Tuesday, May 24, 2022

Biden’s Big Lie: ‘Green’ Energy Doesn’t Save Money, It’s 4 to 6 Times MORE Expensive

President Joe Biden keeps claiming that wind and solar energy are going to save money for consumers. But more government subsidies to “renewable energy” is a key feature of the White House anti-inflation strategy recently announced by Biden.

He probably got that idea from John Kerry, the administration’s climate czar, who recently claimed that “solar and wind are less expensive than coal or oil or gas.” Pete Buttigieg, the Biden Transportation secretary, makes the same claims about the thousands of dollars that motorists can save if they buy electric cars.

This couldn’t be more wrong.

Proponents of “green” energy boondoggles are often masters at playing with the numbers, because that is the only way that wind and solar electricity generation make any sense. Advocates such as Kerry love to focus on the low operating costs of solar and wind since they don’t require constant purchases of fuel.

Ignoring the relatively short lifespan of solar and wind components, as well as the high initial investment, can make it appear as though solar and wind operate at lower costs than fossil fuels or nuclear power.

Let’s get the facts straight. The cost isn’t just what you pay at the retail level for gas or power. It also includes the taxes you pay to subsidize the power. A 2017 study by the Department of Energy found that for every dollar of government subsidy per BTU unit of energy produced from fossil fuels, wind and solar get at least $10.

That’s anything but a money saver.

The reason the subsidies are so high is that solar and wind have additional costs compared to their more reliable competition. “Green” energy sources are non-dispatchable, meaning their output can’t be changed to match demand. The wind doesn’t blow harder, and the sun doesn’t shine brighter, just because electricity use is peaking.

Conversely, fossil fuel entities—such as a coal plant—can ramp up generation when we need it most and ramp down when demand falls.

Widespread adoption of solar and wind generation would necessitate expensive batteries on a large scale to ensure that people still have power when the wind stops blowing or when the sun stops shining—like it does every single night.

So, unlike reliable and flexible natural gas, solar and wind require large-scale storage solutions: massive banks of batteries that are hardly environmentally friendly but are also extremely expensive. And since batteries don’t last forever, they add to both the initial expense and maintenance costs during the life of a solar or wind energy generating station.

The same problem exists with electric cars. The sticker price on EVs is considerably higher than for conventional gas-operated cars, and the so-called savings over time assume that the electric power for recharging is free. But it isn’t and power costs are rising almost as fast as gas prices.

Factors such as these are consistently ignored by Kerry and other “green” energy activists.

To genuinely evaluate dissimilar energy sources and provide an apples-to-apples comparison, the U.S. Energy Information Administration uses the Levelized Cost of Energy (LCOE) and the Levelized Cost of Storage (LCOS). These measures consider the initial costs, the lifespan of generation and storage systems, maintenance and fuel costs, decommissioning expenses, subsidies, etc., and compare that to how much electricity is produced over a power plant’s lifetime.

The numbers don’t lie: “green” energy is a complete waste of resources.

The LCOE and LCOS for solar and on-shore wind farms are four times as expensive as natural gas. But offshore wind takes the cake—it’s six times as expensive as natural gas.

Imagine paying four to six times as much every month for the same electricity! That’s the green paradise world that the Biden administration wants for America.

Yet, it’s even worse than that because electric power costs greatly affect the cost of producing nearly everything else. In the case of producing aluminum, for example, a third of the total production cost is electricity alone.

Imagine what quadrupling electricity prices would do to the prices of all the goods and services that people buy. If you think inflation is bad now, just wait until the nation is dependent on wind and solar—then you’ll see REAL price increases.

And despite official government data contradicting their own claims, the Biden administration—including Kerry—continues spouting simple untruths on wind and solar. They hope that no one will check their fantastic facts.

To the left, wanting it to be true, makes it true.

All the while, the middle class is being crushed by $4-a-gallon gasoline and businesses everywhere are buckling under $5-per-gallon diesel. The Wall Street Journal warns that electric power blackouts could be coming because of overreliance on wind and solar power.

