A Wake-Up Call for Canada's Energy Sector

At the outset of the pandemic I was inclined to think that the tough economic realities of our post-prosperity world would diminish the environmentalist movement, as people increasingly recognized the importance of pro-work policies over and above green utopianism. Well, that hasn't happened, in part because the economic disaster hasn't been as catastrophic as it initially seemed it might be, and in part because massive increases in debt financed government spending -- most particularly on unemployment benefit top-ups and direct-to-taxpayer stimulus checks -- have obscured the rough shape the economy is actually in.

Consequently, environmentalist fantasies have continued unabated, with their most recent victory being Joe Biden's decision to cancel the Keystone XL pipeline project via executive order on day one of his presidency, a move which has already eliminated one thousand Canadian jobs and will shortly do the same to tens of thousands stateside. I've spent this past week hammering both Biden's decision and Canadian Prime Minister Justin Trudeau's supine indolence in standing against it on behalf of Canadian workers.

Along those same lines, Dan McTeague, president of Canadians for Affordable Energy, has written a sobering blogpost which really is Must Read. McTeague, a longtime Canadian M. P. (he was elected as a Liberal, but don't hold that against him), knows more than anyone about Canada's resource industry and the effects burdensome regulations on it has on regular people.

After pointing out that Keystone XL was "one of the most sophisticated, innovative, job-creating, economy-stimulating, aboriginal-engaging, infrastructure projects in North America," McTeague rakes the Trudeau government over the coals for its totally inadequate management of the issue:

The response from Canada’s Environment and Climate Change Minister, Jonathan Wilkinson, to Biden’s decision was appalling. Minister Wilkinson said that he wasn’t going to dwell on this particular decision about a pipeline, but instead would focus on the new climate ally we have. Incredibly, he took the view that the new U.S. administration “offered a welcome dose of climate optimism.”

Climate optimism? Think about this, fellow Canadians. Climate optimism for Jonathan Wilkinson means having someone in charge of the biggest economy in the world ranting about a “climate crisis” just like Justin Trudeau does, while ignoring the real crisis. And what is the real crisis? It is the disaster of ideologically-driven environmental policy that raises the cost of living and kills jobs.

He goes on to warn Canada's oil and gas companies that they had better wake up.

Your customers are watching you trip over yourselves to show your green credentials and as you boast about your commitment to meet globally-imposed emission reduction targets such as the Paris Accord’s 30% reductions by 2030 target, or Canada’s “net-zero emissions by 2050” commitment.

Instead, those companies have to accept the fact that "the Trudeau government and their friends simply do not want your sector to exist," adding "Stop pretending that you do not know this!"

So, assuming that Canada's oil and gas industry takes McTeague's advice, what should they do in practice? He has several concrete proposals, including doing a better job of promoting the good work they do, both with the public and with politicians; and refusing to adopt the environmentalist language of the left, which has the effect of conceding their points (which are wrong).

Most important, he advises them to stand up for their customers, and "be a voice for their interests instead of the interests of environmental activists, their government friends, and the investment community sharks who feast off the green largesse of the taxpayer."

This should be a wake up call to all Canadians, McTeague says, demonstrating as it does "that Canada doesn’t matter to the U.S., and Justin Trudeau and his minions like Jonathan Wilkinson aren’t capable of changing that current reality." Canadians should respond accordingly.

Net Zero: Cost, Costs, and More Costs

Getting accurate estimates of the costs of going "Net-Zero" from the governments and global institutions that adopted the policy has been a difficult task from the first. That would have been so even if they had been honest and transparent in their accounting. Moving economies from dependence on cheap reliable fossil fuels to reliance on electrification fueled by renewables (i.e. wind and sun) would require massive expenditures on almost every aspect of life.

It also has the potential to be very alarming. If voters learn that the policy will result in higher fuel prices, higher taxes, and the need for them to spend large capital sums to transform their household economies by, for instance, replacing gas-fueled heaters and petrol-driven cars with electricity-fueled ground storage heaters and EVs, they may take fright and decide that the game isn't worth the dim flourescent bulb. Managing voters' opinions has therefore become an important element in the policy. It has to be "sold."

As it happens, the United Kingdom -- which has reduced carbon emissions more substantially than any other country -- has also put together the strongest political coalition in support of the Net-Zero policy. All the political parties represented in Parliament back it. So, overwhelmingly, does the media. So do all the major cultural institutions such as the BBC. Even bodies apparently remote from politics such as the National Trust (which looks after Britain's stately homes) are keen to be seen as relevant to the cause. When the Climate Change Act setting out legally-binding targets for carbon emissions reduction was passed, only five MPs voted against it.

That legislation created a climate change committee, rooted in parliament but independent of the government, and gave it the task of holding ministers to account over whether they have met the carbon reduction targets written into law. Its sixth annual report was issued at the end of last year. And it offers a very useful glimpse into the lifestyle changes and probable costs of the Net-Zero policy which most governments and agencies have been reluctant to publish or discuss in detail.

No, ministers

That's understandable. When wind and sun still contribute only a measly 1.5 percent of global energy consumption, as Matt Ridley pointed out recently, it's hard to estimate the costs of expanding that share to the 94 percent now contributed by fossil fuels of one kind or another. But the costs won't be small. And there will be a great many of them spreading into every area of life since the mere act of living consumes energy and is sensitive to its cost.

To prevent this article becoming an encyclopaedia, I'll examine only three kinds of cost: lifestyle costs, economic costs, and political costs. I have to admit that the committee's report is relatively honest about the lifestyle consequences of net-zero, though it wraps up its admissions in honeyed phrases. Here, for instance, is its cheerful summary of how "we" will reduce demand for carbon-intensive activities:

The U.K. wastes fewer resources and reduces its reliance on high-carbon goods . . . Diets change, reducing our consumption of high-carbon meat and dairy products by 20 percent by 2030, with further reductions in later years. There are fewer car miles travelled and demand for flights grows more slowly. These changes bring striking positive benefits for health and well-being.

