John Quiggin

The International Energy Agency reported today that global CO2 emissions hit a new record in 2010, and are well above where they should be for a path to stabilise CO2(+equivalent) concentrations at 450 ppm. The Global Financial Crisis has had a significant impact in the US and Europe but (not surprisingly) hardly any in China, where the impact of the crisis was short-lived, and rapidly offset by a strong fiscal stimulus. With the failure of policy in the US, things are not looking good. On the other hand, after playing the wrecker’s role at Copenhagen, China now seems to have embraced the idea of becoming the world leader in renewable energy.

The real good news is a new study undertaken by the IEA that refutes negative views about the variability of supply from PV and wind power (expressed by quite a few commenters here over the years, and the subject of numerous amateur analyses at blogs like Brave New Climate) and concludes that “the challenges of integrating large shares of variable renewables in power systems are far from insurmountable“. The analysis suggests that starting with existing grid characteristics, and employing balancing technologies now available, it would be possible to supply between 20 per cent (Japan) and 60 per cent (Denmark) of electricity generation using variable renewables, with an average of around 30 per cent. No specific date is given, but the discussion implies a time horizon around 2030.

Unfortunately, the PDF containing the detailed analysis is on sale at a price of 80 euros, which I don’t intend to pay, but the executive summary is online and gives a general idea of the argument.

An important point is that the most natural partners for variable renewables are sources that can be turned on and off easily. Hydro-electricity is the best example, but scope for expansion is limited. The next best case is a mixture of gas and variable renewables, and that seems like the sensible path to take over the next decade or two.

In the absence of any equally authoritative critique of the IEA analysis, I intend to treat this question as settled from now on, as with the prospects for nuclear power. Anyone seeking to make unsupported counter-claims based on their own intuition, BNC-style amateur analysis and so on should take them to the nuclear sandpit.

Summing up the news so far, if the world’s governments are willing to act to stabilise the global climate, they can do so at very low cost. It remains to be seen whether or not they will.

The announcement by the UK government (Conservative-LibDem coalition) that it would aim to reduce CO2 emissions by 50 per cent, relative to 1990 levels, by 2025 has had a significant impact on the Australian debate and is likely to have a greater impact as time goes on.

In part this reflects the fact that, understandably if not entirely justifiably, Australians pay a lot more attention to news and ideas from the UK and US than from, say, France or Germany. The British announcement cuts the ground from under many of the claims being made by the denial/delusion/delay lobby in Australia.

* The idea that “Australia risks getting out in front of the world” is obviously false. Even assuming we get a carbon tax, leading on to an emissions trading scheme later this decade, we will be a decade or so behind the UK and other EU countries, which introduced an ETS in 2005

* The view that it is impossible, in a modern economy to reduce emissions substantially without a radical reduction in economic activity is obviously not shared by the UK government which (unlike the critics) has actually done the analytical work required to show that large reductions can be achieved at very little economic cost, and is now implementing the required policy. I’ve demonstrated this point over and over on this blog, and the negative responses have amounted to little more than “La, la, I’m not listening”, but hopefully a practical demonstration will have more effect

* As part of the longstanding intellectual trade with the UK, we get a regular flow of delusionist speakers like Lord Monckton out here (fair’s fair, we did send them Clive and Germaine after all). Demolition jobs like this one, from a leading British Tory, might make their audiences a bit more sceptical

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Here’s a new sandpit for (non-nuclear) lengthy side discussion, rants on idees fixes and so on.

Fire away on anything related to nuclear energy.

It’s time again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

That’s the advice on scandal management from former Clinton spinmaster Lanny Davis, who’s since applied his expertise to defending some of the least appealing clients imaginable. Whatever you think of Davis, his advice is pretty good, and lots of people have come to grief by doing the opposite. That certainly seems to be the case with George Mason University. In March 2010, they received an official complaint of plagiarism regarding the notorious Wegman report produced (at the request of Republican Congressman Joe Barton) to criticise the well-known ‘hockey stick’ graph of global temperatures. Amazingly, GMU Professor Edward Wegman had lifted substantial blocks of text, without acknowledgement, from one of his targets, Raymond Bradley. When this was pointed out by bloggers John Mashey and Deep Climate, Bradley complained and asked for the report to be retracted.

Ignoring (or ignorant of) Davis’ advice, GMU took its time, perhaps hoping the problem would go away. Unfortunately for them, the opposite happened. Further research produced at least two more instances of plagiarism, one in another section of the Wegman report dealing with social networks and another in an unrelated paper on color vision. As I a mentioned a little while ago, the social networks analysis produced an academic paper, accepted by a Wegman mate with no peer review, which has now been retracted.

