IPCC climate talks 2014
The latest climate talk-fest has again degenerated into the poor countries (I mean the developing nations) nakedly demanding large sums of money from the leading countries (sorry, the developed nations) to save them from the horrendous consequences of global warming caused entirely by the leading nations’ appalling development of advanced sources of energy – h/t Len Mills.
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Outcome is “Lima Call for Climate Action” apparently. Closest I can get to it is this (which seems to be the “4 page document” agreed to:
21. Welcomes the Lima Climate Action High Level Meeting convened by the President of the Conference of the Parties on 11 December 2014 and encourages the Executive Secretary and the President of the Conference of the Parties to convene an annual high-level event on enhancing implementation of climate action
http://unfccc.int/files/meetings/lima_dec_2014/in-session/application/pdf/cpl14.pdf
Financial extortion and INDC appears to be these clauses:
4. Urges developed country Parties to provide and mobilize enhanced financial support to developing country Parties for ambitious mitigation and adaptation actions, especially to Parties that are particularly vulnerable to the adverse effects of climate change; and recognizes complementary support by other Parties;
14. Agrees that the information to be provided by Parties communicating their intended nationally determined contributions, in order to facilitate clarity, transparency and understanding, may include, as appropriate, inter alia, quantifiable information on the reference point (including, as appropriate, a base year), time frames and/or periods for implementation, scope and coverage, planning processes, assumptions and methodological approaches including those for estimating and accounting for anthropogenic greenhouse gas emissions and, as appropriate, removals, and how the Party considers that its intended nationally determined contribution is fair and ambitious, in light of its national circumstances, and how it contributes towards achieving the objective of the Convention as set out in its Article 2;
15. Reiterates its call to developed country Parties, the operating entities of the Financial Mechanism and any other organizations in a position to do so to provide support for the preparation and communication of the intended nationally determined contributions of Parties that may need such support;
16. Requests the secretariat to:
(a) Publish on the UNFCCC website the intended nationally determined contributions as communicated;
(b) Prepare by 1 November 2015 a synthesis report on the aggregate effect of the intended nationally determined contributions communicated by Parties by 1 October 2015;
22. Notes the estimated budgetary implications of the activities to be undertaken by the secretariat referred to in this decision and requests that the actions of the secretariat called for in this decision be undertaken subject to the availability of financial resources.
# # #
Keywords: “urges” (4), and “call” (15)
Those are the only 2 operative words that I can identify – apart from “welcomes”.
Thanks, RC. It’s hard to penetrate, all right.
Also possibly: “may” and “encourages”
So updated list:
“urges” (4.)
“may” (14.)
“call” (15.)
“welcomes” (21.)
“encourages” (21.)
They’ve certainly nailed it down. No wriggle room at all there. Universal commitment a cinch in 2015.
‘Billions won’t satisfy warmists’
Christopher Booker, The Sunday Telegraph, 7 December 2014
“….so carried away are the warmists by their quasi-religious belief system that, when it was again proposed in Lima that richer nations should pay poor countries $100 billion a year to protect them from runaway global warming, the UN’s chief spokesman, Christiana Figueres, dismissed this as “a very, very small sum”. What is needed to decarbonise the global economy, she said, is “$90 trillion over the next 15 years”.”
http://www.telegraph.co.uk/comment/11277024/Billions-wont-satisfy-warmists.html
‘Time for the UN to get out of climate change’
Negotiators and Secretary General continue to ignore scientists and public opinion
Tom Harris, Executive Director, ICSC
OTTAWA, Dec. 13, 2014 /PRNewswire/ – “Climate change negotiators in Lima, Peru seemed oblivious to the findings of the UN’s ongoing My World survey about what the people of the world really want the agency to focus on,” said Tom Harris, executive director of the Ottawa, Canada-based International Climate Science Coalition (ICSC). “The seven million people polled so far indicate that, in comparison with issues such as education, health care, jobs, and energy, they care very little about climate change.”
“Perhaps most out of touch with reality is the UN Secretary General Ban Ki-moon himself who on Wednesday asserted that climate change remains his ‘top priority’,” continued Harris.
