Why Are Green Buildings So Inefficient in Their Energy Usage?

Why Don’t Green Buildings Live Up to Hype on Energy Efficiency?

Analysts call it the “energy performance gap” — the difference between promised energy savings in green buildings and the actual savings delivered. The problem, researchers say, is inept modeling systems that fail to capture how buildings really work.

By Richard Conniff • May 25, 2017

Not long ago in the southwest of England, a local community set out to replace a 1960s-vintage school with a new building using triple-pane windows and super-insulated walls to achieve the highest possible energy efficiency. The new school proudly opened on the same site as the old one, with the same number of students, and the same head person—and was soon burning more energy in a month than the old building had in a year.

The underfloor heating system in the new building was so badly designed that the windows automatically opened to dump heat several times a day even in winter.  A camera in the parking lot somehow got wired as if it were a thermal sensor, and put out a call for energy any time anything passed in front of the lens.  It was “a catalogue of disasters,” according to David Coley, a University of Bath specialist who came in to investigate.

Many of the disasters were traceable to the building energy model, a software simulation of energy use that is a critical step in designing any building intended to be green. Among other errors, the designers had extrapolated their plan from a simplified model of an isolated classroom set in a flat landscape, with full sun for much of the day. That dictated window tinting and shading to reduce solar gain. Nobody seems to have noticed that the new school actually stood in a valley surrounded by shade trees and needed all the solar gain it could get.  The classrooms were so dark the lights had to be on all day. 

It was an extreme case.  But it was also a good example, according to Coley, of how overly optimistic energy modeling helps cause the “energy performance gap,” a problem that has become frustratingly familiar in green building projects.   The performance gap refers to the failure of energy improvements, often undertaken at great expense, to deliver some (or occasionally all) of the promised savings. A study last year of refurbished apartment buildings in Germany, for instance, found that they missed the predicted energy savings by anywhere from 5 to 28 percent. In Britain, an evaluation of 50 “leading-edge modern buildings,” from supermarkets to health care centers, reported that they “were routinely using up to 3.5 times more energy than their design had allowed for” — and producing on average 3.8 times the predicted carbon emissions

Buildings account for 40 percent of climate change emissions and are the fastest growing source of emissions.

The performance gap is “a vast, terrible enormous problem,” in the words of one building technology specialist, and that’s not an exaggeration.  Though much of the public concern about energy consumption and climate change focuses on automotive miles-per-gallon, the entire transport sector — including trains, planes, ships, trucks, and cars — accounts for just 26 percent of U.S. climate change emissions.  Buildings come in at 40 percent, and they are the fastest growing source of emissions, according to the U.S. Green Building Council.

Eliminating the performance gap matters particularly for European Union nations, which have a legally binding commitment to reduce emissions by 80 to 95 percent below 1990 levels by mid-century.  But knowing with confidence what savings will result matters for anybody trying to figure out how much to invest in a particular energy improvement.

Researchers have generally blamed the performance gap on careless work by builders, overly complicated energy-saving technology, or the bad behaviors of the eventual occupants of a building.  But in a new study, Coley and his co-authors put much of the blame on inept energy modeling.  The title of the study asks the provocative question “Are Modelers Literate?” Even more provocatively, a press release from the University of Bath likens the misleading claims about building energy performance to the Volkswagen emissions scandal, in which actual emissions from diesel engine cars were up to 40 times higher than “the performance promised by the car manufacturer.”

For their study, Coley and his co-authors surveyed 108 building industry professionals — architects, engineers, and energy consultants — who routinely use energy performance models.  To keep the problem simple, the researchers asked participants to look at a typical British semi-detached home recently updated to meet current building codes. Then they asked test subjects to rank which improvements made the most difference to energy performance. Their answers had little correlation with objective reality, as determined by a study monitoring the actual energy performance of that home hour-by-hour over the course of a year. A quarter of the test subjects made judgments “that appeared worse than a person responding at random,” according to the study, which concluded that the sample of modelers, “and by implication the population of building modelers, cannot be considered modeling literate.”

‘We have cases where modelers will come up with a savings measure that is more than the energy use of the house,’ says one scientist.

Predictably, that conclusion raised hackles. “The sample seems odd to me,” said Evan Mills, a building technology specialist at Lawrence Berkeley National Laboratory, “to include so many people who are junior in the practice, and then to be criticizing the industry at large.” He noted that almost two-thirds of the 108 test subjects had five years or less experience in construction.  But Coley and his co-authors found that even test subjects with “higher-level qualifications, or having many years of experience in modeling,” were no more accurate than their juniors.

In any case, Mills acknowledged, “the performance gap is real, and we must be aware of models not properly capturing things. We have cases where modelers will come up with a savings measure that is more than the energy use of the house, because they are just working with the model,” and not paying attention to the real house.

