Wednesday, May 27, 2020

Beware! Post-lockdown stimulus policies worldwide are likely to be "Green"

Administrations are likely to adopt green stimulus policies for the following eight reasons:

1. Green spending is still perceived as unobjectionable because it generates a common benefit, partly because the economic character of renewable technologies is not well understood. Green spending is seen as less threatening than, say, spending on conventional energy, nuclear, coal and gas with carbon capture and sequestration, since those energy sources are perceived as standard, selfish, big business. Green businesses are in fact if anything even less self-denying, less virtuous, but that is not currently the perception. Governments are well aware of this.

2. Furthermore, green public spending would be seen to benefit businesses that can plausibly pretend to address a common threat in climate change. Therefore that spending will be less resented. The fact that there are other, much less resource-hungry ways of reducing emissions is not well understood by the public, and in fact that resource-heavy character is a positive attraction for an administration because…

3. The immediate gross effect of green spending is large. Lowcarbon energy sources, and green technologies generally, are almost all very low productivity – nuclear would be the exception – and a great deal must be spent on both labour and other resources to deliver measurable results. The Net Zero target as outlined by the UK’s Committee on Climate Change, for example, implies extremely heavy spending, on the electrification of transport, and also on hydrogen generation, carbon capture and storage, hydrogen storage and distribution infrastructure, not to mention the re-equipping of 26 million households to use hydrogen boilers in conjunction with heat pumps. And these are only some of the most important costs that are additional to the previous target. This is attractive for an administration since they can spend a great deal with a relatively small number of policy instruments, reducing legislative and administrative burden. There will be no risk of missing the 16.45 departure from Victoria.

4. Furthermore, there are presentational benefits arising from the scale of the spending necessitated by low productivity technologies. The spending results in highly salient action; the consequences of green spending will be highly visible because they will be everywhere, and the numbers of people involved will be large. It will seem as if something is being done to rebuild the economy.

5. While low-productivity investments are clearly undesirable, administrations will persist in supporting them because the green industries have successfully misrepresented themselves as cheaper than conventional energy, a falsehood in which the British government has colluded and now may even believe. Capital costs for both wind and solar are still very high, contrary 3 to the propaganda; the operation and maintenance costs are high and perhaps even rising, and the grid system management costs of introducing wind and solar are vast; no other word will do. Nevertheless, British government departments and indeed some academics persist in claiming otherwise. It is a pitiful intellectual failure, and will eventually be found out, but not soon, which is in fact a further reason that government will be drawn to wasteful and harmful green spending as a post-Covid stimulus, namely…

6. The gross effect of all public spending is immediate, while net effects – positive or negative – are delayed. Thus, it is the gross effect that interests bureaucracies and elected politicians; the net effect is somebody else’s problem. For example, a large upfront expenditure on green technologies has a rapid gross impact, while the inevitable negative net effect will only materialise in a decade’s time. This can be compared with spending on highly productive and valuable technologies; the upfront spending is smaller so the gross effect is reduced, while the positive net effect, like all net effects, is delayed. The result of this is that, paradoxical though it may seem, administrations aiming to stimulate an economy are actually positively drawn to what in other circumstances would be thought of as malinvestment. History, I think, shows this, but a misunderstanding of that history is actually one of the reasons that government will be drawn to Net Zero as a post-Covid stimulus.

7. The positive aura of a Green state intervention rests very heavily on the continuing positive public understanding of Roosevelt’s New Deal, which of course also had a large renewable energy component in the Tennessee Valley Authority. Greens in the UK have been relying on this comparison for some time now, at least since 2008 when the Green New Deal Group was formed, and the phrase Green New Deal is all the more powerful since, with hindsight, the New Deal seems green before its time. However, the net benefit of Roosevelt’s policy is highly questionable, a matter well understood in the United States, but almost undiscussed in the United Kingdom. Indeed in the US there is a sizeable body of analysis suggesting that while Roosevelt’s moves to stabilise the banking system were successful, the massive public spending that followed, and for which the President is most often praised, actually delayed recovery, and that it was only the demand created for war materiel that returned growth to trend. That is still controversial, of course, but at least there is an ongoing adversarial debate in the US. Here in the UK, the history is taught in schools without any qualification, supported by a background of cultural indoctrination: the teaching in schools of the Grapes of Wrath as a set text, and informally from films such as It’s a Wonderful Life. Our understanding of Roosevelt’s New Deal is shallow and obtuse, with consequences for our grasp of the threats posed by any attempt to employ Net Zero spending to restore the economy after lockdown. 4

