Monthly Archives: June 2017

A post revisited — Investment in energy research

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A post revisited — Investment in energy research

This post on the remarkable level of investment in energy R&D in the US was written in September 2011. It is not my intent in these retrospectives to play the ‘I told you so’ card but given the egg on the faces of the current and recent Australian governments over energy security, it is pretty hard not to.

Did politicians really think that we have coal, oil and gas and so the job was done?

Emission notwithstanding, did they just sit back and let the end of life for major coal-fired power stations be someone else’ problem?

Well in Australia they did. In America too I suspect. Trump is not pulling the Paris pin because he is a climate sceptic, he’s keeping coal going so that, at least on his watch, the lights stay on across America. Nothing will kill your voter base faster than blackouts attributed to poor planning.

So here is what Alloporus thought in 2011 about energy R&D…

Investment in energy research

In the US Federal research funding into energy is $3 billion. This figure includes investment into oil, coal and gas as well as solar and other alternative energies.

Then there is a further $5 billion invested by the private sector for a total of $8 billion in an industry worth $1 trillion a year; making investment in R&D only 0.8% of revenues.

Apparently $8 billion pays for about 9 days of military involvement in Iraq – pretty scary and perhaps something they might look at when considering reducing budget deficit, but I digress.

The point here is that 0.8% is woeful. Any company that spent less than 1% of revenue on R&D would not last long. Given that energy is so critical to economic performance and given that we have reached peak oil and will eventually run out of coal and gas too, 0.8% seems irresponsible.

And then there is a huge global movement that believes we must tackle climate change by reducing emissions from greenhouse gases.

What should the investment be? In successful economies upwards of 3% of GDP is allocated to R&D, which is roughly $430 billion. This amount must cover many sectors but energy security should be worth at least 5% of the available budget or an order of magnitude more than the current allocation.

We are kidding ourselves if we think that energy security can be achieved when we invest peanuts.

There is money to be made from energy. There always has been. I bet that the first hunter-gatherers who figured out through trial and error how to transport fire with them as they wandered were revered and feared. The thinking and testing that went into creating and catching a spark to start fires was, well, gold to the people who mastered it.

The smart individuals who put a wheel into running water or threw a lump of coal onto the campfire might also have made a relative bob or two.

So it’s not about the returns. It is that it is future money. The power stations cornered the market for a period long enough to scorch the space for new investment. If end of life is 30 or 50 years away there is no market for anything else until then. There is no need to look forward as energy is secure.

This lack of foresight might just be our undoing.

“Sod this for a game of soldiers”

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“Sod this for a game of soldiers”

Humans are exceptional. We have large brains, opposing thumbs and binocular vision. We can speak loudly and in many tongues. We have extended our family units into tribes, societies, and global systems of trade and commerce. We went to the moon and invented popcorn.

And all this happened in the blink of an evolutionary eye.

Then, by some quirk of fate, many of us developed an equally exceptional trait. We discovered cognitive dissonance.

We learnt to bend our brains to mentally justify shortcomings when faced with a problem, therefore separating oneself from the problem.

Take a moment to think just how useful this is.

You can know virtually nothing about a topic but can still claim expertise in it. This might be mouthing off in the pub with your mates on what Tiger has to do to win another major to berating the leader of the opposition in the highest chamber in the land.

It can allow mediocrity to have more influence than is ever justified.

You can ignore the fact that $3, the price of the coffee you just bought at Uptown Baristas, is an amount that over a billion souls must make stretch to cover all their daily needs.

Once everyone is separated from a problem it can be duly forgotten. The truth is easily lost in the cloud of dissonance. After a time the cloud clears, as most do. There, basking in the sun’s rays is the problem, smiling sweetly.

We have done this with almost all the really serious issues of our and future times: water resources, food security, wealth inequality, super bugs, pandemics, and a host of environmental issues.

It could be that it’s just all too hard for our thinking brains — the thinking fast and slow argument. Certainly, dissonance is a lazy solution to problem solving. Except that problems are not resolved they are just ignored.

