Oh what a tangled web we weave

Some people want to be MPs, MPs want to be ministers and ministers want to be financially comfortable in their later years.  According to Monday’s Guardian, half of all Tory ex-ministers take jobs in companies relevant to their former departments. Business is driven by value for money and directors would not be offering employment for the pleasure of ex-ministers’ company at their lunch tables.  The Patterson affair was trivial: the line between advising on lobbying and helping out with doing it is a fine one, remembering that the companies will make no secret of where their advice came from. The civil servants who actually make the decisions are well used to ignoring the lobbying by their own ministers, never mind other MPs. 

One wonders for example what motivated the Government to put millions into Rolls Royce generation II small nuclear reactors intended for submarines, 20 years or more ago, and disregard the modern generation IV advanced nuclear reactors (costing about the same but producing more electricity) now being progressed by other leading countries.  It would be absurd to believe that future employment had anything to do with it. 

Parliament should not waste its time on trivia, like the Patterson affair, or whether the Prime Minister had the authority to have his official living quarters redecorated, but on the far more insidious forms of corruption, namely ministers and senior civil servants making decisions in their own long term interest and trespassing on the coattails of quangos and regulators that should be independent but are not.  

My streamlining quangos paper last October showed how they could all be abolished: either they are necessary but should not be independent, in which case they should be integrated within their departments, or they are necessary and should be truly independent, in which case they should report to Parliament, not government, or they are unnecessary and should be abolished. Setting up a new quango to address an awkward issue is bad government and expensive for taxpayers. 

The NHS is a classic case in point: it should either be an Executive Agency (part of government) or a Public Corporation (independent of government and reporting to Parliament). The previous Health Secretary considered these options and decided it was more fun to tell the NHS what to do when he felt like it and disclaim all responsibility when he didn’t.  As a “non-departmental public body”, It remains simultaneously independent, and not independent, of government. 

The fact is that neither this, nor any other, UK government will stop meddling in legislative matters that belong to Parliament or using the tangled web of governance to further its own interests.  And the personal interests of ministers do not necessarily coincide with what the country most needs. 

The country is lucky to have many high quality ex-ministers still serving on the back benches.  They should confer with the leaders of opposition parties to discuss what kind of parliamentary commission should review the streamlining of governance and its relationship with Parliament.  Government would obviously whip against any such motion and we would then see which MPs prefer their own personal ambitions to the best interests of the country.

Decision making on steel - kick that can

Much muttering is going on over what should be done about steel in the UK. The correct answer being nothing. At least, nothing yet.

The tasks of decarbonising the economy and securing supply chains do not come bigger than for the sprawling steel plant in Port Talbot in Wales.

For more than a century it has dominated the town as one of its largest and best-paying employers.

But the plant, one of the UK’s top carbon polluters, will need to find ways to make steel with less carbon dioxide output - eventually cutting it entirely in the race for net zero.

The challenge for loss-making parent Tata Steel UK is who will pay for improvements to achieve this. An inability to find the funds could put local jobs at risk.

It is possible that the UK really does need to be able to make its own virgin steel. So, scrap recycling with electric arc furnaces is fine but not exclusively. It is possible that it doesn’t so arc furnaces only would be fine.

That though isn’t the only question. There is a method - direct reduction - which is low to no carbon. It depends upon green hydrogen to work usefully. If we do get solar to electrolysis cheaply enough then DRI is the solution. If we don’t it ain’t.

So, what do we do now? We wait.

Which is where we really do insist that doing everything now is not cheaper than just waiting and seeing. Even, this is at the heart of why so many dislike the Nordhaus (you know, the Nobel winning manner of dealing with the problem) approach to climate change. This seeming detail:

Within the next 10 years, one of its two blast furnaces will need replacing, offering the opportunity to simultaneously implement a new system - giving time for new skills to be learned.

The Nordhaus approach is to work with the capital cycle. Don’t scrap perfectly usable stuff we’ve already got built. Wait until we need to replace it anyway then make sure that the replacement is the best - in this case least emittive perhaps - available option at that time.

