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CCNet 02/12/13

Britain's £85 Billion Bill For Climate Policies 

UK Industry Near ‘Crisis Point’ Over Green Taxes 



 
 
Climate-change policies are expected to cost Britain more than £80 billion by the end of the decade, as critics warn that the global-warming industry is spiralling out of control. The full cost is contained in a study to be published [this week] by the Global Warming Policy Foundation, a think tank founded by Lord Lawson, the former chancellor. Its analysis puts the cost to the British public of climate- change policies at £85 billion in the 10 years to 2021. Benny Peiser, the foundation’s director, who compiled the report, said: “The public has absolutely no idea how staggeringly costly and excessive the Government’s climate initiatives are. Even we were shocked when we discovered the astronomical funding streams and added them up.” --Robert Mendick, The Sunday Telegraph, 1 December 2013
 



British industry has warned that green taxes are pushing it to “crisis point” even as George Osborne prepares to cut environmental levies on household energy bills in this week’s Autumn Statement. Leading industrialists from companies such as Tata Steel and Ineos told the Financial Times that green taxes were putting their British plants at a competitive disadvantage relative to those plants’ European competitors. They urged David Cameron and his chancellor to extend their pledge to “roll back” the levies on households to manufacturing plants. --Elizabeth Rigby and Tanya Powley, Financial Times, 2 November 2013




We are at a crisis point, the chemical company. We will not have an energy-intensive sector in this country in 20 years’ time; it will not exist. You already see chemical companies closing assets, steel companies closing assets. -- Tom Crotty, Director of Ineos, Financial Times, 2 November 2013
 
 
 

In this week’s Spectator Diary, Lord (Nigel) Lawson, chairman of the Global Warming Policy Foundation, partly lifts the veil on a curious “secret meeting” held at the House of Lords between a team from his GWPF and six scientists from the Royal Society. The society insisted that the meeting be shrouded in secrecy; not even the names of those present were to be revealed. What might have surprised it was the calibre of the scientific team the GWPF was able to muster, including three fellows of the Royal Society itself, and Dr Richard Lindzen, the world’s most distinguished atmospheric physicist. --Christopher Booker, The Sunday Telegraph, 1 December 2013
 
 
 
 
One of my favourite charts – I know, I should get out more – comes from Professor Robert Allen of the University of Oxford. It shows the cost of energy, as measured in grammes of silver per million BTUs, in various world cities in the early 1700s. Newcastle stands out like a sore thumb, with energy costs much lower than London and Amsterdam, and far lower than Paris and Beijing. The average Chinese paid roughly 20 times more for heat than the average Geordie. This meant that turning heat into work (via steam engines) throughout the north of England was profitable. In China, by contrast, it made more sense to employ lots of people, on low wages . The result was an industrial revolution in Britain with innovation and rising living standards and an “industrious” revolution in China (and Japan) with falling living standards. Affordable energy is the indispensable lifeblood of economic growth. -- Matt Ridley, The Times, 2 December 2013
 

 
 
 
It will come as no surprise to find that our favourite junk scientist came up with this gem back in 2006, in the Guardian: “Dr Viner added that Britain could experience more dramatic and unpredictable weather in the future, including tornados. We saw a tornado in Birmingham last year and I think generally we are likely to see an increase in localised, unforecastable and unpredictable weather.”  Wow, tornadoes! Fortunately, we have the ever sensible meteorologist, Philip Eden, to tell us the real story. According to the TORRO website, the UK gets about 35 to 40 tornadoes a year, but this number will increase “with the improved communications and a growing network of TORRO reporters.” So, next time you hear a junk scientists making up claims about tornadoes, suggest that they check the facts first. --Paul Homewood, Not A Lot Of People Know That,2 December 2013
 


 
1) Britain's £85 Billion Bill For Climate Policies - The Sunday Telegraph, 1 December 2013

2) UK Industry Near ‘Crisis Point’ Over Green Taxes - Financial Times, 2 November 2013

3) Christopher Booker: The Secret Society Of ‘Warmists’ - The Sunday Telegraph, 1 December 2013

4) Matt Ridley: Green Energy Could Kill Britain’s Economy - The Times, 2 December 2013

5) Fuel Bill Cuts Follow Energy Policy Change - BBC News, 2 December 2013

6) And Finally: David Viner Gets It Wrong Again - Not A Lot Of People Know That,2 December 2013
 
 
 
1) Britain's £85 Billion Bill For Climate Policies
The Sunday Telegraph, 1 December 2013

Robert Mendick

Climate-change policies are expected to cost Britain more than £80 billion by the end of the decade, as critics warn that the global-warming industry is spiralling out of control.
Vast sums are being spent on initiatives ranging from climate-change officers in local councils to the funding of “low carbon” agriculture in Colombia at a cost of £15 million alone. Billions of pounds are also being added to fuel bills to pay for green policies.

