If everyone's so against climate change then why's everyone still flying?

We’ve had the usual burst of airline stock market results recently, they come around every few months. And the results are that, roughly enough, flight numbers are back to what they were pre-pandemic. That’s for short haul flights that is, the ones that take people off for an experience. Business travel is still below those pre-lockdown days. We had that little shock that showed Zoom calls working and so behaviour has changed. As it probably should do, having done it there’s not that much exciting about business travel. I’ve a comfy chair at home and I can mix my own gin - well, the first three or four at least.

But that the population is back to flying again is one of those interesting things. Obviously, interesting in that it enrages all those who think that us proles shouldn’t be allowed to fly. But rather more importantly, in that it’s so obviously against what all the usual polls and surveys tell us.

Everyone’s really, really, against boiling Gaia they tell us, every time they’re asked. And yet the very same people happily get on a ‘plane to the beach. That thing we keep being told is the very act that is boiling Gaia. There’s a disconnect here but what is it?

The answer is as economists have been pointing out for a long time. It’s revealed preferences that matter, not expressed. Or, more colloquially, look at what people do not what they say - and most certainly don’t pay any attention at all to what they say everyone else should be doing. To be slightly more formal again, we really only grasp human motivations, trade offs and decision making by observations of what is done within the constraints the universe throws at us.

Which is all very interesting and describes why people do indeed claim to be very worried about boiling Flipper and then fly off to the beach for sun and sangria. But there’s a larger lesson to be learned here too.

Politicians making decisions for us is near by definition acting upon expressed preferences. The results of the opinion poll, the focus group, even an election is still an expression of opinion. The information flow to those making those decisions is therefore hopelessly flawed. Because we know that what people say isn’t what they really mean. So it isn’t just that politicians are incompetent, or that reality’s too complex to be managed, or that they’re blinded by ideology (although all three are certainly true). It’s that the information flow to them, that they’re basing their decision making upon, is known to simply be wrong.

The implication of this is that political decision making has to be about revealed, not expressed, preferences. As revealed such can only be, umm, revealed by observation of those with the freedom to do those things the correct political stance is that classical liberal world. Consenting adults get to adult consentingly, over economic as well as all other parts of life. Adjustments for significant third party harm and prices for externalities are fine additions to such a system. But we’ve got to have the freedom to do as we wish so that it’s possible to divine what it is that everyone wants to do.

We simply don’t have any other effective information source. As is shown by the way in which everybody says they’re right there with Greta then go fly off to foreign for a long weekend.

If you think Shell's profits are obscene just wait until they stop investing for more oil and gas

Just a little note really. Something about how companies and financial markets work. Something that might be of interest to Greenpeace and the like complaining about “obscene” profits at oil and gas companies like Shell.

If they stop investing in new oil and gas projects their profits will go up.

Which does nicely illuminate this complaint:

Shell has reported profits of just over $5bn (£3.9bn) for the second quarter of the year, prompting outrage among campaigners who called the figures obscene, and a protest at the company’s London headquarters.

Obscenity is one of those undefinables and is really left to the opinion of those who claim to know it when they see it.

But we’d just like to point out that imagine what would happen if Shell did in fact stop exploring for, planning for, investing for, more oil and gas production? Their profits would soar of curse. They’d no longer have to carry the costs of exploring for, planning for, investing for, more oil and gas production. Also, they could fire everyone not specifically producing right now.

Certainly, profits 20 and 40 years out would decline because if there’s no investing now then there won’t be production then. But the effect of not investing now would be that all the returns of the past 20 to 40 years of investing would be available to be paid out to shareholders right now. Instead of some being retained to invest for that future.

Stop spending on the future and there’s more profit now. Profits would truly soar. And then what would Greenpeace have to complain about?

This new Cambridge suburb - so where are you putting the country cottages?

Lots of people - some we like, some we don’t - are getting very excited by this idea of a new planned suburb for Cambridge. We have to tell everyone that this is, sadly but predictably, a disaster of the usual planners’ mistake. One description is that planners don’t know enough to be able to plan. Another is that well, planning, eh? But the problem is summed up in the question of, well, great, but where are all the country cottages going to go?

