Adam Smith Institute

So, the Prince of Wales has decided to speak out against GM crops, blaming them for pretty much everything. I have written before against the doomsday lunacy that GM crops provokes. With this latest officious dabble in politics, the Prince of Wales has put himself at the movement’s vanguard.

From his ivory tower, the Prince is able to make the comment: "Look at India's Green Revolution. It worked for a short time but now the price is being paid”. What price is that exactly? For the people of the Punjab, there has been a decline in poverty by 11.52% between 2002 and 2005.

Of course, protecting the environment is important and the Prince’s project to save rainforests is on the whole a noble cause. Yet he fails to see that protecting the environment is where GM crops do so well, as they require far fewer pesticides to return high yields. Thus, GM crops allow practices closer to the Princes own Highgrove estate. Also, for the carbon-crazed: “GM crops need to be tilled less and sprayed less, cutting tractors' fuel use and reducing the impact of greenhouse gas emissions. In 2006 alone, the permanent carbon dioxide savings from reduced fuel consumption since the introduction of GM crops was equal to removing 25 per cent of cars from Britain's roads for a year.”

Progress is not a simple thing. GM crops will not save the world from all the challenges that will be faced. However, they have and will continue to save the lives of countless millions of people from starvation. After all, Horace was quite wrong. Pale death does not knock at the hut of the poor and the towers of kings with impartial step.

As early as 1992, the Adam Smith Institute propagated the use of marketable permits for tackling high CO2 emissions (see Rethinking the Environment). This cap and trade system means that while the government has limited the overall value of emissions, firms (polluters) can trade their pollution permits. The incentive to reduce emissions is created by the cost of buying extra permits and selling your surplus if you are more efficient.

So only 13 years later, the EU entered Phase I (2005-2007) of its Emissions Trading System that sought to do just that. Over the same time period CO2 emissions in the EU rose 1.9 %. Why does the market approach appear to have failed?

Firstly, Phase I only covered a two year period; it takes time for firms to invest in more efficient methods of production and consequently reap the benefits of lower CO2 output.

Secondly, the scheme only applied to installations in the energy and industry sectors which accounted for less than half of the EU‚s emissions of CO2. In other words, the emissions trading system was not able to have its full effect.

Thirdly, the ETS was subject to lobbying and mismanagement by the EU and its member states. They allowed far too many permits to be issued, and of those only 5% were auctioned, the rest being freely allocated. This is evident in the price of allowances- from April 2006 to September 2007, it fell from •30 per tonne of CO2 to •0.10. The result: the incentive to reduce emissions vanishes.

Now in 2008 as Phase II begins, the EU has decided that it, and not the member states will allocate the emissions caps- the caps themselves will be lowered and more permits auctioned. Also, coverage of the scheme will increase to contain aluminium and ammonium producers, and, by 2010, the aviation industry. But don't hold your breath. The EU will be just as vulnerable to lobbyists as its members making overallocation just as likely. And increasing the proportion of permits auctioned from 5% to 7% is less of a step in the right direction, and more of a snail's pace.

Instead, lowering the caps to a more effective level and auctioning them all will better reflect the ideas that were suggested 16 years ago, and in the long run will help to vindicate a market based approach to the environment.

A slightly odd (and definitely geeky) thing to do but I'm going to praise some environmental research that has just been published. Yes, even something from the Stockholm Environment Institute. (Summary here, full report here.) Whether their calculations are entirely correct or not isn't my point: it's that they are trying to answer an interesting question.

A little background. There are, over and above the way that the UN and IPCC measure emissions two others in common usage. The first is producer emissions: add up all the CO2 (actually, CO2-e but never mind) emissions in a country. But that doesn't take account of imports and exports. OK, so thee's another measure: consumer emissions. This adds in to what is produced in the UK what is embodied in the things we import. However, in one of those remarkable twists of the way in which statistics are defined, such consumer numbers do not take account of the CO2 embedded in what we export....those emissions clearly being associated with the consumption habits of those in other countries rather than our own. It's not really all that much of a surprise that there are those who like to quote this latter number, despite the clear and obvious double counting.

