OFFICIAL WISDOM: GETTING IT EXACTLY WRONG

There is no end to official policies that are eventually seen as getting it exactly wrong -- though this recent one is rather tragic -- and when normal cyclic global cooling comes, official acceptance of the warmist scare will be seen to be yet another such folly -- much like that other famous Greenie false prophecy: Paul Ehrlich's "population bomb".

But I think there is always room for another example of official folly so let me mention one that has taken place in my home town of Brisbane.

In the old days, lots of people in Brisbane had rainwater tanks for domestic use, as the town water was rather "hard". Eventually, however, the town water improved and the tanks fell out of favour. But there were still a lot of them around. The local council eventually took notice of this and concluded that the old tanks were a health hazard. So it sent inspectors around telling people to pull down their old tanks on pain of prosecution. My neighbour over the road was one of those threatened and he did pull his tank down.

Now, however, Greenie opposition to dam building has ensured that Brisbane has a water shortage. So what is the council doing? Offering people $1,000 grants to install rainwater tanks! My bemused neigbour has signed up and reinstalled a rainwater tank roughly where his old tank used to be.

Betting that official wisdom is in fact official folly is probably the best bet in all circumstances. It is only official meddling in people's daily lives that caused the Brisbane rainwater tank fiasco. But the meddlers will always think that they know best. Don't believe them. It is almost certain that they will do more harm than good.

My FOOD & HEALTH SKEPTIC blog reports almost daily examples of know-alls who are getting it wrong. The whole concept of a "healthy" diet is fundamentally flawed, for instance. Who these days has not absorbed the message that a low-fat diet is healthier? The supermarkets are full of low-fat foods and the great sin of McDonalds is that their food is "high in fat". Yet a huge recent U.S. study of 50,000 people costing $400 million and lasting 8 years found absolutely no effect on health of a low-fat diet. Don't believe me? You can find the links to the actual journal articles reporting the findings in the right-hand column of my FOOD & HEALTH SKEPTIC blog.





Groan! More blinkered vision from alleged scientists -- this time about rain and snow

There is no dispute that the earth warmed slightly during the 20th century and warmer seas do give off more evaporation and hence cause more rain and snow. So the guys below have just proved the obvious. And even the Lockwood paper concedes that most 20th century warming was due to changes in the output of the sun. So where is the "evidence" of human effects? It is non-existent. It is just faith



An Environment Canada study has detected the first direct evidence of human influence in changing global patterns of rain and snowfall -- including a significant increase in precipitation in Canada. The study published in the science journal Nature found precipitation increased by 10 per cent in northern regions during the 20th century, a change that cannot be explained by natural variability or volcanic eruptions [I suppose changes in the output of the sun are not "natural" variability, then?]. Human activity can be the only explanation for the changes, according to the study, co-led by Francis Zwiers and Xuebin Zhang of Environment Canada. "These are pretty big changes over the better part of the century and what we're able to say from our study is that a substantial part of that change is due to human influence," Zwiers said.

Zwiers and Zhang examined global rainfall data from 1925 to 1999 [A selection of dates well-designed to exclude prior and subsequent changes in climate] and compared it with 14 computer models. The study confirms the reliability of the computer models widely used to study climate, showing that actual changes are in line with computer predictions. But the changes are happening faster than predicted. [So they are NOT in fact in line with the predictions! Heads I win; tails you lose]

Almost all computer models predict that global warming will bring increased precipitation along the equator, with more moisture transported toward the poles, resulting in greater precipitation at higher latitudes. [The models predict that warming will bring more rain! Bravo! You don't need a model for that! Just boil a kettle sometime and watch the steam coming off] Changes in precipitation will impact the food supply and movement of people. Despite the overall moistening in upper latitudes, the models predict a drying in the interior of North America.

"We've run climate models over the 20th century. They simulate a certain response in precipitation that corresponds on the large global scale with these changes that we've seen," said Zwiers. "It has to do basically with a strengthening of the hydrological cycle and greater transport of moisture vapour away from the warm parts of the world toward cold parts of the world."

