 5% reduction from the levels in 2000. With substantial commitments to emission reductions from other countries around the world, this target would be increased to 15%. The Government was at pains to point out that Australia’s population growth makes this target more ambitious than it sounds. However, by world standards Australia’s emissions are very high, whether measured per capita or by gross domestic product. This means that Australia should have more scope for relatively inexpensive emissions reductions than many other countries.

So 5% does seem to be a very unsatisfactory target. If you are a climate-change skeptic, even a 5% target is a needless waste of time and money, while if you take forecasts of climate-change seriously it seems woefully inadequate. However, rather than focusing on the target itself, in this post I will look at the implications that the Government’s plan will have where consumers will see it most directly, on the price of petrol.

In their White Paper on the carbon reduction scheme, the Government proposes a cap on the price of carbon of $40 per tonne for the next 5 years while, for their financial impact modelling, a price of $25 per tonne has been assumed. In an earlier post I calculated the impact of the price of carbon on the price of petrol. Here are the results for a range of carbon prices.

So, if the Government’s assumption is correct that the price of carbon will initially be around $25 per tonne, we can expect an increase in petrol prices of 6 cents per litre. Even if the price of carbon reaches the $40 cap, the impact on petrol prices will only be around 10 cents per litre. I say “only” because that 10 cents is small compared to extraordinary moves in petrol prices seen over the last year due to movements in the price of crude oil. From July to November, the price of petrol in Sydney fell by almost 40 cents per litre, according to prices published by the Australian Automobile Association, and based on my observations has fallen another 20 cents since then. Even compared to the 38 cents per litre fuel excise, 10 cents seems a modest figure. The chart below shows the dramatic moves in petrol prices along with projected prices based on the daily price of Singapore 95 refined oil, based on a regression model I have used in a number of posts in the past.

Introducing an emissions trading scheme for carbon will eventually affect a wide range of consumer prices, but based on the relatively small increase in petrol prices that it will produce, the scheme is not likely to have a significant impact on consumer behaviour. The scheme will do all its work on the behaviour of businesses and, given the dire financial straits we find ourselves in today, this is presumably why the Government has been so unambitious with their target. But this does also highlight that there is a lot more that the Government could be doing to reduce consumer carbon emissions beyond the trading scheme itself.

Photo Source: Foto43 on flickr (Creative Commons).