But why would we use less cheaper energy?

A claim that confuses us. If we lard the world with renewables then we’ll all, in aggregate, use less energy. Well, that doesn’t confuse - if energy becomes more expensive then we’ll use less energy, yes. The confusion comes when we’re told that renewables will be cheaper and also that we’ll use less energy if it all comes from renewables. That’s not something that happens with our species.

But here we’ve the statement:

This is such an important and often overlooked point: A clean energy economy will use 40% less energy than a fossil fuel economy. As Hannah Ritchie writes in her newsletter this week, "Electrification is efficiency."

If we could just get someone at the back there to shout “Jevons!” for us?

But leave Jevons out of this because we’re not trying to be that sophisticated here. We might also insert that ritual mention of the Nordhaus work in lighting - as it has declined in price over the centuries the percentage of income spent upon it has stayed static - but again we don’t need to go that far into complexity.

We can just stay with really simple supply and demand. With us humans if something gets cheaper then we buy or use more of it. How much more depends upon the elasticity of demand with respect to price (which is what gives Jevons!) but stick with that very simple first order effect. Also, if something becomes more expensive we use less of it. This is true enough, often enough, that if we see falling demand for something then we can usefully opine that the price must have risen. In fact, if we assume that the price relative to alternatives has risen then we will be correct all the time.

OK. So, now we’re being told that humanity will use less energy if it’s all renewables. That jibes with - actually, flatly contradicts - the idea that energy will become cheaper when it’s all renewables. In fact, we’re on really safe ground if we insist that the only reason people will use less energy is if it becomes more expensive.

So, the assumption that the world will use less energy is that insistence that renewables are going to make energy more expensive. No, efficiency doesn’t change this. Even if we assume that there is greater efficiency that just means that we’ll all turn the thermostat up (or, for A/C, down). On the simple grounds that that’s what humans do in response to a change in prices.

Which is interesting, no? They’re not just indicating that maybe renewables aren’t cheap they’re flat out insisting they’re not.

If dengue is becoming endemic then why are we building mosquito farms?

A slightly worrying report:

Rising temperatures mean that nearly half the world’s population may now be at risk of dengue infection, new modelling forecasts.

Analysis from Airfinity, a science data analyst company, shows that the incidence of dengue has already increased by at least 30-fold over the past 50 years.

Half a million cases were reported to the WHO in 2000, rising to 5.2 million in 2019, with the true number of annual infections now estimated to be up to 96 million.

Once specific to small pockets of Asia, the disease is now considered endemic in more than 100 countries globally and its geographical reach is continuing to spread, according to the WHO.

If this is true then why is it that British government policy is to increase the number of swamps in hte country? The Somerset Levels are to be returned to that ague ridden swamp it was before drainage, beavers are being reintroduced to create swamps - even in the middle of London.

We all know how to limit the spread of mosquito bourne diseases, have fewer mosquitoes around. Do as is done in places like Singapore, make absolutely certain there’s no standing water for them to breed in. So why is it that government policy is to create swamps by the hundreds of square miles in this green and pleasant land?

Is it just that government is incompetent or is there really a plot to murder us all in our beds? And, umm, shouldn’t we find out?

Business rates and tax incidence

It is helpful to know the incidence of different taxes. We should identify the wallet or purse that it comes from because very often this is not the one that people think it is, or the one that the legislators intended it to fall upon.

For example, since corporations are not people, they don’t pay Corporation Tax. Its incidence is on the workers, who do not receive pay increases when the money goes in tax, on the shareholders, whose shares lower in value because the tax reduces profits, and on the customers, who pay higher prices as the firm increases them to make up for the money taken by the taxman. Numerous studies have shown that the biggest losers are the employees, with estimates showing that 60 percent of Corporation Tax is paid by them.

Most people think that they pay National Insurance and that there is an employer contribution. In reality the so-called employer contribution is a wage cost, and comes out of the wage pool that would otherwise be available for wage increases. Its incidence is on the employees.