The background to this is that housing is a technology. A technology is just a way of doing things using a wide definition. So, how we do housing is a technology, it’s a way of doing that thing. But the crucial thing about a technology is that you need all the moving bits to make it work. A steam engine that’s just a pot of boiling water drains no mines, propels no trains. Our long funded cucumber house warming system won’t work without the sunshine as an original input. We must have all the bits of the technology for it to work.

Perhaps it’s growing up in Bath that makes this obvious to this particular eye. But all those images and talks are about building townhouses and mansion flats. Lovely things both of them - but the difference between a townhouse and a house, in English English, is usually the provision of a garden or not. Townhouses don’t need them - because the inhabitants have somewhere else, out in the country, which is their garden. That’s rather why they’re called townhouses, to distinguish them from those proper places out on the rolling acres.

We are, after all, plains apes and like to have a stretch of turf to lay about in. Which is why that townhouse, without the garden, has always been rich man’s housing in this country. Rich enough to have, or at least gain access to, another place out there with that garden. No, parks, communal areas, they’re not the same. This also carries over to those Edwardian mansion flats in London and some other larger cities. Delightful things to live in, absolutely - but they’re not for 100% of living time.

This has been a long running problem with housing planning in Britain. At least 80 years, David Kynaston’s books surrounding Mass Observation contain the same argument. The planners talking about how everyone should live in flats, the actual people asking for the des res with front and back garden, thank you very much. A detached would be nice, a semi is acceptable, a terrace if we must, but front and back please, a place for the roses and one for the kids’ bouncy castle.

To which the planners’ claim has always been that Europeans live in flats, so why not the British. Which is where the painful ignorance comes in. The Europeans do not live in flats. They live in two places. In Russian it’s a dacha, in Polish a dacza, Czech a chalupa. In Southern Europe - places which came off the land much more recently - perhaps a quarter or eighth share in Granny’s cottage out in the boonies. No one observing the periphique on Tuesday is going to suggest that Parisians live only in Paris.

Europeans might live, for much of the time, in a flat. But they near all have access, perhaps in the extended family but still, to that place in the country.

There are those two technologies for housing, each with their own moving parts. Each technology only working if it is complete. The British one, that house with garden. The continental with a flat and that shack - if nothing better - out there in rurale profonde. Yes, even German cities are surrounded by a green belt (no, not Green Belt) of shacks and summer houses.

This new thing in Cambridge. It’s those planners all over again, not grasping the basic technology they’re dealing with. If it’s all going to be town houses and flats then where are those country cottages going to be? And if it’s not flats and townhouses then where are the gardens?

All of which is, of course, the problem with having planners doing this sort of thing. Given that they’re ignorant of what they’re trying to plan the plan isn’t going to be very good, is it?

The actual answer is simply to allow builders to build houses (or flats!) that Britons want to live in where Britons wish to live. This will shock, annoy and outrage the upper middle classes at The Guardian. But what’s the point of a life without a little fun and enjoyment in it?

Rewilding is to blame for Mediterranean forest fires

Or at least, to be acccurate, rewilding is partially to blame for Mediterranean forest fires. Which is darkly amusing as that man most insistent upon rewilding, George Monbiot, is trying to tell us that it’s all about climate change.

Why? Because an increase in number & spread of wildfires was a consistent forecast by climate scientists. Like many other climate science forecasts, it has materialised with a vengeance. Current fire patterns can clearly be attributed to global heating:

The thing everyone’s thinking about now concerning wildfires is those happening around the Mediterranean currently. Sicily, Rhodes, the list goes on.

Now, we know, we’re on most lists of climate deniers (DeSmog actually has one of us so listed because we argue for a carbon tax. Go figure). George keeps telling us we’re fossil fuel apologists and all the rest.

And yet we are in fact right here. Sorry about this but really, we are.

Forest fires - more often scrub fires - are an entirely natural part of the Mediterranean ecology. Been going on for thousands of years. The major determinant for any one fire season is actually how wet the preceding winter was. Rains happen in winter, native vegetation is pretty much dried out and dying back by May. Some climate models do indeed predict more winter rain in these ecologies - so it’s possible that the climate change argument is right.

But it’s also true that summer temperatures make little difference. Dried back grasses and the like are not notably more flammable at 41oC than 40. Or even than 35. And they will be dried back - that’s just the basic pattern here, near no precipitation at all from late April-ish through to October.