And here's my grouchy response to it:

But what if our diets don’t change voluntarily? Or consumers don’t actually like the new low carbon foods predicted here? Or they want to use their cars and fly on vacation more often than the planners predict? Those "striking positive benefits for health and well-being" sound alarmingly like the medical authoritarianism currently running our lives in the fight against Covid-19. Will doctors and other planners change their presciptions if we don't like the medicine? Or will they ration the foods, car trips, and vacations that the consumers (who are also voters) are determined to enjoy?

My sarcasm notwithstanding, these recommended (a.k.a. imposed) lifestyle choices imply heavy economic costs as industry and agriculture change what they now produce in response to market demand to quite different goods and activities prescribed by ministers and civil servants. The U.K.'s decision to prohibit the sale of petrol-driven automobiles from 2030 in order to require a switch to electric vehicles will force both the taxpayer to finance the electrification of the entire country and the driver to buy a much more expensive car.

When we see the scale of this economic and industrial transformation, it's plain that it's a very expensive project indeed. As I pointed out last month, even the committee chairman concedes that if it is to make us richer rather than poorer, then "[l]ow carbon investment must scale up to £50 billion each year to deliver Net-Zero." Not to worry, however, because he also assures us that "our central estimate for costs is now below 1 percent of GDP throughout the next 30 years."

But these estimates were  immediately challenged by Dr. John Constable, energy editor of the Global Warming Policy Foundation, as "entirely divorced from reality":

Some of them are out by several hundred percent, meaning that the claim that we can decarbonise painlessly doesn’t stand up to even cursory scrutiny. Offshore wind is twice as expensive to build as the CCC assumes, and two to four times more expensive to operate. The resulting electricity will be many, many times more expensive than they claim, making the use of heat pumps and Electric Vehicles utterly unaffordable.

So the estimate that net-zero costs will be less than 1 percent of GDP annually for the next thirty years is a fanciful one. Almost all other estimates are higher, some several-fold. Net-zero is a plan fueled not by fossil deposits but by optimism.

And that takes us to the third cost: political costs. These are obvious. Everyone has accepted at the back of their minds that there'll be a price to be paid by governments in power when the higher taxes and energy prices fall due. But that won't be tomorrow or, with luck, before the next election. So MPs never seem to have done the calculation of how heavy the political costs might be -- until last week when the Onward think-tank in London produced an analysis of the political impact of net-zero and discovered that it would be formidably high.

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In particular the carbon-intensive industries most reliant on fossil fuels are concentrated in the Midlands and North of England -- the very regions where Boris Johnson broke Labour's "Red Wall" and won a slew of traditionally Labour sets to swell his parliamentary majority to eighty seats. Johnson has since acknowledged that he had only "borrowed" those voters and would have to justify their trust in him by leveling up their economic prosperity to that of Britain's booming South-East.

What the Onward report suggests is that Johnson's green industrial revolution risks pushing the poorer regions further down the prosperity index rather than levelling them up. Boris Johnson's green agenda is completely at variance with its post-Brexit policy of an infrastructure build-up to as well as being economically regressive

Consider, now, the report's analysis of how this will impact the seats won in 2019 as summarized by the Telegraph:

Some of the biggest concentrations of polluting jobs are in Conservative-won seats West Bromwich West, with 59pc, as well as Hyndburn in Lancashire and Stoke-on-Trent North with 55pc each, according to the Road to Zero report.

The East Midlands has the highest share of jobs in high-emitting industries at 42pc compared to London, the lowest, with 23pc.

The research suggests that up to 10m jobs could need to be replaced, or see workers retrained, as the UK aims to achieve “net zero” carbon emissions by 2050.

What makes this report so interesting is that Onward, a progressive Tory think tank, and the GWPF, a Thatcherite one, now agree on at least one aspect of the net zero policy: It's a political suicide note.

Diary of an Acclimatised Beauty: Celebrating

Happy New Year from Lyford Cay! I can’t imagine being anywhere else but here—away from border closures and shuttered shops. We are proving that there is life during Covid. Common sense would tell us that commercial flights and large resorts are a recipe for shutdown. Here… we wisely have none of that.

After big fireworks last night we ended up dancing on the beach, but it was mostly the guests of residents who don’t know the way of things here and stayed out late. That’s the thing with the non-residents… even if they weren’t frightfully easy to spot, one can always sense them nervously tugging at their pockets for vibrating cell phones that are a big no-no in this club and so many others that they obviously haven’t frequented.

The residents are of course mostly all lovely people, who’ve made their mark and can now focus on the things that matter. Speaking of just that sort, I had so wanted to talk to philanthropist Louis Bacon about all things environment. We’ve a strong contact in that one of my clients -- well, my former client -- is a big to-do in the Audubon Society. And Louis has received the actual Audubon Medal.

There's life after Covid.

I haven’t had the chance to talk to him owing to the fact that my hosts are on the Nygard side -- that’s Peter Nygard, who shares a property border with Mr Bacon and for whom a once-peaceful adjacency eventually led to duelling feuds and some sort of federal racketeering suit in Manhattan. I had hoped to at least bump into his wife but she’s a second wife and… well you know how those things go.

I've heard whispers that he's not really as committed to the environment as he seems to be,  and he did sue Wikimedia for publishing some bits he considered libelous, and there was even some suggestion of foul play when his estate manager was found floating naked in a hot tub, but I refuse to believe that someone who gives millions of dollars and thousands of acres for easements and wildlife could be in it for the wrong reasons.

