The Climate Philosopher

The Solution to the Eurozone Sovereign Debt Crisis

2011-11-12T13:00:00.003Z

The Eurozone is in crisis. Wednesday's City AM's headline, 'ENDGAME', sums up the mood. But as the Chinese linguists and the German poets know, moments of crisis, as well as being moments of great danger are also moments of great opportunity. The danger in this case, is that the increasing price that Southern European countries have to borrow both represent, and themselves precipitate, a risk of sovereign default. Increasing yields become a self-fulfilling prophecy, a one-way bet for whichever nation-state is next in the firing line for the international bond markets. Finally, step by step the entire Eurozone unravels at potentially great cost to Euro-denominated bondholders and European taxpayers.

But there is another way; and that way is remarkably simple. Italian savers and depositors should fund the italian government; spanish savers and depositors should fund the spanish government, french savers and depositors should fund the French government, and german savers and depositors should fund the german government. Italians are prolific savers; just as their government is a prolific borrower. Italian bank deposits amount to €1.4trillion, 70% of that country's huge €1.9trillion public sector debt. If there was a way that these savers could fund the state; and another way to fund the banks could be found – then this would take off most of the pressure off the Italian government. Such a way can be found. Furthermore, this way not only helps out the highly indebted public sectors of the south; it would make the banking systems in these countries more stable too.

Governments trying to fix their bond markets are like pantomime artists trying to balance plates on sticks. The plates have to keep spinning, and in a way that is approximately stable. It's exceedingly difficult to keep the plates spinning: put taxes or cut spending too much and the economy would nosedive; not enough austerity and, some argue that the bond markets would take their revenge (although we don't seem to have seen an example when severe austerity has actually worked once the bond markets have decided that a country is in the firing line – but that's another story). All the politicians, European institutions, central bankers etc are frantically trying to keep the plates spinning, and therefore to keep the plates horizontally balanced. But there is another way to keep the plates horizontal. That way is to take the plates off the sticks and put them on the floor.

The financial system is well advanced at producing well structured financial products (ok, there have been some really badly constructed financial products, but those really are the exception to city know-how). Principles of such system are that the maturity and risk profile of assets and liabilities should be well matched. However, the system as a whole, and particularly the system of money, banking and government debt, would get a D- for it's financial construction. It is shockingly badly constructed; risk and maturity and liquidity profiles are shockingly badly matched. That needs to be changed.

I'll get to the point. We need to implement a version of full reserve or narrow banking; where every pound in an account is backed up by a real pound of state created money, including an accounting entry by state institutions. The deposits of the Italian banks should be transferred to the Italian central banks. In exchange the banks would issue new bonds with equivalent value to the Italian state. Those bonds could then be sold by the Italian government on the open market, and the revenues used to pay off most of the italian state's outstanding debt. The same solution can be implemented across the Eurozone. This would make deposits safer and would finance the state.

Updated: Beware! Austerity without end will not work and will endanger Europe!

2011-11-07T08:52:00.003Z

Substantially Updated 12th November 2011

Bitte bedenken Sie! Einschränkung ohne Ende wird nicht funktionieren und kann das gesamte europäische Projekt ernsthaft schädigen! Wir müssen bessere Möglichkeiten finden, um das Wachstum in den südeuropäischen Ländern zu unterstützen. Ein taktischer Rückzug ist notwendig. Zum Beispiel könnten weitere Währungen und weniger Rentenmärkte erforderlich sein. Vollständige reserve banking eingeführt werden sollte. So europäischen Staatsschulden sollten durch private Spar-und Anlageform finanziert werden, während Geschäftsbanken sollten neue Anleihen auszugeben.

Méfiez-vous! Austérité sans fin ne fonctionnera pas et risque d'endommager sérieusement l'ensemble du projet européen! Nous devons trouver de meilleures façons de soutenir la croissance dans les pays d'Europe du Sud. Un retrait tactique est nécessaire. Par exemple, plus, en parallèle, les devises et les marchés obligataires moins peut être nécessaire. La pleine réserve bancaire devrait être introduit. Ainsi européenne des dettes souveraines devraient être financées par l'épargne privée et des dépôts, tandis que les banques commerciales doivent émettre de nouvelles obligations.

* * *

The Eurozone crisis has two elements: a crisis of competitiveness and a financial crisis. We can solve the financial crisis (as perhaps is now being done) but the underlying competitiveness crisis remains. It is the competitiveness crisis that shows the underlying structural problems of the Eurozone, and it is this problem that must be solved at all costs for the entire future of the European project (a project, of course, that Britain has never truly bought into... but that is another story).

How can the Eurozone crisis be solved? This article will describe possible solutions. The most important point to recognise is that the leading Eurozone countries (Germany, primarily, but the other members of the Eurozone too) must be able to recognise that mistakes have been made, as a first step to solving it. Austerity without end simply will not work, and may destroy much of the credibility of the entire European construction.

* * *

In the summer I visited the Pyrenees Mountains in southern France. One day, my sister and I went for a walk. All was well until we lost the main path. So we walked on, up the valley that we expected to take, and then finally got to what we thought was the right path. The guidebook informed us that we would find a lake and then a barren lunar-like landscape. We found these things, but the walk was taking us much longer than we expected. The guidebook then suggested that we should climb until we reached a ridge. We saw a ridge in front of us, but by this time it was nearly 6pm and we were less than half way through our walk. Suddenly it dawned on us that the ridge in front of us was close to the summit of the Pyrenees, and the direction we were taking was west when the route was supposed to take us North. We were in the wrong valley.

I mention this episode because it shows the necessity of recognising a wrong turn. Sometimes we need to admit errors, in order to find a better way forward and to avoid disaster. This, in a manner of speaking, is what needs to happen with the Eurozone. Recognising an error or a structural problem created by human decisions is not the same as recognising that everything we did was wrong. Rather it is a humble admission of human frailty and a call to change path, or retreat for a while, to keep the whole show on the road. I believe we can apply the same lessons to the Eurozone at present time.

* * *

There are a number of interconnected crises in the Eurozone at present. The first can be broadly called a 'financial crisis' and includes the southern European governments of Greece, Italy, Portugal and Spain, the Eurozone banks, and some central European institutions, primarily the European Central Bank and the Eurozone Stability Fund. The second, more long running crisis is the crisis of competitiveness and growth problem in the same southern European countries.

As Martin Wolf of the FT has recently pointed out [1], the solution to the crisis must involve both financing and adjustment. Financing, because otherwise southern Europe would go bust; adjustment because without it, Southern Europe would be stuck forever in a low growth, high unemployment, state. Financing has been agreed at the Eurozone summit, subject to some implementation details. What is still to be worked out how adjustments can be made.

What is adjustment? Adjustment is the process of improvement of competitiveness in countries that have on going low growth and high unemployment. Competitiveness can be measured crudely by the price of a unit of productivity; by labour costs multiplied by real productivity per unit of labour. Productivity can be improved typically in three or more ways:

The exchange rate of the uncompetitive nation can devalue;
Inflation can rise in competitor countries;
The uncompetitive country can cut its labour costs voluntarily or through a slow, usually painful, process of deflation.

Typically, countries can accomplish a devaluation of the exchange rate rather easily; inflation in competitor countries is not usually under the control of the uncompetitive country; finally cutting the labour costs is the final option. This is usually the hardest, and is most difficult in a recession. It is an option that needs to be avoided at all costs, because the pain may prove too much for the Euro, or even for the European project in general. But it is the route taken in the Eurozone now, as the other options have been ruled out. We would be best advised to seek an alternative route.

* * *

One attractive solution to the debt crisis involves what is known as full reserve banking (or the related concept of ‘narrow banking’). Most of the money supply in the economy is bank deposits. And bank deposits are merely the bank’s 'promise to pay' currency on demand. Bank deposits differ from other promises to pay like bonds in that bank deposits can be used to settle accounts; hence they are money. So bank money is both a liability for the bank and is money. The consequences are that is possible to swap the liabilities of the state for the liabilities of a bank. The banks can issue bonds and the government can issue money. In that way, the Italian national debt would be primarily composed of private sector bank accounts at the bank of Italy (although the bank accounts could still be administered through the private banks). And the residual ‘loan fund’ could be fully private and could issue new debt and equity without major government regulation.

What are the complicating features in the European case? There are two: a) fiscal discipline in peripheral Eurozone states and b) competitiveness in peripheral Eurozone states. Can these problems be solved? Yes: but only by solving other problems too. Fiscal discipline can be enforced only by taxes that are actually collected, such as Europe-wide carbon taxes or fuel or property taxes in the specific states in question.

The problem of uncompetitiveness is harder. This can be truly solved only by Eurozone break-up or by equivalent nominal changes. But an uncontrolled breakup hits the credibility of the whole European project.

For the Euro itself, there are three options:

Keep the Euro; enforce central Eurozone bonds and/or central taxes such as upstream fuel taxes and use the ECB/Quantitative Easing/Full Reserve Banking to sort out the debt crisis;
Keep a pan-Euro but weaken the currency by creating a parallel currency in the northern European countries (including Germany and others); existing Euro obligations would be retained, but the North would transist to a new currency.
Let Greece default and then let them leave the Euro, and see the others fall too.

All options have their advantages and disadvantages. What must be made absolutely clear is commitment either way. Either Greece has the full commitment of Germany or it does not. If it does not, Germany needs to create an alternative structure. Once we have a group with full commitment defined; full reserve banking, transfer of bank liabilities to national savings banks, or government debt purchases must be used to squash any further debt crisis, and appropriate taxes must be raised to ensure proper tax collection.

* * *

So which would be the solutions that Europe actually takes? I propose three:

First, and most important is the introduction of full-reserve banking in the Eurozone. Under this system, European depositors would finance European governments rather than financing the banks. Italian commercial bank deposits would be, in effect, transferred to the Bank of Italy, and so on. With their liabilities to depositors taken away, Banks could issue new bonds and the money generated transferred to the central bank, to pay for the reduction in liabilities. This money could be used to purchase the outstanding government debt. Italian bank deposits amount to around €1.4trillion, a substantial part of the €1.9trillion Italian government debt.

Second is to do with currency, and is a partial retreat from the Euro idea. The plan would involve setting up an additional, initially parallel currency for the Northern European countries in addition to the Euro (which would continue to be pan-European). Over time, taxation and money issuance in a Northern-European block would be switched to a hard-Northern-Euro basis. All existing Euro-denominated nominal obligations would be paid in full but the basis of those obligations must be allowed to devalue in real terms.

Third, I wanted to mention some solutions to current account deficit financing. With monetary policy ineffective, fiscal policy must be used. But the northern European countries want to cut down on southern profligacy. The creation of more European government paper (money or government bonds) by the Eurozone and the spending of that paper into the southern economy would be an effective way to stimulate the southern economy. But who should create what paper and for what purpose? It seems to me that the appropriate thing would be for the Eurozone to create such paper and to spend it in the south; ideally on real assets such as power stations, but could also be on financial assets such as land. In that way the deficits of the south would be financed. Deficit spending is needed by the Eurozone to stimulate the South, and that deficits spending should be used to construct real assets and to stimulate the southern European economy.

* * *

Whatever happens in the Eurozone, it is essential that a single fact be noticed. Austerity without end will not work. It will not improve southern European competitiveness enough to compete with Germany, and the unhappiness caused will derail the whole European project. So a tactical retreat is needed. Such tactical retreats need to involve financing and adjustment. But what is certain is that we need more demand in the South of Europe in the short term, and not austerity without end. Creative ideas to promote more growth are needed; and a partial and managed retreat from the monopoly of currencies and the proliferation of government debt is required. We'd be better having two or more European currencies and a single Eurozone debt, backed by common carbon or land taxes. Most importantly, a version of full reserve or narrow banking should be put in place. This would allow European savers to finance a large part of European nations’ sovereign debts and would also promote greater long-term stability in the European banking system.

[1] ‘First Aid is not a Cure’, Financial Times, 11th October 2011; available at: http://www.ft.com/cms/s/0/f84a5d76-f368-11e0-b98c-00144feab49a.html#axzz1dUeHQJH3

Green Growth

2011-10-26T17:42:00.002+01:00

My proposals would focus on electricity market reform (focusing on very large amounts of investment in zero-carbon power) and a very large consumer-basis carbon incentive, (a tax refunded according to historical consumption for consumers; but not falling on producers until equivalent taxes could be placed on carbon-intensive inputs). This could be allied to financial reform (bank money-government money/governmetn debt/bank debt swap; and/or negative interest rates; and/or standardised green bonds).

A touch more complicated than saying just 'a carbon tax' but then the principles are basically the same, it would, I claim, stimulate the economy, not put people's bills up and avoid costly subsidies.

Stephen

Gesellian Monetary Policy

2011-08-11T19:12:00.001+01:00

Gesellian Monetary policy is, basically, the idea that you tax money. Gesell himself suggested you stamp money. Not much fun for savers, you might say. But money is an illusory asset: it is not backed by any real asset. Keynes argued that because the supply of money could not increase when demand increased, the existence of money (especially inflexible money ie gold) caused recessions.
Keynes argued there were two ways out of this conundrum -- a flexible money supply (central banking), or gesell's idea of taxing money.

Keynes argued that there are two problems with Gesellian monetary policy. The first set are to do with practicalities - stamping money is costly and could be faked. The second is that another commodity (land, precious metals, foreign currency) would step in as a store of value, replicating the role of money and leaving us no better off.

But there are solutions to the practical problems. One which I read about was to perform a lottery on the serial codes of banknotes. Another would be to impose chips on coins and notes. All these I find unconvincing. There's a better way. Separate bank money and currency so there is a separate cash pound (the british pound) and a bank deposit pound (call this the british 'sterling'). Instigate a given but slowly changing exchange rate between the two. Then tax the deposit pound and slowly devalue the cash pound relative the deposit sterling.

What do you do with the taxed deposit sterling? If you destroy it, isn't this the same as doing nothing in pounds terms? (It depends what transactions are written in: pounds or sterling). If you reintroduce it, isn't this the same as printing money?

(In regard to the second set of problems, you could tax them too; at some points asset inflation might not be a bad thing.)

An interesting thought experiment.

Stopping the looting

2011-08-08T22:22:00.001+01:00

The London riots show a 'pillage' economy coming to our streets.
The police obviously need to get a step ahead of the looters, or else this will overwhelm the ability of the police to keep things under control. The danger that looting would spread to everywhere if not stamped out.
The first thing to do would be to close down the Blackberry messaging service that seems to be used by the looters to coordinate their attacks.
A second measure would be to declare an after-dark curfew on various parts of the capital - ie shopping centres and shopping streets.
The third thing is to draft in sufficient police resources to impose this shutdown. There needs to be a small police presence guarding every shopping place and mobile units ready to reinforce these units anywhere where violence breaks out.

The Solution to the Eurozone Debt Crisis

2011-07-19T09:20:00.003+01:00

"Money is Debt" is the key message of recent money reform is video. Or at least 97% of it is. Let me explain. Most of the money supply in the economy is bank deposits. And bank deposits are merely a 'promise to pay' on demand, whatever numbers are in your current account. Bank deposits differ from other promises to pay like bonds in that bank deposits can be used to settle accounts; hence they are money. So bank money is both a liability for the bank and is money.

What does this mean? It means that we can swap the liabilities of the state for the liabilities of a bank. The banks can issue bonds and the government should issue money. Easy. Alternatively, the central bank can buy ECB bonds, and raise reserve requirements. Straightforward.

What are the complicating features. There are two: a) fiscal discipline in peripheral Eurozone states and b) uncompetitiveness in peripheral Eurozone states. Can these problems be solved? Yes: but only by solving other problems too. Fiscal discipline can be enforced only by taxes that are actually collected; such as Europe-wide carbon taxes or fuel or property taxes in the specific states in question. Uncompetitiveness is harder. This can be truly solved only by Eurozone break-up or by equivalent nominal changes. But an uncontrolled breakup hits the credibility of the whole European project.

So in sum, there are two options:
a) Keep the Euro; enforce central Eurozone bonds and/or central taxes such as upstream fuel taxes and use the ECB/Quantitative Easing/Full Reserve Banking to sort out the debt crisis
b) Split the North from the South of Europe; create a Southern Euro (Portugal/Italy/Spain/Greece/Ireland) and a northern Euro (Germany). It may be best for Germany and co to leave to set up their own currency (let's call it the ECU) rather than the other way around.
c) Let Greece default and then let them leave the Euro, and see the others fall too.

All options have their advantages and disadvantages. What must be made absolutely clear is commitment either way. Either Greece has the full commitment of Germany or it does not. If it does not, Germany needs to create an alternative structure. Once we have a group with full commitment defined; full reserve banking, transfer of bank liabilities to national savings banks, or government debt purchases must be used to squash any further debt crisis, and appropriate taxes must be raised to ensure proper tax collection.

The general theory of economics: a desert island allegory

2011-03-21T08:50:00.002Z

This short allegory attempts to understand a simple economy and how investment, inflation, growth are affected by banditry and taxation, the existence of money, and the financial sector. I attempt to show how the schools of economics (classical, Keynesian, Austrian, and Georgist) can be considered part of a general economic theory, that is surprisingly simple to explain and understand. This is relevant to anyone interested in how the economy works, and can be made to work better, giving our society greater real wealth and more freedom.

PDF version here

The Desert Island Economy
Consider a desert island with some farmland, a small wood, and two men: a farmer and a toolmaker. The farmer (Adam) spends all his available time farming. He tills the soil with the tools he has, and, as they wear out, he replaces them, by trading with the toolmaker. He produce a range of foodstuffs including growing apples in his orchard (to simplify we will refer only to apples as the primary unit of food). The toolmaker (Fred) harvests his wood sustainably to manufacture a steady supply of wooden tools, and then trades with the farmer to obtain food. Both have enough food to survive, but there is no surplus to invest.

Now consider there is a year with exceptional productivity. The farmer grows more food than is needed on the island, and so he stores some of it for next year. The following year, the farmer needs to grow less food, so he invests his surplus time planting apple trees along each of his hedges. Apple trees need little input of labour in order to produce food in the future, although they do take time to nurture. The apple tree costs resources equivalent to 100 apples, and produces 5 apples per year. It produces a return of 5% per year.

The trees in the wood have also grown rapidly and therefore the toolmaker has surplus wood. Because he has more wood than he needs, he spends some time (equivalent to the cost of manufacturing 100 tools) building a tool-making machine. The tool-making machine produces by itself 5 tools per year without further resources or depreciation – it produces a return of 5% per year.

Storing apples and wood can be done without cost, but of course this provides zero return (0% per year). Given this, individuals start to invest their spare resources in apple trees and tool-making machines, and next year, they have further time and resources to invest. Economic growth has begun.

Bandits
Now a bandit arrives. The bandit offers shares in his banditry company, 'Bandit-Co' to the public. Bandit-Co offers to give a certain return on investment. For the investment of one hundred tools, the banditry company offers to steal some tools each year and will give to its investors10 tools per year to the investor; or for the donation of one hundred apples, will steal and give 10 apples per year to an investor. In short, he offers a return of 10% on investment. Pretty soon, instead of investing in a tool making machine, the tool maker invests 100 tools in the bandit's shares; and the farmer, instead of planting an apple tree, invests 100 apples in the bandit's shares. Both the farmer and the toolmaker are initially happy with their investment, which makes twice as much as their investment in a apple tree or a toolmaking machine. However, over the course of the year, they are disturbed to find that 10 of their tools and 10 of their apples have gone missing. On the other hand, they reason, at least they have enough to eat. If the farmer had invested in apple trees, he would, he reasons, have been 5 apples down from a full diet. And the toolmaker thinks the same.

Meanwhile the bandit is happy with having received the entire surplus of the society for the year in exchange for little work and a few hours spent plundering. What does he do with his winnings? He might (a) consume them immediately, or (b) store the surplus (with a rate of return of 0%), (c) invest in apple trees and tool-making machines (offering a return of 5%) or (d) invest it in a similar company, 'Loot-Co' (offering a rate of return of 10%) which has opened for business next door.... The most likely choices are a combination of (a) consuming (because he is hungry and likes to satisfy his desires), (b) because he likes to have 'liquid assets' or (d) because it offers the highest return of all the investment options. Economic growth stops and looting and banditry take over.

After a while the farmer and toolmaker realise that the Bandit-Co and Loot-Co are not doing society any good, and the farmer and toolmaker expel Bandit-Co and Loot-Co from the island. Economic growth resumes, and all is happy for a while. The surplus of production over consumption reaches 10% and the farmer and toolmaker invest this surplus, making a return of 5%. Economic output expands at 0.5% per year.

Gold
They also make contact with a second identical island, which turns out to be easy to get to, with zero transport costs. This includes Farmer Ben, a second farmer (we will call the first Farmer, Farmer Adam from now on). Farmer Ben has exactly the same number of apple trees as Farmer Adam. (They also make contact with Toolmaker Geoff on the other island, identical in wealth and productivity to Toolmaker Fred.)

In the year 1000, the accumulated wealth of 400 apple trees and 400 tool-making machines (equivalent in value to 40,000 apples and 40,000 tools). The combined output of the two islands reached 2000 apples per year and 2000 tools per year; and total trade had risen to 1000 apples per year and 1000 tools per year (trade between the islands has not yet started: half of this trade was between Adam and Fred; the other half between Ben and Geoff).

Then there was an exciting event on the islands. Adam, Ben, Geoff and Fred each found 500 gold coins. Gold coins can't be eaten, but they looked shiny and so they were ideal for exchange1. Since the tools were finished and the apples harvested at different times in the year, the citizens used gold as a store of value and a unit of exchange. The toolmaker bought food using his stock of gold, and later sold tools, receiving the same quantity of gold back in return. In general, each coin was spent about twice per year, and the price of an apple and of a tool was approximately one coin in each case.

The total exchange value of the gold coins in the economy was 1000 apples and 1000 tools. This was 100% of the production of the economy, and about 5% of the total stock of capital goods (wealth). Total wealth (of the virtual and physical varieties) was now 20,000 apples, 20,000 tools and 2000 gold coins, or, in the 'physical numeraire' 21,000 apples and 21,000 tools. The values of the coins tended to rise in value with the growth of the economy, so that the next year, a gold coin would buy 0.5% more apples (1005 apples per 1000 coin or 2005 tools per 1000 coin).

