Hi Jo,

Just picked up on your blog following leads on Tom Heap – I’m writing a piece for my website (www.biggreenbang.co.uk) on the panorama / KPMG saga – just wanted to say what a great blog it is~!! Don’t find so many to-the-point sites in the UK – have picked up on guys like Joe Romm in the States but you seem to have your finger right on the pulse in the UK!

…Should explain that my site has been initiated by a load of IT techie nerds who are already working in telecoms and are about to launch a zero carbon mobile phone company (by a combination of using low carbon technology, buying into renewable power and carbon offsetting) They are committed to putting part of their profits into green projects and are setting up BGB in the hopes that it will be a vehicle for making sustainability issues available to a wider public – they have ambitions to develop it as a community resource too – They obviously hope to get spin-off business for their mobile phone network but I believe their motives are genuinely good and they seem to be giving me a fairly free rein!

look forward to hearing from you

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Date: 10 November 2011
From: jo abbess
To: tim b

Hi Tim,

Good luck with the Panorama research.

Another person to follow on this is Christian Hunt at Carbon Brief :-

http://www.carbonbrief.org/blog/2011/11/looking-into-panoramas-sources
http://www.carbonbrief.org/blog/2011/11/kpmg-not-sure-if-written-report
http://www.carbonbrief.org/blog/2011/11/another-correction-from-the-mail-group-on-energy-bills

…Keep the green flag flying !

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Date: 11 November 2011
From: tim b
To: jo abbess

Hi Jo,

Thanks for getting back,

I would like to send you a link to the article but for some strange reason its not been published yet – not so much research on Panorama as a general review of Knowns and Unknowns that a report based on figures from and unpublished draught press release throws up!! – It was a Carbon Brief piece that made me take the tack i took.

What I was really interested in was the cut of Tom Heap’s jib – I picked up on your site because I Googled his name – and lo and behold you critiqued the Beeb’s Climategate coverage saying, “some of the mistakes made by the reporter, Tom Heap, were laughable”.

My deeply sceptical mind started to wonder – especially given his Countryfile role, if he’s not one of the “farmer boy climate sceptics” (living in rural XXXXXXXXX with lots of Telegraph reading Hooray Henrys – I meet lots of them!) That is pure speculation on my part but even if it’s just a case of a young ambitious journalist trying to make a name for himself (and aware that good sceptic record will be a great career move for anyone wanting to work for Murdoch, The Mail, The Express… its a long and tragic list!) – he’s hardly generous with information!

…We are still sticking the nuts and bolts of the site together at the moment – my responsibility is writing relevant stories – and my background in environmental issues goes right back to the early days of the Sullom Voe oil terminal in the Shetland Islands (1970′s) I’ve been immersed in this stuff most of my adult life – starting out as a “back to the land idealistic greeny” and ending up a cynical old man – but still believing that this is the most improtant issue we have ever faced!

best wishes

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Date: 11 November 2011
From: jo abbess
To: tim b

Hi Tim,

Don’t grow old and cynical. Instead, grow wise and excited about the prospects for positive change.

It won’t be your generation that fixes climate change with renewable energy, sustainable agriculture and a steady-state economy. It won’t be my generation, either – I’m older than many of the “senior” figures in the UK Government.

We owe it to the next generations to share our hope, knowledge and encouragement; and believe in them.

Scotland will have wind and marine power to replace the oil and gas economic compromise with the English. Wales and Ireland can become energy-independent and shake off Westminster. There will be more sanity, more loft insulation and peace.

I would suggest caution in trusting the BBC for energy news. The BBC people that actually know anything about energy appear to be sidelined by those rolling with the “national interest” programme, supporting UK energy companies and their tainted arguments; not realising that it’s in the interests of the energy business to transition out of carbon. I am looking forward to work by Fair Pensions and other organisations on how companies, and banks, can only survive by investing in renewable energy.

…Stay in touch,

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Date: 15 November 2011
From: tim b
To: jo abbess

Hi Jo,

Fear not – Old and Cynical is a bit of a pose – having reached 60 this year I feel entitled to a degree of curmudgeonlyness – I am indeed excited by the positives, but I’m aware of the extent of change that is needed and the scale of resistance. I suppose the old cynical bit comes from an acute awareness of the political trickery and media manipulation being used by the energy industry in particular – The ST/Panorama thing is a case in point – they’ve sucessfully run a well publicised negative story with a headline figure of £34 billion savings on a report that still (as far as I know today) remains unpublished. The manipulation of media, astroturfing and funding of front organisations in the USA by the likes of Koch and Exxon has led to a political fantasy world over there – with climate denial held as orthodoxy by the right. There’s evidence this ultra neo-con agenda is influential in the current [UK] government.

