Sunday, May 28, 2017

TRUMP, MORE NONSENSE ON CLIMATE, AND THE ARGUMENTS MOVE ON

Apologies to readers for a longer than usual gap. This has been the result of travel commitments and the diversion of my time into writing a rather longer piece for another publisher.


The Trump caravan moves on. The recent G7 meetings are reported to have included tense conversations between Trump and other leaders on climate policies. Hitherto Trump’s lack of consistency on the subject has been encouraging, as campaign slogans promoting coal interests meet some wider global realities. And Trump’s unpredictability (to use a kind word) means that even if he eventually comes down on the anti-science side of the argument, the US position will carry less weight in the rest of the world and is less likely to undermine the Paris agreement.
However it is clear that the “refute the science” camp epitomised by climate sceptics such as Trump[1] and the UK’s own Nigel Lawson is increasingly in disarray. In recent years they have relied heavily on the cherry picking of global temperature statistics purporting to show a pause in “warming” since 1998, an unusually hot el Nino year. The statistical analysis was always laughable, but the last two years, coinciding with another el Nino, have driven the last nails into the coffin of this particular piece of sophistry and spurious argument.
The result is we now see the sceptics retreating to another line of defence, essentially that the outcome of increasing CO2 might not be as bad as predicted and therefore might not justify “expensive” action in mitigation. Jonathan Chait reports one such line in the Daily Intelligencer of 1 May, picking up a column from the New York Times in which Bret Stephens, whom he describes as “a conservative refugee from the increasingly Trumpist WSJ”, argues that the certainty of climate science is overrated, while still admitting the reality of warming and the human influence on it.
This at least is progress of a sort. Pre-election Trump treated the science as one of the great hoaxes of all time, so at least there is some recognition of the science. And it is also true that the science is anything but certain in estimating the climatic impacts and their economic and social costs. However this argument, which is developed to suggest that we cannot afford to abandon or reduce our fossil fuel consumption, ignores the reality that the uncertainties over outcomes runs in both directions.
The problem is the implicit argument that the risk is one-sided.  Climate Shock, a 2015 book by two very serious economists, Wagner and Weitzman, argues that we pay too much attention to scientists’ best estimate of the “likely” global warming outturn. What should really concern us is possible underestimation of climate change. The best estimates are both dangerous and expensive.  But the more extreme but still plausible possibilities are terrifying, threatening human civilisation in any form to which we have become accustomed and almost certainly implying a massive involuntary reduction in population.
It is also worrying that the evidence hitherto is to suggest that scientists have if anything erred on the side of not appearing to be alarmist, and that their predictions have proved right, within a range of uncertainty, or have underestimated the warming that has actually occurred.[2]
We do not accept a 10%, or even 1%, chance of a fatal outcome when we take a flight.  Nor should we collectively accept such risks in forming our energy choices. Nor is the cost of effective action impossibly high (although it might become so if we wait too long). It is broadly assumed to be of the order of 1 to 2 percent of GDP, roughly speaking the equivalent of assuming we might reach a given standard of living inn 2050 instead of 2049. It is also, for individual economies, within the boundaries of impacts (on standard of living) brought about by short term fluctuations in the oil price, or by significant changes in government fiscal policies.
We should expect more dubious arguments along these lines from conservative commentators such as Stephens, Lawson, Trump and others. The ideological objective is small government, and fact and logic are twisted to reach the desired political conclusion.



[1] Trump, like our own Daily Mail climate science specialist Melanie Phillips, has form on matters scientific, having got into deep water on the subject of vaccination and autism. This is another area where the promotion of absurd and indefensible positions has caused huge social damage, but this blog confines itself mainly to energy matters.
[2] Climate change prediction: Erring on the side of least drama.  Brysse, Oreskes, O’Reilly, and Oppenheimer. Global Environmental Change. Volume 23, Issue 1. February 2013


Sunday, May 7, 2017

SHOCK. HORROR. THIS IS A GOVERNMENT THAT DOES NOT BELIEVE IN FREE MARKETS.


Has May pinched Corbyn’s policies (or at least Ed Miliband’s)?


I commented a short while ago  (on 25th April) on the very different treatments handed out to the idea of energy retail price caps, depending on whether they were proposed by Labour or Conservative administrations. To recall the discussion.

