The following appeared in the Financial Times today:

As Expected: Treasury Sees Red At Huhne’s Green Bank

Monday, 31 January 2011 12:35 Elizabeth Rigby, Financial Times

Chris Huhne is at loggerheads with the Treasury over the size and scope of the green investment bank, as officials seek to thwart his attempts to ensure it operates as a fully fledged bank.

The Treasury has already earmarked £1bn for the bank, to be spent on green infrastructure projects such as renewable energy. It has also privately confirmed that more than £1bn of funds from asset sales will also be made available, according to two ministerial aides. But in return for the additional funds, officials are trying to prevent the energy secretary and Vince Cable, the business secretary, from establishing it as a bank. The bank is one of the flagship green initiatives of the coalition.

A commission on how the bank should operate – led by Bob Wigley, a former European head of Merrill Lynch – has recommended it should have powers to raise finance from the private sector. But the Treasury is concerned the bank will increase national debt and would prefer it to act simply as a fund, dispensing grants and loans.

“The Treasury is completely against the idea of a proper bank because they can’t see where it would go on the government’s balance sheet,” said one person familiar with the talks. “Huhne is determined to get a bank and Cable is acting as the arbiter.”

Mr Huhne believes the bank is central to efforts to build Britain’s green infrastructure and low carbon economy in the coming decades. The energy sector needs to invest at least £200bn over the next 10 years to meet official targets for developing renewable energy and cutting carbon dioxide emissions.

The government is due to outline plans for the bank this spring but is struggling to meet the deadline.

I wonder if anyone at the treasury, let alone at Chris Huhne’s Department of Energy and Climate Change, saw this chart that someone kindly pointed out to me in the Investors Chronicle:

sectorperformancesmall.png

Click for larger image

Note the juxtaposition of Automobiles and Parts (+89.91%) and Alternative Energy (-52.3%) at the beginning and end of the listing.

If this reflects the level of market confidence, post Copenhagen and Cancún, in the coalition’s so-called Green Revolution, then God help the green bank. Investment in Alternative Energy looks as though it holds about as much allure as subprime mortgages, and it seems that the coalition has learned nothing from the banking crisis. The value of assets are determined by supply and demand: politically correct optimism is not an entry that any accountant would attach a value to on a balance sheet.

 

41 Responses to “Will alternative energy be the new subprime disaster?”

  1. 1
    geoffchambers Says:

    There’s an article here about how they might resolve the problem
    http://www.guardian.co.uk/environment/2011/feb/01/oliver-letwin-green-investment-bank
    Half a trillion of unsupported debt off balance sheet, and they hope no-one will notice. Yes, that was “half a trillion” as in 25% of GNP. The Guardian had to correct the article, since at the first stab they wrote “million” instead of “billion”.

    A micro-example of how “green energy” financing will work out in practice: I heard about a guy here who’s taking advantage of French schemes to subsidise renewables by setting up a solar panel company with generous government finance. Naturally, he’s a Green, whose work experience is in an NGO helping people in difficulty. So naturally, his first act is to hire the kind of people he’s used to working with. So your solar panels are being installed by a crack team of ex-addicts, alcoholics, handicapped people etc. It would make a great subject for a comedy series. I wonder if the BBC would be interested?

  2. 2
    TonyB Says:

    TonyN

    I use mozilla firefox and linux on my netbook and can see the comments section.

    On my computer with windows I can’t. This is why I haven’t commented on this thread. It has happened also with several other threads in the past.

    The sad truth is that renewables are unfortunately extremely inefficient and consequently highly expensive. It is sheer dogma preventing the building of desperately needed grown up power stations.

    Once our energy needs are secured by the building of nuclear plants and ideally coal ones (as we have the fuel in abundance and the technology is well known) we can start to follow the green energy pipe dreams.

    Bearing in mind all the hype I am surprised by the figures in the chart shown above

    Tonyb

    [TonyN: I'd be very interested to hear from anyone else who has encountered the same problem with seeing the comments, and if so on which threads]

  3. 3
    Alex Cull Says:

    TonyN, I’m using WinXP at home – Google Chrome (default) and Firefox are okay but Internet Explorer 7 cannot see the comments to this post, and I think this was the case with some earlier threads, as Tonyb has said. Not sure why – could it be the graphic?

  4. 4
    TonyN Says:

    Many thanks Alex.

    I have another report of problems in IE7 and will try to get to the bottom of the problem next week. It seems that ‘bad’ HTML may be the cause although this could be because I am using a very out of date WordPress theme (Tiga)rather than carelessness or incompetence. The MS browsers always were a bit fussy.

  5. 5
    TonyB Says:

    tonyN

    People can’t tell you that they can’t see the comments if they can’t see the comments…

    It happens on Windows XP and 7

    I can’t tell you on which other threads it happened as I lost interest when I couldn’t see them-it’s certainly been 4 or 5

    Tonyb

  6. 6
    Alex Cull Says:

    It’s certainly looks as though the green lobby have their work cut out for them. In the Independent, recently:

    Europe must bridge a €2.2trillion (£1.9trn) “carbon capital chasm” if it is to meet 2020 carbon emissions reduction targets.