Inflation and Recessions
People noticed that they could also use gold coins as a store of value over longer time periods, which would be useful if their individual crops failed. People no longer kept apples and tools in storage, because money promised a larger return - 0.5% relative to 0% - (although not as large as apple trees and tool making machines). The price of apples and tools fell, compared to the price of money, and money made a greater return than expected. The price of apple trees and tool making machines also declined relative to that of gold coin. Gold coins made an unexpected return above the expected 0.5%, which encouraged the interest of investors.

Sometimes, investors thought that the return might even top the 5% expected on apple trees. One year, instead of investing his 10 surplus apples in apple trees, as was the norm, Farmer Ben, decided to sell them to the first island for gold coin. When he did, the first islanders found that there were too many apples to go round. The price of apples dropped relative to that of gold coin. The price of apple trees also dropped relative to gold coin. Farmer Adam did buy the surplus apples but stored them instead. Nobody was sure whether apple trees were a good investment. Marginal producers of apples and of tools stopped producing.

Similarly, Geoff sold his surplus tools to the first island. The price of tools dropped relative to money. Tool machines similarly dropped in price. Nobody was sure whether tool machines were a good investment.

Island two then felt much more rich. It had more gold than island one but fewer apple trees and tool-making machines. Because of the general surplus of apples and tools, occasioned by the shift of preferences from apple trees and tool making machines into gold, gold had made an unexpected return relative to physical goods. Owners of gold were able to take advantage of the recession in island one by buying up apple trees and tool making machines at reduced rates. Island one ended up with owning as many apple trees and tool making machines but with more still gold than island one. On the whole, the society invested less, and was less rich, with gold than before it arrived on the scene.

On the other hand, when people shift from desiring gold to desiring apples and apple trees and tools and tool machines? In this case, demand for those goods increases, up to the capacity of the economy. Once, however, we have reached the capacity of the economy, further shifts will simply reduce the price of gold relative to apples or tools (in other words, we will have inflation).

What is the difference between gold on one side and apples and tools on the other? It is that apple and tools are flexible in supply, and gold is not. Whereas supply can respond to shifting portfolio preferences between apples and tools, such that full employment is maintained, the supply of gold cannot really respond to shifting preferences towards it. It is a good in fixed supply, so that changing portfolio preferences lead to recessions rather than to shifting patterns of demand.

Discussion
What we have suggested2 is:

   1. that the existence of money leads (all other things equal) to a smaller stock of real assets (capital goods and inventories) in equilibrium because money (as 'virtual wealth) it is an alternative store of value to 'real wealth' (capital assets);

   2. that the rate of return on money cuts off investment opportunities that would be acceptable;

   3. that money can cause recessions because it is totally inelastic supply, so that when portfolio preferences shift towards it, supply will not respond (unlike shifts in portfolio preferences between physical goods).

Exactly the same arguments will hold for other goods fixed in supply with little carrying cost, such as land3. It is also easy to see that the problems with gold hoarding outlined here become even worse when lending and borrowing come into the picture, especially with fractional reserve banking, and even more especially with fractional reserve banking without any liquidity reserve. Various economic actors can be alleged to play the role of the 'bandit' above including monopolists, drug suppliers, and the state itself.

The solution to these dilemmas is simple. We should try to reduce the rate of return on all unproductive activities including money hoarding, land ownership, drug supply (including processed food) and other addictive behaviour, ownership of monopoly rights and brands etc. Instead we need to enable investment opportunities that produce things that benefit society. Then the real need of individuals to store their accumulated labour will then manifest itself in real wealth rather than illusory financial assets and an endless 'rat race'.

1There's another story too, involving a government requiring tokens as taxation which the government itself issues, but we we will deal with money as gold here. See P. Arestis and M. C Sawyer, A handbook of alternative monetary economics (Edward Elgar Publishing, 2006).

2See J. M Keynes, The general theory of employment, interest and money (Atlantic Publishers & Distributors, 2006), http://ebooks.adelaide.edu.au/k/keynes/john_maynard/k44g/.

3Ibid.; H. George, Progress and poverty (Cosimo Inc, 2005), http://library.isb.edu/digital_collection/Progress_and_Poverty.pdf; S. Gesell and P. Pye, The natural economic order (Peter Owen, 1958).

PDF version here

Fukushima Meltdown -- The Worst Case Scenario

2011-03-15T09:15:00.001Z

I have been speaking about the ongoing Fukushima nuclear power saga. It may be necessary to consider in detail the worst case scenario for the plant, which could transpire in the next few days.

The operators fail to cool the reactors;
The fuel and fuel cladding melt, creating a radioactive magma;
The fuel magma melts through the bottom of the reactor vessel;
The magma hits the concrete, and causes chemical explosions which lifts some of the magma into the air;
The magma contaminates the immediate vicinity of the reactor; making the site unusable. Lower levels of radiation contaminate the nearby area (land or sea depending on the direction of the wind).

To prevent this, the reactors need to be cooled which means that water needs to be pumped into the reactors. It is essential to get power to the remaining pumping equipment.

This means:
a) A sufficient power source (e.g. a grid connection or sufficient diesel generators - there should be others on the site)
b) Sufficient diesel to power those pumping devices (this could be shipped in by helicopters).
c) Sufficient pumping power is needed (fire engines may not be sufficient - the other reactors on site that are closed down could surely be used in some way).

Furthermore, actions need to be taken to prevent further explosions and build up of pressure in reactor core.

If this eventuality is not prevented, it would be a level 6 accident on the 1-7 nuclear accident scale. It would lead to a one-off release of radiation; but not an ongoing release such as happened at Chernobyl (level 7). The immediate site would be contaminated. Further contamination would depend on the wind direction. It would not however lead to major loss of life or health risk beyond those in the near vicinity.

Difficult decisions need to be made for personnel, such that they are rotated and monitors such that life-threatening levels of radiation are not received; and that individuals past a childbearing age are used, because of the risk of infertility.

The worst case scenario is probably 50% likely at the present time. To stop it (if that is possible at present), heavy pumping equipment needs to be used to pump water into the core (its not clear whether the fire engines used are sufficient). The main consequence of the worst case scenario would be possible injury to the people engaged in trying to prevent it. To prevent this, their radiation needs to be monitored.

A clear chain of command needs to exist, and decisions need to be taken promptly, with knowledgeable people in charge, under advice from the designers at GE. It's not clear whether a more serious accident than has happened already is avoidable.

There will be lessons to be learned from this accident. Despite this worst-case scenario (lets not forget this was one of the 5 biggest earthquakes of the last 100 years, and the reactor was built in the early 1970s, without the passive safety systems in modern designs) the main people at risk from death or injury are those who are bravely battling the nuclear problem. In terms of objective measures such as lives lost or loss of life expectancy, nuclear energy remains one of the safest energy sources available.

Arguments for A Fishing Husbundry Corporation

2011-02-03T08:41:00.002Z

Update - Final PDF Version Here

This note makes four points in regard to management of common pool resources, illustrated by the case of fisheries.^² First, I argue that the critical issue in regard to environmental problems is that prudential environmental constraints not being imposed at all – in many cases no constraint beyond sheer physical availability is respected.^³ Second, I argue that monopolies are sometimes preferable over 'free competition' in the ownership and management of integral natural systems such as fisheries.^⁴ Third, I argue that shared-ownership limited liability companies, regulated by appropriate authorities, can be useful legal entities for solving such problems. Fourth, I suggest that the ownership of shares in such a company (with monopoly rights to control access to the fishery) could be given to fishermen. This would change the fishermen's role from 'harvestry to husbandry', ensure political feasibility of the plan, and, it is argued, protect the fishery from long term degradation and destruction.

Environmental constraints (as opposed to resource constraints) we define here as those that are prudential rather than physically binding. In the short term, it is possible to fish more that a fishery will sustainably yield, but that will eventually cause the collapse of the fishery (fundamentally because fish are being harvested faster than their rate of reproduction replenishes the stock). Respecting environmental constraints requires two things: a) the imposition of a constraint, defined by some human assessment of natural limits; and b) the allocation of any rents from such a constraint^⁵. Why does the environmental constraint not follow 'naturally' from the laissez-faire operation of the market and from private property rights? The problem (from the perspective of laissez faire) is that property rights have not been defined in the case of large environmental assets such as fisheries.

Imagine for a moment that an individual has no property rights over his home, and furthermore the home is open access – anyone can enter. Suppose furthermore that there are no other social structures – wary neighbours, traditional morals – to prevent others from entering, and that the house is well known to everyone in the world. In this case, despite the good nature of most people, it seems likely that thieves and looters would enter and steal the home's contents. Even the continued existence of the house is in doubt, since the building materials used to make it could also be looted. Now compare the house with the open sea fishery. The sea is entered at will by fishermen, often with huge industrial-scale nets. No access charge is made. The result would be the same as that of the open-access house. The sea is looted. Just like in the case of the house, there is a simple solution – private property. Private property of the house entails a monopoly of use and access to it by the owner; private property in the case of the fishery means a single legal entity with a monopoly to determine access. The main difference is that a fishery is a much larger entity than a house (it's more of a hotel than a house!); but the principle remains the same.

If we agree that proper management of the fishery entails at the very least that access to it is adequately rationed (for example through a price), this raises the question: what is the correct legal structure to do so? The literature on these issues provides some suggestions. Garret Hardin mentions the two structures to prevent "The tragedy of the commons": private property (already mentioned) and the state ('mutual coercion, mutually agreed upon').^⁶ Elinor Ostrom, by contrast, finds that many of the traditional approaches that have preserved environmental systems fit neatly neither into these two categories.^⁷ We may say, perhaps that the solutions are traditional, which includes in the West, the state and private property and also other systems around the world. Mancur Olson notes that collective institutions, such as the state, often respond to narrow interests rather than broad ones, because narrow interests have a greater incentive to engage in lobbying and other political activities.^⁸ Given this, environmental policy that is essentially conservative (i.e. policy that does cause a redistribution of financial interests) may be preferable: other approaches may be politically infeasible.

In this essay I deal primarily with two institutions: the state and the limited liability company. Which is best? A state might be expected to act in the public interest, but faces a few constraints: a) it must respond to political pressure, and that pressure may come from fishermen who observe only their own short term gains; b) it may not have sufficient focus or information processing capacity to work out the best fishing yield; c) the problems may cross international borders.

We therefore consider another option: the limited liability company. By contrast with the state, firms typically have a narrowly defined set of objectives (although more narrow in UK and USA than for example Germany). In fact firms are so focused as they have been defined as 'pathological'. The firm is defined as a legal structure defined typically by limited liability and characterised by profit maximisation. Typically firms are strategically focused on core aims or mission. We should note also that the term 'corporation', has also been used traditionally in the UK to denote not just firms owned by shareholders, but also focussed public entities. Public corporations have been used in the past to solve environmental problems, such as the construction of a public sewerage system in London.

It is the proposed that fisheries management could be managed by a corporation. A new institution would be set up to manage fishing rights in a certain area, for example the British zone of the North Sea. The corporation is granted the right to charge fishermen access fees and other charges, and to limit the types of ship entering the zone, how they are permitted to fish, and their total catch. The corporation is regulated according to certain conditions: it must maintain fish stocks to a minimum standard set by scientists. Beyond basic regulation, the corporation is free to do what it likes to manage fish stocks. Shares in the corporation could be given to fishermen in proportion to their existing fishing quotas, to compensate them for their increased cost. The rent charged to the fishermen to use the fish stock would return to them. The fishermen could sell their stocks in the fishing husbandry company should they wish. But in the first instance the fishing husbandry company would protect the fish stocks for the long term, and be owned by the fishermen themselves. This corporation would be expected to act in the best interests of the fishermen and the fish, and through regulation it would be guaranteed to ensure the basic sustainability of the fishery.

1Email: stephen@stephenstretton.org.uk

2In the writing of this note I have been conscious that political ideas often find a voice because they are consistent with a wider set of ideologies espoused by one movement or another. Mostly, I hope to raise some pique in this paper by attacking simplistic versions of existing ideologies rather than actively supporting one or another. In particular I wish to illustrate ideas opposed respectively to simplistic (and, I would say false) versions of Georgism (the idea that the only tax should be a land rent charge); free market laissez faire; and environmental socialism. The ideas are, I suggest, consistent with other, perhaps more principled, versions of each political philosophy. I feel, however, that I have not entirely resisted the temptation to pin my colours to one particular mast, since the very modes of thought in economic ideas are, I think, somewhat political. In any case, I beg the reader not to let her politics blind her to her own reasoning and common sense, and to the arguments set out here.

3Rather than the problem being that rent is collected by private rather than public institutions. In the extreme case where no prudential environmental constraint is being imposed at all, there is clearly no rent associated with an environmental constraint to be collected. However, there may still be a rent to do with fundamental physical availability, however, this rent must be distinguished from that connected with the rent from a prudential environmental constraint. There is still a limited number of fish at any one time in the sea, however the prudential environmental constraint for fishing each year is tighter than the total number in the sea. If we fish all the fish in the sea, there won't be any to breed for next year. However, we should also note that imposing an environmental constraint is likely to reduce the private rent of the fishermen first (collecting the rent for public purposes), and only after that has happened, to impose further rents corresponding to the tighter, prudential environmental constraint.

4Although the cases illustrated could alternatively be viewed as a special case of the importance of private property, where the asset in question is very large and used by many people.

5Imposing criminality rather than a tax is another option – as has been tried in the case of narcotics – but such a policy tends to make those who can evade the law extremely rich as they can collect the scarcity rent associated with restricted class of people able and willing to evade the law.

6Garrett Hardin, “The tragedy of the commons,” Science 162 (1968): 1243-1248.

7E. Ostrom, Governing the commons: The evolution of institutions for collective action (Cambridge Univ Pr, 1991).

8M. Olson, The logic of collective action: Public goods and the theory of groups (Harvard University Press, 1971).

Beautiful Computer

2010-12-29T21:48:00.002Z

For once, I feel my computer is beautiful and a pleasure to interact with.

Here are the key points:
1) Asus EEPC 1201N
1) Ubuntu (Linux) (originally dual boot, but now alone after windows became unnecessary)
2) Elegant Gnome
3) Croyde Bay from Baggy Point (my photo)
4) Project Hamster (provides a little box in the bottom right tracking and reminding me of what I'm doing)
5) Tomboy Notes (always on top - on the right - where I put the detailed schedule of what I'm doing)
I wish everyone else as much computer happiness as possible in the new year!!

Privatising Obligations

2010-10-27T10:12:00.006+01:00

(Apologies for the slightly half-baked nature of this post; that's because I don't have the answers in this case: I need some help.)

Preamble:

I was having the general thought: if the financial system does not produce anything, but it does change behaviour (for example by providing liquidity/ready-cash for those who did not originally have access to such things), then it could be used as an analogy to try to solve collective action problems like climate change. The government could create an artificial world of contracts and options which changes behaviour without producing anything itself.

The general idea is that of concentration of power: if we can concentrate ownership of something, then we suddenly have a strong incentive to protect it.
(You can see here that I am trying to 'think out of the box' and I am not afraid of slaying some liberal/leftish/georgist sacred cows in the goal of better understanding, "to be go to hell for a heavenly cause")

The question I have is how do we concentrate ownership of something negative (the example I give here is legacy nuclear decommissioning liabilities)? How do we privatise an obligation that has unknown cost? If that could be achieved, then I think we could be closer to solving our collective action problem.

How Do We Privatise Legacy Nuclear Decomissioning Obligations?

The economic advantages of privatisation are well known. Privatised companies tend to be more efficient, and, since they are heavily regulated often better at solving environmental problems (witness the extremely healthy state of Britain's rivers and beaches compared to a few decades ago - this is partly due to the investment of the privatised utilities).

Now it seems easy to privatise something cash-positive -- a right to certain assets and/or an implicit right to the monopolistic power of a customer base. Often the rights to the assets and the customer base come with implicit obligations (e.g. environmental ones). So long as the liabilities are less onerous than the value of the rights (the assets), then the company is solvent and it is possible to privatise the obligations 'attached to' the rights.

Sometimes, however, it would be advantageous to privatise a pure obligation. Such is the case with the nuclear decomissioning obligation. The cost of this obligation is huge and the danger of it being in the public sector is that costs would overrun.

Some will say that private companies will not do a good job, but this is belied by the behaviour of the water companies for example. So long as clear regulatory standards are in place.

In any case it's not clear that we really need to decomission to such a high standard.

One way to privatise is to say: "we will pay X billion for the job: if you can do better, you can pocket the difference".

I'm not sure how you privatise an obligation: perhaps my readers will know the answer.

(This paragraph is a little incoherent, sorry again).
Why is this relevant to climate change? Well, if there was a collective action problem involving a benefit that accrued to the world only if everyone did some action, then a global government could set up options that pay in the event that the brilliant thing happened. A company could buy some of these options and then could persuade others to change behaviour by paying individuals to make that behaviour change. Unmatched derivative contracts designed by the government could help: it could even sell these at a benefit to the public purse. Even in this situation you have the 'natural tragedy of the commons' but that is counteracted by an 'artificial happy story of the commons'.

Difficult stuff. Anyone knows how to privatise an obligation let me know.

What does the data tell us about global warming?

2010-09-16T12:01:00.004+01:00

"Prediction is very difficult, especially about the future", goes the old saying and perhaps we should add "especially about the climate". However, it's good to work out how well past predictions have fared.

Here's a comparison of Hansen's original 1988 predictions to outcome. http://www.realclimate.org/index.php/archives/2009/12/updates-to-model-data-comparisons/

"And finally, let’s revisit the oldest GCM projection of all, Hansen et al (1988). The Scenario B in that paper is running a little high compared with the actual forcings growth (by about 10%), and the old GISS model had a climate sensitivity that was a little higher (4.2ºC for a doubling of CO2) than the current best estimate (~3ºC).

The explain that 'Scenario B' of Hansen's prediction has a temperature trend of 0.26 Celsius per decade, whereas the outcome is 0.19 Celsius per decade.

[...] Thus, it seems that the Hansen et al ‘B’ projection is likely running a little warm compared to the real world, but assuming (a little recklessly) that the 26 yr trend scales linearly with the sensitivity and the forcing, we could use this mismatch to estimate a sensitivity for the real world. That would give us 4.2/(0.26*0.9) * 0.19=~ 3.4 ºC. "

There's a bit more discussion of climate sensitivity here.

The model predictions are compared to the GISTEMP and HADCRUT global temperature series. There's a great project to make the GISTEMP computer code clearer here: Clear Climate Code . The minor coding errors don't seem to have affected the temperature trend. Some will claim that the temperature trend is somewhat an artefact of Urban Heat Island Effects.

However, we also have data from satellites, showing a temperature increase in the lower atmosphere (picking UAH the more conservative of the two estimates) of 0.16 Celsius per decade. (Here's the UAH data alone).

The final source of data showing the warming trend is the ocean heat content (expressed in sensible units by David Mackay) , which shows a strong upward trend. One interesting thing about this is in the period 2000-2010, where the air temperature has been static, the sea temperature has increased a lot. The heat capacity of water (and in aggregate, the oceans) is very much greater than air, so we've actually had plenty of global warming of the oceans in the last few years.
He notes that the warming of the top 700m of oceans over the last 40 years averages about 0.45W/m2 over just the oceans. The estimated extra heat over that period is shown in this graph. This data suggests that the observed increase in heat flow is roughly two thirds of what our models suggest it should be. Therefore either estimates of fast feedback are slightly too high, or aerosol effects are larger than we expect.

In conclusion, the data suggests that global warming is happening; that models predict approximately the correct magnitude. My take on the data would be that they suggest a 'fast'/Charney climate sensitivity in the range 2-3 Celsius per doubling of CO2 concentration (to be clear, observations on ocean heat suggests towards the lower end of this range, but only if aerosols have had a relatively small effect). However, this does not include so-called slow feedbacks, such as Carbon Cycle and warming-induced Methane releases which may be significant, and therefore justify a larger range (perhaps 2-6 Celsius) for climate sensitivity.

In short, the evidence suggests that climate change is happening, that the warming is about as much as the IPCC consensus suggests, and that action is needed to not build any more greenhouse gas emitting infrastructure.

Nuclear Safety

2010-08-08T20:45:00.004+01:00

I remember going to the Centre for Alternative Technology a year or so ago. There was a display about energy technologies.Energy technologies were assessed according to diffferent criteria from green (meaning good) through amber and red (bad) to black (very bad). Nuclear energy scored quite highly on all the criteria except one: risk where it got black (very bad).

Now of course risks from nuclear energy are of various types, including risks that are quite well specified because we have good knowledge of them. I'll split the safety issues in two: those associated with the direct design of the reactor and operation under normal circumstances and those through other matters. Here I will deal with only the risks of the direct operation of the reactor.

I am surprised at how little design features of nuclear reactors are discussed. Unlike the Soviet RBMK design used at Chernobyl, nuclear reactors built in the West over the last four decades typically enjoy a 'negative void coefficient', meaning that power would fall in the event of a void in the coolant, due for example, to a loss of pressure, a negative feedback loop which leads to the reactor shutting down. Some new reactor designs (e.g. the Westinghouse AP 1000) also employ 'passive safety' features, meaning that failure of safety systems leads to reactor shut-down through 'passive' processes such as gravity, rather than relying on the defence-in-depth of multiple parallel safety systems. Redundantly, Western nuclear power stations are also typically built with a concrete containment dome.

So in this case, nuclear reactors have a very low risk. How low? Well risk assessment can only by definition assess those risks that can be assesed, but nuclear reactor designs should blow up only one in every 10 million reactor-years, and even then they should be fully contained. So there is a 1/10000000 chance of a contained nuclear reactor accident. This appears absurdly low: even if the world built 1000 nuclear reactors, we would only expect a contained accident every 10,000 years or so. If only climate change had such low risks of catastrophic outcomes!

Of course there may be other risks and environmental damages associated with nuclear power, and I'll try to deal with all these some other time.

I have also been thinking about the banking system and wondering if similar design features should be applied to it! Can we get 'passive safety' into the financial system. Might be worth a try!

A solution to climate change within three decades?

2010-08-01T12:59:00.002+01:00

Syndicated from Outdoor-science.com

Tackling climate change would cost the UK £1 trillion so why should politicians sign up? My friend Stephen Stretton’s new think tank might have the answer. Stephen spoke to me about cutting carbon dioxide emissions close to zero and convincing climate skeptics.

Full article here

Decisions Under Uncertainty

2010-07-28T09:34:00.001+01:00

I found the following diagram from Mike Hulme's book interesting. It describes different ways of describing the risks from climate change (note the empowering nature of the national security frame).