8. And finally, to these powerful concerns we can add the regrettable truth that the British government at almost every level is wracked by a timid fear of breaking step with what they take to be the consensus of international policy, a timidity brought into sharp focus by the fact that the UK happens to hold the chair of the COP process. They are concerned that by trying to protect British interests they will be seen to align the UK with that part of US opinion with which it most dreads association, namely those that reject the Paris Agreement in order to ‘Make America Great Again‘.

China’s Ascent To Global Superpower Based On Cheap Coal

This year's record drop in carbon emissions due to the COVID-19 crisis has renewed questions about China's continued push for coal-fired power as the government pursues economic recovery.

Last week, the International Energy Agency (IEA) estimated that worldwide carbon emissions linked to global warming will plunge nearly 8 percent this year in the wake of the pandemic and production shutdowns.

Global energy demand will fall by 6 percent, a loss seven times greater than during the 2008 financial collapse, the IEA said in a 41-page report.

In the first quarter, China recorded the biggest cut with a slump in demand of over 7 percent following an eight-week lockdown to limit the spread of the disease.

"The absolute decline in global energy demand is without precedent, and relative declines of this order are without precedent for the last 70 years," the Paris-based agency said.

Among the stunning figures in the IEA's forecast, global oil demand could fall by 9 percent this year, rolling back consumption to levels of 2012.

Worldwide demand for electricity is expected to shrink by nearly 5 percent, driving coal demand down by 8 percent and cutting coal-fired power by over 10 percent.

The magnitude of the declines will draw attention to questions of not only when but how economies recover.

One of the wild cards in the forecast is what China will do to resume growth as the rest of the world struggles to restore demand in staggered time frames and recovery rates.

China's gross domestic product tumbled by a record 6.8 percent in the first quarter, according to official statistics.

The International Monetary Fund has forecast a partial improvement this year with 1.2-percent growth, rising sharply with expansion reaching 9.2-percent in 2021.

But if China's recovery relies on a big rebound in coal-fired power, the damage in terms of climate change could cancel out much of the emissions reduction expected this year.

"The recovery of coal demand for industry and electricity generation in China limits the global decline in coal demand," the IEA outlook said.

Global coal use could recede only half as much as forecast, "if China and other large consumers ... recover more quickly," the IEA said.

The report classifies China as "a coal-based economy." Despite gains in renewable sources and lower-carbon natural gas, the country still relies on coal for 57.7 percent of its primary energy, according to the National Bureau of Statistics (NBS).

Roughly two-thirds of China's electricity is generated from coal, raising the odds that when the economy bounces back, so will coal consumption and carbon emissions.

"As after previous crises ... the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure," the IEA warned.

Recovery so far has been gradual, judging by China's recent data on power production.

Generation in the first half of April rose just 1.2 percent from a year earlier after consumption fell 6.5 percent in the first quarter, the China Electricity Council and state media said.

But the IEA also noted the close links between industrial output and electricity use in China, a factor that points toward future growth of greenhouse gas emissions.

Industry accounted for over 60 percent of power consumption in China last year compared with 20 percent in the United States, it said.

A recovery for industry may inescapably drive a rebound of carbon emissions. But environmental advocates argue that the consequences will increasingly be a matter of choice as the cost of renewables comes down.

Environmental groups have argued for years that falling costs for solar and wind generation would undercut coal and eventually force investors to abandon coal-fired plants, turning them into "stranded assets."

According to a recent report by the Carbon Tracker Initiative, an independent financial think tank, the tipping point of price competition has already passed.