What the new report tries to do is estimate the real balance. How much CO2 is embedded in what we import and how much in what we export (and yes, they look at re-exports too)? So that we can come up with a number that truly reflects the emissions from our consumption.

It's not really a surprise that our consumption emissions are higher than our production ones. Firstly, we run a large trade deficit on goods so we obviously import more "things" than export them. Secondly, our goods exports tend to be high value added items (jet engines say) rather than physical resource or energy intensive ones (aluminium say) so again we'd expect to be importing more CO2 than exporting. Finally, we're one of the world's great exporters of services rather than goods and yes, there's less CO2 embedded in the former than the latter.

So, yes, our consumption numbers are higher than our production ones: for we're a high tech, services orientated economy. So far so geeky and perhaps not all that interesting. However, now that we've got the distinctions between the various statistics out of the way we can keep a sharp eye open for those who would misuse them. Using the trade adjusted consumer numbers the report says that:

...rather than going down by 5 per cent, as ministers claimed, CO2 emissions have gone up 18 per cent between 1992 and 2004 when all emissions are counted.

However, there's another report coming from the same source soon:

An SEI report to be published soon by the campaign group WWF will suggest that the UK's total greenhouse gas emissions are 49 per cent higher than reported.

I wonder what definition that will use? Consumer perhaps, unadjusted for exports?

But Stuart Bond, WWF's head of research, said: "This shows our claims on emissions are simply a big lie."

Could be Stuart, could be, we'll judge your claims on that lies, damned lies and statistics spectrum when you release your report, shall we?

Quite like old times as Arthur Scargill returns to The Guardian to tell us that coal is the answer to all our problems. If only we employed hundreds of thousands to work underground, banned all foreign coal imports, then we could power the entire island from coal and renewables and all live happily ever after.

Well, yes, although there's a certain amount of wishful thinking there. This can all be done without harming the environment apparently: clean coal technology is sufficiently advanced that not only will there be no particularate pollution but we're able to capture all of the CO2 as well. Slightly unfortunate to have to point out that, at least with present technology, no we can't. No one really thinks we ever will be able to either. We think we might be able to capture some of it, perhaps even a majority, but not all. Further, no one has even built a decent sized demonstration plant yet, let alone a commercial pilot, so we've really no idea how much it is likely to cost either.

But the really breathtaking claim is the one that coal is better than nuclear. For of course, the biggest challenger to coal for baseload electricty production is indeed nucelar power: so out comes the boogieman of radiation.

Is he unaware that there is no known way of disposing of nuclear waste, which will contaminate the planet for thousands of years?

There are ways known: vitrification and burying it are known to work, the barriers being political not technological. But it's most unwise for those championing King Coal to start talking about radioactivity for a rather different reason:

A 1,000 MW coal-burning power plant could release as much as 5.2 tons/year of uranium (containing 74 pounds (34 kg) of uranium-235) and 12.8 tons/year of thorium. The radioactive emission from this coal power plant is 100 times greater than a comparable nuclear power plant with the same electrical output; including processing output, the coal power plant's radiation output is over 3 times greater.

Poor old Arthur. His problem always was that his worldview didn't actually coincide with reality, wasn't it?

Violent surprise attacks on unsuspecting citizens in their own home are a feature of totalitarian states, and were used to intimidate dissidents in Nazi-Germany and in Stalin's USSR. But for some time now scientists in the West have been falling victim to such storm trooper assaults perpetrated by animal right activists. As in the UK, US Scientists and their families have been horrified and severely traumatised. According to the Washington Times:

Over the past couple of years, more researchers who experiment on animals have been harassed and terrorized in their homes, with weapons that include firebombs, flooding and acid… These attacks have been escalating in recent years: The Washington-based Foundation for Biomedical Research said researchers were harassed or otherwise victimized more than 70 times in 2003, up from 10 a year earlier.

