$260 / ton for carbon – the price of salvation

the monetizing of carbonLord Stern: Models ‘grossly underestimate’ costs of global warming

Submitted by Eric Worrall

Lord Stern, the British Academic who prepared the “Stern Review” on global warming for Prime Minister Tony Blair, has just claimed a carbon price of up to $260 / ton is required to prevent dangerous global warming.

“The risks are in fact likely to be so large that a globally coordinated carbon price of $US32-$US103 ($34-$110) per tonne of emissions is needed as soon as 2015 to prevent the temperature increase from exceeding 2 degrees of pre-industrial age levels, said Lord Stern and co-author Simon Dietz, from the UK’s Grantham Research Institute.

Within two decades, the carbon price will need to almost triple in real terms to $US82-$US260 a tonne, the two researchers say in their paper to be published in The Economic Journal.”

Source: http://www.smh.com.au/environment/climate-change/models-grossly-underestimate-costs-of-global-warming-nicholas-stern-says-20140616-zs8tr.html
Lord Stern’s “Stern Review”, prepared in 2006, has been heavily criticised since its release, for making some unjustifiable assumptions.

For example, according to “The Economist”, Lord Stern used a near zero discount rate when calculating the impact of future harm.

http://www.economist.com/node/14994731

The effect of using such a low discount rate is to make problems which occur in the distant future as important in terms of the calculation as problems which occur today – for example, if your report predicts mass starvation in 100 years, a near zero discount rate could be used to justify creating global hunger today, to ward off the predicted future risk, if the future casualty rate was greater.

Non-discount of future risks is wrong for all sorts of reasons, not least because we have no idea of what advances 100 years of technological progress will deliver.

Economic forecasts of the past, such as the Great Horse Manure Crisis of 1894, are often a source of hilarity in modern times, due to their rather outdated assumptions.

http://bytesdaily.blogspot.com.au/2011/07/great-horse-manure-crisis-of-1894.html

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77 Responses to $260 / ton for carbon – the price of salvation

  1. AlecM says:

    Stern is not an academic. He’s a Civil Servant who decided to tell porkies to ingratiate himself with Tony Blair. Another Civil Servant also told porkies to ingratiate himself with Tony Blair, the man who wrote the fake ‘WMD dossier’ which led to the Iraq War and the Sunni-Shia 30 years’ war we have just entered.

    Anyway, back to Stern. He was ennobled and became an academic whose job is to oversee propaganda for carbon trader Jeremy Grantham, who, so it appears, wants to create totalitarian government of the West to profit from carbon trading.

  2. Tonyb says:

    Lord stern was a uk treasury hack with no knowledge of climate. He obviously does not know his history either.

    So, by keeping temperatures to within 2 degrees of pre industrial levels does he mean he wants to keep it to within. 2 degrees of the depths of the little ice age in the 1690’s or within two degrees of the 1730’s, which are indistinguishable to the current decade?
    Tonyb

  3. Tonyb says:

    Here is he link to cet to 1659 which gives us a good idea of pre industrial temperatures

    http://www.climate4you.com/CentralEnglandTemperatureSince1659.htm

    Tonyb

  4. Col Mosby says:

    The 800 pound gorilla of “business as usual” has always been, in my opinion, a ridiculous
    assumption to make, especially as regards energy production and transportation fuel. I mean, does any sane person not believe that electric cars will take over once a practical cost-effective battery is at hand? First of all, much of the power used by a gas powered vehicle is in the form of electricity already – power windows, fans, power steering, etc etc And no one will dispute the fact that building an electric car is simpler, and cheaper, and requires far less maintenance and is more reliable than a gasoline powered car. Nor would anyone not believe that current and future generations of nuclear power plants will become widespread, if for no other reason than for the reduction of emissions that are actually harmful. Assuming no change in energy and fuel technology in the next 100 years is completely absurd.

  5. Bryan A says:

    And the Great Horse Manure Crisis of 1894 has been repaired on a Pay It Forward scenario as we all the amount of manure being produced today

  6. Titan28 says:

    What a fool. You’d think after the nonsense called the Stern Report this guy would shut his yap. All over the western world, the (mostly) men in power are fools. How did this happen?

  7. M Simon says:

    Has Lord Stern informed the Chinese?

  8. M Simon says:

    Col Mosby says:
    June 16, 2014 at 2:17 pm

    I look forward to the electric car that can handle a Chicago winter.

  9. wws says:

    “All over the western world, the (mostly) men in power are fools.” Not really, not when you consider their real priorities. (which perfectly explains the perceived “foolishness”)

    Men who are in power are generally there because they are those men who have treasured gaining power, and keeping power, above all else. And many of them have figured out that if you are very good at that one particular trick, you don’t need any other skills, other than an ability to lie convincingly. (As per the famous Bill Clinton quote: “Once you can fake sincerity, you’ve got it made!)