    The EU needs to invest €2.9trn in changes to its buildings, energy and transport infrastructure to reduce emissions. And given the state of public finances most of that will have to come from financial institutions, a study from Accenture and Barclays Capital said.

    But these financial institutions are “riddled with climate change sceptics”, according to Aviva’s Paul Abberley, as reported in the Guardian:

    “There is a strong element of scepticism among a lot of investors with some strands such as climate change,” said Abberley. “Still in investment firms there is a healthy representation of people who put themselves on the sceptical side of the fence and are not convinced it will happen.”

    Abberley said it was important not to blame the City for a lack of action as they are operating within the existing system, which is to seek maximum returns for their investors: “Overwhelmingly the vast amount of money is invested with the very best intent by the portfolio managers to maximise the returns.”

    Investment professionals more interested in returns for their investors than saving the planet? I’m shocked!

  7. 7
    TonyN Says:

    Alex:

    The figures in your first quote are truly eye-watering, but they don’t sound incredible to me. Will anyone other than governments, who are generally speaking skint, make that kind of investment in an ideal?

    I sometimes wonder if the end of the AGW saga will be brought about not by scandals in climate science, rethinks by politicians or a change in the weather, but by the money men bleeding the subsidy conduit dry and moving on.

  8. 8
    Alex Cull Says:

    TonyN, now the Committee on Climate Change is under threat and the Carbon Trust is losing much of its funding, as per the Guardian here and here. Not quite a St Valentine’s Day massacre of the quangos, but close.

    It could well be the case, as you say, and as Peter Geany I think has also said, that money might be key to the AGW saga (or this chapter of it, anyway.) If the low carbon society is unaffordable, it’s not going to happen, realistically.

  9. 9
    TonyN Says:

    Alex Cull, #8:

    There certainly seem to be some very interesting undercurrents although it is still difficult to see how this will translate into a full scale retreat from policies in which both sides of the coalition have invested so much political capital. Perhaps full scale fuel protests with riots in Whitehall, motorways blocked and supermarkets emptying will be the final straw. I understand that we now have the most expensive fuel in Europe.

    Did you see Peter G’s link to how the forever calm and pragmatic Dutch are now viewing things?


    http://www.theregister.co.uk/2011/02/10/holland_energy_switch/

    If they really are prepared to defy the EU on this, then will some of the East European countries follow?

  10. 10
    geoffchambers Says:

    Alex
    In contrast to the Guardian articles to which you link, this one
    http://www.guardian.co.uk/environment/2011/feb/14/carbon-trust-energy-saving-cuts
    suggests that the qangoes were bloated and their cuts may be no bad thing.
    This one, which is headlined Hildegaard but labelled Huhne
    http://www.guardian.co.uk/environment/2011/feb/14/chris-huhne-eu-emissions-targets
    contains the following bizarre quote from the climate change secretary:

    The short-termist view of sticking to 20% doesn’t cut the mustard. Moving to 30% would give our businesses a head-start in new green industries and get us off the oil hook quicker, insulating us from oil price spikes. Decarbonising further, faster will keep us ahead of the likes of China who are already snapping at our heels

    Does he always talk like that?

  11. 11
    Alex Cull Says:

    TonyN, interesting re the Netherlands, although the story doesn’t seem to have filtered through into the media here yet. Definitely a development to keep an eye on.

    Geoff, re Huhne, I’m afraid he does! Mr Huhne appears to live on a fascinating planet, albeit very different to this one we’re familiar with.

  12. 12
    peter geany Says:

    TonyN I had to install Google chrome to see this post and its comments. This happened once before and I just put it down to my machines, but I have tried all versions of IE, 6 and 8 at work, and 7 and the new 9 at home and cannot see this post properly with any of them.

    Anyway, to answer your question; I would say most definitely yes. I know none of us reading and contributing to your blog would be silly enough to put any personal money into alternative energy projects, but there are still many many advertisements for investments in “green energy” and just as worrying and also damaging there are a lot of “energy consultants” spreading doom and gloom about our existing energy sources especially oil. This indicates that vested interests are hard at work ensuring their own wellbeing and not showing the slightest concern at all in either their countries interests or the individual’s interests. And the information often flies in face of on the ground reality.

    We have a parallels happening in energy similar to those that have just occurred with Banking. At the root cause of both are weak political systems (lax democratic accountability) and poor regulation.

    Let me explain. In the wake of the banking crisis which we are miles from resolving, we still have not had those responsible for the mess put their hands up. Instead we have had much gnashing of teeth about bonuses and poor lending practises. Yes these played their part in the orgy of lending towards the end of the crisis but did not cause it and even if bonuses had been half what they were would not have made the slightest difference. What happened was politically the US, and then others (and critically this goes back to Clinton and Blair alliance) allowed banks to borrow and lend without proper capital ratios and without being forced to accept full responsibility for their actions. A small number of bankers for their part promised eternal riches based on computer modelling. Uummm sound familiar?