Don’t tear down usable blast furnaces, tear down ones that need replacing anyway. At which point the begging letters for tax funding are easier to deal with because even if subsidy is still required it’ll only be the marginal cost of the new tech, not the total replacement cost. And, of course, we’ll know a great deal more about whether than green H2 is going to work properly or not in just a few years. If it really does - a reasonable guess being yes it will - then no subsidy will be required as it will the technology of choice anyway.

The general screaming and shouting at present is that we’ve got to do everything right now, today, by lunchtime even. The actual answer is that waiting for the capital cycle is correct. Don’t rip down stuff that works, just make sure the replacement, in its time, meets the new standards. Oh, and make that decision when that time comes, when we know which techs actually work at that point.

Some assertions end up being ludicrous

It’s a standard claim from the intellectually fashionable these days that “excessive wealth” is the major problem our society, our world, faces. Which leads to statements like this:

We need to redefine what the good life is, instead of never-ending expansion, the latest iPhone, jetsetting. The planet can’t take another Jeff Bezos.

Mr. Bezos has that $190 billion or whatever it is this morning as the stock markets gyrate. But that he has that much is the least important part of the story. How did he get it?

According to the bank, Amazon and its peers have pushed down inflation by about 0.1 to 0.2 percent.

That’s per year for a couple of decades. Certainly, we shouldn’t apply all of that to Amazon, or Bezos, but just for kicks let’s try it. That’s a 4% (without compounding) reduction in the price level. That’s something we consumers gain each and every year. Limit ourselves just to the US economy of $20 trillion - and yes, this is the inflation level for the whole economy, it’s not just on whatever tchotchke Amazon sells - and that’s $800 billion a year. We get $800 a year collectively, he gets $190 just the once. If we capitalise our benefit as that Bezos pile is capitalised then we’re getting $16 to $24 trillion (roughly, you understand) over time.

We’re on the right end of the greatest bargain in all history that is. More formal proof is in this from William Nordhaus.

That things can be provided more cheaply means that we’ve had an increase in efficiency. Which is that we’re using fewer resources to reach a particular standard of living - that’s what an increase in efficiency is. Quite why the planet won’t survive increasing efficiency is something that intellectual fashion doesn’t seem to address. The idea that Gaia will suffer from our using fewer resources seems more than a little odd.

Actually, it’s ludicrous. But then that’s the thing with fashion, the results of the usual groupthink often are ludicrous as catwalks and Guardian columns so often show.

The capitalist and free market gloriousness of Johnson Matthey's failure

Johnson Matthey has decided to pull out of that so very important battery design business:

Johnson Matthey is to abandon years of research and development and hundreds of millions of pounds spent trying to find the key that will unlock the full potential of electric cars: being able to travel hundreds of miles on a single battery charge, without the weight and cost of batteries that make the vehicle undriveable or commercially unviable.

What joy. For our task is to have a system which explores the technologically available space for manners of sating consumer demands. To sort through what can be done and match that up with what people want to be done. That being what capitalist free marketry does better than any other system we’ve tried as yet.

That this isn’t working out in this instance is a pain for those who funded it, certainly. But the reason for the abandonment?

With the demand for electric car batteries escalating, MacLeod had to admit that Johnson Matthey had lost the technological battery race with producers in low-cost economies such as LG Chem, of South Korea, and CATL, of China.

“While the testing of our eLNO battery materials with customers is going well, the marketplace is rapidly evolving, with increasing commoditisation and lower returns,” he said. “We have concluded that we will not achieve the returns necessary to justify further investment.”

Someone else got there faster, better, cheaper. So, in order not to run out of their money - or their investors’ money - Johnson Matthey stopped. That’s the grand joy, the manner in which the system stops mistakes. It is not just that the envelope is explored, but that when the corners are found it stops.

Just think it through for a moment. The only alternative to folks risking their own money is that government does it for us all. Which is where the big problem arises - government never does stop such things until they run out of other peoples’ money.

