Showing posts with label cost. Show all posts
Showing posts with label cost. Show all posts

Thursday, April 4, 2013

Now you see it, now you don't

When the stage magician makes the bird appear the audience gasps because he has conjured a bird where there was no bird before.

In the same way, a new carbon tax evokes gasps of shock as opponents complain that it is a new expense that didn't exist before.

Nonsense, of course. The magician's bird existed all along but was hidden from sight. In the same way, the cost of carbon pollution existed all along but was hidden from sight. The costs include threats to food production and water supplies; damage caused by heatwaves that are more extreme and more frequent; droughts that come more often and last longer; more severe storms and flooding; loss of habitats, plants and animals; and worsening ocean acidification.

Carbon taxes don't magically add new costs, they reveal the costs that already exist. With these costs out in the light, there's a better chance that they'll be contained so we can avoid the worst damage from dangerous climate change.


News from the Transformation tab.  

Consumer goods manufacturing giant Procter & Gamble is now sending zero waste to landfill at 45 of its sites across the globe. Procter & Gamble says less than 1% of its waste currently goes to landfill worldwide. The company has reduced the amount of waste it produces by 68% since 2008. It aims to achieve zero waste at all sites.

Tuesday, November 27, 2012

Discount for up-front payment

You need a new washing machine and you need it now! Who is offering the better deal - the guy who says you can pay the full price on delivery, or the girl who offers a 20% discount for cash payment upfront?

If you don't have the cash, you might think that you have no option but to pay the full price on delivery. Or you might figure that you could borrow the money, pay cash, collect the 20% discount, then repay what you borrowed, and still be ahead. If you actually have the cash on you -  it's a no brainer!

When ExxonMobil boss, Rex Tillerson, acknowledged man-made global warming but said society will adapt, he was selling the line that paying for goods after they are delivered is a good idea.  This is a line that benefits ExxonMobile because it lets them keep making money selling fossil fuel while the cost of dealing with the consequences is borne by society.

The costs of paying for the consequences of climate change became more apparent this year as we counted the cost of recovering from drought,  storms and flooding.  For example, Superstorm Sandy  caused an estimated $50 billion worth of damage to the New York region.

Economists say that whatever happens we can't escape the costs of damage caused by rising CO2 emissions. The stark benefit of paying upfront is that this is the only way to avoid the worst extremes of climate change. If we don't pay upfront, we risk average temperature increases of 4-7C by the end of the century. The World Bank warns -
A global temperature increase of about 7 degrees will lead to “unprecedented heat waves, severe drought and major floods in many regions, with serious impacts on human systems, ecosystems and associated services.”
So, how much is the upfront payment option? About 0.1% of GDP over 40 years, according to Treasury modelling for Australia's carbon price legislation.

Worldwide, the IPCC (2007) report said keeping greenhouse gas concentrations low would cost less than 3 percent of world gross domestic product by 2030.

That sounds like a deal you'd want to snap up.


News from the Transformation tab.  

Abu Dhabi: The largest single-unit solar power plant in the world is expected to be completed by the end of 2012 and officially open in the first quarter of 2013.

Thursday, May 24, 2012

Subsidies – specks or logs?

We have set out on this long journey towards a low carbon future.

We know that the cost of doing nothing will be enormous in money, goods, homes and lives. So we are prepared to pay to avoid catastrophe. Of course, we don't want to pay more than we have to, and we don't want to pay more than the other guy. So everyone is busy with their calculators and measuring rods making sure we pay as little as possible, making this transition look like a slow bicycle race.

The situation is ripe for vested interests to say, "Hey! Those guys are getting too much money. It's not fair."

This happened recently with respect to Chinese solar panels exported to the U.S. The U.S. Department of Commerce decided that the manufacturers had an unfair advantage due to big subsidies from the Chinese government. To level things up, they slapped a tariff on them.

Fossil fuel industry supporters often complain that governments are giving too many subsidies to renewable energy projects. Industry associations and lobbyists are counting on their fingers and toes to tally all the subsidies, big and little, for renewables.

The very reputable International Energy Agency (IEA) found that countries worldwide paid $66 billion in subsidies to encourage the development and deployment of renewable energy in 2010.

That sounds like a lot, but it is just a speck compared with the $409 billion that governments paid to subsidise fossil fuel in the same year, according to the IEA.

Fatih Birol, exceptional economist with the IEA says, 
Energy markets can be thought of as suffering from appendicitis due to fossil fuel subsidies. They need to be removed for a healthy energy economy. Energy is significantly underpriced in many parts of the world, leading to wasteful consumption, price volatility and fuel smuggling. It's also undermining the competitiveness of renewables.

Australia doesn't get a mention in this very excellent Guardian article about fossil fuel subsidies, but I note that after floating the idea of reducing the $2 billion diesel rebate, the Australian government caved in to industry lobbying and it didn't get a mention in the recent budget.

When fossil fuel interests criticise the subsidies given to renewable energy, they need to look at the log in their own eyes before complaining about the speck in other people's eyes.
You hypocrite, first take the log out of your own eye, and then you will see clearly to take the speck out of your brother’s eye.
Matthew 7.3