Posted by: graemebird | November 19, 2009

All Australian Economic Modeling For Cap-And-Kill Is So Far Totally Wrong And Idiotic

No Upper Limit To The Dollars And Human-Years Lost.

FIRST WRITTEN MARCH 2007. BROUGHT TO THE FRONT NOVEMBER 2009.

November 2009

In science a lot can be discovered by just extrapolating a few general principles and “KNOWN-KNOWNS” (Taken from Rumsfeld’s majestic Venn-diagram carve-up, of categories of knowledge, for the purpose of sound decision-making). In a sea of murky known-unknowns, and shark-like unknown-unknowns, still there are reliable known-knowns, that come in the form of general principles. And an outline of possible futures and definite future constraints, can be made by:

1. taking a further subset, of the subset, of known-knowns ………… that being known-knowns that are GENERAL PRINCIPLES

2. picking out the strongest of these kk-general principles that clash with eachother,

3. and finding out how the clash is likely to resolve itself.

We want to take the general principle of the Austrian doctrine of the lengthening of the structure of production. That principle is a known-known and it will be reliably true until such time as we start treating our buildings the same way as chip-makers treat their transitors.

(((((That is when we are building arrays of large pyramidal and conical buildings joined by multiple “roads” at different heights, and piping of all appropriate industrial producer goods into this array. Only at that point will some aspects of the lengthening of the structure of production change. Actual distances travelled of components from raw materials to the final consumer goods may shorten at that time, but not before. And so for a time, we will reach real limits to growth. Since the general Austrian principle will not be denied.))))))))

Now we put this Austrian principle slap blam up against the principle of the geometric progression. To whit:

Growth rates when talking about a period of 93 years.

1% 2.5 times larger economy
2% 6.3 times larger economy
3% 15.6 times larger economy
4% 38.4
5% 93.5
6% 225.7
7% 540.4
8% 1283.5

RULE OF THUMB GROWTH RATE ESTIMATES OF VARIOUS METRICS UNDER THE ASSUMPTION OF GOOD POLICY.

We want some pretty realistic “good policy” estimates. So that we will see what the utter disaster of the cap-and-kill is going to do to us. It won’t do much to lets say FRANCE, except by buggering its trading partners. But it will be a total devastation to us here in Australia. And those poor people in the US.

In the early decades we are looking for a population growth rate of maybe 3% per year. A drop in GDP by maybe 20% up front with all sorts of reforms. But thereafter a growth in GDP of about 5% per year. A growth in energy consumption of about 6% per year. Of energy production at maybe 8% per year. And a growth in GDR of about 8% per year. Here I assume that energy consumption, in the first instance, grows proportional to GDR and NOT GDP. I’ve already, for the sake of argument, factored in a two per cent, after the fact, improvement in energy efficiency. You can see that this is very ambitious already. And its not likely to be bested. Until city layout starts changing that is. I’m making this energy efficiency business so optimistic to rule it out as a factor that the CO2-Bedwetters can wish away, once they take all relevant matters into account and build, for the very first time, a proper economic model for this problem.

Other than being generous on the energy efficiency side the above figures are probably quite realistic for good policy.

((((((Although until we get serious about the city layout then sometime this century we would reach a sort of gridlock. Where it would be pointless and wasteful to keep growing GDR at a faster rate then GDP.

Thanks to the congestion charging argument being split into two camps, (the stupid camp and the evil camp.) we have no way of having a free enterprise solution to city layout.

Thanks also to the moronic economics fraternity, on all three sides, left, right and Austrian, for failing to recognise that Henry George had a point, and that we needed to take some of his arguments into account, even if it is the case that we reject his land tax….. well thanks to this bloody-mindedness on all sides …. we don’t have the other half of the equation that would give us the city layout that we need.))))))))

So anyway the solid known-knowns so far:

KNOWN-KNOWNS

1. The lengthening of the structure of production

2. The reality of the geometric progression.

AND HERE IS SOME MORE:

3. The fact that subsidies are destructive of the long-term prospects for new technologies.

4. The fact that long-term tax-exemptions are NOT destructive of these prospects. (5 years as compensation for rapid change. 15 years (under conditions of growth-deflation) to make sure there is plenty of capital development to speed a drop in prices for the new technology.

5. The foolishness of expecting any energy source, or any given group of energy sources, to grow at more than about 20% compounding per annum.

6. That technological progress is embedded in capital accumulation and particularly in the rate of capital update.

7. Capital accumulation and update are in an of themselves energy-THIRSTY activities. Much more so in the energy production business.