The full cost is contained in a study published [this week] by the Global Warming Policy Foundation, a think tank founded by Lord Lawson, the former chancellor.

Its analysis puts the cost to the British public of climate- change policies at £85 billion in the 10 years to 2021. More than half — about £47.6 billion — will have gone on funding green levies, such as subsidies for wind farms, added to consumer fuel bills.

The rest — about £20 billion — will have gone to the European Union for global-warming initiatives.

Last month, the EU’s commissioner for climate action said that a fifth of the EU’s £805 billion budget from 2014 to 2020 would go on “climate-related spending”. Britain contributes about an eighth of the total EU budget.

Benny Peiser, the foundation’s director, who compiled the report, said: “The public has absolutely no idea how staggeringly costly and excessive the Government’s climate initiatives are. Even we were shocked when we discovered the astronomical funding streams and added them up.

“Britain’s climate policies combine to a mind-boggling amount of subsidies and departmental spending, which will drastically increase in the next few years.”

Dr Peiser said Britain needed urgently to rethink its climate policies. “Major economies such as Canada, Australia and Japan have now begun to curtail and abandon their unilateral climate policies and targets,” he said. “It does not make any sense that the UK alone is accelerating its exorbitant spending.”

Although the Department of Energy and Climate Change (DECC) sets policies on green levies, much direct spending comes from other departments and quangos, such as the Department for International Development (DfID), which the foundation estimates spends £610 million a year on climate initiatives overseas.

The study also found more than £2 billion is being spent by the Department for Environment, Farming and Rural Affairs on climate-change policies over a decade; £1.5 billion by the Department for Transport; and £1.3 billion by the Department for Business, Innovation and Skills.

Quangos spending millions include the Committee on Climate Change and the Carbon Trust, the study says. Ofgem, the energy regulator, is investing nearly £100 million over three years in “contributing to the achievement of a low-carbon sector” and delivering of government programmes “for a sustainable energy section”.

An EU database of UK schemes details 185 payments totalling £1.5 billion to overseas projects.

By contrast, France’s spending totals £275 million.

Full story
 
 


2) UK Industry Near ‘Crisis Point’ Over Green Taxes
Financial Times, 2 November 2013

Elizabeth Rigby and Tanya Powley

British industry has warned that green taxes are pushing it to “crisis point” even as George Osborne prepares to cut environmental levies on household energy bills in this week’s Autumn Statement.

Leading industrialists from companies such as Tata Steel and Ineos told the Financial Times that green taxes were putting their British plants at a competitive disadvantage relative to those plants’ European competitors. They urged David Cameron and his chancellor to extend their pledge to “roll back” the levies on households to manufacturing plants.

 “We are at a crisis point,” said Tom Crotty, director of Ineos, the chemical company.
“We will not have an energy-intensive sector in this country in 20 years’ time; it will not exist. You already see chemical companies closing assets, steel companies closing assets. At some stage you need to take a decision and say, is that OK or is it not OK?”

On Sunday Mr Cameron promised households he would tweak green levies to save an average of £50 on domestic energy bills. He also pledged to offer homebuyers a grant of up to £1,000 to insulate their homes.

Heavy industry complains it has been largely ignored by the government, despite accounting for nearly as big a chunk of electricity consumption as domestic customers. The suspicion is that the government is taking a populist stance on household bills to blunt Labour’s attacks on the high cost of energy to consumers.

“Our UK manufacturing plants face electricity costs that are as much as 50 per cent higher than our key competitors in France and Germany,” said Karl Koehler, chief executive officer of Tata Steel’s European operations. “If the chancellor wants an industrial recovery and to rebalance the economy he must show real commitment to fair energy costs for foundation industries such as steel.”

Mr Cameron’s actions come as the Conservative leadership tries to clear away outstanding “micro” policies to focus on the Autumn Statement. This is expected to be one of the most optimistic for years, with the Office for Budget Responsibility set to announce the largest upgrade to government economic forecasts since the turn of the millennium.

Full story
 
 



3) Christopher Booker: The Secret Society Of ‘Warmists’
The Sunday Telegraph, 1 December 2013

The climate scientists who advise our politicians are so sure they are right that it is impossible to have any serious dialogue with them.

In this week’s Spectator Diary, Lord (Nigel) Lawson, chairman of the Global Warming Policy Foundation, partly lifts the veil on a curious “secret meeting” held at the House of Lords between a team from his GWPF and six scientists from the Royal Society. This arose from a bizarre personal attack made on Lord Lawson as a “climate denier” at an Australian university, by the Royal Society’s president, Sir Paul Nurse – a geneticist who has publicly shown that he knows little about climate science, but who believes that rising CO2 is disastrously causing the world to warm. After Lawson pointed out to Nurse that his attack was factually inaccurate, Nurse offered to send some of his “experts” to put the GWPF straight on science.

