Whaling does indeed tell us something about oil and fossil fuels

The Guardian asks:

The modern oil industry was born in 1859, yet it would take more than 100 years – and the near-extinction of a species – before it replaced blubber. As we now seek to replace oil in turn, are there lessons to be learned?

Yes, absolutely. The clue is here:

But it is worth remembering that whaling did not end because the industry found its conscience or progress made everything better. Whaling ended because there were no longer enough whales to turn a profit

Not wholly and not quite. What really happened is that oil became both cheaper and better than whales as a product to use. Therefore people stopped using whales - thus no profits to be had - and used oil instead.

So, what is necessary to stop us using oil? That the alternative, whatever new technology that is, be better and cheaper. This is not only necessary it is sufficient. Humans like cheaper and better, it’s what makes us richer. So, create the technology which is cheaper and better and people will entirely naturally stop using oil and use instead the new.

Well, get on with it then.

What does anyone expect?

This amuses more than anything else:

Teaching unions have criticised a “politically motivated” review of the way sex education is taught in schools, after Conservative MPs voiced concern that children were being exposed to “graphic” material including “lessons on oral sex”.

This is not to comment upon how sex is taught in schools nor what is age appropriate. Of course we have views on that but that’s not the point to be made here.

The education budget is getting on for £60 billion a year at the moment. That’s £60 billion lifted from the populace - by politics - and allocated to education - by politics - and therefore there is politics involved in what is done with it.

How could it be anything else but politically involved? All discussions of what is taught in taxpayer funded schools is going to be politically motivated simply because we’ve put the entire school system into the hands of politics.

It is, obviously, possible to have entirely non-political schools. Those are going to be the ones that don’t take money from the political process. That is, not-state schools.

This applies across all areas of life of course. It’s also blindingly obvious. If politics provides the funding then politics is going to be deeply involved in how it is spent. The only way to have a part of life not subject to “politically motivated review” is to have a part of life that is not funded by the state and politics.

Seriously, what do people expect? That everyone’s going to chip in the thick end of a hundred billion quid and not ask for some oversight in return?

An alternative formulation of the point is that fine, you think this is an area of life that shouldn't be touched, determined or reviewed by politics. Fine, have at it - the only way you’ll get that is by not funding it through politics.

Superabundant Wind

The Departments of Business and Energy have made the rather good observation that the decline in British industry is, in part, due to UK energy prices being higher than our competitors.

They plan to “supercharge” industry by reducing the energy costs of the 300 or so largest manufacturers, not by taking the money from primary producers like Big Oil and their extravagant profits of late, nor from the Treasury (heaven forfend!), but from ordinary households who, once energy prices start falling, will not notice.

The Energy Intensive Users Group (EIUG) have a case, albeit unquantified, but only 210,000 members.  It is not clear who the other 90,000 plus beneficiaries will be or how they are to be selected.  And is it fair to other companies who do not have the time, or inclination, to join the EIUG but are just as penalised?

The cost of the measures will eventually be funded through consumer bills, with the cost to the average household expected to be an extra £3-£5 a year. As there are about 28.1M households in the UK, the “carefully crafted” supercharge for the 300 or so manufacturers would be rather over £100M p.a.

The Departments of Energy and Business have not shared their “careful crafting” but this would seem a relatively small incentive and certainly ineffective in supercharging industry.  Trinomics produced an interesting review of EU member state energy subsidies in 2018, i.e. when the UK was still in the EU, which did not appear to support the action now being taken.

Rather than clobbering the poor old consumer, it would be far better to network what should be the lowest cost electricity production, i.e. wind farms, directly to these 300 or so large manufacturers. The odd thing is that, thanks to government intervention, the three Europe countries with the highest electricity prices: Denmark, Germany and UK, have the highest share of wind generation. The Trinomics research shows that government interference in energy marketing is the main reason for higher costs. If government really wants to supercharge manufacturing, it should simply butt out of pricing energy.

The reality is that the Energy Department is living in fantasy land and have yet to grasp that energy shortage forces prices up and only a superabundance will bring them down. The new policy is based on their energy strategy white paper of 2020 in which the figures simply did not add up.

