Month: November 2014

Coal and China

John Quiggin32 Comments

Among the sceptical reactions to China’s part of the joint announcement on climate policy made by the US and China, two were particularly prominent

* The statement didn’t require China to do anything until 2030
* The statement simply reflected “business as usual”

These arguments were almost immediately refuted when China announced, in its http://thediplomat.com/2014/11/in-new-plan-china-eyes-2020-energy-cap/ that it would cap coal consumption at 4.2 billion tonnes by 2020, with total primary energy consumption (including oil and gas) held below 4.8 billion tonnes of coal equivalent. By contrast, in 2013, the estimate was for 4.8 billion tonnes of coal alone. Back in 2010, the US Energy Information Administration was predicting continued growth in Chinese coal assumption to 2035 and beyond.
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50 years later

John Quiggin15 Comments

I once read a remark about the kind of bank advertisement that shows a proud young couple outside their first home, to the effect that it would be better to show them middle-aged, making the final payment on their 25-year mortgage, at which point the home would truly be theirs.

I have the same kind of reaction to the Queensland government’s (publicly funded, I believe) ads showing “ordinary Queenslanders” celebrating the fact that our public assets are going to be leased rather than sold under the government’s plan. Most of those in the ads are young (20s and 30s, I’d say). Even so, many of them will have passed on by the time the lease first comes up for renewal in 2064.
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Subsidising coal

John Quiggin41 Comments

I was going to post on the Newman government’s announcement of subsidies to development of new coal mines in the Galilee Basin, but this piece by Michael West says it all. Key observation

The very day after the G20 concluded, with its recommendations about ending government subsidies to fossil fuels, it appears the Queensland government is poised to ramp up its subsidies for the humungous Galilee Basin coal project.

Read more: http://www.smh.com.au/business/mining-and-resources/wise-investment-or-fossil-fools-queensland-backs-coal-as-g20-moves-the-game-on-20141117-11odkq.html#ixzz3JM8yeHsw

A policy lesson from G20

John Quiggin47 Comments

After spending months warning us of terrorists, rioters, and (most fearsome of all) thousands of political minders roaming the streets of the Brisbane CBD, warning us to reconsider our need to travel and giving us a long weekend, Brisbane Lord Mayor Graham Quirk is upset with us for taking off to the beach or staying home and waiting the whole thing out. He has been roundly mocked. It’s now clear enough that, except for high-end hotels and restaurants, G20 is going to be an economic disaster for Brisbane.

There is a broader lesson here. Paying substantial amounts to attract an event where the audience is mostly going to regard the venue as interchangeable with lots of others (car races being a prime example) is almost never going to be a sensible economic policy. The inflow of event visitors will mostly be offset by the deterrence of other potential visitors and by an exodus of locals. And the idea that events like this “put Brisbane on the map” is silly.

We won’t be lining up for another international summit any time soon, but the Commonwealth Games will be in the Gold Coast in 2018. I’m confident that an analysis after the fact will reveal very little to show for the $2 billion we are spending on them.

I’ll qualify the above by saying that it’s a different story with mass participation events. Noosa Triathlon for example, attracted 14 000 participants and 50 000 spectators (mostly family members, I think). The local tourism council tipped in $250k. Assuming a similar amount from Tourism Queensland, that’s a subsidy of $10/head. The event could probably have gone ahead without any subsidy: the main contribution for this kind of event is organizing road closures and crowd safety.

Planet saved … in Brisbane!

John Quiggin104 Comments

It’s hard to overstate the significance of the agreement announced today by Barack Obama and Xi Jinping to limit US and Chinese greenhouse gas emissions. The limits are significant in themselves: not enough to guarantee stabilization of greenhouse gas levels at the agreed target of 450 ppm, but enough that we can get there just by ratcheting up an existing agreement rather than by looking for something new.

I’ll write more later, but I wanted to note this event as soon as I could