8. Any subsidies to energy production of any sort inevitably lead to wasted (literal) energy resources. This is such a proven empirical fact that it hardly needs going into further. Tax exemptions of 15 years or more do not have this feature if the competitors are exempted also. That subsidised energy-saving programs are wasteful, will be also the case for the subsidised insulation program we have on the fly now. You might not believe so. But its just a matter of someone doing the numbers. However a 15 year tax-exemption for stand-alone companies providing energy-saving investments (such as insulation) need not, and would be unlikely to, cause the same wasted (literal) energy, so long as the competition also got that benefit.

If we bring these 8 general principles together and let them fight it out, we will see that the cap-and-kill will slow the rate of CO2-Emissions ONLY BY REDUCING THE RATE AT WHICH THE ECONOMY PROGRESSES. The cap-and-kill, if “successful” will be “successful” almost overwhelmingly and only by slowing technological development and hampering the rate of growth in pretty much all other metrics mentioned.

If you don’t believe me do the maths yourself, with all 8 of these general principles in mind. Don’t shoot the messenger, this is just a fact.

Supposing you say “HO HO Graeme. Still talking about pyramids ho ho.” And thats your whole argument. Well snideness cannot change anything. Suppose you are saying that we are going to double heliostat solar energy every year. HOW????? By a subsidy??????? I’m telling you it cannot work. By a 50 year tax exemption funded by closing down ABARE and a string of other bureaucracies?

Now thats better!!! Just so long as you have the tax-exemption for all competing businesses as well. That can work I admit it. It can speed up the rate of growth, and the rate at which prices fall. And if the technology is not making an accounting profit, well too bad. But the whole thing ought to be done under monetary conditions of growth-deflation or bubbles could form. And it ought to be done under conditions of the reduction of all types of debt.

But even under that good policy of growth-deflation, mass-sackings, surpluses in every level of government, and the right tax-exemptions…………

…… EVEN WITH ALL THAT the growth of alternative energies is STILL! going to take time to get up a head of steam. And in the meantime emissions MUST increase a great deal if growth and technological progress is not to be hampered. Because the heliostats (for example) must be manufactured USING HYDROCARBON RESOURCES. So early on, even if we can push growth of non-CO2 emitting energy sources up to 20% per annum, this will INCREASE and not decrease emissions. Maybe not for France. But for us this is just a fact.

Hence the cap and kill will work no question. But only by paralysing growth and technological progress. If you don’t believe me do the maths. But you must take the 8 realities above into account when you are setting up your maths assumptions.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

ORIGINAL FROM MARCH 2007

We are hearing certain folks playing down the cost of what the energy-deprivers want from us. Some folks can be compromised with. But we can never compromise with utopian-eschatologists because there is no upper limit to their demands or the costs that they will wish to impose on us.

From time to time you’ll hear a leftist economist say something like:

“Cost estimates are between 8 and 24 times the cost already spent on the gulf war… Not insubstantial… But clearly affordable”

WHAT THE FUCK?????? EIGHT to TWENTY-FOUR TIMES THE GULF FUCKING WAR????

And lets not forget that this action won’t change the weather a skerritt except out of sheer serendipity. And lets not forget that even if it did work it would change the weather FOR THE WORSE!!!! “Cost estimates are between 8 and 24 times the cost already spent on the gulf war… Not insubstantial… But clearly affordable”

Affordable to whom?

Have YOU got the money? I don’t have the money. The Americans are up to their eyeballs in debt. Who has to die so that we can have this money FOR AN INVESTMENT IN FRAUDSTER EGO??? Affordable to whom? Well the answer is that ANY AMOUNT is AFFORDABLE TO THE TAXEATER.

BECAUSE THE TAXEATER DOESN’T HAVE TO PAY IT.

This deal is driven by the contempt of taxeaters for the rest of us. For our taxpaying friends, for the days of our lives. Only the taxpayer has to pay for this vandalism and the bills never stop. Only a taxeater could have uttered these words surely. But getting sidetracked into debates over whether its affordeable (every serious amount of spending kills-someone… somewhere… sometime.. now-or-in-the-future)…

SO LETS NOT GET SIDETRACKED.

Lets just point out the ridiculously low estimates these fellas are giving us. 8-24 Times the Gulf War is a lot of money for anything at all. But its a shitload of money for nothing at all and to the extent that that nothing at all aproaches some-small-thing that some-small-thing is only bad. 8-24 times the cost of the Gulf War is an enourmous amount of money. But as huge as that is…. As many people as the spending of that for no reason at all … As many people as that would kill, or ruin, or break their hearts, or as many people as that put-upon would stop from ever really feeling alive. As much as that amount of money would fuck people up for no reason whatsoever….. the fact is that its a ridiculous UNDERestimate.