I have to assume such a beef was bound to happen as their houses (the Bacons and the Nygards) are on the beachfront where the homes get quite close to each other, and in that area, one man’s dining room is only 200 feet from the other’s revolving acrylic discotheque.

As for Mr Nygard, my hosts maintain there is mostly nothing to the FBI raid and arrest at his fashion empire on charges of sex trafficking and racketeering. Here in Lyford he’s mostly disliked for his efforts to dredge the sea floor around his estate that eventually caused his cay to be seized by the Bahamian government. And then something caused a puddle that caused a feud between neighbours and here we are. As I’ve heard daddy say, one man’s cocktail party is another man’s sleepless night. Whatever the ruckus—he was awarded the Queen Elizabeth Diamond Jubilee Medal.

Happy New Year to you too, Ma'am.

Which got me to thinking… I should just go and chat up Her Majesty’s newly remarried (and newly gay) cousin Lord Ivar Mountbatten. He and daddy are quite chummy, and I met him with his daughter Ella at the Royal Windsor Horse Show. Surely he’ll make the introductions—landowners tend to be big environmentalists.

This year, rather than silly resolutions I’ll be making significant intentions that support, empower, and manifest a joy-filled existence. I think it’s so important.

I made my way down to the New Year’s brunch in the pink tented dining pavilion. I was seated with some Austrians and I got excited that they might know Mr Bacon. Yes I know he’s an American but he obtained Austrian citizenship due to a special treatment for celebrities who have provided notable achievements for Austria. No one seems to know what the notable achievement was, but I hoped they were his guests. Sadly they were not, and didn’t know the least thing about him despite his celeb-status. 

Once they heard I lived in Los Angeles they wanted to talk election stuffs and rant about Trump. I wasn’t sure what he’d done to them specifically but they seemed in favour of the Paris Climate Agreement. Well, so am I! Very much so, but I wasn’t stupid enough to think anyone could slip it past the Americans and hope they wouldn’t realise they had to comply more and pay more than anyone else.

I was quiet for a bit. Where were the Austrians who stood on principle so very many times? Not to mention they were the first to say there was “no path back” when one of their stupid teens ran off to be a brood mare for ISIS. This was a puzzlement. And so I began:

“Is it Americans you dislike? Or do you simply share an all-consuming love of our planet?” I asked in the queen’s English. What followed was such nonsense I wondered how they could claim to stand for anything. I changed the subject so deftly I’d have made even Judith (mummy) proud. I just don’t get the blanket hatred for America thing… all things considered-they really are good caretakers of our earth.

Top this, Europe.

I asked them where they stood on Austria’s drastic move away from coal? They had no informed opinion. On their very own MAGA (Make Austria Great Again) rockstar Sebastian Kurz? Didn’t know. Nygard vs Bacon? (OK that was totally unfair but these two were getting on my nerves). But they somehow knew they were right to hate America for pulling out of the Agreement and didn’t have to be the informed sort of haters.

I lied about how much I’d enjoyed talking to them and excused myself. These two were such boors and were hardly going to help me manifest my higher purpose to save the planet. And no sooner had I focused on my destiny than I found a handsome hedge fund billionaire to chat up. Happy New Year Everyone!

Toyota Chief on Electric Cars: Slow Down!

The Observer reports on some very striking comments by Toyota Motor Corporation president Akio Toyoda, on the topic of Electric Vehicles. EVs are hot right now, with the automotive industry investing heavily in them, and governments throughout the world (prominently, as The Observer mentions, those of Great Britain and California) looking to aid their development by banning the sale of gasoline and diesel engines in the not-too-distant future.

But Mr. Toyoda is not convinced that they are the answer. At a recent press conference, he pointed out a few problems with the projected shift to EVs. First, he claimed that “the current business model of the car industry is going to collapse" if the industry shifts to EVs too quickly. No word on whether he thinks that the oft-discussed 10-15 year timeline put forward by activists in and out of government falls into that category, but it wouldn't be surprising if that is exactly what he had in mind.

Next, he pointed out that "Japan [for one] would run out of electricity in the summer if all cars were running on electric power." There just isn't enough electricity to go around, especially with battery technology being what it is. He estimated that "the infrastructure needed to support a 100 percent EV fleet would cost Japan between 14 trillion and 37 trillion yen ($135 billion to $358 billion)," a hefty percentage of GDP for a famously stagnant economy like Japan's.

Worth noting that it is a lot cheaper to generate the electricity a given vehicle needs on site -- that is, within the vehicle itself, as a gasoline powered combustion engine does -- than producing it elsewhere and transporting to the car.

And, following up on that point, he called attention to the fact that "most of the country’s electricity is generated by burning coal and natural gas, anyway," so the stated goal of leaving fossil fuels behind by shifting to EVs isn't going to happen. In his words:

The more EVs we build, the worse carbon dioxide gets… When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?

Unfortunately the answer to that question is probably "No," both for the politicians and the propagandists in the media.

Meditating Upon the Black Stuff

Call me a cockeyed optimist. I’m not convinced that the end is nigh. True a giant asteroid might come hurtling our way. However, I still regard dire warnings of the imminent end of times as the stuff of outlandish cults. Or, more entertainingly, humourists.

I might be missing something. Alexandria Ocasio-Cortez, David Attenborough, Greta Thunberg, Prince Charles, and too many other notables to mention, think differently. They’re sure we are on our last legs; with only, what is it now, something like nine or ten years left to save the planet? Don’t hold me to this number. I get confused when threatened with extinction.

