How to interpret a percentage change

How to interpret a percentage change

Here is what the International Energy Authority said happened to carbon emissions last year across the globe.

Carbon emissions rose by 1.7 per cent in 2018 to a record 33.1 billion tonnes, with coal making up a third of the total increase

That is 560 million tCO2 more carbon emitted than the previous year.

That increase is equivalent to the total emissions of the international aviation industry or if you prefer, the annual emissions for Australia.

Recall that 1990 was a pivotal year for climate change issues. It was chosen, arbitrarily for those not in the know and all those with an ounce of common sense, as the benchmark year to compare targets for emission reduction.

In 1990 global greenhouse gas emissions were roughly 22.4 billion tCO2.

Rather than concern ourselves with the increase since then, yep it is half as much again, let’s focus on what a 1.7 per cent increase on 22.4 billion looks like.

It’s 381 million tCO2e

Buckets of water example

Now, let’s suppose that I have two buckets the size of laundry baskets. Each bucket is big enough to hold 50 litres of water.

The first bucket is the 1990 bucket. It contains 22.4 litres of water.

The second is the 2018 bucket and it contains 33.1 litres of water.

If each day I added 1.7% of the starting volume to each bucket (381 ml and 560 ml) in 72 days the 1990 bucket would be full.

The 2018 bucket is spilling water on the floor in 30 days.

Less than half the time!

Same percentage. Very different result.

The analogy is not quite reliable for the greenhouse gas issue. The atmosphere may be like a bucket in that it has a finite volume but it is a huge bucket unlikely to overflow with gas.

The issue for greenhouse gases is, of course, the way they alter the atmospheric composition and change the warming potential, retaining more of the sun’s energy as the proportion of greenhouse gases rises.

The per cent change result still holds. 1.7 per cent of the 2018 amount has a much bigger effect than 1.7 per cent of the 1990 amount.

Global population example

The global population growth rate in 2018 is around 1.1% or roughly 83 million people added to the mix each year.

This percentage gain is less than the 1.6% gain in 1990 that delivered roughly the same number of new people.

So again let’s do the bucket test. This time we’ll go with the 1.1 per cent gain and use slightly smaller, 10-litre buckets.

The 1990 bucket starts with 5.3 litres of water and the 2018 bucket has 7.2 litres.

If each day I added 1.1% of the starting volume to each bucket (58 ml and 79 ml) in 81 days the 1990 bucket would be full.

The 2018 bucket is spilling water on the floor in 35 days.

Lower percentage but a faster fill. Ouch.

Pay rise example

Is it fair to give a 1% pay rise to all employees in the company? Sounds fair.

Everyone gets the same proportional raise, all the boats get to float. Except that the CEOs 1% gets him a new fridge out of the first paycheck and the tea lady gets a coffee at Starbucks.

Be aware of percentages when the media spout them.

They are only useful if you know the amount the percentage refers to.

Why are carbon emissions increasing?

Why are carbon emissions increasing?

The climate is changing.

After a few glasses of Chardonnay, even the most ardent sceptic would concede this reality. And the consequences are increasingly dire. The headlines of fire, flood, heatwave and crippling cold (all increasing in frequency and intensity because more energy is retained in the global atmosphere-ocean systems) are more frequent and dramatic, yet are only part of the story.

The everyday consequences are far-reaching too.

Ask a Sydneysider how often they turned on the air conditioner this summer; pretty much every day they’d say. Extreme heat keeps people indoors and makes them worry about their energy bills. Cold in Chicago does the same thing. There are some heavy psychological challenges from these consequences that run far deeper than cabin fever.

Then there is the guilt trip.

Rhetoric and considerable evidence have convinced most of us that climate change is our fault, the consequence of profligate emissions of greenhouse gases coming roughly a third each from our needs for energy, transport and agriculture.  

We are also told that the solution is emission reduction.

So why are global greenhouse gas emissions increasing?

First reason is
context

One inevitability of the industrial revolution that began in the late 1800’s is that most human societies are not only dependent on fossil fuel energy, but they have also used it to grow.

More people, with ever greater needs and wants. This success means that use of fossil fuel to power people and agriculture are greater than ever. Indeed, most of the carbon emissions have happened in the lifetime of the baby boomers. Three-quarters of our fossil fuel burning has happened since ABBA won the Eurovision song contest in 1974.


This is a ‘locked in’ reason. We cannot go back and make different decisions any more than we could turn off the needs and wants of the 4 billion people around in 1974 or the 7.5 billion people doing their thing today.

Just like we cannot go back and imagine if Mouth & MacNeal from the Netherlands had won Eurovision in 1974 with their little ditty, “I see a star”. They came second.

