Saturday, June 11, 2011

Warming, What Warming?

Dr. David Whitehouse

If there is one question, in my experience, that many climate scientists will avoid it is, “how long does the current standstill in global temperatures have to continue before you question some of your assumptions about global warming?” The question is a pertinent one. In the past decade there is evidence that atmospheric carbon dioxide levels have increased more steeply than before, so why hasn’t the temperature gone up faster than ever before?

When it was first noted some years ago that the post 2001 global annual temperature was at a standstill it aroused considerable passion. Though it was a simple description of the data often those who pointed it out were severely criticised, and their motives questioned. Even today some deny there has been a standstill, although it is now accepted as fact in the scientific literature that the Earth has not warmed at all in the past ten years. See the references in the GWPF article "nothing wrong with our graph" as well as here, also Wang et al Advances in Climate Change Research 1(1): 49-54, 2010, and here, to give but a selection of many references. Even the Royal Society has said the rate of increase has slowed.

Some will say it’s meaningless as ten years is nothing, the canonical climate period is thirty years and that the 1980s were warmer than the 1970s, the 1990s were warmer than the 80s and the past decade is the warmest of the instrumental record. What more needs to be said?

One climate scientist even said that if the temperature stayed the same for the next 50 years it would make no difference to the theory.

But clearly it does matter. Whatever its relationship to long-term climate, the standstill is important because it requires an explanation, and because nobody predicted it, or indeed has a specific explanation for it.

Some will argue that more than a decade ago they correctly predicted the average temperature of the first decade of this century and that it proves the climate models are correct. However, predicting the decadal average temperature, extrapolated from the 1980s and 1990s as part of a rising trend in temperatures is one thing. Predicting that the temperature rise would stop for a decade is another entirely. Also predictions made a decade ago, especially if ‘successful’ must be considered in the light of climatic influences we have since discovered such as solar effects, revised recently, and stratospheric water vapour variations.

The fundamental observable, in the absence of other climatic influences, of increasing levels of greenhouse gasses is rising temperature. Sooner or later the other variations in climate will average out and the long-term greenhouse gas upwards trend must re-establish itself.

How long the standstill?

It is currently at ten years. If you look at the instrumental temperature record, HadCrut3 for example, it’s obvious that there are features in the temperature curve that each require an explanation. The initial low temperatures and rough standstill between 1850 – 1910 (there was a brief warmish phase at about 1875). The rise between 1910 and 1940, the standstill between 1940 – 1980, the rise 1980 – 2000 and the standstill 2000 – 2010. Standstills are not unusual. It is also interesting that in the 50 years since 1960 when the IPCC says greenhouse gasses became the dominant climate driver, there has been temperature increases in only two of five decades! In fact, since the start of the instrumental period in 1850 only 50 of the 160 years have been part of an increasing trend.

Recently the UK Met Office conducted a series of simulations incorporating climate change models with decadal fluctuations in climate and concluded that one out of every eight decades would show a ten-year standstill, but that no standstill will last as long as 15 years. Since we have three standstill decades since 1960 this data seems to be somewhat outside the conclusions of the simulations. Each year is now significant as a prolonged hiatus in temperature acquires more and more statistical significance in taking the observations away from the theoretical predictions.

Keenlyside et al predict no increase in global temperature over the next decade whilst Smith et al made predictions for post 2009 global temperatures saying that there would be a period of stability until 2009 and thence an increase with half of the subsequent years being warmer than 2009. It remains to be seen if this will be the case.

The IPCC says there should be an increase, on average, of 0.2 deg per decade. In Hadcrut3 the increase for 1979 – 2008 is 0.18 deg per decade which seems to fit in with the IPCC estimates. However, the trend for the past decade is zero making a revised estimate for the 1980 – 2000 period as 0.27 deg per decade.

Looking at atmospheric data, which is independent of the weather station data used in HadCrut3 (I am grateful to Lubos Motl for these figures), from RMS AMU between January 1979 and 2011 the increase was 0.14 deg per decade. However, the figure for 2001 – 2011 is minus 0.04 deg per decade. That is, if anything, the world has got cooler, although still within a statistical constant line within errors of measurement.

The UK Met Office has said that it believes the standstill is probably partly caused by the low solar activity of the past decade coupled with the influence of stratospheric water vapour variations. Only appreciated very recently these variations have had the effect of reducing the increase in the past decade. However, if this is accepted then it must also be accepted that the same variations added up to a third of the temperature increase seen between 1980 – 2000.

In its last report the IPCC showed a graph showing global surface warming vs date for various greenhouse gas emission scenarios. Curiously, for a report issued in 2007, it used only global temperature data up to 2000, that is before the standstill. The actual trajectory taken by the world’s temperature is much closer to the temperature expected for constant greenhouse gas concentrations at the 2000 level, which is obviously not what is happening to our atmosphere. None of the IPCC’s scenarios are consistent with the observed global temperature standstill.