If those who do think the end is nigh were asked, I feel confident they would nominate coal as the biggest culprit. It spews out CO2 like nobody’s business. According to the U.S. Energy Department, per unit of energy produced, coal emits around twice as much CO2 as does natural gas. And, to boot, it has been the predominate source of power for industry and households for a very considerable time.

According to the Resources and Energy Quarterly published by the Australian government, thermal coal still accounted for 45 percent of global electricity production in 2018. Hence, coal is still doing its darndest to queer the planet and, shiver in trepidation, there’s 133 years of proven reserves of the black stuff still to dig up. But it’s not all bad.

To coal or not to coal? That is the question.

It’s good for Australia. Thermal coal is the fifth biggest exporter earner behind (in order) iron ore, metallurgical coal (there’s that coal again), natural gas and gold. The prime minister is torn. Electorates in coal country in Queensland gave him victory in May 2019. Careless of dire predictions of doom, they selfishly voted their wallets ahead of the planet. Yet, from royal progeny to billionaires to zealots to inner-city elites to banks to boardrooms to the media, the anti-coal clamour is deafening. Politicians wilt.

In 2017, to the chagrin of the great and good, Scott Morrison -- before he became prime minister -- theatrically brought a lump of coal into parliament to make a powerful case for coal. And now, only a few short years later, is contemplating zero net emissions “as quickly as possible.” Trying to mix coal and zero emissions is a species of double-think. He’s a politician, he won’t notice.

Coal is enigmatic. Cheap energy to some, demonic to others; and with a future which is hard to pin down. Here is a trick question. How many coal-power plants are under construction? Answer: it depends upon which newspapers or fact-check websites you read or TV channels you watch. Greens and their allies want to convince everyone that coal is uneconomic, and on the way out. Coal lobbies present a bullish outlook for coal. Different interests, different schticks, different facts.

That said, whatever source of information takes your fancy, a large number of new coal-power plants are on the way. This is simply because coal provides cheap and reliable power and the Chinese and Indians, e.g., aren’t stupid. No need to guess who is.

The Chinese know how to make electricity.

When I say new coal-power plants are on the way; not so much in Australia, where they are on the way out. An irony you might think in a country with rich coal reserves, which for so long underpinned the competitive advantage of Australian manufacturing. Not so to those who believe Australia has to do its bit by closing down all of its installed coal-power of around 23 GW capacity in order, wait for it, to offset the up to 250 GW or so (depending on what you read) of new capacity China is intent on building. Do the sum.

Here is something else: on December 2, the International Union for Conservation of Nature (IUCN) claimed that coal dust blowing from coal-loading ports 100 to 1,000 kilometres away threatened, the perpetually threatened, Great Barrier Reef. Peter Ridd, cancelled by James Cook University In Queensland for daring to suggest that the Reef was not under threat, described the claim as “ridiculous.” Ridiculous? How about “crackpot.”

On much surer footing than the tendentious apparatchiks at the IUCN, Michael Shellenberger (Apocalypse Never) goes into bat for coal. Coal, he says, with twice the energy of timber, saved the forests, while fuelling the industrial revolution. But for coal there might have been few trees left. Excluding those conservationists who bizarrely favour making them into biomass, everyone likes trees. Ergo, coal’s role in preserving them must be good.

Then again coal must be bad. The Economist (3 December) told us that, “unlike natural gas and oil, it is concentrated carbon, and thus [in America and Europe] it accounts for a staggering 39% of annual emissions of carbon dioxide from fossil fuels.”

That might be true, who knows, but this isn’t: “Solar farms and onshore wind are now the cheapest source of new electricity for at least two-thirds of the world’s population.” Here the poor sods at the lower end of the prosperity scale in Asia and Africa are invited to “consign coal to museums and the history books.” “Much work lies ahead,” avers editor-in-chief Zanny Minton Beddoes.

I just wonder how much work has to be done to persuade developing regions of the world to use the cheapest source of electricity? They must all be dim-witted, if Ms Beddoes is to be taken at her word. Of course, Ms Beddoes is spouting agitprop. To be kind, she can do no other as a dedicated follower of the party line.

The case against coal is not based on economics. It is the cheapest source of 24x7 power. The case stands or falls on the danger CO2 presents to the planet.

If the alarmist predictions are wrong then the trillions of dollars spent on wind and solar farms has been the gravest waste of resources in the history of mankind. As the size of the effect of man-made CO2 on global warming is matter of conjecture, a contested hypothesis at best, it is inexplicable that is has taken such an iron grip on the minds of so many in positions of influence and power.

The overwrought reaction to Covid is similarly puzzling. Perhaps when religion wanes, collective belief is more susceptible to superstition and mass suggestion. If that is so; what, I wonder, will be the next hobgoblin to scare us into submission?

The Way We'll Live, Then

In the last week Europe’s political leaders in and out of the European Union have been engaged in the over-production of promises to transform the continent into a Net-Zero carbon-free green utopia. A few examples:

  1. Even before the week began, the British prime minister, Boris Johnson, had pledged that the U.K would reduce its climate emissions by 68 per cent from their 1998 figure by 2030—the largest single Net Zero promise of any major economic power.
  2. Soon afterwards but still early in this week, Britain’s official Climate Change Commission produced its sixth report giving its statutory advice to the government on how to reach its Net Zero target beyond That advice was bold: “Our recommended pathway requires a 78% reduction in UK territorial emissions between 1990 and 2035. In effect, bringing forward the UK’s previous 80% target by nearly 15 years.”
  3. Not to be outdone, the heads of EU governments, meeting as the EU Council this weekend, announced that they were adopting the emissions reduction target of at least 55 per cent by the year 2030. It had originally been a 40 per cent target. But the European Parliament would prefer an even more ambitious target reduction of 60 per cent.