Climate Change Frame	Audience Engaged
Scientific Uncertainty Frame	Those who don't want to change
National Security Frame	As above, but now inspired to act
Polar Bear Frame	Wildlife lovers
Money Frame	Politicians and the private sector
Catastrophe Frame	Those who are worried about the future
Justice and Equity Frame	Those with strong ethical leanings

Peter Dawe's comment that an entrepreneur is someone who makes decisions before knowing all the facts. I think we probably need more of an entrepreneurial attitude on this.

Source: Hulme (2009) 'Why we disagree about climate change: understanding controversy, inaction and opportunity', CUP (quoting Shanahan (2007) see http://tinyurl.com/ks3bme )

A Simple Macroeconomic View

2010-07-07T15:02:00.005+01:00

Here's this from the Aleph blog, three years ago:

"Sometimes I think that the Keynesian and Austrian Schools of economic thought can be merged into a consistent synthesis that would disagree about the goals of policy, but largely agree on how economies work. One of the men that would help promote such an idea would be Hymen Minsky."

Here's an attempt to do just that:

1) Prices are sticky and markets (e.g. for labour) don't always clear; there is 'involuntary unemployment'. (Keynes) -- [Evidence? For example, graph of unemployment (x-axis) against inflation (y axis) 1990-2010 is approximately horizontal - ie big changes in unemployment without changes in inflation. the following graph is from Austalia]

2) Fractional reserve banking adds a second class (bank deposits) of money to the first (banknotes issued by the central bank). The second class of money, bank account money is usually created at the same time as debt, causing asset price inflation (Austrians); and deflation (Fisher) when the the two are cancelled out when de-leveraging.
3) Conventional economic thinking tends to ignore asset prices. But increases in credit money lead to increase in asset prices, and these lead to wealth effects which may add to economic instability.

To put it simply, markets (as currently constituted) don't always work, that's why you need a Keynesian response in a 'great depression' scenario. Some of the reasons that markets as currently constituted don't work may be 'Austrian' (ie the markets are distorted by the existence of fractional reserve banking), but the 'Austrian' message tends to be distorted as 'make markets freer, but ignore the privileges of the financial sector and the asset-owning sector', when these sectors are probably the most important distortions. However, there may be other reasons that 'markets don't work' apart from the 'Austrian' ones.

QE2 - Just Print Money

2010-07-02T17:21:00.003+01:00

Why did I change from being a fiscal dove in 2008, asking for deficit spending, to being a fiscal hawk in 2010, arguing that UK needed to drastically reduce its deficit? One reason was the dramatic success of unconventional monetary policy or quantitative easing (QE). Printing money and pumping money into the economy seemed to inflate asset prices, making people feel richer and bringing the UK out of the recession.

The success of QE leads to two conclusions: firstly, fiscal policy need not take all of the load; secondly, it's very bad practice to finance deficits indefinitely with printing money, so if you are using QE, you should get the deficit down sharpish.

I agree broadly with the scale of the UK fiscal tightening (however I would have done it more with tax rises, and with wage cuts: I think the spending cuts may be somewhat unrealistic). But it seems inevitable that such as sustained tightening, copied elsewhere, may well lead the country back into recession. To argue otherwise is to base policy on hope rather than logical argument.

In order to prevent a double dip recession/depression I suggest:
a) create moderate inflation, through rises in indirect taxation such as VAT and carbon taxes
b) pre-emptively introduce further quantitative easing, so as to prevent a 'double dip' recession.

The bank of england needs to take account of the 'feedback' of fiscal tightening and act decisively to prevent a double-dip recession. In the future reserve requirements may need to be raised in order to mop up the money.

Peak Oil and Energy Technologies

2010-06-29T07:58:00.001+01:00

(this is an old post that I hadn't yet published on this blog)

http://www.energybulletin.net/32721.html

The Peak Oil thesis predicts that the rate of oil production will peak soon and start to decline, not keeping up with basic demand. However basic economics argues that in the event of a supply shortage, the price of oil would rise. The consequences of an increase in price are that the demand for oil would fall, and new forms of supply would be found.

Nevertheless, since both oil demand and oil supply are not particularly responsive to price, a peaking of conventional oil production could lead to quite severe price increases, with consequent economic effect.

Supply shortages are gaining credibility with articles like the one above. So perhaps the oil price is going to go much higher than expected.

However, in this case, the high oil price (even at current levels of over at over $50/barrel) would accelerate the technological development of oil shales, tar sands and even coal-to-liquids too.... All of these have even higher greenhouse gas emissions than oil. :(

Of course if oil/gas prices go high enough there might be a switch to electricity. But sadly again coal (for electricity) might benefit, since it is largely cheaper than cleaner alternatives. :(

Unfortunately there's no shortage of coal. Since China is the biggest growing market we may need a electricity technology that's cheaper than coal IN CHINA...

That's a hard task, but it may be the only way the world can be saved.

There are few technologies which are even close to being cheap enough.

Wind is cheap enough in certain positions, but it's intermittency makes it unattractive.

Concentrated solar energy has been argued to be potentially economic with conventional ways of producing electricity. Yet it is suitable only in equatorial regions with large areas of deserts. There is unlikely to be enough space in Eastern china, and unlikely to be enough water in western china.

It is a similar story with Carbon Capture and Storage (CCS) Technology. Noone is doing CCS on a large scale yet either (a large-scale pilot by BP in Peterhead was recently abandoned due to lack of government support). If you have optimistic assumptions about altruism (i.e. that countries will pay extra to save the planet) then this is a a crucial technology too.

Nuclear is generally more expensive than coal, but it is not inherently so. Given the severity and all-encompassing nature of climate change impacts, it might be risk-efficient to eliminate some safety systems/shielding on nuclear reactors, reducing the cost below coal. The benefit of carbon emissions would outweigh the slightly-increased risk.

However, now we may not have to make such a difficult choice. Modern reactors such as the AP1000 have passively safe modular designs which are safe without expensive backup multiple safety systems. But we're not yet building these types of reactor on a large enough scale for them to be really cheap. Perhaps we should.

Back to Basics

2010-06-28T21:26:00.003+01:00

In the clamour of contention and controversy surrounding the climate change debate, sometimes it makes sense to return to first principles. I was reminded of this sharply during a conversation with a professor of solar energy technology, when he stated bluntly that speculation on solutions is worthless unless we have come up with a concise definition of the problem we are trying to solve. I hope in this initial column to humbly attempt to lay out the problem we face with the hope of looking at possible solutions, and the debates surrounding them, in later columns.
Full Article Here

My New Column for the International Business Times

2010-06-28T21:20:00.002+01:00

I've just started a new column for the Green Investing section of the Online newspaper the International Business Times.

My first column was published about a week ago here.

I've now rewritten the article with a friend, so I can post it onto this blog next.

Check out http://uk.ibtimes.com/greeninvesting/ for more news and comment!

Units

2010-06-14T12:08:00.008+01:00

"For those who want some proof that physicists are human, the proof is in the idiocy of all the different units which they use for measuring energy." Richard Feynman, The Character of Physical Law

Discussion of energy is bedevilled by by units problems. The impass is not only the use of non-metric units, it is also the use of different time units (seconds, hours, days or years). The discussion can perhaps only be resolved by sometimes using dual units: one strictly SI (with seconds as the time units) and another in familiar units, using years.

The Case for Carbon Taxes in the UK

2010-05-18T13:30:00.010+01:00

Britain now has a new Liberal-Conservative coalition government, determined to tackle the huge British government budget deficit (at 12% of GDP in 2009/10, the highest since the second world war). The new chancellor, George Osborne, and his deputy, David Laws, will set out their initial plans for spending cuts shortly, and will lay out a new budget by late June. This 'emergency budget' will presumably also include plans for taxation increases. Many commentators believe that a rise in Value Added Tax (VAT) is both justified and likely. An alternative to a VAT rise is to impose a Carbon Tax. A carbon tax sets a fixed price on fossil fuel use, based on the carbon content of the fuel, and therefore is proportional to the final emissions of carbon dioxide produced. Not only could such a tax raise significant amounts of revenue, it would provide the incentives needed to meet ambitious targets for reducing greenhouse gas emissions by 2020, set out in the manifestos of both governing parties. Furthermore, a carbon tax could both stimulate and re-balance the economy away from increasingly costly fossil fuel imports and towards immediate investment in energy efficiency and low-carbon energy infrastructure. It can be argued that carbon taxes are currently well suited to the circumstances faced by the UK and other similar countries.

Carbon taxes are arguably the most important part of a package of measures needed to finance the replacement of an energy system currently dominated by fossil fuels. During the global economic crisis, many called for a 'green new deal', financed by government deficit spending. After the recession, our priorities are rather different. Massive government deficits and growing national debt limit the capacity for discretionary government spending financed by borrowing. When faced with large indebtedness, maintaining economic growth seems essential to reduce the burden of that debt. How can we both stimulate the economy and cut the deficit?

Maybe we need a stimulus promoted not by government spending, but rather encouraged by the government's ability to provide security and stability for investment in vital infrastructure. In the energy sector, the government can provide the stability that investors will achieve an adequate return on their investment in new low carbon electricity generation infrastructure, for example. This means that the government should provide confidence that the carbon price will be maintained.

What specific types of carbon taxes could be imposed? This depends in part on what is there already. As can be seen from the following table, there are a bewildering variety of different taxes in different sectors, managed by different departments, and at different tax rates. However, a few general statements can be made. Taxation on energy is highest in the road transport sector (when taxes amount to equivalent of over £500/tCO2) and lowest on air transport, domestic heating, and net-imports, where carbon or energy taxes are minimal. Amongst the other sectors, there is already a small carbon tax of £20/tCO2, once the european emissions trading scheme is added to the climate change levy and other fees and charges existing at the national level.>

Deciding on an approach for all sectors requires the application of a number of principles, some of which will be outlined here. Firstly, we need to determine the target carbon price. I would argue for a carbon price of around £100/tCO2, since this is the approximately the price needed to stimulate large-scale alternatives to fossil fuel. Secondly, the carbon tax should simplify the existing taxation system. Thirdly, the tax should where possible leave British industry in an equivalent, or more competitive position. Fourthly, the change should in the short term make consumers no worse off, and in the medium term, it should protect the most needy

From these principles we could suggest a number of possible alternatives. The first is a single, across-the-board carbon tax. This is the simplest and most clear. The main concern for this tax would be an impact on competitiveness on energy-intensive sectors. Such impacts are surprisingly limited, as in Britain's case the sectors that are most energy-intensive are not those that are particularly export-intensive. Energy is a surprisingly small proportion of costs for most businesses. However, there would remain some effects in the coal & steel and chemicals sectors, for example. Special measures, such as refunds, could be imposed in these sectors. A more elegant solution would be a system of border tax adjustments, which would probably have to be imposed at the EU level. A ubiquitous, cross-sectoral, carbon tax could be safely introduced at a low level of around £10-20/tCO2, across all sectors apart from imports , and replacing the climate change levy. Other less-ambitious approaches could include replacing and rationalizing the climate change levy, and/or a residential carbon tax, refunded initially according to historical usage, with the refund being taken away over time, although retained for the elderly.

Instead of a VAT rise, the government should consider imposing a carbon tax in one, many, or all of the energy-consuming sectors of the UK economy, and guarantee that this rate will be at least maintained for the lifetime of new infrastructure.

Notes

Problems Solved

Reduce budget deficit (12% of GDP in 2009/10).
Reach the challenging emissions targets for 2020 (34% by 2020 (Conservative) or 40% by 2020 (Liberal Democrats)).
Reform and simplify the tax system, including the climate change levy.
Provide a level playing field for low carbon investments by putting a minimum price on carbon. Let the market decide, rather than the government 'picking winners'.
Provide an economic stimulus by encouraging economic agents to bring forward expenditure on energy service, substituting current investment spending on energy efficiency for future spending on fuel use, creating real assets, and increasing net national wealth.
Rebalance the UK economy to reduce imports and improve balance of trade.

Existing Measures By Sector

No. Sector                 Schemes            C-Price  Emissions-as-%-of-uk
1   Electricity/Domestic   ets red-vat fit ro £10/tCO2 (15%)
2   Electricity/Commercial ets ccl ro         £20      (15%)
3   Electricity/Industrial ets ccl ro         £20      (10%)
4   Gas/Domestic           red-vat            £0       (10%)
5   Gas/Commercial         cert               £10       (5%)
6   Gas/Industrial         ets                £10       (5%)
7   Oil/Road Transport     rtd roadtax        £500*    (20%)
8   Oil/Air Transport      lc                 £20       (5%)
9   Oil-Coal/Commercial    ccl                £10    (trace)
10  Oil-Coal/Industry      ets ccl            £20       (5%)
11  Oil-Coal/Domestic      duty               £?     (trace)
12  Agriculure & Waste         -                       (10%)
13  Embodied carbon in Imports -          (additional ~+70%)
14  UK contribution to intl air transport  (additional ~+5%)
15  UK contribution to intl shipping       (additional ~+5%)

Possible Sectoral Approaches

Domestic refunded carbon tax 1&4 red_vat increaser neutral
Small industrial/commercial carbon tax (ccl levy replacement) 2 3 5 6 9 10
Large Industrial/commmercial Electricity carbon tax refunded in energy terms. (R.O. replacement) 1 2 3 neutral
Carbon Import tarriff (eu level)

National Unity Government Needed

2010-05-08T15:41:00.005+01:00

It's admitedly an exaggeration to say that the UK is only a failed bond auction and a couple of breaths of the animal spirits away from a death-spiral. But its not much of an exaggeration - we are way, way, too close for comfort. We need a massive shift in the government's fiscal position, while not making the recession worse. In the election it seemed that none of the parties could face being honest with the electorate -- to make vividly real, what they proposed in order to improve the public finances. So now, they should all get together to implement the nasty medicine:

Across-the-board 10% cut in all public sector workers' salaries -- with a 20% cut for MPs.
Increase in consumption taxes, specifically a GBP100/tCO2 carbon tax.
Simplify the income tax system with a flat rate of (say) 40%, with no income below (say) 10,000 taxed.

That lot wouldn't be popular - indeed it would bring people onto the streets.
Britain last faced this sort of deficit in wartime. We need a national government to sort it out. There should be a coalition of all the main parties for the 5 years needed to sort this out.

Election Day

2010-05-06T12:38:00.003+01:00

Well, we're in the middle of election day here in the UK. Obviously the big issue is how the government will tackle the deficit, amounting to about 12% of GDP; one pound in every four the government spends is borrowed. Tackling the deficit will require both spending cuts and taxation rises.

So which party is best?? They are all about the same as far as I can see. They all commit to tackling the deficit but none tell us how they will do it. Everyone agrees on notional, massive, spending cuts, but none provide enough of the hard detail.

Some people have asked me how I think they should vote. None of the parties is telling the truth, so why vote for any of them. I think we need a churchillian party that is willing to say, "All I offer is blood, sweat and tears" -- tax rises in other words.

On the other hand, there's no point in pushing the economy back into recession, which could cause a greek-style collapse. What we need, therefore, is tax rises that stimulate the economy, and push forward the new low carbon economy at the same time. Can't be done??? Well, it may just be possible. More on that another time.

But who should I vote for? Well, you can vote for a candidate not a party. Look for the best local candidates.

Vote for honesty or not at all.

How Should the US Legislate on Climate Policy?

2010-03-23T07:34:00.016Z

The passing of legislation in the United States congress is crucial to reducing greenhouse gases globally, for two reasons. Firstly, the US is significant in its own right, as the second-largest global emitter of greenhouse gases. Secondly, as the richest and most powerful country in the world, many other countries wait for the lead offered by the US, and the US will have a great influence on the structure of future agreements.

This short post set out in outline what I think the US should do to reduce greenhouse gas emissions.

First, scrap the Kyoto system. In the Copenhagen negotiations the US argued in favour of the replacement of the Kyoto protocol. There are good reasons for scrapping Kyoto with its distinction between developed and developing countries, and its extensive use of 'flexible mechanisms'. I have outlined the problems with Kyoto in an earlier paper.

Secondly, introduce an upstream approach. Rather than measure the CO2 emitted by companies and individuals at point of emission ('downstream'), it's easier to measure how much carbon is extracted or imported into the country and levy the tax there. The economic incidence of the tax will be broadly the same wherever in the chain you implement it.

Thirdly, have a broad tax base for the proposals. Any carbon price/tax should include all emissions, not just some sectors. An upstream approach that taxes the carbon at source(see previous section) should catch almost all CO2 emissions. The carbon tax should include petroleum for transportation and natural gas for home heating - all fossil fuels in short.

Fourth, adopt a consumption basis for the carbon price/tax rather than a production basis. This means that taxes should in principle be levied on imports of goods from any other countries that do not have comprehensive plans to reduce greenhouse gas emissions. This means using border tax adjustments. This can be implemented by value according to the emissions intensity of the original relevant country-sector.

Fifth, reverse the direction of political realism: structure climate policy so that it is more politically acceptable the more stringent it is. Ways to achieve this might include a sectoral approach for negotiating the transitional measures to adapt to a high carbon price; and 'transformative contracts' for existing high-carbon interests (for example giving guaranteed electricity prices for solar power produced by fossil fuel companies), with 'frontloading' of subsidy and 'backloading' of costs (recognizing that political actors have a relatively short time horizon / high discount rates).

Sixth, ensure a carbon/tax price that is high enough to encourage clean fossil fuels with Carbon Capture and Storage and Concentrated Solar power, to provide scalable energy sources for the future (and possibly Air Capture of CO2 from thin air). This price would need to be at least $200/tCO2 over the next decade. Implementing carbon capture and storage with an upstream carbon tax approach requires implementing subsidies for verified carbon storage (a small proportion of which could be held in escrow pending long-term verification of carbon storage).

Implementing the preceding points may be more straightforward with a carbon tax than an emissions trading scheme. Furthermore, an international system of harmonized taxes has only one degree of freedom - the tax level - meaning that international negotiations may well be simpler when based around a common carbon tax level than level of emissions reductions. Furthermore, such an international club could be created from the 'bottom up', by agreements between the United States, Europe and Japan, and other OECD members.

Whilst in principle it is possible to adopt cap-and-trade scheme with most of the previous features, it would be very different from those adopted so far, for example the EU (in particular it would need to be upstream with a complete tax base, and a much higher carbon price). To keep things simple, therefore, my advice would therefore be to adopt a carbon tax of around $200/tCO2, with revenues rebated in the short term (1-5 years) to reduce taxes on domestic companies, and individuals and to reward resource owners for keeping carbon in the ground (so that major political actors are no worse off). In the long term (>~3 years) revenues should be used to reduce the fiscal deficit.

The carbon tax could be managed by a central agency in order to meet emissions targets, rather like a central bank sets interest rates in order to meet inflation targets. The price level would only need to be changed infrequently - every year or two - however, in order to ensure that the targets are at least met.

A Risky Business

2010-01-23T14:40:00.005Z

I was talking about risk last night with a couple of friends. I was asked why climate change is a risk to individuals, nations and the world. Here's why. The following distribution describes the estimated chance of different warmings if we give up producing CO2 and other greenhouse gases now (actually if we stopped in 2005). You will see that we have a more than evens chance already of melting the greenland ice sheet (7m of sea level rise, enough to reach the shores of Cambridge). Over the next few years we will reach the same chance of destroying the amazon rain forest (it's even possible that if climate change was compounded by drought, a vast fire might erupt). Big risks.

from: http://www-ramanathan.ucsd.edu/dai/Ramanathan-Feng-PNAS-2008.pdf

The commentary "Stop Worrying Start Panicking?" on this is here:
http://www-ramanathan.ucsd.edu/dai/Schellnhuber-PNAS-2008.pdf

The other thing I've been thinking about is the basic evidence about why the planet is cooking (in particular, how we determine the radiative forcing of different gases). I've found this article which appears quite good: http://www-ramanathan.ucsd.edu/RamAmbio.pdf

Designing a Book in Open Office

2010-01-09T12:08:00.006Z

I've been searching for some tools to help me write a book. The word processing tool I intend to use is Open Office, which I find much more elegant and clean when it comes to the use of styles.

Using Open Office, I've been searching the web for tools to improve the design and give hints on writing a book in OO. Here is my list of links:

Overall this is the best link: http://www.linux.com/archive/articles/51448

A basic tutorial on Open Office is Available here: http://www.kaaredyret.dk/openoffice.html

Further resources on taming OO are here: http://www.taming-openoffice-org.com/newsite/?page_id=27

A general guide to writing a book is available here: http://www.taming-openoffice-org.com/newsite/?page_id=18

Experience is http://user.services.openoffice.org/en/forum/viewtopic.php?f=30&t=8545

There are two ways to write a book: as a single file or as a master document. For information about the single file method see here: http://www.freesoftwaremagazine.com/articles/create_book_template_with_writer

or here: http://maketecheasier.com/layout-a-book-with-openoffice-org-part-1/2009/07/13

Interestingly, the other Open Office apps have styles too: http://www.linuxjournal.com/content/graphic-styles-openofficeorg-draw-and-impress

Information on graphic design and pagelayout is on Wikipedia here:http://en.wikipedia.org/wiki/Graphic_design and http://en.wikipedia.org/wiki/Page_layout

I also use Zotero for references, which I'm finding very helpful. Go here http://wiki.services.openoffice.org/wiki/Bibliographic/Style

Templates

You can get a full book template here: http://www.lulu.com/content/multimedia/6x9-book-template-for-openofficeorg-writer/232670

The open office templates are here: http://templates.services.openoffice.org/en/search/node/book

I've downloaded all the templates but I'm not that impressed by the graphical design.

The 'Advanced book template' has space for notes.

One template with active development is here: http://templates.services.openoffice.org/en/node/1577

This is intended for novelists, but has a lot of detailed help, including styles to create notes that won't be part of the final book. There is even a google group

http://groups.google.com/group/open-office-writers

Global Climate Policy: An Agenda For Effective Action

2009-12-17T17:15:00.001Z

Full Paper

"Rules must be binding; Violations must be punished; Words must mean something."