To which we must add another factor, rewilding. Which, given Monbiot’s arguments, he seems to like. But which does have the effect of increasing the fire season:

The socioeconomic transformations that occurred in Portuguese society during the second half of the last century have led to a profound change in its age structure, with important repercussions in terms of sectors of activity. This in turn has led to a drastic reduction of workers in the primary sector, due to the rural exodus, a consequence of which was the abandonment of many agricultural areas and their transformation into forested areas.

In turn, the abandonment of the agricultural-forestry-pastoral activity led to an accumulation of large amounts of fuel in the forest which, when weather conditions are favorable, feed forest fires.

“Forest” here is not quite towering oaks and stands of beeches. It’s scrub more than anything. But the point stands. Portugal is a vastly richer country than it was even 30 years ago let alone 50. So, those acre farms out in the wilds where people used to scrape a peasant living are being abandoned. You can actually buy whole villages in some areas for less than the price of a flat in Southern England. A truly rural cottage in many areas is the price of a decent used car.

Because they are being abandoned. The land is rewilding as a consequence. This increases the load susceptible to going up in flames in the normal dry summer.

We’re perfectly happy to agree that climate change might be having an effect. If overheating Gaia is leading to more winter rains which increase the fire load then sure, we’ll accept that as an influence. Summer temperatures make pretty much no difference at all - because summer temperatures always do get to where unattended land might burn. But we would also insist that this is not the only effect at work here. Rewilding is a real thing here as those boonies empty out. That also increases the fire load. On this there is that academic research and we also bothered to ask our local fire brigade - anecdata perhaps but then data is simply the plural of that.

We’d also add one final point. The biggest reduction in forest fires in both Portugal and Greece came a few years back. It used to be that if the hillside went up in flames then there was automatic planning permission for - say - tourist villas. When this was changed to burnt forest being, well, just burnt forest then the number of burnt forests rather went down.

Funny that, but have we mentioned before that incentives matter?

Public provision or public finance

Britain has made the same mistake twice, first in education, and then in health. In both cases the laudable aim was to give everyone access to a valuable service. In 1870 it was the Elementary Education Act, commonly known as Forster's Education Act, which set the framework for schooling of all children between the ages of 5 and 12 in England and Wales.

In 1948 it was the National Health Service Act. Free healthcare at the point of use comes from the core principles at the founding of the National Health Service. The 1942 Beveridge cross-party report established the principles of the NHS which was implemented by the Labour government in 1948.

In both cases the problem was perceived as one in which a lack of means deprived the poorer part of the population from access to what were deemed to be essential services: education and health. In both cases the decision was taken that these services were to be produced and run by the state.

The result has been that state provision has dominated both health and education. The NHS, admirable in many respects, has grown too big to manage. State education has been producer dominated, with parents allocated school places, some of which are clearly delivering a less than adequate preparation for life’s needs or for further education or training.

Choice and completion, the two factors that lead the private sector to improve its output in terms of both quality and efficiency, have been largely absent from state provision. In education, this lack has been redressed to some extent by the spread of academies and free schools that give schools more independence from local authorities and enable them to experiment, but the remaining state schools offer parents little choice.

A more viable model to achieve free healthcare and schooling would be to combine private or independent provision with state finance. In this model, people would choose between schools or different healthcare providers, and in doing so, direct state funding to the providers they have chosen.

The schools would receive their funding, weighted by age group, according to the number of students that parents chose to enroll there. Doctors and hospitals would receive their funding based on the number of procedures they carried out, with patients choosing between them, as happens in Australia, where large numbers of UK-trained doctors are choosing to live and work.

In this way, the choice and competition so little found in state provision, would be incorporated while maintaining the important principle that the services would continue to be free at the point of use.

In retrospect, this should have been done when state education and state health were first introduced. It was not, and because of that, there have been major problems with both services. A change to make it that the money should follow the parent or patient could vastly improve both services. It could correct the mistakes that made both of them under-perform.

Just Stop Stupidity

There is universal agreement that greenhouse gas emissions should be reduced as soon as possible. How that should be achieved lacks consensus.

On 18th July 2022, Mr Justice Holgate ruled: 

“the UK government’s plan for reaching net zero emissions was unlawful because it provided insufficient detail for how the target would be met.”

