Thursday, April 17, 2014

Chapter 5 and the Summary for Policy Makers

Chapter 5 was one the main chapters of the Working Group III 5th Assessment Report at the centre of the controversy this week on so-called censorship of the Summary for Policy Makers (SPM). The SPM is an executive summary of the report for the IPCC member governments. Those member governments get to dictate what points from the underlying report get included in this summary and how they are "spun". However, there is also a Technical Summary that is written entirely by the researchers responsible for the main report. The material from Chapter 5 that was in the draft SPM but eliminated in the plenary meeting in Berlin referred to emissions from specific groups of countries. This blogpost provides a quick overview of the deleted figures, some of which are still in  the Technical Summary.

The first graph breaks down emissions by broad global regions:

The developed countries are represented by the members of the OECD as it stood in 1990 (since then Mexico, Korea, Czech Republic etc. have joined). Eastern Europe and the former Soviet Union are designated "Economies in Transition" and the developing world is broken down into Asia (importantly including China and India), Latin America, and the Middle East and Africa. The left-hand panel shows emissions year by year since the Industrial Revolution and also breaks them down into energy and industrial and land use related emissions. The former continue to increase but the latter appear to have peaked. Since the 1970s, the majority of growth in energy and industrial emissions has come from developing countries and particularly Asia. In an attempt to better represent the historical responsibilities of each group of countries the right-hand panel shows the cumulative historical emissions of greenhouse gases by region.* China and particularly India have campaigned to get historical contributions to global warming better-acknowledged. But the results of our analysis show that less than half of the cumulative emissions now come from the developed countries as a whole (more when only energy and industrial emissions are considered). This, presumably, isn't the message that developing country delegates wanted to see.

The next controversial figure breaks down total and per capita greenhouse gas emissions by country income groups:

The leftmost panel shows total emissions which increased everywhere due to population growth. But they particularly increased in upper middle income countries (which includes China). The total emissions from this group are now almost equal to that from the high income countries. On a per capita basis, emissions were flat in the developed world and declining in the poorest countries (as emissions from land use declined). They rose in the middle income countries. The figure does, however, also show that in all developing country groups per capita emissions remain much below those in the developed countries.

The final deleted figure deals with emissions embodied in trade:

Looking at the emissions generated in producing imports and exports, the developed countries and economies in transition ("Annex B") import more "embodied" emissions than they export. The opposite is true of the developing countries ("Non Annex B"). Emissions that include the net emissions embodied in trade are termed "consumption emissions" in contrast to the "production emissions" that are the total emissions emitted within a country and are the usual way of calculating emissions.** These numbers are derived using input-output modelling. The results are often used to argue that developed countries have reduced their emissions by offshoring production to developing countries, which is a controversial question. But properly answering this question is more complicated than this. They are also used to claim that developed countries are responsible for their consumption emissions rather than their production emissions. But both importers and exporters gain from this trade. Because of these controversies I can understand the decision to drop the discussion and figure from the SPM.

* These do not directly correspond to the amounts of gases in the atmosphere. A large fraction of annual carbon dioxide emissions are absorbed by the ocean, vegetation etc. and methane only survives for an average of 11 years in the atmosphere before being oxidised to carbon dioxide and water. So, I am not very enthusiastic about treating cumulative emissions of carbon dioxide equivalent greenhouse gases as an indicator of historical responsibility.

** Economists would usually use the term "production emissions" to refer to emissions from production activities  and "consumption emissions" to refer to emissions by consumers. This initially caused some communication problems among researchers from different disciplines in our chapter team.

Tuesday, April 15, 2014

774 ABC Melbourne

I was just interviewed on 774 ABC Melbourne radio. They wanted to know about the IPCC Report being "censored". So, I explained that the governments get to edit their own executive summary - the Summary for Policy Makers - from a draft provided by the scientists but they can't touch the underlying report or the Technical Summary, which is a second executive summary. Also the SPM has to be fully referenced to the underlying report so it is a question of picking and choosing what to emphasize rather than censoring. The main changes in the SPM are a downplaying of "international cooperation" in favour of an emphasis on "sustainability, justice, and equity" in the framing statements and the deletion of graphs and discussion of how emissions break down on a regional or development level basis in any way. This apparently reduces the onus on development countries to take actions equivalent to those of the developed world and focuses more on the distributional issues rather than contributions to the total problem. Though emissions per capita are much lower in developing countries they now emit the majority of total emissions and are catching up in terms of their contribution to the accumulated greenhouse gases in the atmosphere.

Monday, April 14, 2014

IPCC Media Update

I was on ABC News 24 at 12:10 today. Clip doesn't seem available yet. Went over to parliament house studio for the interview. Just me in the room with the cameraman and questions coming from the news team in Sydney. JJJ piece was cancelled in favour of another story after they recorded the interview with me. I may be Sky News or Radio National (7:05-7:15) tonight, details to come. Our story is now up on the Crawford website. There is also a story on an interview I did with the Guardian.

Key Messages from the IPCC Working Group III Report

Here are some of the emerging key messages from the IPCC WG III report. You can download the Summary for Policymakers. The full report should be available tomorrow.
  • Emissions grew faster than ever since 2000.

  • Most of the growth is coming from middle income countries like China and India. Per capita emissions are still low in most developing countries, meaning a lot more growth in emissions can be expected under business as usual.

  • We need a broad portfolio of solutions to solve the problem including renewables, carbon capture and storage, carbon dioxide removal, and energy efficiency. There is no silver bullet.

  • Already delay is meaning that it is getting harder to stay within the 2 degree limit.

  • Estimated costs of meeting this goal are still relatively low GDP would be 2-6% by 2050 than it otherwise would be. Because GDP per capita would likely double globally by 2050 this means the doubling is delayed by 1-3 years or growth is 0.005% to 0.017% lower per year than it would otherwise be in the interim.

  • On the other hand, the lower estimates of costs depend on untested technologies at realistic scales to capture carbon from burning fossil fuels or to remove it directly from the atmosphere.

  • There is an increased recognition of the problems of integrating renewables into energy supply systems. Costs of energy storage or backup will be crucial.

  • Countries such as China are focusing heavily on the co-benefits of reducing emissions, including reducing local air pollution and improving energy security.

Sunday, April 13, 2014

IPCC WGIII AR5 Report Media

Working Group III's contribution to the IPCC 5th Assessment Report was released this evening. We have a story on the Crawford School website and an article in The Conversation. I will be interviewed tomorrow morning for TripleJ's Hack program. Live interview with Radio National that I mentioned in an earlier version of this post is now off - they found someone to report from Potsdam instead.

Saturday, April 12, 2014

Port Macquarie Conference Paper Now on the Web

Our paper from the Port Macquarie AARES Conference is now on the web. We plan to have an updated and extended version of the paper on the web as a formal working paper in the next week or so. I'll write up a discussion about the paper then.