ICSC chief science advisor, Professor Bob Carter, former Head of the Department of Earth Sciences at James Cook University in Australia explained, “That ‘action taken on climate change’ rates dead last among the 16 priorities the public wants to see action on is not surprising. They understand that the remote possibility of human activity contributing to climate problems decades from now is unimportant in comparison with the very real problems faced by the world’s poor today.
“During the UN Climate Change Conferences in 2007, 2009, and 2012, hundreds of climate experts endorsed open letters (see here) to Mr. Ban explaining his mistakes on the science,” said Carter. “Among the scientific luminaries signing the letters were Dr. Antonio Zichichi, President of the World Federation of Scientists; Freeman J. Dyson of Princeton Institute for Advanced Studies; Dr. Zbigniew Jaworowski, professor of natural sciences, Warsaw; and Dr. Richard S. Lindzen, Professor of Meteorology, Massachusetts Institute of Technology.
“The Secretary General did not even acknowledge receipt of our open letters, let alone address any of our points,” concluded Carter.
New Zealand-based Terry Dunleavy, ICSC founding chairman and strategic advisor asked, “How can anyone take Mr. Ban seriously after he asserted on Tuesday that ‘Science has not only spoken – it is shouting from the rooftops. Our planet has a fever – and it is getting hotter every day.’
More>>>>>
http://www.prnewswire.com/news-releases/time-for-the-un-to-get-out-of-climate-change-285707691.html
Telegraph:
Ironically, the conference has remained overtly reliant on fossil fuels, in the form of diesel generators. The talks are taking place in a vast temporary village constructed on the site of the Peruvian military headquarters.
Organisers rejected powering the village with solar panels on the grounds they were too unreliable, while efforts to hook the site up to the national grid – which is half-fed by renewable energy – failed due to technical problems.
Experts say the Lima talks will have the biggest carbon footprint of any UN conference to date at more than 50,000 tons of carbon dioxide.
As well as the diesel generators, the footprint has been enlarged by the jet fuel burned by the estimated 11,000 people who flew in from abroad to attend – including roughly 4,000 from non-governmental organisations – as well as the emissions from the fleet of coaches that crawl through Lima’s gridlocked streets to shuttle delegates to and from the venue.
http://www.telegraph.co.uk/news/worldnews/southamerica/peru/11292469/Frantic-efforts-to-save-Lima-climate-change-talks.html
http://unfccc.int/files/meetings/lima_dec_2014/application/pdf/auv_cop20_lima_call_for_climate_action.pdf appears to be the final long document they agreed to as the “Lima Call for Climate Action”.
TOM
Tom, the final document was whittled down to 4 pages which corresponds to the top 4 pages of the document you link to. See Richard Treadgold’s next post on the 4 page document here:
https://www.climateconversation.org.nz/2014/12/cop-agreement-or-cop-out-from-lima/
The document you link to is the same 4 pages but with the Annex of the draft negotiating text from 10 December 2014 at 06:30 added at the bottom. But note there’s no date or FCCC letterhead on the document.
The 4 page document just has this at the bottom:
Annex
Elements for a draft negotiating text
[Placeholder for Elements for a draft negotiating text – Version 2 of 10 December 2014 at 06:30]
You’ve got hold of a different version because the title of the document you link to is:
Decision -/CP.20
Lima call for climate action
Whereas the title of the FCCC letterhead version is:
Further advancing the Durban Platform
Draft decision -/CP.XX
But the Reiterating/Recalling and paragraphs 1 – 22 over the top 4 pages are the same in both documents. It is interesting to look at what they threw out and how the draft was changed but the Annex of the draft negotiating text has been superseded by the final document.
You can also access the draft negotiating text as a seperate document here:
http://unfccc.int/resource/docs/2014/adp2/eng/12drafttext.pdf
Note that there are paragraphs 1 – 43 in that preliminary document but the final has only 1 – 22 i.e. they discarded and condensed 21 paragraphs.