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Hillary dodges nuclear waste storage issue

Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Environment & Public Works Committee, today blasted Senator Hillary Clinton (D-NY) for accusing the Senate Republicans this week of failing to ask the `hard questions' about Yucca Mountain. Clinton failed to attend the last two EPW hearings on the issue. Senator Clinton was quoted asserting that the EPA (Environment Protection Agency) and DOE (Department of Energy) have been unaccountable to Congress because they have "not had to answer questions up until now because the Republican Congress has not been willing to ask the hard questions," according to a July 22, 2007 article by the Associated Press.

"When Senator Clinton had the opportunity to ask `hard questions' of Administration officials about Yucca Mountain, she was missing in action. In fact, Senator Clinton failed to ask ANY questions because she was absent from the last two EPW hearings on Yucca Mountain," Senator Inhofe said. "The `hard questions' now need to be asked of Senator Clinton: Why didn't she attend either hearing? What is her plan for nuclear waste disposal? If it's not going to Yucca Mountain, where will it go? If we're not building Yucca Mountain, do the electricity consumers get their $28 billion refunded?" Inhofe asked.

Under Senator Inhofe's leadership, the EPW committee conducted two hearings on Yucca Mountain in 2006. Senator Clinton failed to attend either hearing. There was a full committee hearing on March 1, 2006 chaired by Senator Inhofe and an EPW subcommittee hearing on September 14, chaired by Senator George Voinovich (R-OH).

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Australian Left reverses under pressure: Now in favour of cutting down trees



KEVIN Rudd yesterday scrapped forest policies which cost Labor two key Tasmanian seats at the last federal election - and he sweetened the deal with $20 million. The Labor leader pledged support for the Regional Forest Agreement and the Tasmanian Community Forest Agreement. This means no more areas of old-growth trees would be turned into reserves and locked away from felling - which brings Labor into line with the Federal Government policy. The key forestry union, the forestry industry and the State Government all welcomed the policy change. It was condemned by The Wilderness Society.

A few days before the 2004 election, Prime Minister John Howard was greeted as a hero in Tasmania by workers afraid the old-growth reserves preservation policy of then Labor leader Mark Latham would cost them their jobs. CFMEU forestry branch national secretary Michael O'Connor said then: "I would only say Mr Howard's policy is better than Mr Latham's." The industry anger was linked to Labor's election loss of Bass and Braddon in Tasmania and a seat in Victoria.

Yesterday Mr O'Connor said: "The ghost of Mark Latham is well and truly buried." And Mr O'Connor's Tasmanian counterpart Scott McLean, who cheered Mr Howard three years ago, shook Mr Rudd's hand after the policy announcement at the 100-year-old Britton Bros sawmill at Smithton on the North-West Coast. "What this policy does is finally put the ghost of Mark Latham to bed," Mr McLean said.

Mr Rudd said: "In the last election we didn't get the balance right, that's why I came back here to Tasmania very soon after becoming leader of the Parliamentary Labor Party. "In the period since then we've been consulting with the local industry, with others here in Tasmania, with (Braddon candidate) Sid Sidebottom. Our shadow minister Kerry O'Brien has also been part and parcel of the decision. "We support its implementation in full, and believe the implementation is necessary to provide long-term stability and security to Tasmania's forest industry."

The $20 million package for industry development includes $9 million to boost value-adding in Tasmania, plans for a ban on illegal imported timber and also a major study into the impact of climate change on the timber sector. Mr Rudd said the package was a fresh commitment to the industry in Tasmania to provide long-term certainty. "I'm here today to make it clear-cut where we stand in terms of the Tasmanian Community Forest Agreement," he said. "Mr Howard is locked in behind that, I'm locking in behind that, I can't be any clearer than that."