When the IPCC issues an update to this graph in their next report they should use the data up to 2010 with data that includes the standstill.

Perhaps it is temporary and a regular feature of an intermittently warming world, perhaps it is not, the global temperature standstill of the past decade is real and contains information that is crucial to the debate about global warming.

SOURCE (See the original for links)

Another Warmist theory takes a tumble: Ocean Acidification is GOOD for Calcifying Clams

Discussing: Range, P., Chicharo, M.A., Ben-Hamadou, R., Pilo, D., Matias, D., Joaquim, S., Oliveira, A.P. and Chicharo, L. 2011. "Calcification, growth and mortality of juvenile clams Ruditapes decussatus under increased pCO2 and reduced pH: Variable responses to ocean acidification at local scales?" Journal of Experimental Marine Biology and Ecology 396: 177-184.


In introducing their study, the authors write that "whether and how ocean acidification will affect marine organisms, ecosystems and the goods and services they provide is currently a topic of great concern," and in their specific case that concern is directed towards juvenile clams of coastal marine ecosystems, since they say these shellfish "link primary productivity with upper trophic levels" and "are also important economic resources for fisheries and aquaculture."

What was done

In an experiment designed to test the effects of increased pCO2 and reduced pH of seawater on the calcification, growth and mortality of juvenile Ruditapes decussatus clams, Range et al. conducted a 75-day controlled CO2 perturbation experiment, where the carbonate chemistry of seawater was manipulated by diffusing pure CO2 into natural seawater to attain two reduced pH levels (by -0.4 and -0.7 pH unit compared to un-manipulated seawater), hypothesizing that under these conditions the juvenile clams would exhibit: (1) reduced net calcification, (2) reduced growth of the shell and soft tissue, and (3) increased mortality.

What was learned

At the conclusion of their experiment, the eight researchers say that they found "no differences among pH treatments in terms of net calcification, size or weight of the clams," disproving the first two of their three hypotheses. Their third hypothesis also proved to be wrong -- doubly wrong, in fact -- for not only was juvenile clam mortality not increased in the low pH seawater, they say that mortality was significantly reduced in the acidified treatments, which was something they describe as a truly "unexpected result."

What it means

The Portuguese scientists conclude their paper by noting that life is intriguingly complex and that "the generalized and intuitively attractive perception that calcification will be the critical process impacted by ocean acidification is being increasingly challenged," citing Widdicombe and Spicer (2008) and Findlay et al. (2009) in this regard. And we note that the results of their own study further contribute to this emerging perception.


New Ethanol Mandates From Washington

My father founded and ran several area gas stations until his death. At first, he embraced the use of oil and gas mandates like those that regulate the ethanol industry — he saw ethanol as a possible revenue stream. However, optimism dwindled as each fall’s harvest brought bushels of despair, not what others had promised. He would one day realize the strife that comes with perverse government regulations.

Many have regarded ethanol to be the proverbial “fuel of the future,” claiming that it reduces the cost of gasoline at the pump while also emitting less pollution. Although ethanol can replace gasoline in some ways, it is less beneficial than many expect.

The Department of Energy began releasing data in 1997 determining that some of the benefits derived from ethanol don’t outweigh the costs, as researchers had previously believed. Ethanol may emit less pollution when burned in place of gasoline, but the Environmental Protection Agency reports that it releases carcinogens at far higher levels than they predicted when it’s created.

Despite the abundance of new testimonies and information, however, both the federal and state government continue to support ethanol ardently, as our country’s energy messiah.

Pointing to often-circulated claims of environmental friendliness and cost-effectiveness, Rep. John Shimkus from Illinois recently introduced new legislation that would impose further government mandates for the production of ethanol. Amid another distressing year for Detroit, this governmental decree would require that 50 percent of all new automobiles be capable of running on ethanol and other non-petroleum fuels by 2014. That number would stiffly rise to 95 percent just three years later.

So, do the advantages of ethanol outweigh the costs? The answer, simply, is no. Aside from its counterproductive environmental effects and proven efficiency loss for each mile to the gallon, ethanol is a precarious investment for the government to force on us for several reasons:
First, it has been shown that increases in ethanol production are correlated with an increase in food prices. These effects can be felt not only statewide, but also nationally and internationally.

Second, and as a direct result of government mandates, a cloud of pseudo–market demand now hangs heavily above the heartland. Simply put, the current supply/demand ratio did not arise naturally from the decisions of producers and consumers, interacting voluntarily in the market. Instead, the ethanol industry is artificially bolstered by government sanctions.

Finally, both this mandate and others like it point to the essence of how government controls harm the economy. There are too many hands in the cookie jar, and, as a result, everyone’s hand gets stuck; the cookie crumbles. Automakers should not be burdened with absurd requirements such as this from legislators who seek to alter the free market for the sole benefit of their constituents, and at the expense of everyone else.