Some people argue for business rates to be frozen or lowered, thinking this will help businesses, but in fact landlords are the beneficiaries when this is done because it allows them to put up the rents. Rents and business rates are inversely proportional. Rising rates make for lower or frozen rents, and rate decreases enable landlords to increase rents.

Knowing the incidence of the tax leads to a policy initiative that could direct help to businesses rather than landlords. Business rates could be frozen or reduced for 3 years, but only for businesses whose landlords agree to a rent freeze for 3 years. The rates would not be frozen or cut unless landlords signed up for this. The effect would be to direct the benefit to the businesses, and help them as they struggle with increased costs elsewhere.

At a time when the UK needs to boost growth by having its businesses prosper, this is a policy that could help them to do that.

Unleash the Bond Vigilantes!

We think this is much too gloomy about the prospects for that idea of a Scottish debt issue, of kilts bonds:

Scottish independence is about to be dealt a fatal blow

First Minister’s plan to issue bonds takes the SNP’s financial ineptitude to new heights

In fact we think the truth is entirely the other way around.

In reality, there are two big problems with the plan. To start with, Scotland’s credit rating will be terrible. We can forget about whether it is a single or double A. The alphabet doesn’t have enough letters to capture how poor a risk it will be: the CCC that is traditionally the lowest possible score does not begin to capture it.

That could well be true, tho’ perhaps CCC is to overstate it.

However, we should also recall that prices are information. We might not like the information that prices give us, but then that means that prices are - in such a case - that boot up the backside so necessary. Issuing kilts therefore becomes an independent source of information about the fiscal performance of the Scottish Government. Something that could well be useful, no?

Which is also a useful insight into what those bond vigilantes are. It’s not some shadowy cabal deciding upon what the price should be. Nor is it a political judgement on whatever it is that is being done. It’s simply people deciding, by putting down their cash or not putting down their cash, the price at which the more and less spendthrift can borrow money. As such it is that independent judgement of people waving their own wallets upon that fiscal stance.

Kilts would thus be hugely useful information to the Scottish Government. As we support more information to governments - one of their biggest problems, as we all know, is the lack of reliable feedback and information systems - then we support the issuance of kilts.

That the current answer might well be BB- or even CCC is information that is useful to have. And far from it then being a death blow to independence it is, we think, a necessary step towards it*. Independence, if it is to happen, requires a fiscally continent Scottish Government. If kilts produce the boot up the backside that produces that then why would any object?

Or, to put it another way. Kilts issuance might well show how terrible the financial position is of the current Scottish regime. At which point some might grasp the lesson that the bond vigilantes are giving - you’ve got to do much better than this, Matey, if you’re to have independence. Which would be good for of course doing better would be good whether independence happens or not.

The price of kilts would be a price and so and therefore useful information. We’re fine with that.

*We’ve no particular view on the independence of Scotland. Of course, we’ve all got independent views on the desirability or not of it but in that we’re like any other group concerning the point. We default down to Mencken on democracy - the point is that the voters get what they ask for, good and hard.

There's a simple solution for Mr. Sheeran here

Don’t play the Albert Hall:

Ed Sheeran has objected to plans by the Royal Albert Hall to sell dozens of seats at the prestigious London venue to investors, some of whom sell them on for inflated prices.

Currently, 319 people own 1,268 – almost one in four – of the Royal Albert Hall’s seats on 999-year leases. A bill going through parliament would grant the hall’s governing body the power to sell an extra 52 seats to investors.

Sheeran is “vehemently opposed” to the practice of these seat-holders selling their unwanted tickets at inflated prices, a letter from his aides said.

The star’s team has “worked tirelessly to get his tickets into the hands of his genuine fans at the intended price”, the letter said. It criticised “unscrupulous sites where tickets are listed at many times over the face value”.

This is not just us being trite.

Of course, we all know that the Albert Hall was actually financed by the debenture holders. The return on the capital put in being those free tickets associated with the seats and boxes that were financed. There’s even a market in said debentures.