That sort of problem — energy models showing unreasonable results — also turns up at the preliminary stage on 50 percent of projects going through the LEED certification process, said Gail Hampsmire of the U.S. Green Building Council.   Designers have a tendency to take a “black box” approach, providing whatever inputs a particular energy model requires and then accepting the outputs “without evaluating the reasonability of those results,” she said. “You always have the issue of garbage in/garbage out, and the capability of the modeler to identify whether they are getting garbage out is critical.”

So what’s the fix?  The current accreditation requirements for energy modelers are “very gentle,” said Coley, but “when you’re trying to get something off the ground relatively quickly, you can’t send everybody back to college for three years.” In any case, the problem isn’t really education in the formal sense.

“It has to do with feedback,” he said, or the lack of it. The culture of building construction says it’s perfectly reasonable for architects — but not energy modelers —to travel hundreds of miles to see how the actual building compares with what they designed.  For energy modelers, there’s not even an expectation that they’ll get on the phone with the building manager at year one and ask how energy usage compares with the original model. As a result, said Coley, energy modeling can become like theoretical physics: “You can very easily create a whole web of theories, and then you find yourself studying the physics of your theories, not the physics of the real world.”

The organization that gives LEED certification is now requiring that developers post actual energy usage on an online data base.

The answer, he suggested, is a regulatory requirement that modelers follow up on their work by routinely checking their predictions against a building’s actual energy consumption. A system of modest inducements could also make that feedback more broadly available — for instance, by promising to take three weeks off the planning permissions process for developers who commit to posting actual energy usage to an online database. The Green Building Council has begun to require that sort of reporting for projects seeking LEED certification, said Hampsmire, with an online platform now in development “for building owners to track their own performance and compare it with other buildings.”

A second problem, according to Coley, is the tendency of government agencies to require simplified energy models at the start of the design process.  The requirements often include certain uniform assumptions about energy use, making it easier to compare one building with another.  “Because you have to do that at the start, it becomes the default, and this sets up a kind of ‘Alice in Wonderland’ world, and it’s not surprising that modelers model this artificial world.”  But at least in the United States that has become less of a problem in recent years, according to Hampsmire.  Current building code requirements are “fairly good,” she said. “They don’t say, ‘Model energy use for a building occupied eight hours a day,’” or some other arbitrary standard. Instead, “they specifically state that all energy use has to be modeled as anticipated.”

The takeaway from all this isn’t to discredit energy modeling but to improve it.  Builders increasingly need realistic modeling, said Coley, by people with a deep knowledge of building physics and at least as much experience with real buildings as with energy models. Without that, the result will be even more $500-million office blocks with too much glass on the southern exposure, causing everybody inside to bake on a hot summer afternoon.  Without smart energy modeling, the result will be a world spinning even faster into out-of-control climate change.

“This isn’t rocket science,” said the Berkeley Laboratory’s Mills.  But then he added, “It’s harder than rocket science.”

Richard Conniff is a National Magazine Award-winning writer whose articles have appeared in The New York Times, Smithsonian, The Atlantic, National Geographic, and other publications. His latest book is House of Lost Worlds: Dinosaurs, Dynasties, and the Story of Life on Earth. He is a frequent contributor to Yale Environment 360.

Doom and gloom won't save the world

Doom and gloom won't save the world

The best way to encourage conservation is to share our success stories, not to write obituaries for the planet, says Nancy Knowlton.

18 April 2017

Early in my career, I witnessed first-hand the depressing side of the job. The coral reefs off the north coast of Jamaica, where I had spent several magical years as a graduate student in the mid 1970s, were struck by a category-5 hurricane in 1980. Then came mysterious ailments that devastated two of the most important coral species, along with a species of sea urchin that, because of previous overfishing, had become the last defence against a tide of seaweed that was choking the struggling coral. Ten years after my first dive in Jamaica, the reefs I'd studied were all but gone.

These days, students studying reefs spend their time investigating bleaching and acidification, terms that were never mentioned when I took my first coral-reef class in 1974.

As we observe Earth Day on 22 April, it's worth recounting how researchers like myself have managed to rebound a bit from all this depressing news.

In 2001, my colleagues and I at the Scripps Institution of Oceanography in San Diego, California, founded the Center for Marine Biodiversity and Conservation. Core to our programme was an interdisciplinary summer course, which brought together students ranging from marine biologists to physical oceanographers, economists and anthropologists. We thought of it as medical school for the ocean.

We began with what we thought was a logical starting point — the state of the ocean. These were depressing lectures. Doom and gloom consumed the entire course. Basically, we were training our students to write ever-more-refined obituaries for the seas.