Don’t get me wrong, I support the development of renewable energies and green solutions. Markets reward efficiency. However, as both a Missouri resident and an owner of my father’s businesses, I find that legislation like our own E-10 mandate and the proposal advanced by Rep. Shimkus in Illinois are harmful — especially in the long run.

Neither supply nor demand would exist at anywhere near current levels without both federal and state mandates, both of which have propelled ethanol into the forefront of the American auto and oil industries. As it stands, the eagerly pushed supply of ethanol more than satisfies current market demand. And that, folks, is just basic economic principle.



Three articles below

It's time the British Government grew up over climate change, says Nigel Lawson

The Coalition’s obsession with climate change is damaging Britain’s recovery from recession, former Tory chancellor Nigel Lawson warns today

Writing in the Daily Mail, Lord Lawson delivers a scathing assessment of David Cameron’s so-called ‘green agenda’ and says it is ‘time this Government grew up’. Lord Lawson, one of the most respected Tory figures of recent decades, accuses the Prime Minister of risking Britain’s economy to make a ‘symbolic’ point.

In a devastating verdict he writes: ‘The Government’s highly damaging decarbonisation policy, enshrined in the absurd Climate Change Act, does not have a leg to stand on. It is intended, at massive cost, to be symbolic: To make good David Cameron’s ambition to make his administration “the greenest government ever”.

His comments came after former Civil Service chief Lord Turnbull accused ministers and officials of pandering to global warming ‘alarmists’ and piling huge, unnecessary costs on ordinary families.

Lord Lawson, Chancellor under Margaret Thatcher, goes further today, saying that plastering Britain with wind farms will push up bills to families and businesses without producing any real benefits. The switch to ‘low-carbon’ energy is expected to add £200 to annual energy bills. He writes: ‘This price increase would be economically damaging at the best of times; and these are not the best of times.’

And he warns the harm to business could be greater still, adding: ‘The economy is already recovering from the recession. ‘However, there is indeed a threat to that recovery and the bitter irony is that this is of the Government’s own making. ‘It is its so-called climate change policy of ‘decarbonising’ the British economy.’

He says it is ‘highly uncertain’ that higher carbon emissions will warm the planet to a dangerous extent and warns it is ‘futile folly’ for Britain to act alone when its emissions are two per cent of the global total.
Last weekend, some 52 (for the most part little known) economists signed a letter to the Observer newspaper calling on the Government to retreat from its commendably firm determination to reduce substantially, during the lifetime of this Parliament, the appalling budget deficit it inherited.

I am reminded of my own time as a Treasury Minister when, in March 1981, no fewer than 364 (rather better known) economists signed a letter to the Times claiming that ‘present policies will deepen the recession, erode the industrial base of our economy and threaten its social and political stability’ and should be abandoned forthwith. In fact, from that moment, the economy embarked on eight years of uninterrupted growth.

I have no doubt that Chancellor George Osborne will, rightly, ignore the bad advice of the 52, just as we did of the 364. And indeed the International Monetary Fund has sensibly encouraged him to stand firm.

The economy is already recovering, slowly but incontrovertibly, from the recession. However, there is a threat to that recovery — and the bitter irony is that this is of the Government’s own making.

It is not the very necessary reduction and eventual elimination of the budget deficit. It is the Government’s so-called climate-change policy of ‘decarbonising’ the British economy — the replacement of carbon-based energy with substantially more expensive non-carbon energy, in particular wind power.

The ostensible purpose of this policy is to prevent what is customarily described as catastrophic global warming. Now, there are at least two major problems with this.

The first, as more and more eminent scientists are finding the courage to point out (the most recent being the distinguished physicist Professor William Happer of Princeton University), is that it is far from clear that there is a serious problem — let alone a catastrophic one — of global warming at all.

My think-tank, the Global Warming Policy Foundation, has just published a devastating analysis by the former Head of the Civil Service, Lord Turnbull, demanding that politicians ‘stop frightening us and our children’ about the threat of global warming. He calls on Whitehall and ministers to consider the damaging economic impact of blindly following the ‘climate-change agenda’.

While it is scientifically established that increased emissions of carbon dioxide into the atmosphere from the use of carbon-based energy, such as coal, oil and gas, can be expected to warm the planet, it is uncertain how great any such warming would be, and how much harm, if any, it would do.

The second major problem with the British Government’s policy is that even if it were thought to be desirable to cut back drastically on carbon emissions, this can have an effect only if it is done globally. For the UK, responsible for 2 per cent of global emissions, to go it alone is futile folly.

And the complete failure of the UN-sponsored environment jamborees — in Cancun last year and Copenhagen the year before — to achieve a global decarbonisation agreement clearly shows that this is not happening and, in my judgment, is not going to happen.

