From the Rockefeller Lancet report

Only a minor little point but symptomatic of how people really don’t quite get the basics sometimes. The Lancet has teamed up with the Rockefeller foundation bods to tell us all that we’d better have global environmental socialism real soon now or Aieee! We’re All Gonna Die!

We think we’ve been told this before really.

They talk about the joys of the circular economy and seem to miss rather an important point about it:

Several essential steps need to be taken to transform the economy to support planetary health. These steps include the reduction of waste through the production of products that are more durable and require lower quantities of materials and less energy to manufacture than those that are being produced at present; the incentivisation of recycling, re-use, and repair; and the substitution of hazardous materials with safer alternatives. These changes will necessitate innovations in design and manufacture that capitalise on the potential restorative powers of natural systems combined with strategies to reduce overall demand for resources that greatly damage the environment during the course of their extraction, production, use, or disposal—leading ultimately to the circular economy (panel 1; figure 19).11 Importantly, such a transformation could also bring benefits to health and wellbeing if occupational health standards are adhered to, including through reduced amounts of air, water, and soil pollution; increased employment opportunities; and changes in diet and physical activity.

It’s that “increased employment opportunities”. That’s a synonym for “everyone has to work harder”. And that’s really not a development that we’re happy about having. For the aim and point of this having an economy thing is that we minimise the amount of human labour that has to be performed thus maximising the amount of human leisure that can be enjoyed. The basic problem here being of course that all too many people don’t realise that jobs, employment, these are not benefits of a plan, they are costs of one.

Yes, it’s only one small point taken from a large and long report. But it is symptomatic of their lack of knowledge about how economics works. That lost more people are going to have to work reprocessing our rubbish is not a good part of their plan, it is a cost of their plan.

Energy efficiency isn’t quite as efficient as it’s cracked up to be

It’s true that this information is from the US. It’s also true that this shows more than a dash of Hayek’s “fatal conceit”. The idea that the clever people can plan things for us and we’ll all go off and do them just as we’re planned to do. Human beings don’t really work like that which is why planning so often fails. But to the information itself: energy efficiency programmes don’t have the effects the planners thought they would:

Conventional wisdom suggests that energy efficiency (EE) policies are beneficial because they induce investments that pay for themselves and lead to emissions reductions. However, this belief is primarily based on projections from engineering models. This paper reports on the results of an experimental evaluation of the nation’s largest residential EE program conducted on a sample of more than 30,000 households. The findings suggest that the upfront investment costs are about twice the actual energy savings. Further, the model-projected savings are roughly 2.5 times the actual savings. While this might be attributed to the “rebound” effect – when demand for energy end uses increases as a result of greater efficiency – the paper fails to find evidence of significantly higher indoor temperatures at weatherized homes. Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5% annually.

What we are looking for in an investment is a positive rate of return of course. The idea that the outputs of whatever it is that we do are worth more than the original value of the resources we have to put into doing it. A negative rate of return is evidence that we shouldn’t be doing this, whatever it is, because it is making us poorer.

Which is why, if action to deal with climate change there is going to be we have always insisted that that action should be a carbon tax. It’s analagous to the argument over Greece and the euro. The horrendous economic pain there is because they must go through internal devaluation. That austerity: in order to screw down the price level for local labour. It’s far easier, and there’s a great deal less pain, if just the one price, the exchange rate, can be changed and thus realign the economy in a much simpler manner. So it is with the carbon tax and climate change. By changing that one price we make it rational to perform those tasks where the savings are greater than the costs. Including, of course, those social costs of carbon emissions.

We thus don’t need to have armies of engineers making plans where the outcomes aren’t going to live up to the hype. It becomes in the rational self-interest of each consumer to do those things which help and not to do those things which don’t. So, consumers do those beneficial things.

We’re generally of the view that government is best kept out of the operation of the economy. Yet even we agree that sometimes intervention is necessary. But when intervening, keep that intervention to the simplest action that will achieve the task: in both of these cases that means just the one single change to the price level and then let the market calculate out the implications of it.

And so is the biter bit: serves them right

One of the more bizarre points of Osborne’s budget is that renewable energy generation technologies will be subject to the Climate Change Levy. Given that the levy is meant to be one of the clumsy, kludgy, ways in which the UK begins to have a carbon tax this is pretty odd really.

And as Guido points out, the boosters of renewables are having conniption fits:

Caroline Lucas: “We’ve seen yet another example of reckless short-term policy making that prioritises the profits of polluters over the public interest in a safe and habitable climate”

RenewableUK: “It’s another example of this government’s unfair, illogical and obsessive attacks on renewables”

Greenpeace: “This will make it more expensive for business to buy electricity from renewable power. He is man out of step with the times”

Friends of the Earth: “This is totally bizarre, making renewable electricity pay a carbon tax is completely counterproductive — like making apple juice pay an alcohol tax”

Friends of the Earth does have it right there: non-carbon energy generation shouldn’t be paying a carbon tax, that’s rather the point of it all.