(US President Barack Obama)

The negotiations currently taking place at Copenhagen at the fifteenth Conference of the Parties (COP-15) of the United Nations Framework Convention on Climate Change (UNFCCC) aim at the fundamental objective of the UNFCCC, namely to stabilize atmospheric greenhouse gas concentrations at non-dangerous levels. It is argued that the existing institutional tools at our disposal – international treaties and in particular the Kyoto protocol – are insufficient to achieve this goal. Furthermore, the framework put in place at Kyoto suffers multiple and fundamental flaws which fatally undermine its effectiveness; any new treaty must have a structure which mostly evades these flaws if it is to be effective. Treaties, legal structures, and other institutions more commensurate with the scale of the climate change challenge are suggested to inform discussions around the structure of any future climate agreement. An agenda for effective global action is outlined here:

Strong global institutions – e.g. a world environmental agency – including an agreed framework (such as coordinated carbon taxes) for collective policy, to replace national commitments.
A framework action plan to eliminate carbon emissions sector-by-sector, region-by-region, over the next two to three decades. In particular a plan to develop, transfer and deploy the safe, responsible, and very large-scale use of enhanced energy efficiency, renewable-electric, nuclear, and carbon capture and storage energy technologies; and to encourage responsible land use and agriculture, including the sustainable use of water¹.
A significant ($100-$200/tCO₂e), sectorally complete, substantially geographically complete, agreed, and guaranteed minimum carbon price, levied upstream at the national level (including embodied carbon from any regions not otherwise carbon-constrained), with revenues used at national discretion. It is possible that a carbon tax may have net economic benefits at the national level if used to replace taxes with higher 'deadweight' costs. The removal of fossil fuel subsidies has already been agreed as part of the Kyoto protocol, but has not been fully implemented.
A plan to protect forests and other natural carbon stores.
A plan to keep high carbon fuels in the ground (following Hansen et al. 2008).
An enabling framework for enforceable state-corporation climate contracts (e.g. guaranteeing the carbon price for investors) (Ismer & Neuhoff 2006).
An enabling framework for the use of trade sanctions to enforce state-state climate commitments, such as border tax adjustments (Ismer & Neuhoff 2007).
Unimpeachable monitoring and verification of all commitments.

Full Paper

Why The 'Kyoto' Approach Fails

2009-12-16T17:08:00.002Z

Full Paper

The structures for climate change mitigation agreed at Kyoto were flawed in a number of different ways. The most obvious flaw was the lack of effectiveness – it is not clear that the Kyoto treaty has reduced emissions at all. There are three main reasons for this lack of effectiveness:

Firstly, the treaty does not give binding commitments for all major emitters – in particular, the developing countries has no binding commitments and the United States signed but did not ratify the treaty.

Secondly, among the countries that implemented the agreement, many did not achieve the Kyoto targets. Little real action was noticeable – those who have achieved the targets (such as the UK and the former Soviet states) seemed to do so largely by accident rather than design.

Thirdly, the targets, although binding in international law, included no enforcement mechanism, beyond a threat that future targets would be more stringent for those countries that failed to achieve the target. There are also the following problems with international treaties in general:

Countries can in principle withdraw from treaties once signed, although this is rare.
Treaties face significant barriers in the US congress, with two thirds of United States senators required for ratification.

The Kyoto approach requires national emissions targets, negotiated country-by-country. It is possible that emissions reductions, whilst key to the end goal, are a politically and psychologically negative way of 'framing' commitments. (In other words, if commitments are expressed in different, but likely equivalent, terms, the balance of perceived national benefits may be different, for a given level of expected stringency). Countries may not know if they are able to reduce emissions by a large amount. Fast developing countries such as China or India may wish to play safe, avoiding emissions targets, whereas a more practical action plan (see below) may be perceived more positively by nations.

The Kyoto treaty and the actions since the treaty encourage downstream emissions trading. There are a few fundamental flaws to this approach:

Low coverage of sectors (the European Emissions Trading Scheme (EU-ETS) covers only 40% of the EU domestic emissions, and none of the net emissions embodied in its net imports);
An emissions trading scheme gives a volatile price for structural reasons related to the short-run price insensitivity (inelasticity) of fuel demand and the fact that carbon based fuels are ubiquitous in a modern economy (and so fuel demand is sensitive to the economic cycle and the weather). This volatility can lead to delayed investment and higher economic costs;
Emissions trading schemes encourage 'quota seeking' behaviour by nations in any original agreement and by companies in the political process of allocation rights to emit;
Perverse incentive to avoid stringent commitments – the structure of the agreement with national emissions caps fails to transform incentives of nation states;
The use of 'offsets', such as the Clean Development Mechanism (CDM) has multiple problems in addition to the lack of a developing country cap. Most fundamentally, it encourages 'double counting'. Offsets provide perverse incentives to developing countries to inflate expected emissions in order to demand payment to reduce them back to more reasonable levels.
No incentives to preserve existing forests and other natural carbon stores.

More fundamentally, none of the major powers (with the possible exception of the EU) have agreed to cede any sovereignty to a global institution. There also seems to be a fundamental difference in opinion between developed countries – which expect developing countries to accept binding commitments – and developing countries, who seek financial assistance from the developed world.

Finally, there is a lack of any necessary or direct connection between a treaty being agreed, and any real action to reduce emissions. We need a new treaty that has an 'action plan' to reduce emissions.

Make a deal or go home?
Given the multiple flaws in a possible Copenhagen agreement, there are two possible approaches. Firstly, the countries could avoid making a deal; Secondly, the countries could make a flawed deal that is ineffective. Both outcomes have major drawbacks. We might not get a better opportunity to reduce emissions, yet a flawed treaty would be little better than none at all. I think the best that could be expected would be a global agreed target and then leave implementation of those targets to a further treaty

Banks paying the cost of insuring against future bail outs

2009-11-08T22:06:00.010Z

Returning to the other great issue of the day, namely "What to do with the banks?", I'd like to make the following, 'modest proposal'.

Fractional-reserve banks require insurance to continue. (IMHO it's unlikely the banking system could survive de-growth or deflation for example.)
That insurance is at present done by the state.
The state should be paid a proper rate for that insurance.
That insurance could, in part, be provided by ultra safe reinsurance companies such as Swiss Re and Munich Re, and/or the Lloyds names, who are mostly exposed to hurricane, and not credit risk. It's unlikely that they could shoulder all the risk of a bank. They would, one would think, negotiate a fair price for that risk.

So I propose the following.

The insurance should be properly defined, and 'living wills' be created too (for the circumstances where the insurer is not prepared to insure the banks).
Once the risks have been defined, some proportion (say 10%) of the whole insured amount should be insured by the reinsurance companies.

The government would then 'discover' the price needed to insure the banks if done in the private sector. The bank would then pay the same rate for the whole amount to the government as the rate paid to the reinsurance company for its part in the insurance.

Concentrated Interests Satisfying Distributed Needs

2009-11-05T14:19:00.013Z

I've dipped into The Logic of Collective Action, recently. This is an absolute classic recommended to me originally by an ultra-intelligent Canadian lady that I know. Definitely worthwile reading. Thinking about the book, makes me come to the following draft conclusion. Here it is:

All successful* social changes ('memes') - by which I construe very broadly to include religions, technologies, political ideas, government policies, and behaviour traits - that I can think of, have two elements:

the meme satisfies some need, desire or requirement felt by lots of people;
they are invented, promoted or implemented by a single or small number of individuals/organizations with concentrated interests, who have a strong psychological or commercial interest in the meme.

Examples of the following can be found in religion (e.g. Christianity - human psychic needs/need for order in the Roman Empire & Jesus/his followers/the Roman Empire), technology (e.g. the telephone - public comminication & Bell), political ideology (e.g. communism - needs of the 'working class' & Marx/the Bolsheviks), and environmental protection (e.g. Ozone depletion - many people in high lattitude countries & the interests of Du Pont, which makes alternatives to CFCs).

(* by succesful I mean in this context simply that the changes happen.)

Cooperating by Competing Cooperation

2009-10-27T18:27:00.003Z

Well what we should do to limit fossil fuel consumption??? What we should do is what humans usually do, namely 'cooperate by competing'. Cooperating by competing is the whole basis of Adam Smith's economics. I'm not suggesting the competition is individual capitalism. Rather the competition is over the rents associated with fossil fuels.

Let me explain. Fossil fuels are limited by how much is in the ground, but even more, they are limited by the desire to have a safe, non-hothouse Earth. If we want to preserve the natural world and the environment that we have grown used to, we need to limit the amount of fossil fuels that we dig up and burn. Any limitation has a 'scarcity rent' associated with it. Who charges the scarcity rent is up to us.

So the UNFCCC should give its official blessing to set up two cartels; a cartel of the fossil fuel producers, which would limit the amount of fossil fuels dug up, and a cartel of the fossil fuel consumers, which would limit the amount of fossil fuels burnt. Rental income from both cartels would be returned to the producers and consumers of the fossil fuels respectively.

What Would I Do? Thoughts on Copenhagen Negotiations

2009-10-27T16:59:00.006Z

With 40 days to go and counting, it will not have escaped the readers of this blog's notice that are some climate change negotiations coming up, related to the end-of-year conference in Copenhagen. This blog post tries to ask what could be achieved in an 'ideal world' at Copenhagen. What are the objectives of global negotiations? What are we trying to achieve? What are the political constraints that we have to deal with?

In a separate blog post I discuss one possible ways of solving the climate change problem. Here I merely describe what I personally would think would be a good outcome of Copenhagen.

It seems likely that targets will be a major part of the outcome. What use are targets? Well they suggest what nations promise to do in the future. But unless they are enforced, they are pretty useless.

Institutions, Measurement and Enforcement
A better outcome than targets would be institution(s) with teeth.

What is an institution? Well the OED defines Institution (6th definition) thus:

An established law, custom, usage, practice, organization, or other element in the political or social life of a people; a regulative principle or convention subservient to the needs of an organized community or the general ends of civilization.

So we need some of those, at the global level!! At the moment we have some institutions already: the International Panel on Climate Change (IPCC) - which does the science - and the UN Framework Convention on Climate Change (UNFCCC) - which organizes these Conferences of the Parties (COPs). But it would be nice to get an institution with teeth.

What would an institution with teeth look like? Maybe like the World Trade Organization. The WTO appears to annoy a lot of people which perhaps means that it does something.

Why do we need institutions? Well, one reason is that we need enforcement. If people don't do what they said that they would do, then they need some sort of serious redress. Enforcement could take the form of financial penalties for example. Related to enforcement is the issue of measurement - we need to know what an outcome has been before we can enforce it.

Equal Rights or Nobody Worse Off?

2009-10-26T11:23:00.006Z

When we constrain pollution using market instruments such as taxes, the revenue generated to the central authority can have many purposes. The changes in relative prices can also affect the value of assets - for example, houses or coal power stations, and change the relative costs of entrenched ways of behaving -e.g. entrenched commuting patterns.

There are a few possible principles that we might use to allocate the revenues, in the case that they do not go into general taxation. (We are only considering principles here):

"Revenues are the equal right of all"
"Make nobody worse off"
Give revenues to the rich and powerful
Give revenues to the poor

The first principle has been argued for extensively. The third and fourth principles have been used often. The second principle has not been used very often and is often neglected.

It should be noted that principles one and two are in conflict. If we give pollution rights equally, this will make some people better off and some people worse off. However, if we make sure that nobody is worse off, we may not make a change that respects 'equal rights'.

It is an interesting question which of these principles is best; and one which I will return to in future. I lay open the possibility that one of the reasons that many people resist environmental taxation is that principle two is not respected.

Evidence for Climate Change and Related Policy Issues

2009-10-25T16:59:00.014Z

To get back to the purpose of this blog, I thought I'd do some work outlining some of the evidence for climate change and the policy issues.

Science Issues

Why do we think that the observed increased concentrations of CO2 and Methane will warm the earth?
1) Basic physics
2) Water vapour feedbacks from recent measurement of radiative outflow from satellites & Models integrating these observations
3) Observations of the climate warming up already (see below for detailed refs)
4) Observations CO2 of the ice ages (showing evidence for positive feedback as well as a very close link between temperature and CO2 and Methane)

Concentrations of CO2
Concentrations of CO2 went between 180 (ice age) and 280ppm (warm period between ice age). They are now at 388ppm: higher than the last few million years; the sun is also getting stronger over the very long term.

Science of Greenhouse Effect

Basic Physics: see this BBC site

Undergraduate level Physics: see Archer

Greenhouse gases increase the flow of energy into the Earth. It has been estimated that a concentration of CO2 of 550 parts per million (before industrialization the level was 275 parts per million) would leave to 3.7 Watts extra heat imput per square metre of the Earth's surface area.

Water vapour
The Stefan Boltzmann law would shows that the heat radiated from the earth's surface increases by about 3.2 Watts per square metre per degree Celsius rise in temperature. Therefore, the Earth's temperature would need to rise by about 1.2 degrees Celsius to balance out this rise in temperature.

However, we know that warmer air has a higher absolute level of humidity (in otherwords it contains more water vapour). Water vapour is also a greenhouse gas, and so this traps heat too.

We can estimate that water gives a positive feedack of -1.6 Watts per square metre per degree Celsius rise in temperature.

This should be compared to 'StefanBoltzmann' extra heat flow of 3.2W/m2K, giving net effect of 1.6W/m2K

When we include this effect (but assume no other feedbacks), that means that the earth would have to rise in temperature by 2.3 Celsius (not 1.2 Celsius) before the outflow of heat balanced the extra inflow.

So CO2 drives temperature, that increases humidity, and that leads to the water vapour feedback, which can be observed. See this article.

All the evidence is put together with computer models, but we don't really need computer models to estimate these issues, we can work it out ourselves from science and observations

Evidence of warming

Specific Fingerprints

Science of Climate Change
Stratosphere is cooling, a typical indicator of climate change
Tropopause is rising, as expected
"Tropical hotspot signature" I don't know if this is actually expected or observed
See Taylor for an understanding of these issues

Observed Impacts

Very many different observations around the world e.g. temperature measurements, rate of glacier melt, species shifts, Artic sea ice, sea surface temperatures, coral reef bleaching, heat waves:

Sea level rise
Storms, Hurricanes
Droughts and Floods, and other impacts
Sea Ice (ice at the north pole is declining rapidly, at the south pole increasing slightly)
Coral reefs (some evidence of decline, especially bleaching in a large proportion of populations)
Polar Bears ("of the 19 subpopulations of polar bears, eight are declining, three are stable, one is increasing, and seven have insufficient data")

Most of these show some evidence of climate change. People will I'm sure, come to their own conclusions.

'Sceptics'

There are some arguments about climate change by self-styled 'sceptics'. Here is an explanation of the more complex issues.

Policy Issues

Uncertainty & Risk?
Of course, there is always discussion and debate, but the fact that there are big risks shouldn't blind us to doing something to secure ourselves against those risks.

Timeliness?
We know that the earth responds to a lag to our behaviours. We already have seen serious effects to climate change (see 'evidence of warming' elsewhere in this reply) and the rate of increase of greenhouse gas concentrations is itself accelerating (think of putting the foot down when you see a road traffic accident). Don't you think it might be good to be a little bit safe rather than sorry?

Kyoto Ineffective??
We need a much stronger treaty that doesn't only include global targets, but also coordinated taxes.

Costly?
It has been estimated that the investment required to decarbonize the UK is around £600bn (which would spent mostly on UK resources). The UK consumes 1.7million barrels of oil per day or 620 million barrels per year, with a value (at $80/bbl) of $50billion (£30billion).
We use 91.1 billion cubic metres of gas per year present, worth £11billion (at 35p per therm or 13p/cu m). So we spend more than £40bn per year on fossil fuels; replacing this with renewable and nuclear infrastructure could get a return on our investment of 15 years. Not bad.

Good, strong, climate policies could increase investment in real infrastructure, providing jobs, and making us less dependent on foreign oil! Hurrah!

How To Avoid Getting Distracted

2009-10-24T12:36:00.016+01:00

Distraction is the bane of modern life. There are main two sources of distraction - internet and email - plus you can simply forget what you are supposed to be doing. Here are some technological suggestions to avoid getting distracted:

Internet

Pull out the cable / disconnect the Wifi.
Block certain websites (i.e. facebook) during work hours. If you use Firefox, an addin called "self control" may do the trick.

Work offline.
Disable notifications.
Clear emails only once a day.
For the time when you need to send an email: create a 'sending mail' link, with a shortcut referring to "mailto:" (the bit inside the quotes). This will open your email sending application without checking for new mail. You can put this shortcut on the desktop, start menu and/or 'quick launch' bar.
For the time when you need to find an email, use google desktop to index your gmail or outlook emails (I don't usually use the rest of the desktop search functionality, so I just search my gmail; this also works for outlook).
Avoid difficult, intellectual, or contraversial discussions that use email - at all times, and especially during work hours. There is a role for such discussions - mostly to construct something of value - i.e. they should aim for publication in a peer reviewed journal, newspaper, or website. Face-to-face discussions may also be useful.

Tasks

NowDoThis.com is a website that prevents multitasking/distraction by telling you exactly what to do next. It can be integrated into your desktop using the 'active desktop' functionality; or it can be added as a sidebar to your (e.g. firefox) browser.

Can we measure energy prices and taxes?

2009-09-22T10:27:00.003+01:00

It seems pretty clear that the long term agreement at Copenhagen will focus on some long term greenhouse gas emissions targets: a reduction of 80% by 2050 for the UK or 50% by 2050 for the world, for example. Such targets, if they are credible, set out long term direction, and have some value. However, there is also a need for immediate action. One such action that could make a big difference is a 'price on carbon', or, equivalently, higher energy taxes. In order to make such changes subject to an international agreement, we will need to measure these prices. if we can measure prices, we can write contracts (often known as 'derivatives') based on these prices. Measuring pre- and post-tax energy prices is a non-trivial task, but is being done by the International Energy Agency. Here I consider how such a task might be accomplished.

On Assertiveness

2009-08-05T17:54:00.006+01:00

I've been looking for resources on assertiveness. Assertiveness is about communicating positive and negative ideas and feelings "openly, honestly and directly". What I particularly liked about this article was the emphasis of choice that we have between four modes of communication which were outlined:

direct aggression: bossy, arrogant, bulldozing, intolerant, opinionated, and overbearing
indirect aggression: sarcastic, deceiving, ambiguous, insinuating, manipulative, and guilt-inducing
submissive: wailing, moaning, helpless, passive, indecisive, and apologetic
assertive: direct, honest, accepting, responsible, and spontaneous

Among these four identifiable modes of communication, the assertive is clearly the most effective.

The article also gives a few tips to improve our assertiveness. Quite a lot of it is about body language: having good body posture, even tone. Interestingly, it seems it is necessary to talk about oneself; to start statements with 'I'. I clearly have ownership over statements I make about myself. Factual statements are also secure.

This University of Iowa information sheet lays out three parts of an assertive communication:

empathy/validation: Try to say something that shows your understanding of the other person's feelings. This shows them that you're not trying to pick a fight, and it takes the wind out of their sails. From the above example, "I know that you get anxious when you're all ready to go and I'm not … ."

statement of problem: This piece describes your difficulty/dissatisfaction, tells why you need something to change. For example, "… but when you do that, I get all flustered and take even more time. By the time we get in the car, we're mad at each other and not much in the mood to have a good time."

statement of what you want: This is a specific request for a specific change in the other person's behavior. For example, "From now on, let's be sure we know what time we want to leave, and if you're ready before I am, will you please just go to another room and read the paper or watch TV?

Summarization is a key part of being assertive. We will often need to repeat what we say as well. Assertiveness appears also to be fundamentally about being specific. Rather than asking for general thing; we pick a time and date and place for an important meeting, for example.
Interestingly, compromise appears to be an important part of assertiveness, although not over things that are a matter of one's self worth or self respect.

Further Reading

What am I called? Preliminary thoughts

2009-08-02T14:55:00.003+01:00

OK, so I have to decide on what I am called. "But surely your parents decide that?" I hear you say?
But the thing is; they only give you a suggestion. It's one's own choice what to tell people, and how to sign off. The decision arises because of the collision of two worlds: the 'friend' world of "Steve" and the 'family and work' world of "Stephen"... The two worlds move closer together with an "activist" world having elements of both.

The decision becomes necessary for consistency purposes and consistency is of course a large part of professionalism. The specific decision needed is what to sign off at the end of emails.
There are two options:

Steve; or
Stephen

I need to be consistent. A person with ideas about global problems should at least be able to decide on what he is called.

The problem is, that 'Steve' is not really a shortening of 'Stephen'. The correct shortening would be 'Stephe', pronounced 'Steve', as one or two of my friends have noted... Except that Steph is not pronounced 'Steve' at all but 'Stef'. So I can't really consistently be both Stephen and Steve; I can only be one or the other for official purposes.

Now, it's easier to go for the more informal of the two. There are more friends around than family and easy informality is a part of business as well as friendliness. For a while, my housemate was called 'Stephen' and so 'Steve' was easier.

But there are considerations for 'Stephen' too. I generally prefer it; it seems a more beautiful and generally higher class name than 'Steve', and 'Stephen' is actually slightly easier to say that 'Steve'. When combined with my surname, 'Stephen' has a better ring to it than 'Steve'.

Of course people can call me what they like. If people know me as 'Steve' then the definition of my name 'Stephen' is not going to change anything between us. It will just be how I sign emails and introduce myself.

So that is where I am. If people have any comments, please say so in the next few days. I will then post my final decision.

Difficult Issues

2009-07-24T17:08:00.003+01:00

In the next few posts, I'll try to cover some of the most difficult questions. These are:

What am I called? Stephen or Steve?
What energy sources should we use? Is nuclear in or out?
What are appropriate design principles for economic systems or policy changes?
What theories of ethics and politics should we use?
What is 'realism' when applied to politics?

I'm going to try to 'tie off' a few things.

A Minimalist, Shared, Personal Morality

2009-07-16T15:50:00.029+01:00

"...tis a cause that hath no mean dependance
Upon our joint and several dignities."

(William Shakespeare, 'Troilus and Cressida', Act II, Scene 2)

A friend of mine wishes me to comment on moral matters. I'm extremely reluctant to do so, partly because, at least until recently, I have been a young man "...whom Aristotle thought / Unfit to hear moral philosophy" (ibid.). I have flaws, and think those more skilled at the art of life may have more to say. Perhaps also, there is some truth to Lao Tzu's aphorism, "Those who know, do not speak. Those who speak, do not know". However, time waits for no man. Those who devote much time to theoretical thought and words may lack balance, unless they set aside some thoughts and words to moral matters, difficult and hard to demonstrate as these subjects may be.

The scientific method, our best guide to the how the world is; needs at the very least some care if applied to questions of value and of action. For example, I am conscious personal experimentation may be a poor guide to living well. Experimentation always delays the point of choice to some future time when we have 'found ourselves'; and the act of experimentation itself has moral implications. It is too late once we have experimented to know in advance what one should experiment on. In the case of the atmospheric experiment that humanity is carrying out at present, decisions over what to do now cannot wait until we have a full physical demonstration what the true consequences of our possible paths of action could be.