So the Lima outcome was half of what they started with.
>”but the Annex of the draft negotiating text has been superseded by the final document”
Not quite right here.
The “enhanced action” and INDCs were carried forward to Paris Dec 2015. This is the Annex in the draft linked above:
AD HOC WORKING GROUP ON THE
DURBAN PLATFORM FOR ENHANCED ACTION
ADP.2014.12.DraftText
Annex
Complementary information on intended nationally determined contributions of Parties [INDCs]
You’re right that the Lima agreement is only four pages. But the Appendix seems to be the draft negotiating text of what the ADP* have been working on for Paris for 2015, not any draft text of what the COP people had been working on for Lima (although I am sure many negotiators would have loved to see some of that ADP draft in the Lima agreement)t.
If you go to http://unfccc.int/meetings/lima_dec_2014/session/8532.php (since the ADP were having their second meeting at the same time as COP20), they have the same draft text as is at the end of the Lima COP agreement.
*ADP = “The Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) is a subsidiary body that was established by decision 1/CP.17 in December 2011. The mandate of the ADP is to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties, which is to be completed no later than 2015 in order for it to be adopted at the twenty-first session of the Conference of the Parties (COP) and for it to come into effect and be implemented from 2020.”
Tom, yes just corrected myself above.
>”But the Appendix seems to be the draft negotiating text of what the ADP* have been working on for Paris for 2015, not any draft text of what the COP people had been working on for Lima
Yes, the paragraphs 1 – 43 (whittled down to 1 – 22 in Decision -/CP.20 final) were the draft text for COP 20
The Annex is “the draft negotiating text of what the ADP* have been working on for Paris” as you say.
Considering:
1) A decision on the International Mechanism for Loss and Damage associated with Climate Change Impacts was already deferred until December 2016 (not a typo).
2) A decision on the Ad Hoc Working Group on the Durban Platform for Enhanced Action (mitigation, adaptation, finance, technology development and transfer, and capacity-building, and transparency of action and support) was already deferred until December 2015.
3) A decision on the intended nationally determined contributions of Parties (INDCs) was already deferred until December 2015.
What did everyone go to Lima for?
I think the purpose of Lima was to just to continue to lay the foundation for Paris. One would have thought that they could have just done this at UN HQ with a far smaller number of people, but I guess if they skipped a big COP do, there would be hell to pay with the media and activists..
It seems to me that a major goal is always to appease climate activists that they are, really this time, going to enable something significant in Paris. So, it is a lot of PR of leaders swearing true allegiance to the UNFCCC articles, especially #2 and 4. That continual swearing of faith to article 4 makes a bit of a mockery of the statements that Lima that brought the firewall between developing and developed nations that is implicit in the UNFCCCdown, as some are saying. What do you think?
The COPs are always the big show, but in this case I can’t see that they accomplished much. However, the real threat is the ADP, even though it is behind the scenes, since that shows us what they are really up to.
Some people are saying that, because COP20 was not very significant in its progress we can all relax. To me that is like saying that, because an enormous threat only got a little more threatening, we can relax. NOT!
>”leaders swearing true allegiance to the UNFCCC articles, especially #2 and 4. That continual swearing of faith to article 4 makes a bit of a mockery of the statements that Lima that brought the firewall between developing and developed nations that is implicit in the UNFCCCdown, as some are saying. What do you think?”
Firstly Article 2 in the Decision:
10. Agrees that each Party’s intended nationally determined contribution towards achieving the objective of the Convention as set out in its Article 2 will represent a progression beyond the current undertaking of that Party
ARTICLE 2: OBJECTIVE
The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner.
http://unfccc.int/essential_background/convention/background/items/1353.php
The INDCs, yet to be produced, are paramount obviously.