    At first only some banks were reckless, (they were safe whilst only they played) whilst others stood back aghast at what they were doing. However these banks started to make vast sums of money which allowed them to expand and critically adversely effect the share value of those that didn’t participate. Those banks that did not participate got swallowed up. Where were our regulators when this happened? Asleep as usual! Now whilst only 20 to 25% of the banking community played this deadly game all was well. The majority paid for the minority. But as soon as everyone jumped in the money dried up and suddenly confidence deserted the market. What was not apparent to many was that Bankers were forced to adopt poor practices due to political interference in the markets. Ireland is a classic case of this where they were forced to accept low interest rates of the Euro that effectively gave the country a negative interest rate. When the history of this event is written our Politians will not come out with enhanced reputations.

    In the wake of the crisis Billions in taxpayers money has been spent to pay for this mess. The British public at large still think it was the banker fault, and whilst this persists were will never fix the root cause. My brief explanation is over simplified but I hope the gist of what happened is in there.

    Now to energy; once more our politicians are interfering, not to push better or more efficient technology but to pushing alternate or inefficient technology. Our political leaders for all their plethora of advisers, are playing out an agenda, and ignoring the lessons of the last 250 years. That they will fail is beyond question. We have the Banking example above where an experiment to make us all rich came crashing down. And ironically it is the banking crisis and its botched aftermath that is the catalyst for the crumbling of the green agenda. The people of Britain are not going to agree to massive green investment when cherished services are being cut to pay our way. It’s not the science that is causing the shift in public opinion; it is money, the only thing that ever matters. When we all feel well off we switch off and politicians can almost get away with anything, just as they did from the mid-90s until 2007.

    The last Government in a fit of political vandalism committed to a large increase in expenditure without costing it out. This has resulted in additional borrowing and costs to you and me again without any accountability. Inflation has started to rear its ugly head and some of this inflation is self-inflicted. This is very apparent in the energy sector where we see gas on the world market at half the price it was a year ago yet we are paying more. At long last we see the regulator looking into this, but we have forked tongued Politians who want the energy generators to deliver a 20% reduction in CO2 emissions and encouraging these self-same generators to extract a levy on every house hold to pay for it and then pretending they are not offering subsidies.

    In Europe we see many instances of subsidies being removed from solar, and wind. And again it’s the same thing we saw in banking. If just 5 % of households took up the solar option and made use of the feed in tariff then no one would notice. The many paying for the few. However a soon as everyone realises this is an invitation to print money the stupidity of the scheme becomes apparent and its cost are unsustainable. Wind is a disaster and there was an interesting discussion amongst MPs last week. This was cause for a little optimism, as some of the language was quite damming and more in line with my discussion with my MP on Friday. Blunt and to the point.

    The comment from Huhne just demonstrates that he is clueless. We are not even going to get to a 5% reduction by 2020 let alone 20% and he thinks we should aim for 30%. He is delusional, as are those who advise him and those who support him in his current position. The thing he should be worried about is the fact that China has announced the development of the molten salt Thorium reactor. This is an area where WE should be leading the way, and if we removed all subsidies from all other areas and commissioned a thorium reactor our energy worries would fade into history. But then expecting our political leaders to do the right thing is something we have all but given up on.

  13. 13
    James P Says:

    The only company I can find listed in the 350 under AE is ‘Hansen Transmissions International NV’ who aren’t doing very well, either. Can they be related to James..?

  14. 14
    peter geany Says:

    This is an interesting battle that is going on in Government, and demonstrates that the Lib Dems are clueless when it come to being practical. As I said in my post above it is money that is killing AGW

    http://www.guardian.co.uk/politics/2011/feb/17/treasury-nick-clegg-green-agenda

  15. 15
    TonyN Says:

    Peter Geany, #12,

    There isn’t much that you say that I’d disagree with, but I think there is also another way of looking at the ‘green revolution’ which is perfectly compatible with your views, but puts it in a historical context. All this reminds me of the 1970s.

    In those days we had nationalised industries. They were very uncompetitive, but then they didn’t need to compete with anyone, so people thought that didn’t really matter. And they were also very inefficient, with appalling overmanning and low productivity, but that wasn’t supposed to matter either because the huge losses this caused were paid off by the government. Politicians never tired of telling the workers in the nationalised industries that they were the backbone of British industry, without acknowledging that British industry wasn’t really doing very well.

    This system had little to recommend it other than creating a lot of jobs, but politicians could claim that unemployment was low so the economy must be in pretty good shape, and wasn’t it clever of them to manage things so well?

    Then, in the 80’s, a government came along that was brave enough to say, “This doesn’t work really does it? Not only are nationalised industries failing to create any wealth for the nation, but also high taxation is required to keep them afloat. So instead of revenue being used to improve public services and fund enterprises that actually would create wealth, rather than consume it, it is being gobbled up by the low productivity and uncompetitive practices of the nationalised industries. We can so better than that.”

    I seem to remember that the people who thought like this called themselves Conservatives or Tories.

    During that decade the idea of denationalising industries swept the world, and most people thought that was a pretty good thing. For a while it was rather a rough ride, but eventually unemployment, national debt, inflation and interest rates all began to fall, ushering in an era of general prosperity. But then the banking crisis forced people to confront some unpleasant economic realities, like the massive debt that had powered supposed economic growth and funded unrestrained public services and infrastructure investment. Once again we faced the grey world of austerity that fiscal deficits inevitably inflict when reality catches up with eye-catching political initiatives and spin.

