Study: Oxford Academics Promote Covid-19 Renewable Investment Stimulus

Guest essay by Eric Worrall

According to the Oxford meta-analysis, the least desirable stimulus measures proposed are airline bailouts, traditional transport infrastructure, income tax cuts, reduction in VAT and other goods and services taxes, and rural support policies.

The abstract of the study;

Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?

The COVID-19 crisis is likely to have dramatic consequences for progress on climate change. Imminent fiscal recovery packages could entrench or partly displace the current fossil-fuel-intensive economic system. Here, we survey 231 central bank officials, finance ministry officials, and other economic experts from G20 countries on the relative performance of 25 major fiscal recovery archetypes across four dimensions: speed of implementation, economic multiplier, climate impact potential, and overall desirability. We identify five policies with high potential on both economic multiplier and climate impact metrics: clean physical infrastructure, building efficiency retrofits, investment in education and training, natural capital investment, and clean R&D. In lower- and middle- income countries (LMICs) rural support spending is of particular value while clean R&D is less important. These recommendations are contextualised through analysis of the short-run impacts of COVID-19 on greenhouse gas curtailment and plausible medium-run shifts in the habits and behaviours of humans and institutions.

Read more: https://www.smithschool.ox.ac.uk/publications/wpapers/workingpaper20-02.pdf

Essentially their argument is green investment creates lots of jobs upfront, and provides lasting benefits; for example, they allege renewable energy requires fewer people to maintain once the infrastructure is built, improving economic efficiency.

… A lesson from the GFC is that green stimulus policies often have advantages over traditional fiscal stimulus. For instance, renewable energy investment is attractive in both the short and the long run. Renewable energy generates more jobs in the short run (higher jobs multiplier), when jobs are scarce in the middle of a recession, which boosts spending and increases short-run GDP multipliers (which are derived from expanding demand). In the long run, renewable energy conveniently requires less labour for operation and maintenance (Blyth et al., 2014). This frees up labour as the economy returns to capacity. The more efficient use of labour and the savings on fuel means that renewables are also able to offer higher long-run multipliers (which are derived from expanding supply). …

Read more: Same link as above

The big unanswered question the study leaves is, if renewable energy has no fuel costs and has lower labor costs, why is it so horribly expensive? Why do renewable advocates scream every time someone threatens to cut their government subsidies?

In the UK, Scotland’s Energy Minister Fergus Ewing has criticised the central government for cutting subsidies that support the uptake of renewable energy.

Speaking at a Bloomberg Energy Finance conference, Mr Ewing was reported as saying: “We are extremely disappointed that the UK government since May has decided to embark on what we can only term as an outright onslaught on renewables through removing planned, tried, tested, promised, clear investment commitments.

“That’s no way to continue to attract investors.”

Read more: https://www.smart-energy.com/regional-news/europe-uk/scotland-slams-uk-renewable-energy-subsidy-cuts/

The obvious answer to this paradox is they need the subsidy money. There is a hidden cost associated with renewables, a cost which was not discussed by the authors of the Oxford study.

Claims that renewables offer any long term economic benefit or even a short term benefit should be treated with extreme caution, until the renewables sector demonstrates it can thrive and compete without government subsidies or other market distorting mechanisms such as forced purchases of renewable energy.

The last thing we need, at a time when the global economy is stretched to the brink with Covid-19 lockdowns and spiralling medical costs, is to bet everything on trying something new, especially something with as poor a track record of economic return as investments in renewable energy.

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n.n
May 6, 2020 1:22 pm

Stimulate and retard monotonic change… progress.

Vuk
May 6, 2020 1:29 pm

There is a gold in them cloud cuckoo lands.

Vuk
Reply to  Vuk
May 6, 2020 1:51 pm

….. preferred version
https://youtu.be/zSSDXu6hfUc

markl
May 6, 2020 1:38 pm

“In the long run, renewable energy conveniently requires less labour for operation and maintenance (Blyth et al., 2014). This frees up labour as the economy returns to capacity. ” Bullshit. What about the operation of baseline backup? How about solar panel replacement/lifespan? Wind generation hasn’t come close to reliability forecasts for blades or mechanical apparatus.

Greg Cavanagh
Reply to  markl
May 6, 2020 2:21 pm

The labour force required for equivalent capacity is like 30:1, Solar:Coal.
As usual, they make statements without knowledge.

Farmer Ch E retired
Reply to  Greg Cavanagh
May 6, 2020 2:43 pm

Maybe they know common-core math.

nw sage
Reply to  Farmer Ch E retired
May 6, 2020 5:53 pm

Or they relied on ‘scientific’ advice base on models (and all that implies)

Michael Jankowski
Reply to  markl
May 6, 2020 3:44 pm

It is hard to believe that these people write such things with a straight face.

The economy will return to capacity in the short-run, not the long run.

“Frees up labour” = unemployment. Such spin.