The TCFA protects 170,000ha of forest, including 45,000ha on private land through the Forest Conservation Fund. Mr Rudd said Labor's $9 million Forest Industries Development Fund would help reverse the trade deficit in forest products. Another $1 million will go to a new Forest Industry Skills Council to build capacity for the forestry workforce. The $1 million program to fight illegal timber will support certification schemes for products sold in Australia.

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Greens' energy tax would destroy the Australian economy

Green fanatics are talking about cutting emissions by a suicidal 60 per cent. I say suicidal because such a policy would be devastating for living standards. To cut USA Co2 emissions by 33 per cent everything powered by petrol would have to be abandoned. If the emissions cut was raised to about 70 per cent they would have to virtually abandon electricity production. In plain English: these fanatics and their media allies are demanding that Australians should destroy their country's capital structure and adopt the `life-style' of a medieval peasant.

Some greenies have tried to use the economic concept of discounting to deceive people in thinking that emission cuts would be economically painless. Discounting recognizes the fact that we value present goods more highly than future goods. That is why we have interest. If it were not so, then $100 ten years hence would have the same value as $100 in the hand. In business planned expenditures are discounted by the rate of interest to provide an estimate of their present value. At an interest rate of 10 per cent $100 in a year's time is worth $91 today. Obviously, the higher the interest rate the lower the present value of a future good.

When a firm, for example, is appraising a potential investment it can calculate its internal rate of return. If the internal return is greater than the rate at which it can borrow, the investment is profitable. (This, of course, is a great simplification of the investment process). Therefore discounting is used by firms to measure and compare future flows of benefits and costs in dollar terms. This is basically what most economic models try to do when they attempt to compare the costs of cutting CO2 with the apparent benefits. But this approach also brings into play the economic concept of cost. Every economist knows that the real cost of anything is not its money price but displaced values: those things that must be sacrificed to obtain the desired good. Economists aptly call these sacrifices opportunity costs.

Thus the real cost of buying a car is all the other goods and services that would have otherwise have been bought. To a firm, its costs would be displaced alternative revenue flows. The effect, and intention, of reducing emissions is to burden the economy with higher production costs. Thus the costs to society of these green policies will be lower productivity, more premature deaths, fewer opportunities for more productive technologies, especially energy intensive ones, fewer resources for schools and hospitals, the loss of investments yielding more and more better paid jobs, etc. And no amount of discounting can make these costs disappear. In fact, the greater the reduction in Co2 emissions the more savage the cut in living standards

If we focus on the firm for a moment we see that when it considers a potential project it will discount the anticipated stream of earnings and costs and compare them with each other. Should the costs exceed anticipated earnings then obviously the project will be rejected. A crude way of applying the same principle to an economy would be to try and calculate the alleged future costs to the economy of CO2 emissions, discount these alleged costs at a certain rate of interest, divide the result by the population to get a per capita figure and then subtract the figure from per capita GDP.

If the per capita GDP figure is $30,000 and the per capita cost is $10,000 then the loss of income is significant. (The figures are arbitrary and chosen for reasons of exposition). Of course, it will be argued that it's still worth the cost and it's only a one-off sum anyway that doesn't have to be paid at once.

The problem is that it's not a one-off sum - none of these figures are one-offs. Journalists who claim otherwise are liars. What is being deliberately ignored is that a permanent increase in energy costs will force firms to restrict output by eventually changing their factor combinations in a way that will bring operating costs into line with a lower level of output. To argue otherwise is to assert that rising production costs do not affect output. If this were so, then an immediate doubling of wage rates would not affect output or the demand for labour.

It clearly follows that the reduction in output becomes a permanent feature of the economy. Now a non-green economist could argue that there need not be a permanent fall in living standards or any fall whatever, merely a reduction in the rate of increase in consumption. What this amounts to is that part of those savings that would have gone into increased production will be directed into reducing CO2 emissions. In other words, instead of having a 4 percent growth rate we only get 3 percent.

