11 November 2010

Chris Huhne on Pragmatic Energy Policies

Speaking in China earlier this week, Chris Huhne, UK Secretary of State for Energy and Climate Change, provided an indication of just how much the debate over climate change policies has evolved.  He explained that policies focused on decarbonizing energy supply are justified on a much broader and pragmatic base than simply concern about climate change:
The UK's commitment to a sustainable energy mix is motivated by growing evidence that climate change is a tangible threat.

But it is also driven by more pragmatic concerns.

The first is purely economic.

For too long, our national prosperity was tied to the financial wizards in the City of London.

Risk-taking casino capitalism replaced manufacturing and production, hollowing out our industrial heartlands and creating an economy that was overly dependent on the financial sector.

When the credit crunch struck, were hit hard. We have had to cut public spending to pay down our budget deficit.

In the face of fiscal austerity, is it clear that greening our economy is the best way build a more balanced economy – and to secure more sustainable growth. With thousands of jobs in whole new industries, it is one of the brightest prospects not just for economic recovery, but for growth.

The second reason for our low-carbon transition is security.

As an island nation with dwindling fossil fuel resources, we are increasingly reliant on imported energy. Our energy import dependence could double by 2020.

Energy security is a prime concern.

Our winters are nowhere near as cold as those in Beijing. Nor are our summers as hot as Sichuan.

But we depend on scarce natural resources to keep our people warm and our economy moving.

Regardless of the public consensus on climate change, it is clear that relying on increasingly rare fossil fuels is not a long-term option. We cannot be exposed to the risk of resource conflict. Nor can we afford to remain at the mercy of volatile fossil fuel markets.

Not only are we vulnerable to interruptions in supply, we are also exposed to fluctuations in price. Oil or gas price shocks could reverberate throughout our fragile economy, hampering growth.

A more sustainable supply of energy is not an expensive luxury. It is a critical component in our national and economic security.

We are committed to clean coal with carbon capture and storage. To new nuclear power without public subsidy. To a radical nationwide programme of energy saving.

And to improve drastically our uptake of renewable energy.

Because thanks to a decade of under-investment in renewables by previous governments, we have a lot of ground to make up.
Huhne's comments are a sign that the debate is moving in a healthy direction.


  1. Er, welcome stuff, but...

    If our reasons for decarbonisation are scarcity of fossil fuels and security of energy supply, why is carbon capture and storage the first thing you think of?

  2. That is one of the very worst analyses I have EVER seen! It is a purely Marxist diatribe against free markets and for central planning (because the world has such overwhelming evidence supporting the successes of central economic planning?) Geez!


    1) Central planning was the root of the recent financial crisis (and Bill Clinton bears more blame than any other individual).

    2) Centrally planning our energy future will prove to be an even bigger disaster -- no matter what the excuse for embracing such abject folly.

    3) Only a Socialist could love the government created follies of Ethanol, Wind and Solar.

  3. Thank you, Tom. What we have here is fundamental dishonesty. What they can't get with one argument, they'll get with another.

    And by the way - did the speculators of the City of London really cause the hollowing out of industrial Britain? London's financial markets replaced the UK's industrial jobs in time - they didn't cause factories to be shut down. If it wasn't for those nasty casino capitalists, the UK would be a poorer place today relative to the rest of the world.

    And this 'new jobs' meme is a bad joke - one Obama loves to tell as well. Can governments 'create jobs' by taking money out of wage earners to subsidize other jobs? Sure. Does it make sense? I don't see how. The money taken from taxpayers obviously can't be used in other, more efficient ways. We could just as well put a tax on every new hire in the private sector, give it to men to dig holes and fill them back in, and call it 'creating jobs.'

    That 'island nation' business: is the UK going to stop importing anything from 'furriners?' Are they going to become self-reliant in food? Raw materials for manufacturing? The whole point of international trade is to sell what you have and buy from others what you need. Should the nations of the world join the UK and shut down international trade? What a farce.

  4. omments:

    Tom said... 1

    "why is carbon capture and storage the first thing you think of?"

    Fischer-Tropsch - Converting Coal to Liquids - byproduct is a lot of CO2.

