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It did not read like that to me at all: page 12: "various approaches could reduce financial hurdles..."

They try to spin it as if it is an access to money issue but I don't believe that to be the case. The vast majority of businesses and people have access to capital if they wish it. The issue is the ROI must be larger than the cost of capital (i.e. bank interest). Only a small subset of people would have access to capital without debt and this means doing nothing can often have a better ROI than doing something.

The only way to close this gap is to offer subsidies which are simply a way to confiscate capital from people and force them to spend it on investments which the government decides are better. This causes economic harm.

people and businesses are unaware of potential conservation investments

Add people with product to sell have an incentive to educate people on these investments. There is no need for government intervention if there is a real economic return.

there is a choice between conservation investment and no investment, where an extra incentive would increase economic activity and help the economy

All available capital is allocated. Some people choose to keep part of the capital in low risk investments because to hedge against future cash flow problems. Encouraging people to take more risk can be good for the economy but there are likely many ways to take risks which have a higher ROI than marginal energy efficiency measures. Edited by TimG
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They try to spin it as if it is an access to money issue but I don't believe that to be the case. The vast majority of businesses and people have access to capital if they wish it. The issue is the ROI must be larger than the cost of capital (i.e. bank interest). Only a small subset of people would have access to capital without debt and this means doing nothing can often have a better ROI than doing something.

In my experience, ROI must be > 20%. Some companies specify a payback period of 3 or even 2 years.

The only way to close this gap is to offer subsidies which are simply a way to confiscate capital from people and force them to spend it on investments which the government decides are better. This causes economic harm.

This is not the only way. Another way is to introduce a carbon tax. The tax can be revenue-neutral with an offsetting deduction in payroll tax for example.

All available capital is allocated.

No it is not. This is like sying that the market prices all goods and services perfectly.

I find it very hard to beleive that someone can be against energy efficiency!

Edited by carepov
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This is not the only way. Another way is to introduce a carbon tax. The tax can be revenue-neutral with an offsetting deduction in payroll tax for example.

Unlikely. For large users lobbying for exceptions to the tax usually provides a higher ROI than actually investing in efficiency improvements. The tax would never be high enough to change consumer choices because energy is a relatively small part of most people's expenses.

No it is not. This is like saying that the market prices all goods and services perfectly.

No - it is like saying everyone lives somewhere. If capital exists it is being used. Capital can be created with bank loans but that comes with a cost. There non-monetary reasons why capital may be used in less productive investments but it is rather arrogant of the government to assume that its non-monetary priorities are more important that individual non-monetary priorities.

I find it very hard to beleive that someone can be against energy efficiency!

I am against governments harming the economy by diverting capital from more productive uses into improvements in efficiency that have no economic merit on their own. Edited by TimG
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I am against governments harming the economy by diverting capital from more productive uses into improvements in efficiency that have no economic merit on their own.

So am I. However, odds are $1.2 trillion in savings, for a $520 billion investment has economic merit and will not harm the economy.

In theory, some capital will be diverted from "better" inverstments into conservation investments. However, in today's econoimic climate, people and businesses are awash in cheap capital. The reality is that more of today's idle capital will be used to invest in projects that conserve energy - boosting the economy. This will also save cash year after year and allow people and companies to make even more investments.

***

Another thing that governments can do is to allow the construction of nuclear plants and pipelines.

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So am I. However, odds are $1.2 trillion in savings, for a $520 billion investment has economic merit and will not harm the economy.

When has a government funded project come in on budget? The risks are much higher when you talk about deploying new technology - if the technology fails to perform as advertised the ROI disappears very fast. IOW - you look at those numbers and see a 2x ROI - I look at them and see a negative ROI because I assume costs will exceed estimates and technology will fail to deliver on expectations.

Another thing that governments can do is to allow the construction of nuclear plants and pipelines.

Can't agree more - especially pipelines funded entirely with private funds. Edited by TimG
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When has a government funded project come in on budget? The risks are much higher when you talk about deploying new technology

typically, it's only government that will take the risk in deploying new technology.

Can't agree more - especially pipelines funded entirely with private funds.

nice sentiment... too bad it doesn't carry through to ensure appropriate private funding (in escrow) to cover the costs... the full liability costs... associated with any resulting environmental impact/damage. Oh wait, that's what industry thinks government (i.e., the taxpayer) is for, right?

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typically, it's only government that will take the risk in deploying new technology.

nice sentiment... too bad it doesn't carry through to ensure appropriate private funding (in escrow) to cover the costs... the full liability costs... associated with any resulting environmental impact/damage. Oh wait, that's what industry thinks government (i.e., the taxpayer) is for, right?