“legal instruments” were relegated to an option among others in Cancun (I think it was). From the Decision,
2. Decides that the protocol, another legal instrument or agreed outcome with legal force under the Convention applicable to all Parties shall address in a balanced manner, inter alia, mitigation, adaptation, finance, technology development and transfer, and capacity-building, and transparency of action and support;
Secondly Article 4 in the decision (this is the big one),
3. Underscores its commitment to reaching an ambitious agreement in 2015 that reflects the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances;
ARTICLE 4: COMMITMENTS
1. All Parties, taking into account their common but differentiated responsibilities and their specific national and regional development priorities, objectives and circumstances, shall: [(a) =(j)]
2. The developed country Parties and other Parties included in Annex I commit themselves specifically as provided for in the following: [(a) – (g)]
3. The developed country Parties and other developed Parties included in Annex II shall provide new and additional financial resources to meet the agreed full costs incurred by developing country Parties in complying with their obligations under Article 12, paragraph 1 […]
4. The developed country Parties and other developed Parties included in Annex II shall also assist the developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects.
5. The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention […]
6. In the implementation of their commitments under paragraph 2 above, a certain degree of flexibility shall be allowed by the Conference of the Parties to the Parties included in Annex I undergoing the process of transition to a market economy, in order to enhance the ability of these Parties to address climate change, including with regard to the historical level of anthropogenic emissions of greenhouse gases not controlled by the Montreal Protocol chosen as a reference.
7. The extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments under the Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties.
8. In the implementation of the commitments in this Article, the Parties shall give full consideration to what actions are necessary under the Convention, including actions related to funding, insurance and the transfer of technology, to meet the specific needs and concerns of developing country Parties arising from the adverse effects of climate change and/or the impact of the implementation of response measures, especially on […]
9. The Parties shall take full account of the specific needs and special situations of the least developed countries in their actions with regard to funding and transfer of technology.
10. The Parties shall, in accordance with Article 10, take into consideration in the implementation of the commitments of the Convention the situation of Parties, particularly developing country Parties, with economies that are vulnerable to the adverse effects of the implementation of measures to respond to climate change. This applies notably to Parties with economies that are highly dependent on income generated from the production, processing and export, and/or consumption of fossil fuels and associated energy-intensive products and/or the use of fossil fuels for which such Parties have serious difficulties in switching to alternatives.
http://unfccc.int/essential_background/convention/background/items/1362.php
The firewall is still there, the Annex I “responsibilities” and what they “commit themselves specifically” to are massive and highly contentious (for Annex I that is). Mockery as you say Tom.
List of Annex I, Annex II, and Annex B Countries
http://www.ipcc.ch/ipccreports/tar/wg3/index.php?idp=478
>”However, the real threat is the ADP, even though it is behind the scenes, since that shows us what they are really up to.”
Exactly Tom. This is a UN activity as I understand, Annex I has yet to address what the ADP have put together but at least we can read the draft now. The ADP draft should be elevated to everyone’s front-of-mind, the Lima Call for Action is a nothing document.
>”Some people are saying that, because COP20 was not very significant in its progress we can all relax. To me that is like saying that, because an enormous threat only got a little more threatening, we can relax. NOT!”
Exactly again Tom. All that has happened is that the all important Paris COP 21 got one year closer. And what is the ADP all about that COP 21 will have to decide on?
“Enhanced Action” on:
Mitigation,
Adaptation,
Finance,
Technology development and transfer, and
Capacity-building, and
Transparency of action and support.
That’s a lot of stuff that we have to get into our heads. All in pages 8 – 12 here:
AD HOC WORKING GROUP ON THE DURBAN PLATFORM FOR ENHANCED ACTION
ADP.2014.12.DraftText
Annex
Complementary information on intended nationally determined contributions of Parties
http://unfccc.int/resource/docs/2014/adp2/eng/12drafttext.pdf
That’s our UNFCCC homework for now until COP 21.
The BBC notes that there is no mention of Annex I countries in the Lima Call for Action – so what?
Annex I is still in ARTICLE 4: COMMITMENTS and paragraph 3 in the Lima Call for Action “Underscores its commitment” in respect to Article 4. The only shift is in respect to Non-Annex I i.e. “poor” or developing countries.