    So far as I understand the present situation, our government intends to trade its way out of debt by means of something what it calls a ‘green revolution’, which is intended to ‘decarbonise the economy’. This seems to be all about producing energy in ways that are very inefficient expensive and totally uncompetitive, but create lots and lots of new jobs even if they are funded by subsidies from the government through increased taxes or less expenditure on public services.

    We seem to have come full circle, but this time round the new unproductive and uncompetitive enterprises that are being funded by government are not nationalised industries. They remain in the hands of anyone who has been smart enough to join the gravy train, and who can blame them? Politicians and policy makers never tire of telling the new green businessmen that they are doing work of national importance that will save the planet. What is surprising is that the governing party, which has dreamed up this fiasco, call themselves Conservatives or Tories.

    So what’s changed since pre-Thatcher times?

  16. 16
    tempterrain Says:

    TonyN,

    If you’d checked the figures before making your comparison of Green energy with the subprime banking collapse you’d have known that it just doesn’t make any sense. The numbers just don’t stack up.

    You could have started by taking a look at £37 billion pa for defence.
    http://www.mod.uk/DefenceInternet/AboutDefence/Organisation/KeyFactsAboutDefence/DefenceSpending.htm

    and then a reported bill for UK taxpayers of £850 billion to bail out the UK banking system.
    http://www.independent.co.uk/news/uk/politics/163850bn-official-cost-of-the-bank-bailout-1833830.html

    The UK total budget for Green energy is less a £1 billion. From my reading of this article it looks like this is spread over several years. But even if it’s an annual figure its really just small change by comparison.

    http://www.renewableenergyfocus.com/view/13358/uk-renewables-industry-takes-stock-of-spending-review/

    I understand the arguments that taxpayers don’t like subsidising nationalised industries, but we have nationalised industries here in Australia that actually make a profit.

    Correct me if I’m wrong, but both the USA and the UK seem to have opted for a system whereby the banking system is allowed to remain in private ownership, with their profits distributed to those private owners, when times are good. But when times are bad, the taxpayer picks up the tab to cover those losses.

    So, yes, there are pros and cons from the taxpayers point of view with regards to privatised/nationalised industries, but haven’t both governments chosen all of the ‘cons’, and none of the ‘pros’ from both options?

  17. 17
    manacker Says:

    PeterM

    You seem to have completely missed TonyN’s point:

    our government intends to trade its way out of debt by means of something what it calls a ‘green revolution’, which is intended to ‘decarbonise the economy’. This seems to be all about producing energy in ways that are very inefficient expensive and totally uncompetitive, but create lots and lots of new jobs even if they are funded by subsidies from the government through increased taxes or less expenditure on public services.

    It’s not about comparing the absolute magnitude of the “green energy” debacle with that of the “bank meltdown”. The latter was an enormous disaster. The former is a short-sighted political policy, which will not achieve a “green revolution”, but simply waste large sums of taxpayer money, eventually leading to a future disaster.

    To say it’s all OK because it’s not as bad as the bank collapse or will not cost as much as defense spending is illogical (and irrelevant), Peter.

    A bad deal is a bad deal. And this one will get much worse as the lights go out and direct or indirect carbon taxes are levied in order to finance the debacle.

    Max

  18. 18
    tempterrain Says:

    Max,

    I’m sure that TonyN can speak for himself, if he wants to!

    However, I’d just make the point that if the UK government does want to try to “trade its way out of debt”, by any means, including partially or totally, an element of spending on energy supplies, then a figure of less than a £1 billion is just not going to anywhere near adequate.

    This sort of program is just ‘greenwash’ designed to give the impression that a problem is being tackled.

  19. 19
    manacker Says:

    PeterM

    I’m sure that TonyN can speak for himself, if he wants to!

    He already has (see #15).

    In today’s world of inflated budgets and government spending, £1 billion does sound like “peanuts” (a mere pittance of £16 per man, woman and child), but government forecasts are invariably understated. It seems to me that the more pertinent point is that before one decides to “tackle” a “problem”, one must first establish that there is a “problem”.

    On the NS thread I showed that the average EU inhabitant’s share of the proposed future carbon tax would be around $2,000 per man, woman and child annually (with the UK a bit higher than the average), so this is no longer “peanuts”.

    From what I have read, it appears that the UK (unlike China) does not have a real energy policy, but is simply chasing windmills and green energy schemes because they sound “nice” and the “politically correct” thing to do.

    I can see why UK residents, like TonyN or Peter Geany, could get frustrated by their government’s lack of direction (you and I are on the sidelines here, so really not directly impacted).

    The US does not appear to be much better, but that’s another story.

    Max

  20. 20
    tempterrain Says:

    The title of the thread is “Will Alternative Energy be the next Subprime disaster?”

    The obvious answer is “No it won’t” Because the sums of money involved would need to be multiplied by a thousand to be comparable.