And in the current atmosphere of an auction on speed, who would bet against the Parliament getting its way?

For children and other living things...

Now, going carbon free will be extremely expensive both for governments (i.e., taxpayers like you) and for individuals and households. Just how expensive we’ll get to in a moment, though with some difficulty: governments have been very cagy about spelling out its costs clearly. But the financial costs may not give as accurate a picture of the scale of these promises—think how hard it is to grasp what a billion dollars is, let alone a trillion—than a look at what they would mean in visible and practical terms.

On that Climate Change Commission report is extremely illuminating because it breaks down the main effects of going Net Zero under four headings with examples of how we’ll be living under each one. Again, here are a few (with some editorializing in italics by me):

  1. Take up of low-carbon solutions. People and businesses will choose to adopt low-carbon solutions, as high carbon options are progressively phased out. By the early 2030s all new cars and vans and all boiler replacements in homes and other buildings are low-carbon – largely electric. By 2040 all new trucks are low-carbon. British industry shifts to using renewable electricity or hydrogen instead of fossil fuels, or captures its carbon emissions, storing them safely under the sea. [Choose? We’ll be choosing these changes because the government will prohibit the sale of the cars, vans, and boilers we use now. It’s what we used to call a Hobson’s Choice. And we won’t like all of it because—to take one example—the low-carbon heaters don’t keep people as warm as their current oil and gas-based ones. And what then?]
  2. Expansion of low-carbon energy supplies. U.K. electricity production is zero carbon by 2035. Offshore wind becomes the backbone of the whole U.K. energy system . . . New uses for this clean electricity are found in transport, heating and industry, pushing up electricity demand by a half over the next 15 years, and doubling or even trebling demand by 2050. Low-carbon hydrogen scales-up to be almost as large, in 2050, as electricity production is today. Hydrogen is used as a shipping and transport fuel and in industry, and potentially in some buildings, as a replacement for natural gas for heating. [Let me be sure I get this thing straight: we intend to electrify the entire country to heat people's homes, fuel their cars, provide power to industry, and do a hundred other things while at the same time making our electricity supply dependent on unreliable renewables, mainly wind (of which perhaps Boris Johnson himself will supply a large percentage.) But I’m being unfair—we’ll also rely on hydrogen (not yet available in sufficient quantities unless we make it from forbidden fossil fuels) and carbon capture (still to be developed.)]
  3. Reducing demand for carbon-intensive activities. The U.K .wastes fewer resources and reduces its reliance on high-carbon goods. Buildings lose less energy through a national programme to improve insulation across the country. Diets change, reducing our consumption of high-carbon meat and dairy products by 20 percent by 2030, with further reductions in later years. There are fewer car miles travelled and demand for flights grows more slowly. These changes bring striking positive benefits for health and well-being. [That all sounds very jolly? But what if our diets don’t change voluntarily? Or consumers don’t actually like the new low carbon foods predicted here? Or they want to use their cars and fly on vacation more often than the planners predict? Will the planners change the plan? Or ration the foods, car trips, and vacations that the consumers (who are also voters) want to enjoy?]
  4. Land and greenhouse gas removals. There is a transformation in agriculture and the use of farmland while maintaining the same levels of food per head produced today. By 2035, 460,000 hectares of new mixed woodland are planted to remove CO2 and deliver wider environmental benefits. Some 260,000 hectares of farmland shifts to producing energy crops. Woodland rises from 13 percentof U.K. land today to 15percent by 2035 and 18percent by 2050. Peatlands are widely restored and managed sustainably. [Producing energy crops? Ah, they mean like the U.S. cellulosic ethanol program that according to an article in the Scientific American  was supposed to produce energy from wood and plant wastes, reducing greenhouse gases substantially, but that by 2017, after development over three administrations, produced not the predicted 16 billion gallons but ten million gallons or, as one energy expert put it, “enough fuel to satisfy approximately forty minutes of U.S. fuel consumption last year.” You know, there are times when the damn plane just can’t take off from the drawing board.]

After looking at this list of the industrial,, economic and personal lifestyle changes needed to bring about Net Zero in Britain, it seems inevitable that together they must amount to a massive sum. But the report’s chairman sums up the costs in a single breezy paragraph:

Some of our most important work is on the costs of the transition. Low carbon investment must scale up to £50 billion each year to deliver Net Zero, supporting the UK’s economic recovery over the next decade. This investment generates substantial fuel savings, as cleaner, more-efficient technologies replace their fossil fuelled predecessors. In time, these savings cancel out the investment costs entirely – a vital new insight that means our central estimate for costs is now below 1% of GDP throughout the next 30 years.

How credible is that? Let me point out some warning signs in it. The first is that to think the argument that “in time these savings (from going from fossil fuels to cleaner technologies) cancel out the investment costs entirely” is a “vital new idea” is dotty on at least three counts: It’s the rationale for almost all investments. What’s vital about it is the qualification “in time” which for investments of this scale might be centuries. And the timescale might even be never if, as seems highly probable, the price of fossil fuels remains stubbornly lower than the price of technologies still to be invented.

And that risk is illustrated be the following comparison: the sum of 50 billion pounds cited as the annual cost of making Britain and the British virtuously Green is almost exactly the same figure as the 50 billion Euros given by the E.U. heads of government to Poland this week as compensation for killing its coal industry. The two programs are so different from each other in scale and risk that they could hardly cost anything like the same budgetary figure.

Forward into the glorious red, er, Green future, comrades.

Even if the figures added up, however, the Climate Change Commission’s program would still face the larger political problem that its proposals depend on the support or at least acquiescence of the great majority of their fellow citizens in massive potentially unwelcome changes in how they live, work, travel, eat, and enjoy themselves not for a short period but forever. When we see the growing discontent with the privations and regulations that governments have temporarily imposed for protection against a pandemic, it doesn’t seem likely that whole populations will agree to live out their dystopian fantasies.