Liam Fox’s Atlantic Bridge charity had close ties with ALEC – a well funded influence peddling machine that gets its money from similar sources – (check out ALEC Exposed for a bit more insight) – two of its trustees [William] Hague and George Osborne (and especially Osborne) are leaders of the climate denial lobby within the Cabinet (Osborne’s father-in-law – is David Howell – and he’s apparently a prominent Climate Change denier). The gulf between the Government’s promises on carbon targets etc and its actions is growing at a rate – and it doesn’t seem beyond the realms of possibility that a beleaguered David Cameron would offer a withdrawal of support for renewables against a get out of jail card on Europe.

I’m not saying that the Panorama report is deliberate manipulation – but I don’t think it’s a possibility that should be ruled out. The technique of “reporting” on unpublished reports has popped up a few times this year – if memory serves me correctly the [Daily] Mail ran a whole load of spurious headlines on the costs of the new Electricity Reform Bill on pure speculation.

So yes, agreed that we have to be positive and hopeful – but feel we have to keep an eye and a voice on the “rich old white men” who seem to be determined to use no holds barred dirty tricks to stop a move towards a decarbonised world – as for it being future generations that will be the ones who change things – well The [International Energy Agency] IEA are saying we have 5 years to get on top of carbon emissions – not a body exactly renowned for making provocative extravagant claims. One of the things they highlight is that future carbon consumption is locked in by the investments we make today – build a coal power plant and we’re locked into burning coal for the next 40 years etc – I’m sure you are a aware of these issues as I am – so I feel I have to disagree about leaving it to younger generations – we are all in this together and my year old grandson has no voice – I have to speak for him!

Good grief – all this stuff sounds terribly like a conspiracy theory – I’ve fought against believing it but the evidence train is so strong that it has to be taken seriously

best wishes

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Date: 15 November
From: jo abbess
To: tim b

Hi Tim,

As Cameron says, “calm down, dear”. You’re not a conspiracy theorist – you’re just doing some critical thinking.

It is now clear that the United Nations Framework Convention on Climate Change will be ineffectual in delivering a workable carbon treaty. The International Energy Agency and the US Energy Information Administration are powerless. The G20 Governments are incompetent. Carbon taxation and carbon trading are dead in the water – because they are based on faulty economics. The Climate Finance Fund for mitigation and adaptation will be as poorly funded as the international aid programmes. Deforestation will continue apace.

Stupid old white men do not have an evil agenda – they seriously believe they are doing the right thing (especially if it ups their share price). However, they do have an agenda – business as usual – and this does need to be critiqued.

There is no prospect of “business as usual” for a number of reasons – Peak Oil being one of them. We could discuss different opinions about the causes of Peak Oil for several weeks, but the data is in. The “business as usual” approach to tackling Peak Oil is a ramshackle plan to drill more, in more places, including the Arctic; to do Coal-to-liquids, Gas-to-liquids projects; to try to coax algae to produce biodiesel, a whole range of ethanol and methanol projects. All of these will fail. Where was the Arctic physically during the Permian ? Paleogeography indicates there’s not much oil in the Arctic. Algae breed messily and slowly. Coal is also peaking. Gas is going to peak in 2030 – 2035.

The problem with these problems is that most people are not paid to see them, or they are paid not to see them, which is why you have the climate change denial lobby, and the renewable energy rubbishing lobby.

My view on these matters is that there is no evil, just incompetence. And this needs to be continually shown to the light with sanity and clarity.

Keep on at it (and do keep in touch – although I rarely enter into lengthy correspondence),

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Date: 15 November 2011
From: jo abbess
To: tim b

Hi Jo

…should emphasise that I don’t believe the evidence points to a conspiracy theory. Rather the opposite – its so strong it’s clearly not a conspiracy theory. A year ago I would have thought the notion that corporate power in the [United] States was systematically funding the stuff it funds ridiculous – now I feel a bit silly not knowing it was going on!

As for “not being evil” – Well I guess that depends how evil is defined – in my demonology spreading deliberate lies in order to knowingly pursue a path that will cause harm to others ranks fairly high on “the things I would define as evil” scale. Pursuing a course that gives a favourable balance sheet but putting the global eco-system at risk definitely justifies the tag! Having said that, I’m not concerned with moral judgements so much as trying to explore ways of getting a broader mass of people to recognise the biggest obstacle to the kind of paradigm shifts we need to make are political rather than technological – it’s as if we are fighting against a Goebbels style propaganda campaign but no one even knows its happening. I suppose part of the point of BGB is to try and introduce these notions to the “wanna be green by means of farmers markets and good recycling” to the harder nosed side of the issues in as gentle way as possible.

cheers

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China has launched Tiangong-1, the “Heavenly Palace“, and demonstrated an international co-operative republic of space in the making. Many technologists, scientists, engineers and military personnel in the major economies will have taken part in the coordination of this project.

