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August 17, 2007

Politics Isn't Going to Solve Climate Change

Yes, yes, I know, Nick Stern called climate change the greatest market failure ever. But here we have, well, it would be if it were not so seriously expensive, the most glorious example of an economic truism. If you think market failures are expensive, wait until you see how government cocks up.

Increasing production of biofuels to combat climate change will release between two and nine times more carbon gases over the next 30 years than fossil fuels, according to the first comprehensive analysis of emissions from biofuels.

Biofuels - petrol and diesel extracted from plants - are presented as an environmentally friendly alternative to fossil fuels because the crops absorb carbon dioxide from the atmosphere as they grow.

The study warns that forests must not be cleared to make way for biofuel crops. Clearing forests produces an immediate release of carbon gases into the atmosphere, accompanied by a loss of habitats, wildlife and livelihoods, the researchers said.

Britain is committed to substituting 10% of its transport fuel with biofuels under Europewide plans to slash carbon emissions by 2020.

We in Europe are committed to that 10% (actually, I thought it was 20% but never mind) and the US is going down the ethanol route. Both are plans supported by the entire political class, both are howlingly stupid and will make things worse, not better.

There is a place for bio-fuels, probably one on the very margins of society. Refining (it's a simple process that can be done in a garage) the oil from the local chippie is a great way to get transport out of something that's difficult to dispose of anyway. But on any scale much larger than that it doesn't, as above (and this is published in Science, so it's not an easy calculation to dismiss), make sense: in fact, makes things worse, not better.

This is something of a burden to bear for those who are insisting upon a political solution to climate change. It doesn't surprise the cynics like myself, who are already insistent that the political process is so appalling that just about anything that comes out of it is bound to be worse than what would happen in its absence.

For, how can anyone argue, with a straight face, that we need to have lots of lovely international agreements to deal with this problem when, as with the EU and biofuels, the first international agreement to do something makes it worse, not better?

Politicians picking winners, eh? When will we learn?

August 17, 2007 in Climate Change | Permalink


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It's simple really. There are four types of action:

1) those that are good for the environment and good for the economy
2) those that are bad for the environment and good for the economy
3) those that are good for the environment and bad for the economy
4) those that are bad for the environment and bad for the economy

Definitely do 1, think carefully before doing 2 and 3, never do 4.

The fact that the political classes always seem to plump for option 4 suggests the next time we have a foot-n-mouth outbreak, we ought to cull more than the cattle.

P.S. Anyone who pretends there are only options 2 and 3 should be ignored.

Posted by: Philip Thomas | Aug 17, 2007 11:02:00 AM

The problem with the whole climate change debate is that people talk in simplistc absolutes, when the reality is nothing can be wholly good or bad for the environment or the economy. Every solution will benefit some part of the economy/environment and hurt another. I agree with the point about politicians and their uncanny ability to cock things up. I'm sure the comon agricvultural policy is inefficent in both economic and envioronmental terms but all they do is tinker with it when it needs scrapping.
And look at carbon offsetting - so it's ok for me to cross the atlantic in my private jet as long as I pay some bloke in Kuala Lumpa not to drive his car for a year ?? It's like saying instead of giving up smoking I'll pay my next door neighbour to do it instead - it's madness.

Posted by: Matt Munro | Aug 17, 2007 1:21:16 PM

Granted, Matt. My approach was simplistic but it's important in driving home the nature of the beast. When you trade off the many costs and benefits, it almost always tips one way or the other. Furthermore, it's normally crushingly obvious which way it's going without rigorous extended analysis. Such as is the case with these biofuels, a few quick sums would spot that 2-9 times CO2 emissions a mile away and the fact you have to subsidise it to high heaven points out the economic vitality of it. The problem is that these plans are instigated by politicians that ignore one half of the equation as inconvenient, in this case the costs.

Posted by: Philip Thomas | Aug 17, 2007 1:36:50 PM

Grabber Gordon should make recycled chip oil duty free.

You can see the folly in the targets.

"committed to 10%" = "10% by any means".

People who want to consume biofuels would tend to reject biofuels sourced from recently cleared woodland if they knew about it.

Governments wanting to achieve their 10% target, especially if it means handing over vast sums of OUR money to some undemocratic bureaucracy, I mean "being fined by the EU", will prefer to slash and burn.

So far the "climate change lobby" is making it clear that Statism is part of the problem.

Posted by: Roger Thornhill | Aug 17, 2007 4:00:58 PM