At some point, if this push for green energy continues, the whole nation will start to look like California, where gas is $6 a gallon, the lights go out, and electric cars are stranded because of rolling blackouts. If that’s our “green” future, then Americans should want nothing to do with it.


Stop New York’s climate madness before it drives electric rates into orbit

Word from the former head of the Public Service Commission, John Howard, that the state’s carbon-free-energy law will cost New Yorkers “hundreds of billions” in higher energy bills.

And his numbers come right from documents released by the state Climate Action Council, which is tasked with figuring out how to make the plan work.

That is beyond question more than New Yorkers can pay: All this madness will do is fuel the exodus out of the Empire State before the plan finally becomes so obviously insane that it gets abandoned.

Then-Gov. Andrew Cuomo pushed the Climate Leadership and Community Protection Act into law in 2019, as he polished his credentials for a potential future presidential run. Advocates for the Climate Action Plan admit the capital investments needed will surpass $300 billion, but Cuomo & Co. simply ignored the costs, since they expected to be long out of office before reality hit home.

Instead, Albany can pretend that Con Ed and other utilities will pay the bills, not taxpayers. Except that utilities only get their income from ratepayers, who are the taxpayers.

Biden’s road to record-high gas prices may soon lead to rationing
The transition requires not just vast new wind-and solar farms, but new transmission lines and enormous investments in batteries and other power storage, because “green” energy is utterly weather-dependent.

Shorn of subsidies, wind and solar are also far more expensive, so even if the infrastructure were free, utilities bills would still spike.

Honesty about all this would’ve sunk the plan, so Cuomo hid the truth, and the Legislature went along. Heck, Gov. Kathy Hochul is still pushing this insanity in a bid to bolster her immediate political future. So much for her vows to deliver the “transparency” that Cuomo didn’t.

Kudos to Assembly Speaker Carl Heastie for at least nixing Hochul’s push to immediately ban new-building natural-gas hookups statewide, another favorite of the climate warriors even though gas is the lowest-carbon fossil fuel.

Heastie, like anyone who seriously looks at the numbers (including all the utility execs gamely trying to comply with the plan) surely knows the law’s mandated transition away from all fossil fuels by 2050 simply isn’t achievable, not just with current technology but any now on the horizon.

We guess the speaker just figures calling out left-wing nonsense isn’t his job. But Howard, a former Cuomo appointee and Assembly staffer, now has the freedom to sound the alarm. “The Legislature, either through its silence or total lack of actions, has given this commission nearly the exclusive responsibility to reach into New Yorkers’ pockets to pay for the CLCPA mandates,” he thundered at a public PSC session.

That is, Con Ed, National Grid and so on will take the early steps, then ask their regulators for rate increases to fund them, which the unelected PSC will grant — until the public finally wakes up to demand relief.

Not that Howard’s the only Democrat crying foul. Transport Workers Union Local 101 President Constance Bradley has also warned that Hochul’s expanded zero-emissions plan would “wipe out thousands of good union jobs.” And TWU International President John Samuelsen gave the big picture: Democrats need to “decide whether they’re for the working people or the elites.”

Indeed, since New York gets so much of its tax income from the rich, sticking the cost in utility bills instead is another burden on the poor and working class.

Who also can’t invest in home generators to keep the lights on when the blackouts hit: Empire Center experts want the current plan will within a few years leave the state up to 10% short of being able to meet peak demand.

The sooner the state abandons this madness, the better. Consider it one more reason to vote out every New York Democrat you can come November.


Why investors need not worry about climate risk?

At the start of the movie Jerry Maguire, Jerry (played by Tom Cruise), writes a mission statement titled “The Things We think But do Not Say,” and shares it across his company. Jerry’s late-night revelation was to call for his company to have fewer clients, to focus less on making money. That message was not well-received by his bosses. Jerry was quickly fired.