    Even allowing for some overspend, I doubt if even TonyB thinks this is even remotely possible.

  21. 21
    TonyN Says:

    Evidently the concerns expressed in the header post on this thread are shared in high places. The following link is to one of a number of media reports that have appeared in the last few weeks:

    http://www.guardian.co.uk/politics/2011/feb/17/treasury-nick-clegg-green-agenda

    In the aftermath of the banking crisis, there is good reason for shunning the kind of liabilities that the Green Investment Bank would acquire. To do otherwise would indicate that the Treasury had learned nothing from recent history.

    On the other hand, it is difficult to see how the government’s grandiose plans for a green revolutions can be financed otherwise. So we have a rather interesting situation.

  22. 22
    peter geany Says:

    More problems for the alarmist AGW world. http://www.climatesciencewatch.org/2011/02/19/house-votes-244-179-to-kill-u-s-funding-of-ipcc/

    The next thing we will see is a lot of out pouring from liberal elite in Europe about how crass and greedy the US is. They will indulge in their usual we are so superior and know best rhetoric.

  23. 23
    tempterrain Says:

    I’m not sure that the US cutting funding for climate research would necessarily be such a bad thing.

    Firstly, and contrary to what you hear from climate deniers, the scientific community isn’t calling for ever greater amounts of money to be spent researching the AGW problem. That way politicians would have an excuse for doing nothing – they’ll always be waiting for the results of the increased research effort!

    Any new money should go to research on how CO2 can be directly reduced, and that requires groups of engineers and scientists with completely different skills and backgrounds. So, if you think about it, (and I know that may be difficult for some of you) the ‘gravy train’ objection just doesn’t make sense.

    Secondly, the US Republican politicians who are promoting the idea of cutting scientific spending can kiss goodbye to any pretence of being scientific sceptics. A true sceptic position would be that more evidence is needed not less. They may as well just say they just don’t want to know if AGW is turning out to be a real problem. They’ve decided it isn’t and that it must be against the US constitution, or whatever, to think otherwise. Their status as deniers will be well and truly confirmed.

  24. 24
    manacker Says:

    PeterM

    You have given a rather convoluted analysis of the reasons for and results of the US Congress decision to cut IPCC funding.

    I’d say it has much more to do with the lack of credibility of that body following all the revelations of corruption and bogus scientific data promulgated by this group.

    Not too many people take IPCC seriously today, so it is reasonable to conclude that very few people are interested in funding another 1000+ page volume of exaggerations and speculations cloaked in the mantle of “climate science”. (The last one was bad enough.)

    Climate science needs to shift away from the IPCC approach of “proving that AGW represents a serious potential threat” to finding out more about natural climate forcing (still a major “unknown” today) and clearing up the many huge uncertainties relating to the AGW premise. Is cloud formation tied to long-term ocean current oscillations, such as PDO (as correlations by Spencer have shown)? How is ENSO involved? What drives these and other oscillations? What has caused the observed multi-decadal temperature cycles since the modern record started in 1850? What caused even longer cycles, such as the LIA and MWP (rather than “how can we make it appear that these cycles never occurred, so we can claim unusual 20th century warming”)?

    If we really want to understand how our climate functions, we need to work on answering these questions, rather than simply putting together half-baked projections and bogus “hockey sticks” to support the IPCC sales pitch.

    That’s why IPCC (unlike climate science, itself) has become irrelevant and redundant.

    Max

  25. 25
    manacker Says:

    PeterM and PeterG

    The US Congress decision to cut IPCC funding is not directly related to the topic of this thread, which (as I understand it) has more to do with UK green energy policy and its likely financial impact, specifically the conflict between the Treasury and the Ministry of Environment on how to handle “green investments”.

    The general lack of credibility of the IPCC among US Congressmen has not yet moved to the British Parliament (or the Department of Energy and Climate Change), but (maybe) this is only a matter of time (Lord Monckton is certainly doing his best to accelerate this).

    But maybe we should move our discussion on this to the NS thread (before TonyN does).

    Max

  26. 26
    TonyN Says:

    I seem to remember the Department of Energy and Climate Change estimating the cost of complying with the Climate Act and decarbonising the UK Economy £480bn (Yep, bn, I haven’t checked the figure but that doesn’t matter,it’s obviously a very, very large one.)

    So far as I am aware, the Green Investment Bank, with liabilities underwritten by the government is the only idea that the coalition has for raising the kind of funds needed for investment in alternative technologies on a scale that would meet the targets.

    Without the GIB, decarbonisation as a policy is stuffed, and that was the point of this post. With the GIB, the government risks floating a new nationalised bank that will be investing in a very high risk market that othe investors are shunning and the private sector will not touch without the support of public funds. Without the GIB, the costs would have to be passed on to the public directly, which is hardly likely to go unnoticed.

  27. 27
    tempterrain Says:

    The cheapest way to decarbonise the UK economy is to copy the French and go nuclear.

    They have about half the CO2 emissions and with a similar, (or better ?), standard of living so there is no need to despair just yet.

