The world’s biggest offshore wind developer has taken a £4.6 billion hit after scrapping two projects in the United States in a significant setback for America’s renewable energy industry.

The decision led to billions of pounds being wiped off the market value of Orsted, the Danish energy group that also operates much of the North Sea’s wind industry.

It blamed rising costs…

Wind power is grossly more expensive than everyone thought it was and was planning for. As a result, obviously, we both should and will have less wind power.

From the London Stock Market:

Shell has announced a bigger-than-expected $3.5 billion share buyback even as the oil and gas giant’s quarterly profits fell by a third to $6.2 billion on lower prices.

The FTSE 100 energy group’s adjusted earnings were down from the $9.5 billion it made in the same period last year but were in line with analysts’ expectations.

Fossil fuels are vastly profitable and wildly value additive. Therefore we should have more of them.

Except, of course, those pesky externalities of climate change. If only someone had written a report - 1200 pages would be a nice length - explaining how to deal with this dichotomy. Or had been granted the Nobel for explaining it. Or even explained the basic mechanism well over a century back.

Work out what the cost of the externality is - roughly is good enough - and stick that on the whatever it is that causes it. Then it’s included in all the prices everyone uses to make a decision. We then get not just less of the externality but the right amount of it. For only those things that still add value despite that cost still get done, those that don’t, don’t.

Or, given that people did do all of those things if only we had a polity that would enact that solution - or, given the current polity, was capable of understanding it.

The answer to climate change is the carbon tax.

One result of having had it would be that a Danish company wouldn’t lose £4.6 billion trying to build something clearly and obviously economically unviable in the US. For given that all of the costs of the varied technologies would already be in the decision making prices the economic unviability would have been obvious on the first Excel spreadsheet. And so remain in that model rather than become the £4.6 billion reduction in aggregate human wealth it just has become.

The carbon tax is not, in fact, a tax. It’s a decision making guide so that we don’t do blubberingly stupid things. Given what people have been doing about climate change we therefore recommend it as a policy. For we really do think that climate change would be better addressed by not doing blubberingly stupid things.

Maybe that’s just us, but, well, you know…..maybe?