Thursday, April 10, 2014

John List to Take Up Fractional Appointment at Monash

A coup for Monash University -  John List to take up fractional appointment at Monash!

One motivation for this move would be the ERA. But the census date for ERA 2015 is 31 March 2014. Staff need to be affiliated at that date for their prior publications to be counted. Also the ARC is cracking down on institutions claiming the publications of affiliates. For those employed in less than a 0.4 fractional position, at least one publication must list the institution as an affiliation on the publication. As a reviewer for ERA 2012, I think some institutions really abused the system with their claims of affiliates' publications in ERA 2012. So, this move by Monash is either a long term plan, or has nothing to do with the ERA.

The Motorcycle Kuznets Curve

My colleague Paul Burke has a new paper with the intriguing title "The Motorcycle Kuznets Curve". Motorcycle usage peaks in middle income countries. Population density helps increase motorcycle usage. I guess country fixed effects deal with the climate.

This is What Market Dis-Equilibrium Looks Like

Caption in the accompanying Sydney Morning Herald article: "High rents driving retailers away: 89 shops on Oxford street are vacant, for lease or closing."

Tuesday, April 8, 2014

Climate Change and the World Economy

The blurb for our forthcoming book is below. Thanks to those who suggested papers that we included in the book! Previous posts on this project.

Climate Change and the World Economy

Edited by David I. Stern, Professor, Crawford School of Public Policy, The Australian National University, Frank Jotzo, Associate Professor, Crawford School of Public Policy, The Australian National University and Leo Dobes, Adjunct Associate Professor, Crawford School of Public Policy, The Australian National University, Australia.

World economic activity is a cause of climate change and climate change has an impact on economic activity. Adaptation to climate change can occur locally, but action on climate change requires global cooperation or at least coordination.

Covering all aspects of the problem, this collection contains both classic and recent key published articles on this burning issue. The first section explores global trends in emissions and their drivers as well as the most important forecasts of global greenhouse gas emissions. The second section covers mitigation policy at the international level reviewing costs, benefits, and analysis of policy instruments. The final section focuses on adaptation and the roles of risk and uncertainty in responses to climate change.

The extensive, authoritative introduction provided by the editors puts these contributions into context. This volume will be of interest and value to researchers and policy professionals in the areas of climate policy and environmental economics.

40 articles, dating from 1956 to 2012

Contributors include: N.P. Gleditsch; R. Mendelsohn; N. Nakicenovic; W. Nordhaus; G. Peters; B. Smit; S. Smith; N.Stern; R. Tol; M. Weitzman

May 2014 c 752 pp

Hardback ISBN 978 1 78100 918 5

Price c £250.00


I've spent the last couple of days trying to replicate results in RATS that Chunbo produced using STATA. In the process we found a lot of bugs in our data-processing and computer codes but now we can replicate each others results. We are estimating a translog cost share system together with the cost function. Previously, I have used the RATS command SUR to estimate a system of seemingly unrelated regressions and then the command RESTRICT(replace) to impose the restrictions and SUR(CREATE) to produce the restricted SUR estimates. This did not reproduce the same results as STATA at all. Instead using NLSYSTEM in RATS (despite the fact that the system is linear), I managed to reproduce the same results as STATA. This now seems to be the recommended way to do this type of analysis according to the RATS User Guide. So, I really don't know what the estimates produced by RESTRICT in RATS represent and I strongly recommend not to use them. This shows yet again that it is very important to know what the computer code you are using is actually doing.

Monday, April 7, 2014

IPCC Working Group III 5th Assessment Report Launch

The IPCC Working Group III 5th Assessment Report will be launched with a press conference on Sunday 13 April at 11am Berlin time. This will already be Sunday evening in Australia, so Wednesday 14th April is the effective release date here. The governments are already meeting at the final plenary in Berlin starting today to approve the report. So, we are beginning to prepare our media release here at ANU and writing an article to appear on The Conversation. I imagine that there will be quite a bit of confusion about the difference between this report and the WG II report launched only a week ago, so maybe that's something we should explain. Also, I see the Sydney Morning Herald has a "sneak preview". Anyway, expect more blogging on this coming up!

Friday, April 4, 2014

Back in 1990-91 when I started my PhD I was introduced to esoteric ideas like Energy Return on Investment and Peak Oil in classes given by Cutler Cleveland and Robert Kaufmann. Nowadays, these ideas are showing up in humorous videos on YouTube.

Friday, March 28, 2014

Chunbo Ma Seminar at ANU

Chunbo Ma will be visiting ANU from Monday for a couple of weeks to work with me on our ARC project. On 10th April he is giving a seminar on his research on the effect of solar panels on house prices. Chunbo was my PhD student in the US and we have published a few papers together. Our current work is on substitutability in China. Well, it is really more about using new estimators to estimate elasticities of substitution and we will use Chinese data to do that. Please register and come along to Chunbo's seminar if you are in Canberra.

On 1st April I am giving a seminar at Arndt-Corden Department of Economics. It will be a longer version of the presentation I gave at the AARES meeting in Port Macquarie in February and at the recent AARES evening in Canberra. I just heard that the same paper has been accepted to the World Congress of Environmental and Resource Economics in Istanbul. Please come along to this seminar too!

Friday, March 21, 2014

IAEE Asia Conference

I just agreed to give a presentation in a dual plenary session at the IAEE Asia Conference in Beijing in September. The topic of the session will be climate change policy. I'll report on our research on understanding the costs of mitigation policies.

Substitutability and the Cost of Climate Mitigation Policy

Yingying Lu, my post-doc on our ARC project, and myself have a new working paper on our research on the effects of assumptions about substitutability on the estimated costs of climate change mitigation policy. Some of the results are in line with our expectations and some are quite surprising...

I originally proposed this project because I was surprised that there could be such different views on the costs of stopping climate change. The mainstream economic community working on these issues usually finds that the costs of even quite strong action are in the neighborhood of lowering GDP by 1-4% below what it would be under business as usual (BAU). As GDP is expected to continue to grow strongly in such models, this seems to be a quite trivial cost to avoid disaster. It implies that   doubling today's level of GDP will be delayed by just 1 to 2 years. Tavoni and Tol argued that these figures ignore those models which failed to be able to simulate the stronger policy scenarios. But even when they compensate for that bias they estimate that the net present value of the reduction in GDP is about 8% of BAU GDP. On the other hand, Tim Jackson argued that we need to stop economic growth in order to have any chance of dealing with climate change. This does not seem to be an uncommon view among natural scientists, environmentalists, and also many climate skeptics. Roger Pielke argues that such unprecedented decarbonization is "all but impossible". Again, the implication is then that growth must be stopped in order to reduce emissions.

So, I wondered whether mainstream climate models are somehow missing something. Specifically, are they assuming that it is easier to reduce fossil fuel use than it actually is. If the economy was less flexible - if the parameters known as elasticities of substitution were smaller - it would presumably be harder to reduce fossil use. Very little research has been published on the sensitivity of climate policy costs estimated by mainstream computable general equilibrium (CGE) models to changes in the elasticities of substitution. And what there is is not really designed to answer this question.