We can also add that the Green New Deal won't actually work

Aditya Chakrabortty rather shocks contemporary opinion by stating that the Green New Deal probably isn’t quite the way to do it:

At some point, the post-2016 left, radicalised by Trump and Brexit, will have to surrender its notions of a radical programme executed through a vast state machinery. …(…)… I hope what comes next is a more focused, locally rooted and inclusive politics based around asking people what they actually need in their lives, and working out how to fit those things within an environmental framework. That can be done with universal desires such as housing and food, healthcare and education.

Indeed so, the task is how do we gain the highest possible standard of living for the most people within whatever constraints the universe throws at us? Highest here being measured by what actual people think best maximises their utility, by their preferences of what they value. Constraints being, well, everything. Physics just doesn’t work that way, or it does, being no different in the sense of constraining action than chemistry or known technology or human desires - constraints are constraints.

Programs executed through a vast state machinery don’t have a good track record at delivering that although of course hope springs, as ever, eternal that some day, with some plan or other, they will.

The solution will be, as it is with everything else, markets even if they need to be nudged or adjusted. Because that’s the system which does produce that maximisation of utility inside whatever constraints exist.

We can also add, and we should also add, that such centralised and clod-hopping state plans won’t in fact work. This is one of the strong messages from the Stern Review itself. Where it is noted that humans tend to do less of more expensive things, more of cheaper. This being just one of those human things. This is then linked to the insistence that state plans, the detailed direction of activity, are more expensive ways of dealing with climate change than markets suitably nudged and adjusted.

The implication of this, and it’s made explicit in that very Stern Review, being that if we adopt the expensive method, the state and planning, then we’ll do less climate change dealing with than if we used the cheaper, more efficient, method of nudged markets.

This then means that those who insist upon the Green New Deal aren’t, in fact, interested in dealing with climate change for that’s the way of doing less dealing with climate change. It is, instead, an excuse to impose their other plans upon us all.

Something that many of us have twigged already of course but worth pointing out once again.

The Emperor’s Net-Zero Clothes

Boris Johnson’s praiseworthy wish to save the planet rests on two ambitions: the UK itself achieving the global goal of net-zero carbon by 2050 and that example inspiring the rest of the world to follow, or at least moving substantially in that direction. The first ambition relies on the British people believing it to be feasible and affordable even for the poorest. My colleagues, Professors Edwards (Oxford), Kelly (Cambridge) and I address those issues in a research paper published by this Institute today.

We discuss whether the government’s strategy is coherent and the numbers add up, then whether it is feasible and, as the government does not seem to know, what the costs might be and, fourthly, whether the achievement can be rescued by new technology.  The answers to those questions are “no”, “no”, “maybe £3trn (one and a half years of total UK GDP or over £8,000  per person)” and “only partly”.  If you doubt these conclusions, read the paper.

This blog addresses why such a manifestly unrealistic ambition commands such widespread acceptance in the UK and who will be the little boy next door, following the fable, who will shout “the emperor’s got zero clothes.” It concludes with addressing the second ambition, namely that the rest of the world will follow the example of a piffling little country which is responsible for a mere 1% of the problem and cannot even command the support of its European neighbours. Or the Eurovision voters come to that.

The evidence for CO2 and methane rising is clear. Most of the public thinks that it is the cause of rising sea levels, floods and droughts and therefore, as with any threat to our way of life, the public holds government responsible for doing something about it. No one else can.  “Doomsday” as the Prime Minister called it at COP26 can be forestalled if we all agree to take the medicine the government is devising: “we gave you vaccines for Covid and we can protect your grandchildren from the effects of climate change.” The medicine, renouncing fossil fuels and having less livestock breaking less wind, is disagreeable.  Almost all energy will have to be in the form of electricity supplied by new, green, means.  This will involve new science and technology, new green jobs for all at higher rates of pay.  In short, the medicine is being coated with so much sugar that swallowing it will be a pleasure.  These are the emperor’s net-zero clothes. 