But the wider point is important. For one of the glories of a free market is that we, as both producers and consumers, have choice. We can, if we should so wish - which usually means if we think the issue is important enough - change our behaviour so as to reward or punish any specific set of either producers or even consumers. By agreeing to purchase from, or agreeing to supply to, that is.

This does not only extend to mere matters economic. We are able to impose our ethical and moral beliefs and preoccupations in exactly that same manner. In fact, we have a duty to do so. For it is exactly by changing our own behaviour to accord with our ethical and moral preoccupations that we impose them upon the economic world around us.

We’ve the freedom and liberty to do so therefore we should do so. Even if that freedom leads to us thinking that it’s not an important enough issue for us to do anything about.

If Ed Sheeran doesn’t like the way the Albert Hall is run then don’t play the Albert Hall. London has a number of places that will host a popular beat combo after all. And here’s the trick at the end. If Ed’s not willing to change his behaviour in this manner that he obviously can then the issue’s not that important to him, is it?

Sometimes it's necessary to translate these reports

Solar’s great, no, really, it is:

New research suggests that solar power is set to become the dominant energy source by 2050. While this shift promises a cleaner energy future…

We know that the while will be followed by a but:

The world may have crossed a “tipping point” that will inevitably make solar power our main source of energy, new research suggests. The study, based on a data-driven model of technology and economics, finds that solar PV (photovoltaics) is likely to become the dominant power source before 2050 – even without support from more ambitious climate policies.

Can’t say that bothers us in the slightest. If solar’s the cheapest way to gain the energy we all desire then good luck to it. We’re wedded to a process, not a technology.

But that but:

However, it warns four “barriers” could hamper this: the creation of stable power grids, financing solar in developing economies, capacity of supply chains, and political resistance from regions that lose jobs. The researchers say policies resolving these barriers may be more effective than price instruments such as carbon taxes in accelerating the clean energy transition.

Ah, and here’s where we need the translation. For those four buts are all very expensive problems to try to solve. Meaning that solar is not, in fact, nice and cheap if it has four expensive problems to solve before it is the useful solution.

Solar might be cheap at generating a kWhr, but that’s not what we want. We want a system that can deliver a kWhr where and when we desire to use it. Thus bringing in those vast grid and storage costs. The system costs of solar are not low at all.

Which is why we’re wedded to that process. And also why this report tries to insist on something “much better” than the carbon tax. For what the carbon tax does - sticking that one crowbar into the price system - is makes all of these different costings transparent. We allow the market to chew through all of the complicated sums - not the planners - having already included the costs of climate change in the prices the market chews through.

The reason so many fully in favour of dealing with climate change don’t like - and some positively hate - the carbon tax is because they know that it will show up so many of their pet plans for the grossly expensive follies they are.

Which is why we’re so in favour of that method. For as the Stern Review points out, us humans do less of more expensive things, more of cheaper. Therefore we want to be efficient in dealing with climate change. Precisely because the more efficient we are, the cheaper it is to deal with it, then more dealing with it we’ll all do.

That’s just how our species works after all.

But if Welsh Water is worse than English water then what about privatisation?

We think this is a fascinating little piece of digging by the BBC:

Welsh Water has admitted illegally spilling untreated sewage at dozens of treatment plants for years.

The admission came after the BBC presented the water company with analysis of its own data.

One of their worst performing plants is in Cardigan in west Wales.

The company has been spilling untreated sewage there into an environmentally protected area near a rare dolphin habitat for at least a decade.

Welsh Water says it is working to tackle the problems and does not dispute the analysis,

Our word. Gosh. Because of course the English water companies have been subject to a barrage of complaints recently, no? As a result of Feargal Sharkey, Surfers Against Sewage and all water bills in England are to rise substantially to pay for the higher standards they desire. Well, OK, maybe that should happen - as we said. If we all want cleaner water then we’ve all got to pay for it.