I wondered how governments would respond to that? Then I remembered something:

“Communism is Soviet Power + Electrification of the Whole Country.” Vladimir Lenin, Report on the Work of the Council of People’s Commissars. December 22, 1920

Goodness gracious. That report was issued exactly one hundred years ago. Next week.

Diary of an Acclimatised Beauty: Resetting

Paradise at last! I couldn’t take one more day in St John’s Wood as London goes into yet another lockdown and daddy grumbles about Boris. One day leading to another… and all of them leading nowhere.

But I am alive again in Lyford Cay, having arrived late last night—and mask free! I got up rather early today, put on lipstick and perfume, availed myself of a golf cart and got myself down to the club. I was so excited you’d have thought I was sneaking into Buckingham Palace. I wasn’t hungry in the least but wanted to feel part of a living breathing world. Surely my hosts here wouldn’t miss me — I’d  only just met them over Thanksgiving at Annabel’s anyway.

In minutes I was drawn into familiar noises… silverware, and ice being poured from a pitcher… oh it was just like the movies! Or every single day prior to coronavirus.

Now this is what I call green.

Lyford (the former Cay) was hopping! And nearly everyone dressed in white which could only mean they have an all-white rule for tennis or croquet or maybe everything. The substantially older women—the ones who delineated between jewellery and breakfast jewellery, were none of them in white, so it must indeed be a sporting requirement.

I looked around the room like a tourist might do. I felt as though I were looking through a window only because I hadn’t seen humans with coiffed hair or gold sandals or anything even remotely resembling civilisation for so long. I signalled the waiter for more tea, more berries, a paper if possible? Just more of everything because I wanted to bask in the glow of what was officially called… breakfast.

There were no papers but the waiter provided me with a card that allowed me to read several publications on my phone. “Even better!” I squealed. Lyford was green! Peering over my phone so that I could secretly scan the room, I settled on a conversation of a group of businessmen across th way…”the Great Reset”. Whatever could that be?

I googled on my phone to very little success… just links to a conference in Davos with futuristic looking businessmen talking intently. Was it staged? They were yellowish and pocket-sized. I googled and found it’s meant to be a global green push—post Covid. Things really were looking up. But I was very confused about seeing Prince Charles and Yo-Yo Ma in the promo and I was a little iffy on “a brighter, better and more sustainable future" from the ashes of Covid-19.

I texted daddy to ask him about the great reset and he texted back: “A lie.”

Really? A lie? I texted back, “What about financing sustainable recovery?

His response, “A lie.”

I started another text but before I could even finish he texted back -- 

“Also a lie." Followed by, “I can keep this up all day.”

As I made my way to the pool  I got another text from him: “And don’t bother your nice hosts about this unless you are prepared to return via commercial flight. Mummy and I miss you. Take pictures.”

What I know is there is no stopping him when he’s in one of these moods. I know deep down inside he is committed to our planet but no one is willing to do the heavy lifting. I got out my laptop and decided I’d write about this very important opportunity. This may be the biggest pro environmental initiative of my lifetime.

After sketching out my outline, I took a short swim and returned to my notes. Somehow my arguments weren’t so clear. I called father for help. “Hi, so…  I’m a bit wobbly on why the presentation features people like Meghan Markle instead of…”

“An economist with credibility?" he replied. "Because this is not an economic plan, it is just a lie, disguised as an economic plan, disguised as a way to save the planet. But it’s also about demilitarisation, and, independent media… oh and saving the arts. Shall we also throw in the whales?”

“Please just go with me for a minute… the great reset will ensure that every recovery stimulus from now on must include green conditions. To my mind this can’t be bad.”

“But specifically what?” He asked. Green stimulus money… to be spent on what? Tearing down infrastructure and rebuilding it to be more carbon neutral? Poof- our house in an adobe."

“But what about, you know, infrastructure… and trains?”

“You mean a tax! You want to tax everyone to build a train, even if everyone doesn’t ride on this train because it is better for the planet, yes?”

“Yes, but it is better.” I insisted.

“Perhaps but we are talking about things in places where they don’t exist -- take your new hometown. A train in Los Angeles would be prohibitively expensive, and would require a huge tax increase, so really we are talking about a tax.”

“Well, Tesla managed with private money.”

“Tesla sells carbon points, to other polluters, and makes a profit from it, so what have you achieved? It’s a shell game, darling. Listen, you know I’m all for environmentally ethical rules but that is not the role of business, the singular motivation of business is to make a profit, and profits make for better economies, better economies are better caretakers of the land-without exception.”

“And their promise of one hundred new carbon-neutral cities?” I continued.

“Find me the carbon-neutral city that you both want to live in and which respects the environment.”

The carbon-neutral city of the future!

He had me there. And I imagined my life with no luxury, no air travel, no country house, and sharing of all IP. This wasn’t going to work. I’m not giving up on the planet but I’m not giving up thousands of years of progress to these people whose main accomplishment, as far as I can tell… is to hold forums. Something to ponder tomorrow after my morning swim.

Thanks Again, Fracking!

In a recent article in the Toronto Sun, Lorrie Goldstein comments on a surprising fact: that Justin Trudeau, the dream political leader of the environmental lobby, is going to have to concede that Canada has missed the emissions reduction target it agreed to in 2009, while America -- after four years under Donald J. Trump -- will actually exceed that target. Says Goldstein:

This despite the fact Trump, unlike Trudeau, never imposed a national carbon tax on the U.S. Nor has any American president done so. Also, despite the fact Trump, unlike Trudeau, announced he was withdrawing from the 2015 Paris climate agreement in 2017, saying it was contrary to the economic interests of the U.S.