Whilst this is at least partly true. We are lazy and lack courage to resolve truly difficult issues we can be brave. In the moment the extraordinary is possible. Actions in wartime trenches to random acts of kindness prove we are capable and exceptional.

So here is a suggestion. Let’s say ‘sod this for a game of soldiers’ and banish cognitive dissonance from our lives.

All we have to do is become aware when we hear ourselves or our mates or our leaders lurch into a justification.

Then make a mental note that says, “A justification is like most things on the internet, best ignored”.

Then we’d get to see what happens next.

 

 

 

Five percent

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Five percent

What is 5%?

Well apart from being a proportion, here are a few things.

  • 5% is one in twenty
  • 5% is an arbitrary threshold value considered significant in statistical analyses
  • 5% is half the current rate of GST in Australia
  • 5% is a pay rise almost worth having
  • 5% is less than the percentage increase in US military spend under the Trump administration

5% is quite the conundrum. It is not very big and yet it can be big enough to be noticed. You would not want food prices to increase by 5% but they have, roughly every two years or so in most mature economies.

You’d like a 5% pay rise over no pay rise at all but in the US rust belt, many workers have waited over a decade to get it, only for it not to really matter that much.

It seems that 5% is an awkward, niggly kind of proportion. Always a bit on the cusp of significance — one in twenty is surely just chance. Give me one in a hundred and I’m listening.

The other day a friend of mine, also a fellow science nerd, told me that 5% of the hip pocket dollar is spent on the environment.

One in twenty of the dollars in the average wallet ends up as an environmental expenditure.

Now this bald statement that could take a bit of unpacking. What’s in the hip pocket? What is the environment in this context? Would the 5% spend include food or the council waste levy or just donations to the WWF?

In most of the developed world food counts for around 8% of household spend. There is an environmental levy in my own local council but I pay that in my rates, part of my tax spend. And my hip pocket has a whole heap of unavoidable bills from utilities to the mortgage.

We could be here all day figuring it out, so let’s just say that, on average, people spend 5% of their after-tax dollar on something environmental.

That’s $5 for every $100 that arrives in their bank account, at their discretion.

So is this enough? Is it significant?

People die if they don’t eat and have access to clean water. They need somewhere safe to stay and the opportunity to build a meaningful life with some fun in it. These primary needs would use up most of the $100, most of the time.

Add in the inevitable unexpected cost when the boiler bursts, the roof leaks or a family member needs hospital care and there may rarely be 5% left over.

$5 is significant if the cost of living has already allocated the contents of your hip pocket to the necessities of life.

This is where the thought usually stops.

The cost of living is unavoidable. If it eats up all you can earn, then the environment is not even a thought.

Only think a little longer. The environment is where the food, clean water, timber for the house, sand for the mortar, clean air, space for fun, among many other key necessities comes from.

Ignore the environment and it is used up, polluted and dysfunctional for these key goods and services.

Fail to pay anything for these things and they stop.

We should be very scared that we spend only 5% for there is no point in investing in ourselves if the foundation for many of the vital things we need is eroding away beneath us.

Another take on the quiet carriage

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Another take on the quiet carriage

The quiet carriage is a relatively new and popular phenomenon on the commuter trains of Sydney. Half the carriages are designated as places where noise is supposed to be muffled on pain of public outrage and abuse.

Today I travelled on a noisy carriage. It did not have the quiet designation so the hubbub, chitchat and eardrum bending headphones were free to decibel away without fear of retribution.

No matter. The carriage choice was mine. I could have taken a few extra steps to enter a quiet one.

The thing is that hearing is but one of the senses.

All was well for nearly an hour. There are few travellers in mid-afternoon and my tip tapping was only occasionally distracted by a cough or a ringtone.

The train stopped at Parramatta. Several passengers entered the carriage and a young woman sat across the aisle from me. In her hand was a Styrofoam box.

