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Cognitive dissonance, carbon taxes and economic collapse

So why are they doing this?

The sense of urgency is palpable.  We have just months to save the planet.  British Prime Minister Boris Johnson says that the climate doomsday clock is at a minute to midnight.  The heir to the throne of Britain and a large part of the Commonwealth says that we need to go onto a war footing.  And one of the UK’s favourite luvvies says that the only way to save the world is to introduce World War Two-style rationing… But probably not for the elites.

This being so, we might pause to wonder just what the hell is going on in Glasgow this week.  More than 400 private jets and a massive fleet of limousines ferrying hundreds of dignitaries between the conference centre and the luxury hotels where they are staying – at a time, by the way, when 36,855 families in Scotland are homeless – does not look much like the code-red, minute to midnight, wartime footing emergency that the media is pedalling.  Rather than burn more fossil fuels in a week than most of sub-Saharan Africa burns in a year on a media circus that, frankly, is going nowhere, our leaders might have learned one of the few positive things to come out of lockdown and conducted their business via Zoom.  And if anyone is going to claim that they had to meet face to face – because, you know, body language – then why not slim the event down and, indeed, combine it with last weekend’s G20 meeting?

After a decade of falling living standards for those in the bottom half of the workforce, and with the UK caught up in a winter energy crisis, the elites are going to have to start practicing what they preach.  If they don’t, climate change is going to disappear from the political agenda as hard economic realities and a growing energy crisis engulf the majority of ordinary people.

What about imports?

One of the biggest problems with our theoretical net zero approach to climate change is that it measures emissions by land area.  That is, the UK’s carbon dioxide emissions count only the fossil fuels burned within the land area of Great Britain and Northern Ireland – and even this excludes military emissions.  However, as Oxford professor Dieter Helm pointed out in a recent interview with the Spectator, this approach has allowed states to offshore their most polluting activities to the developing world.  In this sense, a portion of Chinese and Indian emissions, for example, are really British emissions.

Helm’s solution is to impose a carbon tax on imports as a means of deterring the practice of offshoring, while forcing consumers to pay the full cost of the pollution involved.

While this is attractive insofar as the elites would finally have to pay for their copious consumption, for the same reason it will never happen.  Indeed, the way in which the elites have historically exempted themselves from paying tax is a key reason why so much of planet Earth has been despoiled in the first place.  Even if some nominal carbon tax is introduced, the elites will write the legislation and frame it in a way that only the little people have to pay it.

Economy into focus

Helm also highlights the problems Europe in general and the UK in particular is experiencing with non-renewable renewable energy-harvesting technologies (NRREHTs).  The structure of the European and UK energy markets have allowed wind and – to a lesser degree – solar generators to reap the benefits of cheap electricity when the wind is blowing and the sun is shining, while ducking the cost of back-up when the wind stops blowing.

When Helm conducted a review of energy markets on behalf of the UK government, he argued that unless generators were obliged to provide continuous “firm” 24/7 electricity, we would end up in precisely the crisis we are facing this winter.  Instead, the government opted for the misguided energy price cap which has caused supply companies to fail in droves even before the winter arrives.

Helm’s argument is surely correct in environmental terms.  If we want to create the conditions for innovation in storage technologies, then allowing renewable energy suppliers to duck the cost of intermittency is the very worst way of going about it.  If, on the other hand, they must also pay the cost of back-up and storage, they at least have an incentive to find the cheapest and most efficient means of doing so.

This though, raises the economic problem which will soon be taking over from climate change as the main focus of concern.  The energy cost of energy is rising remorselessly as all of the cheap fossil fuels have been consumed.  NRREHTs cannot change this because they depend upon fossil fuels at every stage.  Worse still, the proposed storage technologies – pumped hydroelectric, lithium batteries, compressed air, and most recently hydrogen-ammonia – all add to the energy cost of energy.  Thus, energy which used to power the majority of the economy will, in future, be increasingly diverted to essential energy sectors.  Whichever way you cut it, that points to a serious shrinking of the economy on a scale that no living human has experienced.

As you made it to the end…

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