And now, Nature, which published the original hockey stick paper in 1999, has weighed in with an editorial calling for GMU to hurry up, and making mention of the Office of Research Integrity as an alternative process. That could make it a criminal matter.

At this point, GMU has no appealing options.

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A few updates on my last post

* A link from Paul Krugman, who’s more pessimistic than I am

* A scathing piece from archetypal centrist Dana Milbank on default denialism, linking it to birtherism, climate conspiracy theories and moon landing hoax claims

* At Crikey Guy Rundle looks at the significance of the (non)-Rapture in relation to climate change and similar denials of reality

The fact that, with no observable exceptions, the US Republican Party relies on delusional beliefs for most of its claims about economics, science and history has been obvious for some years. But, until recently it’s been outside the Overton Window. That seems to have changed, as witness:

* Jacob Weisberg, who only a little while ago was giving qualified praise to the Ryan Plan, now says the Repubs have

moved to a mental Shangri-La, where unwanted problems (climate change, the need to pay the costs of running the government) can be wished away, prejudice trumps fact (Obama might just be Kenyan-born or a Muslim), expertise is evidence of error, and reality itself comes to be regarded as some kind of elitist plot.

* USA Today comparing Republican climate change delusionism to birtherism and saying

The latest scientific report provides clarity that denial isn’t just a river in Egypt. It paves a path to a future fraught with melting ice caps, rising sea levels, shifting agricultural patterns, droughts and wildfires.

* The Washington Post, home of High Broderism says “the Republican Party, and therefore the U.S. government, have moved far from reality and responsibility in their approach to climate change.”

* Even GOP house journal Politico draws the formerly off-limits link between “skeptics” and “deniers”, regarding the Republican adoption of fringe economic theories suggesting the US can safely leave the debt ceiling unchanged.

Why is this happening now, after years of apparent Republican immunity from any kind of fact-based challenge? And how will this affect public debate in the US and elsewhere?

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It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). As always, civilised discussion and no coarse language please.

There are three people prominent in Australian politics whom I would happily support as Prime Minister[1]. Of these, the one who has the best chance is, I think, Malcolm Turnbull (it shouldn’t be hard for readers to guess the other two). He’s reminded us again what we lost when he was replaced by the lightweight opportunist who now leads the Opposition, against a mirror-image PM. If the Libs would put Turnbull up again, they would get my vote for the first time.

fn1. That reflects a fairly pessimistic view of what progress can be made. A competent government with a decent and consistent policy on climate change is as much as we can hope for at present.

Linking to Bennett McCallum with some puzzlement a while back, Brad DeLong asked why a higher inflation target could be seen as undermining central bank independence. I’m with McCallum on the analysis, but not on the policy conclusion. A higher inflation target would reduce central bank independence, and a good thing too.

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A few years back as part of the attack on climate science (and in particular the famous ‘hockey stick’ graph) Senator Joe Barton commission an assessment of the work of Michael Mann and others from Professor Edward Wegman of George Mason University, along with his former student Yasmin Said and some others. This included, not only Wegman’s supposedly independent assessment of the statistical methods used by Mann but a ‘social network analysis’ of the relationship between Mann and his co-authors, which purportedly showed that Mann’s network of co-authors dominated the climate science field. As I pointed out at the time, Wegman et al started the analysis with Mann at the centre, so the primary result was that Mann had written a paper with every one of his co-authors! Nevertheless, a version of the paper was published in Computational Statistics and Data Analysis, in which Wegman took this analysis to the startling conclusion that senior academics should not collaborate with each other, but should instead work only with their students. Wegman follows his own advice in this respect, and now we can see why.

It’s just been announced that the paper is to be retracted on the grounds that it contains extensive plagiarism, much but not all of it from Wikipedia. Wegman’s response, showing the wisdom of his research strategy, is to blame his graduate student, who was not, however credited as an author. USA Today, which has taken the lead in following the Wegman plagiarism story, asked an actual expert to look at the paper and her reaction was about the same as my amateur assessment (Wegman and Said are also newcomers to the field, which may explain their heavy reliance on Wikipedia as a reference source).
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For students of agnotology there is no more striking finding than the observation that many people, presented with evidence that undermines a strongly held belief, react as if that belief had been confirmed[1]. This seems to undermine any possibility that evidence will ever settle political disputes. And yet, evidence does seem to seep through in the end. Although belief in Saddam’s Weapons of Mass Destruction persisted long after the absence of evidence had turned into clear evidence of absence, it faded away in the end (not that it has completely disappeared even now).