    Everything men like Stern do is focused on gaining and keeping power, to the damnation of any other interests. One of the best ways to do that is to frighten the low information voters and other gullible types, and get them to invest the power-seeker with all he wants, so that he can promise to “keep them safe”. How convenient, how perfect, it is when the plan to do that involves taking a vast amount of resources (ie, money) away from the people who might otherwise oppose you!! And as far as making everyone miserable, Lenin and Stalin demonstrated how a state of constant envy, promoted by the government, allows an abusive government the leeway to impose an incredible level of oppression on the citizenry.

    Lord Stern is a serial fabricator, a manipulator, and a would be dictator. But he is no fool – he knows exactly what he’s doing.

  10. Mac the Knife says:

    Looks like Mr. Stern has observed the Al Gore Wealth Creation Model in action….. and he wants a piece of the action in the UK!

  11. M Simon says:

    Col Mosby says:
    June 16, 2014 at 2:17 pm
    Assuming no change in energy and fuel technology in the next 100 years is completely absurd.

    http://www.nbcnews.com/science/science-news/low-cost-fusion-project-steps-out-shadows-looks-money-n130661

  12. GoneWithTheWind says:

    $260 a ton. By my rough calculation that cost on top of fossil fuel would make the alternatives actually be cost effective. Not cheap, not actually practical but if you ignored the fossil fuel used in the manufacturing process finally PV and wind power would make some economic sense. Could that be the whole purpose of all of this? This scam and contrived “solution” all to make alternative energy the only energy and we would have to pay 10-20 times as much as we would for cheap fossil fuel energy but after the $260 a ton carbon tax it would be “cheap”. I think a light just went on.

  13. davidmhoffer says:

    Could someone do the math and translate this into $/litre of gas?

  14. Lil Fella from OZ says:

    So much for considering the economy.

  15. Dave B. says:

    What a moron. And who gets the $260.00?

  16. hunter says:

    If Lord Stern is sincere in this, he is deluded or stoned. If he is just rent seeking he is a cynical slimeball.

  17. Tom in Florida says:

    Col Mosby says:
    June 16, 2014 at 2:17 pm
    “First of all, much of the power used by a gas powered vehicle is in the form of electricity already – power windows, fans, power steering, etc etc ”

    Yes and that electricity comes from an alternator which is driven by the gas powered engine.
    ———————————————————————————————————————-
    M Simon says:
    June 16, 2014 at 2:28 pm
    “I look forward to the electric car that can handle a Chicago winter.”

    Indeed, and I look forward to what will happen when 3 million electric cars all try to recharge at the same time during one of those Chicago winter nights.

  18. spdrdr says:

    davidmhoffer – each litre of petrol produces 2.31 kilograms of CO2, so 432.9 litres will produce a tonne. At a price of US $260 per tonne, we are looking at US $0.60 per litre, or $2.25 per US gallon.

    However, that does not include the cost of carbon dioxide input in the production process – this calculation is purely the rate of tax on CO2 produced by combustion only.

  19. Latitude says:

    Well…..I guess removing carbon from carbon dioxide in the atmosphere is very expensive….

  20. Steve from Rockwood says:

    2.5 kg CO2 per litre of fuel.
    $260 per metric ton is $0.26 per Kg.
    $0.26 x 2.5 = $0.65 per litre of gasoline or about a 50% increase in price in Canada.

  21. davidmhoffer says:

    spdrdr says:
    June 16, 2014 at 3:11 pm
    davidmhoffer – each litre of petrol produces 2.31 kilograms of CO2, so 432.9 litres will produce a tonne. At a price of US $260 per tonne, we are looking at US $0.60 per litre, or $2.25 per US gallon.
    >>>>>>>>>>>>>>>>.

    Well \i’m starting to warm up to this idea. As the polls have been showing, the great unwashed don’t have climate change very high on their radar screen. Hit ‘em with a $2.25 uptick in fuel prices and they will be up in arms and calling BS on the whole caper in nothing flat. Nothing turns someone into a skeptic faster than increasing the price of gas by $2.25 per gallon. Not to mention that rampant inflation that would follow as prices in every energy intensive industry from food production to autos goes through the roof.

  22. Christopher Hanley says:

    “… Models ‘grossly underestimate’ costs of global warming …”
    What costs? The only cost I can think of is the opportunity cost of abandoning fossil fuel energy in favour of so-called alternatives (which aren’t), as well as the cost of human life and welfare.

  23. Hugh says:

    Methinks if models are sooooo out of whack regarding the costs of global warming, maybe they’re not so reliable about the existence and magnitude of global warming as well.

  24. DN says:

    I stand up like a scholar in pulpit,
    And when the uneducated people all do sit,
    I preach, as you have heard me say before,
    And tell a hundred false jokes, less or more.

    Of avarice and of all such wickedness
    Is all my preaching, thus to make them free
    With offered pence, the which pence come to me.
    For my intent is only pence to win,
    And not at all for punishment of sin.

    – Chaucer, “The Pardoner’s Tale”

  25. $260 / ton for carbon – the price of salvation starvation.

