Monday, September 11, 2006

Germany's wind farms destroy jobs and don't reduce greenhouse gas output

Since the 1980s, Germany's government has promoted and subsidised wind energy with wide political support. In 1991, all parties backed a law forcing utilities to buy electricity from wind-energy firms at 90% of the average retail price, making suppliers and consumers pay for the growth of wind farms. Building wind farms became popular among farmers seeking extra income from pastures and among underutilised shipyards with skilled labour and trying to diversify. Many schemes were in underdeveloped regions, so many local politicians backed them. Later, investors in wind energy could also deduct investments against tax, making the deal attractive for high earners. So wind energy came to be promoted by a wide range of people who could hide their special interests behind the screen of green slogans.

Incentives improved further with the Renewable Energies Act in 2000. This abolished the link to retail energy prices, which had fallen thanks to liberalisation of the electricity market, and replaced it with a guaranteed price of 0.091 Euros per kWh for wind farms, a good three times the German average production cost of electricity of 0.025 to 0.03 Euros.

Germany produces about 3.1% of its electricity from wind energy, but this comes at the cost of an annual subsidy of 4bn Euros or so. But what about the alleged benefits for the economy and the environment? It is often claimed wind power has created 45000 jobs in Germany. But with a large subsidy anyone can create jobs, although, at more than 80000 Euros a job a year, it would be cheaper to send workers on permanent vacation in a tropical paradise.

Wind farms actually lower employment, thanks to higher energy prices for the economy, according to the Bremer Energie Institut. If the economic effects were not bad enough, it also seems ecological benefits of German wind energy exist only in the imagination of its supporters. First, the wind in Germany is unreliable, so wind generators operate at full capacity for about 1400 hours a year on average - just more than 58 days' worth. Britain, claiming better wind, still only managed to reach a third of its wind-power capacity in the very windy year of 1998, according to its trade and industry department. So every wind turbine still needs full conventional energy backup.

Even if wind power did decrease the amount of carbon emissions from conventional electricity firms, those utilities could sell on those carbon savings to anyone else: "carbon emission trading" gives companies an emission allowance, and allows them to buy or sell it, locally or internationally. A 2004 report for Germany's federal economics ministry showed carbon reduction would be zero, at the considerable cost of higher energy prices.

Another concealed environmental problem is carbon emissions from manufacturing turbines. The wind sector is now the second-biggest consumer of steel, after car makers, in Germany. At lower wind speeds you need more than 10 tons of iron for a given output, compared with about two tons for coal, one for gas and half a ton for nuclear.

Germany's wind energy promotion has been extremely expensive, and has probably destroyed jobs. Its ecological benefits under carbon trading are nonexistent, and it needs full conventional backup. The German experience does not prove that wind energy can never be viable, but it does show that state interference with the market can create enormous economic and ecological distortions. If wind energy really is the energy of the future it must prove itself in the market without state subsidies, but this has not yet happened anywhere.


Biofuels from food crops bugs VW

Volkswagen has attacked biofuels made from food crops as unsustainable, setting the German car maker at odds with US President George Bush, US car makers and European governments, which have all been touting ethanol as an environmentally friendly alternative to petrol in cars. Bernd Pischetsrieder, chief executive, called on politicians to lower tax breaks for current "first-generation" fuels - made in the US and Europe from corn, wheat, rape seed and sugar beet - and instead provide financial support for new second-generation technologies that promise big cuts in carbon dioxide (CO2).

Mr Pischetsrieder said some of the current biofuels were "totally pointless" and "like a wolf in sheep's clothing". He criticised tax benefits that were not linked to carbon dioxide, since some methods of refining biofuel actually led to higher carbon emissions than from petrol. "The current situation is totally unsatisfactory, both from the environmental and economic standpoint," he said.

Even as Mr Pischetsrieder was speaking in Berlin, the US Environmental Protection Agency proposed an increase to renewable fuel requirements - mainly ethanol - from 2.78 per cent of all fuel this year to 3.71 per cent next year, and said it would help cut CO2 emissions.

Mr Pischetsrieder is the highest profile opponent of today's biofuel technology. The handful of opponents of the fuel in the environmental movement have mostly been concerned about increased leakage of carcinogenic fumes, development of monoculture farms and the danger to rainforests from new palm plantations in developing countries, particularly Malaysia and Indonesia. Soaring demand for biofuels has contributed to a surge in the price of several of the grains and oilseeds used to make ethanol and biodiesel.

US car makers have been strongly supportive of biofuels, running expensive ad campaigns in an attempt to win back customers concerned about the environment who had defected to Japanese rivals. General Motors and Ford argue that even though the carbon benefits of today's technology are small, and biofuel is more expensive per mile than petrol even with tax breaks, the fuel should be promoted by governments in order to ensure the market is prepared when new technologies arrive.


Australia: The water shortage problem is political, not technical

Managing water supply is the biggest climate-change adaptation facing Australia. And governments and planners realise the problem is upon us. Faced with the converging threats of population growth, a warming climate and increased environmental flows into the nation's river systems, water policy-makers are pursuing a suite of controversial new technologies to ensure urban Australia does not run out of water. "Australia doesn't have a water problem. It has a water-management problem," says Adelaide University's professor of water economics Mike Young. Three-quarters of Australia's population live in the urban centres, but they consume only 8 per cent of available water. Irrigators account for 67 per cent.