  28. 28
    peter geany Says:

    PeterM #27 You know its quite amazing that so many people agree with you about the cheapest way of de-carbonising the UK economy, yet it is the one area that the coalitions is at pains to point out they will not subsidise. This is why de-carbonisation will not happen in the short term.

    As for the std of living being better in France….! My brother and Sister both live their and their complaints about everyday life are similar to what you here from the average Brit. Levels of taxation being the biggest complaint.

  29. 29
    peter geany Says:

    TonyN
    Trading in Carbon has been suspended in the EU, but this fact is getting amazingly little publicity. Amazing how our press seems to avoid contentious issues that highlight the real incompetence of the EU.
    Basically through fraud many certificates have been stolen and then resold. Now those that have the certificates don’t know if they are the genuine owners or the subjects of fraud and likely to have their certificates confiscated. So there is a move afoot to have the EU publish who owns what, a move that is being resisted. Talk about an open and honest market!! I think the EU is trying to ensure they are not held libel for the losses.

    There can be little confidence in any aspect of the green revolution at present with fraud seemingly at every level. There has to be a lesson here on how to conduct matters of government, but as with the banking crisis there is one group failing to admit their culpability in the whole process, our political class. Until they do progress will not be made.

    This is just another symptom of what happens when governments try to push a highly developed society in a direction that is based of dogma rather than substance.

  30. 30
    manacker Says:

    PeterG and PeterM

    If you are concerned about “carbon footprint”, nuclear is certainly the way to go, as you’ve both remarked.

    IMHO the best measure of a national economy’s ability to generate wealth for its citizens with the lowest “carbon footprint” is the annual GDP per ton of CO2 generated.

    Attached is an up-dated table showing the “carbon efficiencies” of various major economies:
    http://farm6.static.flickr.com/5291/5467159842_41256896ed_b.jpg

    As you can see, France (with around 80% nuclear power) is pretty much on top of this list, with the UK, Germany and Japan close behind. (Switzerland is actually even higher than France, with very little fossil-fuel based power, but since it is so small I did not show it separately.)

    The USA, Canada and Australia are a bit lower, probably primarily due to the lower population densities and longer distances.

    Russia, China and India are still pretty low, but both India and China have increased this efficiency considerably over the past few years (as GDP growth has outpaced growth in CO2 emissions).

    Max

    PS TonyN: does this belong on the NS thread?
    http://farm6.static.flickr.com/5291/5467159842_41256896ed_b.jpg

  31. 31
    Alex Cull Says:

    On the subject of energy, here’s a good article in The Register from last Friday re the Commons Energy and Climate Change Select Sub-Committee taking a look at shale gas this coming Tuesday (1st March.)

    From The Register:

    It’s a game-changer, for sure.

    No technology in the world is as disruptive as shale gas right now. Shale disrupts the conventional gas and oil businesses by decoupling the price of natural gas from the price of oil. It disrupts the petroleum industry by providing a cheap alternative to petrol: UPS is putting liquified natural gas-powered trucks into its fleet. It disrupts both by allowing new entrants into the field, which upsets the existing cartels, and state monopolies.

    It disrupts the nuclear industry by providing energy buyers with a supply that’s cheap and reliable – with no subsidies required. Politically, shale frees much of Europe from a dependence on Russia’s gas production. It also disrupts the environmental movement in several ways, making the high subsidies that investors demand to build ecologically correct renewable energy, such as wind and solar, hard to justify. An economy dependent on gas, rather than coal, cannot but help but lower its carbon footprint.

  32. 32
    geoffchambers Says:

    Alex
    To the list of disruptions, you can add massive political disruption. Here in France, shale gas has been discovered under the Larzac plateau, a sacred site to ecologists, since Mitterand bowed to public pressure and removed French nuclear missiles, and handed the land over to green co-operatives. This is where eco-megastar José Bové raises sheep to make Roquefort. (Actually, someone does it for him, since he’s rather busy flying round the world saving it from captalism).
    Despite the fact that the government has halted exploration on the Larzac Plateau, 20,000 protesters turned out last weekend in a tiny village to warn them off.
    The socialists are almost sure to beat Sarkozy in next year’s election, but they need the support of the Greens. There are serious environmental questions over shale gas exploration (pollution of the water table etc) but they won’t get discussed rationally in France, in what is sure to be a massive political battle if any government were so foolish as to try and make the country self-sufficient in energy.

  33. 33
    geoffchambers Says:

    PeterGeany
    I’ve just read your #12. Your interesting analysis of the sources of the banking crisis is largely echoed here in France by ATTAC, a group of leftwing economists (numerate refugees from the evaporation of the Communist Party). Unfortunately, their analysis is rather spoilt by their recommendation that governments should take back control of the economy … in order to invest in the green future.
    TonyN #15
    While I wouldn’t deny many of your criticisms of pre-Thatcher Britain, I disagree most strongly that her policy of privatisation helped to resolve Britain’s chronic low productivity, which was just as bad in private industry as in the public sector. Closing unprofitable steel mills and encouraging profitable management consultancies certainly increased productivity on paper, and made Britain a rather different country (and one I’m happy to be out of, in some ways).
    The British working class (more numerous and more unionised than their continental counterparts) have traditionally preferred lower growth and productivity, (and an easier life) to the high unemployment (and also stress, as measured by suicide and alcoholism) found in France. Grotesque working practices (e.g. in printing industry) and a small number of highly publicised daft policies in red town halls led Thatcher to declare war on the working class, a war which she declared won with the defeat of the miners (and the loss of 30% of Britain’s industry).
    But you don’t change the anthropological make-up of a country overnight. The British worker and the rentier capitalist alike continue to prefer a quiet life with a minimum of change (i.e. efficiency).
    On a recent visit to London I sat in a fast food emporium watching a multicoloured group of middle-aged ladies leaning on their mops, chatting, and occasionally wiping a table – British multicultural low productivity in action. In France these old dears would have no chance of a job – and their offspring would be out in the streets torching cars.