  26. Rastech says:

    “Could someone do the math and translate this into $/litre of gas?”

    $0.0001c.

    But nobody will be able to afford it . . . . . . . .

  27. Jeff L says:

    Science aside, no economic analysis is ever done with zero discount when considering whether to invest or not (ie invest in carbon reduction for a future temperature ). This clearly shows they are trying to make the tax as high as possible for political reasons or , equally as likely, they have absolutely no idea what they are doing , in terms of economic analysis

    But , if we do inject some science & even assume their science is right, most of the temp rise is > 100 years out (based on their equilibrium climate sensitivity). If you have done any economic analysis, you would know that the present value of anything at nearly any discount rate 100 years out is basically zero.

    Do they think we wouldn’t do the math? Did they think no one had any economic analysis skills?

  28. Quinx says:

    Who, exactly, gets the loot, and what do they do to earn it?

  29. The object here is to impoverish and enslave the population. The State has always wanted to increase its power in any manner possible.

    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” ~ H. L. Mencken

  30. Cosmic ray says:

    How does $260 compare to today? And what would $260 do to a gallon of gas?

  31. Jimbo says:

    Lord Stern, the world renowned economist and CLIMATE SCIENTIST, has in the past accused "vested interests" of delaying action to tackle ‘climate change’. But what are Lord Sterns’ vested interests? But first, he backtracks to tell us it’s worse than he ever imagined.

    Guardian – 26 January 2013
    Nicholas Stern: ‘I got it wrong on climate change – it’s far, far worse’
    Author of 2006 review speaks out on danger to economies as planet absorbs less carbon and is ‘on track’ for 4C rise

    So here are Lord Stern’s VESTED INTERESTS in ALTERNATIVE ENERGY SCHEMES – with interest. He is an economist afterall. LOL.

    Can you trust an economist with money invested in alternative energy schemes for advice on the science of CAGW? You decide.

  32. ferdberple says:

    $260 / ton is required to prevent dangerous global warming.
    ===============
    so the scheme is to price fossil fuel out of the reach of everyone.

  33. Jimbo says:

    Lord Stern is a “Member, International Advisory Board, Abengoa SA” (Spain). What is Abengoa SA? Abengoa SA (Spain) is engaged in concentrated solar power, 2nd generation biofuels, biomass and wave energy.

    Profile of Lord Stern at Abengoa SA (Spain)
    http://www.abengoa.com/web/en/accionistas_y_gobierno_corporativo/estructura_organos_gobierno/estructura_organos_gobierno/curriculums/consejo/cv_nicholas_stern.html
    http://www.abengoa.com/web/en/index3.html

    Lord Stern has all his fingers in the carbon pie. No wonder he keeps telling us it’s worse than he thought. He is about to lose MONEY. LOL. Don’t trust him, HE HAS VESTED INTEREST AND INTERESTS.

  34. Jimbo says:

    Finally, here are Lord Sterns full disclosure of interests as he is a member of the UK parliament (House of Lords). All I see is carbon this, climate change that. Follow the money after declaring a state of global emergency. Is that how it works? What a joker. He thinks he is smart and everyone else is dumberer than dumbs. Didums.
    http://www.parliament.uk/biographies/lords/lord-stern-of-brentford/3846

  35. Gamecock says:

    Col Mosby says:
    June 16, 2014 at 2:17 pm

    I mean, does any sane person not believe that electric cars will take over once a practical cost-effective battery is at hand?

    ====================

    You presume a “cost-effective battery” is feasible.

    In spite of your “no true Scotsman” fallacy, I would agree that someday electric cars might be prolific. But that someday, if ever, is generations off. Hence, electric cars have no relevance today. None. What may happen a hundred years from now means nothing.

  36. I’m already paying $433 per ton. So for an extra 60% on top of that, Stern will be satisfied with his cut? Or is this just the tax that gets us warmed up for the next tax?

  37. Steve Oregon says:

    Isn’t the lesson here that a $260 per horse manure tax could have more easily and expeditiously solved the manure problem?
    And too bad there wasn’t a Lord Stern in 1900?

    Had the automobile technology had not been practical, or it had been too expensive to mass produce the horse manure problem would have worsened for a while.

    However, today as alternative energy technology is not yet practical (because it is too expensive requiring tax subsidies for people to buy it) there is no such manure problem to worsen.
    Worrying warmers (in demanding alternative energy) have invented a false urgency with AGW.
    They see a modern day manure crisis in CO2 emissions where none exists.

    So an apt twist to the old saying may be,

    “Necessity may well be the mother of invention but inventing the necessity is not a prudent way to run a nation much less a business.”

    Alarmists, by inventing a necessity, demanding their remedy and concocting a false Cost/Benefit analysis are in effect producing a new Great Manure Crisis where none existed.