China, the biggest global emitter, has made it clear that it will not accept any restraint on its use of carbon-based energy, as has India. (The annual increase in China’s emissions, incidentally, is greater than the UK’s total emissions.) And the U.S., the second-largest emitter, has made it clear that without China and India on board, there is no prospect of the U.S. signing up to anything.

The plain fact is that the world relies on carbon-based energy simply because it is by far the cheapest available source of energy and is likely to remain so for the foreseeable future.

The major developing countries, in particular, are understandably unwilling to hold back their development and condemn their people to avoidable poverty, by moving from relatively cheap energy to relatively expensive energy.

Yet this is precisely what the present UK Government is committed to. Alone in the world, we have on our statute book a Climate Change Act. This commits us, unilaterally, to a legally binding process which is already well under way. And eventually — by 2050 — we will have near-total decarbonisation, by switching to an ever more expensive mix of ‘green’ energy sources.

To achieve this, the Government has introduced a range of measures, notably the renewables obligation, which requires electricity suppliers to buy a proportion of their power from renewable sources, chiefly wind power, at huge cost, which is then loaded onto all electricity bills.

Then there are the so-called feed-in tariffs, under which a greatly inflated price is paid to wind-farm owners and others who supply renewable energy to the grid — and again loaded onto our electricity bills.

On top of this, there are a number of other price-inflating measures, such as the so-called ‘carbon floor price’ (a commitment to ensure that the price of conventional energy stays high and goes higher, by means of a government levy on firms generating electricity based on the amount of CO2 they produce), which are yet to take effect.

What is doubly unacceptable, however, is that the public is being made to pay for this by stealth. This is why, in the cause of proper transparency, our electricity suppliers should be made to reveal in our utility bills the extent of this hidden tax element, which is costing families an average of £200 more a year.

This price increase would be economically damaging at the best of times; and these are not the best of times. And the damage is all the more serious when other countries are not doing the same.

In recent weeks, spokesmen for both the Engineering Employers’ Federation and the Energy Intensive Users’ Group have warned of investment and jobs going overseas, where energy costs are lower.

They have been joined by spokesmen for the chemical industry and the UK head of Tata Steel (Britain’s largest steelmaker, the former British Steel), which has already announced substantial lay-offs in the UK, partly for this reason. And this week the CBI, at long last, voiced its deep concern.

It is curious, to say the least, that a government that came to power saying it wished to rebalance the economy to rely less on financial services and more on manufacturing should be determined to impose the most anti-manufacturing energy policy of any government in British history.

This policy, incidentally, will also greatly exacerbate the problem of ‘fuel poverty’ (officially defined as the number of people who are obliged to spend more than 10 per cent of their household income on fuel), as the charity Age UK has pointed out.

The Government needs all the political support it can get to carry through its economic policies. Its disastrous ‘green’ energy policy can only undermine that support.

The Coalition likes to boast, as did its Labour predecessor which initiated this damaging policy, that the UK is the only country in the world to impose severe and legally binding carbon reduction requirements on its economy.

While this claim is well-founded, ministers might do well to ask themselves why the UK is the only country to do this. The answer, of course, is that no other country has the slightest intention of incurring such pointless and self-inflicted economic harm.


The answer, my friend, ain't blowing' in the wind

Following the revelation that we’re all paying a secret stealth tax to subsidise so-called renewable energy sources, it seems like a good time to check out exactly what we are getting for our money.

At midday yesterday, wind power was contributing just 2.2 per cent of all the electricity in the National Grid. You might think that’s a pretty poor return on the billions of pounds spent already on Britain’s standing army of windmills.

But it’s actually a significant improvement on the last time I checked the wholesale electricity industry’s official website. At the turn of the year, the figure was 1.6 per cent. During the cold snap the turbines had to be heated to stop them freezing and were actually consuming more electricity than they generated.
Worth it? Wind power contributes just 2.2 per cent to the overall electricity of the National Grid

Worth it? Wind power contributes just 2.2 per cent to the overall electricity of the National Grid

Even on a good day, they rarely work above a quarter of their theoretical capacity. And in high winds they have to be turned off altogether to prevent damage. Britain’s 3,426 wind turbines produce no more electricity than a single, medium-sized gas-fired power station.

Any sane individual would conclude that wind generation is hopelessly inefficient and horribly expensive and stop throwing good money after bad. But when did sanity ever have anything to do with government policy?

Ministers are planning to install another 12,500 of these worse-than-useless windmills, some of them up to three times the size of existing monstrosities.

We are paying for all this through hidden charges which now make up a fifth of all gas and electricity bills. The average household has to fork out an extra £200 a year.

That’s because the Government forces energy companies to buy from renewable sources, which are far more expensive than conventional power stations. The cost is then passed on to the consumer.