BBC,
‘UN climate deal in Peru ends historic North-South split’
By Matt McGrath
Developing countries resolutely fought to keep this sense of differentiation firmly in the text. They were very upset when the original text about the pledges countries will make next year, used the word “shall”. It seemed to them that poor African countries and small island states were being corralled into making the same level of commitment on climate change as the big boys.
No one seriously expects the countries in sub-Saharan Africa will have to do the same as the US and the EU. Eventually the “shall” became a “may”. But when you have a situation where countries like Singapore, with a gross domestic product per capita larger than Germany, are still classed as a Non-Annex 1 (“poor”) country, you can see why there were calls for reform.
So there is no mention of Annex 1 parties anywhere in the document. To make it clear there are different strokes for different folks, the text reiterates the importance of “common but differentiated responsibilities”, or CBDR in the jargon.
But it adds an important rider: “in light of different national circumstances.”
I am told that both China and the US supported this addition. Essentially it means there will be no fixed positions anymore. Countries can and do develop, and with that development will come a different level of commitment on climate change.”
http://www.bbc.com/news/science-environment-30473085
When I look through the four pages of the COP20 agreement, I really see only one definite, significant decision that seems new (although it had always been spoken about):
10. Agrees that each Party’s intended nationally determined contribution towards achieving the objective of the Convention as set out in its Article 2 will represent a progression beyond the current undertaking of that Party.
DO YOU SEE ANYTHING, DEFINITE OF SIGNIFICANCE THAT IS NEW? Most of it just seems like reiterating stuff they already agreed to, or simple administrative stuff that we don’t really need know about.
>”DO YOU SEE ANYTHING, DEFINITE OF SIGNIFICANCE THAT IS NEW?”
Ha, no Tom. Upthread I compiled a list of operative (for want of better term) words that I could identify. Here’s the list with the “strong” language highlighted:
“urges” (4.) <= strong language
“may” (14.)
“call” (15.) <= strong language
“welcomes” (21.)
“encourages” (21.) <= strong language
Those paragraphs are:
4. Urges developed country Parties to provide and mobilize enhanced financial support to developing country Parties for ambitious mitigation and adaptation actions
15. Reiterates its call to developed country Parties, the operating entities of the Financial Mechanism and any other organizations in a position to do so to provide support for the preparation and communication of the intended nationally determined contributions of Parties that may need such support;
21. Welcomes the Lima Climate Action High Level Meeting convened by the President of the Conference of the Parties on 11 December 2014 and encourages the Executive Secretary and the President of the Conference of the Parties to convene an annual high-level event on enhancing implementation of climate action;
https://www.climateconversation.org.nz/downloads/lima-cop-dec-2014-draft-decision.pdf
Nothing new from Lima and deferred until Paris anyway.
And "agrees" (10.) in respect to Article 2 is nothing new and only the Objective of the whole thing. It should go without saying. Paragraph 3 in respect to Article 4 is about Commitments to be decided COP 21. The language in 3 is "commitment":
3. Underscores its commitment to reaching an ambitious agreement in 2015 that reflects the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances
Big difference between Objective and Commitments, the latter being highly contentious for Annex I.
Upthread I linked to a BBC article on this. In it Figueres is very clear Annex I is still on the hook in terms of historical “responsibility”:
“There are three pieces of that concept,” she said [“common but differentiated responsibilities” with the newly added important rider: “in light of different national circumstances”]
“One is the historical responsibility, which is undeniable, of industrialised countries; next is the respective capacities and capabilities of countries, which are an ongoing process; and the third part is actually the national circumstances.
BBC,
“Green campaigners, though, are very upset with the Lima process. Too little had been achieved, too many decisions had been kicked down the road, they said. “These talks delivered basically nothing for the poor and vulnerable in developing countries,” said Harjeet Singh from Action Aid International.”
http://www.bbc.com/news/science-environment-30473085
The major decisions were already kicked down the road before the conference began. Besides, isn’t it all supposed to be about climate?
The BBC piece at http://www.bbc.com/news/science-environment-30473085 is either stupid or dishonest. What is this guy reading? It is certainly not the Lima agreement.