  38. pat says:

    given IEA claims $53 trillion in investment is required to “allow the world to keep climate change below the critical 2 degree threshold” –
    http://www.desmogblog.com/2014/06/13/over-40-trillion-investment-needed-keep-energy-demand-2035-iea-report-concludes

    why haven’t these banks invested this $29 trillion in CAGW-associated markets? LOL. (read the comments):

    16 June: ZeroHedge: “Cluster Of Central Banks” Have Secretly Invested $29 Trillion In The Market
    Submitted by Tyler Durden
    Another conspiracy “theory” becomes conspiracy “fact” as The FT reports “a cluster of central banking investors has become major players on world equity markets.” The report, to be published this week by the Official Monetary and Financial Institutions Forum (OMFIF), confirms $29.1tn in market investments, held by 400 public sector institutions in 162 countries, which “could potentially contribute to overheated asset prices.” China’s State Administration of Foreign Exchange has become “the world’s largest public sector holder of equities”, according to officials, and we suspect the Fed is close behind (courtesy of more levered positions at Citadel), as the world’s banks try to diversify themselves and “counters the monopoly power of the dollar.” Which leaves us wondering where are the central bank 13Fs?…
    However, as The FT reports, what we have speculated as fact for many years now (given the death cross of irrationality, plunging volumes, lack of engagement, and of course dwindling credibility of central planners)… is now fact…
    The report, seen by the Financial Times, identifies $29.1tn in market investments, including gold, held by 400 public sector institutions in 162 countries…
    To summarize, the global equity market is now one massive Ponzi scheme in which the dumb money are central banks themselves, the same banks who inject the liquidity to begin with.
    That would explain this (SEE GRAPH)…
    That said, good luck with “exiting” the unconventional monetary policy. You’ll need it.
    http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market

  39. pat says:

    if the MSM did their job properly, the public would have stopped this CAGW insanity in its tracks long ago:

    16 June: Missoulian: Obama energy price increases are avoidable
    Guest column by ED WALKER
    Electricity prices are on the rise, and your wallet will soon know it. Frustratingly, the reason those prices are going up has nothing to do with normal economics…
    The U.S. Department of Energy expects coal plants with the output capacity to supply 30 million homes to shut down by 2020. That supply will be replaced by more expensive energy sources. The DOE expects prices to increase 13 percent by 2020, and that doesn’t even take into account additional EPA regulations on the horizon…
    Advocates of anti-coal policies point to alternative energy as the answer to fill the gap left by closing coal plants. Their claims ignore the data – even with rapid growth in renewables over the past several years, they can still supply only a small fraction of our coal output. And with the expiration of the renewable energy production tax credit at the end of 2013, the true cost of renewable energy sources will soon become apparent…
    And what do we gain by shutting down American coal plants, killing American jobs, and sticking every American with more-expensive energy bills? From a carbon emissions standpoint, the gains are virtually nonexistent. The world is using increasing amounts of coal and other fossil fuels, and necessarily so – 1.2 billion people in the world still don’t have access to electricity…
    (Sen. Ed Walker, R-Billings, represents Senate District 29 in the Montana Legislature. Walker currently serves as a member on the Senate Energy and Telecommunications Committee and as vice chair of the Senate Finance and Claims Committee.)
    http://missoulian.com/news/opinion/columnists/obama-energy-price-increases-are-avoidable/article_4c1bdd42-f566-11e3-8afe-0019bb2963f4.html

  40. ““Could someone do the math and translate this into $/litre of gas?”

    $0.0001c.

    But nobody will be able to afford it . . . . . . . .”

    Australia introduced a price on carbon of $24 a tonne. This translates into an energy cost increase of between 15-19%.

    Of course, Lord Stern is suggesting a tax that is more than 10 times higher. The point of a carbon tax is to discourage carbon use. If the tax did not effectively cost anything, it would serve no purpose.

    http://www.energyaction.com.au/australian-energy-market/carbon-price/69.html

  41. michael hart says:

    M Simon says:
    June 16, 2014 at 2:26 pm
    Has Lord Stern informed the Chinese?

    I wouldn’t be surprised to learn that his paymasters are still hopeful of persuading the Chinese that it would be profitable for them to join in. [It obviously being dead-in-the-water without Chinese support]

    But why anyone might think the Chinese would pay any attention to Stern is beyond my powers of imagination.

  42. old44 says:

    Has Lord Stern stopped taking his medication?

  43. Louis says:

    The real cost of a $260/ton carbon tax would need to include all the feedbacks. Such things as the cost of transporting fuel to your local gas station, the cost of transporting cars and parts to the local dealership, the cost of harvesting and transporting food and keeping it fresh, and the cost of manufacturing and transporting all other goods need to be factored into the total cost. Of course, the black markets that always spring up in response to artificial price increases, as well as the costs of going after and prosecuting such black markets, will also complicate the calculation.