To be sure, people who are concerned in non-violent ways to protect animals from harm have been around for centuries. But these eco-terrorists are a different bunch. Jerry Vlasak, who speaks for the US Animal Liberation Front, says: "if you had to hurt somebody or intimidate them or kill them, it would be morally justifiable." This is a rhetoric that dehumanises our society in another bout of egalitarian furore, which is aiming at the gradual levelling of the animal and the human world. It is in this context that we should look at the Spanish parliament. For it is the first to deal with the international Great Ape project, which attempts to impose human rights on certain monkeys.

On Tuesday myself and others from the office went along to Waterstones at the LSE to listen to Lord Lawson of Blaby discuss his recent publication: An Appeal to Reason. It was an event that exposed both of the ugly sides of the debate surrounding climate change, but Lord Lawson remained above this and raised some valid points. Perhaps the most controversial was his argument that environmentalism was the new religion, and I believe that he may have identified a core reason for the appeal of climate change.

Over the past fifty years the number of people practicing religion within Western Europe has declined sharply. This has taken place simultaneously with a cultural shift away from independent/communal self-reliance, to expectations of state absolution which has left in its wake a moral vacuum. Lord Lawson argues that environmentalism has filled this vacuum. Over the past decade people have been more and more kowtowing to the potentially over-exaggerated catastrophic happenings that the climate change apostles have been disseminating. The continual doom sayings of these people have built up the idea that everyone is as culpable as next for the destruction of the planet, and that greatness is only attainable through a slavish and moralistic life dedicated to the cause of stopping climate change.

It is difficult to see much between the European interpretation of religion and environmentalism, save for the private/public disparity. The “New Religion” seeks to raise everyone’s guilt through the invasion of the private sphere, via public policy implementation; those that don’t follow the prescribed messages are seen as heretics. Despite living in the 21st Century, a time of religious liberty, it seems that we are rejecting scientific investigation and results out of hand, if it dare question other's beliefs. The invocation of politics to raise a section of science above all others, based on exaggerated scientific truths that tell of harrowing future terrors, is seemingly irrational in this day and age. Self-comfort can be found in many ways, but making others feel guilty via a comparison of actions is not progressive. It is no wonder Lord Lawson titled his book as he did.

O. Glenn Smith writes in the International Herald Tribune on the potential for getting our much of our energy needs from the Sun:

Science fiction? Actually, no - the technology already exists. A space solar power system would involve building large solar energy collectors in orbit around the Earth. These panels would collect far more energy than land-based units, which are hampered by weather, low angles of the sun in northern climes and, of course, the darkness of night.

Cost and efficiency have been the stumbling blocks to this becoming a possibility and unsurpisingly the breakthroughs have come from the private sector. Space Exploration Technologies and Orbital Sciences have been at the forefront of developing the technology to make this a possibility.

Clearly this is promising, but for the foreseeable future our energy needs will still need to be met through a variety of sources, with coal, gas and nuclear at the forefront. As such, government targets on renewable energies are damaging the market response. For example, the government has set unrealistic and damaging targets on the power we will get from wind turbines. Recently a report by an independent consultancy, funded by the Renewable Energy Foundation, undermined the government’s policy.

With the three main political parties closely aligned on imprudent carbon-reduction obsessed energy policies, we could have a monopoly in such bad policies (£260 per year, per household) in the future. And sadly when the government messes up, it doesn’t go out of business.
 

I'm pleased to see that The Great Global Warming Swindle is still up on the website of the UK's Channel 4 television station, despite the communication regulator's critical remarks on it.

The programme was done as an antidote to Al Gore's An Inconvenient Truth. It beat up poor Al pretty mercilessly. It was hugely entertaining. Channel 4 prides itself on iconoclastic stuff and likes stirring up debate. But of course the enviro-nazis don't want debate on this issue stirred up, and around 250 folk complained. The regulator, Ofcom, has to investigate even if it only gets one complaint, so the watchdogs went through the programme with a fine-tooth comb. They concluded that it treated some of the climate-change experts unfairly and did not give them a chance to respond.