This month, the National Audit Office, in the course of demanding an update, said the longer the energy department “goes without a critical path bringing together different aspects of power decarbonisation, the higher the risk that it does not achieve its ambitions, or it does so at greater than necessary cost to taxpayers and consumers.” And the NAO is assuming we will need only 60% more electricity by 2050 whereas, if total energy demand is static, the electricity demand will grow by 100%.

The truth of all this is a little embarrassing: the government confuses making announcements with making decisions.  When it comes to energy, the wind comes from Whitehall does not drive turbines. On-shore wind farms are officially approvable but are effectively banned.  Just one was built in England last year and no plans are on the table. 

Great British Nuclear has been announced countless times since April 2022 but no decision has yet been made.  Sizewell C was consulted upon in 2012 followed by four further round of consultation concluding in 2019. In November 2022 the Chancellor announced a decision would be made “within weeks” and that has now been postponed until, probably, 2025.

Our government seems to be under the impression that a superabundance of energy will drive prices down and that will come from off-shore wind and nuclear because they say so.  The reality is that Whitehall wind achieves nothing and the lights will go out unless action is taken soon.

Workforce composition effects are imporant, d'ye see?

A certain confusion here:

The number of women working in the City has fallen by a third since the 1990s as administrative roles like secretaries disappear from the Square Mile.

Yes, OK, computers have meant that a certain type of job simply no longer exists.

Women’s average wages in the finance sector have more than tripled since 1997, rising from £16,000 to over £50,000 in 2022.

Over the same period, the average earnings of a man in the City have just over doubled from £33,500 to over £80,000.

While that’s true that’s very misleading. Because the reason women’s average wages have risen more than men’s is because the lower paid - and largely female - jobs no longer exist.

The point being that looking at average wages of all women against average wages of all men can indeed be misleading if we don’t also take into account those workforce composition effects. Those whines about a 15% (or whatever the whine is this week) gender pay gap across the nation make this very mistake. They fail to take account of the way in which men and women fo make up different portions of different parts of the workforce - do different jobs that is.

Yes, this is important. Italy, for example, has a very low, by European standards, gender pay gap when measured in this manner. Across all jobs done by all people. The reason being that the Italian married woman with children is very much less likely to work than her European contemporaries. Those who do continue to work tend to be in the professions, have careers rather than jobs. Effectively, lower paid Italian mothers simply aren’t in the workforce and so don’t pull average female wages down.

Yes, important. For that then leads on to a policy prescription. If we wish to lower the gender pay gap - by this measure of all women against all men - then we desire to have those lower paid women leave the workforce when they become mothers. For that’s how it does work in those places with a lower gender pay gap by this measure. That, in turn, means that we don’t want subsidised childcare in the slightest. Rather, we want families to face the full freight, the full costs, of childcare so that those on lower incomes do leave the workforce rather than drag the average pay down.

A lower gender pay gap means no subsidy to childcare, not more.

Of course, we can also look at this the other way around. No, we should subsidise childcare so that mothers can continue working. Fine - but we’ve then got to accept that we’ll have a substantial gender pay gap by this measure.

We could even conclude that measuring the gender pay gap by all women against all men in employment is a silly thing to do precisely because of this effect - that gap falls when more mothers leave the workforce entirely.

But workforce composition effects do matter. Average female pay in the City has risen because the low paid and largely female jobs have disappeared. The same will be true - as it is in Italy - of the population wide gender pay gap. If mothers aren’t in the workforce at all then it will shrink. This indicates no subsidy to childcare, not more, if our goal is the shrinking of that mismeasure of the gender pay gap.

We do, in fact, actually have to make a choice. What is it that we’re going to worry about by which measure? Our temptation is simply to observe that choices in life have both costs and benefits and let people work this all out for themselves. But even for those who disagree with this laissez faire position the central point still stands.

Lowering the population wide gender pay gap means reducing childcare subsidies, not increasing them - for that way the lower paid mothers leave the workforce and so don’t contribute to the gender pay gap. That’s simply true, whatever we might think about the way things ought to be.

Bad economic policy impoverishes

In this modern world there’s really no excuse for population poverty other than bad economic policy. Sure, it takes some time to reverse however many centuries of such bad policy there have been but it can be done. As those booming recently poor places, growing at 5 and 10% a year, show us. It’s also possible, of course it is, to institute bad economic policy which then, over time, will make a place poorer - Venezuela and Zimbabwe have shown us the dangers of MMT for example.