  44. CarlF says:

    I like to re-state numbers in per-capita format. The cost of $260 per ton translates to $790 per person in the US, but only $260 per person in the UK. The cost increases would be included in electric rates and the cost of all goods and services, of course, but in my case would exceed my current cost of power, or roughly equivalent to a doubling of my electric bills. That seems significant to me.
    The UK apparently imports most of it’s coal these days, so there are indeed profits in shipping coal to Newcastle (in the UK, not Oz). I didn’t know that.
    The questions that come to mind are, who would get the tax collected (the shipping country or the receiving country), and what would all that money be spent on? In the US, the talk was of wealth redistribution, the holy grail of socialism and a major driver of CAGW.

  45. lee says:

    I see both Stern and Dietz are economists; I don’t see a science degree (other than honoraries). When do they expect the mythical 2 C?

  46. Paul in Sweden says:

    Why is there not a disclaimer stating the conflict of interest and ‘Big Green’ Industry connection with GMO(Grantham Mayo van Otterloo asset management) financial each and every time Grantham Research Institute is cited? Grantham Reseach Intitute should be trusted on climate as much as a Philip Morris owned & operated research group on tobacco related heath issues.

  47. CRS, DrPH says:

    Worry not….tax carbon, and a veritable waterfall of wealth shall follow. The consultants say so. http://www.remi.com/carbon-tax-study

  48. Niff says:

    Only the adherents to the faith would inhale this crap.

    I loved the analogy of the Great Horse Manure Crisis of 1894. Excellent!

    Whenever the adherents tell us we need to leave the coal in the ground…I think of the same being said about flint in the stone age. ‘We need to leave it for our children’…!

  49. pat says:

    Tim Worstall claims the MSM is doing the usual beat-up:

    16 June: Forbes: Tim Worstall: Lord Stern’s New Climate Change Economics Paper Finds The Carbon Tax Should Be Lower
    There’s breathless reporting over in the Independent about the new paper on the economics of climate change from Nicholas, Lord Stern. Apparently the new calculations change everything and tell us that we really must pull our fingers out and get on with imposing really strict restrictions on how much CO2 anyone is allowed to omit.
    The real point about this paper though is that it doesn’t in fact uncover anything new at all, despite the quite heroic attempts it makes to big up the size of the problem. The final answers are around and about the same as we get either from the original Stern Review or from William Nordhaus’ original DICE model. And that is, as I say, after the quite excessive attempts to make sure that the problem is going to be very bad indeed.
    Here’s how the propaganda offensive starts out in the newspaper: …BLAHBLAH…
    Yet when we actually go to read the paper itself (this is the freely available working version) that’s not actually the result we end up with at all. What we do end up with is that a carbon tax to avoid all of this nastiness should (dependent upon the specific model we use) be maybe $30 a tonne CO2-e today, rising to $250 a tonne in a few decades, or in the other version it should be $75 a tonne as a flat rate now and into the future. And the thing about these numbers are that that first low and rising tax is exactly what the original Nordhaus model recommends and that higher flat one is exactly what the Stern Review recommended. So despite their bigging up the problems they’ve ended up with exactly the same answers that we’ve all been accepting for most of the past decade. Depending upon how important you think working with the capital cycle is we should either have a low carbon tax now and make sure it rises into the future or we should have a medium level one right now…
    http://www.forbes.com/sites/timworstall/2014/06/16/lord-sterns-new-climate-change-economics-paper-finds-the-carbon-tax-should-be-lower/

  50. rogerthesurf says:

    If Lord Stern is an expert in Economics, (a fact which I sincerely doubt after reading some of his report – The Stern Review-), he should also be able to outline, (by using knowlege and the understanding of the level any second year economics student), the effect that such a carbon price will have on the economy – first of all the UK and secondly the world.

    Not many will choose poverty for the sake of some unreliable predictions of slightly warmer weather.at some unspecified time in the future as well as having to believe that its caused by the friendlt gas CO2.

    Cheers

    Roger

    http://www.rogerfromnewzealand.wordpress.com

  51. pat says:

    Chinese business still not playing the game:

    17 June: BusinessSpectator: Reuters: Beijing emitters ‘ignoring carbon scheme’
    More than a quarter of all companies covered by Beijing’s municipal carbon laws ignored a key reporting deadline, local media reported Friday, with some powerful companies questioning the local government trading body’s authority to regulate them….
    Some of the firms implied that Beijing’s Development and Reform Commission (DRC), which operates the scheme, did not have the authority to issue orders.
    “It ends up like this because they don’t follow our rules and the document shown to us does not fit the requirements,” Zhou Jiancheng, vice director of planning and statistics at the Beijing Railway Bureau, one of the firms that failed to submit the report, told newspaper Beijing Youth Daily.
    He said the company would have to see a “red-header document” before they would submit the emissions report.
    In China, a “red-header document” normally refers to orders issued by the highest levels of government, whose name would be printed in red on the letterhead…
    A new law mandates all companies to follow environmental regulations regardless of the authority level, but that does not enter into force until next year and it remains to be seen how successful it will be…
    Beijing, where companies must hand over permits to the government to cover for their 2013 emissions by June 15, is only the latest of several local governments struggling to enforce its carbon scheme.
    Guangdong province and the cities of Shenzhen and Tianjin have also found it difficult to convince local firms to follow the rules…
    http://www.businessspectator.com.au/news/2014/6/17/policy-politics/beijing-emitters-ignoring-carbon-scheme