We quickly realized the folly of focusing so much on the problems — we could see it on our students' faces. There had to be another way. After all, in medical school the focus is on preserving life, not describing death. So in 2009, my husband Jeremy Jackson and I began running symposia at academic meetings called 'Beyond the Obituaries', which were about success stories in ocean conservation. A small workshop in 2014 led to a Twitter campaign, #OceanOptimism, which has now reached more than 76 million Twitter accounts.

On the weekend of Earth Day, the first ever Earth Optimism Summits will take place. In Washington DC, more than 235 scientists and civic leaders from 24 countries will share their success stories of conservation on land and water. Sister summits and activities are being held in nine countries around the globe. The goal is to learn from each other, and change the conservation conversation.

This journey has taught me several lessons. First, unrelenting doom and gloom in the absence of solutions is not effective. Social scientists have known for decades that large problems without solutions lead to apathy, not action. Yet much of conservation communication still seems to be focused on scaring people into caring.

As a community, we seem to be addicted to despair. For example, when the West Indian manatee (Trichechus manatus) was bumped down from endangered to threatened status under the US Endangered Species Act last month, many environmentalists protested and worried about relaxed protections, rather than celebrating the practices (boat speed limits and winter-refuge safeguards) that enabled the animals' partial recovery.

Second, an extraordinary number of success stories are largely unknown — not just to the general public but also to conservation scientists, policymakers and philanthropists. Searching Twitter for #OceanOptimism (and its offspring #EarthOptimism) is still one of the best ways to find examples. My favourite instance of unrecognized success was the 2015 announcement of the recovery of seagrasses in Tampa Bay, Florida, to 1950s levels. Of the 300 or so people I have mentioned this to (including 200 marine scientists at a research meeting in Tampa), fewer than 10 were aware of this important conservation achievement, which was the result of keeping fertilizer-filled run-off waters from flowing into the bay. Elsewhere, stocks of Chilean loco (an edible sea snail), Madagascar octopus and marine fish in parts of the Philippines are healthier thanks to the establishment of small-scale, locally empowered, sustainable fisheries.

Many young people have told me and my colleagues that our messages of optimism energize them and provide direction and inspiration. They also tell us that they almost left the field because so many of their courses were dispiriting.

Let me be clear: I am no Pollyanna when it comes to the future of the planet. The catastrophic coral bleaching of the Great Barrier Reef this year and last cannot be denied. The problems remain huge: daunting even. Conservation is often two steps forward, one step back — or frustratingly, one step forward, two steps back.

But we must also celebrate successes: species brought back from the brink of extinction, landscapes and seascapes protected or newly restored, and the integration of sustainability into corporate boardroom decisions. Even when these success stories are shared, we often undermine them with caveats and bury the story of how they were accomplished. Yet talking about these successes is how we will learn to expand them.

Nature

544,

271

(20 April 2017)

doi:10.1038/544271a

A Century Later, Lenin's Legacy Lives On

Ian Morris, Stratfor

 On Easter Sunday exactly a century ago, a train pulled out of Zurich's central station, beginning one of the most famous railroad journeys of all time. On board were Vladimir Lenin, his wife and 30 of their closest friends. Eight days later, after two boat trips and a second train ride, the little band of revolutionaries reached Russia. The rest, of course, is history.

Shipping Lenin home in a sealed train to foment a revolution and thereby take Russia out of the First World War was the idea of Arthur Zimmermann, the German foreign minister at the time. Germany launched several similar plots in that stage of the war, including inciting a Republican rising in Ireland, Islamist jihadism in the Middle East and — the one for which Zimmermann is best remembered — a Mexican invasion of Texas. All except the Russian gambit failed; but though Lenin succeeded in doing what Zimmermann wanted, he succeeded in several other, very different ways, too.

While Lenin's ambitions were chiefly sociological and ideological — to create a socialist paradise — Zimmermann's were more geostrategic, and through most of the 20th century it seemed that Zimmermann had gotten more of what he wanted than Lenin had. On Easter 1918, one year after Lenin's trip, his most obvious accomplishment was getting Russia out of the war and freeing up a million German troops for a last great offensive on the Western Front, exactly as Zimmermann had intended. By Easter 1927, however, a decade after the train left Zurich, Lenin's most important consequence seemed to be the creation of a crusading communist state spreading revolution across Europe. By Easter 1967, half a century after Lenin, his main legacy appeared to be a nuclear-armed superpower capable of ending civilization if the doctrine of mutual assured destruction broke down.
Seen from Easter 2017, however, the geopolitical effects that were so important in the 20th century seem to have faded. Pundits regularly suggest that Russian President Vladimir Putin's grand strategy differs little from that of the czars before him. But that doesn't mean Zimmermann and Lenin have been consigned, as Trotsky said of Lenin's socialist rivals, to the scrapheap of history. Rather, the importance of Easter 1917 now looks to have more in common with Lenin's sociological and ideological aims than with Zimmermann's geostrategic ambitions.