This argument overlooks the fact that this policy would only slowdown CO2 emissions, which would cause the greens to demand more stringent reductions. This is because the greens' goal is to use greenhouse taxes to reduce absolute production and not just its rate of growth. In other words, the greens real target is industrialisation. In any case, it's ridiculous to assert that deliberately slowing down capital accumulation is not a cost to society. Any government action that forcibly reduces investment and consumption is a cost to society. (The Nazi and Soviet economies are graphic examples of this economic truth).

Moreover, the idea of blanket energy taxes and aggregate discounting for the economy are highly questionable, falling into the trap of what I call the tyranny of aggregates. By concentrating on discounting for the economy economists have neglected the key role that the market rate of interest plays in not only equating the supply of capital with the demand for capital but of allocating capital through time. Production takes time, a fact that no one would dispute. The question is: How much time? This is where interest plays its vital hand. If the rate of interest falls naturally, i.e. people are saving more, from 5 percent to 3 percent then this will signal to entrepreneurs that more capital is available.

By definition, this means that the discount rate also falls. Many capital-intensive projects that were ignored because the previous rate of interest made them unprofitable because of their highly time-consuming nature now become profitable at the lower rate of interest. Therefore the effect of market fall in the rate of interest is to lengthen the production structure by adding more time-consuming but highly productive stages to it. (This is what is meant by allocating capital through time).

Imagine the economy expressed as a right-angled triangle with a number of rectangles going through it, with each rectangle representing a stage of production. As the triangle gets longer and wider more and more time-consuming complex stages are added to it, which eventually increases the flow of consumer goods and services. Now take two identical triangles and then have one expand at 5 percent a year and the other at 2 percent. The one expanding at 5 percent will double in size in about 14 years while the other will take about 35 years. We can see that after 14 years of growth the differences in size would be enormous. Let us now superimpose the slow growing triangle A on the fast growing one B. The area outside A but still within B is what B would have had to sacrifice if its growth rate had been cut to 2 percent.

As B is now a far richer economy than A because it has a longer production structure it can allocate more resources to fighting whatever environmental problems it comes to face. This means that instead of imposing an energy tax on production economy B can pay for the environment out of general revenue. In addition, its rapid growth also means that advances in technology would be embodied in its capital structure. On the other hand, the cost to A of fighting environmental problems will be far greater. Greens can argue that there is no time to lose; impending doom in the form of global warming calls for measures now. And that the economic benefits from cutting Co2 emissions will greatly exceed the costs. No and No. In fact, the evidence against the existence of man-made global warming is mounting.

Antarctica is getting colder and accumulating more ice, and sea levels are not rising. The IPPC has conceded that the warming up to 1940 was the result of solar activity during the early part of the century. So the ice caps are not melting and polar bears are not disappearing. The Medieval Warm period - which was much warmer than today - and the Little Ice Age happened independently of human activity, indicating that even severe weather fluctuations are a natural part of global weather patterns.

In other words - don't let the greens panic you. Considering the amount of anti-warming evidence that is accumulating, I think people are being wise in questioning the motives of those who are using hysterical language in an attempt to bulldoze us into adopting policies that would destroy our living standards while simultaneously increasing government control over our lives.

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The Lockwood paper was designed to rebut Durkin's "Great Global Warming Swindle" film but it is in fact an absolute gift to climate atheists. What the paper says was of course all well-known already but the concession from a Greenie source that fluctuations in the output of the sun have driven climate change for all but the last 20 years really is invaluable. And the one fact that the paper documents so well -- that solar output is on the downturn -- is also hilarious, given its source. Surely even a crazed Greenie mind must see that the sun's influence has not stopped and that reduced solar output will soon start COOLING the earth! Unprecedented July 2007 cold weather throughout the Southern hemisphere might even be the first sign that the cooling is happening. And the fact that warming plateaued in 1998 is also a good sign that we are moving into a cooling phase. As is so often the case, the Greenies have got the danger exactly backwards.

For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, GUN WATCH, SOCIALIZED MEDICINE, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For times when blogger.com is playing up, there are mirrors of this site here and here.

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