Given that a young man knows nothing about morality except that which he has instinctively or been taught, but that some sort of guidance seems to be essential when living in society - and given that at least those who think long and hard about life can be influenced by those thoughts -it seems necessary to adopt some sort of 'defensive' theory of morality - one that is not novel or new, but is guided by those who have come before. A theory of morality may require at least some experience of living; and since the young have not had much such experience; a mid sympathetic to empirical demonstration may argue in favour of granting the experienced at least some authority over such matters.

Such a defensive theory should not be over theoretical; it should deal with the common sense wisdom over how to live one's life, and with perhaps justified agnosticism over the sources of such wisdom.

Such a theory should not over extend itself by asking too much; we have justified skepticism over those who invent new laws to bind others in society. We are well aware that some people are powerful that lack certain virtues and some people with many virtues are not powerful. Our minimalist conception will focus on those virtues that are common to both parties.
The ancient concept of virtue (Arete in Ancient Greek; there is a possibly similar concept De in Chinese philosophy) tend to have the connotation of 'excellence' and 'power' in addition to our modern sense of personal goodness. Living a good life is good for the individual and is good for society; and we will focus on those principles that are in the intersection of the individual and the society good, leaving it to judgment where there may be a conflict.

Ancient Greek philosophers distinguished between moral laws specific to certain societies, and those that tend to be shared by all. In our minimalism we deal with only those that are shared by most successful civilizations.

I think such a defensive, minimalist, common-sense, practical, theory exists, and has been outlined by C.S.Lewis, for example. This outline is from Lewis and the notes in brackets are from here:

I. The Law of General Beneficence: (Golden Rule, help the community)
A. Negative (Do no harm, Golden Rule)
B. Positive (Preserve society, make people happy)
II. The Law of Special Beneficence (Put own family and friends first)

III. Duties to Parents, Elders, Ancestors (Respect and care for elders)

IV. Duties to Children and Posterity (Protect and care for children)

V. The Law of Justice:
A. Sexual Justice (No adultery)
B. Honesty (Re property, money)
C. Justice in Court (No bribes, no favoritism)
VI. The Law of Good Faith and Veracity (Tell truth, keep promises)

VII. The Law of Mercy (Be tender-hearted)

VIII. The Law of Magnanimity: (Soul should rule the body)

A. (Courage, defense against attacks)
B. (Death before dishonor)
C. ("Is not the love of Wisdom a practice of death? [Ancient Greek]")

The point of this post is not to outline anything new, of course, but the opposite. These are laws shared by many societies and successful civilizations around the world.

In order to slim down our obligations a little more (so as to preserve the core), we could examine the consistency of modern norms with these. The main way that modern Western man differs is in the concept of adultery (we have different norms below that of marriage) maybe a pragmatic response would be that conduct in such fields should be governed by 'good judgment' rather than moral stricture. But even we replace a moral stricture with 'good judgment' in that case, the spirit of the law and its justice still applies. Keeping promises is also sometimes difficult for our politicians; perhaps it is good to promise less in order to deliver more. It's helpful not to make inconsistent promises and to deliver upon them mechanically. We don't need to think about everything.

Our obligations in regard to climate change seem to be a case both of "Positive General Beneficence" and "Duties to Children and Posterity". So, even though we were careful to not over extend our idea of morality, we still have obligations to the future. Let us then proceed; strengthened by moral vigour of the principles of all successful and well-respected individuals and societies.

An Unsustainable Concept

2009-07-14T11:23:00.044+01:00

sustainable, adj.
1. Capable of being borne or endured; supportable, bearable. Obs. rare.

2. Capable of being upheld or defended; maintainable.

3. Capable of being maintained at a certain rate or level.

4. Ecol. Of, relating to, or designating forms of human economic activity and culture that do not lead to environmental degradation, esp. avoiding the long-term depletion of natural resources.
(Oxford English Dictionary)

There are two problems with burning fossil fuels. The first problem is that fossil fuels are running out; the second is that fossil fuels are not running out. The first problem is often called 'peak oil' and the second is known as 'climate change'. If either the first problem or the second is accurate, then we can say that burning fossil fuels is 'not sustainable'. This amounts to arguing that if either A or not-A is true, burning fossil fuels is unsustainable. It seems to be that we can determine sustainability from pure logic. But to get such important results from a tautology, appears to be suspicious at the very least.

Perhaps the problem with our line of reasoning is that we have failed to distinguish between positive and negative effects of an activity. A natural resource running out would not be problem if the use of the resource only imposed costs on society; nor would inexhaustibility be a problem when an activity only provides benefits. So we can rephrase our criterion. If an activity provides benefits and the capability to continue the activity is limited, or if the activity imposes costs and the capability to continue it is not limited, then the activity is not sustainable. From this it can be shown by simple logic that any activity that has both positive and negative effects is not sustainable.

Well at best it seems that sustainability is a pretty hard thing to achieve; and at worst the whole concept looks a little incoherent. Sustainability is, however, an idea to which we often are encouraged to pay homage, despite (or perhaps because of) these problems of definition and coherence.

I think the widespread use of this notion of sustainability explains quite a lot of the religious claptrap surrounding environmental issues. When I say 'religious'; what I mean, broadly, is the tendency of some environmentalists to think about environmental issues in somewhat 'moralistic' terms - 'wind turbines are good', 'cooling towers bad' etc. But such black and white terms may be misleading. The primary concept of value here, "sustainability", is one that, strictly speaking, almost no activities satisfy. This leads, inevitably to a sense of guilt at having to engage in so many activities that seem immoral, and the psychological need for at least some redeeming activities that can make us feel virtuous again. When some such positive activities turn up, there is a great temptation to cover up any negative features (remember any activity with both negative and positive features is unsustainable), even if such downsides actually do exist. So wind turbines may be lovely despite them having some quite serious downsides both in terms of the opinions of those nearby and the reliability of the output they produce. For others nuclear power stations are lovely and wind turbines unlovely. Such distinctions, unless they can be justified by some more fundamental principle, appear somewhat arbitrary.

As an aside, actions with purely negative consequences could be included as 'sustainable' too, if they are exhausted quickly. Perhaps one example is the extra expense in buying a more expensive product (say shampoo) which differs from the standard one by the eco-friendly blurb on the side (say the shampoo is kind to hedgehogs for example). Presumably, your wallet is finite and so limits the damage that your efforts to do the right thing can do.

Some activities fail to be sustainable on both levels. Presumably they both have positive effects and are limited and negative effects and are unlimited. How bad can you get? It's in these cases that the concept of sustainability appear to have serious self-consistency problems. To assert A and not-A is inconsistent; to assert A and B at the same time as not-A and not-B is doubly so. Either fossil fuels are running out or they are not. What should we do? Are wind turbines actually sustainable? What about burning fossil fuels?

A related problem with the categorical notion of sustainability is to do with the idea of criticality. Put bluntly, some aspects of sustainability matter more than others. If my sofa is on fire, then this constitutes a sustainability issue to living in a house. Imagine too that my wooden walls are, over decades, rotting, due to damp and occasional flooding. If I use a fire extinguisher it may well be an unsustainable act, because it causes flooding in the house, and makes my rotting problem worse. But if I don't put out my fire, my house would burn to the ground anyhow. Some may argue that I should instead use a sustainable method to put out the fire; such as finding a blanket in my loft. Rather than use the 'unsustainable' fire-extinguisher; I should use the 'sustainable' fire blanket in my loft. But what if the problem has grown so big by the time I get my fire blanket that the fire is then unmanageable? Failure to focus on our critical problems may lead to undesirable outcomes.

I therefore propose that rather as looking at sustainability as some sort of idol in which we invest all of our scarce hopes, we recognize that all of the activities of humanity are unsustainable. We need to be more precise about things. Instead we need to focus on critical unsustainability of activities that are akin to our house burning down.

I suggest two principles: first, an overall civilization-focus on tackling critical issues and risks, particularly climate change; Secondly the principle that we should do activities only if they add to overall (natural and human) wealth [n759hv]. The notion of wealth may be as difficult to define operationally as sustainability, since it requires some method of valuation over and above that of the market, when dealing with environmental concerns. But it least may well be internally consistent and able to sanely direct those with inflammable furniture.

Hard and Soft Constraints: Why Malthus is usually wrong but sometimes right

2009-06-26T15:38:00.003+01:00

A free market economic system is efficient at meeting human desires with limited resources; although the equity or justice of the situation will depend on government policy, such the tax system. Limited resources are a 'hard' constraint – we can't use what doesn't exist. For environmental problems, however, the problems are much more severe, because nature cannot enforce the limitations that may be necessary. The constraints are 'soft' – we can violate them, but at high future cost. Nature can in a sense 'punish' the future inhabitants of the globe, but those who are punished are not necessarily the same as those that have made the violations. Humanity must therefore impose restrictions on its own behaviour, including legal or financial incentives such as taxes or caps, or face severe damage to nature.

Full article here: [lf6e24]

Ends and Motivation

2009-06-25T16:22:00.006+01:00

I've been thinking about various bits of folk wisdom about how to motivate other people to understand and act regarding climate change.

One such piece of wisdom is the following [Antoine de Saint-Exupery, 'The Wisdom of the Sands", University of Chicago Press, June 1984]

"If you want to build a ship, don't drum up the men to gather wood, divide the work and give orders. Instead teach them to yearn for the vast and open sea."

So, desire must come first in these things, it seems.

After desire, we then see things in terms of Goals and Objectives. I found the following information useful [ny95bl]

A goal is a broad statement of what the program hopes to accomplish. (e.g. "To motivate food stamp participants to eat foods that are consistent with the Dietary Guidelines for Americans and the Food Guide Pyramid".)
An objective is a specific, measurable condition that must be attained in order to accomplish a particular program goal. There are many different ways to specify objectives; the program and evaluator should choose the method that works best for each situation. (e.g. "50% of learners will be able to report making knowledgeable decisions about food purchases after completion of the eight week course.")

Another interesting quote is the following:
"Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime".

(According to Wikiquote [awcblc] this has origin unknown.)

* * *

When discussing motivations it's good to note that some or all of our motivations seem to have some relation to our biological functions and/or goals.

Aristotle's ethical thought [2gyf85] attempts to find the good to which activities aim:

Every art and every inquiry, and similarly every action and pursuit, is thought to aim at some good; and for this reason the good has rightly been declared to be that at which all things aim. But a certain difference is found among ends; some are activities, others are products apart from the activities that produce them. Where there are ends apart from the actions, it is the nature of the products to be better than the activities. Now, as there are many actions, arts, and sciences, their ends also are many; the end of the medical art is health, that of shipbuilding a vessel, that of strategy victory, that of economics wealth. But where such arts fall under a single capacity- as bridle-making and the other arts concerned with the equipment of horses fall under the art of riding, and this and every military action under strategy, in the same way other arts fall under yet others- in all of these the ends of the master arts are to be preferred to all the subordinate ends; for it is for the sake of the former that the latter are pursued. It makes no difference whether the activities themselves are the ends of the actions, or something else apart from the activities, as in the case of the sciences just mentioned.

He does so "by ascertaining the specific function of man" [nobpxj], and in particular that which makes us specifically human, the rational part.

Certainly we can ascertain a lot by assessing function and biological function; but that is the end to man qua piece of life, rather than the end to man qua man. It seems that the end to man qua man is subordinated in evolution and in the sense of Aristotle to the end of man qua lifeform and the end of man qua life form to the ends of our genes. However, for Aristotle it is not our overall ends that matter, but rather the ends of the specific features that make us human.

Aristotle argues that all reality can be classified metaphysically, with distinctions being made when there are differences. So if we can define man, this way; by his distinctions from other animals then we can deduce certain things from this definition. If 'man' can be defined like 'can opener' there's a chance that just like a can opener has a good function, so can man. I'm not necessarily asserting this mode of argument, merely exploring it.

Deciding Upon Change

2009-06-25T11:55:00.004+01:00

I've just come across the Beckhard-Harris change model
For change of an organization to take place, the following must be true:

Dissatisfaction x Vision x First Steps > Resistance to Change

It strikes me that this may be relevant to climate change. Resistance to change in the may be high (depending on the steps and vision proposed); furthermore, dissatisfaction, vision and first steps may be lacking.

In the case of climate change, a further aspect is possibly lacking. In organization theory, the existence of an organization capable of choosing is usually not in doubt. In the case of climate change, on the other hand, it is not clear that we have the global organization to tackle this problem. So I propose the following adjustment to the model for cases where the existence and/or functioning (which may amount to the same thing) of an organization is in doubt:

'Agency' x Dissatisfaction x Vision x First Steps > Resistance to Change

'Agency' here is an a quantifying noun, meant in the philosophical sense as the 'capacity to make choices'.

Communicating Effectively

2009-06-24T12:34:00.001+01:00

I'm always searching for ways to communicate more effectively, especially in the written form, so I asked 4CMR's communications officer. Here are her five tips:

Each sentence should have less than fifteen words!
Each paragraph should have only one idea - smaller is better!
Use the Active not the Passive!
Who? why? what? when? & how?
Cut out any word that is not necessary!

Biofuels - the rundown

2009-04-03T20:17:00.001+01:00

Have I forgotten anything?

Life Cycle Analysis
- Direct Energy Use (tractors etc)
- Energy Use in fertilisers
- N2O emitted from fertilisers
- Methane emitted from land and cattle

Land Use
- Direct and Indirect
- Direct carbon loss

Opportunity cost
- Food
- Carbon Reduction
- Water

Systemic Effects
- Uses current transport system
- Avoids better futures

Rebound
- Doesn't Displace Fossil Fuels.

The Earth is like a saucepan

2009-04-02T20:46:00.000+01:00

If you measure transient temperature, don't expect it to tell you the final response. The earth takes time to warm up like a saucepan of water does.

I wrote this in response to comment-11843 of this blog post.
http://rankexploits.com/musings/2009/multi-model-mean-trend-aogcm-simulations-vs-observations/#comment-11843

This graph purports to show that reality is on a different trajectory to the climate models. What in fact it shows is rather different. It compares a transient response of temperature to greenhouse gases to the final response ('equilibrium') response to that same forcing.

(It's a bit like if you say to me 'if you put a saucepan of water on the hob I predict it will boil eventually'; and I put it on the hob and then measure the temperature after 30 seconds which is only just above room temperature, and then I say to you 'you were wrong'. I would not comparing like with like; I should wait if I want my water to boil.)

This graph is COMPLETELY CONSISTENT with the IPCC models. The post could be confusing between transient response and equilibrium, and this post tries to clarify this.

WHAT DOES THE SCIENCE SAY?
IPCC TAR IS92a predicts that in 2060 there will be 550ppm CO2 only, forcing at 4.3W/m2, temperature change of 1.5C above the pre-industrial.
IPCC TAR (2001) IS92a scenario best guess:
http://www.grida.no/publications/other/ipcc_tar/?src=/climate/ipcc_tar/wg1/figts-19.htm

This model result is consistent with the 'bottom graph' here
http://img254.imageshack.us/img254/2626/tempobsrvvsco2ct4.png

The IPCC also predicts climate sensitivity of 3C (best guess) - which would be the result if the CO2 level stabilised at 550ppmCO2(e), which is consistent with the 'top graph' from the same link.

In other words the bottom graph actually shows best guess 'transient response' and the top one best guess 'equilibrium response'. To compare the two graphs on the same basis (making the top one the 'model' and the bottom 'reality') is extremely misleading.

-----------------------------------------------------
REFERENCES

2060 - CO2 at 550ppm
http://www.grida.no/publications/other/ipcc_tar/?src=/climate/ipcc_tar/wg1/figts-19.htm

Forcing at 4.3W/m2
http://www.grida.no/publications/other/ipcc_tar/?src=/climate/ipcc_tar/wg1/figts-19.htm

Temperature change at 1.5C above preind
http://www.grida.no/publications/other/ipcc_tar/?src=/climate/ipcc_tar/wg1/figts-19.htm

Climate sensitivity at 3C +/- 1.5C
http://www.grida.no/publications/other/ipcc_tar/?src=/climate/ipcc_tar/wg1/figts-19.htm

Plotting on our graph
http://img254.imageshack.us/img254/2626/tempobsrvvsco2ct4.png

------------------------------------------------------
PERSONAL COMMENTS
I'm afraid to say that I find this graph completely typical of all the 'sceptical' posts that I've seen - completely correct except for a 'minor' flaw in comprehension. This is usually the flaw in almost-experts - the 'minor' structural assumptions make a big difference!
Investigating this has taken me two hours in total; or about £40 in lost other work.

Let me say that I am completely open to scientific arguments and I find it very helpful in getting to the bottom of things to attack a problem sceptically (as long as there is no bias in that scepticism). But every time I feel that there may be a good argument, I feel disappointed and
that I have wasted my time, or that my points are viewed as marginal when they are actually structurally extremely important.

I do not want to have a political position on this, only listen to evidence and arguments. I do not have a closed mind but I won't be easily convinced on any structural point by anyone who has a 'position', because the mental effort in taking out the scientific 'signal' from the
political 'noise' is too great.

This particular case and the general question of climate change is emphatically is NOT closed. I am emphatically open to understanding the climate system more just in
non-political way (how does this system work; how can we represent feedbacks etc etc.) But I just won't be spending any more time considering this case in detail, or really other general points where people's motivation for scientific statements are political hobby horses (where people know in advance what result they want). I think I have to draw some sort of line under what you might call CSPNs 'Climate Science Political Movements' and 'Climate Sceptic Political Movements' (as opposed to the usual highly detailed structural scientific scepticism, which has no political bias).

Note that these criticisms can be applied to both 'sides'.

Knowing what you are aiming for

2009-03-31T17:55:00.003+01:00

Here is a quote from Goethe:

"I respect the man who knows distinctly what he wishes. The greater part of all mischief in the world arises from the fact that men do not sufficiently understand their own aims. They have undertaken to build a tower, and spend no more labor on the foundation than would be necessary to erect a hut"
- Johann Wolfgang von Goethe

Oxymorons and Effective Argument

2009-03-27T12:21:00.004Z

Don't disagree; but do raise precise objections

I recently looked up the definition of 'oxymoron'.

1. (Rhetoric). A figure of speech in which a pair of opposed or markedly contradictory terms are placed in conjunction for emphasis.
2. More generally: a contradiction in terms.

(Source: Oxford English Dictionary)

I had previously thought that the definition of an oxymorons was (2.) a self-contradiction. However, in fact an oxymoron, in the older sense (1.) is the concatenation of two concepts which are almost opposite. The intersection of two opposed concepts is considerably more precise a concept than the intersection of two similar concepts.

On a similar track I've been struggling for some time on how to effectively disagree. Disagreeing when best done may be a bit like an oxymoron; it allows the common ground to be specified more exactly.

Disagreeing effectively is pretty important, especially in the case of complex issues where a degree of consensus is important. People may want to disagree effectively, because they want to

understand each other better;
get to the bottom of things;
come to a collective or consensual decision is order to take collective action.

Quite often these factors are combined.

Disagreeing is difficult to pull off for a number of reasons. Mostly this is because people feel threatened if you disagree. That is because individuals' identity or self-worth is often wrapped up with what you agree or disagree about. If you attack their arguments, you are often felt as if you are attacking the person themselves.

A second and related argument is that broad, imprecise, concepts are often understood differently by different people. So what you are attacking might be quite different from what is being defended. (Tongue in cheek...) ...I'm often struck by how rubbish other people's arguments are, and how I have much superior arguments. But if people were to look at my own expressed work, they might similarly criticize it. We are comparing our own mental representation of our ideas to our understanding of someone else's expression of their ideas. Both the saying and the listening are opportunities for misunderstanding however good the original idea.

Agreeing is perhaps a way of being simple. The content of political agreement e.g. in the case of voting for a particular party might be broadly 'forget about the details the key point is X': where X might be 'we want broadly more/less government/social support'.

Disagreeing is perhaps a way of being precise. So if you are 'being more precise' then say so: you are not attacking them, but rather providing an alternative view that can give a more exact crossover.

Disagreeing is also sometimes a way of generating a useful alternative representation of a problem. If your representation of a problem is alternative, then just say so. In this case, it behooves you to express yourself well. The easiest way is to appeal to more general thoughts

For these reasons and more the best way to disagree according to 'how to win friends and influence people' is not to do it at all. But there remains some benefit to argument and critique; it makes our arguments more precise and more solid.

How to argue and critique given time constraints is another important question. Perhaps, then express the argument that is being made and make a single comment to it. This is positive and win/win for both parties.

Getting out alive

2009-03-27T10:44:00.005Z

In general, there are two elements to a successful resolution of a serious crisis:

Firstly, 'get out of it alive'.
Secondly, 'make sure it doesn't happen again'.

In regard to the current financial crisis, we need to address both elements. Satisfying the first criterion is both urgent and important, whereas the second is important, but slightly less urgent. It would be good if policy could address both elements. However, the policies needed may in principle be different, or even opposite for the two elements. A policy should not be rejected on the grounds that it only addresses one of the two, so long as it is understood that it is not the whole short/long term solution.

Arguments such as "we shouldn't do those things that got us into this mess in the first place" or "we need a sustainable solutions not a sticking plaster" sound good but are actually fallacious. When your financial life is in danger, just when your environmental or personal life is in danger, the solutions differ. If your house is on fire 'sustainable' or 'ethical' solutions might be nice to have, but are completely secondary considerations to getting out of your house alive.

Solutions however must work. In other words they must be effective - i.e. do what they intend to do, and be broadly sound and robust. Being 'sound and robust' sounds a bit like being 'sustainable', but there are important differences. 'Sustainability' is sort of a council to perfection, avoiding rapid use of non-renewable resources sometimes adding extra 'ethical' criteria to decision making- whereas 'sound and robust' just means a solution which basically works under a variety of different circumstances. What we need is to tackle unsustainability, and particularly critical unsustainability; not expect our solutions to be perfectly sustainable according to every criterion.

It's quite clear what 'getting out alive' means in personal context, and in the case of global warming it is fairly straightforward. In the case of financial crisis it is less clear, but avoiding systemic meltdown and a great depression is usually the underlying motivation for government action. More on this some other time.

Capital and Money

2009-02-26T11:04:00.004Z

Just a quick note of clarification. What is (financial) capital? And what is money? And which part of money is cash?

'Capital' in this context means net worth - i.e. the difference between the assets of a bank and the liabilities of the bank. I appreciate this might be confusing since it is an entirely different definition than physical capital - factories and such like.

