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First of all I wish everyone who is reading this blog a Happy New Year!

Over the Christmas break I came across the truly remarkable ‘Story about Stuff’. It’s the story about the consumer product economy. Lots of what is presented in the video is common knowledge, but still, seeing the links starting with natural resource exploitation, over to production, distribution and manipulation of consumer behavior, to disposal management is frightening and makes you think a bid harder about our society’s values and, particularly, about your own retail shopping behavior. If you haven’t seen the video already I highly recommend spending 20 minutes and watching it. Here is the link: http://www.storyofstuff.com/

Here’s a talk I gave at a conference on Economics and Democracy with an MP3 audio and a PDF of the presentation The End of Economic Liberalism and endofeconomicliberalism0812. There may be a paper in due course.

There is little news to report about the Australian Government’s approach towards achieving its renewable energy target by 2020. In the absence of that, I thought, I report on the consequences of renewable energy policy from the other side of the world. I have recently read an interesting article about the German biomass energy generators and their impact on forest depletion which I consider as a remarkable example of how climate change policy should not work. Here is a bit more about it.

Germany is currently experiencing a boom in the timber market. The high demand for timber can mainly be attributed to bio-energy generators which are receiving high garantied income through the renewable energy act. According to the act, electricity generated from biomass and fed into the grid system is being rewarded with between 7.7 and 11.67 Euro Cent per KW/hour depending on the total capacity the facility. A bonus of 2.6 Euro Cent comes on top of that when timber as a re-growing resource is used.  This made it highly attractive to invest in timber burning power stations in recent years. In addition, wood pellet heating systems became attractive to German home owners as an alternative to expensive oil and gas heating systems.

Timber is a renewable resource with a somewhat CO2 neutral balance when used in power generation.   However, the overall CO2 balance of each power plant should also factor generator efficiency and fuel transport in. Due to the high growth in the biomass sector, this resource became scarcer recently. Biomass facilities burn fresh timber, matured timber as well as organic waste like leaves.  As a consequence, even tree parts that weren’t used before for burning such like tree root systems, bark and branches are now considered for energy generation with considerable consequences as these parts are not only valuable nutrient for forest soils but also important for the soil’s water storage capacity. In addition, more and more tree parts with high water contents are also being used which inevitably will negatively impact on plant efficiency.

The demand for timber grew by 23% from 2006 to 2007, with a total of 76.7 million cubic meters being harvested. Limited supply of timber let the price per solid cubic meter timber double from 30 Euro in 2003 and is now also affecting other sectors such as the pulp industry in Germany. One can easily imagine that timber needs to be imported to still the growing hunger for wood in Germany which will further decrease the positive effect of energy from biomass on climate.

Issues with soil depletion and the tight timber market require urgently new concepts to satisfy the hunger for re-growing resources and to maintain sustainable forestry in Germany.

This example nicely shows how political intervention for a higher cause like saving the environment can trigger trends negating the originally laudable aim and raises the question of how political actions should/could constantly be matched against developments in the real world. Particularly, in areas that are too important to the world to be left ruled by the market alone.

I am looking forward to reading more details about Australia’s approach for a low pollution future on Monday, 15 December when the White Paper on the Carbon Pollution Reduction Scheme will be released.

I have not been very impressed by the Queensland Governments approach to the fluoridation of public drinking water. For such a controversial issue, there has been minimal communication, or transparency in the decision making process, and for good reason. The important claim of the Australian Dental Association (ADA) and Queensland Health that “Queensland residents suffer more tooth decay than residents of the States and Territories where water fluoridation is available” seems to have no scientific backing*.

Some quick research on data from the Australian Institute of Health and Welfare, and the ABS, shows that Queensland ranks as one of the lowest in dental service expenditure per person. Perhaps the claim that Queenslanders suffer more tooth decay than other States is because the QLD government spends $58/person/year less on dental services. The $35 million rollout for fluoridation infrastructure is much less than the $228 million/year that would be required to increase dental service expenditure to the national average, and so a wise decision for cost savings.

State and territory aggregate health expenditure and average population (2003-04 to 2006-07)

 I’m not saying that fluoridation of the public water supply is imminently dangerous, and I’m not disputing the evidence that fluoride helps to prevent dental caries in 5 to 12 year old children. I know a number of people who grew up on fluoridated water. However, I am very much opposed to any Government policy that removes the public’s ability to make informed decisions on their own health… especially when it is cleverly framed to hide lack of Government expenditure in key areas.

* it was used by the ADA 2007 Water Fluoridation in Queensland Report, which sourced it from Peter Forster’s 2005 Queensland Health Systems Review, who sourced it from Queensland Health’s Water Fluoridation question and answer sheet – June 2005, from where it apparently sprang from, with no accessible legitimate scientific article to back it up.

Somebody once told me “Once the water starts flowing, the money stops”. Admittedly that was referring to exceptional funding under a drought but it seems to equally apply to the QLD government backflips on the water grid. Instead of enhancing the community efforts of residents in SE corner dramatically reducing their water consumption to around about 140-150 litres/day by putting in long term assets to augment supplies for the rapidly growing population in the South East
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Being involved in the Garnaut Climate Change Review was certainly an interesting task and involved getting our hand on some of the latest data being generated by the other contributors to the projects. Uncertainty plays a big part of climate change and the work by Garnaut has at the very least frame further policy debate. By defining the targets for CO2 emissions (aim for at least 550ppm and if the world jumps on board then aim for 450ppm) policy makers now have a defined set of parameters to help compare alternative options.
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It has taken some time for the blog to come back to life.

The group has been exceptionally busy since being down. We have spent a fair bit of time doing work for the Garnaut Review into Climate Change. We have also provided input into the climatic change impacts for Renmark irrigators district, and the current and future policy actions that will influence their long term allocations.

While the group has been working on a range of issues including: market based instruments; carbon costs & energy trading; economics of diseases; updating the Murray Darling model; and starting the design work for a fine scale version of the model.

When it rains it pours. Just the other day I write something about feral animals and then I stumble across this gem today today.

Savannah cats are being considered for import into Australia. These so called domestic cats are a cross between the wild Serval cats from Africa and a domestic cat. Not only are they bigger and jump higher but are more like a dog.

Please sign the petition to prevent these things coming in and increasing the genetic diversity in the wild. As sooner of latter one will wonder off and its all over folks.

I had a quick browse through the Biosecurity Australia web site and found nothing directly relating to Savannah cats in particular so they must just be going through the standard approach for cats and dogs.

During the next few weeks we will be uploading and providing access to a variety of podcasts produced by Prof. John Quiggin.

The first of this series “Climate Change Mitigation versus Adaptation a False Dillemma” by Prof. John Quiggin was presented at the AARES Symposium, Adelaide 23 May 2008.

I got bored the other day and for some reason plotted the Index of real net value of farm production farm production from the ABARE Australian Commodity Statistics 2007. Yes I’ll ignore the fact that I need a life.

Now I was expecting the decline in the relative income during the major droughts during the period (1965-68, 1982-83 and 1991-95) and these are marked on the chart. What did surprised me however, was the jumps in income during the oil shocks. The only thing I can think is that initially prices received (i.e. like the current jump in wheat prices) and then costs increases removed those gains the next year (i.e. cost of fertiliser).

It’s going to be interesting to see what happens when the 2007-08 data gets released.