The report estimated that 71 percent of China's coal-fired generating capacity will cost more to run than building and operating renewable projects.

Yet, China appears to be pressing ahead with new coal-fired projects, responding to industry arguments that the country could face a supply squeeze in the next two to three years.


Earth records 600 millionth consecutive cooler-than-average month

The Earth just had its 600 millionth straight cooler-than-average month thanks to naturally-driven cooling.

An historical reconstruction of the Earth’s temperature by Northwestern University Adjunct Professor Dr. Christopher Scotese provides an illuminating and surprising comparison of today’s temperatures to that of the past. And it’s not what you think.

According to Dr. Scotese the Earth “has alternated between a frigid ‛Ice House’, like today's world, and a steaming ‛Hot House’, like the world of the dinosaurs.”

That’s correct, he described today’s temperatures as frigid. It turns out that most of Earth’s history since the explosion of life in the Cambrian Period nearly 600 million years ago was hotter than our climate today — a lot hotter.

For fully two-thirds of that time the Earth experienced temperatures that were much warmer than today. During these periods of “Hot House” conditions there was no ice at either pole. We “only” entered our current “Ice House” conditions about 50 million years ago. Using the average temperature of the Earth for the last 600 million years, we have experienced 50 million consecutive years of below average temperature.

While factually correct and, for a climate geek and geologist like myself, quite interesting, this information has nothing to do with the current climate debate.

And neither does a recent widely publicized report by the National Oceanic and Atmospheric Administration’s (NOAA) that the planet had its 420th consecutive month with above-average temperature. Bear in mind that the “average temperature” they were referring to was that of the 20thcentury. Well, duh.

Of course recent temperatures would be higher than the 20th century average. That is because the Earth’s temperature has been increasing for more than 300 years. Had NOAA used a 300-year average they could have added even more months of above-average temperatures because the average would have been even lower.

The blessed rise of temperature that we are experiencing is lifting us out of the death-dealing cold of the horrific Little Ice Age, when half the population of Iceland perished. The beginning of this warming started in the late 1600s, long before man could have had any effect on temperature. In fact, the rate of warming over the first 40 years of the trend, extending into the early 1700s, was several times the rate of the 20th century warming and was 100 percent naturally driven.

At least the first 150 years of our current warming were also entirely naturally-driven and contributed about the same amount of warming as the last 150 or so years during which we have been adding CO2 to the atmosphere.

The question is not whether the planet is warming. It is, and demonstrably so. We know this from both direct measurement and thousands of historical records.

The real question is did the natural forces that were driving the temperature increase in the 17thcentury, or for that matter over the last hundreds of millions of years, suddenly stop for some reason in the 20th century? Of course not, but that is what the Ayatollahs of Alarmism want you to believe.

So why the media firestorm and portrayal of the latest data as dangerous? H. L. Mencken warned us of imaginary “hobgoblins of alarm” that governments needed to create to frighten the population into accepting onerous regulations such as the Paris Climate Accords. Climate change today is one of those hobgoblins of alarm used to convince people that our current warming is “unusual and unprecedented” when it is neither.

Six hundred million months of below average temperature or 420 months of above average temperature? Both are true, depending on what metric you choose to use, but the media are publicizing what is designed to best promote fear of catastrophic climate alarm. We have seen in the recent COVID-19 pandemic that fear is one of the most potent motivators of public action. Those promoting the economically destructive green policies will be using this and any other event deemed out of the ordinary to further the climate of fear that they need for public acceptance of these harmful policies.


Net-Zero Greenhouse-Gas Emissions, and Extinction Capitalism


To climate-shame corporations is to hobble economic dynamism.
Shutting down the whole global economy is the only way of limiting global warming to 2 degrees Centigrade, Yvo de Boer, the former United Nations climate chief, warned in the runup to the 2015 Paris climate conference. Thanks to COVID-19 we now have an inkling what that looks like. The conference went further and chose to write into the Paris agreement an aspiration to pursue efforts to limit warming to 1.5°C. The 1.5°C backstory reveals much about the quality of what passes for science and gets enshrined in U.N. climate treaties — and is directly relevant to American corporations that now find themselves on the front line of the climate wars.

