"Some businesses see nothing but profits in the green movement."
The Climate-Industrial Complex
By BJORN LOMBORG
Some business leaders are cozying up with politicians and scientists to demand swift, drastic action on global warming. This is a new twist on a very old practice: companies using public policy to line their own pockets.
The tight relationship between the groups echoes the relationship among weapons makers, researchers and the U.S. military during the Cold War. President Dwight Eisenhower famously warned about the might of the "military-industrial complex," cautioning that "the potential for the disastrous rise of misplaced power exists and will persist." He worried that "there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties."
This is certainly true of climate change. We are told that very expensive carbon regulations are the only way to respond to global warming, despite ample evidence that this approach does not pass a basic cost-benefit test. We must ask whether a "climate-industrial complex" is emerging, pressing taxpayers to fork over money to please those who stand to gain.
This phenomenon will be on display at the World Business Summit on Climate Change in Copenhagen this weekend. The organizers — the Copenhagen Climate Council — hope to push political leaders into more drastic promises when they negotiate the Kyoto Protocol's replacement in December.
The opening keynote address is to be delivered by Al Gore, who actually represents all three groups: He is a politician, a campaigner and the chair of a green private-equity firm invested in products that a climate-scared world would buy.
Naturally, many CEOs are genuinely concerned about global warming. But many of the most vocal stand to profit from carbon regulations. The term used by economists for their behavior is "rent-seeking."
The world's largest wind-turbine manufacturer, Copenhagen Climate Council member Vestas, urges governments to invest heavily in the wind market. It sponsors CNN's "Climate in Peril" segment, increasing support for policies that would increase Vestas's earnings. A fellow council member, Mr. Gore's green investment firm Generation Investment Management, warns of a significant risk to the U.S. economy unless a price is quickly placed on carbon.
Even companies that are not heavily engaged in green business stand to gain. European energy companies made tens of billions of euros in the first years of the European Trading System when they received free carbon emission allocations.
American electricity utility Duke Energy, a member of the Copenhagen Climate Council, has long promoted a U.S. cap-and-trade scheme. Yet the company bitterly opposed the Warner-Lieberman bill in the U.S. Senate that would have created such a scheme because it did not include European-style handouts to coal companies. The Waxman-Markey bill in the House of Representatives promises to bring back the free lunch.
U.S. companies and interest groups involved with climate change hired 2,430 lobbyists just last year, up 300% from five years ago. Fifty of the biggest U.S. electric utilities — including Duke — spent $51 million on lobbyists in just six months.
The massive transfer of wealth that many businesses seek is not necessarily good for the rest of the economy. Spain has been proclaimed a global example in providing financial aid to renewable energy companies to create green jobs. But research shows that each new job cost Spain 571,138 euros, with subsidies of more than one million euros required to create each new job in the uncompetitive wind industry. Moreover, the programs resulted in the destruction of nearly 110,000 jobs elsewhere in the economy, or 2.2 jobs for every job created.
The cozy corporate-climate relationship was pioneered by Enron, which bought up renewable energy companies and credit-trading outfits while boasting of its relationship with green interest groups. When the Kyoto Protocol was signed, an internal memo was sent within Enron that stated, "If implemented, [the Kyoto Protocol] will do more to promote Enron's business than almost any other regulatory business."
The World Business Summit will hear from "science and public policy leaders" seemingly selected for their scary views of global warming. They include James Lovelock, who believes that much of Europe will be Saharan and London will be underwater within 30 years; Sir Crispin Tickell, who believes that the United Kingdom's population needs to be cut by two-thirds so the country can cope with global warming; and Timothy Flannery, who warns of sea level rises as high as "an eight-story building."
Free speech is important. But these visions of catastrophe are a long way outside of mainstream scientific opinion, and they go much further than the careful findings of the United Nations panel of climate change scientists. When it comes to sea-level rise, for example, the United Nations expects a rise of between seven and 23 inches by 2100 — considerably less than a one-story building.
There would be an outcry — and rightfully so — if big oil organized a climate change conference and invited only climate-change deniers.
The partnership among self-interested businesses, grandstanding politicians and alarmist campaigners truly is an unholy alliance. The climate-industrial complex does not promote discussion on how to overcome this challenge in a way that will be best for everybody. We should not be surprised or impressed that those who stand to make a profit are among the loudest calling for politicians to act. Spending a fortune on global carbon regulations will benefit a few, but dearly cost everybody else.
Mr. Lomborg is director of the Copenhagen Consensus, a think tank, and author of "Cool It: The Skeptical Environmentalist's Guide to Global Warming" (Knopf, 2007).
CultureWatch, Bill Muehlenberg’s
Climate Change, Celebrities, and Reality
A small news item caught my attention today. It was about yet another Hollywood celeb pontificating on climate change, urging us to act immediately or else we will all perish. Why it is that these Hollywood elites think they are so qualified to speak on difficult scientific and economic questions is beyond me. Although I often suspect they are acting out of all the guilt they carry for making so much money while contributing so little to society.
The annual income of some of these megastars must be equal to that of Botswana’s GDP. Yet the rich and famous are known for little more than being rich and famous. So they have to prove that they are worthy of existence by hopping on to the latest trendy cause. And the hippest campaign to get excited about lately is of course climate change. The trouble is, the solutions they are pushing will cost them nothing, but will cost us ordinary poor slobs plenty.