Well, they didn't need to respond because they'd got their response in at length beforehand, thanks to Big Al. It was Swindle that was the response. But the regulators ruled that the programme, while polemical, had not materially misled people. People watching it knew what they were getting.

Still, I'm sure the fuss will be enough to ensure that all the schools that are happily showing An Inconvenient Truth to their pupils (with all its own polemics, and with its demonstrated errors) do not show this cheerfully vicious rebuttal. There's something terribly one-sided about this debate, don't you think?

Yesterday I rather made fun of Al Gore's latest call for a greener world. Today (alerted by EU Referendum) I can show you the expense of a less adventurous plan. This is the EU's plan that each EU country should reduce their emissions by some amount, in Ireland's case, by 20%. One way of looking at the costs of such a plan is to work out what level a carbon tax would have to be set at to make such a reduction possible:

In a presentation made to the committee, Prof Tol made what he described as a "cheeky" suggestion that the carbon tax needed to meet this stringent target would be equal to a carbon tax of €4,000 per tonne of CO2.

Given that the Stern Review thought that the cost of the emission of such a tonne of CO2 was $85 (and the EU thinks about €40, Tol's own estimate is lower) clearly this level of taxation is ludicrous. It simply isn't sensible to pay 100 times more in tax to discourage an activity than the costs of the activity you're trying to discourage will incur.

Richard Tol isn't, contrary to what some might fear, a crank, or anything like it. He's actually one of the people that helped write the IPCC reports that the whole concern is based upon.

Unfortunately, what we're seeing here is not unusual. The politicians have got the bit between their teeth, they're insisting that something must be done and dangnit, they're going to be the ones who tell everybody else what to do. Unfortunately, in their ignorance, they're now telling everyone to do things which will make us all immeasurably poorer. More unfortunately, for little reason as well.

At the heart of the economic debate over what we should do about climate change is a point that all too few have as yet grasped. We shouldn't spend more on mitigation that such mitigation will save us. To do so is simply to make future generations poorer.

The politicians are insisting that we pay 100 times more to mitigate than the mitigation will save us. Politicians: actively campaigning to make you and your children poorer: isn't that nice of them?

A government-sponsored report on biofuel policy has concluded that the UK’s current biofuels policy could plunge an additional 10.7 million Indian people into poverty, in addition to hundreds of thousands of people throughout Africa. Biofuel policies drive up demand and prices for food staples, and their environmental credentials are far from pristine. Besides distorting the market for food, government-induced demand for biofuels has led to an increase in the destruction of the rainforest, potentially offsetting most of the positive environmental impacts.  In response to the report, the government plans to slow its planned expansion into biofuels, at least "until controls are in place to prevent food prices from rising."  The plan, it seems, is simply to counteract one government intervention that had unexpectedly bad consequences with another.

Placing controls to artificially keep food prices low will only further distort the market in some of the most crucial commodities for people around the world. Subsidizing farmers in one part of the world will only put others out of business, and price ceilings will only restrict the supply. At the same time, we cannot push for biofuel policies just because they sound nice and clean if the actual impact is starvation and no tangible benefits for real people. Maybe if governments stopped interfering in the market, creating demand that would not otherwise exist for the sake of policies with questionable environmental outcomes, those 10.7 billion people would be a lot better off.

Apparently, the efficiency of power plants in the United States has remained the same for the past 50 years. That's right; in 1957, at a 33% efficiency rate, power plants got just as much energy for every pound of coal as they do today. Why this dearth of technological growth in such an important sector? One author makes a plausible case that it is the extensive regulations and perverse incentives created by government subsidies that have distorted the market, making efficiency unprofitable and competition miniscule.

According to the article, the market "is not stagnant because we've hit any fundamental limit. Indeed, studies by the US Department of Energy and Environmental Protection Agency have identified a whopping 200,000 MW of potential (that's 20% of the peak power demand of the US) for proven technologies that either recover waste energy from industrials and/or cogenerate heat and electricity from a single fuel source."