'Cash': more precisely, 'Monetary Base' or M0. Cash or deposits of the Bank of England that can be freely convertible into cash. I refer to 'monetary base' colloquially as 'cash', because that is what it is!

'Money': 'Broad money' or M3. This definition contains bank deposits as well as 'monetary base'. Bank deposits are liabilities on the banks to pay the depositor cash on demand. I refer to 'broad money' colloquially as 'money'. Tim Joslin calls deposits 'electronic money' as far as I am aware.

N.B. Banks have two requirements governing their operation: they must have enough cash and they must have enough capital in order to lend.

Simplifications

2009-02-25T12:52:00.002Z

I have come to the following draft conclusions:
a) The banking system is short of capital and it can't get it from joe public when the future outlook (and government involvement) is so uncertain
b) The non-banking system is short of cash, and can't get that cash from the banks without getting into more debt.

The banking system can be recapitalized by creating New Banks (see earlier posts), not recapitalising the old banks.

The non-banking system can get more cash but how? Printing money and some non-house inflation might be a good option.

What does a carbon price mean??

2009-02-25T12:05:00.002Z

What is a good carbon tax? Well a good start would be $100/tonne of CO2.
What does a carbon tax of $100/tonne CO2 (10c/kgCO2) actually mean??

Let's relate it to some other quantities:
Petrol has a 2.3kg of CO2/litre or 10.47kg CO2/gallon
So the tax adds 23c to a litre of petrol or $1.05 to a gallon of 'gas'

Crude oil has a carbon content of 0.43 metric tons CO2/barrel [http://www.epa.gov/grnpower/pubs/calcmeth.htm]. So the tax adds $43 per barrel of oil.

In electricity, the average carbon footprint is around 0.5kg CO2/kWh (0.4kg for gas 1.0kg for coal). So this tax adds 4c/kWh to gas electricity and about 10c/kWh to coal electricity.

How much revenue would this tax gather? If we each emit 20tonnes CO2 (US data) then this would make $2000 per person per year. This money could be spent by the government, used to reduce other taxes or used to reduce the government deficit. If that falls to 10tonnes, there would be $1000 per person per year.

If we say have a £50/tCO2 tax, this would at present make £500 per person, £500x60m=£30,000m=£30bn in total.

By comparison, here are the tax takes in 2006/7 (From http://www.hm-treasury.gov.uk/d/bud08_chapterc.pdf )
Income tax: £147.8bn NIC: £87.3bn VAT: £77.4bn Corporation tax £44.8bn

So a carbon tax at this level could replace approximately 40% of VAT.

A profitable supermarket versus a profitable bank

2009-02-24T13:09:00.002Z

This post just follows up from the last where I compared a bank to a supermarket which retains it's earnings. There is an important difference between the two, which helps to clarify the point that has been made.

As far as I can see, the difference between an earnings retained Sainsburys (if excess profit-as-cash isn't given back to shareholders but retained, say in a vault) and the desert-island bank - is that Sainsburys sucks in cash; whereas the desert island bank has an outstanding /obligation to receive cash/ which may or not be covered by any 'real' cash existing in the system (it is conceivable that there is not enough cash & deposits in the system to substitute for cash). Bank deposits /can /substitute for cash (until all the deposits are used up) but in this thought-experiment world, there can be a retained obligation for the guy to supply something (cash) which he can't get from anywhere since it does not exist outside the banks and the central banks. In that case there will be large amount of unrequited demand for cash (the debt obligation).

There appears to be only a few ways that cash can be got into the non-bank system, to supply the outstanding obligation. The main options are if the cash in the bank or central bank is used to buy up real assets. Presumably if the bank(-owners) have market power then they would be able to enforce as low cash-price for the assets in exchange for the outstanding debts (in other words there will be a fall in asset prices). In other words, the removal of the outstanding debt obligation /does not have to be /in the form of a default; it could be that the bank invests in property directly; or that the earnings are distributed to shareholders, who themselves invest in property. However, the bankruptcy choice is /more likely/ if asset values fall (and if the decision rest primarily with the debtor) because bankruptcy transforms the obligation to hand over the now-low-value asset rather than a costly cash-obligation.

Thus deleveraging will cause a fall in asset values and either
a) a settlement of the outstanding debt due to the banks or the shareholders of the bank physically buying real assets in exchange for cash
b) default and the exact same process taking place, except that the banks get less for their money

in the same way that in an upturn the reverse is true (leveraging is accompanied by increasing asset prices and low default rates).

I'm not sure of the real world relevance of this primordial example but it does perhaps emphasize that giving banks cash in exchange for assets will not solve the problem, because the key is the cash shortage in the real economy and not within the banks.

Is Banking A Ponzi Scheme?

2009-02-20T19:39:00.010Z

A common argument* (to the effect that banking is a Ponzi scheme) is considered below**

[* Note: The argument considered is the one (imperfectly expressed) below. There may be other arguments claiming that banking in general, or in certain circumstances, is a Ponzi scheme, which may be true, but are not considered here.]

[** Second Note: I'm no longer sure that the argument is false. Although 'Ponzi scheme' is pretty imprecise word. The aspect I'm not sure about is that banks may have a monopoly over 'created' money and there may be the potential for a sort of 'short squeeze' on bank deposits/cash.]

When the rate of interest charged by banks on loans is greater than that charged on deposits, does banking constitute some sort of Ponzi scheme? Here is the argument:

Imagine a desert island consisting of one guy and a bank.

There is a certain amount of cash in a desert island economy (lets say £100) and it belongs to the bank. This is helpful because then the bank needs capital and liquidity to make loans and the guy wants some money. Let's say that banks need to have both capital (net assets) of £100 and liquidity (cash) of £100 in order to loan £1000 (both a liquidity requirement of 10% and a capital requirement of 10%).

So the bank on a desert island has £100 in cash. Through the wonders of fractional reserve electronic banking it can lend someone £1000 as an electronic deposit at an interest rate of (say) 10% per year. So long the guy doesn't want to withdraw this money in cash (aha the bank has only £100 in cash, so that would be impossible!) then the bank can create a deposit of £1000 and a outstanding loan of £1000. Let's say the deposit pays 5% per year from the bank to the guy and the loan pays 10% per year from the guy to the bank.

This guy is stupid and does nothing with his deposits. After a year, the deposit in the bank expands to £1050 and the loan outstanding amount expands to £1100.

The bank wants the principal plus interest back (£1100). But the guy has only £1050 of 'money' (deposits). In fact, since in our thought-experiment world, outside the bank there is only £1050 of money in total in the economy! So when all the debts are canceled by the deposits the bank is still owed £50. Money conservation (so the argument goes) implies that there is not enough money to pay back the bank, because amounts outstanding on the loan increase faster than outstanding amounts on the deposits!

Hence, banking requires an ever increasing amount of new money created to pay back the old.
So someone has to default. More debt is required to keep the thing going!! A Ponzi scheme!!

This is a very simple argument. However, is it true?

Is it true for any profitable institution? Say a supermarket? A supermarket makes profit - more money comes in than goes out. What does it do with the profit? Is it recycled, or do all the bank notes always end up with the supermarket? Usually the profit is either distributed to shareholders or kept as assets on the supermarket vault. Does any profitable institution eventually suck the whole economy dry of money? Or is that money usually given back to shareholders or used to buy real assets?

Is it the same with the bank? Can't the desert island bank just pay back it's shareholders, or buy some real estate. In this example, the profits from the rest of the economy are ploughed back to the bank, and the bank gets richer.

So in the original situation, the bank uses it's £50 profit to buy the guy's garage (in the open market), paying off his debt. Then there are no outstanding debts. Of course, since the bank made some profit at the small guys expense, the garage ownership got transferred from the small guy to the bank. The bank has ended up one garage richer and the guy has ended up one garage poorer. The bank makes the new asset cancel the existing debt obligation.

Now let's say that the man is poor, with no garages or other assets to sell. In that case he goes bankrupt and defaults because he does not have anything to pay back the bank. The bank has to write off the asset and the bank loses the excess asset that it thought it had.

So what happens depends on whether there are assets to transfer in exchange for the debt. But there is no 'money conservation problem'. There is only a default problem if the poor guy has nothing to sell to the bank, in which case the poor chap is bust. Otherwise the bank gets more stuff (not money).

----------------------

Let's introduce growth into the economy.

Let's now say that the guy is a builder; he started off with one house with garage; however this time he does not just sit on his electronic money. This builder instead transfers £1000 in electronic money (deposits) to a brick supplier who supplies bricks and the builder builds a second house plus two sheds. He sells the second house (plus shed) to the brick supplier for £1050, leaving him with a second shed worth £50.

What is the financial situation?
The brick supplier starts with zero, and then received £1000 of deposits (in exchange for the bricks). This grows into £1050 of deposits (in the bank), and then is paid back to the builder leaving £0.

The builder starts with £0, gets a £1000 deposits from the bank in exchange for £1000 of debt. He pays £1000 of deposits to the brick supplier. After 1 year he receives £1050 of deposits back from the brick supplier. He then has £1050 of deposits and £1100 of debt. He uses the £1050 deposits to pay off £1050 of debt, leaving himself with £50 of debt (ie obligations to the bank). He then sells the second shed to the bank for £50 in cash. He deposits the £50 cash at the bank, paying off the deposit. The final situation is exactly the same as before, except that the bank now has a shed.

This is productive economic growth and is not a problem, albeit one where the product of the growth goes to the bank in exchange for finance.

There is no Ponzi scheme. There is a certain amount of financialization - transfer of assets to the financial sector, but no shortage of money.

The mistake is to see the obligations to the bank - and in particular the remaining obligation £50 to the bank as being a bit of 'negative money'. It is not. It is an obligation to the bank. This obligation can be paid back with any sort of asset, not necessarily a bank deposit or cash. The bank creates a net obligation to itself of £50 through it's hard-nosed practice of charging more interest on its loans than it donates on its deposit (and - we might add - it has a lot of sometimes free implicit government support). But it does not induce a money shortage. It just achieves, at the end, more of the assets in the economy to itself in exchange for being profitable.

Powering India from the Rajastan Desert

2009-02-20T17:41:00.003Z

How much solar could be got from the Indian desert?

Well, the 'Great Indian Desert' is 200,000km2. [ http://en.wikipedia.org/wiki/Thar_Desert ]
Let's conservatively assume 10W/m2 (10MW/km2) http://www.withouthotair.com That makes 2000GW or 1kW for 2billion people. So India can power it's existing energy consumption from the Thar desert, even with 2billion people ; but it can't power an american (10kW/person) level of consumption from this source.

Powering China from the Gobi Desert

2009-02-20T17:29:00.006Z

Just thought I'd do some calculations specifically about the Gobi desert.

[The tone of this post has changed slightly from "wow china has a lot of people" to "wow there's lots of space in the Gobi, we can power the world from up there"; to "wow it's bitingly cold up there".... :)]

The Gobi is Northerly, high up and is dry in Summer. It's cold and snow-laden in winter however. It has an area of around 500,000 square miles (1,300,000 square km). [Source: http://tinyurl.com/d2t37m ]

[ http://en.wikipedia.org/wiki/Gobi_desert ]
Can we do Solar here? The temperature in winter seems to be cold. Around -15 to -25 Celsius. There might be a problem with water pipes involved in Concentrated Solar Power freezing. Even the mean annual temperature seems to be quite low - around zero e.g. at Sivantse (-2.5C) or Ulaanbaatar (3C).

So it's not clear that we can do CSP on the Gobi plateau. Maybe we should ask a (Chinese) engineer? You could try using anti-freeze as a coolant but mirrors and pipes are probably going to be unpleasant and expensive to erect in biting -20C to -30C temperatures and strong Siberian winds.

Using (hopefully cold-resistant) photovoltaics might be a better plan.
[ http://www.withouthotair.com ]
Let's say (generously) they achieve 5W/m2 [Similar to Bavarian Solar Park]

Let's say that 1million square km can be used. Then the Gobi can provide 5,000GW. That's about one third of total world energy consumption and 5kW for 1 billion people.

But it's still a bit chilly up there. And PV is likely to be expensive, (remember you've got to pay for the systems integration, not just the panels).

What about wind? 2W/m2, (assume only 0.5 million square km - if it's mountainous or even hilly then the valleys are less useful), 1000GW = 1kW per person for a billion people. Maybe not the whole story, but a significant input to China's energy consumption. It's high up in UlanBator and very windy.

Surely therefore wind (cheap; can be done now) is the one to go for? Wind is notoriously intermittent but my guess is that the Gobi is big enough and continental wind currents reliable enough to give some assurity.

My conclusion from this post is:

a) If renewables are reasonably feasible on the Gobi then they could power a large fraction (wind) or all (solar) of China's energy consumption.
b) However, the economic costs and engineering difficulties in the Gobi should not be underestimated, specifically the Siberian conditions (freezing temperatures, biting winds, windchill in the -40s permafrost?).
c) Wind seems the best option (can deal with mountainous terrain without huge costs), and (by carpetting every hill and plateau in the Gobi) could make a contribution of about 1000GW to China's energy needs
d) If Solar is possible up there, then Solar can power all of China, but I'm sceptical about the total systems costs of doing so at present,

Is a 'Renewables Only' View US-Centric?

2009-02-17T13:57:00.006Z

It will be difficult for China and India to live off their own renewables

David Mackay has written in detail about the question 'Can Britain live off its own renewables' in his new book (http://www.withouthotair.com).

The broad answer to this question is that to make an impact renewable energy sources need to be 'country sized' and Britain does not really have 'country sized' areas to devote to energy generation, except perhaps offshore in the Atlantic or in foreign far-flung deserts (and even then there remain formidable technical, political and economic barriers).

Renewable energy sources have a power density around 1-5Watts per square metre. To achieve 5000Watts per person requires1000-5000-square metres per person. To power the entire population requires 50,000-300,000km2 of land (between one fifth and all the land in Britain).

Here are some interesting figures for other countries:

Country__Population__Area (km2)_Density(km-2)_Land pp (m2)
UK_______60,776,238_____242,900___________246________4000
China_1,323,324,000___9,596,961___________138________7250
India_1,103,371,000___3,287,263___________336________3000
----------------------------------------------------------------
USA_____301,140,000___9,629,091____________31_______32000
World_6,733,164,238_148,940,000____________45_______22000

Broadly speaking, this suggests that it will be difficult for China and India to live off their own renewables. Asia is where the future of the global economy (and of future emissions growth) lies. Of course, we see that for US (and in the future for the world in total) this constraint is not as important; but this shouldn't distract us from the need to find a solution that can be adopted in Asia too.

This the view that renewables are the whole answer may be somewhat US centric.
For reasonably local alternatives to coal in USA, China and India it may be that 'renewables' may be only part of the answer. Achieving a cost of electricity lower than coal must be our number one objective, but fundamentally we need an energy source that will suit India and China too.

The joys of Open Office and Zotero! (but save in MS Word .doc format using bookmarks for Zotero references)

2009-02-16T12:34:00.004Z

Just a quick update about my favorite formats to use!

I've previously posted about the joys of (free, open source, easy to use) OpenOffice Writer over the dreaded (expensive, commercial, horrible) Microsoft Word; and the joys of (free, open source, easy to use) Zotero over the dreaded (expensive, commercial, horrible) Endnote.

However, the .doc format is, however, ubiquitous and if you start passing round .odt people get upset. But you don't need to use Microsoft Word in order to save in Word format! Open Office can save in Microsoft Word format (and PDF, Latex and MediaWiki for that matter)! You can also still use Zotero.

The particular referencing convention I tend to use is Author-Date (Harvard Reference Format 1) which stores the references as Endnotes, and I format using Bookmarks. Bookmarks are the format for use in word documents.

Comments: Zotero has an annoying habit of going back to Reference Marks when you click the set document preferences button. You need to ensure you stay on bookmarks if you do this. Zotero is fairly stable, but occasionally there are problems. It's best to backup your work regularly anyway.

What level of concern about climate change is justified? Part One.

2009-02-08T12:32:00.007Z

This post is about the motivation for this blog. So it's an important post. Perhaps this post should have come at the start. Anyway, diving in... what are the key facts of the matter about climate change?

Firstly, we know there is an important natural greenhouse effect on Earth. The sun, which is hot (at an effective temperature of 5000C) emits electromagnetic radiation at a high energy (high frequency; low wavelength - mostly in the visible and ultra-violet spectra). The Earth, which is warm (about 14C) re-emits electromagnetic radiation mostly at low energies (in the infrared spectra). Some of this infra red radiation is absorbed by certain gases in the atmosphere (water vapour and carbon dioxide) and then re-radiated. Half of this re-radiating heat radiation goes back down to earth, leading to a higher equilibrium surface temperature. We can easily calculate what the temperature of the earth would be without greenhouse gases - about minus 15Celsius. So we know that the temperature of the Earth is about 30Celsius higher than it would otherwise be, due to the effect of these gases. It seems that water vapour and carbon dioxide are the two most important of these gases, although other gases such as methane are also important.

Water vapour is the most important component of the greenhouse effect, but the concentration of water vapour in the atmosphere depends on temperature. The second most important gas carbon dioxide had an atmospheric concentration of about 280 parts per million by volume (ppmv) before human industrialisation (and after the ice ages where it dropped to 180 ppmv).

The most basic climate model w0uld suggest that a 100% effective greenhouse would raise (absolute) temperatures by 2^(1/4) or about 20%*250K=50 Celsius. This can be compared to the observed temperature increase of about 30 Celsius.

Simple models (similar to those of Arrhenius) suggest that the doubling of carbon dioxide concentrations from 280 to 560ppmv would raise global average temperatures by approximately 5C. Complex (General Circulation) models, and an analysis of the forcings in the ice ages (see previous post) suggest an average temperature rise of 3C for a doubling of CO2 concentrations, but with a probability range between about 1.2C - 6C (although there is non-zero chance of temperature rises above the maximum in this range).

Whilst there are arguments why the temperature might be less than the 3C, there are also arguments why it might be higher than this. How do observations of the whole world compare?

Next post I will discuss the observational record and what the estimates of climate sensitivity mean for us.

The question of concern

2009-02-08T11:57:00.005Z

To start with, I'll ask a question, one suggested by friend of mine:

Why be alarmed about climate change?

There is a question about this question. Is this the right question to ask? 'Alarmed' is an emotional word, imbued with connotations of panic. Even in the case of a major war; it is likely that public address announcments would ask us not to be alarmed, but instead to behave calmly and rationally. In other words, even in the event of a likely catastophe, alarm might be an inappropriate response. The argumentative strategy of the 'straw man' (or 'paper tiger') is to attack a opponent position which is falsely weak.

'Alarm' (or it's cognate 'alarmism') is also a word which is used as a group label in climate change debating circles and labels are notoriously divisive. So instead I'll ask a different question:

Why be concerned about climate change?

Now it's possible that my choice of words is also viewed as political and contentious. I could try to ask a purely scientific question. But I'm looking for a choice of words that hints at emotion (in the sense of moving someone) without being itself emotive.

However, I think the question could be contrued as being a leading one. So I could ask the question 'should we be concerned about climate change?'. This feels like it is a leading question in the direction of thew answer 'no'. It also has the contentious word 'should'. However, it is at least roughly neutral, but could be made more so by replacing 'should' by a question of 'justification'. So this is where I shall start my next discussion.

Is concern about climate change justified?

But this question could be answered 'of course - we should have some concern about climate change', but the level of concern would be a long way down the list of those concerns which are viewed as relevant. So perhaps a better question is:

What level of concern about climate change is justified?

I think this is a useful question. It's still emotional to some extent; using the word 'concern' is a personal rather than an objective measure; however 'justified' is an objective sounding word.

Notes on Persuasion

2009-01-26T03:37:00.001Z

This is great! :

http://climateprogress.org/2008/10/13/why-scientists-aren’t-more-persuasive-part-2-why-deniers-out-debate-smart-talkers/

If the banks need any more public money, the government should buy high street branch networks and create (and then slowly privatise) a 'good bank'

2009-01-26T01:02:00.005Z

The most straightforward way to solve the current crisis is bank nationalisation. There are a few reasons why the government might not want to take this path, one of which is the large overseas assets and liability of UK-based banks. The sovereign has limited fiscal credibility; the key to avoiding future hyperinflation is not biting off more than it can chew. It should focus on the UK and on creating a 'good bank' to promote future lending.

I never suggested that the government buy stakes in banks, as the UK government did late last year. However, in retrospect it seems to have been a good plan. The systemic collapse of the banking system was forestalled.

Of course, most of that money went into a black hole. But the government did end up by owning large parts of the banks' equity, which might be worth a lot in the future if the banks recover. £37 billion for pure upside on say £2trillion of assets isn't too bad a deal. And having an equity stake is clearly not the same as guranteeing the banks liabilities for free. Limited liability still applies.

However, the government obviously has certain responsibilities in the UK banking system - it needs to guarantee the deposits of UK savers, and it needs the banks to lend enough to keep the economy going.

To summarise, the UK government has two clear requirements, both UK based

a) 'Get lending going again' to UK individuals and companies

b) Guarantee the deposits of UK individuals, charities and (probably) companies

These objectives can be acheived by a transaction that involves:

a) Buying the branch networks of the major UK banks (needed to 'get lending going')

b) At the same time, taking on the liabilities of the domestic depositors

c) Taking on the 'good' assets in the corporate lending and mortgage book

The old banks would be left with more cash (from being able to sell some of their tangible assets). This would leave a deleveraged, cash-rich rump (including in effect an overseas lending unit) which might die slowly.

HBOS would be a good example. The government should take on the branch network, and the brand and the domestic depositors (liabilities), and the good parts of the domestic mortgage book (assets); but none of the 'toxic debt'. This would then be a 'good bank'.

The government could then progressively sell stakes in the 'good bank' to private investors.

The main risk for this plan, would be that if only some of the branch networks were bought, there might be a run on the other, privately owned banks.

There would still remain the question of what to do with the remaining 'bad bank'. Few might lend to it; but in any case few are lending to the big banks now anyway. Bankruptcy is one option, but it usually involves plenty of money for lawyers.

If the banks are insolvent, they need to be declared bankrupt. Bankruptcy has risks; the main one being the huge 'costs of financial distress' (Lehman Brothers will keep its' liquidatorsarmy of lawyers and accountants busy for many years) the advantage of the government buying the 'good bank' first, is that systemically important assets (uk depositors, interbank lending) can be trasferred into the public sector first.