The society insisted that the meeting be shrouded in secrecy; not even the names of those present were to be revealed. What might have surprised it was the calibre of the scientific team the GWPF was able to muster, including three fellows of the Royal Society itself, and Dr Richard Lindzen, the world’s most distinguished atmospheric physicist. Although the GWPF has in general scrupulously observed the “Chatham House rule” that the society imposed on the meeting, we can piece together something of how it went.


Nurse’s team, led by Sir Brian Hoskins of the Grantham Institute, who also sits on the climate change committee advising the Government on policy, trotted out all the familiar arguments for the orthodoxy, including several “hockey stick” graphs to show global temperatures now soaring to levels unknown for thousands of years. They threw in some of the scare stories warmists have come up with to counter evidence that for 15 years temperatures have failed to rise as their computer models predicted, such as that “the oceans are acidifying” and that there has been a dramatic increase in “extreme weather events” (neither claim is true).

As one present put it, “it was like talking to members of a cult”. What particularly struck the GWPF team was their opposite numbers’ refusal to discuss the policy implications of their beliefs, even though Hoskins is a leading member of the “independent” committee which advises the Government on its increasingly disastrous and futile “low carbon” energy policy. In short, the meeting seemed perfectly to exemplify the real mess we are in, where the officially approved scientists who advise our politicians are so sure they are right that it is impossible to have any serious dialogue with them.
 


 
4) Matt Ridley: Green Energy Could Kill Britain’s Economy
The Times, 2 December 2013

The Chancellor is to knock £50 off the average energy bill by replacing some green levies with general taxation and extending the timescale for rolling out others. On the face of it, the possibility that global energy prices may start to fall over the next few years might seem like good political news for him, and some of the chicken entrails do seem to be pointing in that direction. There is, however, a political danger to George Osborne in such trends .

For Government strategists reeling from the twin blows of Ed Miliband’s economically illiterate but politically astute promise of an energy bill freeze and the energy companies’ price hikes, the prospect of lower wholesale energy prices might seem heaven sent. But in many ways it only exacerbates their problems, for the Government is right now fixing the prices we will have to pay for nuclear, wind and biomass power for decades to come. And it is fixing those prices at quite a high level.

The more that oil, gas and coal prices drop, the worse these deals look and the more they threaten our economic competitiveness. The Liberal Democrats have not allowed the Chancellor to cut subsidies for the renewable energy industry, the most regressive redistribution of wealth since the Sheriff of Nottingham was in his pomp.

They argue that what has driven energy bills up threefold in ten years is mainly an increase in the wholesale price of energy, rather than any great lurch towards subsidising renewables. True, but most of the lurch is yet to come and as wind power capacity quadruples by 2020, it will add £400 to average bills — not to mention driving up the price of energy to industry, which will pass it on to consumers.

“There is not a low-cost energy future out there,” said Ed Miliband when Secretary of State for Energy and Climate Change in 2009, at the time an enthusiast for discouraging energy use by price rises. It even became fashionable to argue, when Chris Huhne filled that post, that higher prices would cut bills (yes, you read that right) by encouraging people to use less power.

Anyhow, the forces that have driven energy prices up in recent years appear to be fading. Consider some of the reasons that oil and gas prices rose in 2011, the year energy companies pushed up prices even more than this year. Japan suffered a terrible tsunami, shut down its nuclear industry and began scouring the world for gas imports to keep its lights on. At about the same time Libya was plunged into civil war, cutting off a key supplier of gas. Add in simmering tension over Iran, Germany’s sudden decision to turn its back on nuclear power, the legacy of a couple of cold winters and the lingering depressive effect on oil and gas exploration of low energy prices from much of the previous decade, and it is little surprise that oil and gas producers pushed up prices.

Contrast that with today. Several years of high prices have driven a surge of new exploration. Deep offshore technology is advancing rapidly and huge gas fields have been found in the Mediterranean and in the Indian and Atlantic oceans. In the United States, the shale revolution has glutted both gas and oil markets, displacing imports. Iran is coming in from the cold, Libya is back on stream and Australia is preparing to export huge volumes of gas. Should the rest of the world start producing shale gas — China, Argentina, Poland and others are on the brink, even Britain might one day deign to join them — that would further add to supply.

A decade is a long time in energy policy. Ten years ago, no less an oracle than Alan Greenspan told Congress: “Today’s tight natural gas markets have been a long time in coming, and distant futures prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon.” Abundance and low prices are exactly what America now has: so much so that it is using gas instead of coal to provide base-load electricity, investing heavily in manufacturing and chemical industry, and shifting some of its road transport from oil to gas. By 2020, shale gas will have boosted the American economy by £500 billion, 3 per cent of GDP and 1.7 million jobs, according to McKinsey Global Institute.