Second reason is
behaviour

Estimates suggest that up to half of all greenhouse gas emissions are the result of inefficiencies and waste: poor construction practices, food waste, sloppy supply chains, replacing goods that work fine with shiny new ones.

We also like to copy ostriches. Subsidies to fossil fuel businesses are estimated at $5 trillion globally. That is a lot of money to prop up emissions we are told we should be curbing.

Third reason is
we don’t want to stop emitting

The willingness to make the sacrifices to our lifestyles and wellbeing, real or perceived, to reduce carbon emissions is absent for most of us. Way too many everyday issues are way more important to us than breaking a few weather records. So what if they have to shovel some snow in Chicago.

The formal government agreements to counter individual indifference have failed too. The infamous Kyoto Protocol was signed in 1997, that’s 20 years ago. Since then global emissions have continued to rise.

There is some hope that renewable energy sources are becoming cheap enough for us to want to use them purely for back pocket reasons. This will see emission rates stall and even for coal and oil trail off towards an ignominious retirement (they will not go gracefully).

Again the reality is that market pressure was always needed to move the dial. Climate advocacy, legislation, or protocols were never going to generate the necessary willingness to act.


Source: Boden, T.A., Marland, G., and Andres, R.J. (2017). Global, Regional, and National Fossil-Fuel CO2Emissions. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tenn., U.S.A. doi 10.3334/CDIAC/00001_V2017.

Will global greenhouse gas emissions stop increasing?

Yes they will.

Most likely emissions will decline to pre-industrial revolution levels for three main reasons:

  1. Fossil fuels will become scarce and eventually run out
  2. Conversion of land for agriculture will slow to nothing once all the land that could be farmed is farmed
  3. Low to no emission alternatives to our current behaviours that produce greenhouse gases will be cheaper but just as satisfying

A more significant question is not will but when.

Should the three reasons follow their natural course it could be decades or longer before emissions slow and reverse back toward the natural background rate.

This means that every day in Sydney or Chicago will be a headliner for its extreme heat or cold, until it’s the norm and the headline changes back to the inane actions of famous human beings.

Why are global greenhouse gas emissions increasing?

Because of people.

Trite perhaps, but true nonetheless.


Post revisited — the missing link

Post revisited — the missing link

It used to be said that only death and taxes were certain. All else was a maybe. It seems Australians can now add ‘confused climate policy’ to the list of certainties. Since this post first appeared in August 2011 very little has changed. You could even argue that some of the uncertainty has leaked to other jurisdictions and tweets from the POTUS.

And the message is still missing.

The missing link

Some years ago I wrote an essay entitled ‘What if it’s not emissions’. I was not in denial or even sceptical about climate change, more concerned that we had become fixated with emission reduction as the solution to climate change. So convinced had we become that it was a given that if emissions came down, we would have fixed that awkward problem and all will be well with the world.

My real issue was that we risked putting all our eggs into the emission reduction basket.

After more years of political inaction than seems decent, the Australian government has just released a clean energy future policy on climate change. And, guess what? We still have the same fixation. The proposal is all about emission reduction, initially through a tax on pollution followed by a cap and trade system to make emitting greenhouse gas so expensive that no rational business could afford such behaviour.

It might be about emissions, but the policy formulation sees only a modest reduction target – 5% below 2000 emission levels by 2020. This means in 2020 Australia is pledging to emit 509 million tCO2e in greenhouse gases or 56 million less than it did in 2009.

Only by 2020, even with the proposed intricate emissions reduction policy fully functional, emissions of 679 million tCO2e are predicted.

Actual emissions will increase because the Australian population will grow in numbers at roughly 890 people per day, the economy will grow and so will affluence. Economic growth will require energy to follow the historical trend of a doubling in consumption every 30 years. And although the policy does talk about energy efficiency and alternative sources, the required capacity increase will inevitably be met by traditional means.

Emissions growth will leave a shortfall in the target of 170 million tCO2e or 30% of current emissions. So it would seem that the emissions reduction basket has few eggs.

This again begs the question ‘What if it’s not emissions?

Let us accept what the science tells us and agree that it is emissions that are a significant driver of the current climate warming. What the policy shows is that, rather like American debt ceiling, we cannot quite admit the severity of the problem. And, more importantly, we lack the courage to tackle the problem head on. It is just too hard and too scary.

And this would actually be ok if we hadn’t missed the critical issue in all this.

We have stopped talking about how 7 billion people are going to sustain growth in affluence on a warming planet. We have forgotten about adaptation. Forgotten that we will need to use water wisely, deliver sustainable production on farms, and manage our landscapes when the temperatures change, rains forget to fall, seasonality shifts, severe weather events become more frequent and the sea levels rise.

