Carbon Tax – Nova misleads – Perhaps you won’t notice.

One of Nova’s politically motivated tactics is to try and scare the public into thinking they are wasting money on battling carbon emissions by presenting only short term effects. Her gullible reader are all too ready to complain about the carbon tax to even notice.

Instantly it’s obvious to the experienced climate scientist that Nova is not concerned about the long term effects of climate change because she cites 2020 as the year by which we should judge the carbon tax plan.

As any climate scientist will tell you, even shutting off ALL emissions will still leave CO2 levels at high levels for many decades, thus the planet will still continue to warm. Any short term look at temperature difference expected from changes in emissions is fundamentally flawed. It’s not the short term consequences we’re concerned about, it’s the long term warming. I suspect Nova knows this, but is hoping you are dumb enough not to notice.

Given that Nova cites the Garnaut 2011 report so much, it seems strange she doesn’t take heed of how this was explicitly stated in the introduction:

The costs of reducing emissions will come straightaway. The benefits of reducing damage from climate change will come later—many of them to later generations of Australians. In fact there will be more and more benefits for later and later generations.

Let’s examine her “alarmist” post “Gillard’s tax on “carbon pollution”: the facts”

Nova wants to highlight and stress how small an impact reductions would make on a short term period, rather than present the long term benefits of reducing carbon emissions.

Nova’s first few arguments are:

  • By 2020, CO2 in the air would be 411.987 parts per million by volume, compared with 412 ppmv if no action were taken.
  • Global warming forestalled by 2020 would be 0.00007 C°: i.e. 1/14,000 C°.
  • 0.00007 C° is 1/700 of the threshold below which modern instruments and methods cannot detect a global temperature change at all.

Nova neglects to mention the effect that it would have on temperatures 100 years from now, perhaps because sheds light on real long term cost of greenhouse gas emissions.

Nova cherry picks again - IPCC 2007 projections

Next is the first of many “Nova” calculations. These, unlike most financial reports, can not be replicated because Nova only gives partial workings for how she arrived at them. It’s obvious Nova has rushed things a bit – in her effort to overstate the cost she says:

  • At this rate, total cost of the carbon tax/trade policy will be not less than $127 billion between now and 2020, not counting gasoline and power price hikes.

Nova later quotes 127 billion as a total for 10 years (“total $127 bn/10yr”). Here she presents this figure as the cost of the carbon policy between now and 2020. The carbon tax is not implemented until mid 2012 ; from then until 2010 is NOT 10 years. Perhaps you won’t notice.

Nova then uses this revenue figure as a percentage against GDP when it’s wrong to do so. This is a cost to the business and a revenue to the government, which then goes on to subsidise industries and the general public and partly goes towards assisting green energy infrastructure. The tax revenue/cost is a reinvestment of funds, not a loss. This is unlike the figures for financial loss due to inaction. The two cannot be directly compared.

If you look at the source for Nova’s claim, Garnaut 2011, the 10.1 carbon trading cost comes from using Garnaut’s $11.5 billion revenue (10.1 = 11.5 x 23 / 26 to adjust for carbon tax rate). What Nova fails to mention is this section from the Garnaut report …

The amount of revenue collected rises with the carbon price, but decreases with emissions. The revenue from a carbon price is expected to rise in the short to medium term as the price increases and as additional sectors are covered. In the longer term, the revenue from a carbon price will decline as a result of steady falls in emissions eventually overcoming the rise in permit prices.

Again one wonders if Nova likes to purposefully exaggerate the costs whilst at the same time neglecting to mention the long term benefits. Perhaps you won’t notice.

Nova continues her inexplicable equations to make this statement:

  • If all the world’s measures to cut greenhouse-gas emissions were as cost-ineffective as the Australian Government’s proposed policy, forestalling just 1 C° of global warming would cost the world $1.7 quadrillion.

Again it is difficult to fathom how Nova arrives at this figure – perhaps she just simply extrapolates the 2020 figures. If so then she needs to realise the benefits are not linear over time and the costs of alternative energies will not remain constant.

A more reasonable comparison would be to look at the costs and benefits from acting / not acting over a 100 year time frame – Nova won’t do this of course. She states:

  • Forestalling all of the 0.24 C° global warming predicted by 2020 would demand almost $60,000 from every man, woman and child on the planet.

Again I suspect Nova’s figure are again extrapolated from small time ranges but that’s secondary to the main problem with the above statement. We are not acting because we wish to eliminate 0.24 C° of warming by 2020. We are acting to reduce the amount of warming that we have already committed to. The greater our actions, the more likely we are to avoid devastating changes to our climate and ecosystems.

Nova makes this next comment but it is unclear how she determines (if at all) the future cost of inaction. She doesn’t declare any method for this.

  • Even at Garnaut’s artificially low discount rates, the cost of the Gillard policy would be 7.6 to 15 times the cost of doing nothing about climate change.

Once again Nova’s flawed understanding of the carbon revenue vs GDP percentage makes statements based upon her math quite ridiculous. The carbon revenue is an investment, not a capital loss.

Furthermore, Nova also can’t accept the science-based findings that show this planet is changing more rapidly than in recent geological times and that the change over the next 100 years could be between 4 and 6 degrees. Some long term implications such as the acidification of the ocean or loss of animal species may never be undone.

