Bio-fuels and sustainability

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This week Policy Exchange launched a report called "Green skies thinking: promoting the development and commercialisation of sustainable bio-jet fuels". The thrust of their argument is that bio-fuels cannot replace oil as the primary energy source for all transport because of production constraints, but road vehicles can be powered by electricity or hydrogen. However, such options are not open for aircraft, so bio-fuels should be used primarily by them.

The logic is fine as far as it goes, although of course it takes it as a given that we will all be going to hell in a handbasket if carbon dioxide emissions are not drastically cut back. And we might well see flights in a generation's time largely powered by economically viable algal bio-fuels. But what has sustainability got to do with it?

The term has become a convenient catch-all for environmentalists' policy prescriptions for pretty much everything we do. But the supply of jet fuel is at present perfectly "sustainable", in that the demand for flights can continue to be met for the forseeable future. When oil prices rise sufficiently high for alternatives to become viable, things will change. Something which can only be sustained by use of high and continuing public subsidy does not deserve to be called sustainable.

The mantra of sustainability assumes that future generations will continue to use resources in the same way as we do. A quick review of the last two centuries would surely be enough to show the fallacy of that argument. And if we do not need to second guess how our grandchildren might choose to live their lives, then there is a strong case for regarding sustainability as just another fashionable but failed concept.

Martin Livermore is the director of The Scientific Alliance

A very inconvenient truth

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One of the curious implications of the current downturn has been to decrease slightly the prominence of environmental issues on the political agenda and in the media. Nonetheless, Climate Change is still widely seen as humanity’s greatest threat, and further legislation to address this is inevitable. Beneath the hyperbole and hysteria, the scientific consensus that emerges is hardly apocalyptic. Even the Intergovernmental Panel on Climate Change itself predicts a fairly modest 1.8 to 4°C rise in global average temperatures this century. Of course, this is not insignificant, but the action taken in response must be proportional and effective. There is a real risk at the moment that governments use the issue of climate change in a pseudo-Orwellian way as something we need to fight collectively, and therefore use it as an excuse to pass legislation that severely curtails our liberties.

For example, introducing limits on the amount of flying or driving we could do each year are potential future policy responses. Not only would these infringe our rights to lead our everyday lives, but in enforcing measures like these, vast amounts of data on our movements and activities would need to be collected, stored and analysed to assess our ‘carbon footprint’, eroding our right to privacy. Draconian measures such as these are not just undesirable threats to our liberty, they are also impractical and unnecessary. Fossil fuels are finite resources, a fact reflected in their cost. We have already seen that as oil prices rise because of a simple supply-demand relationship, companies and individuals pro-actively seek out alternatives, whether that may be reducing their use of a type of transport or equipment, increasing the efficiency of existing technology or investing in new technology. Furthermore, public recognition of the need to reduce fossil fuel use is a powerful incentive for corporations to do so: many companies already attach great prominence to environmental credentials to help differentiate them from their competitors.

Therefore, a free-market based solution is by far the most effective way of making the transformation from fossil fuels to cleaner, renewable energy sources. We must then remain vigilant against attempts to infringe our liberties under the premise of environmental issues. The really inconvenient truth for governments is that the most effective solution relies on individuals and corporations acting not as a result of compulsion, but in the logical pursuit of their own self-interest.

A very inconvenient truth is written by James Freeland, winner of The Young Writer on Liberty 2009.

The population bomb four decades on – Are we still doomed?

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There is nothing new about fears of overpopulation – every century has had its fair share of apocalyptic claims about the future of mankind and the Earth. The late 1960s saw the release of The Population Bomb by Paul R. Ehrlich, which stands as one of the founding texts of the modern environment movement. It popularised neo-Malthusian concerns that current rates of population growth were unsustainable, a fear revived every year on the UN’s World Population Day (today, July 11).

This year, the Electronic Journal of Sustainable Development took the opportunity to assess whether these fears are justified. It features a new paper by Paul R. Ehrlich and Anne H. Ehrlich (unnamed co-author of the original book) who have few regrets about the claims they made. If anything, they argue that “perhaps the most serious flaw in The [Population] Bomb was that it was much too optimistic about the future". They point to the collapse of numerous fisheries, the irreversible loss of biodiversity, ozone depletion, and most importantly in their view, global warming.

But such claims – no matter how popular they remain – are at odds with empirical evidence, according to Indur M. Goklany, co-editor of the EJSD (free online journal) and author of The Improving State of the World. In his article, he argues that “despite unprecedented growth in population, affluence, consumption and technological change, human well-being has never been higher."

Even if Goklany concedes that the record is mixed for the environment, he explains why this is: “Initially, in the rich countries, affluence and technology worsened environmental quality, but eventually they provided the methods and means for cleaning up the environment… After decades of deterioration, their environment has improved substantially." His and many of the other articles in the EJSD show that if anything, we need more economic growth and technology, underlined by stable market institutions like property rights – not less.