Ministers know there would be an outcry if they raised taxes to pay for windmills, so they hide the subsidies in our gas and electricity bills and hope the energy companies get the blame.

Scottish Power has just announced it is increasing gas prices by 19 per cent and electricity by 10 per cent. Although there is little the companies can do about rising world commodity prices, our bills are being artificially inflated as a direct result of the Government’s insane ‘climate change’ policies.

At a time when the price of everything from petrol to basic foodstuffs is going through the roof, it is outrageous that ministers are piling on the misery by forcing all of us to pay well over the odds for domestic fuel.
Here’s how crazy it is.

Earlier this year the National Grid was forced to pay £900,000 compensation to the owners of six wind farms which were forced to close down one especially gusty night — because they were producing too much electricity and there was no capacity to store it.

So they’re either producing little or no electricity, or else have to be switched off because they’re producing too much. Either way, we pay.

It’s not just windmills, either. Farmers are being offered £50,000 to cover their fields with solar panels, which are useless when the sun don’t shine. Given that we are told we could soon be facing food shortages, you might have thought it would make sense to encourage farmers to grow crops.

But with a guaranteed annual return far higher than if he grew wheat, you can’t blame Farmer Giles for concluding it’s not worth getting his hands dirty and taking the money. Lavish subsidies for renewable energy schemes are also making some of the country’s richest landowners even richer at the taxpayers’ expense.

Meanwhile, manufacturing industry faces a 70 per cent increase in its fuel bills — regardless of the level of world energy prices — because of a reckless levy on carbon emissions imposed by the Coalition’s tame racing driver. Some say he ran off with a lapsed lesbian and that he persuaded his ex-wife to take the rap for a speeding offence. All we know is: he’s called Chris Huhne.

The Lib Dem Energy Secretary epitomises the political establishment’s obsession with ‘man-made global warming’. Climate change has given them a catch-all excuse to grab more power and raise taxes.

Don’t take my word for it. Tony Blair’s former Cabinet Secretary, Lord Turnbull, has condemned MPs and civil servants for punishing hard-working families and jeopardising economic growth in the name of saving the polar bears.

He said: ‘We need more open-mindedness, more rationality, less emotion and less religiosity and an end to the alarmist propaganda and to attempts to frighten us and our children.’ Amen to that.

Why should Britain have the world’s toughest targets for cutting carbon emissions, especially when China is opening a new coal-fired power station every week? Meeting those targets will take £13 billion a year out of the economy.

Why should British householders, uniquely, be forced to pay higher gas and electricity bills to disfigure our green-and-pleasant with hideous War Of The Worlds windmills, simply so politicians like Huhne can preen themselves at international ‘global warming’ conferences?

It is suicidal to load unnecessary financial burdens on British businesses, which are trying to compete with cut-price Chinese products produced in factories powered by cheap electricity.

It’s not even as if there are tens of thousands of jobs being created in Britain by the ‘green economy’. The wind turbines are all built and installed by foreign firms. British taxpayers are subsidising companies in Germany, Spain and Japan.

My wife recently went for lunch in a Norfolk hotel which was overrun with Scandinavian technicians, living high on the hog, plonking offshore wind farms in the Wash and the North Sea.

Politicians are putting our economic recovery at risk by posturing over ‘global warming’ and dragging their feet over the obvious and urgent solution of building more clean, safe nuclear power stations.

Because of this madness, Britain faces the very real prospect of rolling power cuts in the not-too-distant, as our older generation of power stations come to the end of their lives.

Stuff the polar bears. Unless the politicians get a grip, sky-high gas and electricity bills will be the least of our worries.


The REAL reason fuel bills are going through the roof? Crackpot green taxes you're never even told about

Scottish Power has understandably provoked howls of protests after announcing plans to raise its gas price by a thumping 19 per cent and its electricity tariffs by an inflation-busting 10 per cent.

And over the next few days and weeks, I am sure its main competitors will announce similar price hikes — leaving Britain's unhappy householders facing annual power bills some £200 higher than they were a year ago.

Of course, the power companies will offer the normal excuses. Media-trained chief executives will point to increases in wholesale power prices, which have gone up by about 25 per cent since last winter. And no doubt one or two will blame increased demand from Japan in the wake of the earthquake and tsunami last March.

But none of them, I'll wager, will mention one of the biggest reasons why our power bills only ever seem to be heading up and up and why — regardless of what's happening in the wholesale energy market — they could easily have doubled by 2020.

Spurred by the Government's stubborn but wrong-headed commitment to renewable energy, so-called green stealth taxes are already adding 15-20 per cent to the average domestic power bill and even more to business users. And yet, despite the growing cost of these taxes, you won't find any mention of them at all on your gas and electricity bills.