Imposing Equality, by Any Means Necessary

In 1962, just as the geostrategic consequences of Lenin's trip were reaching a terrifying peak in the Cuban missile crisis, the British Marxist historian Eric Hobsbawm published a classic book called The Age of Revolution. In it he argued that the modern world had been born between 1789 and 1848 in linked economic and political revolutions. On one hand, the British Industrial Revolution gave humanity access to undreamed-of amounts of energy trapped in fossil fuels; on the other, political revolutionaries argued over what kind of society should replace the monarchies and aristocracies that had ruled almost every state on Earth for 5,000 years.

In an earlier column, Jason Lopata and I drew attention to the account that anthropologist Ernest Gellner offered in his 1983 book, Nations and Nationalism, of what he called "Agraria" — a simplified model of how premodern states worked. In these agrarian states, Gellner suggested, "the ruling class forms a small minority of the population, rigidly separate from the great majority of direct agricultural producers, or peasants.

"Below the horizontally stratified minority at the top," Gellner went on, "there is another world, that of the laterally insulated petty communities of the lay members of society" — that is, peasant villages. Gellner called these villages "laterally insulated" because peasants did not get out much: Throughout most of history, few farmers went more than a day's walk from their birthplaces. In Agraria, peasants in each district tended to have their own dialects, rituals and traditions — living, says Gellner, "inward-turned lives, tied to the locality by economic need if not by political prescription."

 In Gellner's diagram, broken vertical lines symbolize the fragmentation of the peasant world, while a solid line marks the chasm dividing the masses and elite. States of this kind persisted for five millennia because, at the end of the day, both masses and elites needed each other. Peasants could get on with farming only if managerial elites established a monopoly on violence and used it to back up courts of law and other institutions that made peace, trade and markets possible. Meanwhile, managerial elites could survive only if peasants paid taxes to support them (often in considerable luxury). Agraria was basically a protection racket.

The Industrial Revolution swept Agraria away. To take advantage of the flood of energy released by coal and later oil, societies needed much more sophisticated divisions of labor. "Perpetually growing productivity," Gellner noted, "requires that this division be not merely complex, but also perpetually, and often rapidly, changing." This meant that rather than staying on the farm and doing as their forefathers had done, people had to be able to learn new skills and move where labor was needed. "The immediate consequence of this new kind of mobility is a certain kind of egalitarianism," said Gellner. "Modern society is not mobile because it is egalitarian; it is egalitarian because it is mobile."
Consequently, a diagram of industrial society would not be full of lines, like the diagram of Agraria. It would be an empty rectangle, within which people move freely — because, as Gellner put it, "A society which is destined to a permanent game of musical chairs cannot erect deep barriers of rank, of caste or estate, between the various sets of chairs which it possesses."

Agraria had worked by drawing lines, not just between the elite and the masses but also between men and women, free and enslaved, believers and heretics, pure and defiled, and countless other categories. Each group was assigned its place in a complex hierarchy of mutual obligations and privileges, guaranteed by the divine will (as explained by a priesthood) and state violence. Fossil-fuel society, by contrast, needed to erase lines, creating a homogeneous community of interchangeable citizens, each equally free to move to whatever place they would be most useful.

As a result, if traditional expectations about how people should worship, whom they could marry, and what jobs they might do interfered with the growth of the markets needed to supply the labor fueling an industrialized economy, and to buy the goods and services that it could produce in such abundance, then those traditions had to go. "All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify," Marx and Engels rightly observed in 1848. "All that is solid melts into air."
The great challenge of the past two centuries has been how to erase the lines within Agraria. The shift was always going to be traumatic; but in Western Europe and its overseas settler colonies, it was never as violent as Marx and Engels had expected. This was partly because traditional agrarian elites mostly mounted fighting retreats across the 19th century. Rather than making last-ditch stands, they compromised with their critics and even became critics themselves, thereby hanging onto much of their wealth and power as the world changed around them. In the face of such slippery tactics, the critics increasingly turned toward buying cooperation by pursuing liberal, nonviolent transformation.
Yet this hadn't always been the case. In Britain, the kind of new elite that Charles Dickens' novels criticized so savagely initially herded paupers into workhouses and deported felons to Australia to create a more open society, while Euro-Americans first drove Native Americans beyond their borders and then confined them on reservations. But as the 19th century wore on, that changed. As early as the 1830s, British governments legislated on workplace conditions, and in the 1860s the United States deployed massive state violence — not to expel or eliminate African-Americans but to turn them (in principle, at least) into full citizens. By the 1870s, most liberal regimes had legalized trade unions and introduced free compulsory primary education. Some governments even offered savings plans for retirement, public health programs and unemployment insurance. The very word "liberal" changed its meaning, from someone who believed in having the smallest possible state consistent with protecting the individual pursuit of wealth, to someone who believed in governments big enough to intervene to guarantee equal liberties for everyone.