Or there are slower versions of bad policy:

The EU executive is considering a target that would see 40% of the bloc’s clean tech made in Europe by the end the decade, as part of a response to a wave of subsidies from the US and China.

According to a draft of the EU’s Net-Zero Industry Act, which is due to be unveiled next week, 40% of green tech needed to meet the bloc’s climate and energy targets should be made in the EU by 2030.

This is to get the point and purpose of production entirely the wrong way around. This is to assume that producing something makes us richer. It doesn’t. Being able to consume something is what makes us richer. As Adam Smith pointed out, the sole purpose of all production is consumption. Once we’ve grasped that then the purpose of trade becomes clear. If someone else can produce what we desire to consume better, cheaper, faster, than we can, then we should gain our consumption from that production of that other person. This does not change whether it’s the other adult in the same household, someone in the same village, county, country or some near random stranger 11,000 miles away. If we can gain our consumption better by gaining it from them then it’s from them that we should gain our consumption.

Here the EU is making the opposite assumption. That gaining our more expensive, later, worse, consumption from someone nearby is better. That it is going to be more expensive, worse, later, is proven by the very fact that they’re looking to have a law about this. If it was already going to be preferable on speed, cost and quality grounds then there would be no need for a law, would there?

Basic economic theory really does matter. Otherwise the political types are going to institute bad economic policy, that very thing which makes us all poorer.

Oh, and it’ll reduce the amount of climate change mitigation done too. As the Stern Review pointed out, humans do less of things as they become more expensive. So, limit climate mitigation within the EU to the more expensive domestic production and less of it will be done.

Both broiling us and impoverishing us just isn’t a good outcome from economic policy now, is it? But as we’ve already said, bad government is really the only cause of poverty in this modern world. Perhaps we should stop having bad economic policy?

All the single (household) ladies

According to a 2019 government report, fewer than one in five of all new mothers follow a full time career after maternity leave. Women who were previously in full time employment often either choose to become part time or stop work altogether. This might seem normal and a result of them having a child, not being a woman. 

However, if we compare women's work trajectories after having a child to new fathers, the gap is wide. 3 years after having a child, 90% of men are in full time work or are self-employed compared to a mere 28% of women. So why are women so much less likely to return to the working world?

The childcare crisis in the UK is a big part of the problem. The cost of childcare in the UK is the highest in the OECD, with a UK couple where one parent earns the average wage and the other earning ⅔ of the average wage spending 29% of their combined income on full time childcare. 

It then becomes more economically logical for one parent to stay at home and look after their children themselves. Largely a result of the wider societal and cultural trends, it often lands on the women to stay home and look after the children.

As women stay at home to look after their children they are sacrificing potential skill development time. Fathers on the other hand, who go back to their full time role continue with little chance and thus, as women stay stagnant and men progress in their careers, the gap between them widens.

Not only do women suffer by losing transferable skills and end up with less savings in their pensions, but wider society also suffers from lost economic output. The Centre for Progressive Policy found that the UK is losing at least £9.4bn in additional earnings per year through mums not returning to work after having a child.

The best way to give women the chance to reach their full potential and rejoin the workforce after having children is to reduce the cost of childcare. This can be done by relaxing the child:staff ratios in the UK. Our current minimum child:staff ratio in the UK is 4.5:1 which in comparison to countries such as France (whose child:staff ratio is 8:1) is one of the most restricted in Europe. By relaxing child:staff rations by simply one child, costs could reduce by 9-20%, providing working mothers with ways to balance their work-family life.

Another method would be to adapt the current government subsidy schemes for childcare. The UK government aims to provide payments to struggling families to help them afford childcare. However, the scheme is deeply flawed and is filled with strict, inflexible requirements for parents to follow. This includes only allowing them to access the scheme through approved childcare providers and only for 38 weeks (the equivalent of school term time). So all parents looking to work throughout school holiday time are once again faced with a difficult decision and taking that length of time away from work is not an easy task.

Instead of continuing with this dysfunctional subsidy scheme, a much more beneficial scheme for parents would be to provide parents with direct cash payments that they can use in the way they choose. They can access the child providers they want and at the times they want. This is a much more flexible system and provides parents, particularly mothers with greater ability to rejoin the workforce while affording childcare services.