That, of course, suits the Government down to the ground. If it raised the huge sums required to encourage renewable energy and limit carbon emissions through general taxation it would make the Government itself very unpopular. But by doing it through electricity and gas bills, the Government has cleverly ensured that it's the power companies that take the blame.

So, what should be appearing on our power bills? First is the so-called Renewables Obligation, which currently requires power companies to buy 11 per cent of their power from renewable resources.

The problem is that renewable energy — most of which comes from on- and off-shore wind farms, solar panels and biomass plants (power stations fuelled by wood chippings and agricultural matter) — is between three and five times more expensive than power from conventional sources such as coal or gas.

So by obliging power companies to buy this more expensive renewable energy — and latest estimate suggests off-shore wind-farms could be up to ten times more expensive — the Renewables Obligation already starts to inflate our power bills.

Sadly, however, it doesn't stop there. Next is the European Emission Trading Scheme, which requires all energy-intensive companies to off-set their emissions with so-called carbon credits — permits which allow companies to emit a specific amount of waste. At the moment, these are free, but they won't be for much longer, with new measures due to come into force next year — another reason why our power bills are heading only one way.

The Carbon Emissions Reduction Commitment, which requires energy suppliers to invest in expensive technology to reduce their carbon emissions, also does nothing to help.

Then, at least for corporate customers, there is the Climate Change Levy, which effectively taxes businesses, companies and public bodies on the energy they use. So when added to the other climate change taxes, the average British business is already facing a power bill some 20-25 per cent higher than it should be.

But unfortunately it's not going to stop at that. The Treasury itself already admits that scheduled increases in the Climate Change Levy will see business power bills increasing by 70 per cent by 2020, regardless of what happens in the wholesale market. Outside observers, however, believe the bills will double.

And that's before the Carbon Floor Price — the controversial measure introduced by Chris Huhne in March — comes into effect in 2013. By charging power companies and heavy industry for their CO2 emissions (at £16 per tonne, rising to £30 per tonne in 2020), the Chancellor has admitted that the aim is to make power derived from fossil fuels deliberately more expensive, making both nuclear power and renewable energy look more competitive.

And yet he's done this at a time when Britain has reserves of fossil fuels for years to come, in the shape of coal, gas from shale and, of course, North Sea Oil, which may be in decline but is nowhere near to running out. And yet businesses all over Britain will be needlessly forced to pay more for power from such sources, robbing them of funds that could create jobs and pay for investment.

It's the final unseen tax, however, that is perhaps the most outrageous. It's now widely accepted that landowners and big businesses have started to invest in renewable energy projects — be they wind or solar-powered — only because of the huge subsidies being offered by the Government.

At a time when household savers are struggling to get a 0.5 per cent return on an instant access saving account, some of these renewable energy subsidies — paid in the form of generous payments for the electricity produced, so called feed-in tariffs (FITs) — are guaranteeing annual returns of 10 per cent. Small wonder that after years of disinterest and inactivity, renewable energy projects are now popping up all over the place.

These direct subsidies are paid for out of general taxation — in other words by every individual or corporate taxpayer — to the current tune of some £1.5 billion a year. But research has shown these subsidies are being paid to some of the wealthiest landowners and biggest businesses in the country, including the Crown Estate. It's one of the biggest wealth transfers — from millions of ordinary hard-working taxpayers to a few hundred of the hugely wealthy — in British history.

It's staggeringly unfair and, in the growing opinion of many, totally pointless.

Not only is much of the science behind the idea of global warming now being disputed but, at a time of such widespread economic hardship, we simply cannot afford to misdirect scarce economic resources on such a massive scale. Britain needs jobs, it needs industry. What it doesn't need is rows and rows of heavily-subsidised wind turbines.

People, however, will only realise that when the cost to each and every one of us becomes readily apparent and, at the moment, it's being deliberately hiddens. The Government has to come clean and force the power companies to make their bills fully transparent.

For residential customers, the cost of the Renewables Obligation and European Emission Transfer Scheme needs to be itemised in the same way VAT currently is. If the EETS really is costing each household an average of £100 a year, then householders have a right to know that.

For business customers, many of which pay huge power bills already, both the Climate Change Levy and the Carbon Floor Price, where appropriate, need to be separately quantified and itemised.

Only then will those facing spiralling power bills have all the information required to make the appropriate decisions. Only then will it be possible to see if a power company has been raising its prices unfairly and change supplier.

And only then will the true cost of the Government's mad rush towards renewable energy become clear, allowing voters to back or sack those who formulated the policy.

But full transparency could have also have one other benefit. It could persuade the Coalition Government to rethink this misguided and unaffordable energy policy altogether.