Nova now goes on to fail at basic economics. If something costs more, people are less likely to purchase it. Most people are capable of understanding that. Nova can’t; she says:

  • For most Australian households, the $10.10/week benefit from the Gillard scheme will exceed the $9.90/week cost, providing no disincentive to emit.

Even if the benefit received is EXACTLY the same as the additional cost involved, the incentive is still there to switch from the polluting product (which has now become more expensive and will become even more-so over time) to a greener product (that does not attract a carbon tax and hence will become cheaper). This does not necessarily relate to energy right now, however as carbon based energy becomes more expensive, greener alternatives will become more competitive.

This ABC News picture may help visualise the process.

There are also other additional benefits to adopting a carbon tax rather than just the obvious. Now that Australia has adopted a stance on tackling climate change, we can rightly pressure other countries into doing likewise, something that has been missing from recent discussion.

Now Nova pulls out another of the old debunked “skeptic” arguments.

  • For 500 big “polluters” (CO2 is not a pollutant, but plant-food to green the planet), compensation plus higher prices provide no disincentive to emit.

As previously discussed, Nova wishes to pretend that Ocean Acidification is not caused by the pollution of CO2 – she wishes to deny the existence of hundreds of scientific papers on the subject and instead pretend it’s no threat at all.

The severely limited view of Nova’s “CO2 is plant food” argument has been brought to her attention many times in the past. Yet she blindly keeps repeating the words over and over again without having addressed the criticism. Nova hopes you don’t notice.

  • Bottom line: It is many times more costly to try to prevent global warming by Gillard‟s methods than to adapt in a focused way to the predicted consequences of global warming.

Nova has gone to great lengths to avoid mentioning the long term costs of carbon pollution generated from currently “cheap” coal-based sources. She confuses revenue with costs when examining it as a percentage against GDP and she repeats old “CO2 is plant food” arguments.

The real cost to the environment from coal-fired power station is incurred over decades to century time scales, something Nova avoids mentioning. The effect of reducing emissions likewise will be felt over decades, not just a few years.

Nova hopes you won’t notice.

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4 Responses to “Carbon Tax – Nova misleads – Perhaps you won’t notice.”

  1. Tucci Says:

    Horsehockey. Sure, “The costs of reducing emissions will come straightaway” for putative “benefits” projected to “come later—many of them to later generations of Australians.

    But those costs will be sustained and will increase, carving away at capital formation (which derives from profits) to reduce the key factor in real material productivity for Australians so that those “later generations of Australians” will become inexorably more and more impoverished as the decades pass.

    On the basis of the “Cargo Cult Science” of “carbon pollution,” the alarmists predict eventual benefit – maybe – generations from now.

    Of course, those later “generations of Australians” are going to repudiate and repeal this predatory viciousness the moment they get the political power to do so. And they’ll be damning Julia Gillard and her accessories in this flagrant rip-off for their stupidity, their gullibility and – beyond doubt – their corruption.

    This ranting jerk thinks he’s got anything resembling a point to make about Joanne Nova’s presentation of the “carbon tax” bloody insanity? Yeah, right!

  2. Michael Says:

    It is remarkable that Nova is still taken seriously given the magnitude of her errors.

  3. adelady Says:

    “Even if the benefit received is EXACTLY the same as the additional cost involved, the incentive is still there to switch from the polluting product … to a greener product…”

    Read a nice comment elsewhere on this. Considered as tax policy alone, it’s a good idea.

    Shifting the tax burden away from something desirable – people working / getting off benefits, and onto something undesirable – pollution (or whatever you want to call it) is good policy at any time.

  4. Tucci Says:

    At 1:00 AM on 15 July, adelady writes:

    Shifting the tax burden away from something desirable – people working / getting off benefits, and onto something undesirable – pollution (or whatever you want to call it) is good policy at any time.

    Hoo, boy. And you’ve gotten your appreciation of political economics, adelady, from just where, precisely?

    The hard fact of economic reality is – and has always been – that taxes of every kind are always paid by the end consumer of the products and services subjected to taxation.

    Always. What you’re perceiving, adelady – and the better word to use is misperceiving – is the direct exaction of “the tax burden” and emphatically not the real burden.

    By taxing those industries and businesses responsible for the bogus “carbon pollution” being yammered about by Gilliard and her sputniki (carbon dioxide, one of the desired products of complete combustion), the government is raising the cost to the end consumers of the goods and services provided by those producers.

    You’re an end consumer, adelady. You’re the person who is going to pay that tax.

    Businesses – in order to stay in business – have to treat government-imposed burdens like taxes and regulations as part of their cost of doing business.

    These costs must be incorporated in the prices of what they provide to their customers. Taxation of such “pollution” imposed upon businesses have to be paid by the ultimate consumer of whatever it is that these businesses are producing, or the businesses can’t stay in business.

    Very simple, isn’t it?

    So the person paying these taxes on the “something undesirable – pollution” aren’t really the bad, CO2-releasing businesses but rather you yourself, the person who has to buy groceries and clothing and electricity and natural gas and medicines and all the other necessities and niceties of your own precious life.

    Those taxes are going to be “buried” in the cost of everything you need to live.

    That’s “good policy at any time” only for the politicians and the bureaucrats who are seeking ways in which to rip you off even more thoroughly than they’re doing right now.

    Sneaky bastiches.

    I quote economist Henry Hazlitt:

    The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

    adelady, with regard to the study of political economics, you’re a helpless victim waiting to be mugged.

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