  34. 34
    TonyN Says:

    geoffchambers, #33:

    I get the impression that you have skipped from the Thatcher years to the present day without pausing at the age of Blair and Cool Britannia, with easy living on low interest rates and bountiful credit. Since when were coolness and debt compatible with competitiveness and productivity? It is the attitudes that were promoted to keep the New Labour project on course that have formed the public state of mind today, not the Thatcher years. And as you so rightly say,”you don’t change the anthropological make-up of a country overnight”.

    In any case I do not think that the economic fantasy that underpins the Green Revolution would have received a moment’s serious consideration in the UK during the 1980s. That may have been a decade of economic brutality, but at least the issues were well defined and understood in the cold light of reality; for both sides.

    I was looking at a report from Bloomberg today (usually fairly reliable) suggesting that the feed in tariff on solar generation will lead to subsidy of up to 12 times the market rate unless the government act quickly. And if they do, then investors are likely to be very reluctant to back this, or any other form of renewable energy, which requires them to have rely on the good faith of politicians in order to be profitable.

  35. 35
    geoffchambers Says:

    TonyN #34
    You’re right, I overlooked the Blair years – and can you blame me?
    I didn’t intend to start a party political debate, but rather to question the value of Thatcher’s assault on low productivity. It’s a feature of British politics over the past fifty years now that it has been defined by the worries of a ruling élite, rather than by the demands of electors. No voter ever complained about falling productivity, just as no voter ever complained about rising carbon emissions. When politicians and their establishment allies define policy by abstract concerns (often involving misleading comparisons with the performance of our neighbours) they falsify the debate, confuse the electors, and lead to the current state of what Ben Pile at Climate Resistance calls a political vacuum, in which all kinds of strange movements may flourish.
    You’re right that the Thatcher years were characterised by a clearer definition of political reality, a reality which was muddled first by Blair and now by Cameron. Pressure friom UKIP and libertarian critics like Delingpole may have an effect on the Conservative party, forcing them to rethink their current centrist muddle. What force is there exerting pressure on the Labour Party, other than the Greens?

  36. 36
    peter geany Says:

    geoffchambers, my analysis is an amalgamation of lots of little bits that I pick up here and there and put together myself. If others come to the same conclusion that is no surprise as an honest look draws one to that conclusion. Your views on the 80’s are interesting. I still remember my first day of work in the UK in Dec 79. I turned up at 1:00pm to find no one in the office! They were all at the pub, and stayed until it closed at 3:00. This doesn’t happen much today, and everyone is better off for it. I always feel felt better when the pace of work is fast and the day flies by and then you can play hard at the appropriate time.

    You are correct about the lack of productivity in the 70’s in the private sector, but that was due to political interference that discouraged good management practises. This has nothing to do with the pace of work for this is not what makes a happy workforce or increases productivity. That requires sorting out the hygiene factors as Maslow called them (this should be a given in any serious organisation but is overlooked to a lamentable level. They are also the easiest to fix.) Once these factors have been sorted then working practises can be developed to increase productivity. Improving productivity does not equal working harder, which is a mistake the Left always makes. Improved productivity ALWAYS results from working smarter and that only ever happens when the workforce is fully engaged. There are NEVER any exceptions to this rule, and is generally why the traditional unions fell out of favour with smart workforces around the world.

    Perhaps the only organisations we have today that understand these issues correctly are manufacturers, or more precisely the successful ones. Of course there are others firms from other sectors that get it right, but manufacturers live and die by the factory gate, and so know exactly what they need to do. However it is no surprise that all of the wind turbine manufacturers are slowly going bust. This is because their factory gate prices have been distorted by virtual reality, and so they have worked to unrealistic figures where there is no real demand, only a government subsidy driven by fanciful requirements. Much like the defence industry really. And as TonyN has pointed out above we have reached the point where real money is needed to move the green agenda on, and that money will not be forthcoming as it relies totally on subsidy, rather than need, and relies on political good will and guarantee. A political guarantee as we all know is worthless, especially when it does not have public support.

    Geoff I don’t recognise your view of Thatcher’s Britain, and I was in my 20’s all through it, but I did recognise a bunch of dead beat useless lazy and demoralised people when I first arrived that suddenly turned into a happy enthusiastic bunch of hardworking people by the end of the 80’. That is not to diminish the upheaval many people went through, but it took a leader of conviction and courage to achieve it. It is an old adage that everyone’s strengths are also their weaknesses, and Thatcher was no exception and the poll Tax was the right idea with the wrong application. She too found limits when it came to changing the attitude to the public sector.

