Utopian Ambitions, Hideous Costs

One of the features of the modern world is that as the ambitions of governments expand, their performance deteriorates, and to cope with the hostile reactions that generates, they grow increasingly tyrannical.

Initially, they divert resources from the everyday tasks of government—building roads, stopping crime, defending the country—to pursuing grand projects such as “building Europe” or “saving the world.” Over time their rhetoric catches up with their performance and they claim credit in elections for what they promise to achieve while ignoring or covering up or distracting from their failure to perform government’s essential duties, let alone their lofty ambitions, at all well.

The final stage of this rake’s progress is that they try to suppress information and even debate about the costs and failures of their most cherished policies and condemn their critics for “social” crimes like “ignoring” science or “spreading hate.” Here are a few examples, from several countries, to make the general point:

Take, first, crime. Crime figures always need some interpretation; for instance, this year U.K. statistics have been distorted by the coronavirus pandemic. In Britain there have been fewer home burglaries since the residents have been living at home most of the time. Until this year, however, there have been sharp rises in crimes of violence, including rape, and moderate rises in thefts and burglaries.

The real enemy is the citizenry.

These patterns do not seem to be reflected in increased police concern: residents increasingly complain that the police respond slowly or not at all to notifications of theft and burglary on the grounds that they are “swamped.” On the other hand the police have expanded their interventions in cases of bias expressed on the internet even when they are not crimes (in which cases they have still recorded them as bias “incidents"), and they run campaigns inviting complaints about “hate.”

In addition, legal reforms proposed—in Scotland by the Scottish government, in England by the official Law Commission—will, if enacted into law, criminalize expressions of racial and other prejudice spoken at home around the kitchen table. Earlier generations of Britons would have seen this an unacceptable intrusion of tyranny into the home in pursuit of the mirage of a multi-cultural society without tensions.

In the United States, state and city authorities in those jurisdictions with left-wing Democrat majorities have instructed their police forces not to intervene to protect people and property against attacks by left-wing mobs of social justice warriors. In Britain the police have shown a similar bias in taking the knee during “Black Lives Matter” protests and dancing in the streets with Extinction Rebellion protesters while cracking down on demonstrations against government-imposed coronavirus lockdowns.

All these things show a trashing of the impartiality of law and hint that the police and legal authorities now see their role as regulating the behavior of respectable citizens and their opinions rather than apprehending and punishing criminals.

It’s as if the real threats to freedom and democracy come from ordinary citizens using free speech and the vote to promote their opinions and interests rather than people who believe their ideas are so right and necessary that they can impose them on the rest of us—and that institutions controlled by the latter are maneuvering to find ways of skirting the law to do so.

A related idea in the sphere of economics is the Great Reset advanced by the World Economic Forum, aka Davos Man, which proposes to exploit the Coronavirus Pandemic to usher in a new age of . . .  well, of what exactly? Its proposals (or some of them) were outlined in a video  that predicts our lives will be better in almost every way except that we’ll “own nothing” but also hints heavily that we won’t be choosing this future democratically but will have to adapt to what the World Economic Forum thinks is necessary.

I remember that it asked whether or not the Davos people in the WEF would own anything like the rest of us. And if the reply came that of course they wouldn’t own anything, as I suspected, I would then ask if they would enjoy the traditional perquisites of ownership such as being able to use the property as they wished.

That kind of thing makes a difference to the abolition of private property. Communist apparatchiks and their apparatchiks did not own their dachas, etc., in the early days of social justice, which is why you discover from books such as Milovan Djilas’s New Class that they ensured their children would inherit their jobs in order to get the privileges that went with them.

And about those privileges: as a result of the Great Reset we’re told we won’t be eating much meat, or traveling very far, or keeping “billions” of migrants out of our nations or cities—the prohibition on traveling  apparently doesn’t apply to them—and that we’ll nonetheless be as happy as clams in a plastic-free sea.

Everything clear now?

So much for the future that Davos offers you. Let’s now look at how that kind of utopianism works in practice. Earlier this week the London Times had a bold headlined story announcing that Ministers in the Tory government, notably Chancellor Rishi Sunak, were considering making people pay for using the roads. It was strong stuff:

Rishi Sunak is considering plans to charge motorists for using Britain’s roads amid concerns over a £40 billion tax shortfall created by the switch to electric cars.

A Treasury paper on a new national road pricing scheme has been presented to the chancellor. The government will announce this week that a ban on the sale of new petrol and diesel cars, which forms part of the prime minister’s ten-point plan on climate change, will be brought forward to 2030.