Here is how the news item goes: “Oscar-winning actress and environmental campaigner Cate Blanchett today urged some of the world’s biggest business leaders to act now on carbon emissions to save the planet. Speaking at the World Business Summit on Climate Change in Copenhagen, Blanchett – who won her best gong for The Aviator, the biopic of air travel pioneer Howard Hughes – said the low carbon economies of the future had to come into being right now.”
She is quoted as saying, “Australia’s best climate scientists have been warning us that we’ll face many more catastrophic fire days in southeast Australia unless the world acts to dramatically cut greenhouse pollution.”. So there you have it – more bushfires in Victoria if Europeans and Americans don’t rush to reduce their carbon footprint.
Someone who takes a slightly different view of these matters is Christopher Booker of the British Telegraph. He has recently written about how action on climate change may do little good for the climate, but will massively impact on our economies. He begins this way:
“One measure of the fantasy world now inhabited by our sad MPs was the mindless way that they nodded through, last October, by 463 votes to three, by far the most expensive piece of legislation ever to go through Parliament. This was the Climate Change Act, obliging the Secretary of State for Energy and Climate Change to reduce Britain’s ‘carbon emissions’ by 2050 to 20 per cent of what they were in 1990 – a target achievable only by shutting down most of the economy.
“Such is the zombie state of our MPs that they agreed to this lunatic measure without the Government giving any idea of what this might cost. Only one, Peter Lilley, raised this question, and it was he who, last month, alerted me to the fact that the minister, Ed Miliband, had at last slipped out a figure on his website (without bothering to tell Parliament). The Government’s estimate was £404 billion, or £18 billion a year, or £760 per household every year for four decades.”
He continues, “Such figures, produced by a computer model, are, of course, meaningless. But one of the mysteries of our time is how impossible it is to interest people in the mind-boggling sums cited by governments all over the world as the cost of the measures they wish to see taken to ‘stop climate change’.”
Unlike Blanchett, others with a more stable head on their shoulders have looked at the very real costs of taking these reckless actions. Booker explains, “Last week I dined with Professor Bob Carter, a distinguished Australian paleoclimatologist, who has been trying to alert politicians in Scandinavia, Australia and New Zealand to the scarcely believable cost of these proposals. He gave me a paper he presented to a committee of New Zealand MPs. China and India, as the price of their participating in the UN’s planned ‘Kyoto Two’ deal to be agreed in Copenhagen next December, are demanding that developed countries, including Britain, should pay them 1 per cent of their GDP, totalling up to more than $300 billion every year.
“Africa is putting in for a further $267 billion a year. South American countries are demanding hundreds of billions more. In the US, the latest costing of President Obama’s ‘cap and trade’ Bill is $1.9 trillion, a yearly cost to each US family of $4,500.
“Meanwhile, as Mr Obama’s Nobel Prize-winning Energy Secretary, Stephen Chu, babbles on the BBC’s Today programme about how the world’s energy needs can be met by wind and solar power (for which, he assured us, we would need to cover only 5 per cent of the planet’s deserts with solar panels), a study shows that for every job created in Spain’s ‘alternative energy industry’ since 2000, 2.2 others have been lost. (Mr Obama talks about creating ‘five million green jobs’ in the US.)”
And various green panaceas often turn out to be quite the opposite: “Last week the BBC and various newspapers excitably greeted the opening by Alex Salmond of Whitelee, ‘Europe’s largest onshore wind farm’, 140 giant 2.3 megawatt turbines covering 30 square miles of moorland south-east of Glasgow. It was happily reported that these would ‘generate’ 322MW of electricity, ‘enough to power every home in Glasgow’. They won’t, of course, do anything of the kind. Due to the vagaries of the wind, this colossal enterprise will produce only 80MW on average, a quarter of its capacity and barely enough to keep half Glasgow’s lights on.
“It really is time people stopped recycling the thoroughly bogus propaganda claims of the wind industry in this way. Any journalist who still falls for these lies by confusing turbines’ ‘capacity’ with their actual output is either thoroughly stupid or dishonest. The truth is that the 80MW average output of ‘Europe’s largest wind farm’ is only a fraction of that of any conventional power station, at twice the cost. For this derisory amount of power, the hidden subsidy to Whitelee over its 25-year life will, on current figures, be £1 billion, paid by all of us through our electricity bills.”
He concludes, “Truly, our world has gone off its head, and no one seems to notice – not least those wretched MPs who allow all this to happen without having the faintest idea what is going on.”
Quite right. But hey, if it makes some Hollywood celeb feel good to push us all into economic oblivion, simply to assuage her conscience, then I guess we shouldn’t complain too much. It’s just that most of us might have to sell our DVD collections – including those featuring Blanchett – in order to get a bit of money to buy some food and clothing. Why is it that these stars and politicians always seem so reckless with other people’s money?
http://www.news.com.au/heraldsun/story/0,,25539461-663,00.html
http://www.telegraph.co.uk/comment/columnists/christopherbooker/5374207/Climate-Change-Act-Now-the-world-faces-its-biggest-ever-bill.html