An Invitation To Be Spurned

Am I the only person who laughed out loud at that wonderful article “Europe calls for climate action” in the Australian Financial Review of May 25? The article, to which the 26 ambassadors from the European Union and its member states appended their signatures, was an agitprop piece designed to ensure that Australia gets mired in the same low-growth swamp that the EU has created for itself.  It promotes policies for Australia and other countries “to adopt, in December in Paris, a fair, ambitious and legally binding international climate agreement to put the world on track to keep temperature rise below 2 degrees Celsius”.

Their Excellencies say, “The latest data from CSIRO indicates temperatures have increased by 0.9 degrees and sea levels have risen by 20 centimetres over the past century”. In doing so they show a lack of curiosity in failing to question why we are talking about data covering a century when the human emissions cannot feasibly have had any effect before the past 50 years. Why not address the past 300 years, a period during which even more substantial warming took place?  Or why not have a look at the past 1000 years when – oh no, that would show the earth having cooled!

The ambassadors also glide over the lack of warming that has characterised the past 18 years and they do so at a time when, according to the modelling they favour, temperatures should have been rising full pelt.

Nor do the ambassadors interrogate the reasons that the IPCC’s chosen authorities offer for the losses.  These reasons include a supposed permanent drought in south-eastern Australia where rainfall data shows a never-ending pattern of wet years and dry ones with no trend evident.  Even factoids derived from this and supposed risks of flooding, epidemics, mortality from extreme heat and so on cannot be tortured to provide evidence of real costs from warming.  The ambassadors want to commit to a 40% reduction of carbon dioxide and equivalent emissions by 2030 compared to 1990 levels.  They say this will not be easy, though they do offer bromides about the pain of using less fossil fuel energy being soothed with new jobs in the renewable sector.  For the EU they say these amount to a 74% increase.  But they overlooked the analysis by Calzada Alverez on renewable subsidies in Spain, once the most eager adopter of such measures. Alverez showed the extra costs necessary to force the adoption of renewables meant nine jobs lost for every four created.

Pricelessly, the ambassadors go on to argue “the European Union’s first mover experience with climate action shows that it is possible to combine economic growth with greenhouse gas reductions”, further lauding the growth they have achieved since 1990.  In fact, headlines such as “High European energy prices drive BMW to US”  illustrate the damage of EU carbon-emission measures.  But aggregate data tells a more comprehensive story.

The following chart illustrates growth in the EU, its five major economies, and the world as a whole.  Greece may be the Union’s lousiest performer with output down nearly 30 per cent from its peak but the EU as a whole has stagnated since 2008.  Even Germany and the UK have seen average living standards fall while Spain and Italy have both shown negative overall growth.  Contrast that with aggregate world growth at 20%t over the same period.

Having cut emissions by 20% since 1990, the ambassadors say lopping the next 20% by 2030 won’t be easy.  Well, yes and no.  The first 20% cuts were made by forcing price increases that choked off household demand and brought about a deindustrialisation (made all the more potent by restructuring of inefficient industries in the former Communist EU members).  As in Australia, high energy prices forced the relocation of energy intensive industries, such as aluminium smelting and, in Germany’s case, car assembly. Of course, this meant no net reduction in global emissions but does allow the bragging rights accruing to a claimed self-sacrifice in order to promote a common good.

Each additional 20% will be progressively more expensive.  This is especially so for Australia, with a coal-based electricity industry and relatively energy-intensive industrial profile.  Moreover a 40% reduction in emissions is only an interim step.  In order to reach the stabilisation of emissions said to be necessary to limit global temperatures increases to 2°C, reductions of 80% for developed countries are necessary as well as substantial reductions among developing countries.  The nascent industrial powerhouses, India and China, have declared such policies applied to themselves as being out of the question.  They and other growth-promoting nations offer willing refuges for the energy intensive industries exiled from developed nations by high taxes and regulations.

The implications of an 80% reduction in per capita emissions, if accompanied by rising living standards, really advance the horizons of science fiction.  We are finding it well-nigh impossible to reduce the costs of wind, the cheapest exotic renewable by the two-thirds necessary for it to compete with fossil fuels, and we are making no progress in the other great white hope: carbon-capture-and-storage of emissions from coal combustion.

The climate change storm will blow hard at least until the Paris Conference in December demonstrates that at least some nations are unwilling to commit economic suicide in pursuit of policies based on a theory for which empirical data offers no succour.  After that we may hope to see a greater emphasis on measuring climate change and a corresponding reduction in the effort involved in constructing models to project it.

Aside from contributing to a warmer climate, carbon dioxide concentrations are totally harmless.  And the data drawn from 18 years of no warming continues to roll in.  Successive studies claiming the heat is there (but hiding in the deep oceans) are one-by-one disproven.

The bottom line set by the world’s greatest atmospheric physicist, Richard Lindzen, is that a doubling of greenhouse gases brings about a 1°C increase in temperatures.  As the relationship between temperatures and greenhouse gases is logarithmic, no significant further warming is likely.  In Lindzen’s view most of the warming from the post-industrial doubling of emissions has already taken place.  Lindzen’s basic analysis is not disputed, but climate modellers build upon this by arguing that the initial warming increases water vapour which compounds the effect by as much as threefold.  So far the models on which such notions are based have considerably overstated the warming that has taken place.

Just because two bakers’ dozen of ambassadors sign something does not mean it is true.  The EU has placed great store on the climate warming deity and has paid an enormous price in loss of industry and of income.  The pressure the EU feels it must impose stems from the difficulties it now faces in view of the institutionalised, difficult-to-dismantle domestic carbon emission reduction programs it has in place. Its only chance of seeing any rebound from the losses it has incurred is for other nations to follow the same policies.  Though that would leave the world even worse off, it would soften the blow that the EU has imposed upon itself with first-mover actions that have undermined its competitiveness.

Australia would be unwise to follow the EU path.  The best approach is to dismantle our current programs: Direct Action, the Clean Energy Bank and other direct subsidies and the renewable program cost some $5 billion a year while needlessly boosting electricity prices and undermining national competitiveness.  Any proposed measures taken to the Paris negotiations should be strictly on the basis of them being contingent upon concrete actions being agreed by all countries with credible timetables for their implementation.

Alan Moran is from Regulation Economics and is the editor of Climate Change: the Facts