Nine weeks before the Copenhagen climate conference, the one where Barack Obama was going to slow the rise of the oceans, President Mohamed Nasheed of the Maldives held the world’s first underwater cabinet meeting. “We are trying to send our message to let the world know what is happening and what will happen to the Maldives if climate change isn’t checked,” Nasheed told reporters after resurfacing. It was part of a campaign by the Alliance of Small Island States claiming that climate change magnified the risk that their islands would drown.

The sinking-islands trope has been endlessly recycled by the U.N. for decades. In 1989, a U.N. official stated that entire nations could disappear by 2000 if global warming was not reversed. Like so many others, that prediction of climate catastrophe came and went. The failed prediction didn’t prevent the current U.N. secretary-general, António Guterres, from declaring last year, “We must stop Tuvalu from sinking.” There was no science behind 1.5°C and the sinking-island hypothesis. Studies show, here and here, that the Maldives and Tuvalu have increased in size. As the 25-year-old Charles Darwin might have told the U.N., coral atolls are formed by the slow subsidence of the ocean bed.

Having incorporated 1.5°C into the sacred texts of the U.N. climate process, the Intergovernmental Panel on Climate Change (IPCC) was charged with coming up with a scientific justification for it. In 2018, the IPCC published its report on the 1.5°C limit. It debunked the sinking-islands scare, reporting that unconstrained atolls have kept pace with rising sea levels. The IPCC had a bigger problem than non-sinking islands. The IPCC’s existing 1.5°C carbon budget — the maximum amount of greenhouse gases to keep the rise in global temperature to 1.5°C — was on the verge of being used up. Like some end-of-the-world cult after the clock had passed midnight, it would find itself in a predicament that promised to be more than a little embarrassing.

Help was at hand. As skeptics had long been pointing out, IPCC lead author Myles Allen confirmed that climate model projections had been running too hot and that they had been forecasting too much warming since 2000. Together with some other handy adjustments, the IPCC managed to more than double the remaining 1.5°C budget. Although it could muster only medium confidence in its revised carbon budget, the IPCC had high confidence that net emissions had to fall to zero by 2050 and be cut by 45 percent by 2030. In this fashion, net zero by 2050 was carved in stone.

That timeline is now being used to bully American corporations into aligning their business strategies with the Paris agreement and force them to commit to eliminating greenhouse-gas emissions by 2050. In fact, the text of the Paris agreement speaks of achieving a balance between anthropogenic sources and removals “in the second half of this century.” The net-zero target has no standing in American law or regulation. Net zero is not about a few tweaks here and there. It necessitates a top-down coercive revolution the likes of which have never been seen in any democracy. This is spelt out in the IPCC’s 1.5°C report, which might as well serve as a blueprint for the extinction of capitalism.

The IPCC makes no bones about viewing net zero, it says, as providing the opportunity for ‘intentional societal transformation.’ Limiting the rise to rise in global temperature to no more than 1.5°C above pre-industrial levels — an ill-defined baseline chosen by the U.N. because the Industrial Revolution is our civilization’s original sin — requires ‘transformative systemic change’ and ‘very ambitious, internationally cooperative policy environments that transform both supply and demand.’

Thanks to COVID-19, we have a foretaste of what the IPCC intends. It envisages, for example, the industrial sector cutting its emissions by between 67 and 91 percent by 2050, implying a contraction in industrial output so dramatic as to make the 1930s Great Depression look like a walk in the park, a possibility the IPCC choses to ignore. The IPCC places its bets on a massive transition to wind and solar, but no amount of wishful thinking can overcome the inherent physics of their low energy density and their intermittency, which explains why countries with the highest proportion of wind and solar on their grids also have the highest energy costs in the world. One option the IPCC does not favor — a wholesale transition to nuclear power — seems unachievable anyway on the timetable it has in mind. Nuclear power stations typically take well over five years to build, and not many are planned for now. Germany is switching out of nuclear power, the Japanese are, to quote the New York Times “racing to build new coal-burning . . . plants” and the Chinese are wary of overdoing their nuclear construction because of the risk of accident.