Well we know what it cost us to clean up the "tar ponds", so I wonder what it will cost to do the same when it comes to it with the "tar sands"

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When has a government funded project come in on budget? The risks are much higher when you talk about deploying new technology - if the technology fails to perform as advertised the ROI disappears very fast. IOW - you look at those numbers and see a 2x ROI - I look at them and see a negative ROI because I assume costs will exceed estimates and technology will fail to deliver on expectations.

Have a look at the chart on page 13. Most conservation efforts are not new/emerging technology. It is proven/piloted common sense stuff.

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Have a look at the chart on page 13. Most conservation efforts are not new/emerging technology. It is proven/piloted common sense stuff.

I am not sure I am looking at the same document.

What I see are a bunch of suggestions that I see as BAU counted as "savings". For example, people running factories are constantly looking to reduce costs and will deploy energy efficiency measures as soon as they can. Purchases of more efficient refrigerators is another BAU countered as "savings" since most refrigerators running today will be replaced in 20 years with more efficient models.

This suggests to me that the real savings are actually much smaller than claimed.

Edited by TimG
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I am not sure I am looking at the same document.

What I see are a bunch of suggestions that I see as BAU counted as "savings". For example, people running factories are constantly looking to reduce costs and will deploy energy efficiency measures as soon as they can. Purchases of more efficient refrigerators is another BAU countered as "savings" since most refrigerators running today will be replaced in 20 years with more efficient models.

This suggests to me that the real savings are actually much smaller than claimed.

Here's the study: that study.

The authors compare increased savings (-23%) with BAU (+14%), and clearly stated on page 8: "BAU forecasts have incorporated expectations for greater energy efficiency". BAU savings are not double-counted.

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The authors compare increased savings (-23%) with BAU (+14%), and clearly stated on page 8: "BAU forecasts have incorporated expectations for greater energy efficiency". BAU savings are not double-counted.

I am saying that the authors are exaggerating the potential savings by excluding stuff from the BAU which should be part of the BAU. I gave concrete examples of stuff excluded from the BAU in my post above. Edited by TimG
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no - without my personal regard for that study, the efficiency findings are over and above BAU..... and land use/credits are not, as you state, "included".

Here's the study: that study.

The authors compare increased savings (-23%) with BAU (+14%), and clearly stated on page 8: "BAU forecasts have incorporated expectations for greater energy efficiency". BAU savings are not double-counted.

oh, that study! No problemo! The waldo presumes not quoting was just an innocent oversight. In any case, it appears after repeatedly making claims that the study's efficiency findings were simply within BAU, given MLW member 'TimGs' last post, he may... repeat may... just be reconsidering!

---

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They wrote that they did not do this. Do you think that they are lying?

No. But if you go an look at their source for the BAU the source appears to assume 2008 technology for fridges and that expensive high efficiency fridges will not become the cheapest available in 10 years. IOW - the BAU estimates are assumptions that may not necessarily be reasonable which undermines the potential savings identified in this report.

This sort comes back to my original argument: if an energy efficiency measure really pays for itself the market will eventually see these options deployed and the economy will benefit. If an energy efficiency measure requires government subsidies (direct or indirect via 'financing options') then it is a net drag on the economy. There could be a few exceptions that don't fall into latter group but they are likely to be the minority.

The one constructive thing the government can do is work with industry to increase efficiency of products put on the market but this could turn into a huge problem if government imposes requirements that industry cannot meet at a reasonable price.

Edited by TimG
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The one constructive thing the government can do is work with industry to increase efficiency of products put on the market but this could turn into a huge problem if government imposes requirements that industry cannot meet at a reasonable price.

Yes, like how the pollution and efficiency standards put on cars was such a disaster. Now the air isn't even brown in California anymore.
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Yes, like how the pollution and efficiency standards put on cars was such a disaster. Now the air isn't even brown in California anymore.

Excellent comment. Anyone who doesn't appreciate those standards having been brought in should go take a walk on the streets of Hong Kong, Mexico City, Port aux Prince, Mumbay etc., etc. After their eyes are watering uncontrollably and they are ready to puke, the value of those standards will be fully appreciated. Some times what human's need to live is more important than what industry would like for their bottom line.

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No. But if you go an look at their source for the BAU the source appears to assume 2008 technology for fridges and that expensive high efficiency fridges will not become the cheapest available in 10 years. IOW - the BAU estimates are assumptions that may not necessarily be reasonable which undermines the potential savings identified in this report.