Downing Street wants to seize the initiative after days of damaging briefings between allies of Boris Johnson’s former adviser Dominic Cummings and his fiancée, Carrie Symonds.

Let me first indulge in a little interpretation of how an ambitious editorial writer on The Sun—a job for which Ms. Symonds once applied—might write up this story in a column. How about:

PM’s sweetie tells Boris: Pay! Pay! Pay! “Make Motorists Pay for New Electric Cars, Pay Higher Electricity Prices, And Pay to Drive.”

Unfair? To Ms. Symonds, undoubtedly unfair. She is a devout environmentalist, apparently an eloquent advocate, and the future Mrs. Johnson. Of course, she has some influence on Boris. But she couldn’t prevail against the Treasury, the Cabinet, all the opposition parties, the BBC, the rest of the media, and the pipes and drums of “Not an Energy Company—BP.”

Then again, she wouldn’t have to do so. They’re on her side. All of those powerful bodies have committed themselves strongly to the policy of making the British economy a net-zero carbon emissions economy by 2050 and thus also to the major step towards it (to be announced, as the Times predicted, this week) of making it illegal to purchase a car driven by the internal combustion engine after 2030.

Well, I’ll leave it there except to point out that this is merely the latest example of what happens when governments declare utopian ambitions and only consider the costs of them as they start coming in. And they have only just started coming in--see my earlier column on the costs of electrifying the whole of Britain to make it hospitable to electric cars.

Electrifying? It will make your hair stand on end.

The Automobile of Tomorrow -- and Always Will Be?

Yesterday was “Battery Day,” the long-awaited moment when Elon Musk was to reveal Tesla’s breakthrough in battery technology that would make the electric car a real economic rival to the internal combustion engine. It was therefore a significant moment not only in the evolution of electric cars but also in the development of policy by governments and international agencies towards a switch from fossil fuels to cleaner and renewable sources of energy.

There’s an obvious link between these two trends. Petrol is the fossil fuel that provides the energy for the internal combustion engine that still powers the overwhelming majority of automobiles on the world’s roads. If it’s gradually replaced by electricity as the fuel powering cars, then one major source of demand for the world’s oil companies will shrink very substantially. And where automobiles go, other forms of energy consumption are likely to follow, notably home heating.

That at least is the intention of most Western governments. Britain’s Tory government, for instance, has decreed that the sale of petrol-driven automobiles will be prohibited by 2035. Ministers are considering bringing forward the date to 2030. There are pressures to speed up the transition from MPs in all parties—notably from a 100-strong group of moderate “One Nation” Tories. And this policy has received support from some unexpected backers, notably the company formerly known as British Petroleum, which, under its new CEO, Bernard Looney, has adopted an almost missionary stance in promoting an ambitious Green agenda.

Quick off the mark, but what about the long haul?

As Ambrose Evans-Pritchard also pointed out in a fascinating analysis of the future trends in the energy market, Looney intends to free his company “from the fossilised grip of his predecessors. Not content to declare a rhetorical Net-Zero target by 2050 -- who doesn’t these days? -- he has called for the U.K. to pull forward its ban on the sale of diesel and petrol cars to as early as 2030. “We’re up for it,” he says.

Mr. Looney is not quite the revolutionary he seems, of course. As Evans-Pritchard points out in the same article, BP is also “doubling down on liquefied natural gas” which is another fossil fuel.  And placing a large bet on the proposition that “natural gas with carbon capture” will become a far larger part of the energy market once the technology for carbon capture and storage has broken out of the laboratory. And having his research department look closely at the coming prospects for hydrogen as a fuel for everything from aircraft to home heating (at least as I read between Evans-Pritchard’s eloquent lines on that last point.)

Even with these qualifications,  the push for electric cars and the switch from oil go hand in powerful hand. Are there any reasons for caution on the side of the skeptical investor? Though most investors have not been very skeptical until now, I think there are.

To begin with, there is likely to be some consumer resistance to electric cars for the reasons that were first outlined by Thomas Edison to Henry Ford in 1894 when evaluating the latter’s petrol-fueled Quadricycle:

"Electric cars must be kept near to power stations. The storage battery is too heavy. Steam cars won't do, either, for they have to have a boiler and a fire. Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke, and no steam. You have the thing. Keep at it."