Meanwhile, the argument that the running out of fossil fuels is what has been driving up prices has been proven once again, for the third time in my lifetime, to be bunk. America, the most explored and depleted oil and gas field in the world, is now increasing its oil and gas production at such a rate of knots that it is heading towards self-sufficiency. If an oil field as gigantic as the Eagle Ford can be found (through technological innovation) in Texas, think how much awaits explorers in the rest of the world. Even five years ago, gas was thought likely to be the first of the fossil fuels to run out. Nobody thinks that now.

At least nobody outside Whitehall. As Professor Dieter Helm told a House of Lords committee last month: “I think one should be very sceptical about this Government and the last Government embarking on policies that require them to assume that the oil and gas prices are going to go up and then pursuing those policies and not being willing to contemplate the consequence of that not being the case.” According to Peter Atherton of Liberum Capital, the recent “strike price” deal with EDF to build a nuclear power station at Hinckley Point in Somerset will only look good value to consumers if gas prices more than double by 2023.

Suppose, instead, world energy prices come down, even as the cost of subsidising renewables and nuclear starts to bite. We will have rising energy bills while the rest of the world has falling ones. That is a recipe for job destruction.

One of my favourite charts – I know, I should get out more – comes from Professor Robert Allen of the University of Oxford. It shows the cost of energy, as measured in grammes of silver per million BTUs, in various world cities in the early 1700s. Newcastle stands out like a sore thumb, with energy costs much lower than London and Amsterdam, and far lower than Paris and Beijing. The average Chinese paid roughly 20 times more for heat than the average Geordie. This meant that turning heat into work (via steam engines) throughout the north of England was profitable. In China, by contrast, it made more sense to employ lots of people, on low wages . 
The result was an industrial revolution in Britain with innovation and rising living standards and an “industrious” revolution in China (and Japan) with falling living standards.

Affordable energy is the indispensable lifeblood of economic growth. Back in 2011, David Cameron was warned by an adviser that electricity, gas and petrol prices were of much greater concern to voters than any other issue, including the NHS, unemployment, public sector cuts and crime. If subsidies for windmills prevent us from passing on any future falls in gas and oil prices, and jobs flee to lower-cost countries, the voters will not be forgiving.
 


5) Fuel Bill Cuts Follow Energy Policy Change
BBC News, 2 December 2013

Major energy firms have started to announce plans to pass on savings to customers following a new package of measures from the government.

British Gas owner Centrica said it would cut bills by £53 in January, two months after a £123 price rise for the average dual-fuel customer.

SSE also said it would pass on savings of around £50 and Npower plans a conditional price freeze until 2015.

The moves come after the government said it would make changes to bills.

Some subsidies for those in fuel poverty will be moved into general taxation and some green policy targets will be slowed down. It said this would cut energy bills by a total of £50 a year for the average household.

Homebuyers could instead be granted £1,000 to spend on energy-saving measures.

However, overall prices are rising this winter for most energy customers.

The Energy Minister, Ed Davey, told the BBC the planned moves by the government would save households an average of £50 on fuel bills.

But Labour leader Ed Miliband, in a speech on Monday, is to accuse ministers of using “smoke and mirrors” over its plan.

Currently, the average dual fuel bill for households is £1,340.

Full story
 


6) And Finally: David Viner Gets It Wrong Again
Not A Lot Of People Know That,2 December 2013

He had us all falling about in our seats with his epic “snow is just a thing of the past” routine.

And we were rolling around on the floor when he claimed that “continental tourists would be flocking to Blackpool for their holidays to enjoy the mediterranean climate there.”

So it will come as no surprise to find that our favourite junk scientist came up with this gem back in 2006, in the Guardian:

Dr Viner added that Britain could experience more dramatic and unpredictable weather in the future, including tornados.

“We saw a tornado in Birmingham last year and I think generally we are likely to see an increase in localised, unforecastable and unpredictable weather. 

Wow, tornadoes!

Fortunately, we have the ever sensible meteorologist, Philip Eden, to tell us the real story. From the Sunday Telegraph:


img001
Unfortunately, the Telegraph never put his articles on line, but he points out that, back in the 1950′s most meteorologists did not believe that tornadoes occurred in Britain. He goes on.

img001

According to the TORRO website, the UK gets about 35 to 40 tornadoes a year, but this number will increase “with the improved communications and a growing network of TORRO reporters.”

It is also worth pointing out that, according to NOAA“In fact, the United Kingdom has more tornadoes, relative to its land area, than any other country. Fortunately, most UK tornadoes are relatively weak.”

So, next time you hear a junk scientists making up claims about tornadoes, suggest that they check the facts first


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