There is simply no upper limit to what the energy-rationing-ideologues might wind up costing us. For me to show this…… lets project out future economic growth rates. We will look at what a 1% growth rate means in terms of the size of the economy in 93 years time. That is to say the size of the economy in the year 2100. As I explained in my criticisms of the SINGULARITY concept (search this site): its the things we do WORST not the things we do BEST that determine the constraints on our growth. Just as in Chemistry.. the rate-determining-step is the SLOWEST and not the FASTEST step in any complex cycle. So we have to get rid of all the constraints years in advance of THOSE CONSTRAINTS rearing their ugly head….. We have to get rid of them years in advance to ensure that we can experience unimpeded economic growth. That being said our main constraint is always and forever capital accumulation. And energy is massively imbedded in this capital accumulation and turnover. Technological improvement is particularly embedded in capital turnover.

Here is the outcome for various rates of economic (OR OTHER) growth over 93 years.

Growth Rate/Outcome with 93 years of Growth

1% 2.5 times larger economy
2% 6.3
3% 15.6
4% 38.4
5% 93.5
6% 225.7
7% 540.4
8% 1283.5

The fact is that there is just no upper limit to what these energy-deprivation-crusaders could be costing us. We are bound to be underestimating what they will cost us by trillions of dollars and billions of human-years of life-lost. And if you want to save human lives and bring the good things quickly to the poorest people in the world…. A wealthy country.. in pursuit of LIBERTY for its own people…. ought to become a massive exporter of capital goods…

And the recipients of this capital, in terms of both loans and physical equipment…. needs powerful amounts of energy to use all this gear, pay back their loans, and release for all time, the vast majority of its people from life-shortening-labour and life-destroying-poverty.

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Responses

  1. Your comment is awaiting moderation.
    “In some parts of the world (Ireland and the UK come to mind), crippling government debt has already caused freezes or cuts in public spending, which in turn translates to inferior public services.”

    Inferior by design. What happens is:

    1. We go to cut fat.

    2. Bloodsuckers then cut bone and marrow to spite and discredit the razor gang.

    3. They then waste money even more lavishly then before.

    There is no cutting costs for goods where we have decided they must be public. And there ought never be any of this hateful “public-private-partnership”. So if its a public good we simply must expect largesse. But the fact is there are dozens, if not hundreds of government departments, that we can get rid of in their entirety.

    And then you have plenty of people that you are now temporarily helping resettle into the private sector, who you can move to clean up the mess if any of this marrow cutting shenanigans is going on. Thats when you sack anyone who doesn’t want to do the job and you still get the job done.

  2. Your comment is awaiting moderation.
    Mark is right in this one. Uranium can go up in price. But the daily rate at which we dig it up isn’t going to peak for centuries. But Coal could peak later this century. And oil appears to have peaked already and could start dropping before it plateau’s on a lower level.

    There doesn’t seem to be any known constrains on methane for the meantime. If we could get the infrastructure out in the ocean via AQUACULTURE…

    If we could get a boom going in aquaculture in a big way…. Then we would have the ocean-based economic development we need to ease us into getting at the methyl-Clathrates.

    Methy-Clathrates are the absolute holy grail of hydrocarbons. And there is simply no end to them in a VERY long time. But the rate at which we can bring them to the surface may be constrained because they are like a harder type of ice stuck to the bottom of the ocean.

    Its plausible that we might run low on the uranium thats really cheap to get at. Its simply not plausible that we will hit any sustained peak daily limit for centuries. Many many centuries. Because its ranked not far after tin as one of the very plentiful metals out there.

    Once we get the capital and prospecting techniques for ocean mining particularly. There is just going to be no end to it.

    So the order of development ought to be

    1. aquaculture
    2. clathrates
    3. ocean mining.

    And then the cup just runneth over. Hence the short-sightedness and idiocy of privatising fisheries (for example). Rather than developing good homesteading rules that any one of us can take advantage of.

    And its not as if we are going to be limited to this Uranium and Thorium gear for fission and fusion. We can progress to deuterium, and boron and all sorts. Where there are neutrons, there is stored energy as far as I’m concerned.

    The really useful metal thats very hard to get hold of is platinum. That really is constrained and its damn useful stuff. But even PLATINUM will be sorted once we get right into the ocean. So we’ve got to get this aquaculture out of the tax system. Because while climate change isn’t “real” (in terms of the smuggled lie in the Orwellian language) overfishing is VERY real and we’ve got to do something about it.

    Chodorov
    20 Nov 09 at 11:32 am

  3. […] The Americans are up to their eyeballs in debt. Who has to die so that we can have this money FOR AN INVESTMENT IN FRAUDSTER EGO??? Affordable to whom? Well the answer is that ANY AMOUNT is AFFORDABLE TO THE TAXEATER. BECAUSE THE TAXEATER DOESN’T HAVE TO PAY … So we have to get rid of all the constraints years in advance of THOSE CONSTRAINTS rearing their ugly head….. We have to get rid of them years in advance to ensure that we can experience unimpeded economic growth. …More […]


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