Rather than address the possibility of a sustained slump in economic activity the IPCC’s approach is to say the benefits of holding the line at 1.5°C are — surprise, surprise! — greater than at 2 degrees Centigrade while studiously ignoring the extra costs of the more ambitious target. A few numbers show why. A carbon tax sufficiently high to drive emissions to net zero would range up to $6,050 per metric ton, over 60 times the hypothetical climate benefits estimated by the Obama administration, indicating that the climate benefits of net zero are less than 2 percent of its cost. In a rational world, discussion of net zero would end at this point.

You don’t have to be a Milton Friedman to fathom the incompatibility with free markets and capitalist growth of what the IPCC terms “enhanced institutional capabilities” and “stringent policy interventions.” So it’s easy to understand why the governments of the world have no intention of achieving net zero by 2050. As Todd Stern, one of the principal architects of the Paris agreement, remarked last November, “there is a lack of political will in virtually every country, compared to what there needs to be.”

Led by Britain, several European countries have legislated net-zero targets without having a clue how they might meet them or their economic impact. Indeed, Britain can claim to be the world’s leading climate hypocrite. Having offshored its manufacturing base to China and the European Union, it is the G-7’s largest per capita net importer of carbon dioxide emissions. Before adopting its net zero target, the Committee on Climate Change observed that Britain lacked a credible plan for decarbonizing the way people heat their homes and that government policy was insufficient to meet even existing targets.

If governments — the legal parties to the Paris Agreement — have no collective intention to achieve net zero, why should America’s corporations? There is no environmental, economic, or ethical good when a corporation cuts its carbon dioxide emissions to meet the net-zero target when the rest of the world doesn’t, unless, that is, you’re one of the select few who believes that self-impoverishment is inherently virtuous. Yet corporations are increasingly being held to ransom by billionaire climate activists like Mike Bloomberg and BlackRock’s Larry Fink with the demand that they commit to net zero, make their shareholders and stakeholders poorer, and give a leg up to their competitors in the rest of the world, especially in the Far East.

The arrogation of the rule-making prerogatives of a democratic state by a handful of climate activists raises profound questions on the demarcation between the rightful domains of politics and of business. It also raises profound questions about the future of capitalism. “Capitalism pays the people that strive to bring it down,” Joseph Schumpeter, the greatest economist of capitalism, observed in the 1940s. They won’t succeed, but for the efforts of soft anti-capitalists within the capitalist system.

The moral case for capitalism rests on its prodigious ability to raise living standards and transform the material conditions of mankind for the better. To climate-shame corporations without the sanction of law or regulation will extinguish the economic dynamism that justifies capitalism. Remove its capacity to do so, and we will have entered a post-capitalist era. This is how capitalism ends.



For more postings from me, see  DISSECTING LEFTISM, TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC and AUSTRALIAN POLITICS. Home Pages are   here or   here or   here.  Email me (John Ray) here.  

Preserving the graphics:  Most graphics on this site are hotlinked from elsewhere.  But hotlinked graphics sometimes have only a short life -- as little as a week in some cases.  After that they no longer come up.  From January 2011 on, therefore, I have posted a monthly copy of everything on this blog to a separate site where I can host text and graphics together -- which should make the graphics available even if they are no longer coming up on this site.  See  here or here


For more postings from me, see  DISSECTING LEFTISM, TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC and AUSTRALIAN POLITICS. Home Pages are   here or   here or   here.  Email me (John Ray) here.  

Preserving the graphics:  Most graphics on this site are hotlinked from elsewhere.  But hotlinked graphics sometimes have only a short life -- as little as a week in some cases.  After that they no longer come up.  From January 2011 on, therefore, I have posted a monthly copy of everything on this blog to a separate site where I can host text and graphics together -- which should make the graphics available even if they are no longer coming up on this site.  See  here or here


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