The 2009 targets, negotiated by the prime minister and the president's respective predecessors as part of the Copenhagen Accord, informally committed both nations to reduce emissions to 17 percent below 2005 levels by 2020. While America's emissions projections for 2020 are about 20 percent below 2005 levels, Canada's projections are down only 0.14 percent. For Canada to meet its commitments for 2020, Goldstein points out, "we would have to cut our current emissions by 123 million tonnes — the equivalent of the annual emissions from our entire agriculture sector and most of our electricity sector — in less than a month."

How could this be? Well, part of the story of America's success (if you could call it that) is the government imposed Covid-19 lockdowns. Goldstein mentions that U. S. emissions for 2020 are down roughly 10 percent from where they otherwise would have been without the lockdowns, which sounds great until you consider the economic devastation they also wrought. The cure in this case was far worse than the disease.

Of course, Canada also locked down and had an equivalent emissions drop. Which is to say, the pandemic doesn't even begin to tell the full story.

What actually happened is that, while the Trudeau government dove deep into virtue signaling environmentalist rhetoric, the U. S. allowed "market forces, innovation and [smart] energy policy" to do their work. Among other things, the U. S. leaned in hard to hydraulic fracturing, allowing us to gradually transition away from our reliance on coal towards natural gas, which "burns at half the carbon dioxide intensity of coal."

Meanwhile in Canada, Goldstein points out, "several provinces have banned fracking," bowing to anti-fracking sentiment in the green movement, while the Trudeau government has imposed a national carbon tax (and doubled it mid-way through a global pandemic), and put real political capital into transitioning away from oil and natural gas, which accounts for roughly 10 percent of the nation's GDP.

It'd be nice if more environmentalists started recognizing (as Michael Schellenberger has) that their preferred methods of addressing these issues are mostly hokum and started advocating for policies which actually work. Both don't hold your breath. Most of them are just hypocrites who mindlessly condemn President Trump as a Captain Planet-style villain, while lauding all of the Trudeaupian fluff.

Is It Me That's Mad, or the World's Leaders?

Yes, I know that the headline should really read “Is it I who am mad—or the world’s leaders?” but the dubious grammatical form used above is better suited to the populist sentiments of this article. And though populism and populist are words routinely used to mean “insane,” “dangerous,” or worse “problematic,” some kinds of populism are in fact social truths that experience has shown to be accurate and valuable, i.e.,  commonsense.

That applies especially to truths about spending, saving, investment, and borrowing. Copybook maxims on that score go from Thomas Jefferson’s “Never spend your money before you have it,” to Shakespeare’s “Neither a borrower nor a lender be/For loan oft loses both itself and friend/And borrowing dulls the edge of husbandry.”

With that prudent advice ringing in our minds, let’s look at how prudently our political masters are handling our collective expenditures, revenues, borrowings, and investments. The first thing to notice (though few do) is just how massive the sums involved are.

Estimates differ but in the U.S., apparent president-elect Joe Biden is proposing a budget of $5.4 trillion equal to 24 percent of America’s GDP. He’s also proposing a smaller (but still massive) tax increase that would leave a gap of $2 trillion dollars for the U.S. Treasury to borrow. But cheer up—it’s bipartisan. President Trump’s budget estimates for 2021 weren’t much lower at 4.8 trillion equal to 21 percent of GDP and a deficit of $966 billion.

Now, expenditures to cope with the pandemic and lockdowns are emergency spending that almost everyone agrees is justified or, to be more precise, inevitable. That’s why the Trump budget rose to an annualized rate of 30 percent of GDP at the height of the pandemic this year. But a cool $700 billion is accounted for by Biden’s “Build Back Better” agenda that would increase spending on infrastructure, the environment, and the Green New Deal. That's equal to one-eighth of Biden's projected total spending for 2021 and one-third of the likely deficit.

The picture is the same in Britain where Boris Johnson’s government, as well as spending vast sums to ameliorate the pandemic and concomitant recession, is embarking on a green industrial revolution and unrelated (even contradictory) infrastructure spending. There too the Labour, Lib-Dem, and Green opposition parties attack these plans as too little, too late. In both countries the general attitude has been Spend! Spend! Spend!

Well, it is -- right?

After all, everyone knows that Tomorrow Is Another Day!

Scarlett O’Hara, Gone With The Wind’s heroine, may be out of fashion in racial politics, but financially she’s never been so enchanting to so many powerful people.

That may be because we simply can’t get our minds or even our imaginations around the figures when they rise from million to billions to trillions. To help us do that, here’s David Schwartz, the science writer and a brilliant popularizer, explaining them to NPR listeners:

The difference between a million, a billion and a trillion is like the difference between eleven and a half days, 32 years and 32,000 years.” Do the sums: a $2 trillion dollar deficit the equivalent of 64,000 years in time measurements.

And an $5.4 trillion dollar total annual budget... or a $23 trillion accumulated national debt... is equal to... but I see the audience’s eyes glazing over... No -- they’re crying.

Now, it’s certainly true that borrowing is economically justifiable and potentially profitable if it’s likely to produce a stream of income or equivalent benefit that over time more than equals the cost of the capital borrowed. A home mortgage is a humble example.

It’s also the case that government investment can be economically worthwhile if it creates an economic environment that hikes productivity, spurs general economic growth, and thereby increases tax revenue for the Treasury. Some state investment meets those criteria, but by no means all. So we should apply certain tests to proposals such as the green industrial revolution and the Green New Deal?

The test that governments seem to like most at the moment is the question:

Can we borrow at a low interest rate?