  52. pat says:

    GREAT NEWS. Voice of Russia is basically the Reuters report below, but the headline is sharper:

    16 June: Voice of Russia: UN climate talks on Sunday fail to predict future of carbon markets
    The use of carbon markets to curb rising greenhouse gas emissions was dealt a blow on Sunday after two weeks of United Nations talks on designing and reforming the mechanisms ended in deadlock.
    The negotiations, held as part of UN climate negotiations in Bonn, Germany, made scant progress as envoys representing almost 200 nations tied reforms to progress under the wider discussions and remained entrenched in diverse positions.
    The deadlock gives investors little sign that there will be a pickup in demand under the Clean Development Mechanism (CDM), the UN ‘s current main carbon market which has seen activity dry up after assignment over $400 billion into emission-cutting projects in developing countries over the past decade.
    It also offers no guidance on how the growing patchwork of national and regional carbon markets worldwide will fit into a future international framework to tackle climate change.
    “We believe there is a future for markets … (but) to agree on something that wouldn’t be robust enough for us to engage on later on would just not make any sense,” Elina Bardram told journalists at a briefing after the talks ended on Sunday…
    Poorer nations have been more wary, particularly as most CDM investment went to wealthier emerging economies such as Brazil and China and to industrial gas destruction projects, which generated healthy profits for companies but led to little sustainable development and had their environmental integrity questioned…
    Framework fails
    In a separate strand of the talks, governments failed to make much progress on efforts to launch a platform to help set common standards and accounting rules for reducing emissions and tie together national and regional emissions trading schemes…
    Separate text listing elements of such a platform, referred to as a “Framework for Various Approaches”, was promoted by a group of richer nations including United States and Japan, which are both designing their own programs to use foreign carbon credits.
    But this was removed after meeting resistance from developing nations, which first want rich governments to take on deeper emission reduction targets at home…
    The EU, whose preparations towards a new global climate deal have not included additional demand for foreign carbon credits to 2030, has been criticized by investor groups for undermining its leadership role in new carbon market development…
    The UN talks are scheduled to resume at the next negotiating round in December in Lima, Peru.
    http://voiceofrussia.com/news/2014_06_16/UN-climate-talks-on-Sunday-fail-to-predict-future-of-carbon-markets-9810/

    16 June: Reuters: Ben Garside: U.N. climate talks fracture over future of carbon markets
    http://in.reuters.com/article/2014/06/15/us-un-carbon-idINKBN0EQ1BR20140615

    read the Green SPIN:

    16 June: BusinessGreen: Will Nichols: UN hails progress at latest Bonn climate talks
    http://www.businessgreen.com/bg/analysis/2350218/un-hails-progress-at-latest-bonn-climate-talks

  53. Eyal Porat says:

    I believe the honorable Lord was mistaken: there is a zero missing in his calculation:
    The proper price should be 2600$ / ton.
    Or maybe I am wrong and it should be 26000$ / ton ?
    Gosh, physics is sooo difficult :-P
    /Sarc

  54. bobl says:

    Davidmhoffer.

    In Australia we have a tax on fuel already that amounts in my calculation to about $280 per tonne CO2 equivalent, our tax amounts to about 42 cents per litre, so maybe $1.80 per gallon or so for our American friends.

    Of course that’s if the tax is on CO2 if it’s actually on carbon which comprises 12/44 ths of carbon dioxide by mass then it’s about 3.5 times that :-)

  55. johnmarshall says:

    Gloom, gloom and more gloom. If only the GHE theory were correct there might be some good come from all that tax but it is a MASSIVE FRAUD.

  56. Sasha says:

    2006

    Stern review trashed

    A member of the UK parliament, MP Peter Lilley, has written a scathing rebuttal study to the 2006 Stern Review of the Economics of Climate Change which has been used a basis for UK government to move forward with climate policy. The number of errors and distortions he has uncovered is quite extraordinary and brings the validity of the Stern report into serious question, if not outright falsifying it.
    http://webarchive.nationalarchives.gov.uk/+/http:/www.hmtreasury.gov.uk/sternreview_index.htm

    As the cost of government measures to combat climate change hit households and businesses, a new study published by the Global Warming Policy Foundation casts grave doubts on the validity of the Stern Review of the Economics of Climate Change which the government relies on to justify its policies.

    The substantial study, by Peter Lilley MP, is the most thorough analysis of the Stern Review so far undertaken. It takes the IPCC’s view of the science of global warming as given, but points out that Stern’s economic conclusions contradict the views of most of the world’s leading environmental economists and even the economic conclusions of the IPCC itself. The study also catalogues a series of errors and distortions in the Stern Review “any one of which would have caused it to fail peer review.”