George Daddis
Reply to  markl
May 6, 2020 3:51 pm

Who the heck are funding these studies?
Is there a National Institute of Non Sequiturs?
(Right next door to the Department of Funny Walks.)

George Daddis
Reply to  markl
May 6, 2020 3:53 pm

These are the same folks who idiotically touted that using “Green” energy vs fossil fuels will create significantly more jobs!

Greg Cavanagh
Reply to  George Daddis
May 6, 2020 10:25 pm

It does, and that’s the problem.

It takes workers to create less energy = more costly energy.
And they advertise that as being a good thing.

ResourceGuy
May 6, 2020 1:41 pm

Let’s face it the UK was severely impacted by a viral infection process very early on and it was not the biological strain. It was an insidious ideological mutation that crossed the blood brain barrier to target neurons and produce masses of clumped proteins. At this point over 80 percent of the population is infected and the science to defend against it is still incomplete.

mikewaite
Reply to  ResourceGuy
May 6, 2020 2:24 pm

On the contrary , the people desirous of a green revolution are very clear minded about what they want , very clever in manipulating media, politicians and academics to their way of thinkng and every project they have undertaken has been met with brilliant success.
It is the sceptics who have, to date, achieved nothing.

ResourceGuy
Reply to  mikewaite
May 7, 2020 11:13 am
John in Oz
May 6, 2020 1:50 pm

This frees up labour as the economy returns to capacity.

Unfortunately, due to the intermittency and non-dispatchable nature of renewables, there would not be sufficient power available to return to the current or increased economic capacity so we have to exist with a much lower capacity with all of the consequent hardships that entails.

Rhoda R
May 6, 2020 1:51 pm

I hope that the rest of the population is getting as tired of this ‘climate change’ fear mongering as I am. I suspect that as the number of things to be fearful of increases that the impact will lessen. Sort of like the Boy Who Cried “Wolf” response.

HD Hoese
May 6, 2020 1:57 pm

From the report
“Experts rating policy archetype in top 10. Figure 2:Mean policy response characteristics by sampling group (i to iv) and wealth of focus economy (v to vi)” Appendix 4–Expert Groups.

and then “Our results suggest that, in many cases, experts think that climate-positive policies also offer superior economic characteristics. However, there is the potential that these results are driven by participation and/or response bias related to any number of background factors. For instance, climate change beliefs of respondents could have influenced their responses to economic metrics in either direction. The survey was not framed as focused on climate change and the survey question on climate impact potential came after the questions on economic impact. However, the invitation for the survey was sent by the authors, who have a public track record of research on climate economics. We acknowledge the potential role of bias in our results and suggest that readers interpret them as uncorrected, subjective and relative perspectives.”

Fig. 2 looks like a target I would get with a pistol or some farther distance with a shotgun. Us non-expert economists might be a little more than suspect about this as a possible investment even if we trusted experts nowadays. They also have a picture of a power plant spewing out what looks like water vapor.

TonyL
Reply to  HD Hoese
May 6, 2020 6:13 pm

Fig. 2 looks like a target I would get with a pistol
I checked. Your bullets are all different calibers. That could be a problem.

some farther distance with a shotgun.
A custom load with mixed shot sizes? Not unheard of, but of dubious value.

As for the paper itself, just another attempt by people in unrelated fields to get on the Global Warming bandwagon. Just not worth our time.

philincalifornia
May 6, 2020 2:37 pm

Nicholas Stern is a co-author. I don’t know whether to laugh or puke.

Ron Long
May 6, 2020 2:50 pm

Looks like all of the smart people got on the Mayflower.

ResourceGuy
Reply to  Ron Long
May 7, 2020 11:14 am

+1

Rudolf Huber
May 6, 2020 2:59 pm

Those academics essentially oppose anything that would make life for the bulk of the population easier. I appreciate that they do this in such an obvious manner. Because it’s rather easy to decipher by voters and as they are hammered by the COVID-19 crisis already, they might remember when the next election comes around. Australia style.

May 6, 2020 3:17 pm

“The COVID-19 crisis is likely to have dramatic consequences for progress on climate change”

The pandemic has created a great deal of excitement in the climate movement.

https://tambonthongchai.com/2020/04/29/numnut-un-bureaucrat/

Joel O'Bryan
May 6, 2020 3:27 pm

If Socialists understand only one thing it’s, “Never let a crisis, manufactured or otherwise, go to waste in the grabbing of more power.” They know this because the people are mostly sheep and will trade away their Liberties, hard won liberties passed down to them from better generations, for a false sense of security.

AWG
May 6, 2020 3:37 pm

So some meatheads on the public dole arrogantly presume that their jobs are worthy of eternal subsidies, and that they have the temerity to dictate what jobs and business models are worthy of existing?

Because as we have seen with the Wuhan Death Miasma, central planning works marvelously. Surely a handful of people have the wisdom and breadth of knowledge to make better decisions and act more swiftly and respectfully than the Unseen Hand.