But then the other part of the general analysis recently has been that it is private, for profit, water companies to blame for all of this. The dividends taken by the capitalists are the cause. Which does rather run into a slight problem, which is that investment in water rose upon privatisation. As we’ve also pointed out.

Cardigan was particularly bad, spilling for more than 200 days each year from 2019-2022.

The data provided to Prof Hammond showed that Cardigan almost never treated the amount of sewage it was supposed to.

According to its permit it has to treat 88 litres a second before spilling - but had illegally spilled untreated sewage for a cumulative total of 1,146 days from the start of 2018 to the end of May 2023.

"This is the worst sewage works I've come across in terms of illegal discharges," he said.

Oh. Well, that deals with the Richard Murphy critique, which is that the English water companies are environmentally insolvent and therefore must be nationalised. Not for profit and state run companies are worse so what do we do with them?

There is that third example, Scotland. But that’s difficult as Scottish Water is so efficient it seems not to monitor sewage overflows at all. A tad hyperbolic perhaps, but certainly very little.

Which does - or at least should, to the extent that anyone is willing to be rational here - bring us back to that basic discussion of state ownership and privatisation. Not, not at all, which is the best system in theory. Nor shriekings about capitalism, nor public goods to be publicly provided. But which is the most efficient system at delivering what we actually desire? Clean water from the taps, with the least sensible amount of environmental pollution, at the best price possible for those two?

We’ve also run a natural experiment here. England, Wales, Scotland, Northern Ireland got different ownership and management systems as a result of privatisation. The spectrum was from most capitalist to least. The best results have also been along that same spectrum - England, Wales, Scotland, NI.

We have, in fact, gone and tested those theoretical speculations. Done it with the water systems of entire nations. And guess what? Capitalism works best. Sure, well regulated capitalism and all that. But capitalism all the same.

Isn’t that interesting?

It's a very weird infrastructure report, isn't it?

Rishi Sunak has been urged to shut down Britain’s gas network and spend billions on rolling out heat pumps, in a major intervention by the country’s infrastructure tsar.

Sir John Armitt, chairman of the National Infrastructure Commission (NIC), warned that the supply of natural gas to all buildings must stop by 2050 if the UK is to hit its climate targets.

Eh? When did we decide to pass such powers over to the unelected? To the appointed, to those two and three levels removed from the electorate - or as we can call the electorate, us?

We might also wonder why everyone’s abandoned that basic lesson from the Stern Review - don’t, really don’t, try to plan all this with Wise Men in Whitehall. Set the general conditions by all means, then leave the market to sweat the details. The unelected banning us from cooking our eggs our way is detailed planning isn’t it? Rather a long way removed from any even pretence at democracy let alone economic efficiency.

At the same time we get told this:

The UK’s infrastructure needs a big cash injection, with public transport, home heating and water networks all in dire need of renewal, independent government advisers have said.

The investments, of about £30bn a year from the taxpayer and £40bn to £50bn a year from the private sector, would result in savings to the average household of at least £1,000 a year, higher economic productivity, and a better quality of life in the future, the National Infrastructure Commission said.

Eh? There are 28.2 million households in the UK. The tax bill for that investment - before we even think of the opportunity costs of the private money that could be turned to something pleasant and enjoyable like root canal work - is therefore £1,062 per household per year against the benefit of £1,000 per household per year. A number which says “Don’t!” in great big glaring letters.

The Man in Whitehall does not know best. As proven above.

At which point we do need a suggestion over what to do. Ours is abolish all of these commissions and offices and committees. The OBR, CCC, National Infrastructure, the lot. Return to a system whereby elected politicians make the decisions.

On three grounds. Firstly, their limited bandwidth will mean fewer silly ideas. Secondly, just basic freedom and liberty. Only those we directly put into office should be allowed to make such decisions over us. Thirdly and most importantly, elections would actually mean something to that freedom and liberty. Because the entire point and saving grace of the system is that we get to throw the bums out if we’re so inclined.

This is, of course, why the commissions, offices and committees exist, so that we can’t. Therefore we must get rid of the commissions, offices and committees.