The physical energy released by fossil fuels and the social energy released by the new liberal deal between governments and citizens made Western societies vastly richer and stronger than any others in the world. And unsurprisingly, some non-Westerners began pursuing industrial revolutions of their own. Like the Western liberals, they recognized the need to sweep away Agraria's ancient internal barriers. But outside the West, their opponents were often much more deeply entrenched, and much more willing to shed blood to defend the old ways. Predictably, perhaps, non-Western reformers proved equally willing to try violent, illiberal paths toward a world of homogeneous, interchangeable comrades.

Lenin's legacy for the 21st century was in being the first person to show how an illiberal path to modernity could work.

A Permanent or Temporary Triumph?

In the late 19th century, industrializing autocrats generally did well in their uppermost aim of holding onto power. Between 1911 and 1925, however, all of them — Qing China, Romanov Russia, Habsburg Austria-Hungary, Hohenzollern Germany, Ottoman Turkey and Qajar Persia — collapsed under the strain of mobilizing to fight modern wars against more liberal powers. As the historian Robert Gerwarth shows in his recent book, The Vanquished: Why the First World War Failed to End, the violence this process let loose was often even worse than that of World War I, and almost all of these ex-Agrarias ended up on extremely illiberal paths toward modernization.

Where liberals used state power to erase boundaries by making everyone equally free to exercise the rights of citizens, illiberals used state power to erase the people themselves if they did not seem to fit into the in-group, defined in terms of class by communists and race by fascists. The path away from Agraria that Lenin forged was deeply paradoxical, subjecting citizens to harsh discipline in the name of equality, deploying armies of slave laborers in the name of economic progress, and swinging back toward treating rulers as semi-divine superhumans in the name of the people. The original cult of personality was Lenin's own, implying at his funeral in 1924 that concentrating all power in the hands of one man was actually the same thing as giving all power to the people, because the Communist Party's leaders were so wise that they singlehandedly embodied the general will. Between 1917 and 1939, these wise leaders killed more than 10 million of their comrades who did not fit.

There were several points in the 20th century, especially during the 1930s and 1970s, when Lenin's illiberal path toward industrial society seemed to be moving faster than the liberal one. 1945 and 1989, however, seemed to falsify such claims, the latter so decisively that political scientist Francis Fukuyama famously announced that the world had reached "the end of history" because liberal democracy had outperformed all its conceivable rivals. Freedom House even provided statistical support for this claim, calculating that while in 1972 just 29 percent of the world's societies were free and 46 percent unfree, by 1998 the proportions had been reversed, with 46 percent free and 26 percent unfree.

In the nearly 10 years since the financial crisis of 2008, however, the forward march of liberalism has been checked. Since the 1980s, China's post-Maoist version of illiberal development has consistently provided faster economic growth than the liberal versions. Admittedly, it began from a much lower starting point than the West and, despite being able to pluck a lot of low-hanging fruit, has generated environmental disaster, massive corruption and violent protests. But some observers nonetheless conclude that illiberal policies might be the best option for growth in the 21st century.

Voters in Turkey, Hungary and Russia certainly seem to think so, returning to power the self-proclaimed "illiberal democrats" Recep Tayyip Erdogan, Viktor Orban and Vladimir Putin, all while 2016 brought nationalist and populist backlashes against liberal globalization to the Western core. Comparing Donald Trump, Theresa May or Marine Le Pen to Hitler — as some shrill journalists do — reveals a profound lack of perspective, but the fact remains that in the 2010s, more people seem attracted to illiberal paths than at any time in the past 40 years. Lenin's legacy continues to mutate; today it is the example he set as the founding father of the first modern but illiberal society that most commands our attention. And a century after Lenin's train left Zurich's central station, the long-term triumph of liberalism is once again in question.

 

Even union economists accept cutting penalty rates creates jobs

Even union economists accept cutting penalty rates creates jobs

by Aaron Patrick, Australian Financial Review

Even the brains behind the unions' penalty rates argument believe that lowering the cost of employees on Saturdays and Sunday will create jobs. All that the experts involved in the case disagree on is how many.

"There may be some small [positive] employment effect in the sector," says Professor Jeff Borland, a Melbourne University economist who spent six hours in the stand at the Fair Work Commission fighting the change on behalf of the United Voice union.

The Labor Party and Australian Council of Trade Unions don't accept that cutting regulated wages can create jobs. They have mounted a ferocious campaign against the Fair Work Commission's modest reduction in penalty rates on weekends in restaurants, bars, hotels, shops and pharmacies.

Reducing the standard rate for full-time and part-time staff from 175 per cent of to 150 per cent on Sundays (casuals are unaffected) will damage the economy by shifting profits from staff to employers, they say, an argument that is being used to attack the Turnbull government.