  5. Let's see. Green jobs. Replacing low cost energy (coal) with high cost and unreliable energy (wind, solar). Some how this is supposed to be a net positive for the economy because a few jobs are created to build wind/solar?

    If that works let's go much further. Let's substitute high cost commodities for low cost commodities everywhere. What a jobs engine we would have.

    Do these people really believe the things they say? Or do they just think the rest of us are stupid?

  6. "With thousands of jobs in whole new industries, it is one of the brightest prospects not just for economic recovery, but for growth."

    It's interesting to note that like his sidekick, Lord Marland, Chris Huhne hasn't heard of Bastiat either.

  7. He explained that policies focused on decarbonizing energy supply are justified on a much broader and pragmatic base than simply concern about climate change:

    What a hoot. Translation: the science or lack of it be damned, our spending constituencies and rent seekers must not be deprived.

  8. You're losing the plot Roger if you think Huhne is capable of talking or implementing any sense on energy policy.

    Energy costs are rising mainly due to absurd 'climate policies.'

    Can I ask once again what are the renewable energy sources that can replace carbon fuels in the UK - certainly not wind and solar?

  9. This is a pack of lies in the respect that it was the Conservatives (Thatcher) who created the finance economy and they aren't going to change that now. Manufacturing sailed out to sea 25 years ago. This isn't the time to revive it (in the age of carbon trading).

    The reason for Britain promoting carbon trading is for the benefit of the finance industry. The exact opposite of what Mr Huhne said above.


    That has led to worries in the City that there won't be enough money to buy all the forest carbon. London's financial centre is the main home to the incipient global carbon market. Prof Heal believes that in a decade, the trade could be worth trillions of dollars.


    The security angle* is also a lie because it was never raised before carbon trading. This is nothing more than an excuse to let the nuclear industry in the back door and make fortunes for Goldman Sachs.

  10. The security angle is also a lie because it was never raised before carbon trading. This is an excuse to let the nuclear industry in the back door.

    British foreign minister Robin Cook revealed that Al Qaida was nothing more than the name of a CIA computer database of their own Islamist fighters.

    "Bin Laden was, though, a product of a monumental miscalculation by Western security agencies. Throughout the 80s he was armed by the CIA and funded by the Saudis to wage jihad against the Russian occupation of Afghanistan. Al-Qaida, literally "the database", was originally the computer file of the thousands of mujahideen who were recruited and trained with help from the CIA to defeat the Russians"


    The Taliban were created by Pakistani ISI at the behest of the CIA who also used Islamist fighters in Chechnya, Bosnia, Kosovo and Macedonia.

    Robin Cook was a very smart politician who resigned over the Iraq war.


  11. Energy policy should be simple: we need energy, population and economic growth requires more energy despite increased efficiency. Energy choice should be based on the cheapest and most viable option without the price being artificially increased by bad policy and taxes.

    Climate and energy alarmism is a socio-economic movement driven by 'green' misanthropists, career scientists (who consume wealth rather than create it)and filthy rich spokespersons such as Gore, Soros, Gates, Prince Charles etc. Why should billionaires have a bigger say than the mere mortal majority?

    Put energy policy in the hands of the relatively poor people with real jobs and we'd have a sensible and affordable energy policy, just like we used to have.

    Huhne is a multi-millionaire who owns 7 homes, so he is insulated from his own stupidity. Energy poverty has doubled in the UK in the past 5 years thanks mainly to 'climate policy.'

    Carbon fuels provide energy security, trying to replace them with expensive non-viable alternatives destroys energy security. Yes, we have hundreds of years worth of coal left, so no worries there.

    Some of us are getting very angry, and many more will join us if the costly climate charade continues much longer.

  12. eric144 said... 9

    "The security angle* is also a lie because it was never raised before carbon trading."

    Let me try to explain.

    The 'Greens' in Europe tend to be quite left leaning politically(as least by US Standards). How does one sell the 'security angle' to someone who doesn't see dependence on the Soviet Union for Energy Supply or for that matter being part of the Soviet Union as a problem?

    The answer is that one doesn't, one uses an environmental reason not to use fossil fuels that would have to come from the Soviet Union/Russia.