As a slightly more optimistic take on the experimental evidence, I offer the example of Santa Claus. Young children, presented with the suggestion that Santa isn’t real, blithely ignore it. Slightly older children, though, react in exactly the manner of the experimental subjects, reaffirming their belief in the Santa story and (of course) the associated presents. Later, of course, they accept the truth.

In some social contexts children are likely draw the obvious analogy between Santa and God, while in other contexts, the distinction between the two beliefs is maintained successfully. But regardless of context, there is an obvious risk, for those who would like their children to grow up as theists, in insisting too hard on the reality of Santa.

Similarly, I suspect that the apparent success of Republicans in believing six impossible things before breakfast, and in taking up new delusions as old ones are abandoned, may mask an underlying erosion of faith. Birtherism may morph into torturism without any obvious sign of stress, but at some level people must gradually become aware that their political beliefs are more like the faith that belief in Santa will bring presents and less like the belief that kicking a rock will give you a stubbed toe.

fn1. The general phenonomen of confirmation bias (paying attention to evidence that supports your belief and disregarding contradictory evidence) is well established. The first finding of reinforcement Nyhan and Riefler find that Democrats ignore contradictory evidence, while Republicans respond in the way I described. I can’t find the study that supported this. Nyhan and Riefler cite earlier research by Redlawski that I haven’t been able to find.

It’s time again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

There are plenty of reasons to be gloomy about the prospects of stabilising the global climate. The failure at Copenhagen (partly, but far from wholly, redressed in the subsequent meeting at Cancun) means that a binding international agreement, let alone an effective international trading scheme, is a long way off. The political right, at least in English-speaking countries, has deepened its commitment to anti-science delusionism. And (regardless of views on its merits) the prospect of a significant contribution from nuclear power has pretty much disappeared, at least for the next decade or so, following Fukushima and the failure of the US ‘nuclear renaissance’.

But there’s also some striking good news. Most important is the arrival of ‘peak gasoline’ in the US. US gasoline consumption peaked in 2006 and was about 8 per cent below the peak in 2010. Consumption per person has fallen more than 10 per cent.
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That’s the title of my piece in yesterday’s Fin, over the Fold

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Tony Abbott, who denounced the government’s very mild pause on indexing the $150k threshold for access to Family Tax Payments as “class warfare”, has previously supported identical attacks on “middle class welfare“. Nothing surprising there: Abbott has shown himself absolutely willing to say whatever he thinks his audience wants to hear on the day. Unfortunately, exactly the same is true of Julia Gillard. Neither seems to think much before committing themselves to whatever thought bubble looks good on the day (cash for clunkers, tax levies for parental leave etc)

By comparison with these two, Wayne Swan and Joe Hockey, among other potential successors, look like stellar intellects and conviction politicians. Kevin Rudd and Malcolm Turnbull are in a whole different universe. As I’ve said before, the current contenders to rule Australia are living disproof of the adage that we get the government we deserve. We didn’t ask for Gillard, and the only alternative we were offered was Abbott. What a choice!

A while ago I wrote a post responding to a Lowy Institute blurb for a new book by Michael Wesley, called There goes the Neighborhood and described as ‘A loud and clear wake-up call to Australians’. In response, I said that ‘At the global level it’s hard to think of a time when we have been less threatened, at least within living memory’, and concluded ‘unless commenters can point to something I’ve missed, I’m going back to sleep’.

Michael Wesley has now responded, and sent me a copy of the book, which I hadn’t read when I responded to the blurb. It turns out that he agrees with me that most of the threats that worried us in the past have dissipated. Also, as I surmised, his main concern is about the way in which the rise of India and China changes our strategic environment. He concludes

In short, we’re entering a world not of threats but of agonising choices that will come at us constantly. My bet is that we’ll look back on the vanished threats that Quiggin talks about with nostalgia for a world that all seemed so simple.

I agree with Wesley that the rise of India and China makes life more complicated in important ways. In the past, our foreign policy consisted, in essence, of the US alliance. That alliance gave us some protection against our local fears, most notably with respect to Indonesia, while also exposing us to some big costs (the need to join faraway wars in which we had no say) and an increased risk of nuclear annihilation, which faded away along with the Cold War, though it hasn’t disappeared.