Union leaders are now shifting their attention to the ACTU's attempt to increase the minimum wage by $45 a week to $37,420, which ACTU secretary Sally McManus proposed last week at the National Press Club.

"A low minimum wage provides a big incentive for employers to destroy good, steady fairly paid jobs by outsourcing them, cancelling agreements and using labour hire," McManus told the press club in Canberra last week.

Mixed messages

The economic arguments made by the unions' experts, in some cases, contradict the messages from leaders of the labour movement and Labor Party.

In a study cited by shadow finance minister Jim Chalmers to attack the government on Sunday, the Australia Institute, a left-wing thinktank, suggested some businesses would struggle to find staff at the lower rate. It didn't acknowledge that they could just pay more than the award minimum.

"The point you make about an increase in jobs is not proven," Chalmers said when asked about the jobs benefit on the Insiders show. "There is not any evidence of that."

Even staunch left-wing economists such as John Quiggin from the University of Queensland accept that a reduction in penalty rates could create jobs – he just doesn't think there will be enough to make the change worthwhile.

"There is an effect but most evidence is that it isn't large," says Quiggin, who was also a union witness in the penalty rates case.

Some people will refuse to work on weekends at the lower rate because they don't need the money that badly, according to the unions' economists. In essence they argue that the market will keep wages above the minimum regulated rate, and therefore there is no or little benefit from cutting it.

"You can't assume wages will come down all the way [because of the decision]" Borland says. "The unions and the Labor Party wouldn't like that argument."

The argument is based in part on a survey by Professor John Rose at the University of South Australia of 472 people who work in restaurants and shops. It found they expected to be paid at least an extra 50 per cent to work Sundays, or $32.10 an hour.

Why business hires:

Economic theory holds that demand for labour increases when the cost is low, and decreases when the cost is high. Workers will be hired if they can increase profits, the theory says, and that won't happen if a company is forced to pay more than the financial benefit they bring to the business.

The theory is used by policymakers to oppose penalty rates and a high minimum wage, which is politically popular and advocated by unions and welfare groups. A paper written in 2015 by a visiting scholar at the San Francisco Federal Reserve estimated that the US minimum wage, which at the federal level is $US7.25 ($9.67) an hour, had cost 100,000 to 200,000 jobs.

The ACTU doesn't accept a higher minimum wage will cost jobs. Because many Australians are working less than they want to, paying them more will get more to turn up to work, according to an ACTU's submission to the Fair Work Commission.

Counter-intuitively, the poor aren't the main beneficiaries of the minimum wage, which covers many people affected by the Sunday penalty rates decision, A study in 2005 by economist Andrew Leigh, who is now Labor's shadow assistant treasurer, found that the poor mostly did not rely on the minimum wage because many of them did not have jobs.

The average minimum wage earner, and even those who earn less than the minimum wage, are members of the middle class, his research found. Presumably that's because they have other sources of income, such as government payments or families.

(Contacted for comment, Leigh says that in families containing at least one worker, the typical minimum wage worker was in the 39th percentile of household income, which he regarded as low income.)

Jobs for the low skilled:

Economists who helped business lobbyists convince the Fair Work Commission to reduce penalties say they want to create more jobs, especially for people with few skills.

"My sympathy is for workers and I don't want to see people unemployed," says Phil Lewis, a veteran labour economist from the University of Canberra, who was a witness for the restaurant, cafe and catering industries. "I think Labor and particularly [leader] Bill Shorten have been particularly opportunistic here."

Lewis presented a picture to the commission very different to the common perception of the penalties debate, which is that hundreds of thousands of the lowest paid are going to suffer from the reduction.

Not many people in hospitality and retailing are paid weekend penalty rates, Lewis says. Small businesses use family members, and pay in cash, or not at all, and some big businesses have negotiated down penalties for higher full-time wages with the shop assistants' union.

Squeezed in the middle are medium-sized businesses. "They have to pay $36 an hour when Woolworths are paying $22 an hour," Lewis says.

To back up its campaign, Shorten is using a Melbourne hotel cleaner, Margarita Murray-Stark, as an example of a victim of the penalty rates decision. But Murray-Stark is a union activist who doesn't know if her employer will cut her wage, according to another newspaper.

The Labor Party blames Prime Minister Malcolm Turnbull for the decision, even though it was made by an independent arbitrator whose president, former ACTU official Iain Ross, was appointed by Shorten when he was employment minister.

Ross, who is never mentioned in Labor attacks on the decision, rejects the arguments put by his former colleagues.

"The evidence of business owners and operators in these proceedings supports the proposition that the current level of Sunday penalty rates has led employers to restrict trading hours, reduce staff levels and restrict the services provided," he says in the judgment.

