What is "objective analysis"?


12 July 2008


Professor Garnaut (ANU) has released his Kevin Rudd commissioned report.   I have previously explained & predicted the effects of Global warming.   In January 2007 I wrote:

 any attempt to curtail fossil fuel use would prove v.expensive. Fossil fuel gives the third world cheap food, water, medicines and the transport necessary to deliver those benefits to their people. The first people to die if we curtail fossil energy use will be the poor in third world countries.

Since then, the legislated requirement by some wealthy nations that ethyl alcohol must be added to gasoline has been found by a UN committee to be the prime cause of rising food prices and increased starvation in third world nations.

In early 2007 I commented on the IPCC and Stern reports.  The Garnaut report follows those reports, & is written by an economist who has considered the criticisms of those earlier reports, and sought to avoid them.  The major problem with the Stern report was the nearly zero discount rate on future events.

Professor Garnaut likens application of national carbon use restrictions to the Prisoner's Dilemma of games theory.  It is an essential condition in "prisoner's Dilemma" that each player has no indication of the decisions made by other players.  The table of rewards is also dissimilar.

The professor mentions that the cost of greenhouse gas mitigation should be less than the damage that the presence of those greenhouse gases caused.   I could not find where he quantified the dollar value of damage.  He did indicate an increasing death rate among the elderly, that the Barrier reef would be destroyed.  (I am skeptical about both those fears.  With sufficient energy, air conditioning will not be a problem, so no elderly need die.  It is thought by some marine scientists that increasing temperatures by as little as 2 degrees centigrade will kill local coral.  However the Great Barrier Reef extends for thousands of kilometers in a N-S direction.   So it is reasonable to presume that varieties of coral exist, except perhaps at the northern tip of the reef, that can withstand higher temperatures than the local environment.  So extensively damage might occur initially, however it seems reasonable to presume that the higher temperature varieties could migrate south with the prevailing ocean currents as the ocean temperature rose.  Another argument is that the increased acidity of the ocean caused by carbon dioxide destroys (dissolves) coral.  I suspect that varieties of coral with more resistant chemical structures would evolve.

In any case, would saving the Great Barrier Reef be worth the thousands of extra lives that would be lost through the privation brought about by overestimating necessary energy taxes?)

The most effective method for controlling pollution is by a carbon tax.  See Nordhaus 1992 in "Nature". I concur with Garnaut that there should be no exemption for any industry.

31st August.  After some experience with the GST, I would suggest that collection of a carbon tax (Ctax) be modeled on the GST.  Anybody who sells a product containing carbon collects the government Ctax.  If the seller exports, then the buyer can claim the Ctax back.  If the seller produces the carbon from fixing atmospheric CO2 then he keeps the Ctax.  If the carbon is mined by the seller, the seller pays the Ctax to the government.  (So farmers selling food which is about 80% carbon by weight would charge and keep a "carbon tax".  On export of food, the government would have to refund to the exporter the carbon tax.  This would not be an export subsidy, even though it might look like one.)  Interestingly, a Ctax levied in this manner would have the effect of making so called "junk foods" proportionally more expensive than at present in relation to standard fare.

Power stations should not be exempted or compensated.  The location of a power station is determined by three factors, which are cost availability of fuel, cooling cost and power transmission costs.  Of these, the most expensive to transport is coolant.  Power stations must dissipate huge amounts of heat, and that requires quite large amounts of water.

Different mineral fuels produce different amounts of carbon per KWH.  The lowest ratio of greenhouse gas to energy produced is from Methane.  Next are the gas fuels, then liquid fuels derived from oil, then anthracite (black coal), then brown coal, then tar sands then oil shale & (probably worst) peat.

Transmission costs are not trivial, but power is cheaper to transport than either fuel or water.

Brown coal power stations would be comparatively expensive to operate in terms of carbon tax.  Brown coal is mined by open cut at Leigh Creek in South Australia, then moved by rail for several hundred Km to Port Augusta, which has access to the ocean for coolant.   With a sufficiently high carbon tax it will become more economical to transport black coal to Port Augusta via sea.  There would be some conversion costs in turning a brown coal power station into a black coal power station, but I expect those costs would be minimal, as black coal is "cleaner".  The Victorian brown coal power stations are less well placed with regard to ocean transport for supply of black coal.

Hence the real losers will not be the owners of brown coal fired power stations, but the owners and workers of brown coal mines.  The winners will be the owners of black (anthracite) coal mines.


In NSW the state government (which has total control of local government) has decreed local government elections will be held next October.

If direct government were to be introduced, a good place to start would be at local government level.  I would suggest the following model.

Direct government could be franchised.   It does not need to be a party,

The elected member who has subscribed to the franchise should own a domain.  Electorate constituents would register to participate on the domain, providing their name and address.  The  member would check in the electoral roll that the registrant was a constituent of his district and resident at the nominated address, and thereupon mail the constituent a password.

The member would publish details of forthcoming legislative matters on the website.  Constituents would log in using their password, and could advise how the member should vote.  A running total of votes cast would be available to constituents on the website.

The member would publish a formula.  If less than (say) 5% of constituents had advised a vote, then the member could ignore the constituent's advice, and vote on conscience.  Where 50% of constituents recommended a particular vote, he would be bound by the vote.  There would be a published sliding scale to determine the cast of the member's vote between those extremes.


I forecast that the Iranian's will either discontinue uranium refining, or have those centrifuges bombed by Israel.  The attempt by the Guard to bluff ownership of medium range ballistic missiles has been shown to be a lie, which exposes a concern that bombing is imminent.  Either way Iran would be publicly humiliated, which would suit Saudi strategy.  However submission to discontinuation could be presented as the act of a responsible world citizen assuaging his neighbour's fears, and some of those carrots might still be available.