In other words, the government did not have a plan at all. The judge’s ruling that one should be produced by 31st March 2023 produced a flurry of documents from the Department for Energy Security and Net Zero (DESNZ) labelled “strategy” and “plan”, but none had substance.

On 23rd June, the Public Accounts Committee reported:

“the Department should bring these together in a coherent delivery plan so that it can understand how realistic its ambition is, and coordinate and sequence its interventions to best effect.”

DESNZ does not do arithmetic. It may recognise that almost all energy in 2050 will take the form of electricity and that our growing population will need at least as much as we use now- about 2,000 TwH. The number of days when wind failed to supply 4 GW at some stage of the day or night fell from 196 days in 2020 to 183 days in 2022. So never mind how many renewables they build, about half the year they won’t work.

Their plan should show how the energy shortfall will be covered. That is, how large the baseload of nuclear plus tidal power needs to be and, when that is insufficient to cover demand, how the surplus demand will be covered by fossil fuels (presumably made clean by carbon capture and storage).  

The general expectancy is that the baseload provided by renewables will be 30% of electricity demand, meaning that fossil fuel energies will fulfil 70% of electricity demand during dunkelflaute (dark) days.

The DESNZ’s failure in the arithmetic department is matched by HM Treasury’s failure to understand nuclear and tidal energy. 

Hinkley Point C was the last nuclear plant approved, but that was nine years ago. Before that was Sizewell B, 27 years earlier.

Modern nuclear plants, called ‘Small Modular Reactors’ (SMRs) are the subjects of similar unjustified hesitancy. In 2015 Chancellor George Osborne recognised SMRs as better value for money, running a selection competition. Yet, eight years later, not a single one has been ordered or built. The Committee on Climate Change (CCC) recommended tidal power to be properly considered, yet DESNZ has ignored that. And when the supply of renewables and nuclear power are inadequate, we maintain the status quo - fossil fuels - proven by the latest interview with the CEO of Shell, Wael Sawan:

“The reality is, the energy system of today continues to desperately need oil and gas”

A related issue is the unnecessarily absolutist thinking that the UK, which causes 1% of global emissions, can solve global warming through unilateral action. This is not only fanciful, but delusory.

To conclude, the DESNZ is failing to do the basic arithmetic on the need for renewable energy to cover the nations’ baseload energy demand; HM Treasury continues to evade commitments to nuclear energy; and activists like Just Stop Oil demand a ludicrous cessation of the mining of fossil fuels. This is a tragic state of affairs, and the responsible institutions would do well to heed the ASI’s advice, and commit to the nuclear agenda. In the meantime, we simply continue burning the fuels destroying our planet.

But why shouldn't climate change be a political issue?

We have an awful lot of people trying to insist that climate change simply should not be a political issue. John Harris is just one of them:

In the UK, unfortunately, the past 48 hours has seen a political story whose parochialist absurdity is off the scale: Conservative voices undermining the fragile cross-party consensus on reaching net zero by 2050 and calling for many of the UK’s tilts at climate action to be either slowed or stopped. The reason? The results of three parliamentary byelections – and, in particular, the views of 13,965 Conservative voters in the outer London suburbs.

But climate change is the very essence of a political issue, something that has to be decided by politics.

No, leave aside the question of whether it is happening, even that of whether anything should be done about it. Stick with just the one point - if we’re to do something what is it that we should do?

Net Zero? A carbon tax at the social cost of carbon? As it happens the science prefers the second rather than the first there. So no one can use “but the science” to decide on the first.

But very much more importantly there’s a big political question here. Britons are being told to carry the cost of lower emissions so that others may gain the benefits of lower emissions. This is something that can only be done with the acquiescence of Britons. Elections are how we decide those things. What we do about climate change is the very essence of what a political issue is. Therefore rather than no politics about climate change we must have lots and lots more.

This is before a rather more sarcastic observation we’d like to make. The same people - largely that is - who argue against this democracy about climate change are those who shout for a “more democratic economy”. Surely that couldn’t be because they think the demos would vote for their economic policies but against their climate ones now, could it?

We literally just turned sand into intelligence

It’s a common enough claim, echoing Boulding. Infinite growth on a finite planet is the dream of madmen and economists. To which an elegant response. One so good that we wish we’d come up with it but as we didn’t we’ll simply steal it.