In other words, we have the technology to drastically increase the efficiency of energy production. In a free market, this efficiency would convert immediately to an increased profit and should therefore be adapted relatively quickly. One major reason that this has not happened is the fact that government regulation makes small start-up companies in the sector unviable – because capital investments are subsidized but energy must be passed on at no mark-up over operating costs. Moreover, mandates to adopt certain kinds of environmental standards have had the perverse effect of shutting out better, more efficient improvements.

Because of its size, importance, and environmental impact, the energy sector is often seen as a sector that requires government intervention. Yet that very government regulation has instead stifled progress to an almost shocking degree. Since the 1950's, we've invented personal computers, the internet, landed men on the moon and sent rovers to Mars. Is it a coincidence that despite all of that progress in unregulated fields, the most heavily regulated sector of the American economy has literally stagnated? I think not.

Meteorologist Fred Singer is always amusing. He has a cheery disposition, and takes particular delight in teasing the likes of Al Gore when their enthusiasm gets the better of their reason. His Non-Government International Panel on Climate Change points out that melting glaciers and suchlike may be evidence of rising temperatures, but they are not evidence that human beings have caused them. And he states simply and confidently that human influence over the climate is insignificant.

The world has been much hotter, and much colder, long before we arrived on the scene. Carbon dioxide has been twenty times the level it is now. The sun – gushing out radiation, gas clouds, and magnetic fields – is a much more important cause of climate change. Carbon 14 and Oxygen 18 isotopes in ancient ice samples allow us to gauge both solar activity and temperature over the millennia; and indeed there is a strong correlation.

Singer has been in London, promoting his new report, Nature, Not Human Activity, Rules the Climate. The idea that human beings are causing climate change, he says, has produced damaging distortions in our energy policy – increasing our costs, damaging our economic growth and lowering our living standards. Instead, he says, since our activities have almost no influence on the climate, we should carry on using coal (and nuclear power) to generate electricity, and use our potentially-insecure supplies of natural gas for less strategic purposes such as transportation.

You might not agree with Singer, but it's hard to dislike the good-natured way he is prepared to stand up against the consensus.

This week the Wall Street Journal published one of the best stories ever about how inconvenient political correctness and green living can be. Both US parties will try to host "green conventions," with the Democrats going to the extreme.

Some examples:

• Union-labour and American made organic cotton caps, shirts, and fanny packs.
• Bio-degradable balloons.
• A rubbish brigade that will look to see that convention goers put recyclable rubbish in one bin and non-recyclable rubbish in another. After, the brigade will look through each bin to ensure no mistakes were made. "That's the only way to make sure it's pure," Andrea Robinson, a convention organizer says.
• Food will be locally grown to minimize emissions from transportation.

Is this what is in store for the nation if the Democrats have their way? So many people accuse the neo-Cons of using fear to get what they want. How is the green madness movement any different?  

We need to recognize a few things. Life expectancy is at an all time high. We live better and wealthier lives with much a higher standard of living than ever. We can communicate with people instantly around the world and travel to every corner of the earth.

Technology and modern living carry trade-offs, but we are better off for it. If patronising only domestic goods made by union-labour with organic materials is the model of the future, the third world can kiss an prospect of future prosperity good-bye, and the first world will slip toward economic mediocrity.  

Gordon Brown wants oil-rich states to invest in Britain's renewable power projects as a long-term solution to the world fuel price crisis. At the Jeddah eneergy conference in Saudi Arabia this week, the Prime Minster said that it would cost the UK £100bn to meet its 2020 target of having 15% of its power supply from alternative energy sources, and he hoped that some of this investment could come from the Middle East.

I'm not sure this is altogether a good idea. With our gas supplies under threat from Russia and other unsavoury East European regimes, and our oil supplied by countries that are often even more unsavoury and even less democratic, energy security is something to worry about. If Middle East governments are going to be controlling large stakes in the nation's alternative sources, it's out of the frying pan into the fire. I'm surprised that the backbench MPs who are trying to derail the plans to build new UK nuclear power stations don't understand that.