Last week, HSBC’s Stuart Kirk, the head of responsible investing in the bank’s asset management group, had a Jerry Maguire moment in the form of a short talk given at a corporate conference on sustainable investing. And just like Jerry, he has subsequently been suspended by the bank with his continued employment appearing unlikely. I’ve seen many presentations by corporate ESG (environmental, social and governance) leaders. Such presentations are generally platitudinous and focused on conveying the reality or the impression of responsible corporate behavior — typically to make existing clients happy or to recruit new clients.

Kirk’s presentation was different. It probably made no one happy and certainly didn’t gin up new business for HSBC. His talk was titled “Why investors need not worry about climate risk” and can be seen in full below. I’d wager that it has been viewed more times than any other corporate ESG talk.

The virality of Kirk’s remarks resulted not simply because the substance of his talk, but the way in which he delivered it — flippantly and with some comments seemingly designed for outrage, such as “Who cares if Miami is six metres under water in 100 years?” Even if offered in jest, anyone remotely familiar with discussions of climate will know that being seen to deemphasize or diminish the importance of climate action will be quickly targeted by climate activists.

It is thus not surprising that Kirk’s comments quickly led to calls for him to be fired from his job. For instance, Christiana Figueres, former executive secretary of the Framework Convention on Climate Change, called Kirk’s comments “outrageous” and demanded that he be fired (below).

On the one hand, I do have some sympathy for Kirk. Of course I do. Eight years ago I lost a job writing for Nate Silver at 538 after writing a column drawing on my peer-reviewed research which explained that the economic and human costs of disasters depend much more on what and where we build than on increasing extreme events. Nothing I wrote was wrong — indeed much of it came straight out of the IPCC — but I (and my publisher) were widely attacked for being out of sync with the climate zeitgeist. The remedy was for Silver to express contrition and to eliminate my voice.

But on the other hand, Kirk’s presentation was insulting, flippant and tone-deaf. Surely, Kirk should know that discussions of climate, and in ESG circles especially, are as much (if not more) about expressing a shared set of values and tapping into the enormous ESG market as they are about the math and science of risk. A charitable interpretation of Kirk’s talk was that he was telling his community that their emperor was naked, less charitably he was raising his middle finger to his professional peers and the broader climate movement. If this was Kirk’s goal, then the talk was a rip-roaring success.

His boss is not pleased. Over the weekend, the CEO of HSBC, Noel Quinn, felt compelled to take to social media to distance himself from Kirk and his remarks, calling them a distraction (below). No doubt Kirk will be looking for new employment sometime soon, and it is hard to see how he can continue to work in any capacity in corporate ESG.

But lost in the furor over Kirk’s remarks and his subsequent punishment is the fact that he raised some important issues that should be discussed openly among those responsible for public and private finance. This was perhaps the greatest failure of his talk — the delivery not only eclipsed the content, but it has also made it much harder to raise these issues in the future. Who in the ESG industry will dare to raise legitimate concerns or express doubts about methods and results? Finance is very often about risk, and understanding risk requires much more than expressions of what we value, but also hard questions, uncomfortable answers and open debate. I suspect we will have even less of these things in the ESG community going forward.

Let’s review some of the important issues raised by Kirk that have largely been ignored in the drama.

One important issue raised by Kirk is the amount of true hyperbole found in remarks given by leaders in finance. Kirk illustrated such remarks by calling out Mark Carney, the United Nations, Henry Paulson, the World Economic Forum and the Bank of England. Let me be clear, Kirk is not wrong to call out each of these statements as hyperbolic. Each of the statements that he highlights in the slide below are demonstrably and empirically wrong. You cannot find support for any of them in IPCC reports. However, it is one thing for a tenured full professor to call out such nonsense, it is another thing altogether for a participant in a $50 trillion-dollar industry to do the same.

Kirk also identified a paradox that comes straight out of the IPCC and is found across the scientific literature. The climate-GDP paradox is that climate change is often warned to be among the world’s greatest financial risks (examples above) and yet if you look at the projections of the IPCC and the associated scenarios, every single one of them — even the most extreme — project a future of incredible global and individual wealth. Kirk illustrated this point in his presentation with the following chart, which shows global GDP growth to 2100 after ~doubling the IPCCs extreme assumptions or the impact of climate change on GDP this century.