The conspicuous absentee from the ranks of the great and good applauding the net-zero attire is the Chancellor.  When the Energy White Paper appeared last December, we were told to expect a paper from HM Treasury verifying the maths: none appeared.  When the Net Zero Strategy Paper appeared last month in time for COP26, HM Treasury did add a review but it was not the expected support. While Number 10 claimed that the transition meant millions of highly paid new jobs and lower energy bills, the Number 11 review was equivocal: in true Wykehamist fashion, each opinion was balanced by the opposite. While acknowledging the Number 10 claims, Number 11 saw serious economic damage, business leaving the UK and higher energy prices and taxes as being just as likely – the implication was more likely – in short, a rift.

Treasury inaction and actions threaten the transition, notably on nuclear. Renewables are volatile and, with the global warming we will have by 2050, increasingly so. That means the all-electric 2050 will need a “baseload” of up to 40% of total Grid demand. Without fossil fuels, that means nuclear.  Fossil fuels and biomass may contribute but we have yet to build a single carbon capture and storage plant and we do not know how effective future ones will be. The Treasury has been blocking new nuclear for over 20 years.  All existing ones are due to be decommissioned by 2035. That leaves Hinkley Point C as the UK’s only approved plant by 2050.  It is scheduled to produce about 1.3% of our electricity needs.  Some way from 40%. If Sizewell C is approved next spring, we will have 2.6%.

Advanced Modular Reactors (AMRs) are more efficient, faster to commission, more environmentally friendly and are being built in the USA, Canada and China.  It is a competitive market with at least half a dozen suppliers and you can get ten of them, producing the same amount of electricity as Hinkley Point C, for about a quarter of the price. To get to a 40% baseload, we would require 323, at a cost of £254bn, presumably from multiple suppliers for security. 

November last year saw a trace of enthusiasm with talk of investing “£385 million in an Advanced Nuclear Fund [research] for small modular reactors and advanced modular reactors. This is alongside £220 million for nuclear fusion.”  Nuclear fusion is very unlikely to be a commercial proposition in this century and the £385M is going on the wrong horse, namely outdated Generation II SMR plants (as used in submarines), not the Generation IV AMRs everyone else will be installing. SMR plants, uniquely, are built by Rolls Royce and therefore, in the mind of the Treasury, must be the best.  Lobbying works.  

In the corresponding announcement 11 months later, all that had disappeared: the focus was back on big plants. A decision on Sizewell C (only 12 years and counting) was described as “urgent” and the cancelled Wylfa equivalent was back in discussion. The Treasury has refused to purchase even one AMR, allegedly on the grounds that they are new and have never been tried in the UK. More probably, the manufacturers of large nuclear plants do not care for AMRs and are lobbying strongly against them.

Not only is HM Treasury blocking new electrical capacity, it is ensuring that consumers will be ripped off by high energy prices.  EDF is being compensated for delays and risks (for which it itself is responsible) by being allowed to charge the Grid prices well above market rates even though nuclear power produces cheap electricity.  One of the factors delaying Sizewell C is the Treasury’s wish to try out its new “regulated asset based model”.  This is a 2020s version of the Private Finance Initiative only worse: the consumer starts paying for the electricity 10 years or so before she actually gets any and the City makes a ton of money at public, i.e. the consumer’s, expense.  The reality is that government can borrow more cheaply than City slickers and the Treasury does not have to bulk up those rates with commercial administration costs and profit margins. Her Majesty’s Loyal Opposition spends so much time being Loyal, there is little left for Opposing such scandals.

Of course, the same thought applies to the Emperor’s net zero attire as a whole: if they shone too bright a light on the plans, the Opposition might be seen as climate deniers.

Being led down the right path for the wrong reasons is preferable to the right reasoning taking us down the wrong path.  That may justify the Emperor’s net zero attire but not the Treasury’s wrong-headed approach to nuclear.  On the other hand, (and no, I wasn’t at Winchester) the Treasury is surely right to seek to protect the economy and consumers’ pockets. Philip Davies MP is also correct in condemning the net-zero enthusiasts for taking the UK down a road the rest of the world does not take too.  Saving only our 1% of global emissions would be simply “futile” as he calls it.