“We literally just turned sand into intelligence”

Just to be completist, that’s from “gfodor.id”.

Us cornucopians and growthists agree, entirely, that there’re a limited number of atoms on the planet. Going into space doesn’t remove the limit, just expands it. The same is true of energy and everything else physical. Yes, you’re right, the universe has limits (unless the infinite universists are right but let’s not go there). Therefore infinite physical growth in a physically limited universe is not possible.

Good, well done.

One line of attack on that idea is whether those limits are relevant at present - to either the size of our current economy or anything that it will get to in any time scale we should want to care about. We do indeed face limits - CO2 in the atmosphere being one, fish in the sea perhaps one more immediate although to be fair opinions differ there - over the relevant immediacies. We worry more about the fish but that’s just us.

But put that aside and move to something more basic. The economic growth that is being talked about is that in GDP. Something we keep having arguments about as we attempt to enlighten people. GDP is not the number, weight, volume, of things done to physical items. It’s the value added. Not even the value added to the number, weight or volume of physical things but the value added full stop. Finally, it’s not the number, weight, or volume of things that are done to. It’s the value added.

Within this are two different but related observations. One is that usual ecological economics insistence that we should work toward qualitative growth, not quantitative. Well, OK, but to the extent that qualitative growth is the addition of value that’s already included in GDP growth. Because that’s what we’re measuring, value added.

The other again, OK, we should prefer the one q to the other q. How do we encourage this? A possibly slightly extreme but supportable analysis of the planned and socialist economies is that they managed no total factor productivity growth over their entire lifetimes. The Soviet Union, from 1917 to 1991 managed not one whit of this. There was economic growth, most certainly - but all of it was quantitative. To gain one more unit of GDP they needed one more unit of inputs. They grew because they mined more, worked more, grew more, without improving the efficiency with which they did any of those things. Another equally standard analysis is that the 20th century growth of the market economies was about 80% TFP improvements and about 20% increases in inputs. (BTW, these estimates are, respectively, sourced from Krugman and Solow, neither of them known as neoliberal extremists like ourselves. Also both Nobel Laureates, unlike ourselves. So far).

So we can argue that even if the ecological are right, we should prefer, deliberately and with malice aforethought, through policy that qualitative not quantitative growth then we should be preferring market, not planned economies. Entirely the opposite of what is argued but then that’s politics for you.

And here we have an elegant exemplar of that basic contention. Sand is now writing novels. To the extent that they’re good novels this is value addition. Given the average novel they are value addition too.

And yes, we know, there really are people out there claiming that we’re running out of sand. But not that sort of sand that is being turned into computer chips, we assure you we’re not.

Are there limits to physical growth on a physically limited planet? Sure, and obviously. But given that the measure of the economy is value added the limit to economic growth is the knowledge of how to add value.

GDP is value added. The limit to GDP is the knowledge of how to add value.

At which point we’d remind you of this observation which we wish we had come up with but as we didn’t we’ll just steal it:

We literally just turned sand into intelligence

QED

The current value of Afghanistan's lithium reserves is zero.

In fact, as the Pentagon itself quotes us as saying, Afghanistan’s mineral reserves are worth bupkiss.

Which makes this Washington Post report more than a little suspect.

Rich lode of EV metals could boost Taliban and its new Chinese partners

The Pentagon dubbed Afghanistan ‘the Saudi Arabia of lithium.’ Now, it is American rivals that are angling to exploit those coveted reserves.

No. Really, just no.

But now, in a great twist of modern Afghan history, it is the Taliban — which overthrew the U.S.-backed government two years ago — that is finally looking to exploit those vast lithium reserves,

Again, no. There are no lithium reserves in Afghanistan. Therefore the value of lithium reserves in Afghanistan is zero.

A mineral reserve is a specific thing, a phrase that has a meaning in the technical jargon. It means that we - some member of the species, perhaps some group of such, homo sapiens sapiens - has drilled, measured and weighed the deposit, shown that it can be extracted using current technology, shown that doing so will make a profit at current prices and also has the licences to be legally allowed to do so. As no licences have been issued - let alone any of the other work - there are no lithium reserves in Afghanistan. Therefore the value of lithium reserves in Afghanistan is zero.