Liberty requires that we the people can say no. Therefore we must be able to.

Science says don't ban vapes, not even flavoured ones

The economic discussion about vapes and cigarettes is whether they are complements or substitutes. Do people who use vapes then smoke the same or a larger number of cigarettes? Therefore a complement. Or fewer? Therefore a substitute. Most outside the weirder end of the public health racket would suggest substitutes. Therefore while vapes may or may not be great if you wish to reduce the smoking of cigarettes they’re absolutely gggreat, as Tony the Tiger would say.

Then we’ve some actual science:

Over 375 US localities and 7 states have adopted permanent restrictions on sales of flavored electronic nicotine delivery systems (“ENDS”). These policies’ effects on combustible cigarette use (“smoking”), a more lethal habit, remain unclear. Matching new flavor policy data to retail sales data, we find a tradeoff of 15 additional cigarettes for every 1 less 0.7 mL ENDS pod sold due to ENDS flavor restrictions. Further, cigarette sales increase even among brands disproportionately used by underage youth. Thus, any public health benefits of reducing ENDS use via flavor restrictions may be offset by public health costs from increased cigarette sales.

Yes, even bubble gum flavoured vapes that might - might - be marketed to children are a good idea if we want to reduce cigarette smoking. Because they are substitutes, not complements.

Which does lead to an important series of questions. Why do we ban vapes for children? Why are we going to ban flavours? Or even, why have we allowed the weirder end of the public health racket to gain any influence, let alone power, over policy?

For it’s not just whatever our position might be on whether they’re mad, bad, terrible to know. It’s that they’re wrong. Strikingly, aggressively, 180 degrees, wrong.

Given this, why is anyone listening to these people? Perhaps equally relevantly, why are we paying them?

Harry Dimbleby meets the Lucas Critique

Henry Dimbleby is upset. Now that we’ve laws against sweeties at the supermarket checkout, even against end of aisle promotions, then people seem to be doing other things. That is, they’re conforming, absolutely, with the law of the land. But they’re still doing things Our ‘Arry doesn’t like, therefore they are bad people:

“Kinder find a way around bans on aisle end displays. Create an aisle end in-aisle. At children's eye level.”

This does remind us of Adrian Mole, those grand plans we all had of bending the world to our will at age 13 3/4. It also reminds us of the Lucas Critique:

The Lucas critique argues that it is naive to try to predict the effects of a change in economic policy entirely on the basis of relationships observed in historical data, especially highly aggregated historical data.

That people place the choccie bars at the checkout and people buy the bars placed at the checkout does not mean that when you ban choccie bars at the checkout then people will stop presenting or buying choccie bars. Behaviour changes to accommodate that law of the land.

This goes on and on, obviously. Cigarette taxes at nosebleed levels produce cigarette brands (“Manchester”) that no one’s ever even tried to sell in legal and taxed form. Plus, obviously, smuggling and so on. As will ever tighter restrictions on vapes.

And if that crusade against chocolate and sugar goes much further then so will reactions arrive, actions change. Which, to be honest, we’re rather looking forward to. Visions of being dragged up in front of that other great literary creation, Justice Cocklecarrot, dance in our heads. Charges of smuggling condensed milk and cocoa powder (maybe Ovaltine for the adventurous) into our underground chocco factory. And while we might dream of such take these restrictions much further and people really will start selling sweeties on street corners.

It’s simply not possible to rule a society at the level of detail these people think is appropriate. Just because we’re all endowed with free will, agency, and so we’ll do as we, not they, wish. So, please just stop.

We’d also add a little warning. No one tell them that lactose in the babbies’ feeding bags is sugar. They’ll be mandating mastectomies soon enough. Others are already, as in Ireland, insisting that Daisy needs to be shot for producing the stuff. So shhh, no giving them ideas, eh?

Unless, perhaps, this is all performance art? Not seen many scripts from Graham Linehan around recently, is he writing Harry’s stuff?