This is a global problem and it has to be solved globally. Assuming that the UK has some sort of divine right to world leadership to save the world is the sort of vanity that cost Charles I his head. In fairness, however, COP26 is proving far more productive than the cynics expected but we must wait to see if pledges are turned into action. Our Chancellor’s attention-getting pledge of making listed companies annually report their greening progress looks to me like more trees having to be cut down. But then the Treasury was always creative when it comes to putting their hands in our pockets.

Calling together 200 world leaders of countries, most of whom with equally little, or even less, contribution to emissions, is just as daft.  The few major world emitters need to find the solutions and then the levers to get the necessary (which might not need to be much) acceptance from the rest. Key is to give far more thought to the optimal speed of transition.  China has set 2060 as their target date rather than 2050 and they may be right.

The Treasury is right that overall, but not in the case of AMRs, the UK needs to move at the speed of the convoy, not commit kamikaze.

Good enough is, actually, good enough

We do, entirely, grasp the point being made about carbon border adjustments:

A powerful incentive for the developing world to get serious about climate change, or just protectionism dressed up in green clothing? Whatever it is, the concept of carbon border taxes, once a faintly whacky fringe idea, is fast going mainstream, threatening to rewrite the rules of global trade.

The UK Government seems determined to tax just about everything else, but you may be relieved to know it has no plans to tax meat. So said George Eustice, Secretary of State for Environment, Food and Rural Affairs, at the weekend, even though livestock farming is a big emitter of greenhouse gases and environmentalists would much rather we didn't practice it at all.

Yet the Government very much does have plans for a "carbon border tax", Mr Eustice said, or "carbon border adjustment mechanism" as it is otherwise known. Designing one that works is another matter; even Mr Eustice admitted that it was some years off.

If we are to have carbon taxes - which we are repeatedly told is the thing to deal with that climate change, if that part of the science is right - then border adjustments to deal with the offshoring of pollution make perfect sense. They’re also difficult.

And the thing is that good enough really is good enough.

If we lived in a static world where equity and justice were paramount in the distribution of production, consumption and emissions then sure, border adjust away. The thing is we don’t. This isn’t a static world in the slightest, it’s one with a continuing maelstrom of technological change.

It’s also one where the actual problem, climate change, depends upon pushing technological change into a certain direction - toward non-emittive techs. Once these exist at economic prices then the problem is largely over.

Yes, OK, coal plants are bad but there are very few indeed who think that solar won’t be cheaper in 20 or 40 years time. Or nuclear, or fusion, or whatever. Steel from coal fired blast furnaces will be replaced, in that two to four decades, by direct reduced iron using green hydrogen.

Or rather, as long as the rich nations who do near all of the technological development in this world are pushed into favouring those low to non-emittive technologies then they will be developed. Once they have been developed and are economic then they’re something like a public good, something that can be and will be adopted by others.

A system that was perfect probably would include those carbon border adjustments. One without it will still be good enough as we still will have the incentives to develop the techs that make a mockery of the problem under discussion. Our suggestion at this point would be to leave it be.

Agreed, this is in part coloured by our general suspicion of governmental ability to do complicated and difficult things but rather more by the insistence that it’s just not necessary. Good enough for government work is a real thing after all. We care much less about the perfection of any carbon emission management system than we do getting there with the least effort and fewest mistakes along the way.

Not that we think there's a coordinated plot here....

….but we’re entirely sure that at least some will have noted the implication, effect even, of such a ban:

If we ban second jobs for MPs now, we’ll soon wonder how they were ever allowed

Just for the avoidance of doubt, no, we’re not stupid enough to think that morals in Parliament - even if we just restrict ourselves to fiscal ones - are quite and wholly everything we should collectively be desiring.

