Thursday, September 02, 2010

More Comments on Climate Change - what can we agree on? and What initiatives should governments offer?

Addendum # 1 - Letter to the Editor of Business Review Weekly
A common technique in dispute resolution is for both sides to look for issues they agree upon. In the climate change debate, this has not yet happened.

Climate change skeptics and supporters should gather in one room and discuss their areas of agreement. Most would agree that our planet is warming up, rainfall in southern Australia is diminishing and sea levels are rising. Regardless of the cause of these climate changes, both parties should agree that we are consuming our limited resources of fossil fuels (oil, gas, coal) at rates which will cause shortages at some point in the future. Actions providing cost-effective economic and meaningful environmental benefits should also gain support.

A range of policy initiatives then becomes clear once these higher level agreements have been reached. Solar hot water systems and ceiling insulation (via a properly planned and implemented incentive program) provide economic pay-back periods of less than 10 years; most diesel-fueled cars are cost-effective after 60,000 km; green building regulations reduce energy and water usage by 50% or more; energy and water audits for businesses; and so the list goes on.

Government would not need to introduce 'a great big new tax' to achieve any of these mutually agreed upon outcomes, instead offering taxation incentives such as accelerated depreciation, year of purchase write-off or return of the GST payments.

The lack of any attempt to reach agreement between opposing climate change groups shows that ideology and politics still remain their primary motivations. No wonder the public is losing faith in political parties who want higher tax income and environmental groups who want a return to the dark ages.


Addendum # 2 - Policy Initiatives arising from Path # 3

If we're prepared to act on issues which people with a concern about the future can agree on, then the following email to someone who asked for my views on 'relevant economic solutions' to climate change may be of interest:

The best economic solutions to environmental problems will be those that have a reasonable economic pay-back period (say, less than 10 years for the big, long term expenditures or less than 5 years for solutions with a shorter working life) which also deliver useful or important environmental benefits. Some examples include:
* solar hot water system - 15 to 20 year life, with a 3 to 6 year pay-back period depending upon the type of hot water system that is being replaced. Current government increases in electricity prices to reflect the actual cost of generating and supplying electricity can only help shorten the pay-back period and hence make solar hot water systems more attractive.
* ceiling insulation in houses - in spite of Peter Garrett making a complete mess of the scheme, the principles behind it were fine. 50+ year life, pay-back period of 4 to 10 years depending on how home heating is generated.An added benefit is that Perth's highly inefficient domestic air conditioners won't need to work so hard in summer, hence reducing the amount of electricity Synergy has to supply each afternoon/evening on a hot summer's day to meet the air conditioning load.
* compact fluorescent lights
* energy audits - the businesses and industries that I've worked in over the years have paid little attention to fine tuning their energy use. This was in spite of energy consultants promising a one year pay-back on the cost of their advice (although you had to also pay for new equipment, etc)
* passive solar energy heat-gain design in dwellings. In theory, design and construction costs impose no extra costs with energy savings of half or more, although occupants need to accept behavioural change to open windows when cool sea breezes are blowing, close curtains when outside air temperatures go up, open curtains in winter when sun is shining into the north-facing rooms, etc.

If electric cars consume less energy (assuming a common basis for comparison exists between electric and liquid fuel motor vehicles) than other cars, then government could encourage their use by eliminating motor vehicle registration fees or refunding GST on equipment purchases.

I'm certainly not a supporter of the concept of trading in older vehicles that may be giving 12 litres per 100km fuel consumption just to buy a new car that might be giving 10 litres per 100 km. A $30,000 motor vehicle loses 20% (at least) in value the second it leaves the dealer's yard, so $6000 in lost value may take 10 or 15 years for an economic pay-back derived from the small fuel saving.