This is all a repeat of a grand mistake that has been made for a long time now. This one:

A decade earlier, the U.S. Defense Department, guided by the surveys of American government geologists, concluded that the vast wealth of lithium and other minerals buried in Afghanistan might be worth $1 trillion, more than enough to prop up the country’s fragile government. In a 2010 memo, the Pentagon’s Task Force for Business and Stability Operations, which examined Afghanistan’s development potential, dubbed the country the “Saudi Arabia of lithium.” A year later, the U.S. Geological Survey published a map showing the location of major deposits and highlighted the magnitude of the underground wealth, saying Afghanistan “could be considered as the world’s recognized future principal source of lithium.”

Really, just no. We explained this here in 2010, at The Register. We explained it again in 2017 at Forbes.

There are lithium deposits in Afghanistan, no one has any doubt about that. But there are lithium deposits near everywhere. It’s a common element. The value of spodumene (the lithium-containing mineral being talked about) at the end of a two goat track is about that zero even when extracted. The artisanal miners are talking of having been able to sell it at 50 cents a kg a year or more back when lithium prices were at their peak. Which is about right, $600 a tonne today (much lower than that 18 months back) for direct shipping ore - delivered.

But don’t just take our word for it. Or rather, take our word but filtered through the intelligence services of the Pentagon. For there is this, from SIGAR (“Special Inspector General for Afghanistan Reconstruction"):

More recently, and more colloquially, the British economic writer Tim Worstall commented on the U.S. government’s view of Afghanistan’s large deposits of iron, copper, and lithium: “The problem with all of this is that those minerals are worth nothing. Just bupkis.” The reason for his assertion: “The value of a mineral deposit is not the value of the metal once it has been extracted. It’s the value of the metal extracted minus the costs of doing the extraction. And as a good-enough rough guess the costs of extracting those minerals in Afghanistan will be higher than the value of the metals once extracted. That is, the deposits have no economic value”—“As we can tell,” he adds, “from the fact that no one is lining up to pay for them”

Afghanistan has lots and lots of lovely rocks. Of mineral reserves it has not a shred nor a scrap. It is indeed entirely possible that some of those rocks will one day become mineral reserves. But the net present value of those rocks is, as minerals, something around zero. The idea that they’re worth $1 trillion is truly away with the faieries - the result of not understanding even the first bedrock* principles of the subject under discussion.

Even the Pentagon now understands this. And if it’s possible to get military intelligence to understand an idea then the rest of us should be able grasp it too.

*Ahaha. Sorry, couldn't resist.

We can't regulate if we don't know

This is from the US but the idea is common enough here: .

@POTUS: Realizing the promise of AI by managing the risks is going to require new laws, regulations, and oversight.

In the weeks ahead I’m going to continue to take executive action to help America lead the way toward responsible innovation.

This is impossible. We do not know what AI will be useful for. We do not know what it can actually do, what we want done, better than other ways of doing that thing (OK, other than writing C grade essays at GCSE level). We also do not know what might be a problem with what AI can do. We don’t know the benefits, we don’t know the risks.

We face, that is, radical uncertainty. So it’s impossible for us to plan anything. For planning assumes that we have an idea of the cost/benefit analysis so that we can say do that, don’t do t’other. And if we are radically uncertain then we can’t do that, can we?

We have to experiment to find out that is - which is what the market process is, experimentation to find out. Where is that confluence between what this new technology can do and the list of things that people want done?

Given that the people developing AI have no clear knowledge here, we the potential consumers have no idea then how are bureaucrats - armed as they are with the wrong incentives to boot - going to have a fogged clue?

We do already have those general and necessary rules - don’t kill people, don’t poison them, no libel, no incitement to violence and all the other rules that make up a civilised society. But we can’t go any further than that general structure because we simply do not know.

This is something the would be planners never will grasp, let alone admit. You can’t plan uncertainty. The lack of knowledge means that you cannot direct activity. It’s exactly when we don’t know that we’ve got to leave well alone so that we can find out from the undirected experimentation of market processes.

They’re using as their excuse to intervene the exact reason they should be doing absolutely nothing.

What’s AI gonna do? Dunno. So, how you goin’ to plan it then?