Less than $1 billion of the $25 billion revenue generated from the carbon tax will go incentive land management through carbon offset projects. They will mostly be Kyoto compliant activities such as permanent tree plantings and flaring methane – just as the international agreement to proceed with a second commitment period of the Kyoto protocol teeters.

There will be money for biodiversity initiatives. Good stuff, but just more of what we have already been doing.

What happened to incentives to revegetate the landscape and put carbon back into the soil? The critical activities that will help us manage that scarce water, produce reliable quantities of food and help save what is left of nature. Missing, presumed dead.

Seems like we should ask again, ‘What if it’s not emissions?

Hidden in deep in the 2017 budget papers from the Australian government is an apparent cut to funding for the National Climate Change Adaptation Centre. This centre is one of the few places in Australia with a focus on adaptation, the thing we have to do if emission reduction fails. Something like Plan B that, given the precariousness of Plan A, should be getting a boost not a cut.

Only this is where we are at just three years out from 2020. Devoid of policy, pushing rubbery emission targets out to the distant future, and cutting funding for Plan B.

For the sake of the grandkids, let’s pray that it is not emissions.

If this is leadership, heaven help us

If this is leadership, heaven help us

At various times I have ranted about the politics of climate change in Australia

The climate change action thing

Climate change policy – does Australia need it?

The Kardashian Index

And I am not alone. Many are tearing out what remains of their hair.

So I thought I would bring to your attention the latest from the current direct action policy option in place in Australia. This is the policy setting that hopes to achieve emission reduction targets through the purchase of greenhouse gas abatement at auctions.

At the end of 2016 the vehicle for this, the Emission Reduction Fund, had paid for 177 million tCO2e of abatement purchased across four auctions at an average price of $12 per tCO2e.

Yes, you read it right. Close to $2 billion, that is $2,000,000,000 or roughly enough to pay the annual salary of 100 cabinet ministers for over 50 years, has been spent to purchase roughly the amount of abatement needed to meet the emission reduction target Australia presented in Paris… for one year.

Let’s make this clear. Emitters of carbon are not paying for this abatement, the taxpayer is.

Now you could be generous and say that the taxpayer is really the economy, so the economy is footing the bill, but that is a very long bow. Industries that were previously under the carbon price and reducing their emissions to save money are not anymore. Instead, various activities from other players in the economy are offered to reduce emissions or to capture carbon into vegetation and the CO2e tonnage presented for sale.

The concept of ‘polluter pays’ that has been so successful in a host of situations, from cleaning up rivers to closing the hole in ozone layer, is not in play here. Polluters carry on polluting as they merrily pass on the externality to the taxpayer.

This is neither good policy nor good governance.

There is no incentive to reduce emissions across the economy only an opportunity for a few to make a fast buck if they have access to some abatement.

At current prices, $2 billion will buy you 400 million tCO2e of offset credit on the international markets, nearly 2.5 times the local option. So not only does the policy fail to incentivise prudence, it pays way over the top for mitigation.

You cannot help think that a few people are laughing all the way to the bank.

Time for scepticism

coal mineAt what point did scepticism become a dirty word?

Perhaps it was when political correctness overtook us and we were forced to accept convention or risk ridicule from everyone, including the kids. Maybe it was when we disappeared into the virtual world where the only thing reminding us of reality was stiffness from ‘smartphone neck’. Or maybe it was when the media purposely made sceptic and denial mean the same thing.

Here is quick reminder of the real definition of sceptical… not easily convinced; having doubts or reservations.

What this means is that a sceptic is not convinced by the first thing she hears. She thinks about new information, turning it around to see it from all sides. She seeks other opinion, even counsel. She thinks some more and then makes a decision to believe or not.

The sceptic is not a denier even though she may choose to reject what she is told. She is much smarter than that — she starts with the idea that whatever new information is heard may not be all that it seems.

Recall any scene from your favourite reality TV show. The editors pull together snippets of action to present the most drama and then milk it with liberal use of mood music enhancement. This can make the little craziness in the scene much wilder and entertaining; but if we believed all these capers as the truth we would be foolish indeed.

Now let’s consider how the sceptic would deal with a more difficult example.

Should we believe the Australian government when it says that giving mining companies taxpayer funded offset credits to capture methane at new coal mines is a good tactic to achieve policy targets for emission reduction?

Under any carbon price mechanism the idea is to reduce the carbon intensity of human activities. This means that energy generation, manufacturing, transport and agriculture [the sectors that make up almost all the greenhouse gas emissions] should release less carbon to the atmosphere than in the past. Where the activity can’t be made less intensive, such as a coal-fired power station, emitters can buy credits [or are given allowances] that, in time, make them commercially inefficient and so they are replaced by cleaner technologies.