It’s a fair question but it should be a secondary one. A low interest rate means it’s cheaper to borrow, but that’s a modest benefit at the best of times and no benefit at all if the investment produces less wealth than the cost of borrowing. And if interest rates rise as they tend to in periods of inflation produced by government over-spending, then the modest benefit becomes a horrendous cost, especially when your accumulated borrowing has reached $23 trillion. So the next—or rather, prior—question becomes:

Can we make sure the investment pays off?

To which the honest answer is, No. As the distinguished political theorist, James Burnham, author of The Managerial Revolution, used to say in his rules on life: You can’t invest in retrospect. Some of the visionary Green schemes proposed by Joe and Boris, such as electric airplanes and cheap hydrogen cars, can’t be  invented simply because we establish a state fund to invent them, any more than the flying cars and personal jetpacks of Matt Ridley’s youthful imagination exist today because we wanted them, as he noted in a column on the ten big things wrong with the green industrial revolution.

I quoted the column last week, but it can’t be quoted too often because to judge from government policy no one in Whitehall or the Beltway has read it. It should be especially worrying that many of the schemes for transitioning from fossil fuels to “renewables” all cost more than the cheap fuels they are meant to replace and need state subsidies for longer than their advocates claim in advance. Demands for extended government subsidies should be a warning. Innovations will occur, of course, because a free economy is an innovation machine. We simply don’t know what they’ll be, and if we concentrate state funding on bright ideas too early, we risk being unable to fund the good ones that survive the sorting out process.

But they lift productivity and economic growth, surely?

Again, the proof of the pudding will be in the eating, but the signs don’t look that good. What economic benefit is likely to arise from the total electrification of Britain electric cars require that would match both its cost and the cost of forcing motorists to give up petrol-driven cars from 2030 onwards? If the answer is that we will benefit from the technological innovations that British and American auto manufacturers make in the course of developing cheaper and more efficient EV’S, we could have those benefits anyway by allowing them to make the cars that the motorists want at a price they can afford and at a pace that would allow government and industry to transition in line with market demand changes. Then we might get technical innovations in both EVs and petrol-driven cars.

But, Miss Scarlett, do you really need an electric car?

We don’t do that because the real aim of policy is not technical innovation—that’s a by-product at best—but a reduction in carbon emissions, or net-zero in short. That’s why everyone concedes that electricity prices will rise for industry as well as for consumers, putting the industries in countries with green hairshirt economic policies at a serious disadvantage with their foreign competitors. How will that kind of enforced economic primitivism help us either to raise productivity or to pay back the money we’re now borrowing? It won’t.

Since this is a global problem, though, surely, our competitors like China are making the same sacrifice?

Well, no they’re not, as a matter of fact, and when they say they will, they usually ask “the West” to give them subsidies to do so. In the meantime, the Chinese Communist Party—no idealistic Greens in that Politburo—is bringing new coal-fired power stations on line with emission levels greater than the U.K.’s entire carbon output.

So why are we doing this?

That’s a bigger question to which I’ll return next week. But it certainly requires explanation because unless the laws of economics have been repealed, the policy of spending and borrowing massively in order to make our economies less productive and efficient can only have one result. It was forecast most eloquently by Rudyard Kipling in his once-familiar poem "The Gods of the Copybook Headings":

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Something to think about.

Empty the Head that Forswears the Crown

Earlier this year Prince Harry, like so many frustrated young men before him, left home and ran off to California with a pretty girl in the hope of hitting it big and changing the world. Of course, being royalty, he didn't move to Haight-Ashbury to start a mediocre folk group and get stoned at anti-war protests. Instead, he and Meghan moved into a $14.7M mansion in Beverly Hills, signed a mega-deal with Netflix, endorsed Joe Biden, and became environmentalists.

Still, like the folkies, Harry has felt it necessary to inflict his faux-poetic thoughts on the rest of us.  Here he is speaking at an event for WaterBear, a new subscription service for environmentalist documentaries:

Every single raindrop that falls from the sky relieves the parched ground. What if every single one of us was a raindrop, and if every single one of us cared?

Far out, man. You can almost hear this being sung by Scott McKenzie or the Mamas and the Papas. No word on whether he thinks the universe might be just a single atom in the finger nail of some enormous being. Of course, to change the world you have to tackle the tough issues of the day, and Harry didn't disappoint on that score. He made it a point to tie the ongoing pandemic to the environment, saying:

[I]t’s almost as though Mother Nature has sent us to our rooms for bad behavior to really take a moment and think about what we’ve done.... We take so much from her and we rarely give a lot back.

But, as Joanna Williams points out in the Spectator, we really shouldn't laugh. For all of his vapidity, Harry is clearly making a play for increased cultural cachet, and he's doing so by parroting  the sentiments of our cultural elite. These are all common views among our beneficent rulers.

Consider another of the prince's insights: "But the moment you become a father, everything really does change... you start to realize, well, what is the point in bringing a new person into this world when they get to your age and it’s on fire?" This is a perfect encapsulation of elite climate hysteria, and it is becoming increasingly normalized.

Williams discusses the fact that this image of the world burning irresponsibly encourages eco-anxiety, a growing problem for both adults and children, many of whom have been psychologically harmed by the propaganda, as Greta Thunberg apparently was after watching a (now-debunked) David Attenborough film.

But there's also Harry and Meghan's longstanding vow to have no more than two children, for environmental reasons. Their public declaration is clearly meant to influence the choices of regular people, making them feel that it would be irresponsible to have more (or any) children, despite the fact that our country has below-replacement birthrates and Americans already have fewer children than we claim to want. Who are these people to say your dream of being a parent is irresponsible?

Talk about privilege.