In the new world, Wesley correctly argues, an uncritical adherence to the US alliance would be a disaster, particularly in the event of a major dispute between the US and China. I agree, and I think most serious foreign policy types already know this. Kevin Rudd’s recent visit to Washington seemed to be devoted, in large measure, to hosing down any expectation that Australia would line up with the US against China in any future dispute (a much more sophisticated line than the updated “All the way with LBJ” line, typically repeated by visiting PMs, up to and including Gillard). Even under the Howard government, generally gung-ho about the US, our diplomats sent the same kind of message from time to time.

Wesley also wants the Australian public to be more engaged and informed, pointing to the deplorable ignorance and anti-Indonesian prejudice surrounding the Schapelle Corby case. Actually, I think this was a good learning experience – most people eventually worked out that, while she cut a sympathetic figure in prison dress, Corby was given a fair trial, (if fact, the Indonesian courts had bent over backwards to give her justice, admitting evidence that would never be allowed in Australia)[1]. Australians are gradually adjusting to the idea of Indonesia as a friendly neighbor rather than a foreign threat. Even so, I think they are well justified in leaving to the experts the kind of diplomacy involved in telling three great powers what they want to hear, while committing ourselves to none of them.

fn1. While I’m on this, I’ll welcome the news that the death sentence imposed on Scott Rush has been commuted. This case was a far worse travesty of justice than anything in Corby’s case, but those most to blame were the Australian Federal Police, who sent Rush to possible death in Indonesia, rather than warning him off (as his parents begged them to do) or arresting him on arrival in Australia (which would have reduced their chances of convicting the ringleaders).

I didn’t do the Budget lockup for Crikey this year, and given the Canberra cold and the slim pickings, probably a good thing. Some thoughts I gave Crikey, over the fold

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I had a call from a local business organization asking if I would talk at a breakfast about the carbon tax to be held in a few eeks. The date was fine, so I said yes, then came the kicker – they wanted an economist on each side of the issue. The organizer said they had plenty of economists willing to speak for the tax, but they couldn’t find any willing to speak against it. I gamely offerd to present the case for an emissions trading scheme as opposed to a tax (even though, at the moment, I lean to a tax). But they wanted an actual opponent of any kind of carbon price, who was also an economist. This has proved to be impossible, which is pretty impressive testimony to the quality of the Queensland economics profession, and to the underappreciated fact that economists are among the strongest supporters of good environmental policy.

I’ve been asked quite a few times about chartalism and its recent rebadging as modern monetary theory (MMT). My answer has been that I really should get around to looking into this. However, the issue came up again at Crooked Timber following my post on hard Keynesianism. Looking around, I drew the conclusion that an attempt to define and assess the various versions of MMT would take more time than I had available. So, instead, I thought I would draw up a set of propositions bearing on the claims I made about hard Keynesianism and invite comment from MMT advocates and others as to whether they disagree.  Here they are

1. Except during the period since the GFC, money creation has not been an important source of finance for developed countries

2. Except under extreme conditions like those of the GFC, money creation cannot be used as a significant source of finance for public expenditure without giving rise to inflation and (if persisted with) hyperinflation

3. Government deficits must be financed primarily by the issue of public debt

4. The ratio of public debt to GDP cannot rise indefinitely, since governments will ultimately find it impossible to borrow

5. The larger the deficits governments want to run during deficits, the larger the surpluses they must run in booms

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Here’s a new sandpit for lengthy side discussion, rants on idees fixes and so on.

It’s time again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

In the leadup to the recent British Royal wedding, it was repeatedly suggested that the event would be watched by 2 billion people worldwide, that is, about 30 per cent of the world’s population. It says something for the quality of the news media that none of those reporting this estimate offered a source or the most elementary checks on plausibility, and hardly any tried to check afterwards. So, now that we are relaxing after Mother’s Day lunch, I thought I’d do the numbers.

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Ian Masters, who’s the US representative of the well-known Australian clan (Chris, Roy, Sue and Olga are all prominent figures here) has interviewed me for this radio program Background Briefing, broadcast and podcast on KPFK-LM, in LA, about my book Zombie Economics. Interview should go to air about noon Sunday Pacific time, and the podcast will be available almost immediately, and also, a bit later at Ian’s own site.

6.30pm, Friday 6 May 2011
Basement Theatre, Business and Economics Building
Professor John Quiggin, University of Queensland, presents “What have we learned from the Global Financial Crisis?” at the Department of Economics – Melbourne Institute Public Policy Lecture 2011.