But as Goklany warns, the great advances mankind has made in the past centuries do not mean that economic growth and technology innovation should be taken for granted. Rather, he warns that the “policy preferences of some environmentalists and Neo-Malthusians, founded on their skepticism of affluence and technology, would only make progress toward a better quality of life and a more sustainable environment harder. Their fears could become self-fulfilling prophecies."

Issue 3 of the EJSD – “The Population Bomb Four Decades On" – is available here.

The EJSD is a peer-reviewed, open access, online journal- the result of a partnership between International Policy Network and the University of Buckingham.

A goal that can't be missed

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The G8 meeting in Italy is reported to have agreed yet more goals. An 80% reduction in carbon dioxide emissions by 2050 (from a baseline yet to be agreed) is more of the usual aspiration target-setting, with no agreement on hard shorter-term goals. The chances of India and China signing up to something similar are zero. The likelihood is that there will some form of agreement cobbled together in Copenhagen in December which will in practice be meaningless and will achieve nothing.

However, one further goal has been agreed which will be easy to reach. That is to keep average temperatures from rising by more than 2°C, which has now been taken as some line in the sand beyond which we cannot go without disastrous and irreversible consequences. In practice, we are extremely unlikely to get close to this goal whether or not anything is done about emissions control. So that's one goal they'll meet.

Elsewhere, Prince Charles, in his Richard Dimbleby lecture, has calculated that we have just 96 months to save the world, in what the Independent reported as a searing indictment of capitalist society. So, I assume he is going to take a lead by shutting down Duchy Originals. In the meantime, we can be comforted that the heir to the throne has such a sound grasp of maths.

For more information, visit the website of the Scientific Alliance.

(Un)common sense on climate change policy

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When so much which is said, written and done in the name of climate change mitigation is tinged with a zealotry which insists that drastic action must be taken, despite the improbability of it happening, it is particularly refreshing to see a remarkably sensible new report from the University of Oxford and LSE.

How to Get Climate Change Back on Course clearly and concisely demolishes the myth that the Kyoto protocol and any successor which might possibly emerge from the Copenhagen conference later this year will have the claimed effect on emissions. It also highlights the ludicrously ambitious targets of the UK Climate Change Act, which would require a sustained rate of decarbonisation over twice that ever seen. That Kyoto places binding obligations on Annex 1 countries and the Climate Change Act targets are legally enforceable is meaningless: no sactions can force compliance.

The authors of the report all subscribe to the view that carbon dioxide is the primary driver of climate change. These are not sceptics. However, they are realists, capable of independent thought and recognising that the current hypothesis may turn out to be false. They propose a policy which is lower cost, efficient and - most importantly - directly addresses the key issue of carbon intensity: a low, ring-fenced carbon tax to fund innovation policies. This is based on the simple truth that clean energy will only begin to dominate when it is cheaper to supply at the point of use than conventional sources. Such a carbon tax may turn out to be unnecessary, but it certainly beats the unholy mess of emissions control. This report should be required reading for all politicians.

For more detail, see the latest Scientific Alliance newsletter.

Railway franchises – the need for reform

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The effective re-nationalisation of the East Coast Main Line (ECML) is yet another setback for the railways privatisation policy of the mid-1990s.

National Express submitted a heroically optimistic bid for the ECML franchise, which was based on a £1.4 billion payment to the Government between 2007 and 2014.

This figure assumed annual revenue growth of over 9% - in the first half of 2009, growth was a meagre 1%.

Not surprisingly, National Express has now thrown in the towel. It remains unclear whether it will be allowed to retain its two other railway franchises.

Given the previous railway franchise setbacks, including the removal of Connex from the South Eastern network in 2003 and the enforced departure of GNER from the ECML, it is clear that reform is needed.

Assuming that the next Government retains the railways franchise system, two obvious improvements could be made.

First, some of the uncertainty relating to future revenues – the key financial driver – could be removed. Imposing a guaranteed minimum and maximum revenue figure within each franchise repayment contract could deter over-optimistic bids.

Secondly, correlating more closely franchise lengths with rolling-stock contracts would be beneficial. In particular, those franchises that compete directly with air services, such as the ECML, should be of much longer duration,

Whilst some argue that shorter franchises promote efficiency, the water sector operates with near-permanent licensees – and without undue problems.     

In time, and once the large Network Rail capital expenditure programme begins to wind down, the Government should allow some vertical integration - initially in rural areas or where the network operation is reasonably straightforward.

Eventually, there is no reason why integrated regional railway operators cannot be treated like regional water companies. With a substantial ongoing capital expenditure programme and decent operating revenues, they could also be price-regulated according to their Regulated Asset Valuation (RAV).

