The present cost of climate change

The cost of climate change is something that has usually been described as a future cost. Climate change is a slow disease, wearing away existing structures bit by bit but accelerating all the time. Mr Stern’s review explained that climate change will cost us plenty, if we do nothing about it. Nevertheless, we have done nothing about it, having regard to the scale of the problem and the measures that must be taken, and having done nothing about climate change we are now beginning to suffer the costs of climate change. Continue reading

The story of the Stern Review, and the sequel

This is the story of the Stern Review Mr Nicholas Stern, a former banker and economist, was employed by Gordon Brown when Mr Brown was in charge of the Treasury, to write a report about the economic impact of climate change. The report in essence said that we all have to act now to prevent worsening climate change because the cost of acting later would be much more expensive. Continue reading

Economics and environmental degradation

New ideas, when they first surface, are often ignored. Eventually they work themselves into the imagination of a few. Some people adopt the idea, others test it, if they can, others speculate about the idea and many ignore or mock it. There are very few ideas that are genuinely new; ideas build on the ideas of others. When an idea gains a small level of acceptance it has started its journey in the world; the journey may be short or it may be beyond the wildest imaginations of those that conceived the ideas. Continue reading

Time for the climate change talk to stop

To permit the climate to change or not to permit the climate to change; that is the question. You can read, see and hear about the importance of address climate change every day. Most of the talking is done by scientists and politicians. The former group can see the evil of climate change that threatens us and the latter group do the talking, but the talking by the politicians give rise to very little action. Continue reading

Mundra’s new coal power station – built with “green” subsidies

How do you get to a position when public money and international programmes devised to reduce carbon emissions is earmarked to build and continuously subsidise a 4000 megawatt power station that burns coal? The answer lies in the advice that you get.

If you go to someone for advice, they will advise what they know. A physician will advise you to take medicine, a surgeon to undergo surgery, a physiotherapist to exercise; a lawyer will advise you about a legal solution and an economist about an economic solution.

Advisers perceive that the only solution there is to any given problem is that which is within their own expertise. The solution that an expert proffers will be the best the expert knows about, but that does not mean that it is the best solution.

If you look to bankers economists and the like for a solution to the problem of reducing carbon emissions you will end up with what looks credible, seems workable but in practice proves not a solution to the problem of how to reduce carbon, but a way for the opportunistic to make money in a rapacious and unscrupulous market.

When the solution is adopted and enacted by politicians the solution becomes set in stone, no matter how much damage it does. Reputations are at stake, and this makes politicians and civil servants who have approved these failed programmes close their eyes to the environmental reality of them. Indeed genuine solutions are not allowed to stand in the way of their beloved trade and cap schemes.

The carbon cap and trade schemes are blindly supported by the European Union and the United Nations. We have been told by bankers such as Mr Nicholas Stern that these emission trading schemes are the way to reduce emissions. It is now apparent that these schemes are actually contributing to emissions throughout the world.

The case of what is happening in Mundra, in Gujarat in India is a case in point. The Tata company will build a coal fired power station there, which will be completed in 2011. It will use technology that will reduce emissions compared to a conventional coal powered power station by around 20%. Under the curious rules that have been devised following the Kyoto Protocol, this is classed as a source of clean energy, notwithstanding that the emissions will be double those from a similarly sized natural gas power station.

Being classified as a clean power project Tata will obtain $450 million in soft loans from the World Bank (the same World Bank that Mr Stern worked for) and it will be able to sell under the cap and trade scheme carbon credits to power stations elsewhere in the world for around $60 million a year, which is quite a comfortable income for a carbon credit that arises because a coal fired power station is being built.

If the project used technology that captured and sequestrated the carbon dioxide emissions then it should qualify for soft loans and should be allowed to trade its carbon credits. However, this project will not do that – it will create huge amounts of emissions, but everyone at the World Bank and in governments across the world are pretending that this is a carbon saving scheme.

India needs power. Genuinely green power is expensive because of an uneven playing field; those that burn coal do not pay the true cost of their emissions.

We cannot stop coal power stations being built in India but we do not need to facilitate them with soft loans and fictitious subsidies from failed emission trading schemes. The $460 loan would be better employed building wind farms, putting in microgeneration and solar power in the Gujarat region. The $60 million a year in carbon credits would be better used to install solar panels in Gujarat.

India will need, it is estimated, an additional160,000 megawatts of power to come on line in the next decade. That is another forty plants the size of that which will be built in Mundra each emitting at least 25 million tonnes of carbon each year with the aid of World Bank soft loans and additional income form selling fictitious carbon savings.

If we go to bankers and business people for advice about carbon emission reduction can we be surprised that the result is a subsidised coal fired power station built in India from which money will be made?

The great persuader and climate change policies

Someone who consults for JP Morgan Chase and Co and also for the Zurich Insurance Group is trying to persuade countries like China to drastically cut their carbon emissions. You may ask what JP Morgan Chase & Co and the Zurich Insurance Group have done themselves to cut carbon emissions; the answer is not very much.

When you understand that the consultant in question is none other than Tony Blair you might be even more puzzled.Mr Blair was Prime Minister for ten years and during that time he had plenty of opportunities to legislate for the UK to cut carbon emissions. He did nothing of the sort. Although during his period of leadership the UK’s carbon emissions did fall marginally, the fall was really due to Mrs Thatcher’s fight with the coal mining unions Continue reading

Hopes,aspirations, signals, endless reviews and consultations- the 2008 Budget

Mr Darling’s Budget has been much as I feared; it shows a Government that is good at commissioning reviews and studies but lacking the political courage to make genuinely hard decisions.  

The Budget documents states: “Tackling climate change is the most serious and pressing global environmental challenge the world faces.” True. Unfortunately the policies announced under the heading “An Environmentally Sustainable World” will do little to tackle climate change or make the world more environmentally sustainable. Continue reading

Green Taxes, reports gathering dust, and polluters that should pay

I decided in October last year to “blog” about the environment and have posted articles almost every day since then. I called this “Ideas for the Environment” because ideas about improving life sometimes turn into real improvements and without the ideas there will be no improvements.  Continue reading

No tax relief for the environment

Governments are notoriously reluctant to change. Some months ago I was talking to a Treasury official about the best ways to incentivise microgeneration and solar thermal in particular. I explained that I thought that a simple income tax allowance of the amount spent on a thermal solar system would be a good idea.

This is what Austria has done and it has led to a massive use of thermal solar and a corresponding gain in environment benefits and in energy security.  His reply was disappointing but not unexpected. Continue reading