The economics of the madhouse
Guest Blogger December 22, 2014
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The Children’s Coalition’s (LibLabCon) insane war on natural gas
By Lord Christopher Monckton of Brenchley
On the very evening when the first October snow in 74 years was falling outside in Parliament Square, the Mother of Parliaments went gaga and nodded through the Climate Change Act 2008 – aptly described as the least justifiable and most expensive law ever to be inflicted on the British people –with only three gallant dissenters. The majority was one of the largest for any Act of Parliament. Was it voted through in similar manner to the Lisbon Treaty? (2013 – 013)
Now the red herrings are coming home to roost. The staggering cost of the near-universal scientific illiteracy to which half a century of Marxist State education has reduced even the governing class is becoming all too painfully apparent.
“Ed” Davey, the daftly-titled “Secretary of State for Climate Change”, a “Liberal” “Democrat” [a.k.a. loony-Left] cabinet minister in the Children’s Coalition which – thanks in no small part to its suicidal climate policies – has run up a larger debt in five years than all previous British Governments added together, has just announced the kiddiwinks’ latest certifiable policy.
Beyond-bankrupt Britain – once the world’s economic powerhouse – has become the world’s economic madhouse. For “Ed” is going to abolish the use of natural gas in the industries and homes of Britain. Just like that.
Target for completion of this latest insanity – less than two decades from today. About half the nation cooks or heats its home with gas. By Government fiat, those households will soon be compelled to switch to far more costly and far less efficient electric heating, whether they can afford it or not.
Naturally, there will also be a huge capital cost to overstretched taxpayers, as the nation’s extensive and expensive gas network is pointlessly ripped up, as the gas-fired power stations that have only recently replaced a large part of our coal-fired power generation network are torn down, and as the nation is carpeted with useless, bird-blending, bat-blatting windmills. Already, 60% of Scotland’s landscape has windmills scarring it.
The tiny tots are going to expand the network of dismal, unstable, loss-making windmills massively. To pay for it, they will charge the average household an extra $400 a year on top of the massive energy price hikes they have already inflicted.
They are also going to install 1.2 GW of new nuclear capacity each year (the equivalent of two nuclear submarines). But – insanity upon insanity – the low-spec, civilian-grade reactors they are going to buy from Hitachi cost six times as much as the high-spec, military-grade Rolls Royce reactors in our Trident submarines.
When I asked Rolls Royce whether, in these circumstances, they planned to enter the thrusting new UK market for civilian nuclear electricity generation, I got a curt – and understandable – No. The pinstripe-suited voice quivering down the telephone conveyed ill-concealed impatience at the increasingly bizarre conduct of the Children’s Coalition.
What is worse, not only gas but also gasoline is to be phased out. All cars are to become electric by the 2040s. Just like that.
On past form, I had anticipated something as half-witted as this. In September’s Energy and Environment, in a paper outlining the many errors of the IPCC, I included a short account of the “economics” of the toddlers’ subsidies to electric vehicles. It has been much repeated, though on the evidence I don’t suppose anybody in the Romper Room at the Department of Climate Madness has learned to read yet, so they won’t have seen it. Here it is.
Deferment of the date of onset of net welfare loss
There has been no global warming this century. If the warming were to resume immediately at the mean rate of 0.14 K decade–1 observed in the past 30 years, by 2035 only 0.28 K warming would have occurred. If the warming rate were to rise by as much as half thereafter and were to persist throughout the remainder of the century, warming of little more than 1.1 K would have occurred by 2100.
Since 0.9 K warming has occurred since 1750 (Central England Temperature Record), the 2 K threshold beyond which we are told a net climate-related cost begins to arise may well not be crossed until the end of this century. A slow rate of warming is less damaging than a rapid rate, so even after 2100 the net disbenefit from the warming may be insignificant.
Should precautions be taken in any event?
Whether mitigation measures should be attempted in any event is an economic question, answered by investment appraisal. The UK’s $8333-per-auto subsidy for electric cars will serve as an example. The two initial conditions for the appraisal are the fraction of global CO2 emissions a mitigation measure is intended to abate, and the cost of the measure.