Switch, for a moment, to the demand common enough in America these days. That no serving politician should retain control of their own money while in office - blind trusts all the way. Even, that Donald Trump should have entirely sold out of the family business. The effect of this is that anyone who has either the drive or fiscal acuity to build a business is barred from office. Anyone who has been successful in a capitalist - largely - and free market - OK, again only largely - economy is to be dissuaded from taking part in the ruling of a largely capitalist and free market economy.

Back to us here with Members of Parliament. A ban on any outside work would mean that anyone who had built a career outside politics and wanted to continue with it after politics would not be allowed to do so. Cincinnatus would not be allowed to go back to his farm because he’d not be allowed to maintain it while in office.

We end up in the same situation as that theoretic American one. Anyone who has been successful in that real world outside the halls of power is at best dissuaded and at worst banned from being part of the ruling caste of that outside world.

This being something which we rather doubt will increase the quality of the running and management of that outside world. We’d be left with only those who decided upon politics as a full time career and also only those who had no knowledge of anything other than politics. This would not be an advance.

The rot of their dead body politic fills the nostrils of the earth with a glorious stink

32nd anniversaries are not normally chosen for particular remembrance but what the heck, this is the grand moment of the past half-century.

From Conrad Schumann’s jump through to the Pan-European picnic there was a vileness that cut across Europe. And then on the 9th of November 1989 there wasn’t. Yes, the system, the entire countries condemned to oppression, more can be said about all of them but this specific and particular symbol finally fell.

Mr. O’Rourke:

The East German border guards didn’t interfere. Instead they came up to openings in the Wall and made V-signs and posed for photographs. One of them even stuck his hand through and asked would somebody please give him a piece of concrete to keep as a souvenir.

The hand of that border guard - that disembodied, palm-up, begging hand…..I looked at that and I began to cry.

I really didn’t understand before that moment, I didn’t realise until just then - we won.

…

We won. And let’s not let anybody forget it. We the people, the free and equal citizens of democracies, we exemplars of the Rights of Man tore a new asshole in International Communism. Their wall is breached. Their gut string is busted. The rot of their dead body politic fills the nostrils of the earth with a glorious stink. We cleaned the clock of Marxism. We mopped the floor with them. We ran the Reds through the wringer and hung them out to dry. The privileges of liberty and the sanctity of the individual went out and whipped butt.

It’s possible to track it down to one specific moment too. In all those miles of videotape that exist out there of that night. Just before the barriers came up. The Border Guards had not been informed about the change in policy even as crowds were arriving to take advantage of it. A small group were, umm, discussing events with an officer of that Border Guard. Stating that the news was out, they could cross. He, that officer, insisting that he had no directions. So, if they tried then there would be repercussions. Possibly shots, as with so many hundreds before. All should go home and await formal announcements etc.

At which point the citizenry laughed. And that’s the moment, that’s the ripening of the glorious stink of that body politic. When the man in the street - here quite literally, not a euphemism or synonym of any kind - laughs in the face of the bastards with the guns then it’s all, finally, over.

There are times when there’s just nothing for it but the Happy Dance.

Fortunately it's only £9,000

We think this might be overpaying a little even at this low sum:

The National Railway Museum will investigate steam trains for links to slavery as forces behind the expansion of colonial power are readdressed.

The museum, in York, is one of a group of organisations examining how steam power aided imperial expansion and drove sugar mills on plantations and cotton gins in industrial cities.

Trains will be assessed for their role in facilitating expansion, according to experts involved in the £9,000 research project – entitled "Slavery and Steam: steam power, railways and colonialism" – which is backed by the universities of Leeds, Sheffield and York.

Given that Stephenson proved the viability of railways after the abolition of the slave trade and only just before the Empire abolition of slavery we’d think that the link might not be all that great. Between railways and causing or exploiting slavery that is.

The correct link between steam engines, rather than steam rail, and slavery is that the one entirely destroyed the economics of the other. Yes, Adam Smith did indeed suggest that free labour was more productive than slave. But it was mechanical power being made available that wholly killed the necessity of human and animal muscle power as the energy source of the civilisation.

£9,000 does seem a little much to be spending to confirm that already well known point. But then it is only £9,000 so why not allow them their little fun?