The price paid for water by Australian households varies between cities, but lurks at about $1.30 a kilolitre. This translates into less than a dollar a day for most households. Irrigators pay no more than a few cents per kilolitre. The entire flow of water tapped by Adelaide from the Murray is equivalent to the allocation of just 15 large-scale rice farmers. It's little wonder then that talk of linking urban and regional water markets has some farmers more than a little nervous. Allowing urban water authorities to freely buy irrigators' allocations would be like letting loose a busload of Australian tourists in a Kuta Beach department store. Their buying power would be phenomenal. The scale of the transfers is likely to be small - less than 1per cent of Australia's total water supply - but Young says within that range are many farmers who are only too keen to sell to new urban players. "The thing that many people forget is that a small amount of water in a rural setting goes a very long way in an urban area," he says. "We're not talking about very big transfers of water; there can be some local effects but in terms of the national economy the effect on Australian agriculture is not very big."

Increasing water scarcity around the world is driving a similar evolution. Water has become a valuable resource and governments are forced to find ways of getting it to the highest-value users. As sure as water always runs downhill, this is creating tensions between the historical and the new users. In the Australian context, this means a transfer from farms to cities, and it has already started. Adelaide recently purchased water from former dairy farmers in the lower Murray, while Perth's water authority bought similar entitlements from Harvey Water in return for investment in infrastructure that will result in water savings equivalent to the entitlement purchased.

National Farmers Federation natural resources manager Vanessa Findlay says the farm sector recognises that this water market transition is an evolving reality. While acknowledging that the effects would be felt unevenly across regional Australia, Findlay says the political pain of the transition will be eased if farmers see a genuine effort by urban Australia to similarly improve its water efficiency. "But we acknowledge that with increasing population forecast over the next 30 years, taking the position that we are not going to trade with urban Australia isn't sustainable."

Despite this view from farmers, the new market thinking is casting a more critical eye over the appropriateness of maintaining severe water restrictions on urban households while selling them the water at bargain prices. While recognising the need to use tools such as short-term restrictions to deal with a supply crisis, National Water Commission chairman Ken Matthews is more doubtful about institutionalising such arrangements in the long term. "We often hear people say that after the drought ends, we really should institutionalise these urban water restrictions forever. I wonder whether that's so," he told the Australian Water Summit earlier this year. "We know that there are better and worse urban water restrictions in different cities of Australia, and why would we concrete the worst such restrictions into a fixed regime?"

Young says the existing regime of restrictions has thrown up a number of inequities that are unsustainable. "If someone is prepared to pay the full cost to enjoy a green environment and the water is available, then that is a perfectly acceptable use," he says. "We need to build mechanisms that make people aware of the value of water. But at the moment people who have swimming pools are allowed to keep them full but poorer people who can't afford them are not allowed to let their children play under a sprinkler when doing that would use a lot less water than what a swimming pool would evaporate. "I can see prices generally being twice as high as they are today but even with that, water would still be very cheap."

At the International River Symposium in Brisbane this week, water engineer Mark Hamstead postulated that Sydney, Melbourne and Adelaide are best placed to tap into these irrigators' markets because of their proximity to river systems, which means they are able to set up inexpensive pipelines to make such trading viable. Sydney has the capacity to establish pipelines to the Hunter, Central Coast or the Murrumbidgee river while Melbourne could tap into the nearby Goulburn system. Adelaide is already plugged into the lower Murray.

By contrast, Perth and Brisbane - which combined are predicted to grow by more than a million people within 15 years - have far more limited opportunities to access farmers' water and will therefore rely more heavily on new water technologies being developed. These include the political hot potatoes of desalinisation and recycling, trapping and reprocessing storm water and tapping into ground water, which are all expected to play an increasing role in securing water for urban Australia for the next century and beyond.

Young says urban water authorities are likely to discover that recycling and stormwater capture would be prohibitively expensive, which would make them look again at desalination, which is becoming increasingly efficient. Despite controversy about its high energy use, new technologies from Israel have driven efficiencies up and costs down to nearly half the price for urban water. Desalination is a serious option for cities such as Perth, with limited alternatives and access to inexpensive, low greenhouse emission energy sources such as gas. "The great thing about desalination is that it is not climate-dependent. So you can actually have the water continuously and have it just in time: you don't have to store it and let it evaporate while you are waiting to use it," Young says.

Tom Hatton, the director of a CSIRO water program, says initial public resistance is almost inevitable when new technologies are proposed. The challenge for policy-makers is to foster public understanding and confidence in the ideas being proposed. "Most of our cities have traditionally had one source of water, or maybe two," Hatton says. "Over the next 10 years people will notice they will start to diversify to three or four." Hatton doesn't express a view as to whether such a free market for water is a good thing. What CSIRO is doing is building a national water stock market, to be known as the water resources observations network.

The network is about 10 years from completion and will allow instant trading of water entitlements, adjustment for seasonal and natural flows, and the creation and trading of derivatives such as water futures, options and hedges. It will be better able to allocate optimal environmental flows, remove uncertainty from the market process, optimise prices, find the most willing buyers and sellers, and signal scarcity. "The solutions are going to be different for Perth than they will be in Sydney. Those choices will not be made on perceptions but on analysis and a lot more technical confidence," Hatton says. "We need to get to the point where those in the market almost have real-time modelling available to them to tell them the state of their water system at any given moment and how vulnerable that is in the near term and medium terms to drought, fire pollution and other environmental threats."



Many people would like to be kind to others so Leftists exploit that with their nonsense about equality. Most people want a clean, green environment so Greenies exploit that by inventing all sorts of far-fetched threats to the environment. But for both, the real motive is to promote themselves as wiser and better than everyone else, truth regardless.

Global warming has taken the place of Communism as an absurdity that "liberals" will defend to the death regardless of the evidence showing its folly. Evidence never has mattered to real Leftists

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