How has Ed Miliband got this so wrong? Wholly, entirely, wrong?
Back in the mists of time the British Government hired Sir Nick, now Lord, Stern to produce a great big 1,200 page report on climate change. Was it a problem, should we do something about it? The answer involved a lot of economics, of course, and came up with the answer that the costs of climate change would be greater than dealing with it. Therefore we should do something.
But what? The answer there was economic too. We should do those things that are worth doing. Where the cost of doing the thing was less than the benefit of that thing being done.
This is not cost as in money flowing to capitalist b’stards, nor even from them. This is costs as in Flipper being broiled in the fumes of the last ice floe - or not, as the case may be.
The logic is perfect even if it’s possible to quibble about some of the sums.
We then gain our policy imperative. Set a price. The price of that damage that will be done by not doing something. Something - near anything - that meets that cost is something to be done. Something that costs more than that is not to be. The logic is still perfect.
The specific warning is also there. Do not set a target for emissions and then pledge to meet that at any cost. Because that will mean insisting upon doing things that do not meet that cost/benefit imperative. Set the price not the emissions. The logic is still perfect.
Then we get to the actual policy enacted:
To accelerate wind farm construction, Mr Miliband wants to scrap limits on the total subsidy on offer to offshore developers in Whitehall auctions.
Instead a target would be set for the amount of electricity to be generated, with the cost to households only worked out afterwards.
How did we end up here?
It’s not as if Ed Miliband hasn’t been informed of all of this. He piloted the Climate Change Act through in 2008, the actual response to the Stern Review of 2006. He’s back in charge again as we can all see. And he’s doing exactly, precisely and wholly what the Stern Review said not to do - he’s pursuing an emissions target and damn the costs.
Possibly technocracy - with the usual list of cross-cutting strategic policies with strict conditionality and cut through - is not the way to run the nation? Given, you know, that our rulers seem not to understand the technics of the answers they’re given?
Tim Worstall