New lending must be seperated from existing lending. Current government thinking suggests that we need a government-backed good bank much more than we need a government-owned bad bank. And taking on the bad assets is socialising private risks - not a good idea. Better to create the good bank first, including both high-street and capital-markets elements. Use the good bank to get lending going and to 'look to the future'. The remaining bad bank would be cash rich with a more volatile and non-domestic balance sheet and fewer tangible assets. It would have in effect a skeleton team remaining. If insolvent it would wind itself up naturally.

Time for a good bank

2009-01-25T23:47:00.003Z

Balance Sheets and Foreign Lending

The problem with the current high street banks is the sheer size of their balance sheets.

The Royal Bank of Scotland in particular is a concern: it has assets of around £3.7 trillion. Quite a lot of this is abroad.

A small change in asset quality will lead to a large loss. This means that their scarce capital will be tied up insuring themselves against existing losses, rather than being able to be deployed to cover new lending.

This poses problems for the government too. If the banks were small domestic institutions with most of their assets being domestic then that would be one thing. But they are large international institutions with large operations abroad. The governement will have enough on it's plate insuring uk depositors (given the matched up the uncertain value of uk mortgages), without having to insure ABN's depositors (matched up against the uncertain value of ABN assets).

Good Bank / Bad Bank

The logic of a good bank / bad bank solution to the British banks is that the good bank can lend without being infected by the uncertainties associated with the 'bad bank'. There is a way of achieving this, which I will come to in the next post.

Next Steps for the Banks?

2009-01-23T14:53:00.003Z

In my previous post, I dealt with what to do if the banks are solvent. But it seems now that the banks are not solvent; at least they will not be solvent in the forseable and credible event of further major losses on their assets (their loan books). What to do with insolvent banks is difficult.

We need a plan of action to deal with these banks.

The easiest and most straightforward plan are nationalisation or bankruptcy.

At one extreme is full bankruptcy. Creditors of the bank would be wiped out as seen by the Lehman brothers; this leads to lots of money for lawyers. This is probably a bad move because of the interconnected nature of the banking system; there is lots of paper and therefore lots of legality.

At the other extreme is nationalisation with full reimbursment of those who hae deposited money. The issue with this is that the banks may have very large credit risks, and the UK sovereign may not be able to bear all of these risks.

Somewhat in the middle is restructuring of the existing banks; swapping the creditors into equity.

After nationalisation, the bank would be seperated into a bad bank and a good bank. The good bank would continue to sell. Bad banks are equity investments. They contain assets but no lending capability.

I think the government needs to assume lending capabilities itself. It needs to create some good banks. There should be at least one good bank.

What is the national debt? What are the debts of the UK banks?

2009-01-21T12:03:00.004Z

Since we have seen a certain amount of creeping nationalization, it is important to realise the potential public liabilities that the public sector might be taking on, in comparison with the total government debt.

First: How much is government debt?

Gross government debt is a stock of how much the government owes the private sector.

The value of gross public debt is about three quarters of a trillion pounds (£774bn); the net debt about £600bn) http://www.hm-treasury.gov.uk/psf_statistics.htm

Pensions liabilities could be added to this (maybe about £530bn). http://www.telegraph.co.uk/finance/2944530/National-debt-may-soar-above-andpound1,000bn.html

PFI liabilities are around £60bn (capital value)-£180bn (total repayment)

So it seems that rougly speaking, the UK public debt is around £600+£530+£100 or £1.2trillion. This is a stock.

(UK GDP (a flow) is about £1.5 trillion. http://www.statistics.gov.uk/STATBASE/tsdataset.asp?vlnk=574&More=N&All=Y . Therefore the total UK public liabilities are about 80% of the flow of income into the british economy. To make the stock and flow comparable if we payed a 5% interest rate, interest payments would be around 4% of GDP.)

Second: What is the value of the liabilities of the banks?

Now let's compare with the balance sheets of the banks (I'll keep the two bits of the Lloyds banking group seperate):

Lloyds TSB

http://finance.yahoo.com/q/bs?s=LYG&annual

Assets of £706bn, Liabilities of £681bn. (net assets of £25bn).

HBOS

http://www.hbosplc.com/investors/results/sfs/2004/balancesheet.htm

Assets £442bn, Liabilities of £370bn

Barclays

http://www.investor.barclays.co.uk/results/2005/annualreport/annualreview2005/summaryconsolidatedbalancesheet.htm

Assets £924bn; Liabilities £900bn.

RBS

http://finance.yahoo.com/q/bs?s=RBS&annual

So, the conclusion is total liabilities

UK Gross Public Debt £770bn

Public Pensions £530bn

PFI £100bn

Total Gross Public Debt £1400bn

Here are the Gross Banking Liabilities (in brackets, the loss incurred for a 10% fall in asset values due to bad debt):

Lloyds TSB £680bn (£71bn)
HBOS £370bn (£44bn)
Barclays £900bn (£92bn)
RBS: over £1tr

These liabilities are large in comparison to the UK existing public debt (£700bn).

How Sensitive Is The Climate

2009-01-11T19:42:00.010Z

Why 'Fast Feedbacks' are quite slow and 'Slow Feedbacks' might be rather fast.

I've just been reading Hansen (2007): http://www.planetwork.net/climate/Hansen2007.pdf

It has lots of interesting stuff about climate sensitivity.

The climate sensitivity is the temperature response of the whole climate to a forcing of greenhouse gases. We know that there are two basic sorts of feedback processes going on in the climate. Firstly we know that as the temperature rises, relative humidity will stay roughly constant and thus absolute humidity will increase. This leads to more water vapour in the air; and water vapour is a strong greenhouse gas. Higher temperatures also has an ambigous (to this author) effect on clouds. The sum of all these atmospheric effects yields the 'Charney' definition of the climate sensitivity which is the equilibrium temperature rise from a doubling in CO2 concentrations; assuming that the land albedo and carbon (CO2/Methane) sinks stay constant. (of course they don't stay constant; we will come to this). This has been argued to be close to 3Celsius (3C) for a doubling of CO2 or 0.75C/(W/m2)*. [*A doubling of CO2 gives an increase in radiative forcing of about 4W/m2, so multiply the C/(W/m2) by 4 to get the temperature change for doubling CO2]

Hansen et al. (1993) calculated the ice age forcing due to surface albedo change
to be 3.5 C/(W/m2). The total surface and atmospheric forcings led Hansen et al. (1993) to infer an equilibrium global climate sensitivity of 3C for doubled CO2 forcing, equivalent to 3/4 +/- 1/4 C/(W/m2). This empirical climate sensitivity corresponds to the Charney (1979) definition of climate sensitivity, in which ‘fast feedback’ processes are allowed to operate, but long-lived atmospheric gases, ice sheet area, land area and vegetation cover are fixed forcings. Fast feedbacks include changes of water vapour, clouds, climate-driven aerosols1, sea ice and snow cover. This empirical result for the ‘Charney’ climate sensitivity agrees well with that obtained by climate models (IPCC 2001). However, the empirical ‘error bar’ is smaller and, unlike the model result, the empirical climate sensitivity certainly incorporates all processes operating in the real world.

This 'fast feedback' is not all that fast however... The fast feedbacks being slow: 50% of the climate response happens in 30 years and the rest takes 1000 years. So we see in immediate terms (net of the cooling effect of aerosols) about 50% of the climate change that we are likely to see.

Now to the 'slow' feedbacks, namely the ice-albedo changes from melting ice and carbon dioxide and methane releases. How fast are they? And how serious?

In answer to the 'how fast', the simple answer is we don't know. Traditionally, ice-melting has been seen as a slow process. But the old models may not be correct; as was shown by record melt rates in the early 21st century. Paleotological evidence points to times between the ice ages where sea levels have risen metres in a single decade. Hansen suggests that the relative stability of our epoch may have been to do with the fact that there was a zone of comfort between the melting of the great Eurasian and North American icesheets and the melting of Greenland and West Antarctica.

The second question is 'how much'. One approach is bottom up: you add carbon cycle causation to the greenhouse effect.

If the effect of temperature on radiative forcing is given by s and the effect of radiative forcing on temperature by g, the feedback relation is simply:

DT(with feedback)/DT(without feedback)= 1/(1-g*s). This amounts to 15-78% more warming (Cox and Scheffer 2007):

the feedback of global temperature on atmospheric CO2 will
promote warming by an extra 15–78% on a century-scale.
This estimate may be conservative as we did not account for
synergistic effects of likely temperature moderated increase
in other greenhouse gases.

But as the authors point out, this does not include the effect of everything working together.

What evidence do we have of everything working together?

A cursory inspection of the graph of greenhouse gas forcing:

shows:

a) A very high correlation (suggesting a strong link between greenhouse gas concentrations and warming)

b) Episodes of very rapid temperature change and ice melt (over the time scale of decades - e.g. the 'Younger Dryas' event.

c) a correlation between the two variables of about 3C/(W/m2)

Now the temperature shifts at the poles by about twice the global temperature change, we can imply a correlation of about 1.5C/(W/m2).

This is about double the 'fast feedback' 0.75C/(W/m2) predicted byclimate models and would imply a temperature change of six celsius for a doubling in CO2, twice what we have already found. But this is not the same quantity. It's not clear that the figure found by dividing the standard deviation of the Temperature graph by that of the Forcing graph is the quantity that Hansen asserts it is and that we want. What is going on?

So, following Scheffer and Cox, here is some basic theory of feedback loops...

Let's assume that Forcing (in W/m2) leads to temperature increases in Celsius (C). Let's assume both processes are linear:

Forcing --> Temp

\ /

<--

If we denote the initial change in forcing by f (before feedbacks)

and the final change in temperature by T (after feedbacks)

This gives T/f=g+g(sg)+g(sg)*(sg)...= g/(1-s*g)

What about the other direction?

Temp --> Forcing

\ /

<--

Here we observe only the final F and the final T
We see Forcing = (s+gs+gs*gs+...)t

F = t * s / (1-gs)

And T = t(1+gs+gs*gs+...)=t/(1-gs)
So F = s * T
T/F = 1/s

So if we observe T/F = 1.5 this implies that s = 2/3.

So the overall effect all depends on the overall strength of the feedback 1/(1-gs).

So ice core evidence provides us with information about the *strength of the Temperature-CO2 feedback* not on the overall greenhouse effect, including feedbacks.

The information about the gain of the whole system will therefore be gleaned from the size of the equivalent radiative forcing change that started the whole process off. If the huge temperature change and big CO2 increase was the result of a huge temperature forcing, this would imply that the feedback from temperature to CO2 was huge, but that the greenhouse effect was small.

Hansen's paper provides some very interesting evidence of the magnitude of the forcings from precession, but does not go so far as to come to an estimate of the 'equivalent' forcing implied by the Milankovich cycles. It is clear that the forcing on a global sense is small, but as Hansen points out, the effect at the ice age boundary is larger.

My conclusion supports the methodology of Cox and Sheffer over that of Hansen. However, it suggests that it should be easy to extend Cox and Scheffer to include other greenhouse gases and ice-albedo effects (by using the data that Hansen himself uses).

What is needed is to have a rough estimate of the magnitude of the original 'equivalent temperature' forcing (already including *local* ice-albedo feedbacks - since an insolation increase at the polar rim where ice is melting is clearly very effect; but *excluding* global feedbacks) that started the whole process off.

Hansen's paper hints at it but does not profer an estimate. His guess is probably a bit better than mine. Perhaps he should guess. An approximate answer to the exactly relevant question may be as much use as the exact answer to an approximately relevant question.

On Preserving the Patterns of the Sacred

2008-12-24T21:55:00.003Z

When I walk past my local village church, a thought occurs to me. Religion suits those who are religious. Going to church; singing in the choir; participating in the local community; all these activities, when bound up with the church, suit those who 'love God'. For much of our history, religious practice and the code of ethics tied up therein provided the unifying framework - intellectually and socially- in which pretty much all of our activities made sense. These activities were justified - within the Christian faith - by belief in God and in the words of God.

Yet these activities can have a justification which stands quite apart from belief in a deity. We might say that the essential character of such activities is their unifying and communal nature. In fact, some might argue, their justification was always enmeshed with these social functions. Furthermore, the idea of God meant something quite different in days gone by than in the current time. Believing in an all-powerful creator and personal God made a lot of sense when the laws governing the universe were not well known. But such belief seems now to be difficult to sustain. Faith is backed into corners and gaps with the advance of science. The different aspects of God - the personal-ethical and the physical-creator – now seem tenuous in themselves and in relation to one an other.

Theology from an atheist point of view looks quite different from theology from the theistic perspective. Religion simply professes belief in non-existent or nonsensical non-entities. Yet the second, social point of view still holds whatever one's views on metaphysics. Whatever the guiding social ideas of an atheist community, it is possible that they would look similar to those professed by the Christian community - a set of common ethics, a time and place of coming together, reverence for the dead and for the ideals of the society; and a sense of the sacred. Since, from an atheist point of view, God either does not exist or is a nonsensical concept, the reasons given by the religious for their actions are delusions. However, there may still be a socially beneficial purpose behind religion.

Of those with non-theistic reasons for interest in Christianity, those who see it as having social purpose come closest to the notion of the noble lie in Plato's republic. The mass of people cannot understand the 'form of the good'; so the philosophers should promote a religion which symbolically represents this ineffable form.

But there is a basic problem of meaning. Which one is it? Is religion the truth? Or is it intended to be a noble lie? Our reaction to it will depend on what it purports to be. It would be best if it would settle down on one conception of itself; a conception that is in reasonable coherence with other truths that are known.

Perhaps the history of protestantism is a wish to go closer to the unadulterated truth. This makes sense for the religiously fervent, but for the doubting makes religion suicidally naked.

Even a fervent atheist might be moved by C. S. Lewis arguments¹ to wish to preserve what one might term 'the patterns of the sacred'. But where does such a type of fervent atheist go? He feels disorientated because 'the desire to worship' clashes with 'the desire for truth' and his commitment to truth clashes with the theists commitment to a quite different truth. He could abandon his commitment to truth. Here are some better options:

He could view religion as purely ritual or traditional
He could try to find a meaning for the ambiguous word 'God' - perhaps finding a link to a sense of 'higher inspiration'
He could search for truth in philosophy and for tradition in old philosophy
He could find truth and beauty in art, literature, and the natural world
He could find communion in the community

None of these are a badge of trust; none aid discipline in hard times; none are the framing protection of a father God larger than ourselves; but together they start to make a worldly and spiritual life that makes a little bit more sense.

1 C.S. Lewis, The Abolition of Man, http://tinyurl.com/8wa545

On Writing Well

2008-12-24T21:44:00.001Z

Writing well, according to William Zinsser, is a matter of simplicity & unity. Simple writing is easy to follow and is not wasteful. Unified writing has a single purpose; uses a consistent tense and pronouns; and is a delight to read. Good writing is thus a transaction between the author and reader; it defines the audience and the capacity in which we hope to address them, expressing as simply as possible the point that is being made. Zinsser suggests that we should let our personality show, using 'I' or 'we' when possible. In this way we express our personal style and establish a connection with the reader.

Beginning and endings are important to good writing. A good beginning gives the reader something to connect with, and draws him in to read the rest. Endings can sometimes bore - Zinsser suggests perhaps ending suddenly or with a quirky quotation. Technical or scientific writing provides particular difficulties. One way to practice such writing is to describe a scientific process step by step. We are thus guided not only express our ideas more clearly, but also to think in a more logical and cogent way. We should write well in order to think more clearly.

The Science Media Centre

2008-12-23T12:01:00.000Z

Earlier in the year (Monday 29th September) I visited the Science Media Centre, hosted at the Royal Institution.The Science Media Centre was set up by the scientific establishment after perceived failures (e.g. BSE, GM crops, MMR and autism) to communicate science effectively.

It deals with controversial science stories. It’s activities include: Briefing journalists on controversial issues, working with press officers and ’crap-busting’

Vision: Accurate evidence-based scientific information

Mission: Easier for journalists to access best science

Values: Reliable, fast, accurate

It improves media coverage of science by scientists doing the media better.

The main strategies employed are ’rapid reaction’ and ’Win Win’.

PLEASE CALL THE SCIENCE MEDIA CENTRE!! SMC Contact Details

Here are my notes for the day.

Henry George and Land Taxation

2008-12-22T09:55:00.003Z

In his magnum opus, 'Progress and Poverty', Henry George attempts to explain the causes of recessions and of poverty. Land is a crucial part of this. George believes the most important factor in poverty this is the ownership of land, a factor of production that is fixed in supply. The result of this limitation is that, while other factors can be increased or improved; land cannot. This makes it a very efficient and equitable tax. Instead of taxing labour or capital, we should tax land instead. This is a great work too often overlooked. His basic point is very good: the owners of land gain an economic rent from so doing. Such a rent provides a good source of government income.

If you are interested in a program to implement the work of Henry George, please see the Systemic Fiscal Reform group. http://systemicfiscalreform.org/

V for Vendetta

2008-12-22T09:51:00.002Z

Imagine Britain 10 years after a devastating biological strike. The levers of the state and control of the media have been taken over by a dictator, albeit one who purports to support homely British values. Into this setting, comes an unnamed masked character who takes up against the state and the status quo. His mask is that of Guy Fawkes and his calling card "V for Vendetta".

The film begins with the destruction of the Old Bailey ("Defend the children of the poor; punish the wrongdoer") and it ends with the destruction of the Houses of Parliament. The destruction of two striking physical symbols of our society makes them in effect martyrs for what they represent.

This is a gripping film; with echoes of 1984 and at times some of the moral ambiguity of Brighton Rock or The Third Man. Its power flows from depicting a reality at odds with our image of ourself and yet close enough to the present to bite, hinting at what we might easily become.

Green New Deal: Investment For Real Wealth

2008-12-17T18:01:00.006Z

On Thursday 11th December, with two friends, I^ⁱ attended an event at the IPPR on The New Economics Foundation ’Green New Deal’^ⁱⁱ. Present were Caroline Lucas, Leader of the Green party and Ann Pettifor from Advocacy International, leading light in Jubilee 2000 affair and a Fellow of the New Economics Foundation.

Here are my notes: http://www.stephenstretton.org.uk/Reviews/GreenNewDeal11thDec.pdf

Here are my thoughts, mostly taking off from what Caroline Lucas said:

There are as many views about Keynes as there people

Keynes is about Investment

Investment means real wealth

Investment doesn’t happen with uncertainty

What governments can do is to eliminate uncertainty

If banks cease to work - recreate another layer of banks above the existing banks.

i Vivienne Raper, Freelance; Robin Smith, Systemic Fiscal Reform; Stephen Stretton, 4CMR;

ii Green New Deal http://www.neweconomics.org/gen/greennewdealneededforuk210708.aspx

Building Infrastructure

2008-12-17T16:41:00.001Z

Here is Andrew Rawnsley on the response to the financial crisis:

http://www.guardian.co.uk/commentisfree/2008/dec/14/recession-tax-spending-economic-politics

"Rather than encourage people to squitter money on imports, the
government should build us an infrastructure fit for this century"

Well said.

New Gadgets

2008-12-16T12:37:00.004Z

OK, I've just reached a state of computer-system nirvana.

On the hardware side, I'm now using an Alphasmart Dana (bought on eBay for £100). The best way to describe this is combining the simplicity of an electronic typewriter with the convenience of a Psion organizer.

On software side, I use Google extensively (Gmail and Calendar). I use CompanionLink for Googleto synchronize my online calendar with the Psion desktop/Alphasmart calendar.

In terms of editing documents, I'm using OpenOffice 3.0 which looks wonderful. This has full support for mathematical formulae, and can export to MediaWiki or Latex format. It links smoothly with (open source) Zotero, which is a Firefox plugin for bibliography management.

Reluctantly, I'm using Microsoft Word .doc format again, just because everyone (including my Alphasmart) can use this.

This system seems to work very well, so now I'm going to use it!!

Nick Pidgeon on Risk, Climate and Nuclear Energy Psychology

2008-12-13T16:44:00.000Z

On 27 November 2008 I went to a talk by Prof Nick Pidgeon of School of Psychology, University of Cardiff on the Public Understanding of Risk, particularly in the context of climate change and nuclear energy. His talk was extremely interesting in the research on the psychology of risk acceptance. Climate Change is very serious; we need education and dialogue and an 'Analytic-Deliberative' process.

Full notes stored at: http://www.stephenstretton.org.uk/Reviews/PidgeonRisk27Nov.pdf

Environmental and Social Entrepreneurship

2008-12-13T16:18:00.003Z

On Wednesday 26th November Cambridge University Entrepreneurs organised an event about Environmental and Social Goals in Entrepreneurship. The talk included NICKY DEE, IAN STEED of the Humanitarian Society and TAMAS BERTENYI - R&D Director of Quiet Revolution

There was lots of useful tips for starting social enterprises. Important common point is finding out the need that you are trying to address

It was a good talk, and I've written up the event here.

Robin Williams: High Performance Rowing Coach

2008-12-08T16:30:00.001Z

On Friday 28th November; Robin Williams, former CUBC and UK Rowing coach explained his successful approach. He suggested that the most important thing is a person or persons establishing a culture of success from the top down. Principles make a difference. its necessary to be realistic and be optimistic; let's set a goal and work out the first step.

'High Performance' is about doing something the best way. The process of desiring success starts with Recreation leading to Appetite and then Ambition, ending finally with Determination, with an important role for Self-belief and Will Power. Rowing is about working as a group and bonding. It takes time to establish the right culture. Coaches are a team too. Everyone has a job to do!

Where do you start? You, start with a dream, this leads to self-belief. Its necessary to focus on processes, rather than outcomes. Assess risks and, where necessary, change processes. Measure success, review and then improve. It helps to start from the basics.

Dreams can come true but the dream is the last inch. It's a series of steps. Ambition is the fuel. Appetite starts it off. Most important thing is to create a good purposeful atmosphere; a space with desire.

Life in a holarchy

2008-11-23T12:44:00.008Z

Traditionally parts of the green movement have often appealed for people to reduce and cut down energy consumption, citing moral arguments. Here I suggest that we need to consider the real physical and psychological needs and desires of people first. It may be easier, politically and economically to provide alternatives than ask people to reduce their consumption by a large amount.

The philosophical background to this idea, I presented on Thursday on 'living in a holarchy*', with a 'two way contract'.
http://stephenstretton.org.uk/8-PhilosophyFuture/TowardsGlobalWarmingEthics.pdf
The basic argument is the following:

Smaller scale structures (e.g. individuals, nations) need to take account the correct-function of larger structures (e.g. nations, earth system) in order to have a suitable habitat to live in.
Larger scale structures (earth system, nations) need to take account of the survival conditions of smaller scale structures (nations, individuals) in order to exist politically.