Both men changed their minds about electric cars subsequently, and Ford embarked on developing one, but in the end abandoned the attempt. That said, some of Edison’s complaints about electric cars are echoed by drivers today. There’s still debate over whether they’re too slow—with admirers saying they’re actually quicker off the mark than conventional autos and detractors responding that quicker is not faster once they’re actually off the mark.

Genius at work, 1899.

Some of these deficiencies will doubtless be remedied by what is a self-consciously innovative industry, but whatever the reasons, polls suggest that consumers are for the moment nervous. A nationwide survey by the U.K.'s automotive trade body (admittedly an interested source), quoted by the Telegraph, found that 44 percent of motorists don't think they'll be ready to run a battery vehicle in 2035. Many say they can't see themselves ever owning one. So it’s not surprising that according to the same report, industry insiders now want, as so often, better government incentives for consumers to purchase electric cars. And when the politicians are talking of bringing the ban on selling petrol- and diesel-based vehicles from 2035 to 2030, the producers are talking of pushing it forward to later than 2035.

The second basis for caution is that as another Telegraph report points out, the minerals needed for the production of car batteries--nickel, cobalt, and lithium—face a number of market obstacles. They’re scarce, difficult to mine or refine, located in countries with bad environmental records, dangerously volatile (lithium), and all in all their supply looks to be falling behind demand.

“Their growing scarcity is a problem that is weighing heavy on not just Musk, but the entire electric car industry,” writes the Telegraph. “Demand for nickel is expected to increase six-fold by 2030, and supply isn't keeping up.” When that happens, prices rise. And the price of electric cars, though becoming more competitive, is higher than other cars and so already a negative market factor.

The third consideration is that electricity doesn’t grow on trees—that is, not until they’re cut down, transported, and fed into power stations. Or as the intellectually lively former Tory MEP, Daniel Hannan, tweeted earlier this week: “I am often struck, in discussions about energy, by how many people talk of electricity as if it were a source of power rather than a medium. Your phone is probably coal-powered.”

So in order to replace disgraceful gas-guzzling, carbon-emitting conventional automobiles with vehicles powered by “clean” electricity, we have to generate much more electricity and make it available to drivers across the country via EV (or electric vehicle) charging points. That means more coal, gas, oil, or timber being fed into the power stations.

What also flows from this reality is that electric cars, however expensive in themselves, will be the cause of much larger costs in the form of a nationwide network of EV (for electric vehicle) charging points, not only as now in public places but in future in people’s homes as well.

In The Hidden Costs of Net Zero, Mike Travers, a distinguished engineer, estimates that the cost of installing EV charging points alone will be a considerable one—something on the order of £31 billion. (At present the U.K. has just five percent of the target number of public devices promised for the end of the decade.)

He goes on to estimate the impact not only of switching to electric cars but also of wider policies of decarbonizing, for instance, home heating, and concludes that the extra demand for electricity would overwhelm the existing system of electricity distribution and require massive infrastructure repair and development at a total bill of £410 billion, an average of £15,000 per household.

Even if we assume, as we must, that the second-order costs of electric vehicles alone would be much lower, these are such staggering figures that we look naturally look for alternatives to current policies, and that takes us down the route of innovation.

As Evans-Pritchard noted above, the titans are doing so. BP’s policies include both banking that carbon capture will give natural gas a longer life expectancy as a respectable energy source and, in the longer term, developing the potential of hydrogen as a versatile fuel, presumably by overcoming its dangerous volatility as tragically seen in the destruction of the Hindenberg.

The problem with innovation is that while it can be depended upon in general, it’s not a reliable solution in particular. Carbon capture is far from a sure thing. If it does ever emerge from the laboratory, however, its benefits need not be confined to natural gas. In principle at least it might make all fossil fuels clean or cleaner—gas, oil, and even coal. Given that these fuels have far lower prices than the accumulated costs of the electricity that powers the Tesla, that would revive their market appeal. The same would be even truer for a new clean fuel emerging from a safe hydrogen.

These rivals to the electric car would have looked smaller yesterday if Elon Musk had unveiled a battery that enables EVs to travel further, faster, and with shorter refueling times at a price that competes with conventional autos and perhaps with other innovation-based cars and that can plausibly claim to leap over the obstacles listed above.

Did he do so?

He said he did. He promised a new battery that would enable Tesla to market EVs at $25,000, a fifty per cent cut from the present $50,000. That would be a game-changer. But industrial history is littered with the bones of true innovators who were over-taken in the final stretch.

We’ll see.