Our research uses McKibbin and Wilcoxen's G-Cubed model. We ran the model under BAU and four policy scenarios ranging from a 20% global cut in emissions by 2030 relative to 2010 to a 20% increase, which matches the RCP scenarios quite well.

We perturbed most of the elasticities of substitution in production and consumption (but not those between domestic and foreign goods and services) by increasing them by 50% and reducing them by 50%. We also tried some other parameter sets, including setting all elasticities to 0.5; setting all elasticities of substitution between capital, labor, energy, and materials to 0.5 and all those between fuels to one;  setting all elasticities to 0.1; and setting all elasticities to 2.

Not surprisingly, as we reduce the elasticities, the cost of abating a tonne of carbon increases and vice versa. What is surprising, is the extent to which the BAU emissions path is changed. BAU emissions are reduced in the less flexible economies relative to emissions in the default model. This effect is so strong that usually the total cost of reducing emissions increases with increasing flexibility and vice versa. In fact, in our most extreme low flexibility scenario, emissions grow so slowly that the more moderate policy scenarios are not binding. Economic growth is in fact halted and so there is a much reduced climate problem to deal with. This seems to be an example of the de La Grandville hypothesis that, the greater the elasticity of substitution, the faster the rate of economic growth.

Yingying and I debated whether the growth effect is real or an artefact of our modelling. Jorgenson et al.'s study avoided the issue by looking at policy scenarios that are based on percentage reductions in emissions relative to business as usual. Babonneau et al. adjust the rates of technical change so that the BAU scenario reproduces the expected rate of economic growth in the European Commission's World Energy Technology Outlook. We believe that this is likely to be a real effect. On the other hand, G-Cubed assumes that the rate of technological is exogenous, whereas the rate would also likely vary with the elasticities of substitution. Additionally, the baseline levels of output and prices at the start of our simulation are based on the real world level of these variables which would also differ if the economy was very different. Therefore, our results are not a reliable indication of the relative performance of more and less flexible economies in the real world

So, what is the bottom line?

1. Because a less flexible economy has higher abatement costs per tonne of carbon but less emissions growth, if what we care about is the total costs of climate policy then it is not so important to get good estimates of elasticities of substitution. If we care about average and marginal costs of abatement, then these parameters are critical. We again find that the distinction between marginal and total costs of abatement is important.

2. Though stopping growth reduces the climate change problem, the reverse isn't true. We cannot find a model economy where the costs of climate mitigation are so high that such a policy would result in stopping economic growth or that mitigation cannot be achieved without stopping growth. Certainly, assuming that the economy is a lot less flexible than it is cannot generate high total costs. In fact the reverse is true.

Sunday, March 16, 2014

Upcoming Presentations

I am giving a presentation to the Canberra Branch of AARES. It is at 6:30pm on Wednesday 19th March on Level 3 at UniPub on University Ave/London Circuit in Civic. It is a rerun of my presentation at the AARES Conference at Port Macquarie last month though I have updated a couple of the slides. Also presenting are my post-doc Yingying Lu and my colleague Paul Burke who is a coauthor on the paper I am presenting, which is titled: "Rethinking the emissions-income relationship in terms of growth rates”. Paul is presenting "Reducing household dependence on biomass energy in developing countries" and Yingying is presenting “Substitutability and the cost of climate mitigation policy”. The event is free for AARES members and $10 for non-members.

On Tuesday 1 April at 2pm I will be presenting the same paper at the Arndt-Corden Department of Economics regular seminar series. The seminar is in Seminar Room B in the Coombs Building at ANU. This will be a longer presentation and so I will present some additional and newer results.

Monday, March 10, 2014

Call for Papers: Special Issue of AJARE on Commodity Booms

Australian Journal of Agricultural and Resource Economics (AJARE)
Special issue on Resources and Energy Commodity Cycles: Maximising the Benefits of Resources and Energy Commodity Cycles

The Australian Journal of Agricultural and Resource Economics (AJARE) is publishing a special issue on managing mining and energy commodity cycles for publication in 2015. Submissions are welcomed.

The economic effects of commodity cycles in mining and energy sectors are a major policy topic in resource-rich countries. This Special Issue will follow a previous special issue on Mining and Resource Economics in the journal in 2012, which has been very highly cited.  Submissions to the Special Issue should be focused on identifying and analysing economic drivers and impacts, as well as evaluating different policy mechanisms available to manage and ameliorate boom and bust cycles.

It is planned that the Special Issue will be released in print form in April 2015. It is anticipated that an associated Symposium or workshop on the topic will be held in Australia in early 2015 to engage policy makers in the research findings.

·         Issue Call – March 2014
·         Submissions due – 15th of September 2014
·         Manuscript selection – 30th of September 2014
·         1st round Reviews Due – 15th of November 2014
·         Review process completed – 31st of January 2015
·         Early bird publications – 28th of February 2015
·         Issued in print form – April 2015

Sample topic areas
·         Resource rents and taxation
·         Sovereign wealth funds
·         State roles to achieve benefit maximisation
·         Labour force transformations in the mining sector
·         Indigenous and remote area employment
·         Productivity growth over a commodity cycle
·         Positive and negative spillovers to other sectors / technology / workforce issues
·         Impacts of price and investment boom on exchange rates, interest rates and other sectors
·         Managing the transitioning from the peaks of resources and energy booms
·         Historical overviews of past commodity cycles
·         Managing conflicts over land use and environmental tradeoffs
·         Providing infrastructure, housing and services to resource regions
·         Economics of energy efficiency
·         Measuring and predicting price and investment cycles
·         Stranded capital and resource assets
·         Sustainable mining
·         Resource extraction and environmental tradeoffs
·         Coal and gas market analysis
·         Economics and regulation of unconventional gas
·         Energy demand and supply analyses

The special issue will be coordinated by Professor John Rolfe (Central Queensland University) and Professor Quentin Grafton (Australian National University), with additional support from the AJARE Editorial team. Further information about the Special Issue can be sourced from Professor John Rolfe (Email: / Phone: 61 (7) 4923 2132).

Early advice about intentions to submit would be welcomed. This can be done by emailing a prospective title and abstract to Professor John Rolfe (

Guidelines for authors and the process to submit an article to AJARE. 

Thursday, February 27, 2014

Job at SPRU

Senior Research Fellow in Innovation and Energy Demand
SPRU – Science and Technology Policy Research
School of Business, Management and Economics

Full time, Fixed Term for four years (with the possibility of an extension)
Salary range: starting at £46,400 and rising to £53,765 per annum
Expected start date: May 2014 or as soon as possible thereafter

Applications are invited for a Senior Research Fellow to join a new £3.7 million Research Centre on Innovation and Energy Demand (CIED), led by the Sussex Energy Group (SEG). This full time position is for a period four years, with a possible extension thereafter. The Sussex Energy Group at SPRU is one of the UK’s largest independent energy policy research groups and is a partner in the Tyndall Centre for Climate Change Research and the UK Energy Research Centre.

