Category Archives: Rants & Raves

Investment in energy research

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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.

 

Populate or perish

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Runners in City to SurfI heard this populate or perish grab on the radio today as projections for Australia were revised to see 35 million inhabitants by 2050, another 13 million more than today.

Enthusiasts were calling in saying we need more people ‘to defend ourselves” presumably because there is a perception of security in numbers.

Others wanted more people because there was a buzz, “it means growth and make the place more vibrant” and, of course, creates bigger markets for the sale of goods and services.

Then others responded with “what about the crowding, the roads, the planning we don’t have?” and then finally someone said “what about the water?” No worries, we will construct more dams.

These exchanges are fascinating for they expose real truths about the human condition and the shape of our future.

In short we really like having more people, so long as we get what we want… and it’s not too crowded.

Mark

I will if you will

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Earlier this week Australian Prime Minister Kevin Rudd announced that the interim 2020 carbon emission reduction target for the Australian governments Carbon Pollution Reduction Scheme would be 5%. …but his government would consider up to 15% if the rest of the world was committed.

The night before I made a bet with my wife that the target would be 10%, not the minimum of 25% that most environmentalists wanted and that most climate scientists reckon is needed to stabilize atmospheric CO2 concentrations below 550ppm.

I underestimated the power of the fear factor. They went for 5%. Was it fear or the political expediency of getting legislation through the complex Australian political system? I heard a comment that said if the decision had been for a tougher  target than 5% the senate would block passage of any bill. I reckon we can always find an excuse for leadership failure.

What we get instead is fence sitting and a very sore behind. 5% is a decision – if you can call it a decision – which is as close to business as usual as possible.

And the excuse seems to be: I will if you will, otherwise I won’t.

The trouble is that somebody has to otherwise the market mechanism for emission reductions triggered by cap and trade simply won’t deliver because the price of carbon will be too low to shift investor behaviour away from carbon intensive business activity.

Mark

Do they think we are stupid?

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Astonishing! That is all I can say. This morning I was astonished, shocked and speechless at what I heard on the radio.
ABC Sydney 702 presenter Deborah Cameron was on the phone to the NSW Minister for Environment and Climate Change Carmel Tebbutt. Very good, a senior Minister and Deputy Premier providing sound bites to the masses on issues of the day….only the topic was this:
The NSW Government is helping introduce technology that will capture the fumes, sorry I should say carbon emissions, from every petrol bowser in Sydney. That’s the smelly stuff you can see drifting skyward in tiny wisps as you fill your tank with liters of liquid carbon.
Yes, of course. Why did I not think of that? The Clean Development Mechanism take note, the solution to our carbon glut is at hand.

Do they think we are completely stupid?
Maybe they do, just maybe they do.

Whose interest do we represent?

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When I was a kid my parents would take pains to let me know what was in my best interest. This was because they knew. Of course they knew, they were the experienced ones.

Thirty plus years on and I look at my two sons and I have little idea of what is in their best interest. If I don’t understand the motivation for hardstyle techno music that currently consumes my 14 year old, how can I know if it is in his best interest.

Sure I know more about what might harm my kids than they do and can advise, even police some activities. I can also tell them what I found or have seen to be bad for folk, but can I really know what is in their best interest?

I don’t think so because I am not them. I advise against the bad, caution where there is risk, but I can’t know what is best for them.

The other day I was in a meeting where a representative of a conservation NGO made a remark to the effect that “saving threatened species was in the public interest”.

Wow, I thought, quite a claim. My reflex was to react and mount a challenge. How could one group with, right or wrong, a minority view, claim the public interest was theirs? I calmed my instinct and just smiled.

But now I am curious. If I find it hard, or even illogical, to know the best interest of my sons how can I know the public interest?

Makes you think.
Mark