Typical gasoline-powered auto engines are approximately 27% efficient. Typical fossil-fueled generating stations are 50% efficient, transmission to end user is 67% efficient, battery charging is 90% efficient and the auto’s electric motor is 90% efficient, so that the fuel efficiency of an electric car is also 27%. However, the electric car requires 30% more power per mile traveled to move the mass of its batteries.
CO2 emissions from domestic transport account for 24% of UK CO2 emissions, and cars, vans, and taxis represent 90% of road transport (DfT, 2013). Assuming 80% of fuel use is by these autos, they account for 19.2% of UK CO2 emissions. Conversion to electric power, 61% of which is generated by fossil fuels in the UK, would abate 39% of 19.2% (i.e. 7.5%) of UK CO2 emissions.
However, the battery-weight penalty would be 30% of 19.2% of 61%: i.e. 3.5% of UK CO2 emissions. The net saving from converting all UK cars, vans, and taxis to electricity, therefore, would be 4% of UK CO2 emissions, which are 1.72% of global CO2 emissions, abating 0.07% of global CO2 emissions of 2 ppmv yr–1, or 0.00138 ppmv. Assuming 400 μatm concentration at year end on business as usual, forcing abated by the subsidy for converting all UK cars to electricity would be 5.35 ln[400/(400-0.00138)], or 0.00002 W m–2, which, multiplied by the Planck parameter λ0 = 0.31 K W–1 m2, gives 0.000006 K warming abated by the subsidy.
The cost to the UK taxpayer of subsidizing the 30,000 electric cars, vans, and taxis bought in 2012 was a flat-rate subsidy of $8333 (£5000) for each vehicle and a further subsidy of about $350 (£210) per year in vehicle excise tax remitted, a total of $260.5 million. On that basis, the cost of subsidizing all 2,250,000 new autos sold each year (SMMT, 2013), would be $19.54 bn.
Though the longevity of electric autos is 50% greater than that of internal-combustion autos, the advantage is more than canceled by the very large cost of total battery replacement every few years. No allowance for this extra cost is made. Likewise, the considerable cost of using renewable energy to bring down the UK’s fossil-fueled generation fraction from the global mean 67% to 61% is not taken into account, though, strictly speaking, an appropriate share of the cost of “renewable” electricity generation should be assigned to electric vehicles.
Dividing the $19 bn annual cost by the warming abated gives a unit abatement cost of $3400 tn K–1. Abating the 0.013 K projected warming over the study period by global methods of equivalent unit cost would thus cost $45 tn, or approaching $6500 a year per head of global population, or almost two-thirds of $71 tn global annual GDP.
Stern (2006) wrote that the cost of allowing the then-projected 3 K warming to occur over the 21st century would be 0-3% of global GDP. IPCC (2013, WGII) puts the cost at 0.2-2% of GDP. Assuming that 1 K 20th-century global warming would cost as much as 0.5% of GDP (in fact so small a warming would cost nothing), global mitigation by methods of equivalent unit cost to the UK’s subsidy program for electric vehicles would be 128 times costlier than adaptation.
In general, the cost of mitigation is 1-2 orders of magnitude greater than that of adaptation (Monckton of Brenchley, 2013). Affordable measures are ineffective: effective measures are unaffordable. Too little mitigation is achieved at far too great a cost. Since the premium is 10-100 times the cost of the risk insured, the precaution of insurance against any net-adverse manmade global warming is not recommended.
Footnote: When I visited the Department of Climate Change in 2010 to meet the House of Lord Minister, Lord Marland, I asked him and his chief number-cruncher, Professor David Mackay, to let me see their calculations demonstrating how much global warming the Department’s insane policies would prevent in the coming decades, and at what cost per Kelvin abated.
There was a strangled, aghast silence. The Permanent Secretary looked at his watch and then fiddled with his tie. The Minister tossed a cricket ball up and down in aimless embarrassment. Professor Mackay said, “Er, ah, mphm …” [I’d never heard that 19th-century Scottish playing-for-time interjection before] “… mphm, er, that is, well, we, ah, ugh, mphm – um, oof, we’ve never done any such calculation.”
I turned to the Minister and said, “Can I take it, Minister, that your policies are based on blind faith alone?” Seems they still are.