    It a matter of personal opinion to question whether Western European dependence on Vlad Putin for coal, oil and natural gas is a good thing. George Bush looked into Vlad's eyes and saw a 'stand up' guy, Colin Powell looked into his eyes and saw the KGB.

  13. Harrywr2

    The German Greens are a right leaning party*. The right wing German governmet has a very close relationship with Russia

    Russian-German gas link launched


    The Soviet Union was dismantled 20 years ago and Mr Putin is not left wing. He is extremely popular because he faced off what he termed the 'forces of international finance' (wink) and put Khodorkovsky behind bars. Freedom, he claimed, was being abused and the voters agreed.

    *After Bush re-election: German Greens shift further to the right, make patriotism a central policy (2004)

    While the chancellor occasionally attempts “through a vigorous appearance abroad to lend himself a patriotic air,” he has “no sense for our national identity,” said Stoiber. CSU General Secretary Markus Söder announced that the party would make patriotism a key issue in the next German national elections.


    Green Party Member, An Ex-Nazi, to Resign (1983)

    Admitting that he was once a Nazi storm trooper, the oldest official of the Green Party said today that he would resign the seat he won in Parliament last week.


  14. This "evolved" energy approach is little more than a warmed-over version of Obama's talking points: green jobs, reduced dependence on foreign oil, and climate change.

    The only problem is that it's all wrongheaded. 1.) Green jobs are incapable of growing the economy right now, as the subsidies cost more jobs than they create (see Spain). 2.) Dependence on foreign oil is a good thing, since international trade is good for all parties. Besides, countries aren't likely to go to war with their trading partners--trading with everyone is the best guarantee of security. 3.) Large uncertainties in climate change scenarios make action impossible on that basis alone.

    So is there a valid reason to promote diversity in our energy supply? Sure--the same reason one diversifies a financial portfolio: to reduce downside risk and to increase the likelihood of catching the high-growth assets. And that's the ONLY reason to promote energy diversity. And yes, such diversity leads naturally to decarbonization.

  15. "We are committed to clean coal with carbon capture and storage." (For which the technology doesn't exist) "To new nuclear power without public subsidy." (What about "renewables" without public subsidy?)

  16. "Huhne's comments are a sign that the debate is moving in a healthy direction"
    Are you blind?
    His comments are evidence of the CAGW position unravelling as the climate fails to obey the models.
    Those politicians who've nailed the colours to the mast and are taxing us like mad to pay for their profligate spending on their beaurocrats and useless, state-employed workforce,under the guise of "Global Warming" are squirming and trying desperately to justify their ruinous policies. Look at how Spain's renewable energy policies have failed, how much windpower is costing us, the public.
    The likes of Huhne are just ardent champagne socialists, drapped in a green vale, isolated from reality by their wealth.
    They've also not got the balls to face down their mistakes and the ardent Greens, admit that nuclear power is the only currently viable solution to our electrical generation energy requirements.
    Notice that he says nuclear must be subsidy-free, whilst pouring £billions into windmills.

  17. What an extraordinary number of misconceptions in one comment thread. Let's try to list them:

    1) "UK manufacturing is out the door." Actually, the UK is still #7 in manufacturing output in the world (recently slipped from #6). Not bad when you have 1% of the world's population. We're also still a net exporter of manufactured goods, one of few outside China.

    2) "Wind is expensive." It's not. The cost of new-build onshore wind energy is <3.5p per kWhr (and, yes, that is the *unsubsidised* cost) while the wholesale electricity price is ~6.5p per kWhr. So every kWhr of wind energy going onto the grid is reducing your electricity bill compared to fossil fuels. What's more, the subsidy (which is applied retrospectively) decreases as more renewables come online. The exact cost is heavily dependent on how the project is financed, since the input costs are dominated by construction. So the discount rate and repayment period largely determine the cost. Depending on these factors, it is somewhere between 1.5 and 3.5p/kWhr.

    3) "Putting renewables on the grid is driving electricity prices." Rubbish. Have a quick look at the plot of wholesale oil, gas and electricity prices over the past ten years. News for some of you: OPEC and the international oil market drive oil prices, oil prices drive gas prices, gas prices drive electricity prices.