Three things come to mind. First of all, China are going to experience a massive drain on domestic economic and social development in pursuit of its programme to set up a space station. Some could say this is deliberate, and that China has been convinced to spend on space to keep them from world economic dominance.

Next, the Chinese are obviously going to set up Earth monitoring systems, and are going to find out that everything the Americans have said about environment and climate, based on the data from the NASA, NOAA and UAH satellites and space occupation, is accurate; and wonder why they were convinced of the possibility of the alternative, and the necessity of going up there to find out for themselves.

And thirdly, the Chinese are going to find that they are drawn into the American and United Nations economic and military security programmes, monitoring common “enemies” – such as those breaking carbon treaties and constructing disallowed nuclear power stations.

So, not a space republic – not even a space race. More, a space replication, repeating what’s already been done before. A giant public works project that should keep the hardworking Chinese people proud for a moment.

Happy Birthday, China !

http://e3network.org/social_cost_carbon.html
http://coolgreenmag.com/2011/07/13/study-you-are-already-paying-9-per-gallon-for-gas/

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from: Jo Abbess
to: Andrew Pendleton

Hi Andrew,

…I don’t like being told that carbon should be priced to solve climate change, because I simply don’t think it will work. All attempts so far haven’t worked, and for one very simple reason – nobody wants to be forced to buy a negative, virtual commodity.

The history of environmental fines is poor. What makes anybody think that carbon can be cleaned up by pricing, when oil spills and air pollution cannot be cleaned up by pricing ?

What’s the name of your Harvard economist again ?

Here’s my essay looking into just the shallows of carbon pricing :-

http://www.joabbess.com/2010/04/30/the-price-of-carbon/

My conclusion concludes with “Trading emissions rights does not appear to be capable of delivering the full low carbon transition. The carbon market is displacement activity. We should be paying for what we want to happen, not for what we don’t.”

Regards,

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from: Andrew Pendleton
to: Jo Abbess

Dear Jo

Thanks for this.

The Harvard economist is Philippe Aghion who is an exponent of endogenous growth theory which suggests that although technological change is inherent to growth, classical economics treats innovation as an externality (Stern said this too).

Here’s his paper relevant to climate change but note he’s written more since and lots more that is just generally about the technology externality:

http://www.economics.harvard.edu/faculty/aghion/files/Environment%20and%20Directed.pdf

But although Aghion believes that government-backed investment in clean technology is essential because otherwise we will build on the shoulders of the carbon intensive giants, he still holds that you need carbon pricing to lock change into the system.

I confess I’ve never seen a single, credible paper in this area that dismisses entirely the need for pricing carbon in some way. But I think the trouble is that climate policy has so far been built on emissions trading and/or taxation without doing enough subsidisation and investment and in fact we should view policy the other way around.

Best regards.

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to: Andrew Pendleton
from: Jo Abbess

Thanks for the paper.

My vision is that we can try to get a strategy for green economic development that brings as many people as possible onto the same page willingly.

Many corporations are against the notion of carbon pricing, including the energy producers. Obviously. And they take great pains to make sure it doesn’t happen or won’t affect their share price and profits. Companies such as BP and Royal Dutch Shell know full well that there is active resistance against carbon pricing/trading or taxation of any kind, which is exactly the reason they and their economists propose it – I think – knowing it won’t go anywhere. Some believe that the European Union Emissions Trading Scheme has experienced cartel activity against its effectiveness. The ETS has been remarkable by its failure and the frauds perpetrated on the exchanges.

Carbon pricing merely dis-equilibrates the economy, which then re-equilibrates – so has no overall effect. People who are hesitant about carbon pricing are going to resist the obvious conclusion of a consistently rising carbon price to overcome market re-equilibration.

Many public commentators, special interest groups and peoples representatives are also against the notion of carbon pricing, because of its regressive nature – costs to energy producers often (no, always) get passed on to consumers. It’s a political bog proposing to add to the end costs of energy.

How to get more people on-side ? Stop trying to apply the wrong economic theorems ! Marginal charging is a good thing when the environmental bad is a very small part of the economy and easily substitutable. It really can influence behaviour when people can say – oh – see – these high tar cigarettes are more expensive than these low tar cigarettes. Or, if I buy the electric option on my new car I won’t need to pay [the central London] Congestion Charge. However, when there is no opportunity for quick substitution at the point of sale, price differentials don’t work. Carbon pricing is not making coal power unprofitable, for example.

Have environmental taxation or fines ever actually stopped bad environmental behaviour ? I sincerely doubt it.

We don’t need to charge a tax for fossil fuels and coal, to attempt to create a disincentive, because going out ten years from now, they will most likely be relatively more expensive than other options. Plus, it’s very hard to apply carbon pricing to the big decisions about generation plant – as there’s so much lobbying to be exempt from carbon pricing.