Three articles below

Climate policy costs large yet still underestimated

Henry Ergas

TO get an intelligent answer, ask an intelligent question. It was the failure to do so that undermined the modelling of the carbon pollution reduction scheme. From the snippets Wayne Swan released on Wednesday of carbon modelling 2.0, it has exactly the same weakness. Not that the snippets lack interest. Most striking is just how large the costs of the new scheme are estimated to be.

According to the Treasurer, per capita incomes will grow by 1.2 per cent annually. The scheme is expected to reduce that growth rate by 0.1 percentage point. That reduction, Swan claims, is a mere trifle. But it amounts to a permanent 8 per cent cut in our long-term growth rate. To see what that implies, consider the present value of the forgone income; that is, the absolute value of the cost to 2050. That present value is in the order of $1.4 trillion. The proposed policy would therefore cost Australia about 1 1/2 years' national income. But even that large amount is a significant underestimate, assuming the modelling is similar to that done for the CPRS.

First, it assumes moving to the scheme involves no transition costs. But resources are not infinitely malleable. Substantial costs would be incurred not merely in moving to the scheme but also if we eventually wanted to abandon it.

Second and even more important, the modelling assumes our commercial rivals are implementing a similar scheme. Given that assumption, the modelling does not assess the government's proposal. Rather, it models an entirely different policy: that of introducing an emissions trading scheme when such a scheme is being introduced by our competitors.

To cost the government's proposal, one therefore needs to ask a more sensible question: what are the consequences for Australia of acting unilaterally? If doing so only doubled the adverse impact on our growth rate, the policy's cost would exceed three years' national income. Of course, the government denies it is acting unilaterally. Rather, pointing to the Productivity Commission's just released report, it says many countries are implementing climate change policies.

But the PC did not examine Australia's mining competitors. And in those countries it did examine, the policies adopted are often ineffectual and inefficient. Moreover, those countries generally exempt their trade-exposed, carbon-intensive industries from paying for carbon emissions. By imposing a carbon tax on those industries, we would truly be flying alone. The government's response to this involves six arguments that are individually incorrect and collectively incoherent.

* First, it asserts, contrary to all evidence, that the world is on track to achieve credible, enforceable agreement on reducing carbon emissions.

* Second, it argues that whatever the difficulties, action by Australia would significantly speed global agreement.

However, even if the scheme did advance global agreement, the question is whether there are not cheaper options for achieving that goal. Spending even a tiny fraction of the policy's cost scaling up our participation in the global process would surely be every bit as effective in advancing international agreement. And if those efforts failed, we would not be left with a costly scheme entrenched by constituencies with an interest in its perpetuation.

* Third, the government says its proposal would reduce uncertainty and promote investment, notably in electricity generation. Uncertainty about carbon prices does create issues for electric power investment. But that uncertainty is inevitable given the absence of international agreement. Trying to deal with it by imposing needless costs on the economy as a whole is neither sensible nor sustainable. And the government's scheme, with its multiple decision points and timeframes, only adds risks to those investors already bear.

* The government's fourth tack is to cast the issue as a matter of morality. Of course, appealing to our better instincts sits uncomfortably with the government's mantra that it won't hurt a bit. But, even putting that aside, there is nothing particularly ethical about wasting resources. Nor is it especially noble to squander them on climate change.

* Fifth, the government argues that without an ETS, other countries will impose punitive tariffs on our exports. Whether that would be legal is questionable. It overlooks the fact those countries are exempting their exports from carbon imposts, making it implausible any claim against us could succeed. Even more importantly, it makes no sense: if Germany taxed imports of our low-cost ores, its industries, not ours, would mainly suffer, losing sales to competitors that did not impose such taxes. Not even the Europeans are that irrational. Even were there a risk that they are, trashing a year's national income is surely not the most cost-effective insurance policy.

* Sixth and last, the government says an ETS is more economically efficient than the alternatives. True, the wealth transfers that masquerade as climate policy are an insult to common sense. But the government is not intending to eliminate those schemes: indeed, its modelling has assumed they would stay in place. And the government and Ross Garnaut propose adding new wealth transfers, compounding the waste. Even were a completely clean-skin ETS preferable to what we have now, that is irrelevant to evaluating what is actually on offer.

Rather, if government is sincere about enhancing efficiency, let it release modelling comparing its proposal, including the existing and proposed handouts, to the wait-and-see option and to the schemes proposed by Warwick McKibbin and Geoff Carmody. Let it, in other words, address the issue of policy relevance: given global uncertainties, how does adopting this scheme compare with alternatives, including that of eliminating the wasteful policies currently in place?

That would be to answer the intelligent question. If it refuses to tackle that question, the government will doom the Treasury's modelling, no matter how competent it may be, to ultimate irrelevance.


Mine union digs in over compensation under a carbon tax

ONE of Australia's largest unions has threatened a blue-collar revolt should the nation's dirtiest coalmines fail to receive the same level of assistance as they were promised under the original emissions trading scheme.