The Centre began work in June 2013 and involves an interdisciplinary team of social scientists from the Sussex Energy Group, the Sustainable Consumption Institute at the University of Manchester and the Transport Studies Unit at the University of Oxford. The Centre is developing a socio-technical understanding of how ‘low-energy innovations’ emerge, how they diffuse and what impacts they have. These themes are studied through a number of projects from a range of disciplinary angles (e.g. innovation studies, socio-technical transitions, economics) and are linked to wide-ranging stakeholder engagement activities. Topics for the first round of projects include low carbon urban transport, the energy implications of 3D printing, successes and failures in low energy innovation, the diffusion of energy service contracting, achieving low energy non-domestic buildings and rebound effects in UK road transport.

SEG wishes to appoint a highly motivated individual with suitable academic experience to contribute to this wide-ranging research programme. Applications are invited from established researchers with a strong track record in a relevant discipline and expertise in energy and climate policy. The successful candidate will be expected to help shape the Centre’s research programme, design and lead research projects, conduct empirical research, participate in funding bids, engage with stakeholders and contribute to the broader work of the Sussex Energy Group.


Wednesday, February 26, 2014

Checking In

I haven't been blogging much lately - things have been very busy (started teaching, trips etc.) so I haven't had time to blog on papers I have read, policy issues and the like and several projects are near completion but not quite there and so I neither have anything to report on them nor any preliminary literature review etc. I can put up as blogposts. That pretty much covers the sources of content for this blog. This should change over the next month or so as some of these projects are finalized.

There is a little news to report. My paper on "Energy and Economic Growth: The Stylized Facts" (one of the almost complete papers) was accepted for the IAEE conference in New York City. So, I expect I will go to that meeting in mid-June. We got another revise and resubmit on the traditional and modern energy paper. Another, because we already had an R&R from another journal that then rejected our revised version. The AARES conference this month was a lot of fun. It looks like some of the papers will be re-presented here in Canberra for AARES members that couldn't make it to the conference. I'll let you know when my paper is scheduled. I also will present a paper on the same topic (emissions and growth) as a seminar at the Arndt-Corden Department of Economics here at ANU on 1 April. Maybe there is a reason why that date was still free :)

Last Thursday and Friday I had a research meeting with Jack Pezzey and Astrid Kander. We discussed our work on modelling the Industrial Revolution. I think we have a viable strategy for overcoming this setback. Location: Coogee Beach. Astrid has been visiting Sydney for this month working with researchers at the University of New South Wales and so Coogee was the perfect place for her to stay. Certainly, a great place for a meeting :)

Wednesday, February 12, 2014

Working in Policy and Working in Academic Research

Interesting blogpost on the differences. These are of course the extreme poles between someone doing solo-authored work in economic theory and someone work hands on in government or international policy. Academic research in economics is increasingly done in teams. Most of my ongoing projects are coauthored at the moment. Despite Deirdre McCloskey's criticisms, we are also very interested in the magnitude of effects - for example the size of the rebound effect or the climate sensitivity. And if you want to get a grant (at least in Australia) you have to convince academics outside your discipline. If you want to have a policy influence you have to convince non-academics. As someone at a school of public policy that is an important part of our mission. I also prefer to answer important questions even if it is hard to give a good answer to them, rather than less important questions which can be answered better. Of course, if we can't say anything novel enough to publish we have to drop the topic. There is a "sweet spot" where the question is both important and can be answered well, but that is difficult to find.

Monday, February 10, 2014

Great New Intuitive Way to Access Climate Data

It can be hard to understand how interpret global climate data sets in the way they are usually presented. This new Google Earth based interface is really good if you just want averaged data for a few gridboxes or station level data. It is also good for visualizing the distribution of station data that supports the gridbox values. For more discussion see this blogpost on Real Climate.

Monday, January 27, 2014

Presentation at AARES Conference

I am giving a presentation at AARES in Port Macquarie next week. Thursday afternoon to be precise. It's titled "Rethinking the Emissions-Income Relationship in Terms of Growth Rates" and is an extension of the Environmental Kuznets Curve and Green Solow Models. My coauthors are Reyer Gerlagh, Paul Burke, and Zeba Anjum. I'm presenting in a session on climate change. My postdoc, Yingying Lu is also presenting in the session on our joint work on sensitivity analysis of the costs of climate change policies. The other two papers are from my colleague Frank Jotzo and Simon Dietz from LSE.

Wednesday, January 22, 2014

Essential Concepts of Global Environmental Governance

I have a very short chapter on the environmental Kuznets curve in this book which will be published later this year (June or July) by Routledge. The book consists of 100 more similar entries on environmental governance topics and will be marketed as a textbook.

Monday, January 20, 2014

Draft ERA 2015 Submission Guidelines Released

This document provides a helpful list of changes from ERA 2012 to ERA 2015. The changes are minor. A good one, is a clampdown on abuse of affiliated researchers - some universities submitted a lot of publications by foreign-based researchers that they claimed as affiliates that did not include any mention of the university submitting the publication to ERA. So it looks like that for the moment the aim of measuring the broader impact of research as the UK REF is attempting to do has been shelved. At least as part of the ERA exercise.

Thursday, January 16, 2014

Power to the People

Power to the People - authored by Astrid Kander (my collaborator), Paolo Malanima, and Paul Warde is now available from Princeton University Press. The book is the culmination of a long-term research project to reconstruct the energy history of Europe and then explore how developments in energy interacted with developments in the economy. That research is a foundation for our exploration of the role of energy in long-run growth, and our ongoing research under our ARC grant on energy transitions.

Sunday, January 12, 2014


This is how I feel today:
The positives are that: I'm not a PhD student, we won't waste time on doing the research, and it must have been a good idea (unfortunately an obvious one for those who know the various literatures). Well, I had better read the (working) paper in detail and see if we still have an angle. If we have an angle all will be revealed in due course.

Thursday, January 9, 2014

ARC Discovery Projects 2015 Funding Rules Released

The ARC released the funding rules for the current grant round. A single document now also includes the rules for the DECRA, Laureate fellowships, and Discovery Indigenous Grants. A separate document reveals the specific changes to the Discovery program in this round compared to previous rounds. The most important changes, I think, are that :
  • You can now apply for five years of funding rather than just three.
  • There are no DORA fellowships for 2015!
  • The limit on publication costs of 2% of non-salary part of the budget (which could be very little in many cases) is abolished and now you need to justify specifically the publication costs on the proposal.
  • International Collaboration Awards are no longer awarded on a pro rata basis but up to $20k and up to 12 months.
The ARC has apparently not yet released the instructions for applicants.