We have identified the climate-GDP paradox in our recent work and it is perfectly understandable and reasonable that an expert in global finance would raise this issue. It is a legitimate paradox in the work of the IPCC and the expert climate community. The larger issue here is that the scenarios of the IPCC generally do not consider climate impacts on growth (i.e., as a feedback within scenarios) and thus lead to what we have called “obvious internal inconsistencies” — such as regions projected to be uninhabitable in 2100 are also projected to have incredible wealth:

For instance, the [extreme] SSP5-8.5 baseline projects currently-developing regions will have substantially higher GDP per-capita by 2100 than currently-developed regions have today (Dellink et al 2017, IIASA 2018), while at the same time other studies project that a forcing level of 8.5 W m−2 in 2100 would render many of these same regions uninhabitable by 2100 (Mora et al 2017).

The reality is that under most methods applied across the literature to project future climate change, the associated impacts are generally small. Swiss Re, the global reinsurance company, dealt with the climate-GDP paradox by simply multiplying projected future impacts by a factor of 10 “to simulate the increasing severity of outcomes from nonlinearities.” This certainly amps up future impacts but at the same time it is of course a completely ridiculous methodological approach to projecting risk.

Indeed, as Kirk was giving his talk last week the Network For Greening the Financial System released the results of a survey of financial institutions and credit rating agencies, which found a lack of evidence in risk differences in ESG investing versus non-ESG investing:

Results from the survey show that conducting risk differential analysis between green and non-green activities and/or assets is not a straightforward exercise and that there is still no clear historical evidence of such risk differentials.

With climate or transition risk not yet identifiable in existing and historical portfolios, and IPCC projections that future financial impacts of climate change will be absolutely dwarfed by future GDP growth, it is of course appropriate for those in the ESG community to raise some questions about the tools we are using to peer into the cloudy future. Silencing uncomfortable questions will not make the issues go away, any more than Donald Trump’s wacky proposals to stop COVID-19 testing would have made the pandemic go away. I have no doubt that some of the furor over Kirk’s remarks is being used to overshadow the legitimate points that he did raise.

Kirk also calls out unrealistic assumptions used by central banks to project future financial risks associated with a transition to a green economy. Again, Kirk is right to identify certain assumptions as being unrealistic or implausible, meaning that the subsequent analysis or stress testing may be misleading. Indeed, I have made similar arguments on the pages of the Financial Times about how central banks systemically misuse implausible emissions scenarios in their analyses of financial risks. The misuse of extreme scenarios is endemic in the ESG community and beyond when discussing climate and transition risks. It is right to highlight these issues, because the misuse of scenarios is itself a major risk to global finance.

Kirk also raises issues related to the importance of adaptation in responding to climate, and how it is overshadowed by mitigation. This of course has been a challenge in climate policy for decades. However, like the other worthwhile points raised by Kirk, this one was lost in the irate reactions to the offensiveness of his presentation.

In one sense, Kirk is just the latest person to get crossways with the climate lobby and to suffer career repercussions as a result. In another sense, far more significantly, this episode is indicative of the deep pathologies of a community that often seems to value political fealty over intellectual substance. Kirk may indeed be the wrong messenger to head up a major ESG practice, but the questions he raises should be taken seriously by the ESG community nonetheless.


New Australian Leftist government already feeling heat over its emissions-reduction strategy

To meet the climate change promise that Labor took to the federal election, the Albanese government must boost renewable energy to 82 per cent of supply by 2030, put a carbon-trading scheme on big business and spend billions on infrastructure and new technologies.

But before the final numbers are even counted, the ALP is under pressure to do more.

The Greens have demanded tougher action to win their support in the Senate, and conservation and investor groups have been quick to insist that Labor lifts its target to cut greenhouse gas emissions by 43 per cent by 2030.

Labor’s policy for the election would cost $75bn by 2030, equal to 3 per cent of GDP. Billions of dollars will be spent upgrading electricity networks, electric vehicles will be given special tax ­advantages, and a new $15bn ­National Reconstruction Fund will provide finance and investment for renewables and other low-emissions technologies.