    Because Stern’s conclusions endorsed policies adopted by both government and opposition and its highly tendentious assumptions were not explicit, it was initially accepted without public scrutiny. The new study shows the Stern Review to depend critically on “selective choice of facts, unusual economic assumptions and a propagandist narrative which would never have passed peer review.”

    Describing it as “policy based evidence,” Peter Lilley argues the government can no longer rely on it to justify expenditure of many billions of pounds and calls for a return instead to “evidence based policies.”

    Stern’s central conclusion that “If we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year now and forever” whereas “the costs of action — reducing greenhouse gas emissions to avoid the worst impacts of climate change — can be limited to around 1% of GDP each year” is found to be entirely fallacious.

    Lilley’s study demonstrates that the benefits of curbing emissions now and henceforth will not be five times the cost of action, as Stern claims. “It is achieved by verbal virtuosity combined with statistical sophistry. In fact, even on Stern’s figures, the cumulative costs of reducing greenhouse gases will exceed the benefits until beyond 2100,” Lilley points out. “If we continue to follow Stern’s advice, the principal losers, apart from British taxpayers and businesses, would be developing countries who cannot raise living standards without massively increasing their use of fossil fuels and will therefore be responsible for most of the growth of carbon emissions,” Lilley argues.

    Lilley asks: “why should this comparatively poor generation make the sacrifices Stern demands to improve living standards of people in 2200 who, if we take no action to prevent global warming — even on the worst scenario depicted by Stern — will be 7-times better off than us?

    Lilley calls on the government to cease basing its climate change policy on the flawed Stern Review and commission a new independent cost-benefit study of alternative strategies.

  57. urederra says:

    I still don’t know if they are talking about CO2 when they say “carbon” or they talk about the element itself.

    If we are talking about tetrahedrally bonded carbon atoms with sp3 hybridation in a covalent network lattice that crystallizes in the octahedral habit (diamond) then, wow, $260 per ton is super cheap.

    In the horse manure fiasco from 120 years ago they weren’t using vague terms. Nowadays you find ambiguous terms in every branch of political science, I think they do it intentionally, to misdirect a discussion: Ozone hole, carbon, climate change, greenhouse effect, organic food…

  58. Non Nomen says:

    Hear the fat cat sternly preaching that hunger is good for you…

  59. ozspeaksup says:

    spdrdr says:
    June 16, 2014 at 3:11 pm

    davidmhoffer – each litre of petrol produces 2.31 kilograms of CO2, so 432.9 litres will produce a tonne. At a price of US $260 per tonne, we are looking at US $0.60 per litre, or $2.25 per US gallon.

    However, that does not include the cost of carbon dioxide input in the production process – this calculation is purely the rate of tax on CO2 produced by combustion only.
    ——
    seen figures like this before
    so
    tell me someone
    how does vaporising something that might weigh a kilo(ie a litre) by the act of going through an engine which utilises it, output 2.31 kg after use?
    sorry but to me its a ridiculous claim and id love to know how the hell they get and keep quoting such

  60. rogerthesurf says:

    OZ,

    can’t speak for the accuracy of the calculation, but the combusted products of the gasoline include oxygen from the air, which presumably gives the extra weight.

    Shh about the oxygen though, they might start charging us for that as well!

    Cheers

    Roger

    http://www.thedemiseofchristchurch.com

  61. brent says:

    Big Oil Advocacy : )
    Top ten reasons why business should love a carbon price
    http://blogs.shell.com/climatechange/2014/06/toptencarbon/

  62. Vince Causey says:

    The importance of discount rates for pricing future costs cannot be overstated. Even a modest discount rate can have a large cumulative effect over 100 years. Businesses often use quite large discount rates to decide if they should invest – certainly at least the return on equity that their business generates.

    Using a near zero discount rate is so totally and absurdly wrong that I am amazed that Sterns report hasn’t been junked. The fact that the Stern report is so often held up as the last word on this subject is beyond parody.

  63. JohnH says:

    Anyone tired of the “well-funded denial machine” meme should do the math on this boondoggle. Here’s what real money looks like. The US, I believe, emits about 5×10^9 tons of carbon dioxide every year. At $30/ton the price of those emissions will exceed the total profits of the Big 5 private oil companies by about 50%. At the target price of $260 the total cost becomes astronomical.

    And it’s so convenient! No wells, tankers, refineries or pipelines. No pesky employment issues and no roads or cars to build. Just sign the law and collect.

    Money for nothing and your checks for free!
    (Apologies to Dire Straits)

  64. Resourceguy says:

    And payable by cash, check, or credit card to your local jet setter leaders and their friends and family

  65. urederra says:

    ozspeaksup says:
    June 17, 2014 at 2:59 am

    tell me someone
    how does vaporising something that might weigh a kilo(ie a litre) by the act of going through an engine which utilises it, output 2.31 kg after use?
    sorry but to me its a ridiculous claim and id love to know how the hell they get and keep quoting such

    It is not vaporising, it is a chemical reaction. gasoline reacts with oxygen and produces CO2 and water (H2O). You have to take into account that you are combining 1 Kg of gasoline with some kilograms of O2.