It would have been helpful if he’d quoted relevant sections from the document. I’m always frustrated by these once-removed commentaries. Why not just reproduce the document and cut out the middleman?
For example, this from BBC article,
Distinction ditched
“It divided the world into rich and poor (Annex 1 and Non-Annex 1, in UN jargon). The richer countries would take on carbon-cutting commitments – the poorer ones would not. Here in Lima, that old fashioned view of the world was consigned to history, though not without a desperate struggle.”
I don’t think so. Nothing has changed for Annex I. And Non-Annex I are not about to join Annex I with “carbon-cutting commitments” because the Lima Call for Action suggests they “may”.
BBC again,
“Developing countries resolutely fought to keep this sense of differentiation firmly in the text. They were very upset when the original text about the pledges countries will make next year, used the word “shall”. It seemed to them that poor African countries and small island states were being corralled into making the same level of commitment on climate change as the big boys. No one seriously expects the countries in sub-Saharan Africa will have to do the same as the US and the EU. Eventually the “shall” became a “may”. ”
“May” to Non-Annex I means “not a chance”. Nothing has changed.
Tom, might be worth a skim through the comments in the next post starting about here:
https://www.climateconversation.org.nz/2014/12/cop-agreement-or-cop-out-from-lima/comment-page-1/#comment-1260441
Same topic.
Nice article Tom:
‘Hoodwinked By The Press On Lima Climate Agreement’
http://dailycaller.com/2014/12/16/hoodwinked-by-the-press-on-lima-climate-agreement/
In other news, it’s all the beaver’s fault
http://www.ibtimes.co.uk/climate-change-beavers-boost-emissions-800-million-kg-methane-every-year-1479809
Beavers, and squirrels:
‘The Cutest Climate Change Culprits: Arctic Ground Squirrels’
By digging burrows in permafrost, Arctic ground squirrels help destabilize the vast stores of carbon in the soil
http://www.smithsonianmag.com/smart-news/cutest-climate-change-culprit-arctic-ground-squirrels-180953657/?no-ist
‘Kill the squirrel to save the planet’ – JoNova
And you thought humans were special because they can control the climate. Move over Big-Coal, make way for the squirrels and beavers. They’ve been stirring up the soil releasing CO2, or damning up streams and producing methane.
Daily Mail — Richard Gray “Forget humans, RODENTS are the climate villains: Squirrels and beavers are contributing to global warming far more than previously thought”
Wake up climate simulators, it’s time to add rodent-forcings to the models. Along with anthropogenic forcing (and beaver-effects), that’s three vertebrate families down, and only 181 to go.
Squirrels have been around in some form for 40 million years, but in the last 100 they’ve become dangerous climate movers. Freaky timing that.
Amazing how the world survived with squirrels for so long, and without any windmills.
http://joannenova.com.au/2014/12/kill-the-squirrel-to-save-the-planet/
In other news, the North Sea Oil Industry is “close to collapse’, according to the BBC
http://www.bbc.com/news/business-30525539
Bad timing. Just as the NH land-only winter temperature anomaly is declining at -0.35C
/decade since 1998 (17 years):
http://icecap.us/images/uploads/COOLING_OF_NORTHERN_HEMISPHERE.pdf
>”Goldman Sachs has suggested $930bn of projects, worldwide, could fail to get the go-ahead next year. And the North Sea is seen as one of the higher-cost, lower-return regions for investment.”
Ouch. That will do more to de-carbonize (and de-monitize) the global economy than the UN.
This may sound like good news to the warmistas, but the glorious independent socialist paradise of Scotland is predicated on a healthy North Sea oil industry so that there is someone to pay for all the free child care, education, and subsidise the thousands of useless wind turbines that blight the country
There’s also the multiplier effect:
Macroeconomics – The Multiplier Effect
Why is there a multiplier effect?
Suppose a large corporation decides to build a factory in a small town and that spending on the factory for the first year is $5 million. That $5 million will go to electricians, engineers and other various people building the factory. If MPC is equal to 0.8, those people will spend $4 million on various goods and services. The various business and individual receiving that $4 million will in turn spend $3.2 million and so on.