With industry compensation still being thrashed out behind closed doors, the national secretary of the Construction, Forestry, Mining and Energy Union, Tony Maher, said he is worried coalminers will be dudded to appease the Greens. "They want to single out mine workers as some sort of trophy hunt," he said of the Greens.

Mr Maher told the Herald that unless the government stood firm and secured the same compensation package as before, "they'll have a big problem with us".

Under the Rudd government's emissions trading scheme, there was to be assistance for 23 of the nation's 150 coalmines.

Most coalmines are open-cut, low-emitting projects, and a price on carbon would have only a minor effect on the price of each tonne of coal they produce.

But there would be a significant increase on the price of coal produced by the 23 so-called "gassy" mines, which emit large amounts of methane.

Rather than giving the gassy mines free permits as compensation, which would allow them to go on polluting, the original scheme proposed to allocate $1.5 billion to help them implement measures to lower emissions.

The Minerals Council and the coal industry have been insisting that the same deal be guaranteed, and now Mr Maher has joined the fray.

Industry compensation for the Gillard government's carbon tax is being negotiated by the government, the Greens and the independents which make up the multi-party climate change committee.

It is understood the government is again pushing for the gassy mines to be looked after, but the Greens, who are hostile to coalmining, are resisting.

Mr Maher said 5000 jobs were at stake if the Greens prevailed, and he warned that the backlash would extend beyond the mining sector.

He likened the potential reaction to the abandonment of Labor by blue-collar workers after Labor's botched Tasmanian forestry policy during the 2004 election campaign. "Australian blue-collar workers won't be salami-sliced on job security," Mr Maher said. "It's mine workers one day, oil workers the next day, cement the next." He said everyone involved in designing the carbon tax needed to realise its success depended on community acceptance.

"Job security and household compensation are paramount. The Greens are in la-la land. I am calling on all the members of the [multi-party committee] to say where they stand on miners' jobs in gassy coalmines. "The government's been really silent about coal. The Greens have been silent; they have been poisoned by prejudice."

Mr Maher's reaction is similar to that of the Australian Workers Union boss, Paul Howes, who demanded in April that the steel sector be exempted altogether from the carbon price. He also insisted that not one manufacturing job be lost.

The union pressure is indicative of fears which are building on the shop floor and being fuelled by the Opposition Leader, Tony Abbott.


End renewables fantasy now

AUSTRALIA'S biggest carbon emitters have called for the immediate withdrawal of commonwealth and state renewable energy programs that the Productivity Commission has found cost billions of dollars for little result.

States that refused to wind back generous rooftop solar and other programs should be denied Grants Commission funds or GST payments, the Australian Industry Greenhouse Network said.

The AIGN, which represents industries responsible for more than 90 per cent of Australia's carbon emissions in mining, manufacturing and energy production, has lobbied the federal government's multi-party climate change committee for reform.

"It may be that punitive action needs to be taken through a reduced distribution of Grants Commission funds or GST revenues to states that fail to make the required reforms to existing programs or continue to adopt new ones," the AIGN says in a letter to the multi-party committee.

AIGN chief executive Michael Hitchens said this week's Productivity Commission report strengthened the case for reform.

The report found schemes such as state-based feed-in tariffs for rooftop solar cost between five and 10 times as much as a market-based scheme to cut the same amount of CO2 emissions.

All parties, including the Greens and independent MP Tony Windsor, have criticised the ad hoc approach to "complementary measures".

The issue of reform is understood to be on the table for discussion within the multi-party committee, but state reform can be achieved only through the COAG process.

The AIGN yesterday called for the so-called complementary measures to be phased out immediately to concentrate on a market-based scheme.

Mr Hitchens said the Productivity Commission report confirmed that if an economy-wide pricing approach was taken in Australia most of the 237 other policies needed to be abolished.

A spokesman for Climate Change Minister Greg Combet yesterday said the federal government's Renewable Energy Target scheme had already been scaled back to a significant degree. "Once we introduce a carbon price, the Renewable Energy Target will not need to do the heavy lifting in transforming our energy sector," he said. "That's because the carbon price will provide additional strong incentives for investment in renewable energy. "Final details of a carbon pricing mechanism are yet to be determined and remain the focus of negotiations in the multi-party climate change committee."

Mr Hitchens said a key challenge for the implementation of a single economy-wide carbon price was the concurrent removal of most of the other measures adopted by all governments. "In the electricity sector, on the most optimistic estimates, the Productivity Commission shows that, globally, all these policies are saving just 210 million tonnes of CO2-e for a total cost, as measured by subsidy equivalent, of over $18,000 million a year," he said.

A Greens spokesman said the party was keen for complementary measures, but it had always been critical of the ad hoc approach. The Greens have said the state-based feed-in tariffs have been very poorly designed and they wanted to see a carbon price.



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