As it's International Women's day today it's the perfect time to reiterate that the childcare crisis needs addressing. On this day we celebrate billions of women and the contributions they make to our society, yet there's always that thought at the back of our minds that there would be many more contributions if we just simply fixed this issue.

Excuse us while we shriek with laughter

We’ve spent at least a decade pointing out that iron fertilisation of the ocean is a possibly useful, if partial, reponse to the dangers of climate change. We’ve also been pointing out that it is, by the usual readings of international law, illegal to even experiment to find out how useful, how partial, an aid to a solution iron fertilisation is.

Over that time more theoretical work has been done but no practical, at least as far as we know. That paucity of iron in the Southern Ocean is now thought to be a driver of the glacial cycle for example.

And then there’s this:

The creeping threat of the Great Atlantic Sargassum Belt

Visible from space, an explosion of harmful seaweed now stretches like a sea monster across the ocean. Could robots save us from it – and store carbon in the process?

Yes, a part of this is indeed from iron fertilisation - naturally:

Increased sea surface temperatures, upwelling and changing currents have combined with nutrients caused by human activity such as sewage and soya farming in the basins of the great rivers of North and South America, and Africa. Sand blown from the Sahara also brings with it iron and other essential minerals.

More biomass, more fish, some at least CO2 sunk to the bottom of the ocean. The basic premise does stand up, even if we’ve a natural experiment here, not a controlled one.

And sargassum’s ability to suck up carbon is behind what it probably the wildest and most ambitious plan to date: capture it using robots, bundle it up and sink it to the bottom of the sea.

Well, one of the things we really would like to do is work out whether other biological routes work better at that carbon sequestration thing. Maybe diatoms for example,. Or plankton. Does deliberately adding iron (probably ferrous sulphate, free from a number of people, the distribution method being a lascar shovelling it over the side) aid in creating more of this benefit and by which biological route?

Oh yes, that’s right, isn’t it? We’re not allowed to go and test any of these things because ferrous sulphate into the oceans is dumping waste at sea and that’s far more important than actually solving climate change. Silly us we forgot that.

Alternatively, we might start wondering whether there are those who don’t want to actually solve climate change. The alarum is far too convenient a political power to lose. But to think that would be cynical now, wouldn’t it?

Clarity of thinking might aid in designing political policy

From New Zealand:

Let me use an example: it will be almost impossible to farm in a world that is three degrees warmer.

That’s an absurd statement. Temperature differences across viable farmland are already larger than three degrees. So, we know that we can farm at three degrees warmer. True, we might need to change cultivars, or even exactly where specific crops are grown, but the idea that farming is impossible - or even near so - with a three degree increase is nonsense.

As can be proven more locally. The temperature variation across New Zealand is already larger than three degrees. Perhaps Auckland methods might move south to Wellington and so on but the claim of impossible is that nonsense.

Sadly, this gets worse.

A slew of opportunistic right-wing voices is lining up to use recent disasters to argue that the government should shift its efforts away from cutting emissions towards adaptation. This is as unscientific as it is dangerous. It is also utterly out of touch with the needs of the people they purport to represent. It is a disingenuous, harmful and bad faith argument that distracts from the conversations we need to be having.

The claim is then that mitigation is the thing, that adaptation simply isn’t the solution at all. Which could even be true - no, we do not believe that but we’re willing to at least consider it as a logical position - but what then follows is again nonsense:

Second, even if we limit warming, there will be effects we cannot avoid. The world has already warmed by about 1.1 degrees. Even if we stopped polluting the atmosphere tomorrow, the climate will continue to change. Extreme weather events will increase and overlap, each one testing the limits of our resiliency and recovery. We need to plan for this.

Our focus needs to shift from short-term preparedness towards creating stronger communities. Resilient, affordable, inclusive communities that can meet everyone’s needs despite the challenges of the disrupted climate.

We need to get serious about this new approach. Otherwise, the changes we experience will be forced on us by extreme weather disasters, rather than our efforts to create vibrant, connected communities, even as climate change shapes how we live.