Methane gas is often associated with coal seams. The whole coal seam gas debate is about extracting this methane as a fuel source. But when the resource in demand is the coal, the methane is either incidental or too expensive to capture. Usually it is released to the atmosphere where it contributes to climate change effects because methane has 23 times the global warming potential of carbon dioxide. Capturing and burning the methane from coal mines would reduce this emission source because methane converts to carbon dioxide when burnt. And carbon dioxide has a net global warming potential of 1.

Burning methane would reduce net emissions from the activity of mining coal.

Except how does this contribute to emission reduction when new coal mines will extract millions of tons of the very stuff that generates greenhouse gases in the first place. No matter that most of the coal is exported and ends on the emissions accounts of another country.

Whatever the rhetoric the taxpayer is actually paying for more emissions not less. In effect it subsidises the development of new coal extraction capacity. This cannot be “a good tactic to achieve policy targets”.

So what should the sceptic do with all this? Be themselves and be sceptical, very sceptical.

This is a ruse by the mining sector to get paid for emitting, the exact opposite of the original policy objectives.

Sounds Crazy #12 | Fossil fuel subsidies

Here’s a thing. Why would you have any international agreement to reduce carbon emissions when governments across the globe are spending 8.5% of tax revenue on fossil fuel subsidies?

Allow yourself to imagine that you come from a nation where the per capita emissions was less than the global average of around 4.5 tCO2e — you could choose any from around 120 different ones.

You would not be too chuffed at any international agreement on emission reduction when you find out that a big chunk of taxpayers money goes to propping up the problem. You could ask this perfectly sensible question: Why not reduce the subsidies? Wouldn’t that make emitting more expensive and be the very market force that complex trading schemes were designed to achieve?

Now you would be told, well yes, but it’s not as simple as that.

Except that it is.

Sounds crazy #5 | Carbon price forecasts

August 2013 is silly season here in Australia. We have a federal election in just a few weeks time and the inevitable merry-go-round of vacuous media grabs and absence of policy debate is upon us. It is actually rather depressing as the main parties jostle to hog the middle ground to spend money they don’t have whilst no one else can come up with anything better than “vote for me”.

It is also rather absurd. On the rare occasion when media do delve beyond the rhetoric, or for some unknown reason you dig yourself for evidence to help make a voting choice, what emerges are gems like this pre-election outlook from Treasury.  Somehow the economic boffins that work for the ministry have managed to predict that the carbon price that in Australia is currently fixed at $23 will first fall to $6.20 in 2014/15 [fair enough as the start of the flexible price period when the domestic scheme is pegged to the EU market has been brought forward a year] and then rise to $18.90 by 2016/17 reaching $38.0 by 2020.

Now we should remember that this is what is supposed to happen to a carbon price. The whole idea was that to ensure steady emission reduction the carbon market is capped so that supply is squeezed over time causing prices to rise. A rising price on carbon would encourage energy thrift and starts to make clean energy sources economically viable with the net effect of lower emissions. Except that the political will to set, stick to and steadily lower the cap has been conspicuously absent.

Alloporus borrowed a graph of the historical carbon price in the EU published by Point Carbon and appended the Treasury projections.

It looks like this:

CarbonPriceProjections

As regular readers will know Alloporus is no economist, but whilst $20 seems possible, $40 by 2020 is hugely over-optimistic. It would require a significant step change around 2015 to reverse a market that has a t best been steady but mostly fallen. Such a change would need considerable and coordinated global political will to achieve. No single nation would stick their neck out that far [probably why the Australian government linked the domestic scheme to the international market so as to neatly sidestep the pressure to go it alone].

Then consider that by 2020 we will have seen price shocks in oil [and possibly coal too] that, even if temporary, will have the required effect on emission reduction without the need for a separate policy. In other words fluctuations in energy needs in response to inevitable pulses in the global economy will allow the modest emission reduction targets to be met most of the time.

Of course politically it is best if the carbon price is low, but for any cap-and-trade policy to be effective the price needs to rise steadily. Alloporus suspects that the carbon price forecast from Treasury sound like some middle ground plucked from the ether for political expedience.

The craziness here is that a lot of money has been spent and committed to deliver emission reductions — a ‘clean energy future’ as the policy was tagged. Except that the cap-and-trade approach chosen only works if the price of permits [the carbon price] rose steadily over time. And this required that the market was manipulated buy controlling permit and offset credit supply. Now that governments have shied away from that part of the plan, the whole policy falls over and monies spent on free permits for exposed sectors and, in the case of Australia tax threshold adjustments and cash payments to households, turn into welcome handouts that have no impact on emissions at all.

$38.0 by 2020 is what they would like it to be, except wishful thinking cannot make it so. You actually have to implement the policy.