To get more people on the same page, it is only necessary to establish that fossil fuels and carbon are likely to carry on getting more expensive and tricky to mine. When they see that opex is likely to keep on getting more costly, they will reconsider their attitude to investment, and how best to place capex.

I think the Son-of-Kyoto Protocol should ditch the notion of “flexible mechanisms” altogether, since carbon trading isn’t working, and carbon credit creation is stuck in a rut (World Bank Development Report 2010 page 262).

[ Also, see : http://siteresources.worldbank.org ]

To make real carbon emissions reductions in the developed countries requires an entire re-orientation of the investment schedules in energy and infrastructure. That won’t be brought about by carbon pricing, which is just a nuisance.

Attempting to charge for a non-existent, negatively valued commodity such as carbon dioxide in emission is an Emperor without clothes problem, I think. And a majority of the Daily Mail, Daily Telegraph and Daily Express readers will probably agree with me on that. I just need to convince them that wind power and solar power work, and also Renewable Gas (for just one example check out Audi’s eGas) and then we will all have the same plan for the future.

The only way to re-capture the opportunity for economic growth is by creating new wealth, in new assets. These are going to come from, in order of priority, negawatts (energy conservation on a wide scale), renewable energy and energy efficiency. That’s not going to be done by carrying on with the same model of industry as before. Carbon is a liability in so many ways, even without carbon pricing.

Carbon pricing is a meme borrowed from previous generations of environmental taxation, but wrongly applied in an inappropriate setting…

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Naturally enough, there are potential pitfalls in my approach :-

1. Energy producers and energy suppliers don’t want to sell less of their products – they will resist energy conservation.

The answer to this problem is to convince them that Peak Oil is real, in fact, all of Peak Oil, Peak Natural Gas, Peak Coal and Peak Uranium are likely in the next few decades. They just won’t have the energy to sell in future if they don’t diversify their business to selling energy services rather than energy; or if they don’t diversify to selling renewable energy rather than fossil fuel and nuclear energy.

2. Energy conservation and energy efficiency may well spur the uptake of energy as an input to other, novel, economic production.

This is widely called Jevons Paradox. Energy rationing is probably the answer to this, but nobody wants to hear it. However, we don’t need energy rationing because of Peak Oil, Natural Gas, Coal and Uranium – “Peak Energy”.

3. Energy conservation will lower fossil fuel prices.

Yes, but isn’t that a good thing ? And because of Peak Energy, it won’t matter how low fossil fuel prices are, we will still need new forms of energy and energy services. And if fossil fuel prices do drop, either because of massive energy conservation measures or energy price controls by countries desperate to control their economies, then Peak Energy will still mean that fossil fuel consumption should be discouraged.

Actually, energy prices are not likely to collapse, even with massive energy conservation. The reason ? Everybody has turned from investing in property stocks and shares to energy, food and soon, water.

From the Acemoglu, Aghion, Bursztyn and Hemous paper :-

“(ii) optimal policy involves both “carbon taxes” and research subsidies, so that excessive use of carbon taxes is avoided;”

Ah, subsidies. What Daily Mail readers call “stealth taxes” – quite rightly.

The word “subsidy” needs to be reclaimed – “targeted investment” or “getting us over the new asset investment hurdle” or something similar.

And – isn’t the “optimal” carbon taxation zero, that is, completely “avoided” ? Then why factor in carbon taxation in the first place ?

2nd November 2008

Browsing at a newsagent on a mainline railway station…

The question on the front cover of Fortune magazine, Europe edition Number 20, November 2008, already on the stands is “Who Pays for The Bailout ? You do, of course”. Of course, as this Credit Crunch means Bailout argument plays out, the issue of Energy and Climate Change is lost. But the question should be all about how to create a new green economy. Who pays for the re-powering ?

A sign of the greening times – another story teaser on the Fortune magazine advises “10 Green Stocks to Own Now”, and the front of the Independent on Sunday quotes Obama claiming that Energy is his “number one priority” in his bid for presidential election, with his “Apollo” project :-

“Obama’s green jobs revolution : Democrat will lead effort to curb world’s dependence on oil; Plans to create five million new posts in clean energy projects : By Geoffrey Lean in San Francisco and Leonard Doyle in Washington : Sunday, 2 November 2008 : Obama has pledged to create five million new ‘green collar jobs’ if elected : Barack Obama is promising a $150 billion “Apollo project” to bring jobs and energy security to the US through a new alternative energy economy, if his final push for votes brings victory in the presidential election on Tuesday. “That’s going to be my number one priority when I get into office,” Mr Obama has said of his “green recovery” plans. Making his arguments in a radio address yesterday, the Democratic favourite promised: “If you give me your vote on Tuesday, we won’t just win this election. Together, we will change this country and change the world.”…”