At first, nothing happened. She made a call and spoke briefly in modest tones that she might even have got away with in the quiet carriage. Then she settled forward, put her phone away and stared at the box.

She opened it.

There is a brief moment when a cat is let out of a bag. You can see the cat, it is going to leap away to freedom and nothing will be fast or agile enough to stop it. Only for a moment, it is just there, a cat frozen in time on the edge of an open bag.

This cat was a burger and chips.

It stared then slithered out of the box without a sound. Once into the air, it permeated with a predators intent eyeing unwary nostrils.

Reaching mine it pounced.

Acridity of vegetable oil heated and reheated more often than is natural, but pungent as though the oil was still warm from the vat.

It was intense.

The assailant was as devastating as a lorry in a library. Any tranquillity from regular smells slapped away into next week.

It was a rare stink.

Now I suspect that the success of the quiet carriage is unlikely to transfer to smell free carriages. After all, who can decide if the smell of burger and chips at three in the afternoon or an over application of Delta by Delta at seven in the morning should be restricted to the smelly carriage? And indeed who would enter a carriage not designated as smell less?

There would be a rush on the odourless zones.

So there we have it. The ears have protection but I fear that the nose will be hit hard by whatever is let out of the box.

As for the eyes, best we not go there.

11 million views and counting

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The truth can be told in many different ways.

This one seems to be connecting…

 

Except that is it resonating?

11 million sounds like a lot but it is less than half the population of Australia, less than 0.6% of Facebook users, and a little under 7% of the global population increase since the message first appeared on YouTube in 2015.

No doubt there have been a few souls moved to action and every effort is worth it.

But to echo the analogy, the human impact on the planet still feels like

One Mississippi,

Two Mississippi,

Three Mississippi,

Boom

The cost of food

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The cost of food

Regular readers will know that my youngest son has just moved to London. He was disturbed to find that with beer costing over five quid a pint and most casual work paying less than a tenner an hour, London, and realistically any large modern city, is expensive for youngsters.

You could see the maths bouncing around in his head. Rent, food, travel, phone and beer essentials would be hard to squeeze out of a tenner an hour.

It’s a motivator for sure. True independence is a demanding master that builds strength and character in most. It even has the power to remove beer from the list of life’s essentials.

Just imagine for a moment if the item on the list that consumes half your income is food. Not the occasional 5 in 10, but half of everything you earn.

Each week the cost of basic foodstuffs to keep you and your family from going hungry takes up 50 cents of every dollar earned. Harsh you would think.

There is not much left for the other essentials on the list.

And if your rent is steep too, maybe 25 cents in the dollar, any financial buffer is a layer of paint thin. All the time there would be difficult decisions to make on what to do with the remaining 25 cents from buying power for cooking to school uniforms for the kids.

In many parts of the world, people face this problem every day. They must use a big slice of their income just to secure nourishment. It is a precarious existence when such a basic need takes up half your resources.

But here is the kicker.

What happens when food prices double?

If the price of food doubles buying food uses all your income. I’ll just say that again because it might take a while to sink in. If the price of food doubles buying food uses all your income.

This has happened, most recently across much of Ethiopia, Kenya, Somalia and nearby countries due to a drought that originated in the Indian Ocean Dipole.

Remarkably, people find solutions to this calamity. They eat less and find cheaper foods. They grow more of their own. They work harder and lean on support networks. They survive.

But they should not have to.

There are enough calories produced in farms across the world to feed everyone. For every individual praying for the price spike to end there is an overweight or obese counterpart in another country.

Here is an idea.

What about a global food safety net? Let’s say a FAO, World Bank collaboration to purchase a reserve of calories each year to ensure that the supply curve does not dip too far for the more than 5 billion people who live on less than $10 a day.

If everyone living in a country where the weekly food bill is less than 15% of family income contributed the price of a UK pint a week, such a fund would have more than enough annuity to deliver food security for everyone.

And how would we persuade people to give up their beer money?

Remind them that what hungry people do is move to find food — think about it.