Sunday, March 18th 2012, 5:51 PM EDT
For those who've missed it, Tim Yeo MP has been engaged in an online debate with former chancellor Lord Lawson on the subject "Is there an economic case for going green in an age of austerity"? As you'd perhaps expect from a man named "Politician of the Year" at the inaugural 2011 Green Business Awards, Yeo very much believes there is. We'll examine more closely why a Tory MP might feel so strongly about this in a moment. But let's first see what Lord Lawson has to say:
It is sad that fashionable obsession can lead an intelligent man like Tim Yeo into such a farrago of factual error and economic illiteracy. The reason why there is no economic case for ‘going green’ is simple. It is that green energy is hugely more expensive than carbon-based energy, it always has been and is likely to remain so for the foreseeable future.
That, and no other reason, is why the world relies on carbon-based energy – coal, oil and, increasingly, gas.
And that is why to ‘go green’ requires either a heavy tax on carbon-based energy, to make it less competitive, or a massive subsidy for wind power and other forms of green energy, to make them more competitive – and probably both. Either way, these represent a huge economic cost and a burden on the consumer that bears especially hard in an age of austerity, but which would be unjustifiable at any time.
Ouch. Anything else, Lord Lawson, to salve Tim's hurt feelings?
One of Tim’s more remarkable assertions is that “to delay Britain’s investment in low-carbon technology just when other countries are starting to accelerate theirs verges on the Luddite”. The trend is in fact in the reverse direction. Not only is the emerging world firmly committed to carbon-fuelled growth, but even in slower-growing Europe ‘green’ subsidies are being phased out. Spain, which went for wind power (in particular) in a big way, has decided to cut back drastically all its ‘green’ energy subsidies. In recent months, similar cuts have been announced in Italy, Greece and the Czech Republic. And Germany, Europe’s largest economy, is doing much the same. Meanwhile, in the United States, the solar power industry, once their renewable of choice, is mired in scandal and in a state of collapse.
I regret, incidentally, the use of ‘Luddite’ as a generalized term of economic abuse, since it does in fact have a precise meaning. It refers to the movement in the early days of the industrial revolution to destroy machines in order to protect jobs. It precise analogue today is the attempt by the Tim Yeos of this world to persuade the government to move from comparatively cheap carbon-based energy to much more expensive green energy in order to create ‘green jobs’.
This also underlines the fundamental point that even if the whole world were to be converted to costly ‘green energy’ – which is not going to happen – there would still be a heavy economic cost, not to mention the human cost in those countries where a slower rate of economic development means unnecessary poverty, disease, malnutrition and premature death for hundreds of millions of people.
Tim, of course, confidently tells us that this is merely a temporary burden that will soon pass, since “despite the discovery of shale gas, the price of fossil fuels will continue to rise”, presumably making green energy thoroughly economic. I wonder how he knows this. As a former Energy Secretary, some 30 years ago, I have watched fossil fuel prices rise and fall as confident predictions regularly bite the dust. What we do know is that in the US, which at the present time is leading the way, the shale gas revolution has caused the price of gas to plummet, and this is bound to spread to the rest of the world before too long.
One last point. The one essential resource for onshore wind power – the UK’s (or at least the unlamented Mr Huhne’s) green energy of choice – is large tracts of land. I am constantly surprised that politicians who like to think of themselves as progressive support such a massively perverse scheme of income redistribution: a scheme that takes money from the pockets of the people and pays it out in subsidies to wealthy landowners.
Ouch and double ouch! Now let's see what arguments Tim Yeo can produce in response to Lord Lawson's analysis.
If we were to price in the true costs of CO2 pollution, even expensive low-carbon generation would look attractive
Ah. OK. That old junk science theory about CO2 being a pollutant. Nice try. Anything else?
Investing in renewables, CCS and nuclear will not only improve the UK’s energy security and guard against rising fossil fuel prices, it could also help to rebalance the economy and create jobs if we can create the right conditions for low-carbon companies to flourish.
Oh. The "green jobs" gambit? Nope. We know that far from creating jobs, government "investment" in the renewables sector kills jobs in the real economy. Anything else?
So why are the Chinese investing so much? Partly it’s because climate change is a risk, but mostly because they believe that growth depends on a low-carbon economy.
Oh puh-lease. The Chinese don't believe for one second in the climate change myth. And the extent to which they believe in a low-carbon economy rests entirely on their ongoing ability to exploit Western credulity on this score by cashing in on the wind-farm and solar bubble (due to burst any second now as governments and taxpayers alike wake up to the fact that these industries are only sustainable through massive subsidy).
Hmm. I think there's an important element which Tim Yeo forgot to include in his impassioned defence of "green economics". Ah yes, here it is: from Tim Yeo's registered business interests at They Work For You.
Click source and see the list of registered business interests