Meanwhile…Gordon Brown and Ed Miliband (and Peter Mandelson) get off the plane in Saudi and beg for investment into green energy in the UK :-

“Gulf petrodollars help UK go green : Brown calls for Saudis to give more cash to IMF : Gaby Hinsliff, political editor : The Observer, Sunday 2 November 2008 : The fight against climate change will get an unexpected boost today from oil-rich Gulf states which will pledge to invest some of their petrodollar profits in British green energy projects. The surging oil price over the past year has left parts of the Middle East awash with cash as the rest of the world is squeezed by the credit crunch, making Arab royals some of the few active investors worldwide. The Gulf states have enjoyed a $1.4 trillion windfall from higher oil prices since 2003. Ed Miliband, the Climate Change Secretary, arrived in Saudi Arabia yesterday with Gordon Brown at the start of a tour of the region. He said some of that cash would now ‘help our firms reap the rewards from going low carbon and providing green energy to thousands of families’ under a so-called ‘green Gulf deal’ to be announced today…”

But that’s not the real reason why they are there. Ostensibly, the delegation’s serious business is about asking Saudi and other Arab oil states to contribute more towards the International Monetary Fund :-

“Gordon Brown in the Middle East : Brown hopeful of Saudi cash for IMF : Allegra Stratton in Riyadh, guardian.co.uk, Sunday 2 November 2008 15.30 GMT : Gordon Brown said today he was hopeful of success in his attempts to persuade dollar-rich Gulf states to prop up ailing national economies through a massive injection of capital into the International Monetary Fund (IMF). The prime minister spent three hours in one-to-one talks with Saudi Arabia’s King Abdullah, trying to persuade the monarch to invest in a revamped IMF. On the first leg of a four-day visit to the Middle East, and aiming to secure hundreds of billions of dollars for the fund, Brown called off a planned dinner with business leaders accompanying him so as to allow maximum negotiating time with the Saudi king. The IMF currently has around $250 billion in its emergency reserves but there are fears that, with Hungary, Iceland and Ukraine having already sought assistance and more nations expected to follow, the sum might not be sufficient. Brown hopes to persuade Gulf leaders to use some of the estimated $1 trillion they have made from high oil prices in the last few years to boost the reserves, indicating that he would like to see the current sum increased by “hundreds of billions” of dollars. The prime minister said following the talks that he was hopeful of having secured Saudi backing…”

But hang on, what’s this ? :-

“…Brown, who is accompanied by a high-level trade delegation seeking Gulf investment, including the CEOs of BP and Shell…”

What on earth are BP (formerly British Petroleum) and (Royal Dutch) Shell doing in a delegation to the Arab states begging for the IMF charity fund and green energy investment ? Is it that BP and Shell won’t pay for green energy and it’s too hard to ask the British people to pay extra tax, so they’re coming to the Arab countries for a green energy bail-in ? What is going on here ? If OPEC countries are all in the “Axis of Evil”, and no foreign oil and gas companies can get a toehold, why are BP and Shell in the government delegation to Saudi ?

Paying for new energy systems can be expensive. The European Union Emisssions Trading Scheme is saying they want 100% of carbon emissions auctioned by 2013 to pay for larger projects – Carbon Capture and Storage and new Nuclear Power. However, the costly deadweight “white elephant in the room” is not nuclear power, but dead wells.

Are they all talking about Peak Oil in the OPEC Gulf, and proposing business opportunities to the King of the House of Saud to offset the Middle East’s future total loss of business as the wells empty – offering them compensation in the form of green investment deals ? Asking the Saudis to join the green energy race now and get ahead ?

BP and Shell have benefited from the recent rise in the price of oil, profiting even as the oil price has hit millions and created impoverishment. But they’re going to have to spend a very large amount on exploration for new oil and gas from now on. So why is there still resistance to spending more on renewables ? Can BP and Shell ever be convinced to go green ? Would a barrel load of toxic news work ? No. BP and Shell can’t pay for green energy because they have to maintain the profits of their shareholders. Pensions are going to be bad enough without forcing major “British” oil companies to pay for such things as bioethanol, algae biodiesel, solar panels and wind farms.

Action to tackle climate change must be a “tight shadow” on Peak Oil and its fall – tighter than the 9.1% depletion of the largest wells projected by the International Energy Agency (IEA) To reverse the oil decline, and more so to take action on climate change, investment is required. Banks are becoming owned by oil-rich nations, but this is simply a natural outcome of poor financial regulation that led to the Credit Crunch. However, it doesn’t mean that the future will be oil and gas necessarily. This new layer of ownership of financial bodies is not significant, as it will not seriously impact the greening of energy, if people are serious about it.