Sunday, January 5, 2014

Harvard MIT Atlas of Economic Complexity

This is an interesting effort to assess the complexity of production and the level of local production knowledge across the countries of the world. The index of economic complexity is derived from the diversity and ubiquity of the goods which countries export. The rich data available on world trade is the strength of the indicator but also its weakness. It doesn't take into account of course any of the sophistication a country might have on the service side of the economy or in non-tradables. Australia ranks very badly. Based on the index the Zimbabwean and Australian economies have the same level of sophistication. Australia's complexity has also declined as minerals have increasingly dominated exports over time. With the upcoming demise of Holden and Ford, Australia is going to look even less sophisticated. Obviously, the Australian economy doesn't produce as wide a range of sophisticated products as the major industrial exporters. Still, it does seem that it has more sophisticated knowledge than the developing economies it ranks with in this analysis.

Tuesday, December 31, 2013

A Meta-analysis Investigation of the Direction of the Energy–GDP Causal Relationship: Implications for the Growth-Degrowth Dialogue

A new paper by Kalimeris et al. is the third meta-analysis of the energy GDP causality literature. The previous two studies are Chen et al. and, of course, our own paper in press at the Energy Journal. This paper covers more studies in fact than either of the previous two papers, 158, but the number of individual tests analyzed is not much greater than in our study. Like Chen et al. the authors only classify results according to the direction of causality and not the magnitude or significance of the test statistics.

The authors attempted to use "Rough Set Data Analysis", which attempts to find decision rules in poorly defined data sets. The results show that there are no well supported conclusions about causal directions in the meta-sample. The main method used in the paper is like Chen et al. a multinomial logit regression analysis. Using this approach, Kalimeris et al. find, as we did too, that the cointegration techniques are more likely to find causality in some direction than are other techniques. This makes sense as there must be Granger causality in at least one direction in order to find cointegration between the variables. But they could not come to any general conclusions about the direction of causality.

Friday, December 27, 2013

Cost Concepts for Climate Mitigation

A new paper in Climate Change Economics by Paltsev and Capros lays out the different metrics one can use to assess the costs of climate change mitigation. The main content of the paper has been around for a while in working papers and a book chapter, which I have cited previously. The paper makes the following points inter alia:
  • Total costs of abatement depend on both the marginal cost and the amount of emissions abated, as we discussed in our paper linked above.
  • In a second best world where there are existing distorting taxes, the costs of abating emissions are greater than simply integrating the area under a marginal abatement cost curve.
  • Terms of trade effects are very important at the macro-economic level. For example, as we are finding in our current research using the G-Cubed model, the loss of GDP in OPEC countries under a climate mitigation policy would come more from the reduction in demand for oil then from domestic abatement efforts.

Tuesday, December 24, 2013

My Year in Review 2013

This was a year of further consolidation and was less eventful academically than 2012, which I also reported was more of a following through on things planned in 2011. It certainly wasn't boring though! And there is plenty to report.

This was my second and final year as research director at Crawford. Renée McKibbin will be taking over from me in 2014. One success this year was getting Megan Poore hired on a continuing contract as HDR (higher degree by research = PhD) academic skills adviser. She continues to do an amazing job working with PhD students in the School. Also our annual PhD Conference was the biggest and best ever, with more than 200 registrations. Megan guides the PhD students in organizing the conference. Coinciding with the end of my term as research director, Robyn Walter, our HDR administrator, will be retiring. As I also wrote last year, Robyn has done a fantastic job of keeping everything running smoothly in this space at the Crawford School (we have about 120 PhD students), dealing with all aspects of student applications, scholarships, milestones etc. I really appreciated having such an experienced staff member to help me through these two years in my role, which made my life so much easier than it might have been.

Canberra in Google Earth 3D Building View

I formally published two journal articles this year. One was the paper on standard errors for journal impact factors published in the Journal of Economic Literature. The other was the paper on Granger causality in the long-run energy GDP dataset for Sweden coauthored with Kerstin Enflo and published in Energy Economics. I also published a very short book chapter. I do also have a paper published already in a 2014 issue of Climatic Change and we have another paper in press at the Energy Journal. We also have a couple of papers under review. So, already there is a good chance of publishing more papers in 2014 than in 2013. And of course the Working Group 3 contribution to the IPCC 5th Assessment Report will be out in 2014 and there will a couple more book chapter style pieces.

Work continued on the research funded by the ARC grant we were awarded in 2011. We hired Yingying Lu as a postdoc to work on CGE modelling with the G-Cubed model. Following Astrid Kander's visit to Canberra last year, in September I visited Lund for two weeks. As this grant will end in early 2015, it's now time to apply to the ARC for another grant. Zsuzsanna Csereklyei will be visiting Canberra in January and February and working with me on developing a proposal focusing on energy efficiency. We've also been working on a paper that hopefully we can soon put out as a working paper.

I gave presentations at two conferences - one was the First International Workshop on Econometric Applications in Climatology in Guelph. The other was the ANZSEE meeting here in Canberra. Actually here in the Crawford Building, which is why I didn't write that I went to two conferences :) Besides those, the only non-teaching presentation I gave was to a visiting delegation from the Ho Chi Minh National Academy of Politics and Public Administration about research assessment.

I attended my last IPCC meeting of this assessment cycle, this time in Addis Ababa, Ethiopia. This was my first trip to Africa south of the Sahara. I also visited Kenya after the meeting in Ethiopia. Spain and Israel also featured in the trip and there were plane changes in Germany, Turkey, and Abu Dhabi as well...

On the teaching front, I taught the Energy Economics course for the second time - in the second semester. Chris Short, Hugh Saddler, and Paul Burke were again guest lecturers. I also again taught an introductory microeconomics course - Economic Way of Thinking I and I again gave a series of three lectures in our flagship CRWF 8000 course in the first semester.

My most popular blogpost that I wrote this year was one on my paper on uncertainty in journal impact factors. Of course, that was near the beginning of the year and so has had plenty of time to accumulate hits...

Some things lined up for 2014, which I haven't already mentioned above, include:
  • Both Yingying and I and many other of our colleagues will be at the AARES meeting in Port Macquarie in early February. Yingying will present a paper on the first results from our CGE research. I am supposed to talk about "Rethinking the Emissions-Income Relationship in Terms of Growth Rates".
  • There will be another research trip to Sweden as required by the terms of our grant.
  • Astrid Kander will be visiting Sydney in February to collaborate with researchers at UNSW on embodied emissions in trade. This work emerged from discussion at the seminar she gave when she visited ANU in 2012. Jack Pezzey and I plan to meet with her there to work on our next paper in preparation for a presentation he will give at the Economic History Society meeting in the UK.
  • Then there are a bunch of conferences in mid-year that we plan to submit abstracts to. The biggest is the World Congress of Environmental Economics in Istanbul. In 2013 I didn't get out of the airport in Istanbul, so 2014 will hopefully present progress on that front :)
  • The deadline for the special issue of Energies on "Energy Transitions and Economic Change" will be in July and we hope to get the first articles online during 2014.
  • I should be more involved with the ANU Energy Change Institute this year. I will be serving on the executive committee and assisting in convening the Masters of Energy Change from the social science side.
  • I'm also hoping to increase my pace of research after completing my term as research director and maybe even write more posts on this blog than this year.
Granada, Spain (and me)

Wednesday, December 18, 2013

Cuts to ARC Funding, Strategic Research Priorities

In yesterday's mid-year budget update, the Australian government announced cuts to ARC funding. $103 million will be cut over a 4 year period and diverted instead to medical research. This actually amounts to about 3% per year of the ARC budget. So, it's not as bad as one might think at first.