Except, except, the nuclear industry has been subject to the Climate Change Levy all along. And there are no “no carbon” technologies at all, there’s always some emissions, from cement for windmill footings, the energy to purify silicon, the rotting of vegetation at the bottom of a reservoir behind a dam. And nuclear has rather lower emissions than some of those forms of generation.

Which is where the biter is bit of course. They all were perfectly happy that the low carbon system, nuclear, that they didn’t approve of had to pay the levy. Now that the hunger of a Chancellor for revenue is coming for them they don’t really have a logical point to stand on.

Oh dear, boo hoo, eh?

Just say no to the Swansea lagoon

Everybody obviously colours the argument for their pet scheme. But it’s rare to see something quite as transparent as the entirely fallacious arguments being put forward for the Swansea lagoon:

Plans to build the world’s first tidal lagoon power plant in Swansea Bay have now been granted development consent. At a time when the UK is struggling to rewire its electricity market to introduce more security, less carbon and less cost, here is a blueprint for an infrastructure solution that ticks each box and that will endure.

Reliable? Quite possibly, low carbon almost certainly yes. However, less cost it simply will not be. We can tell this because they’re asking for a contracts for difference price on the electricity to be generated of £168 per MWhr. Rather higher than even the most absurd of the nuclear plans and very much higher than a gas plant, or even wind turbines (and yes, higher than gas even taking carbon emissions into account).

We know this because this has all been extensively studied. Hundreds and hundreds of pages of analysis with this basic conclusion:

In the light of these findings the Government does not see a strategic case to bring forward a Severn tidal power scheme in the immediate term. The costs and risks for the taxpayer and energy consumer would be excessive compared to other low-carbon energy options. Furthermore, regulatory barriers create uncertainties that would add to the cost and risk of construction. The Government believes that other options, such as the expansion of wind energy, carbon capture and storage and nuclear power without public subsidy, represent a better deal for taxpayers and consumers at this time.

That was the report that killed off the idea of the government itself investing in it. Now Frankenstein’s Monster has risen again by claiming that it won’t get government subsidy. It’ll just pick all our pockets through the electricity price instead. Same people having to pay the same subsidy just via a different route.

That analysis really is damning too. The larger the lagoon, barrage, built, the more money is lost. It’s as if the cot com boom never happened: we lose money on every transaction and make it up in volume. It’s really not too strong to say that this is the rapine of the citizenry.

It’s also possible to identify where the original mistake was made: by Ed Miliband, yes it was. If there’s going to be a subsidy to renewables (we prefer a carbon tax but…) then that subsidy should be the same for all technologies. And thus we’ll end up building out the renewables that work best. However, the decision was made to vary that subsidy dependent upon the costs of each different technology. So it’s possible for people to wander in and claim they’ve got this great idea: but they’ll just need to sell their ‘leccie for 4 times the going rate to fund it. This is madness. And it’s exactly the problem that the imposition of a carbon tax avoids.

We absolutely know that this phantasmagorical plan just will not work, will not work in providing us with the energy that we desire at a price that we’re willing to pay for it. We really do need to tell these chancers and scheme promoters to take a long walk off that short pier that their lagoon will obliterate.

Are these people Nimbys or Bananas?

The reason that Lancashire is not going to allow fracking for natural gas:

Here’s the wording of the official rejection – all about the impact on the landscape and the noise:
1) The development would cause an unacceptable adverse impact on the landscape, arising from the drilling equipment, noise mitigation equipment, storage plant, flare stacks and other associated development. The combined effect would result in an adverse urbanising effect on the open and rural character of the landscape and visual amenity of local residents contrary to policies DM2 Lancashire Waste and Minerals Plan and Policy EP11 Fylde Local Plan.
2) The development would cause an unacceptable noise impact resulting in a detrimental impact on the amenity of local residents which could not be adequately controlled by condition contrary to policies DM2 Lancashire Waste and Minerals Plan and Policy EP27 Fylde Local Plan.

Wrong decision.

It’s worth recalling a few facts about this fracking thing. Carbon related emissions in the US have been falling even as the economy grows. Because that fracking has led to a massive boost in the supply of natural gas, a fall in its price and thus the displacement of he far more polluting coal. Given that the Bowland Shale is three times the depth of the Marcellus, we would rather expect teh same to happen here.

And we’ve even had reports that it would: the amount of extra gas that Cuadrilla announced as a result of just one well test would lower natural gas prices for all of Western Europe by 4%. That’s just the extra from one well test. We do indeed get DEC saying that fracking will not reduce gas prices: but that’s because they speak with forked tongue. What they mean is that gas prices won’t fall from today’s levels: while their own economic models claim that gas prices will double into that same future. Fracking would, by their own admission, stop that doubling, even if not drop prices from today’s levels. Forked tongue or what?

As to impact upon landscape: come one, puhleeze, this is Lancashire we’re talking about. It’s not exactly sticking an oil rig in Lake Windermere, is it?

At which point all we can really wonder about is whether these people are Nimbys (Not In My Back Yard) or Bananas (Build Absolutely Nothing Anywhere Near Anyone) for it’s clear and obvious that they are bananas.