What is of value here is not banking but energy itself, which underpins the entire economy. The scenario is this : Saudi Arabia will not admit in public that it’s going down because of “Peak Oil”. They would prefer to keep up the revenue, but they’re not “engineering” a reduction of supply. It’s reducing anyway.

From their perspective, allowing supplies to weaken, by not doing any new investment into raising production, would be protecting their reserves to sell in future. A good strategy – even more so as prices rise against losses of supply but strong demand (even despite the blooming recession).

I figure that what BP and Shell are doing in the Middle East is making the case to the major oil-producing states to keep on pumping.

I guess that what Gordon Brown is doing is making the Saudis an offer they can’t refuse – either the major western states will implement measures to control oil prices which would make OPEC lose revenue, or the Saudis can underwrite the global bailout.

This mission is not about green energy investment. It’s about keeping the oil flowing.

http://www.cato.org/event.php?eventid=7999

I found this excellent little CATO Institute debate somewhere in my Twitter stream, and I watched the whole of it, despite the annoying accents and speaking styles of the speakers, and the insider economics references to Pigou and Coase (they’re only theorems, you know).

I thought that Kate Gordon made some excellent rebuttals to Andrew Morriss’ whining, pedantic free marketeering, and I was with her right up until the last few frames when she said that the Center for American Progress, of course, supports a carbon tax, as this is, of course, the best way to prevent Carbon Dioxide emissions.

Such disappointment ! To find that somebody so intelligent cannot see the limitations of carbon pricing is a real let down. I tend to find that American “progressives” on the whole are rather wedded to this notion of environmental taxation, “internalising the externalities” – adding the damages from industrial activities into the cost of the industrial products. I do not see any analysis of the serious flaws in this idea. Just what are they drinking ? What’s in the Kool-Aid ?

1. Carbon Dioxide is a virtual, negative commodity

You burn some fossil fuels. It makes light, heat and steam to generate electricity. Brilliant ! Virtually the whole economy runs off of burning dead critters and pondweed from millions of years ago. Talk about recycling !

Problem : the colourless, odourless carbon dioxide gas that’s thrown off during the oxidation (burning) adds to the Earth’s Greenhouse Effect, and the quantities are creating a serious imbalance in atmospheric heat containment.

You can value a stable climate, but you can’t put a price on carbon dioxide – it has (virtually) no chemical, agricultural, engineering or infrastructure value, so who wants to buy it ? Let’s re-phrase that – who wants to pay an additional fee to burn fossil fuels ? Fossil fuels are becoming more and more costly to dig/drill/mine out of the ground – the economy cannot accept the burden of a carbon tax in addition.

Nobody wants to pay for a virtual commodity – hence the moves for global carbon finance are failing – nobody wants to pay into the Climate Finance Fund pot. It’s just like International Development, very few countries are anywhere near the aid contribution levels that will deliver the Millenium Development Goals. And nobody will pay Ecuador to save its rainforest from oil exploitation, sorry “exploration”.

2. A carbon price will never be paid by the polluting industries

The fossil fuel extraction and distribution industries are directly responsible for the global warming side effect of their products, but a carbon tax won’t touch them. A carbon tax or any other form of carbon pricing will slip down the value chain to the end consumers – downstream to the energy service and fuel customers.

Therefore, carbon pricing will never incentivise the polluting industries to change their business models – they’ll just pass the costs on, energy becomes more expensive and even though the poorer will buy less, the rich will carry on consuming. Carbon pricing is therefore regressive, inegalitarian, fostering greater division in society, and not actually tackling the problem of how to reduce carbon dioxide emissions.

Large oil and gas companies like BP, Royal Dutch Shell and ExxonMobil regularly line up in support of carbon pricing, carbon trading or carbon taxation. They know full well that their businesses will carry on extracting, even with carbon pricing in place. Carbon pricing won’t touch their profit margins.

Some people show surprise that large oil and gas companies support carbon pricing. Me, I just reason that carbon pricing will add to the inflationary pressure on energy costs, which will lead to aggressive profit-seeking in energy companies. To my mind, carbon pricing will enable higher energy costs and higher energy profits which will finance the drilling of less accessible places and the continued exploitation and desecration of places such as Canada’s First Nation interior, Latin American rainforest and African coasts.

Energy will get more expensive with carbon pricing, making it imperative that more pristine habitats will be exploited and polluted – because it’s cheaper to rampage over poor, unindustrialised countries, and too costly to clean up. Carbon pricing won’t save the planet – it will exacerbate its ruination. Carbon pricing won’t even lock down and diminish carbon dioxide emissions – people will continue to buy energy, and the companies will continue to supply it, from the same old fossil fuel paradigm.

Tell me, honestly, have environmental taxation and envirocrime fines ever really stopped the offending behaviour in the past ? BP paid for Deepwater Horizon, but now they and their “competitors” are moving on to mine the Arctic.