Back in June the government announced new Strategic Research Priorities to replace the previous National Research Priorities. I heard that these may be undergoing some revision. We'll only get new funding rules and instructions for all schemes in January. But I think we should assume that we will need to address these new priorities in ARC proposals to be submitted in the upcoming rounds at the beginning of 2014.

Wednesday, December 11, 2013


Americans won't appreciate this, but I just realised while signing my name that today is the last day this century where the date can be written as three numbers one apart in order. For countries which list the year first it's 13/12/11. For Americans December, 13, 2014, will be the last such day this century.

Saturday, December 7, 2013

Researchers Work Times Vary Around the World

If downloading papers from Springer = working then this paper by Wang et al has fascinating evidence on when researchers are working around the world. They got several days data on downloads of academic articles from Springer by location and time of day and composed download curves across the day for both weekdays and the weekend. Most of the cultural stereotypes hold up - late lunch in Spain and almost no lunch break in the US and UK. Australians tend to have a more defined workday than other English speakers. Americans, Chinese, and British work particularly hard at the weekend compared to other countries.

Monday, December 2, 2013

Blunt Instruments

"Blunt Instruments: Avoiding Common Pitfalls in Identifying the Causes of Economic Growth" by Samuel Bazzi and Michael Clemens is an interesting read. I have long thought that it is hard to find valid instrumental variables in macroeconomics, this paper provides lots of evidence for this.

So-called "endogeneity" of explanatory variables in regression analysis is mainly due to the following:
  • Reverse causality - Feedback from the dependent variable to the explanatory variable.
  • Omitted variables bias - When variables that are correlated with the included variables and the dependent variable are excluded from the regression, the included variables are attributed as explaining too much or too little of the variance in the dependent variable.
  • Measurement error - When there is error in measuring the explanatory variables their regression coefficients tend to be biased towards zero.
All of these lead to correlation between the explanatory variables and the true underlying error term (but by design not to the actual estimated regression residuals). One approach to dealing with these issues is instrumental variables regression where variables that are correlated with the explanatory variables but supposedly not with the true residuals are introduced. The instrumental variable estimates effectively only use the part of the explanatory variables associated with the variation in the instrument in estimating the regression coefficient. Bazzi and Clemens point out that there are many pairs of econometric studies that claim to have found the same strong and valid instruments for different explanatory variables but don't include the explanatory variables included in the other studies in their models. If a study finds an instrumental variable is strongly correlated with an explanatory variable and it is used as an instrument in another study that doesn't include the explanatory variable in question then the instrument must be invalid as it will be correlated with the error term. Bazzi and Clemens show that many studies published in top journals suffer from these problems.

Of course, there is much more in the paper, but I think that is the key point.

Wednesday, November 27, 2013

Carbon Tax Thresholds

Jack Pezzey and Frank Jotzo have a new short piece in Nature Climate Change on carbon taxes with free emissions thresholds.

Jack Pezzey comments on this piece:

"We're hoping this piece will shift economists' views on a basic assumption about carbon taxation, which we argue is unnecessary, and is stifling the adoption of a tax, with its well-known advantages over carbon (emissions) trading.

The basic, unnecessary assumption is that a carbon tax must be charged on ALL emissions coming from any source that's included in the tax scheme. Our commentary notes that current tax schemes typically do charge for all emissions from included sources, and have low tax rates with key emitters given even lower tax rates or excluded altogether. On the other hand, charging a high tax rate on all emissions would generate implausibly large revenues, at least in the short to medium term. We highlight the academically established, but institutionally ignored alternative of taxing only emissions above fixed thresholds, which are equivalent to free tradable permits in many ways.

We're not arguing that carbon tax thresholds are always a good idea, or that they solve the intractable problem of international cooperation on emissions control, just that a tax with thresholds should always be considered as an option whenever emission pricing is debated (or explained in textbooks). For example, starting a carbon tax at a low rate and with no thresholds may be a good idea. But the trading equivalent of this is full permit auctioning and an unambitious emissions cap, which in the profession is now usually seen as inferior, so why not also consider a higher tax rate with thresholds, the equivalent of the standard trading system seen in practice, with some free permits and (sometimes) a more ambitious cap?

We do not advocate for carbon tax thresholds as a permanent feature. Rather, we see them as transitory measures that facilitate the introduction of carbon taxes, at higher tax rates than might otherwise be possible politically. Carbon tax thresholds could be phased out over time. In the article, we point out the potential benefits from treating carbon taxes as a source of fiscal revenue, and recycling it to achieve greater efficiency in taxation, and to assist low-income households in dealing with energy price increases.

Thresholds also raise contentious issues which complicate taxation; but as we note briefly in the paper, and at length in the Supplementary Information, many of these issues have already been "dealt with" for free tradable permits, that is, resolved, albeit imperfectly, well enough to allow permit trading in practice. So we contend that similar resolutions can be found for tax thresholds, but only if they are first put on the agenda."

Tuesday, November 26, 2013

Energy and Climate: A Primer

A new online textbook written by Cutler Cleveland (who was my PhD adviser) published by Trunity. You can request a desk copy just like you can for conventional hard copy textbooks.

The book's theme is that "a stable, predictable climate is an essential life support function of the Earth. Human use of carbon-based fuels such as oil, natural gas, and coal has increased the quantity of greenhouse gases in the atmosphere that warm the planet. The increase in the Earth's temperature since 1850, and the increase that is forecast to occur over the next 100 years, pose grave risk to all nations. The "climate problem" and the "energy problem" thus are are intimately linked, and must be tackled together."

Produce a List of All Your Department's Publications on RePEc

Something I just discovered, you can make a list of all an academic institution's publications on RePEc. Here is the link for the Crawford School. I don't know where you can access this list from the menus on IDEAS (let me know if you know) but you can produce a list for another institution by pasting the institutions EDIRC handle into the URL in place of Crawford's.

René Böheim explains in the comments how to navigate to the list of publications for each institution. I hadn't noticed that link before...

Monday, November 25, 2013

Can Negotiating a Uniform Carbon Price Help to Internalize the Global Warming Externality?