The centrepiece of Labor’s plan is a revised safeguards mechanism which would become a cap-and-trade carbon market for the nation’s biggest emissions industries. A new body would decide which major companies were forced to cut their emissions, with the total amount of emissions ­allowed across the economy to be reduced each year.

Offsetting emissions is expected to spawn a range of new industries in the agriculture and land care sectors.

Modelling for Labor before the election estimated its climate change policies would result in lower electricity prices for consumers and thousands of new jobs. But it did not calculate the inflationary impact of forcing businesses outside of the electricity sector to act.

Labor’s plan was more ambitious than the Coalition policy of cuts of 26 to 28 per cent by 2030 but below the demands of the teal independents for a 60 per cent cut and the Greens demand of net zero by 2035.

Mr Albanese has said his government would legislate the new target. But to get the changes through parliament it must win support in the Senate from either the Greens or Coalition senators.

“Labor’s goal to have 82 per cent of our electricity generated by renewables by 2030 is a step in the right direction, but the new government must reconsider its position on new coal and gas projects”, Ms O’Shanassy added.

The Investor Group on Climate Change said the election outcome offered an opportunity to reset and align Australia’s economic policies with climate goals.

The group said stronger Paris-aligned 2030 targets were needed to unlock $131bn in investment in clean industries and new jobs across the economy by the end of the decade.

Mr Albanese has made climate change a defining policy for his government. He has pledged to raise it with the leaders of the US, Japan and India at the Quad meeting in Tokyo this week.

To signal its new approach, Labor will seek to host a meeting of the United Nations Framework Convention on Climate Change.

This year’s meeting will be held in Egypt where a decision will be made on the venue for 2023.

Labor’s commitment to cut emissions by 43 per cent by 2030 is broadly in line with the pledges of other major countries.

To meet the target, emissions will need to fall to 351 million metric tonnes, or “Mt”, in 2030 in Paris budget accounting terms.

The ALP policy is projected to set Australia on a net-zero pathway by 2030, reaching net-zero emissions by 2050 in line with the Paris Agreement.

For this to happen, renewable energy penetration will need to grow to 82 per cent by 2030 compared to 68 per cent under business as usual.

The worst thing for the Liberal and National parties going forward would be to engage in another round of climate…
The Labor government has signalled $24bn in public investment to be matched by $51bn in private sector investment. During the election campaign, Labor said annual average electricity bills were projected to be $275 lower by 2025 and $378 lower by 2030.

The safeguards mechanism carbon trading scheme will be applied to facilities that emit more than 100,000 tonnes of CO2e per year across a range of sectors, including mining, oil and gas extraction, manufacturing, transport, and waste.

Labor modelled its policy on recommendations by the Business Council of Australia for emission baselines to be reduced gradually over time. Peak business groups have argued this would be in line with commitments already made by corporations to be carbon neutral by 2050. Businesses will be able to offset their emissions through internal abatement or external offsets from Australia’s carbon farming sector.

Industry will be given flexibility to discover low-cost abatement opportunities and invest in long-term emissions reduction technologies.

According to modelling published by the ALP, emissions covered by the safeguard mechanism have grown 7 per cent since its commencement in July 2016, rising to 140 Mt of CO2e in 2020-21 to be 17 per cent above 2005 levels, or just over one-quarter (28 per cent) of national emissions.

Without action, big companies were projected to overtake the electricity sector as Australia’s largest emitting policy segment in the early 2020s.

Labor said improvements to the Safeguard Mechanism were projected to deliver 213 Mt of GHG emissions reductions by 2030.

It said investment in industry abatement was estimated to create 1600 jobs by 2030, with five out of six of these jobs to be created in regional areas.


My other blogs. Main ones below

http://dissectleft.blogspot.com (DISSECTING LEFTISM )

http://edwatch.blogspot.com (EDUCATION WATCH)

http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)

http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)

http://snorphty.blogspot.com/ (TONGUE-TIED)


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