"The evidence also supports the proposition that a reduction in penalty rates is likely to lead to: increased trading hours, an increase in the level and range of services offered on Sundays and public holidays, and an increase in overall hours worked."

Earth Hour is bad for the poor: Bjorn Lomborg

Good eco-intentions are no excuse for extending energy poverty.  

March 24, 2017

At 8:30 p.m. on Saturday, in the U.S. and around the world, around one billion people are expected to switch off their lights for one hour as a political statement against climate change and fossil fuels, and in support of carbon cuts and renewable energy.

This feel-good exercise not only does absolutely nothing for the planet, but it ignores the reality that what the world’s poorest need right now is more light and energy, much of which will be powered by fossil fuels, not darkness.

Started by the WWF in Australia in 2007, Earth Hour has expanded to a global event, with public spaces going dark, and in some places, people gathering with lit candles instead.

According to the organizers, “Earth Hour shows how each of us can be heroes for our planet.”
This grandiose statement overlooks the fact that the political campaign saves, at the most, the equivalent amount of carbon emissions as China halting its CO2 emissions for less than four minutes.
And that is with some incredibly generous assumptions. In fact, a small decline in electricity consumption does not actually translate into less energy being pumped into the grid, and therefore does not reduce emissions. While any significant drop in electricity demand means a temporary reduction in CO2 emissions, this is partly offset by the surge from firing up coal or gas stations to restore electricity supplies afterward.

Those ‘environmentally friendly’ candles that many participants light? They are a fossil fuel — and burn almost 100 times less efficiently than incandescent light bulbs. (That’s why you won’t ever find a modern hospital using them instead of electricity). Using one candle for each switched-off bulb actually cancels out even the theoretical CO2 reduction; using two candles means that you emit more CO2.

Earth Hour is largely celebrated in rich, urban areas. Around the world, there are around 1.3 billion people living in the developing world who will not get a choice whether to participate or not. That’s because they will be living without reliable electricity on Saturday night, just like they do every other night.

Increasingly, the world’s rich nations insist that these people — the world’s poor — should have no new fossil fuel access. Foreign aid is increasingly tied to renewable energy projects such as building solar and wind power capacity, or tiny “off-grid” energy generators. This has a real cost — and it’s the world’s worst-off who pay.

This appears rather hypocritical: The rich world relies heavily on fossil fuels, getting just 10% of its energy from renewables. Contrast that to Africa, which gets 50% of its much lower energy consumption from renewables.

Clearly, renewable energy means something different if you’re living in a remote part of Africa than if you’re a well-meaning environmental campaigner in the U.S. Owing to poverty, almost 3 billion people around the world still cook and heat their homes with wood, twigs and dung. And more than 4 million die prematurely each and every year because of the resulting noxious fumes and indoor air pollution.

When the proponents of Earth Hour celebrate renewable energy, they are envisioning modern wind turbines or solar power stations. But the reality is that wood and dung used by the poor are by far the largest renewable energy source on the planet.
Even in the rich world where most solar and wind power has been built, solar and wind make up just 1% of total energy, according to the International Energy Agency. Instead, wood makes up more than half of all renewable energy in the rich world, with hydropower contributing a third. Wind and solar is just one-tenth of renewable, which itself is one-tenth of all energy.
So why hasn’t solar or wind energy taken over the globe? Despite constantly hearing that it is cheaper or close to being cheaper than fossil fuels, the technology is still not efficient, cheap or reliable enough to compete. That is why we have to hand out more than $115 billion in subsidies to solar and wind this year. With an electricity price that is typically lower than 10 U.S. cents per kWh, we subsidize each kWh from solar at 27 cents.

An analysis by the Center for Global Development found that that by investing $10 billion in renewable energy, we could lift one person out of darkness and poverty for about $500. Using gas electrification would be more than four times cheaper. Insisting on renewables instead of spending that $10 billion on fossil fuels means deliberately leaving more than 60 million people in darkness and poverty.

And surveys of the world’s poor show that what they really want is grid electricity — just like the rich world has. For the foreseeable future, that will be mostly powered by fossil fuels — just like it is in the wealthy countries.

What the planet needs isn’t a futile, brief-lived, feel-good political gesture like Earth Hour, but sustained, greater investment in research and development of green energy. Only when solar and wind power are effective and competitive will the entire world be able to afford to make the switch away from fossil fuels.

Celebrating darkness over light is a fitting metaphor for a global environmental movement that has lost its way, and is not arguing for the smartest prescriptions for the world’s poor, or for the planet.

Bjorn Lomborg is director of the Copenhagen Consensus Center, author of The Skeptical Environmentalist, Cool It, and The Nobel Laureates’ Guide to the Smartest Targets for the World 2016-2030, and a visiting professor at Copenhagen Business School.

