Matt Nolan

The delay of the ETS and forestry

/in , /by

One thing that does upset me about the constant delays to the emissions trading scheme is the impact it has on the poor old forestry industry.

Forestry has struggled from high shipping costs, strong competition from places like Russia which has driven down prices, a large decrease in demand as building activity collapsed (especially in the US), and uncertainty surrounding the ETS.

Finally the government was clear – the ETS will be introduced and if you cut down trees that were planted before 1990 you owe a liability.  As a result, people cut them down before it was introduced – not getting the best price or having to store the timber.  Furthermore, companies started to look at planting trees – as a way of making some money off marginal land.

Now the whole scheme is up in the air – so forestry has to put up with more uncertainty, and people that have acted in the belief that the ETS would occur have been screwed over.

Matt Nolan

Blog personality type

/9 Comments/in /by

At Typealyzer they have they have a tool that finds out the personality type of a blog (ht Greg Mankiw).

Given that this is a mainstream economics blog the result was unsurprising – INTJ – The Scientists. Here is the description:

The long-range thinking and individualistic type. They are especially good at looking at almost anything and figuring out a way of improving it – often with a highly creative and imaginative touch. They are intellectually curious and daring, but might be physically hesitant to try new things.

The Scientists enjoy theoretical work that allows them to use their strong minds and bold creativity. Since they tend to be so abstract and theoretical in their communication they often have a problem communicating their visions to other people and need to learn patience and use concrete examples. Since they are extremely good at concentrating they often have no trouble working alone.


Matt Nolan

Introspection and the development of a value judgment

/3 Comments/in /by

I was amazed to see a recent article by Chris Trotter where he has an “epiphany“. Chris Trotter has always had a strong set of value judgments about what was right policy and the way the world worked – but suddenly he has shown a willingness to evaluate those value-judgments. And for that I have to congratulate him.

Read more

Matt Nolan

A carbon tax?

/36 Comments/in , /by

It sounds like the possibility of a “carbon tax” is back on the table. We have written on the topic before – but it does not appear that we have laid out what I see as the primary costs and benefits of the different options. As a result, I will do that now. In the comments, feel free to add some costs and benefits:

Read more

Matt Nolan

Reserve Bank to slash rates to 5.5%?

/in /by

I get back into the country and everyone is telling me that rates are going down by 100 basis points in the next meeting – however no-one will tell me why!

Read more

Matt Nolan

Missing the point: The emissions trading scheme

/20 Comments/in , /by

A recent opinion article by Graeme Edwards on the NBR site clearly articulated a critique of the emissions trading scheme that I have heard in various forms over the past year.  Not only have I heard this critique from politicians and the media, but people commenting on the blog and other economists have used this critique.  As a result, it is important to point out why this critique is simply wrong.

The critique is simply that the emissions trading scheme is a “scam” because global warming is not the result of carbon emissions, to learn more about smart and green trading, read here the blog post about how to trade fx with high margins.

Even if we agreed with this view the critique is still wrong.  The reason this critique is wrongheaded is simple – the ETS is not supposed to prevent global warming, it is supposed to raise funds to pay for/reduce a liability we owe thanks to the Kyoto protocal.  Now that we are in the Kyoto protocal, we want to look at two simple choices – what is the cost if we stay in, and what is the cost if we leave?  The ETS was determined to be the least cost way of paying for the liability if we stayed in the scheme, and it was also determined to be of a lower cost than leaving the scheme (relative to losing international prestige and possible new trade barriers if we leave).

As a result, even if it was true that man wasn’t warming the planet with carbon introducing an ETS is still the best policy – as long as we believe that it is of a lower cost than these other potential options.  The debate should lie with the cost of different options – whether global warming actually exists is irrelevant.