If the marginal propensity to consume is equal to 0.8 (4 / 5), then the multiplier can be calculated as:
Multiplier = 1 / (1 – MPC) = 1 / (1 – 0.8) = 1 / 0.2 = 5
As a result of the multiplier effect, small changes in investment or government spending can create much larger changes in total output. A positive aspect of the multiplier effect is that macroeconomic policy can effect substantial improvements with relatively small amounts of autonomous expenditures. A negative aspect is that a small decline in business investment can trigger a larger decline in business activity and, thereby, create instability.
http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/multiplier-effect.asp
So if the multiplier is 5 and $930bn is not invested then the circulation lost to the wider economy is 930 x 4 = $3,720bn or $3.72 trillion.
Mind you, Christiana Figueres tells us that “$100 billion is frankly a very, very small sum” and:
“The world needs to decide: Are those $90 trillion going to go into clean technology, clean infrastructure, and above all resilient infrastructure, or or is it going to go into the technologies and infrastructure of the last century?”
http://www.eco-business.com/news/100bn-climate-finance-goal-very-small-sum-un-climate-chief/
If $930bn is an uneconomic investment in the oil sector then it is also uneconomic in competing sectors.
This could get very bad for Scotland given the multiplier effect disappears if the entire oil sector cuts back in the North Sea but it’s the same for OPEC. Take a look at the “breakeven” oil price to pay for all the government spending (Figure 4):
http://www.vox.com/2014/11/28/7302827/oil-prices-opec
Bad for Russia too (from link):
“Oil revenues account for roughly 45 percent of Russia’s budget, and the government’s spending plans for 2015 had assumed that prices would stay in the $100-per-barrel range. If oil continues to stay well below that, Russia will either have to draw down its $74 billion foreign-exchange reserves or cut back on planned spending.”
Sanctions have sent the Ruble into a tailspin so that doesn’t help Russia either.
And Figueres can kiss goodbye to her $90 trillion because a whole lot of that is/was oil money – not that it was ever going to eventuate.
‘Russians spending spree on real estate, cars as ruble plunges’
http://rt.com/business/206147-russians-weak-ruble-savings/
I remember when I first got wind of the sub-prime mortgage crisis was this article in The Economist:
‘Bearish turns’ http://www.economist.com/node/9378742
Word play on Bear Stearns obviously. Given I got bitten by that eventually and also by the oil price slump in the 90s, I’m wondering if we are seeing the beginnings of another global financial shock?
The North Sea oil industry had a major downturn in the late 1980s when I was there. It survived, but there were lots of layoffs and negative equity situations in the property market
The 80s slump was right after US price controls:
http://www.wtrg.com/oil_graphs/oilprice1970.gif
From – ‘History and Analysis -Crude Oil Prices’ http://www.wtrg.com/prices.htm
But take a look at 1998 – $15. I saw a $10 spot price that year. No-one believes me when I tell them that.
The average is $34.77. It has only been above average since 2003 and the Iraq war. The last time it went above average was 1973, the year I left school and started work on highway design in NZ. I saw plans done previously for an 8 lane motorway Auckland to Hamilton when the oil price was $15 in the late 60s. Needless to say, the only roads I worked on were 2 lane including motorway, only occasionally 4 lane.
Brent Crude on the sidebar is $59.80. There’s no reason for that not to drop further to $34.77 or less that I can think of. Might not of course.
There is a suggestion that it will head down to $50 a barrel
Many North Sea project are $80 a barrel break even, as is US shale
It has the potential to get very nasty, US shale is only part of the picture:
‘Iran Leader Says US Not Only Target Of Suspected Saudi Oil Price War’
By Andy Tully | Sun, 14 December 2014
To many observers, OPEC’s refusal to cut production and thus shore up oil prices was the beginning of a price war with the United States so that Saudi Arabia, the cartel’s most influential member, could regain the market share it had been losing during the recent American oil boom. Now Iran’s president, Hassan Rouhani, is saying that Riyadh, through OPEC, is also using “treachery” to harm the economies of fellow oil-producing Muslim states in the Middle East.