Here’s the link

In my post on bin Laden’s death, I noted the spin in a New York Times story suggesting that torture had helped to extract the clues leading to bin Laden’s location, even though the facts reported suggested the opposite. This analysis, also in the NYT, confirms both the spinning and the fact that the evidence produced under brutal torture was deliberately misleading. Given the failure of the Bush Administration to get anywhere near bin Laden, it seems likely that they were in fact misled, deluded by the ancient belief that evidence extracted under torture is the most reliable kind.

It’s noteworthy that the URL for the story is “torture”, but the article itself doesn’t adopt that description and doesn’t even use the word until well after the lede.

The death of Osama bin Laden has inevitably produced a gigantic volume of instant reactions, to which I’m going to add. Doubtless I’m repeating what others have said somewhere, but it seems to me that most of the commentary has understated the likely impact, particularly as regard US politics. That impact is by no means all favorable – while the Republicans are the big losers, Obama will also be strengthened as against his critics on the left, among whom I’d include myself (admittedly as a citizen of a client state rather than the US proper).

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Looking first at the impact on the Islamic world, I don’t differ much from what I see as the conventional wisdom – Al Qaeda was already struggling for relevance in the light of the democratic upsurge in North Africa and the Middle East, and the death of bin Laden will weaken them further, even if they manage some terror attacks in reprisal[1].

As regards the political impact in the US, comparisons to GHWB and Gulf War I are beside the point. Hardly anyone in the US cared about Saddam or Kuwait before his invasion, and most of them promptly forgot about them once the cheering died down after Desert Storm. Even in GW2, it was clear that Saddam was just another nasty dictator of whom the Bush Administration had decided to make an example. By contrast, bin Laden was unsurprisingly, the object of more national fear and hatred than any figure since Hitler or Stalin.

Equally importantly, bin Laden and 9/11 were central to a Republican narrative about foreign policy as a crusade against Islamofascism and its liberal dupes/fellow-travellers/ineffectual resisters that has now collapsed almost completely. The story had been unravelling ever since the Iraq/WMD fiasco, but the contingent fact[2] that Obama has succeeded where Bush  failed has left the Republicans with almost nothing to say on an issue they expect to own.

That won’t wipe out the impact of bad economic conditions, but I suspect that the lack of Republican credibility on foreign policy (and for that matter, the birther issue) will encourage critical analysis of their fraudulent claims on economics as well.

Coming to the bad news, the success of the US intelligence machine in locating bin Laden is obviously going to strengthen Obama’s position in claiming that he has special knowledge that justifies suspending civil liberties. Reading the accounts in, for example, the New York Times, it’s clear that their sources are trying to make claims for intelligence extracted under torture  even though (on my reading) they didn’t actually get anything useful from these sources (the NYT quotes an intelligence source as saying that the value was in what was not said, which could justify just about anything).

There’s an outside chance that, having secured his standing on the issue, Obama will return to the policies he campaigned on. Failing that, as the fear of terrorism fades, there may be a gradual return to the rule of law, although the precedents set in the last ten years are likely to remain.

Finally, like most people in the world, I’m glad bin Laden is dead. I would have preferred to see him face trial for his crimes, but he was (assuming the official account to be correct) given the chance to surrender, and didn’t take it.

<strong>Update 4 May</strong> The parenthetical qualification in the last sentence turned out to be a sensible precaution, reflecting past experience of these announcements. As <a href=”http://www.salon.com/news/opinion/glenn_greenwald/”>almost always seems to happen</a>, the revised account from the government is very different from the original one. Whereas the original story suggested a gunfight with bin Laden using a woman as a human shield, the new version has an unarmed bin Laden shot when his wife (also unarmed) ran at the assault team and was herself shot, though not fatally. That doesn’t preclude a call to surrender, but it certainly seems that he wasn’t given any time to think it over.

fn1. BTW, has there been any statement from AQ confirming or denying OBLs death?

fn2. It’s interesting to ask how history would have changed if the military had done as good a job with the Iran hostage rescue ordered by Carter as they did in the present case.

It’s the evening of May Day, though as it falls on a Sunday we will (in Queensland at least[1]) celebrate it with that great Australian institution, a long weekend. Last year, I went on the march, this year I ran a triathlon instead[2]. My somewhat confused attitude is, I think, pretty characteristic of the position labour movement more generally.

Updated below

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