This sort comes back to my original argument: if an energy efficiency measure really pays for itself the market will eventually see these options deployed and the economy will benefit. If an energy efficiency measure requires government subsidies (direct or indirect via 'financing options') then it is a net drag on the economy. There could be a few exceptions that don't fall into latter group but they are likely to be the minority.

The one constructive thing the government can do is work with industry to increase efficiency of products put on the market but this could turn into a huge problem if government imposes requirements that industry cannot meet at a reasonable price.

As stated in the report, the BAU assumes continued improvements in efficiencies at the same rate as they are currently improving.

And speaking of all the improvements in energy efficiency over the past 20 years or so, what percentage are a result of government programs/regulations and what percentage came from "the market"?

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As stated in the report, the BAU assumes continued improvements in efficiencies at the same rate as they are currently improving.

I did not get that from reading it. They appear to offer multiple scenarios where technology is fixed or assume people buy the most efficient option regardless of price.

And speaking of all the improvements in energy efficiency over the past 20 years or so, what percentage are a result of government programs/regulations and what percentage came from "the market"?

As I stated above - regulations where the government works with industry to set standards that are achievable are a good thing. Education programs like Energuide are also helpful (i.e. forcing energy consumption to be a clearly reported feature when buying appliances). What does not work are when the government starts subsidizing energy saving efforts that are not economic on their own. What also does not work are the complex fuel economy rules which force car makers to buy "credits" to meet standards that cannot be met. Edited by TimG
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Tim, you can't have it both ways. In one breath you decry all government regulation, then when evidence of its purpose and success are thrown at you, you say they're good when government works with industry. It's just like your climate change denial. You deny that it's a problem in one breath, then claim it is a problem but we shouldn't do anything about it in the next. Of course, you'll just say people aren't paying attention to your posts, but the fact is you keep moving the goalposts and won't admit it.

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Tim, you can't have it both ways. In one breath you decry all government regulation, then when evidence of its purpose and success are thrown at you, you say they're good when government works with industry.

I am sorry that you cannot understand that concept that "if X worked that does not mean that Y will work". I made it clear what criteria separates what I think will work and what will not work. I am consistently opposed to subsidies but often do support government setting some ground rules for the market to operate under.

It's just like your climate change denial. You deny that it's a problem in one breath, then claim it is a problem but we shouldn't do anything about it in the next. Of course, you'll just say people aren't paying attention to your posts, but the fact is you keep moving the goalposts and won't admit it.

Well in this case it is pretty clear you are not reading what I say in the context of where it where it was said. I have nothing but contempt for many of the so-called "scientists" working in climate science but notwithstanding my contempt I don't think they are wrong about the basic relationship between CO2 and temperature. A post where I am expressing my contempt for climate scientists and their often bogus claims does not contradict my general opinion of the science. Edited by TimG
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I'm just waiting for the nay-sayers to cite what has been happening in the last 10 days or so as irrefutible proof against GW. You know that is gonna come.

The AGW hysterians have no compunction about using localized weather patterns to promote their claims. Moving the goal posts for everyone else seems to be the totality of their defense.

I'm just waiting for the nay-sayers to cite what has been happening in the last 10 days or so as irrefutible proof against GW. You know that is gonna come.

yup; there's certainly no shortage of MLW denier types who haven't a clue how localized weather event trends and their, as appropriate, associated increased frequency and/or increased intensity, are evaluated when considering GW impacts upon them.
I am not so stupid as to mistake weather for climate. The warmistas should not be so stupid as to mistake cycles for short-term trends. The events of the last several weeks merely illustrates that it can get cold, contrary to some who had predicted that snow would be a historical event for today's students.
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I am not so stupid as to mistake weather for climate. The warmistas should not be so stupid as to mistake cycles for short-term trends. The events of the last several weeks merely illustrates that it can get cold, contrary to some who had predicted that snow would be a historical event for today's students.

I don't know who these "warmistas" are that you refer to and obviously seem to listen to, but mainstream science has long since concluded the world is warming. They also have predicted that as it did there would be spikes, both up and down, but with an overall rise. One of the most powerful tools that has enhanced that research has been the advent of satellite technology. The discussion now really is how much, how fast, and how do we deal with it. I guess these "warmistas" have frightened you by saying the world is about to end or some such. There are always those types around most issues.

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BS. I challenged you to provide proof of this "prediction" and you refused. At this point it is nothing but crap you are making up.

Well about when the term "global warming" morphed into "climate change" there were these "predictions." However, it's akin to saying that hot weather, cold weather, rain, snow, droughts, hurricanes, and lack of hurricanes would be predicted by these trends.

So would my son's tummy ache.

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