    Our current political class collectively cannot gather the conviction or courage of Thatcher, but I would not necessarily say a reincarnation is what Britain needs. What we need is a leader for today’s issues, a leader who can cut through the technical issues of today’s world and is able to build a team to run the country to its best advantage, rather than run it to please all the various pressure groups. Unfortunately I don’t see one on the horizon.

    Britain once led the world in technology that morphed into high technology. Britain still leads in many areas although the world is much more of a global enterprise, where our people are now very good at providing services and hence the resultant increase in service industries. This has come at the expense unfortunately in manufacturing that many people lament. However we can hold our own if we so chose, as exemplified by JCB and Rolls Royce aero engines. Both of these companies are well managed compared to most. Look at all the formula one teams that are based here. And look what happens when Japanese car manufacturers set up here. It’s all down to management. Contrast this with the nebulous green industries. What are these industries trying to provide us with that is useful??? Bloody nothing. And at the same time these industries are being championed, those same nincompoops are damaging the very same successful manufacturing industries where we lead the world such as Roll Royce with their continuous barrage about CO2 being a pollutant. You have to marvel at the stupidity of it all. Add to this the huge costs being added to energy that hampers manufacturing and you just have to wonder if we have stumbled upon some new species of animal, where the brain is contracting.

    Britain’s attempts at a high-speed rail are another piece of green theatre. If the rail were in place today it would be of use. However it is based on old technology, technology that is energy intensive and intensive of infrastructure costs. It will compete for revenue (passengers) with current rail, air and buses. It won’t remove cars from the road as getting to and from the stations will be both costly and time-consuming. It may be attractive to certain commuters working in London, who will be able to offset the horrendous costs onto their clients, but of no use to ordinary commuters. It will not replace air travel which is already cheaper and faster, so what is it for??? Where is the pressing need???

  37. 37
    geoffchambers Says:

    Peter Geany
    I recognise features of your work experience. Judging by Ricky Gervais’s “The Office” the same mentality is still alive and well, so Thatcher’s union bashing, accompanied by the destruction of a third of British industry, can hardly claim to have resolved the problem.
    I agree about high speed rail as “green theatre”. It’s a good example of what I meant by “misleading comparisons with the performance of our neighbours”. “France has got it, so we must have it” seems to be the rationale, forgetting that France has twice the surface area of Britain, and our population distribution is such that three-quarters of the population of England are within a three hour train journey of London already. (I just made those figures up, but I bet they’re not far off).
    The rationale for being “at the forefront” of green technology is even more bizarre. If Huhne and co really believe that solar and wind technology are going to become competitive, why not let Slovakia and Germany take the strain of massive subsidies, until the technology is perfected and can be installed economically? The Japanese and Chinese companies which make these gadgets will still install factories in Wales if we make it worth their while. If some British boffin has a bright idea, he can make massive profits on the back of the Slovakian taxpayer just as easily as on ours.
    The Bloomberg article TonyN references above says it all. It’s not about financing British boffins; it’s about convincing pension fund managers that the government won’t change their minds every minute. They’ve already lost it, but the politico-media consensus means it may be a long time before politicians and voters realise what’s happening.

  38. 38
    TonyN Says:

    This BBC story seems to have come at a very convenient moment:

    http://www.bbc.co.uk/news/uk-scotland-12597097

    Three things I noticed:

    If each green job displaces 3.7 other jobs, am I right in criticising the green revolution for compromising productivity?

    Note the use of tenses; the report from Verso Economics seems to deal with what has happened, the Scottish Government’s defence speaks entirely of what wiil happen.

    The Scottish Government, as quoted by the BBC, makes no response to the main findings of Verso, but indulges in plenty of irritable and futile arm waving.

  39. 39
    peter geany Says:

    I see those with shrinking brains have just given the go-ahead for electrification of the great west line. What is not clear is how they are going to run 2 different types of trains on the network as the routes they have chosen to highlight as being electrified are only but a fraction of the actual network. A typical half thought out green scheme that I presume will run on the power produced by covering Wales in wind turbines. Currently I can think of a thousand better ways to spend our money.

    I make a prediction this scheme will die on the vine as economic conditions worsen. I travel this line everyday to work and just can not believe the bull coming out about improved journey times. The trains are already travelling at 125 mph but are more often than not delayed by signalling or not having a platform available at the next station. Electrification won’t resolve those issues.

  40. 40
    tempterrain Says:

    I’ve just come across this quote by Dick Cheney:

    “If there’s a 1% chance that Pakistani scientists are helping al-Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It’s not about our analysis … It’s about our response.”

    So why is this principle not applied to AGW which, even you guys have to admit, is more than a 1% risk?

  41. 41
    tempterrain Says:

    TonyN,

    Sorry I posted #40 here by mistake. Delete it or shift it to the NS thread if you like.

Leave a Reply

*Required


seven − 7 =

© 2011 Harmless Sky Suffusion theme by Sayontan Sinha