I think the 'conventional' current of green thinking tends to only see one way of the contract: the need for smaller scale agents to take account of the whole, in order to have a habitat worth living in. But there is also, in my way of thinking a second direction, the need for the larger scale structures to take account of the survival needs and desires of smaller scale agents in order to /exist politically/.

In this context, I think it may be well be worthwhile to focus on a) proper global taxation of carbon based fuels, especially coal; b) new energy supplies.

Regarding (b), the cost of decarbonising our energy supplies (and similarly making each house energy efficient) can be considered positive in an economic crisis, because of the demand stimulation. For the UK, final energy consumption of 240GW at about £2bn/GW (e.g. for uk wind/ccs/nuclear/imported concentrated solar with accelerated learning) makes investment required about £440bn, or about £22bn per year for 20 years. This is less than military expenditure of c.£30bn/year; and current total capital formation (investment) £64bn/year. The investment to will pay back in reduced oil and gas bills in the future. Also having sufficient energy supplies is a crucial part of being human. Arguments over fairness may be difficult when confronted with real human desires: energy is freedom and power. How do you make it worth people's while to reduce emissions? Decarbonising the energy supply also de-links economic growth with emissions, and this is essential.

I do agree that per-capita is a good rule of thumb in determining an apportionment of our relative impacts on the natural world.
I think equality may suffer from an 'equality of what' problem. For example, you could say by contrast that every human should have a right to a house warmed to a certain level, and energy needs would differ. Work by Richard Starkey has indicated the lack of philosophical support for equal per-capita entitlements, despite it's usefulness.

We also need to think more in terms of management and prices than emissions quantities, because creating rights to quantities will lead to 'rent-seeking behaviour'. Institutional arrangements (e.g a world carbon bank) may be better than trying to assign per capita emissions targets to individual nations and people. If you create more property, there will be a fight to enclose it. We need to move from emitting CO2 from being something valuable to fight over to something not valuable that we need to get away from. Better to instead tax carbon heavily, and provide guarantees for investment in alternative energy sources.

* The word Holarchy comes from Arthur Koestler. meaning "a hierarchy of holons — where a holon is both a part and a whole". See http://en.wikipedia.org/wiki/Holarchy

* Compare 'Panarchy'

* I'm indebted to Cormac Cullinan, who either provoked my interest in this concept or was thinking along the similar lines independently http://www.earthjuris.org/viewpointdocuments/Wild%20Law-Cullinan.pdf

Anatole Kaletsky - A good time to spend - or invest

2008-11-20T10:21:00.004Z

Anatole Kaletsky writes
"Cameron may drown in his clear blue water"

With the collapse of their poll lead, the Tories have reverted to type and adopted a thoroughly bad economic policy

Broadly speaking, Kaletsky is arguing that recessions are not a good time to put up taxes, because that risks making the recession worse. Instead it is a good time for governments to borrow to invest. Governments should be trying to counteract the fickle emotions of the markets, not running with them. A disasterous counter-cyclical approach was what originally destroyed much of Britain's industrial capacity in the early 1980s. Trust is central:

At present investors and savers seem to trust nothing except bits of paper signed by governments, be they dollar bills, bonds or banks with government guarantees. At some point the world's savers, investors and bankers will presumably decide that assets of real economic value, such as houses, oil wells or shares in commercial enterprises are better stores of wealth than paper signed by governments. But when this happens the financial crisis will, ipso facto, be over, and inflation not deflation will again be the main threat.

That will be the time to hear from advocates of fiscal prudence - but until then the right policy will be to borrow and spend.

On Disagreeing

2008-11-20T09:56:00.006Z

I found this on the web about how to disagree...
http://www.paulgraham.com/disagree.html
There are seven 'Disagreement Hierarchy' levels from the worst method to the best.

DH0. Name-calling.
DH1. Ad Hominem.
DH2. Responding to Tone.
DH3. Contradiction.
DH4. Counterargument.
DH5. Refutation.
DH6. Refuting the Central Point.

I guess its probably unproductive to do anything below level 4.
And level 6 is best. Here is what is said about level 6.

The force of a refutation depends on what you refute. The most powerful form of disagreement is to refute someone's central point.

Even as high as DH5 we still sometimes see deliberate dishonesty, as when someone picks out minor points of an argument and refutes those. Sometimes the spirit in which this is done makes it more of a sophisticated form of ad hominem than actual refutation. For example, correcting someone's grammar, or harping on minor mistakes in names or numbers. Unless the opposing argument actually depends on such things, the only purpose of correcting them is to discredit one's opponent.

Truly refuting something requires one to refute its central point, or at least one of them. And that means one has to commit explicitly to what the central point is. So a truly effective refutation would look like:
The author's main point seems to be x. As he says:

But this is wrong for the following reasons...
The quotation you point out as mistaken need not be the actual statement of the author's main point. It's enough to refute something it depends upon.

However, is it productive even to disagree at all??? Of course, avoiding disagreement maybe looks aloof, but disagreeing is often extremely time consuming and doesn't necessarily create positive alternatives. Disagreeing in detail often requires an obsession to a task which may be unhealthy.

Anyway, I have the following summary:

Spend time understanding the central point of your interlocutor
Paraphrase this point and even comment yourself. If you have the time to read something, you have the time to comment on it
Suggest positive arguments yourself in the area that really matters, although not necessarily in the same post

There is a danger of all of this 'directed' advice, that danger is that your interlocutor may see this as a 'war' and this war will induce an 'arms race'. You need to move to a more cooperative state; or at least a state where there is some degree of cooperation over shared goals or rules of the game. In general, we need to focus not on how to win the argument, but on the arguments themselves. Truth and reasonableness are higher goals than momentary victory.

Online Bibliographies

2008-11-19T16:54:00.005Z

Today I've been looking at systems to manage bibliographies.

I found two that look good: Citeulike.org and Zotero.org

Zotero.org is a plugin to Firefox. It's open source and has lots of nice features but sharing is not yet developed.
Citeulike.org is a web-based interface that allows open sharing of pages.

I think Citeulike is the way forward for scholarly colaboration.

Problem

However, it exports only in RIS (e.g. for Endnote+Word) or Bibtex (for Latex). What should I use if I want to use OpenOffice or just html for my documents?

Answer

Create a new Citeyoulike group for each document, and to simply link to that at the end of each online document. When a paper needs to be finalised one can export the list into a completed Endnote file, and thence to the format required in the paper.

Zizek and the ideological role of eastern thought

2008-11-19T15:25:00.006Z

This article has links to my own life (self-awareness/self-criticism) more than it has links to the rest of the blog. Nevertheless some people may find it interesting:

It concerns the possible ideological role of 'eastern' ideas especially in the context of 'future shock':

One should mention here the well-known concept of "future shock" that describes how people are no longer psychologically able to cope with the dazzling rhythm of technological development and the social changes that accompany it. Things simply move too fast, and before one can accustom oneself to an invention, it has already been supplanted by a new one, so that one more and more lacks the most elementary "cognitive mapping."

Here is the conclusion:

The difference between the authentic fundamentalists and the perverted
Moral Majority fundamentalists is that the first (like the Amish in the
United States) get along very well with their American neighbors since
they are simply centered on their own world and not bothered by what
goes on out there among "them," while the Moral Majority fundamentalist
is always haunted by the ambiguous attitude of horror/envy with regard
to the unspeakable pleasures in which the sinners engage. The reference
to Envy as one of the seven deadly sins can thus serve as a perfect
instrument enabling us to distinguish authentic fundamentalism from its
Moral Majority mockery: authentic fundamentalistsdo not envy their neighbors their different jouissance.

Envy is grounded in what one is tempted to call the "transcen-dental
illusion" of desire, strictly correlative to the Kantian transcendental
illusion: a natural "propensity" in the human being to (mis)perceive
the object which gives body to the primordial lack as the object which
is lacking, which was lost (and, consequently, possessed prior to this
loss); this illusion sustains the longing to regain the lost object, as
if this object has a positive substantial identity independently of its
being lost.

The conclusion to be drawn from this is a simple and radical one: Moral
Majority fundamentalists and tolerant multiculturalists are two sides
of the same coin: they both share a fascination with the Other. In the
Moral Majority, this fascination displays the envious hatred of the
Other's excessive jouissance, while the multiculturalist
tolerance of the Other's Otherness is also more twisted than it may
appear—it is sustained by a secret desire for the Other to remain
"other," not to become too much like us. In contrast to both these
positions, the only truly tolerant attitude towards the Other is that
of the authentic radical fundamentalist.

My Talk on Wednesday

2008-11-14T18:19:00.002Z

To answer the questions posed in my last post, I gave a presentation at the Land Economy seminar series on Wednesday. I had a warm reception and kind feedback from my talk. I publish my slides here for your reference.

The UK Energy Crisis

2008-09-18T23:35:00.000+01:00

What do we need to do to solve the simultaneous energy and climate crises?

What do we mean by the energy crisis?

There are various energy crises (high prices, unstable suppliers, resource depletion?). One possibly serious energy crisis is the potential shortage of electricity generation capacity.

For example, by 2015, the UK might have only 80% of the generating capacity that it needs.

What are the reasons behind this ’energy gap’?

Firstly there is a closing of existing capacity: both of old nuclear power stations coming to the end of their lives and of dirty coal power stations being closed down due to EU regulations: see this report p11-13.

Secondly, there is large uncertainty in the market.

Uncertainty leads to:

a) returns need to be higher or else investment won’t take place [1]

b) investment may be delayed, especially if a delay will lead to the resolution of uncertainty [2]

The problem now is that there is severe uncertainty over the future of the energy in this country. The government has assuaged some of the regulatory uncertainty by making strategic statements about the future of nuclear, renewable and fossil fuel energy. But there remains great financial uncertainty.

Each power source has its’ own uncertainties

a) Gas: the fuel is now hugely expensive, making this source uneconomic if such prices were to be maintained

b) Nuclear: nobody has built a nuclear power station in the UK since Sizewell: there are considerable price escalation and legal risks. A power station can be built in 7 years but with all the regulatory and public opinion hurdles new power is unlikely to come on stream before 2020. The government was 5 years too late in it’s decision.

c) Renewables: the Renewables Obligation, unlike the German system of ’feed-in tarrifs’ provides a highly uncertain return

d) Carbon Capture and Storage (coal or gas): again we don’t know the exact cost until the plant has been built. Any plants built by 2015 would be ’demonstration’ plants.

e) Coal. The dirtiest energy source of them all. The price of energy in the form of coal is a lot lower than the price of energy in the form of natural gas or oil. However, is the European Emissions Trading Scheme carbon price sufficient to control the price?

In this sitution, gas is ruled out as too expensive. renewables may happen if they can get through planning, nuclear is too late for 2015 but could make a significant impact from 2020 onwards. We are stuck between the rock of our climate change ambitions and a hard place of the investment response of low-carbon electricity to current ambitions. What we need is strong incentives for investment and in particular strong incentives for low carbon electricity. My next post will explain how this can be done.

[1] uncertain cashflows will lead investors to require a higher return in order to compensate for the risk. in otherwords people will invest but only if the price is right.

In otherwords, uncertainty may lead to less investment and the prices of that investment may rise to compensate investors for the extra risk incurred.

The relevant theory of this is known as certainty equivalent. Under certain conditions, an investor’s aversion to risk can be represented by a higher or ’risky’ discount rate. For a full account of the relation between the various ways of representing risk in investment decision see Rothwell and Gomez (2003) "Electricity Economics", IEEE press, NJ, USA pages 53-74

If governments make investing more risky than it needs to be, then electricity consumers (industry and the public) are likely to have to pick up the bill in higher bills or blackouts.

[2] If investment is irreversible there is a further effect. Real options theory shows that a combination of irreversibility and uncertainty can lead to investments being delayed. See for example Dixit and Pyndyck ’Investment Under Uncertainty, Princeton.

How to contain the credit crisis - Martin Wolf (FT)

2008-09-18T13:13:00.001+01:00

Here are 4 do's and 4 do not's of Martin Wolf in the FT. At first glance my plan appears consistent with the relevant do's and the do nots. Note that Wolf suggests to find alternative methods of financing housing including land value taxation (Do not number 3), maybe as an alternative to other property taxes.

http://www.ft.com/cms/s/0/49726416-84ca-11dd-b148-0000779fd18c.html

Here are four “dos” for a wise government.

sustain the core financial system.
if the government does end up bailing out banks or facilitating mergers, make sure it also contains the risks taxpayers are running.
develop a contingency plan for a systemic bail-out of the financial system.
develop a more credible set of independent institutional arrangements to replace the fiscal rules, which are about to be utterly discredited.

Now here are four “do nots”.

do not pay too much attention to the financial sector’s self-interested bleating.
do not change the monetary framework.
do not bail out mortgage lending via government subsidies.(...) What it can do, instead, is facilitate the development of new systems of finance, such as covered bonds. What it can also do is consider land-value taxation as an alternative to other property taxes.
do not panic.

A Possible Solution to the Financial Crisis

2008-09-18T03:41:00.000+01:00

A Possible Solution to the Financial Crisis

Here is a suggestion after reading Anatole Kaletsky's Article today http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4776149.ece?Submitted=true

Two new organisations need to be created to formalise and eventually commercialise the government's role as 'lender of last resort' and 'insurer of last resort' to financial institutions. I'll call these 'Bigbank' and 'Biginsure'

Bigbank's role is to lend other banks so long as the other bank is solvent.
Bigbank's lending should be to other creditworthy institutions. It should it insure the loans it makes against the risk of default where possible, by buying credit default protection in the open market.
Bigbank's role is to provide 'bridging loans' to other banks who might have temporary liquidity problems due to speculative attack.
Bigbank could (say) have around £100bn of capital. The government providing the initial capitalisation, by buying shares, or by guarantee. So long as the risks on the loans that it makes can be adequately insured, Bigbank can lend many times its' capital.

Biginsure's role is to be an 'insurer of last resort'. Biginsure will insure bigbank against it's counterparty going bust, if no other insurers can be found. Big insure could also insure against other major risks where at present. the government provides a guarantee (e.g. terrorism, natural disasters). Biginsure would be well capitalised, in order to cover quite large potential risks. Biginsure could grow (e.g from an initial size of £100bn of government-owned shares to a size of £1tr) by selling shares to the public, so spreading risk broadly.

Both institutions can act commercially, by providing loans at rates that account for the inherent (although not the speculation-induced) riskiness of lending (because now-solvent institutions might become insolvent in the future). The main role of bigbank is to offer liquidity and thus defend solvent institutions against speculative attack.

You can comment: http://climatephilosopher.blogspot.com/2008/09/my-solution-to-financial-crisis.html

Investment Banks Should Not Hold Systemic Credit Risk

2008-09-15T18:25:00.000+01:00

Comments Welcome.

The Triple Crisis

2008-09-15T18:21:00.001+01:00

It has been suggested on my website and elsewhere [1] that we face three fundamental strategic crises:

"Firstly, there is a short term economic crisis in modern economies. Our quality of life could be better than it currently is, and we need to ensure we save enough for the retirement of an ageing population. Our tax systems hold back the economy
Secondly, there is a particular crisis in energy and food sectors, with soaring prices and political instability in suppliers of energy.
Thirdly, there is a global crisis over the future of life on earth, associated with climate change, pollution and the burning of fossul fuels."

I hope to address these fundamental issues in this blog and on my website in my "Short Guide to a Secure Future".

"These crises need a robust, global and integrated response. This website will describe a set of credible and realistic solutions to these crises."

[1] e.g by others such as NEF;

Also see presidential nominees: McCain's views and plans Obama's views and plans

In The Beginning

2008-09-15T16:52:00.000+01:00

It is funny that I see my future writing essays. At school I was never so good with words. Age 11, the mere thought of an essay sent me in to a paroxysm of anxiety. Once I started writing, words might flow... but how difficult it felt to put the first word on paper!

Today, I still have the same difficulty with starting things. What is the main task to be done in a day; where should I start? I find one very useful piece of advise is to write down one word. This reminds me of the beginning of St John's gospel: "In the beginning was the Word...". Why not start every day with a word? And what a beautiful and profound piece of writing this is!

http://kingjbible.com/john/1.htm

1 In the beginning was the Word, and the Word was with God, and the Word was God. 2 The same was in the beginning with God. 3 All things were made by him; and without him was not any thing made that was made. 4 In him was life; and the life was the light of men. 5 And the light shineth in darkness; and the darkness comprehended it not.

Thinking and Our Future

2008-09-15T16:36:00.002+01:00

One of the purposes of this blog is to apply some of the ideas of some of the great thinkers to the great problems of our age, in particular, our energy supply and it's implications for the future of the Earth's climate. I think the particular combination of political philosophy and our energy future is severely neglected.

The limiting factor in tackling the danger of climate change is not our understanding of the physical climate. We know already that there is at the very least a credible risk of an average warming of 2 - 6 degrees Celsius above the long-term average, with a risk of severe impacts such as the melting of ice, the destruction of ecosystems and the desertification of fertile farmland. This in itself might motivate a concern to mitigate those risks.

We know the basic policies for tackling climate change; namely a price for carbon or carbon tax. However, these policies have not been implemented. This could be a communication problem or it could be something even more serious. If we accept there is a danger, we need to think about whether it is a problem which can be solved socially and politically. If not, what needs to change? More fundamentally, is there any agent or idea which can actually affect our trajectory? If we are on a road to hell, can we get off or take a different path? What are the boundaries to the emotiveness of our thoughts? Can science speak truth unto power and if so when? What is power and what language does he speak? How can you or I speak with him or her?

The economics of climate change is now a little less neglected, after the Stern review and the subsequent outburst of academic activity. But the political theory of climate change still seems to exist at a very basic level. Hopefully this blog will find those thinkers who are talking in the wilderness and to bring them in touch with this thread at least. If they cannot be found this blog aims to start to redress their absence.

Welcome

2008-09-15T16:25:00.000+01:00

Welcome to my blog!

This will be my personal blog. I guess I would describe myself as a climate philosopher, where philosophy is considered in the older sense! Hope you enjoy the blog!

Complex Models and The Impact of CO2

2008-07-30T13:30:00.000+01:00

Here is a challenge laid down by Steve McIntyre
http://www.climateaudit.org/?p=3361#comment-282602
"I think that it is important for people in the field to write out a careful “engineering quality” exposition of how doubled CO2 leads to 3 deg C in which all the key parameterizations and feedbacks are written down and described."

Modelling is on the horns of a dilemma. A simple model can't predict the detailed fluctuations.

A complex model may start to predict the *phenomena* of these detailed fluctuations (ie. You get El Nino) but may fail to predict numerically what fluctuations will take place when. As soon as you try to predict the complex details, the additional assumptions introduced will have their own uncertainty and that may well destroy the predictive power in itself.

Climate prediction is therefore astoundingly difficult *in theory*.

What the *practice* is like is a different matter; it's hard to know.

My impression of climate models is good but based on poor evidence(I haven't personally worked on climate models). Its done in the UK by the Hadley Centre, part of the Met Office who are well funded and have to make testable predictions every day. I have also been impressed by those I have seen presenting from the UK (e.g. Peter Cox).

Some have argued that all personal scientific understanding is a sort of model. See discussion of the Lucidity Principle by Michael McIntyre (Prof of Atmospheric Science at Cambridge) http://www.atm.damtp.cam.ac.uk/people/mem/

In general I think it is necessary to build up a hierarchy of models which are themselves scientific understanding, from the very simplest Stefan-Boltzmann Radiative Balance. The books I have/has (I've given some of them away) and recommend are:

'A Climate Modeling Primer', which has a CD attached
'Elementary Climate Physics' by Taylor
'Global Warming: a complete briefing' by Sir John Houghton.

This in part is a solution to Steve McIntyre's request. He should read the books and outline a hierarchy of models himself.

NASA Climate Science "Marginalised"

2008-07-29T16:18:00.000+01:00

An internal audit has found that the NASA press office "reduced, marginalised or mischaracterized" climate science, for political purposes between 2004 and 2006.

"On September 29, 2006, 14 United States Senators cosigned a letter to the NASA Inspector General to request a formal investigation into allegations of "political interference" with the work of scientists at NASA."
...
"Our investigation found that during the fall of 2004 through early 2006, the NASA Headquarters Office of Public Affairs managed the topic of climate change in a manner that reduced, marginalized, or mischaracterized climate change science made available to the general public through those particular media over which the Office of Public Affairs had control (i.e., news releases and media access)."

http://oig.nasa.gov/investigations/OI_STI_Summary.pdf

Swindled!

2008-07-24T15:47:00.000+01:00

Here is Carl Wunsch, professor of physical oceanography at the Massachusetts Institute of Technology, on his treatment at the hands of the makers of a documentary filmed on Channel Four. He said the film, 'The Great Global Warming Swindle', was 'grossly distorted' and 'as close to pure propaganda as anything since World War Two'[1].

Public service broadcasting is a precious flower. It's time to defend truth and integrity of our documentaries, through the public service mandate. The BBC of Lord Reith, Kenneth Clark and David Attenborough should follow, intensify and expand it's mission to inspire and educate. Other broadcasters should not forget their responsibilities. The alternatives are either a media and a society manipulated by hidden interests and characterized by a race to the bottom; or the inspiration of human civilisation and the natural world. We must be brave enough to make the choice.

[1] http://www.guardian.co.uk/media/2007/mar/11/broadcasting.science

Dedication

2008-07-24T15:12:00.000+01:00

This website is here for people who take a critical and scientific view of public discourse. Statements made in the media, in newspapers and in television documentaries should be subjected to critical review, based on how their claims stack up relative to basic physical principles. We will be casting a sceptical eye on some of the wilder scientific pronouncements made in different fields by non-scientists, focussing initially on pronouncements made about the science of climate change. We should apply the standards of the laboratory to what people say in public. And we should not be afraid to be inspired by the art of human civilisation and the natural world - in short we can be inspired by life itself.

It is devoted to the struggle against falsehood and lies, and in particular to Alexandr Solzhenitsyn.

"And the simple step of a simple courageous man is not to partake in falsehood, not to support false actions! Let THAT enter the world, let it even reign in the world - but not with my help. But writers and artists can achieve more: they can CONQUER FALSEHOOD! In the struggle with falsehood art always did win and it always does win! Openly, irrefutably for everyone! Falsehood can hold out against much in this world, but not against art."

Alexandr Solzhenitsyn, Nobel Prize for Literature, Acceptance Speech, 1970
http://nobelprize.org/nobel_prizes/literature/laureates/1970/solzhenitsyn-lecture.html