Martin Weitzman has a new NBER working paper on whether negotiating a common global carbon price will be more likely to succeed than negotiating for emissions quantity reductions has been. His answer is, yes, on the grounds that it is easier to negotiate a common carbon price than separate emissions reduction targets for each country, and that each country has an incentive for a high price on everyone else and to collect taxes itself. For the developed countries it also has the political advantage that they won't be forced to buy permits from developing countries and transfer money overseas.

But, as we showed in our paper in AJARE last year, a common carbon price will impose much higher total direct costs on developing countries than developed countries. Developing countries already argue that global warming is mainly the historical responsibility of the developed countries and, therefore, they should take stronger action. So, a common carbon price doesn't look very politically attractive to developing countries unless there are large side payments. Weitzman misses this dimension of the problem. This will negate the supposed political advantage that developed countries would see in retaining all their carbon tax revenue. Weitzman does admit that: "The model of this paper is so abstract and so removed from reality that it is open to enormous amounts of criticism on many different levels" (p. 17). He does write that: "Nothing in the model excludes side payments to help obtain an international agreement on harmonized national carbon prices" (p18). But won't those change the political acceptability of such an approach?

Fossil fuel exporting countries are a group that will suffer high GDP losses under any emissions reduction plan. Not only do they have fossil fuel intensive economies, but the reduction in demand for fossil fuels under a carbon tax reduces their income, which maybe a cap and trade approach does not do to the same extent. I'm skeptical that they would find it optimal to agree to a high carbon tax. These countries differ from the players in Weitzman's model who only suffer costs from their own abatement.

I do think that carbon taxes have important advantages over cap and trade schemes but I'm skeptical that a global uniform tax rate would see more success than a global Kyoto style quantitative emissions reduction.

Sunday, November 24, 2013

Anthropogenic and Natural Causes of Climate Change

I have a new article coauthored with Robert Kaufmann in Climatic Change titled "Natural and Anthropogenic Causes of Climate Change." In the paper, we test for Granger causality between temperature and, as the title says, potential natural and human causes of climate change. We find that both natural and anthropogenic factors cause temperature change and also that temperature causes greenhouse gas concentration changes. Although the effects of greenhouse gases and volcanic forcing are robust across model specifications, we cannot detect any effect of black carbon on temperature, the effect of changes in solar irradiance is weak, and the effect of anthropogenic sulfate aerosols may be only around half that usually attributed to them.

It is very important in Granger causality testing to control for as many other possibly relevant explanatory variables as possible. So, in the paper we always include all the causes we consider in each regression model. We found only one other paper that attempted to do this - Triacca et al. (2013) - which was very recently published after we initially submitted our paper. And the latter paper still does not include anthropogenic aerosols. This was the main reason why we wrote this paper. The paper is also a follow up on our 1997 paper in Nature which pioneered the application of Granger causality testing to climate change.

All models in the paper include all the potential causes, the differences between models in the paper are in terms of:

1. Sources of temperature data - We use both the HADCRUT 4 and GISS3 datasets.

2. Time periods - We look at the full 1850-2011 period as well as the post 1958 period. Regular atmospheric sampling  of carbon dioxide started in 1958 at Mauna Loa.

3. Ocean heat content - The ocean stores most of the heat accumulated through global warming. It is important to include it in climate modelling especially when using short time series. But we only have data from 1955 on. So we estimate models with and without this variable.

4. Restrictions on the equality of climate sensitivity across causes - All explanatory variables are converted to radiative forcing in Watts per square metre. If we aggregate all of these together into total radiative forcing we assume that the relative sizes of the effects have been correctly estimated and the dynamics of temperature in response to changes in radiative forcing are equal across all factors. So we estimate both more restrictive models that impose these assumptions and ones that don't. In particular, we allow the size of the effects of anthropogenic aerosols to vary. There is particularly high uncertainty concerning the size of the effects of sulfur and black carbon aerosols.

Another important dimension of the paper is that we use Granger causality tests that are robust to the non-stationary (potentially stochastically trending) nature of the global climate data. These are the Toda-Yamamoto Granger causality tests.

Saturday, November 23, 2013

First Issue of Asia and the Pacific Policy Studies Now Online

Most of the papers for the first issue of the Crawford School's flagship journal are now online in "early view". All of the papers for the first issue have now been finally approved. It looks like a few more still need to be processed into the journal format (I know that there should be a paper by Bob Costanza and Shuang Liu in this issue). The journal is open access - so no problems or fees for anyone to download the papers.

The Economics of Global Climate Change: A Historical Literature Review

I have a new working paper coauthored with Frank Jotzo and Leo Dobes up on RePEc titled: The Economics of Global Climate Change: A Historical Literature Review. It is a by-product of a book of collected papers we edited for Edward Elgar to be titled Climate Change and the World Economy. The paper has three sections. The first is on trends and drivers of emissions, the second on mitigation and impacts, and the third on adaptation. I wrote the first section, Frank wrote the second and Leo wrote the third. I then edited all the sections together into a hopefully coherent whole. The paper is titled "A Historical Literature Review" because we focus to some degree on the evolution of the literature from some of the early classic papers to the latest contributions. Of course, there is no way we can write a review that is at all comprehensive. The IPCC reports struggle to do that. I think we do cover some of the key papers in the literature and it could be a useful reading guide for further research.

2012 SNIP and SJR Values Released

I'm a bit behind the curve here but new values for Elsevier's bibliometric indicators SNIP and SJR were released on 18th October. The indicators have been refined further. Both SNIP and SJR are supposed to now average 1 for the journals included in Scopus. But I found that only 5949 journals had a SNIP of one or greater out of 18684 journals with a non-zero SNIP. For SJR only 3234 journals out of 19988 had values of of one or greater. So, this is pretty confusing. Also, unfortunately The Energy Journal still has missing values. We use SNIP internally at Crawford School, because it is the best indicator we have to compare across journals, but clearly there are still some questions about it both regarding the normalization and the very large number of journals with missing values.

Wednesday, November 13, 2013

ANZSEE 2013 Presentation

I'm at the ANZSEE 2013 conference. As it is in the Crawford Building, I don't actually need to go anywhere to be "at" the conference :) So far it has been quite interesting with an opening plenary by John Thwaites from Monash on the report of the National Sustainability Council. My presentation is on Thursday morning at 8:30am in Weston Theatre in the Crawford Building. It's titled: "Identifying the effect of the elasticity of substitution on the rate of economic growth"...

Sunday, November 10, 2013

Steve Dowrick

Here is a link to the obituary that Bruce Chapman and Maria Racionero wrote. All I can add is that I interacted a bit with Steve after I started working for the Environmental Economics Research Hub at Arndt Corden Department of Economics in 2009. I found him to be a very friendly and helpful person. Steve came in to chat a few times when he happened to be visiting over at Arndt Corden and took an interest in my work and also gave me some very nice comments on my draft proposal for the ARC (my first) - he said that if it was up to him he would fund it - this made me feel much more confident! I certainly saw him as a role model.

I knew he had been ill and then heard recently that he had died. It was very sad news, especially as he was only 60 years old.