    4) "The security angle is a lie because it was never raised before carbon trading." Fallacy: correlation does not imply causation. The simple fact is that in 2000 the UK produced all of the gas it needed from the North Sea Shelf, while in 2010 we are importing 50% of our gas needs, partly because North Sea production has declined and partly because demand has increased. So in 2000 gas security was not a worry because it was an entirely domestic market, while in 2010 it is a worry because 50% comes from a European market dominated by Russia. Who's not worried by Russia controlling our energy supply?

  18. " 'Wind is expensive.' It's not."

    Wonderful news! So, all the government subsidies will end tomorrow, yes? Can we start with the British subsidies for wind farms whose construction was subsidized and which now receive government subsidies NOT to produce electricity?

    Oh, and, can we make those wind farms work in the winter (without government subsidies)?

    Click here for some slightly more accurate (and substantiated) facts.

  19. We don't want wind power. We don't want dead birds and bats, we don't want the noise, we don't want vast areas of landscape spoiled. We don't want to make rich land owners richer and the poor poorer.

  20. I'm happy to allow wind power to find whatever legitimate niche it may (or may not) have in the marketplace. I just want government bureaucrats to butt out.

    So long as governments continue to subsidize failure, the wind power industry will never overcome its shortcomings -- because it will never have any incentive to do so.

  21. Tom

    I live in one of the most famous Victorian manufacturing towns in the world. There is no manufacturing left, save 120 jobs in a dieing (sic) factory. I was recently told by the Job Centre that there are (almost) no jobs at the moment. Half the shops are closed and we haven't even started with our return to the 1930s (cuts) yet.

    When I left school in the 1970s, there were factories everywhere and manufacturing was by far the biggest employment sector. If Britain is high up a league table, it's because of our wonderful Rolls Royce A380 engines and other very high tech industries. Mass manufacturing and employment are gone for ever, whatever Mr Huhne says. Please also remember Huhne is a member of the most right wing government in modern history.

    2)I can't be bothered to dispute that.Your arguments may have been stronger if you had provided evidence.

    3)see * below

    4) North Sea oil and gas depletion were prdictable. No security based solution was ever put forward until carbon trading and wind turbines. **They might have included re-opening the coal mines and extending the lives of North Sea fields, developing the west coast fields which seem to have been forgotten, and so forth. In fact, nuclear looks like the main solution to future energy in Britain.

    The British solution has always been the free market, even if it starved millions of Irish and Indians, and betrayed impoverished British workers, time after time after time.

    That is arguably the fundamental reason for the success of the British Empire. Utter ruthlessness. Dealing with Putin is a free market decision. Putin is not a communist, he is probably as free market oriented as anyone else, but he has the unique oiligarchs to contend with. We buy electricity from the French and what know what a troublesome lot they have been down the ages, including being principally responsible for the loss of the American colonies.

    * Households face £769-a-year rise in power bills to 'rewire the nation' for green energy

    5th October 2010

    A £200billion plan to switch to green energy could cost households an average of £769 a year, it was claimed today.

    Industry regulator, Ofgem, said a massive construction plan is needed to build new wind farms, power stations, including nuclear, and a modern national grid.

    The first stage, a £32billion plan to build new pipelines and pylon networks, has been given the go-ahead.


    Picking up the bill: Calculations put the cost of converting Britain to green energy at £769 a year

    'Consumers must make their homes more energy efficient, reduce the amount of energy they use and make sure they are paying the lowest possible price for it,' he said.

    Analyst at the M&C Energy Group, David Hunter, warned: 'Customers should expect a 60per cent hike in bills over the next decade or so.'

    Richard Hall, energy expert at the customer body, Consumer Focus, said: 'While moves to make our energy supply more secure and efficient are essential, the costs involved are huge.

    'Ofgem needs to be vigilant so that customers are not asked to write a blank cheque to fund them.

    'Energy suppliers and generators will get huge benefits from infrastructure changes and must share in the costs.

    'Measures are also needed to protect households at risk of fuel poverty from the disproportionate effects that price rises will have on the poorest consumers.'


    ** The North Sea has almost as much oil left as has already been extracted, a BBC Scotland investigation has been told.

    Experts believe between 25 and 30 billion barrels could still be recovered over the next 40 years.