[2015]. The Telegraph said prices would go up before Miliband’s freeze, while the Times and the Sun warned the “lurch to the left” risked blackouts. The Times’s editorial described his plan as “flawed in practically every detail”. [2017] … on Sunday, the Sunday Times welcomed May’s price cap as an “attempt to capture the political centre ground”. [Guardian]

This was a timely posting. The FT reports today as follows.     Theresa May said during the Conservative party conference in October last year that she was planning to take action on high bills. Since then, the “big six” power companies have stopped trying to match or better the cheapest deals on the market, according to an analysis by price comparison website uSwitch.

So far this looks like first blood to the Daily Telegraph, as the big energy companies take pre-emptive action to raise prices or at least limit any pretence at aggressive competition. The FT also reports that: Iain Conn, chief executive of British Gas-owner Centrica, Britain’s biggest energy supplier to homes, has said there were people at the heart of the Tory government who “don’t believe in free markets”.  

Alternatively this could be interpreted simply as a recognition that in this particular industry, the principles of free markets and competition are beset by so many sources of market failure that some retreat from neo-liberal ideology was inevitable. An energy industry counterpoint came from Paul Massara, former chief executive of Npower, who said free market competition had not so far encouraged the majority of households to switch to cheaper deals. “Free markets haven’t worked and therefore you need to do something. The question is what is the right solution?”  [again according to the FT]

Watch this space. There will be many even more significant battles ahead within the Tory party around the broader questions of markets and “working for everyone”. But, I suspect, they will not be of great prominence in this election campaign.

Saturday, May 6, 2017

ELECTION IRONIES. WHERE WILL EU ISSUES PLAY INTO UK CLIMATE POLICY?


As the UK moves towards the June general election, there is a widespread assumption of an overwhelming victory for Mrs May’s Conservatives. So it is perhaps time to put a positive spin on this most probable outcome and consider the issues that may arise for UK climate policy.

A very strong personal position for Mrs May, and the crushing of UKIP, will make it much easier for her to agree the inevitable compromises that will be required to secure exit terms that avoid the economic disaster of a no deal exit. Inter alia this is likely to include substantial “divorce payment” even if it is well short of the £ 100 bn plus that is a negotiating position currently hinted at in Brussels. But almost any viable agreement will include other equally substantial disappointments for the diehard Brexiteers.

Energy issues will not be top of the list of problem areas, but Brussels may seek to retain the UK within the EU ETS, ostensibly on the grounds of ensuring “fair” competition in trade. The UK should not resist this too strongly, first because the EU ETS has in any case proved to be a rather ineffective instrument, but more importantly because there are potential longer term advantages to membership of a regional block for trading carbon emissions, should these arrangements ever escape from the cycles of weak adjustment to rapidly changing conditions within an inflexible political framework.

In broader terms the UK would be ill advised to seek to separate itself from continental European systems. Interconnection is a major part of future UK energy plans, and a common basis for trading and interconnection protocols and coordination of interconnection investments has some clear positive benefits to both parties. There are also strong contractual and other relationships in the nuclear industry (including disposal of nuclear waste) which will need to be maintained in some form.

There are signs that Mrs May is moving sharply away from the market fundamentalism that has characterised much of the Right of the Tory party, and especially its members most closely associated with campaigning for Brexit. The evidence for this has been most clear in terms of her ambitions for a government that “works for all of the people”. But its most concrete manifestation to date has been in the threat of a “price cap” for the energy utilities. This would be the death knell for the liberalised market as we have known it.

A further irony has been the revelation that price caps currently apply in about half of other EU countries, indicating (whatever general view one takes on their wisdom) that much or most of the EU has not followed the UK market liberalised market model very far down the road. The UK is retreating further towards a more typical EU paradigm of mixed market and interventionist approaches. All the while the Commission itself has been pushing to move faster to liberalised and UK-inspired “single market” solutions. The irony is that at the point of its departure the UK will actually be moving into closer alignment with its neighbours, at least in terms of its general philosophy.

There have been suggestions that consumer bills will be prioritised over renewables investment. On the other hand a government that works for “all the people” may also be predisposed to projects that can show a substantial wider benefit to the economy. Industrial strategy may be back in fashion, and is unlikely to be directed to new fossil technologies except (just possibly) in renewed interest in carbon capture (CCS). It is more likely that nuclear programmes will be maintained, and projects such as the West Coast tidal lagoons, which can show major external benefits (as well as carbon saving) will get some serious attention.

The negotiations have clearly got off to a bad start, with a trio of apparent incompetents in key roles. This does not augur well for either any sort of agreement, or even less for a “good deal” for the UK. But we have to hope that sense will prevail. If it does, and even though Brexit is not the preferred scenario for most Greens and others engaged with climate policy,  then there is no reason to despair of at least some continued progress in UK climate policy.