3. The School of Economics with its sleight-of-hand tricks won’t stop carbon dioxide – only regulation can

New Jersey Governor Christie has pulled out of the RGGI – the Regional Greenhouse Gas Initiative – trying to do Cap and Trade in several US States. Why ? Because Cap and Trade cannot work. Too much of the economy is invested in carbon. You cannot apply a “marginal” re-orientation tariff scheme to a major pillar of the economy. Cap and Trade can work for things like fluorinated chemicals (the Montreal Protocol) because they are easily substitutable and therefore not essential to the running of the economy.

What the economists tell you won’t work. You cannot cap carbon dioxide emissions by general dictat and pricing – you need to be more clever and go for the roots of the problem.

Here’s a parallel example. Why is there so much plastic waste ? Why so much landfill ? Because people throw plastic away. And why do people throw plastic away ? Because plastic is packaging. And why is plastic used for packaging ? Because it is made from cheap feedstock waste from the petroleum refining and chemical industries. And so how do we stop plastic waste ? Putting a price on it ? We already pay the price by having to pay town and district taxes to clean up the waste and dispose of it. But paying for plastic pollution doesn’t stop the problem. How do we stop so much plastic becoming environmental waste ? Go to the root, the source of the problem. Make it a legal requirement for all plastic goods and plastic product packaging to be biodegradable, made from plant sources (or as a second best, fully recyclable).

The best way to reduce carbon dioxide emissions is to become less wasteful with energy. And the best way to stimulate energy efficiency is regulation.

We need regulation and enforcement to ensure that all energy appliances and energy-using products, such as cars, are efficient.

We need regulation and enforcement to make sure that all major energy users, and public services, such as street lighting, office facilities and hospitals, are making the most efficient use of energy.

We need regulation and enforcement to ensure that procurement along each public (state) and private contractual supply chain is the most energy efficient and least energy-wasting it can be.

We need regulation and enforcement to prevent the insanity of the global food and goods supply chain – locally sourced should have preference over globally sourced.

We need regulation and enforcement to increase the proportion of energy that comes from truly sustainable and renewable sources.

Renewable energy is set to become cheaper and more prolific. It will win in the end. Give green a chance.

4. Break the link between energy sales and profits

While energy remains a positively valued commodity, carbon dioxide will always retain a negative value.

Energy should come to be regarded as a utility again, not as a commodity. Energy should be a public service, not the profit centre of private enterprise.

Companies shouldn’t win profits by selling more and more energy. They also shouldn’t win profits by forcing the costs of energy to rise.

Energy should have price control.

Energy services should make profits for companies, not energy sales.

5. Carbon Trading between North and South can only constitute a minute fraction of the global economy

All those economists who think that a major market in carbon can be created out of thin, hot air, are naive to the point of stupidity, in my view.

Real emissions cuts have to take place in industrialised countries – they cannot be offset by outsourcing to China or India.

6. Dream the impossible dream

Of all the things to fight for, carbon pricing is not only the farthest from reach, but also the thing that most people will obviously fight over. It really is an impossible dream to think that the world would ever reach a consensus over pricing Greenhouse Gas emissions. Piecemeal, unilateral action won’t work – only a global deal could create a “level playing field” between polluting and non-polluting forms of energy. A global deal cannot be reached – at least not in a hurry – so it won’t happen in the timeframe we have.

Carbon Trading is not working.
Cap and Trade is not working.
Cap and Anything is not working.
Climate Finance is not working.
Carbon Pricing is not working.
Carbon Taxation is not working.

Supply me with examples that contradict my claims and I will write them up and apologise on bended knee. Seriously. I will supply photographic evidence.

Stop listening to economists. Start thinking about sensible ways to reduce energy waste.

Can we glimpse the future of energy ?

Ambient, sustainable energy is all around us, and sooner or
later we will find the ways to make use of it for the good of all.

The following is an appropriately edited transcript of a
conversation on the Claverton Energy Research Group
forum online, and was written by Nick Balmer, a consultant
in renewable energy.
__________________________________________________________

…The huge scale of the possible changes for all concerned is
causing all of the current Titans in the [energy] industry to deploy
the full force of the media [and their] PR [public relations] in an
attempt to manipulate the public and policy towards their own way
of thinking, or in such a way as to protect their own vested interests.

The great thing is that these issues are being aired out in the open,
and groups like [Claverton Energy Research Group forum] allow
people with knowledge of these affairs to debate these issues openly.

The big problem is that each of us has only a very detailed
understanding of some small fraction of the total issue.

Most of the public and government only has a very slight knowledge
of the total issue, and has had only limited access to ways to find out
in detail what is going on.