Why the Liberal government lost so badly on March 11

Forget the ‘It’s Time’ argument that both the Liberal and Labor parties are using to explain the crushing defeat for the Liberal government on March 11. It’s simply not true.

As politicians and political commentators have said for a long time, oppositions don’t win government, governments lose government. Of course, opposition parties have to show they have competent people and relevant policies to do a good job of governing should they win, but I’m not aware of a competent, effective, unified government that has lost an election at state or federal level in Australia in recent decades.

The reason why Barnett and the Liberals lost the election is because, in their second term, they were an inept government:
* Roe 8 should have been started 2 or 3 years earlier, not 6 months prior to the election
* the partial sale of Western Power should have been fully explained to electors over a year or more
* Barnett should have jettisoned Troy Buswell rather than wait for the troubled MP to implode
* the public should have been invited to suggest names for Elizabeth Quay
* Joe Francis should have paid his defamation penalty out of his own pocket
* problems at the new children’s hospital should have been resolved prior to the election
* there was a total failure by government to explain where the $40 billion of state debt was being spent and
* Barnett should have stood down about a year ago to give his replacement time to develop a profile and learn the ropes (and to avoid the spectacle of WA business leaders conducting their own polling and realising that a change of Premier was needed).

The preference deal with One Nation didn’t help, of course. Many Liberal supporters were appalled at Pauline Hanson’s racist attitudes and her temporary opposition to vaccinations. Of the 13% of voters who were intending to vote One Nation 3 weeks prior to election day, the preference deal caused almost two thirds of them to desert the party and, rather than return to the Liberal fold, they voted for Labor in protest at both parties involved in the preference deal. The unimaginative and ill-informed Liberal Party lay party executive as exemplified by president Normal Moore should have ‘arranged’ for individual Liberal candidates to negotiate their own preference deals: the outcome was likely to have been largely similar to the formal deal struck between the two parties but it could have been sold as an outcome determined by the grass-roots of the Party, not the executive.

Two other factors are important in explaining Saturday’s disaster. The first is the lack of lay members within the Liberal Party, the people who work at polling booths handing out How To Vote cards and who attend dinners and other fund-raisers to help their local candidate pay for election campaigns. The low lay party membership base also meant that fewer people were involved in policy development and fewer people provided feedback to the Party and MPs on topical or important issues. In turn, party powerbrokers had an easier task of gaining support for themselves and their candidates because they had fewer people needing to be influenced.

As an example, I shared an office in Parliament with Family and Children’s Services Minister Rhonda Parker for 3 years in the late 1990s. Current powerbroker Mathias Cormann was her chief of staff and I have never witnessed a senior party member as rude, as arrogant and as verbally obscene as Cormann. I remain perplexed how a minister as sensitive as Parker could have allowed someone like him to be on her payroll.

The second factor in explaining the March 11 drubbing is that the Premier had a team of very ordinary, lacking in talent and lacklustre MPs to choose from. In 2008 when Barnett was given the poisoned chalice of Liberal Party leadership, no one in the party anticipated an early election, let alone a Liberal win. Because of Alan Carpenter’s early election call, the Liberal Party chose candidates in a rush, with powerbrokers choosing lots of sycophants and party hacks of mediocre abilities. When Barnett then won the election, he had very few people of talent and energy to choose his ministers from. As Gareth Parker said in The West Australian of March 13, “Barnett was too often asked to do so much because those around him contributed so little.”

As further proof of the low or dubious quality of sitting MPs, look at Albert Jacob, a member of his church’s executive which expels people with mental health issues. And Peter Katsambanis who left an inexplicably arrogant and insensitive message on Rob Johnston’s phone at 2.50am on the morning after the election.

Now, I never thought I would say anything good about Troy Buswell but I’ve been advised that he was the only person in cabinet to argue against further capital expenditure, saying that state debt needed to be controlled. That he was overruled by Barnett without his fellow ministers backing the then treasurer says a lot about the Premier’s dominance over and control of cabinet, something that understandably led to accusations of arrogance.

The one positive to come out of the loss of so many Liberal seats on March 11 is that it will give the party an opportunity to find new, quality candidates and preselect them well in advance of the 2021 election. If the party’s powerbrokers are kept in check and a larger lay party membership involves itself more with policy development and candidate selection, the party will be a stronger, more representative political organisation able to show to the people of WA that it is once again capable of governing well for all citizens.

In the meantime, we have the Mark McGowan Labor government for the next four years. Many of his team have serious talents and abilities. They should be capable of governing well provided they stand up to what are likely to be the excessive claims of the union movement. I was elected to Parliament in 1996 at the same time as the new Premier and I consider him to be an honest and capable person. Whether he has the strength to stand up to the unions is unknown, but here’s hoping that McGowan’s first four years as Premier are better than Barnett’s last four years in the top job.