Saturday, November 9, 2013

New Journal: Energy Research and Social Science

Another new journal in the energy space: Energy Research and Social Science. Published by Elsevier and the editor in chief is Benjamin Sovacool. The journal will cover all social science approaches and all energy technologies.

Thursday, October 31, 2013

Australia Needs Electronic Voting

Back in 2000 the US presidential election ended in a debacle due to "hanging chads" in Florida. This year the federal election here in Australia we have a similar debacle in Western Australia with ballot papers going missing. This follows an attempted recount there as well as a recount in the lower house seat of Fairfax in Queensland, where it seems that Clive Palmer has been confirmed as the winner with a different margin than either the first round count or the first recount... These problems would be solved by electronic voting. Here in the ACT we do have the option to vote electronically in the Territory election. I don't see why we couldn't do this nationally. Also, in the ACT election the officials look up voters on laptop computers instead of "telephone books" before giving them their voting materials. At the Federal election it was back to paper.

Evolution of the UK REF

Interesting article on how the UK's Research Excellence Framework evolved. An interesting comment is: "Per pound distributed, the RAE and REF are vastly cheaper than distributing the same sums via grant applications to the research councils" Very significant funding is tied to the results of the REF. By contrast, the Australian system is primarily driven by winning grants and then getting overheads based on them sent to institutions by the government a couple of years later with a smoothing process over time. PhD completions also feature strongly. So far, the ERA is only linked to a very small allocation of funding.

Tuesday, October 29, 2013

Survey of Australian Economists on Climate Policy

Fairfax Media surveyed 35 Australian economists on climate policy. Only two (Paul Frijters and Craig James) supported the government's direct action plan. 30 supported emissions trading or a carbon tax and three supported neither direct action nor carbon pricing. They didn't ask me but depending on how the question was worded I might either have been with the 30 or with the 3 who said neither, who seem to have included my colleague Warwick McKibbin. If they asked whether we supported the previous government's policy, then I'd probably have said no, though it was preferable to no action and maybe to "direct action" too, if they asked about carbon pricing in general then it would have been a yes. Anyway, it now seems that Labor will vote to abolish carbon pricing. On the other hand, it looks like they'll oppose direct action. So then what the minor parties think will be important.

Sunday, October 27, 2013

Special Issue of Energies: Call for Papers

Energies is an open access journal on all topics relating to energy. I have agreed to be the guest editor of a special issue on energy transitions and economic change. The journal is indexed in both the Web of Science and Scopus with an impact factor of 1.844 (5 year IF = 2.087) and a SNIP of 1.296 (SJR = 0.543). I am looking for contributions on all topics related to energy transitions past, present, and future (the theme of my current funded research project) and related economic changes. I'm looking for a broad interpretation of energy transition to include not just changes in energy carriers used but also in the scale of energy use. Some of the topics that could be covered are:
  • economics of new renewable energy technologies
  • energy efficiency and the rebound effect
  • energy ladder in developing countries
  • historical energy transitions (biomass to coal, coal to oil etc.)
  • role of energy in economic growth
  • energy and climate change
  • energy security
  • peak oil
  • economics of unconventional fossil fuels
 But this is just to give you an idea of the type of papers we are looking for. The deadline for submissions is 15 July 2014 but early submissions that pass the refereeing process before that date will be published before then.

I look forward to some interesting submissions and will update the blog with progress.

Thursday, October 17, 2013

Carbon Co-benefits of Tighter SO2 and NOx Regulations in China

An in press paper by Nam et al. in Global Environmental Change uses a CGE model to estimate the co-benefits in terms of reduced CO2 emissions from the tougher new policies on SO2 and NOx emissions in the current Chinese 5 year plan. They find very large co-benefits with a reduction in CO2 emissions of 1.4 billion tonnes by 2015 alone. In later (post-plan) years these come to a large extent from switching to non-fossil energy. But in the short-run a large part of the reductions come from reducing energy use very significantly as shown in this figure from the paper:

The figure shows the reduction in energy use relative to business as usual in exajoules under an SO2 and NOx policy alone with no climate policy. For context, current Chinese energy use is in the rough ballpark of 100 exajoules a year. So the figure shows that by 2020 the reduction in energy use due to the policy relative to BAU is around this current level of Chinese energy use. This is simply huge. The policy also induces a complete shift away from using coal to generate electricity after 2040. The reason that the RHS figure above shows reduced coal use flattening out after 2035, is because China would already be using hardly any coal under this scenario.

Looking at historical analogs, when the US introduced tightened caps on SO2 emissions in the early 1990s there was some fuel switching in the long run to natural gas and other electric generation sources, but the main choice that electricity generators made was to switch to lower sulfur coal, to install scrubbers, and to use coal washing etc. I have less detailed knowledge of the reaction in Europe to similar policies but it involved these things in different proportions (more scrubbers and natural gas from what I understand). Presumably electricity use did fall a bit due to higher costs but not on a huge scale.

This model does not seem to have a low sulfur coal option though it does have a scrubber style abatement technology. Switching to natural gas can save some energy as it is a more efficient fuel for electricity generation and switching to renewables can save a lot of energy depending on how renewables are accounted for. But these things mostly happen after 2020 in this paper. So most of the reduced emissions are from reducing energy use on a large scale. Nothing like this happened in the US or Europe (or elsewhere) in reaction to such policies.

My thinking is that the large energy use reductions relative to BAU must be due to high elasticities of substitution between energy and other inputs (the model uses nested CES functions) or other model features that are not immediately apparent to me. The costs of the policy seem to be quite small in the first ten years, so the reduced energy use does not have a big economic impact in the short-run.

Wednesday, October 16, 2013

Econometric Approach to Detection and Attribution of Climate Change in IPCC AR5 Report

It seems odd to put the full Working Group 1 report on the open web but then say that it shouldn't be quoted or cited. But, anyway, it's nice to see that a fairly extensive discussion of the econometric approach to detecting and attributing climate change made it into the final draft of the report. The text of the final draft of the Working Group 3 report is just in the process of being submitted to the TSU. Last Friday was supposed to be the deadline. The government approval session will take place in April next year. So, some way to go to publication for us.

Wednesday, October 9, 2013

Injection of Carbon in the PETM Happened "Instantaneously"

Fascinating paper. They suggest that the most consistent explanation for the observations is that the Earth was hit by a carbon rich comet. I'm skeptical of the former though because a comet containing that much carbon would have to be very large and so would expect larger general effects from that. If it was pure dry ice then it would have a radius of 12km to generate a 3000GT increase in carbon in the atmosphere. Because methane is less dense, about the same radius is needed for that compound too despite its lower molecular mass per atom of carbon. That is the same scale as the object that ended the Cretaceous period though, of course, less massive if the Chicxulub impactor was rocky. And it seems unlikely that it would be pure carbon dioxide or methane and then would need to be even bigger. Perhaps the object was smaller but the impact occurred in a limestone area?