The solutions must be necessarily wide ranging. Some will require changes to our legislation, so developers stop building in high-risk areas. New rules, so that when we do build, we’re constructing more resilient homes and buildings designed to handle extreme weather. Greater use of areas that filter and store water for increasingly long and severe droughts will be critical. More housing is essential for our cities, but we also need to make sure we’re meeting this demand without car-dependent sprawl that concretes over natural areas, or builds in flood-prone areas.

The nonsense being that that’s all adaptation. The very thing we’re told that we shouldn’t be doing instead our efforts must be on mitigation. Don’t do that but also gird your loins to spend a fortune on doing that - logic, eh?

James Shaw is New Zealand’s minister for climate change

Ah, yes, that clarity of thinking just is so useful in the construction of political policy, isn’t it?

As we’ve been saying for a couple of decades now. Assume that the insistences of a problem are correct. The answer is a carbon tax at the social cost of carbon. They gave Nordhaus the Nobel for pointing this out, we are supposed to all follow the science, aren’t we?

Everyone’s entirely at liberty not to believe the insistences but those shouting that we’ve got to do so and also follow the science might like to try doing so.

No, we want to drive inefficient producers out of business

The Great Salad Shortage of Winter 2023 has been met by a claim that we must subsidise inefficient salad producers. Or inefficient farmers:

“We need to find a more sustainable way of trading fresh produce," he says. "When I say sustainable, that's got to be sustainable in terms of viability for small producers, in terms of the social impact, food prices, and sustainable in terms of not imposing a negative impact on the environment.”

No. Simply no. The particular part that is wrong is the “sustainable in terms of viability for small producers”.

The background assumption being made is that small producers are inefficient producers. That’s why they need that special care and loving attention to stay in business. But fixing the marketplace so that inefficient producers stay in business is the very definition of stopping us all from getting richer.

We are - of course - made richer in every very real sense by using the least inputs possible to the maximum output we can lay hands upon. That means that our aim in the economy is to destroy jobs. We want to reduce, to whatever irreducible minimum is possible with the current state of technology, the amount of human labour that has to go into whatever it is that we desire.

That labour can then stop growing cucumbers and go off and be ballet dancers, nurses in the NHS or, heaven forfend, produce something useful. We are made richer by now having ballet, nurses and or something useful plus the cucumbers now being more efficiently produced.

Far from wanting to fix the system so that inefficient producers stay in business we desire, lust after, their failing and as soon as possible.

The aim and method of economic advance is to kill jobs, d’ye see? To drive inefficient producers over the cliff edge into bankruptcy so that we can redeploy those ill-used scarce economic resources to do something else.

It is not necessarily true that small producers are inefficient producers. But if the assumption were not being made that they are then there would be no need for a call for a new system to make it viable for small producers, would there?

Make Britain richer, kill a job today.

Evidence first, policy second

One of the reasons we’re so out of step with the modern world is that we do think that evidence first, policy second, is a useful manner of approaching that difficult task of governance. It’s possible that we’re the last people standing who do still think that the way to order things.

Take The Guardian:

Landlords accused of ‘making up stories’ in drive to change UK tax rules

Lobbyist who warned of landlord ‘exodus’ found to have acknowledged to allies sector is actually growing

We are then presented with evidence that more people are living in rental accommodation so what exodus could there possibly be? Thus is the idea that the taxation of landlords be reduced refuted.

Note, when less government - either revenue or power or interference - is suggested then the number of landlords is said to be increasing.

In the same issue of the same newspaper we also have:

Or they may sell up: there is evidence of landlords exiting the buy-to-let market, which may reduce the stock of rental properties available.

But this article isn’t talking about reductions in the taxation of landlords. This one is talking about an expansion of the state housing sector, about more spending - and power and influence - of the state over how and where people live.

Presumably this is something quantum. When the desired policy is no diminishment of the state then the number of landlords is increasing. When it’s convenient to the argument in favour of more state then the number of landlords is decreasing. A nice example of that policy-based evidence making performance art.

We can’t help but insist - however mansplaining, colonialist or even just plain evil that makes us - that better policy is going to be crafted by agreeing upon the facts first then allow them to inform the policy rather than the other way around.

Yes, yes, this is absurdly 20th century of us, possibly even 19th, but we do assure that it’s true. Evidence first, policy second.