Railways – the impact of the recession

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Today’s figures from Stagecoach, the holder of the South West and East Midlands railways franchises, were reassuring. Despite the recession, Stagecoach reported like-for-like revenue growth of 6.2% in its UK railways business – figures that compare favorably with the lacklustre growth reported recently by National Express from its East Coast main-line franchise. More generally, UK railways privatisation in the mid-1990s undoubtedly had many flaws. Arguments persist about the policy of separating the ownership of the railways network from the train-operating companies. After all, any new competition on the crowded UK network – the rationale for creating Railtrack - was always going to be minimal.

Greater focus on the burgeoning capital expenditure programme would have been far more sensible – a priority that was only accorded post the Hatfield disaster in 2000. Looking forward, changes are needed. In the short term, reforming the franchise system – partly to prevent over-bidding – is a priority. Some franchises have built in revenue protection measures; some don’t. Applying a revenue ‘cap and collar’ for all franchises would reduce the risk element. Furthermore, over-bidders – most obviously, National Express’ bid for the East Coast main-line - should not be allowed simply to walk away: if they do, other franchises held should be rescinded. Moreover, in awarding franchises, a greater priority should be accorded to deliverability.

In the medium term, Network Rail needs major reform. Its net debt now exceeds £22 billion. Whilst it has delivered much of its investment programme, including the notorious £9 billion West Coast main-line scheme, this has come at a heavy financial price. Efficiency levels within Network Rail remain unimpressive and its governance regime resembles that of the 1960s water boards. Re-privatising Network Rail should be a long-term aim. Eventually, some re-instatement of vertical integration of the network is desirable – only the Isle of Wight’s network is currently integrated.

Climate change models

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Last Friday's papers had blanket coverage of the latest government-sponsored projections of climate change in the UK. Summers, particularly in the South East, are set to get hotter, and winters generally wetter. London will become (even more) unbearable in summer, coasts will erode faster than ever and hundreds of thousands of homes will be at risk of flooding. However, although this is put forward as authoritative research, it is actually just the revised projections of computer models. In the world of climate science, hard evidence is replaced by computer output.

These models, flawed and incomplete as they are, are compromised further by being fed with doubtful input data. In particular, unrealistic assumptions are made about the amount of oil, gas and coal likely to be economically extractable. By some reckoning, even the most conservative of the IPCC's scenarios assumes cumulative fossil fuel use by 2100 of greater than the likely reserves; the more extreme scenarios project their use still to be accelerating at that point! If reserves really are effectively limited, there is simply insufficient oil, gas and coal available to raise average temperatures by more than 2° Celcius, even using the IPCC's assumptions for climate sensitivity. And if so, the projections for the UK's climate are simply nonsense.

For more detail, see the latest Scientific Alliance newsletter.

Well, sort of Ms Phillips

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We shouldn't be all that surprised that the Head of Natural England thinks that we should, of course, be using natural methods to be dealing with problems such as climate change, coastal erosion and all the rest:

Protecting and working with nature makes economic sense and can be done now. Continuing to rely on undeveloped technologies as a safety net for climate change would be a disaster.

And as the statement stands itself I'm not sure I would argue all that much. But what is inherent in there is given that the necessary or required technologies are as yet undeveloped, therefore we must use only natural methods. Which is of course nonsense.

If we don't have tried and trusted technologies to do something that we wish to do then we'd better get on with developing them and then testing them so that we can trust them. This is after all how civilisation has advanced, someone spots a problem or a desire and then creates some technology to solve or satisfy it.

As an example that Ms. Phillips would probably agree with, we do not yet have a properly developed and economic method of turning the abundant sunlight we get into the electricty that we desire. Which is exactly why there are tens of thousands of people around the world working on developing, testing and thus allowing us to trust a system that would do just that. Solar PV at cheaper than coal, the thing we are promised is now only a few short years away.

So with any other such problem. If we've not developed the required technology as yet, better get on and do so really, rather than just throw up our hands and say that nature must take over.

The green bubble

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Europe’s unrelenting investment in renewable energy, dating back to 1997, that serves as a template for similar US proposals, has the purpose, among others, to create green jobs. However according to a new study there is not much to show for it. In March 2009, Gabriel Calzada Alvarez of Universidad Rey Juan Carlos in Spain released the results of his study on the EU wide creation of green jobs through along these policies. The summary of his examination is equally blunt and devastating, labeling these investments to be “terribly economically counterproductive" after concluding that for every green energy job created:

2.2 on average will be lost, or about nine jobs lost for every four created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

In addition actually nine out of ten promised green jobs created were not even permanent. To put it in a different way: every green megawatt created:

destroyed 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.

With regard to renewables in Spain, the investment of $36 billion so far created only $10 billion worth in real market prize of energy. Thus renewable mandates have caused already severe damage to the Spanish economy with energy costs increasing nearly 55%. For some companies such as Ferrroatlantico energy cost for its production of iron alloys soared from 37% in 1997 to 43 % in 2005. The escape route for this company of course was the move to nuclear energy saturated France. My best advice these days: spend your days with good Provencal vines and food until the green energy bubble bursts as did the dot.com and the housing bubbles before.