    Gasoline is a mixture of hydrocarbons, mainly octane and isomers with a general chemical formula of C8H18. The formula says that there are 8 carbon atoms and 18 hydrogen atoms in a molecule of octane (or gasoline). Translated into kilograms it means that in a kilogram of gasoline there are 0.842 kilograms of carbon atoms and the rest (0.158 Kg) are hydrogen atoms.

    Now, In a combustion engine gasoline burns, meaning that it reacts with oxygen (O2) yielding CO2 and H2O (water) That is on ideal conditions, if the combustion is incomplete you can have some carbon monoxyde (CO) or some gasoline that fails to react.

    So. all the carbon atoms end up combined with oxygen. Since an atom of oxygen weights 16 times more than an atom of hydrogen, CO2 has proportionally less weight due to the carbon atom than due to the oxygen atoms. For every 44 grams of CO2, 12 grams are due to the carbon and 32 grams are due to the 2 oxygens. In other words, in 1 kilogram of CO2, only 0.272 kilograms are carbon atoms and the rest, 0.728 kg. are oxygen atoms.

    To sum up, 1 kilogram of gasoline, has 0.842 kilograms of carbon, and when combined with oxygen render 0.842/0.272 = 3.095 Kg. of CO2.

    That is on ideal conditions. If the yield of the reaction was 100 %, burning 1 Kg of gasoline will give you 3.095 Kg of CO2. In a combustion engine the yield may be less than 100% and the production of CO2 is less than that.

  66. Resourceguy says:

    Send your carbon indulgence payments to the high priests.

  67. urederra says:

    Just in case the previous post looks complicated:

    1 Kg of gasoline reacts with 3,508 Kg. of Oxygen (O2) and renders 3,087 Kg. of CO2 and 1,421 Kg. of H2O (water)

  68. Robert W Turner says:

    This publication isn’t worth the electricity my computer uses to read it. If only we could put a price on stupidity, Stern would be out of business…or whatever it is he does.

  69. oeman50 says:

    Let’s translate this to the cost of electricity. It would cost about 22 cents (US) for 1 KW hour just for the carbon tax from coal. That’s about 11 cents per KW for power from combined cycle natural gas plants. So, for most of us, that results in our power bills being roughly double to triple what it is now. Good luck with that.

  70. Marlo Lewis says:

    Chris Hope, creator of the PAGE model underpinning the Stern Review’s climate impact assessments, co-authored an article last year estimating that the social cost of carbon is $266/ton. The authors got that figure by assuming a 1% discount rate. They joyfully concluded that replacing fossil energy with renewables would make the economy more “efficient.” SCC is computer-aided sophistry. It is designed to make uneconomic renewables look like a bargain at any price and competitive fossil energy look unaffordable now matter how cheap. For a detailed critique of these parlor tricks, see the link in this post (http://www.globalwarming.org/2014/02/27/menace-to-society-commentary-on-the-social-cost-of-carbon/) to free market groups’ joint letter on the administration’s SCC estimates.

  71. Eric Gisin says:

    When they say “price of carbon” they actually mean per ton of CO2. So you have to triple those to get the price for fossil fuels.

    So we get: $32-103 -> $100-300 and $82-260 -> $250-750

    That first recommendation for 2015 would price coal-electric out of the market, and maybe double gas-electric. For comparison, crude oil is approaching $800 a tonne.

    If they legislated minimum base prices instead of emission taxes, then only coal would increase for the first case, and crude would not be affected by the second case.

  72. george e. smith says:

    So isn’t $240 per tonne expensive for coal ?

  73. Mac the Knife says:

    I apologize folks…. but I just can’t call Stern, this poseur, ‘Lord’.
    Maybe ‘Lord Of The Flies’…a delirious vision of a rotting sows head that speaks of ‘no escape’???

    No – That is profoundly insulting to flies …. and sows everywhere.

  74. Mac the Knife says:

    JohnH says:
    June 17, 2014 at 5:54 am
    And it’s so convenient! No wells, tankers, refineries or pipelines. No pesky employment issues and no roads or cars to build. Just sign the law and collect.
    Money for nothing and your checks for free!
    (Apologies to Dire Straits)

    JohnH,
    Very nice!
    Mac

  75. Mr Right says:

    Or just stop giving our coal to China!

  76. Brian H says:

    The correct “price” for carbon has already been determined by the collapse of CCX: it is zero or negative.

  77. H.R. says:

    Brian H says:
    June 19, 2014 at 9:45 pm

    The correct “price” for carbon has already been determined by the collapse of CCX: it is zero or negative.
    =====================================================================
    I bought a lifetime supply for $5.00 when it was a nickel a ton and now you tell me I got ripped off at that price!? Dang!
    Shoulda’ went dumpster diving when they threw all the offsets out into the back alley.

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