As Egypt is demonstrating today, everybody now has a voice and as
Wikileaks shows, sooner or later everything will come out into the
open.

All of us are struggling to come to terms with this explosion of
access to knowledge.

It is quite clear that lots of bubbles are being burst as a result of
the Global Financial implosion and the huge expansion in available
knowledge.

Just as banking and property has been shown to be an unaffordable
Ponzi scheme and to be vastly over-inflated, UK energy policy is now
coming under huge scrutiny.

We can now compare our energy systems with other countries.

Due to the huge geological accident of fate, since the 1700′s in coal,
and 1970′s in oil and gas, we have been extremely fortunate in being
able to live way beyond the lifestyle standards of most of the World.

We have not had to adapt.

Other countries that didn’t have this advantage had to change over
recent decades.

Places like Denmark, Austria, Germany [and so on] have made huge
changes because they had less energy from fossil resources.

Now we have reached the peak or crunch point, we find ourselves well
behind those countries that had to adapt earlier.

Everybody is concentrating on the Capital cost of deploying per
MW [megawatt] and overlooks the cost of fuels.

The cost of fuels over time is massively more important than the
CAPEX [capital expenditure on investment].

So even if windfarms cost 20 times per MW or GW [gigawatt] more to
build than nuclear or coal or gas, in the scheme of things,
[wind power] is always going to win, because the fuel is free and
unlimited for centuries to come.

Similarly [solar power technologies], or even more effective,
household insulation and cutting energy use.

And yet the media and government are blinded by the barrage of PR
and media from the energy vested interests who are working with
every muscle to stop this coming out into the open.

I often meet financiers in my work trying to promote and support AD
[anaerobic digestion of biological waste for the production of
renewable methane], biomass, solar and wind projects.

I am always struggling to prove to them that I have an offtake [return
on investment] and the fuel supply. This is often really hard to do
[but] I only have to do this for seven to 12 years to make my business
cases stack up.

I was really depressed at the end of one such presentation and
discussion, when one broadly sympathetic banker who had turned me
down said that he was having even worse problems with largescale
energy projects.

How do you predict the price and supply of coal forward for 25 years
or more ?

It has jumped 17% in recent months.

How do you prove that you are going to have offtake for huge power
stations in future years ?

Demand dropped 8% in 2009.

How do you raise the equity or debt for a billion [pound] project when
banks don’t want to lend more than £30 million each ? Imagine how
many banks that would take ?

We have reached a tipping point in our economy, sustainability and
future outlook.

Yes, the existing mega-power companies are fighting as hard as
Mubarak today to hold onto power, but they represent the past just
as surely as he does.

Those companies can rejuvenate themselves, unlike the Egyptian
President.

If they don’t, there are an increasingly large number of smaller and
more active players coming into the market.

The average household pays somewhere around £1,300 a year for
its heating and lighting.

The companies that come forward with a way to do that for £1,000 is
going to capture the market very quickly.

I have friends in Austria who only pay 65 Euros for services that I
pay £1,400 for.

They do this through insulation, triple glazing, solar and biomass energy.

Most [UK] households have less than £400 per year discretionary
disposable income. This prevents them making changes to their houses
they desperately want and know they need to make. This can
drop their energy demands hugely.

If somebody can unlock that Gordian Knot the benefits would be
enormous as there are something like 27 million households.

At a time when household debt is at an all-time high, incomes are
shrinking, and 40% live on ether government salaries, state
pensions or benefits.

Energy is a very high part of these households’ outgoings – if you
pay £1,300 a year and your house only brings in £11,000 to £20,000
per year.

A 50% increase in the £1,300 could bring great distress, and
possibly even civil unrest here.

The increases fossil power [companies] need to make their systems
bankable will increase energy bills. This will feed straight through into
government liabilities because 40% of us live on government payouts.

If government can drop the cost of heating and lighting quite easily
by £100 to £500 per household per year while at the same time
provide employment for hundreds of thousands of White Van men
cutting energy uses, doesn’t this make far more sense than building
unsustainable power stations that will have to be [bankrolled] by the
government, who will then have to buy back electricity at a price our
communities cannot stand ?

Project a similar calculation onto transport fuels and you get even
greater problems.

At $80 a barrel [of oil] industry is shrinking and relatively few
renewable fuel business cases work. At $100 a barrel most renewable
fuels can compete.

At $120 a barrel almost any alternative beats oil, and that is before
you start to look at issues like fuel security and the environment.

Although the battle is one of David and Goliath, or the Dinosaur and
those early mammals, between the new energy industries and the
existing vested energy industries, [it] has only one outcome.

It is only a matter of the co-lateral damage along the way.

Like Mubarak, it is clear they must go. Are they going to go
gracefully, or are they going to smash the place up first ?

Nick Balmer
Renewable Energy Consultant