“The fall of the oil prices is not just something ordinary and economical. This is not due to only global recession,” Rouhani told his cabinet on Wednesday. “The main reason for it is [a] political conspiracy by certain countries against the interest of the region and the Islamic world and it is only in the interest of some other countries.” Rouhani added, “Iran and people of the region will not forget such conspiracies, or in other words, treachery against the interests of the Muslim world.”
Saudi Arabia wasn’t mentioned by name, but most observers say Riyadh was the focus of Rouhani’s criticism.
In the weeks leading up to OPEC’s crucial meeting on Nov. 27, several members of the cartel, notably Iran and Venezuela, were urging Saudi Arabia to call for a lowering of production levels by at least 1 million barrels a day to balance a supply glut more equitably with lower demand. But Riyadh ignored their pleas, and OPEC kept its cap at 30 million barrels per day. Since June, the average price of crude oil has fallen from about $115 barrel to under $70.
The next day, Iranian Oil Minister Bijan Namdar Zanageh said the Saudi motive was to keep global oil prices low in order to threaten the viability of the US boom in shale oil. Extracting oil from shale is more expensive than conventional methods, and can become unprofitable if the price of oil falls below $65 per barrel. Saudi Arabia’s influence in the cartel is understandable because it produces fully one-third of OPEC’s total output, which itself has a 40 percent share in the global oil market. Riyadh itself, however, has said that any cut in OPEC production would harm its own market share, and has not specified any targets of its production and pricing strategy.
Nevertheless, the Saudis have rejected pleas by OPEC members and even Russia, not a part of the cartel, to cut production. It may make sense for Saudi Arabia to use the price of oil to regain the market share it’s lost in the energy-hungry United States, but it’s not as obvious why it would use oil as a weapon to harm its Muslim neighbors.
One theory is that Riyadh’s motive isn’t economic but political, with a bit of religion thrown in. It holds that Saudi Arabia, a Sunni Muslim country, hopes to weaken both Russia and Shi’a Muslim Iran, who support embattled Syrian President Bashar al-Assad, a longtime critic of Saudi Arabia. Further, this theory holds, al-Assad is a member of the Alawite sect of Shi’a Islam.
http://oilprice.com/Energy/Oil-Prices/Iran-Leaders-Says-US-Not-Only-Target-Of-Suspected-Saudi-Oil-Price-War.html
The NZ Hearld has a handy “12 point” guide on how to deal with the TCCD (“typical climate change denier”
here
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11377926
It has some really interesting references including one called “Skeptical Science” that looks really interesting.
Have I been drinking? Sadly, not yet
>”This article [“12 ways to deal with a climate change denier”] was originally published on The Conversation.”
By Rod Lamberts, Will J Grant (whoever they are).
Being published in The Conversation explains the superficiality. The superficiality explains Rod Lamberts and Will Grant.
Years ago I would have been astounded that the NZ Herald would publish that trash. Now it is no surprise.
But even in that context I still find it hard to comprehend how and why the Herald editors could align the paper with such a low level discourse.
Having said the above re NZ Herald, I have noticed lately that the Climate Change section has disappeared from the online edition (Environment remains).
The entire Environment section has disappeared from the Sydney Morning Herald online edition. I used to check it every day to get the warmist updates from Australia. A good many of those voices have been shut down now in that avenue anyway..
Can you actually imagine being at a Christmas BBQ and quoting Skeptical Science?
That would really be a fun party!
>”Can you actually imagine being at a Christmas BBQ and quoting Skeptical Science?”
Like perhaps http://4hiroshimas.com/
“Our climate has accumulated 2,176,277,340 Hiroshima atomic bombs of heat since 1998”
No I can’t imagine that, well, not at any Christmas BBQs I’m ever likely to attend, and in my present life.
Simple. People love to read drama. It sells newspapers.
It disappeared months ago.