CD in Wisconsin
May 6, 2020 3:45 pm

“.. In the long run, renewable energy conveniently requires less labour for operation and maintenance (Blyth et al., 2014). This frees up labour as the economy returns to capacity..”

What a load of garbage. There is considerably more labor efficiency in fossil fuels and nuclear because they are considerably more energy dense than sunshine and the wind.

As I always say, at least bovine dung is useful as fertilizer. I have serious doubts that this report even rises to that level of usefulness. What else needs to be said for a report that has little value outside of lining bird cages with its pages?

lee
Reply to  CD in Wisconsin
May 6, 2020 8:24 pm

What they are saying are these new GREEN jobs are at best temporary.

niceguy
Reply to  lee
May 7, 2020 11:31 pm

AOC will not be happy, she (and many other in that group) wants MORE long term jobs in the “green” energy business.

Thomas Englert
Reply to  CD in Wisconsin
May 6, 2020 9:25 pm

CD,
You could line the bird cage with Fig. 2 to give them something to aim at.

Nessimmersion
May 6, 2020 3:52 pm

How many times?
Sir John Cowperthwaite set the best method of growing the economy in Hong Kong and his method had a universal truth.
Get the govt out of the way, no one on earth can manage an evonomy better than the market can.
Reagan and Thatcher also understood the deeper lessons.
Emulate Cowperthwaite.

pat
May 6, 2020 5:37 pm

BBC is on a covid/co2 roll: biggest decline in CO2 emissions ever as a result of the covid19 pandemic. rarely, if ever, because of the political decisions, based on fake models, to lockdown economies. 1918 Spanish flu gets the usual mention.

first 15m (with slight break) features BBC’s Matt McGrath who says same decline has to happen every year until 2050 to save the planet, and Sundaram/Emory University on the CO2 claim:

AUDIO: 6 May: BBC OS: Coronavirus: Conversation with sex workers
Presenter: Nuala McGovern
We discuss the consequences of the pandemic for the environment, as experts forecast the largest ever annual decline in carbon emissions in 2020 because of the decline in economic activity.
And we get your questions answered on the virus, with Dr Maria Sundaram from Emory University in Atlanta, Georgia.
https://www.bbc.co.uk/sounds/play/w172x2sqn4v9lm8

6 May: BBC: Coronavirus: UK warned to avoid climate change crisis
By Roger Harrabin
The UK must avoid lurching from the coronavirus crisis into a deeper climate crisis, the government’s advisers have warned.
They recommend that ministers ensure funds earmarked for a post-Covid-19 economic recovery go to firms that will reduce carbon emissions…
And investment should prioritise broadband over road-building, the Committee on Climate Change (CCC) says…

Green groups say any bailout should include a condition that the industry shrinks until it finds a technological solution to its carbon emissions…
The committee says the government must produce policies that allow the UK to reduce emissions to Net Zero in an orderly way – unlike the chaos of the Covid-19 crisis…
https://www.bbc.com/news/science-environment-52547885

niceguy
Reply to  pat
May 7, 2020 11:30 pm

Bruno Le Maire is going to “help” Air France-KLM by giving money in exchange of closure of many internal lines, to force people to take the train:

“Kill your business model or you don’t get State help.”

David Sigman
May 6, 2020 6:08 pm

You want to know why it’s so expensive and why it doesn’t work just watch Michael a Moore’s new movie, “Planet of the Humans.”

observa
Reply to  David Sigman
May 6, 2020 7:25 pm

Watching them devour each other with Relevance Deprivation Syndrome with the Rona is sublime satisfaction. These are people who believe in chipping forests for their pet renewables yet going into histrionics and meltdown that the weather is burning them. A picture’s worth a thousands words in that regard and here’s a classic with all those tensions playing out-
https://www.msn.com/en-au/news/australia/nsw-south-coast-bushland-that-survived-fires-given-reprieve-from-bulldozers/ar-BB13HOkp
Who’d be a politician trying to sort all those tensions out eh?

observa
Reply to  David Sigman
May 7, 2020 9:32 pm

Renewables are only for personal use and not for profit-
https://www.msn.com/en-au/news/australia/million-dollar-firewood-theft-operation-busted-in-southern-tasmania/ar-BB13LfUF
Unless of course it’s chipped up and used in approved biomass power stations by multinationals as that’s different.

niceguy
May 6, 2020 6:28 pm

Guess what requires a lot of spending upfront with a lot of builders, machines, work of foundries but few jobs later?

Building new nuclear plants.

And that’s the specific aspect of nuclear economy that was used by “renew” advocates to attack nuclear in discussions of compared economies of electric plants.

The aspect they promote is almost always the aspect they criticize. They are insane.

J Mac
May 6, 2020 6:55 pm

“Renewable Investment Stimulus” is appropriately named…. because governments can just keep granting subsidies and printing money forever.

Is it sarcasm… when it’s so close to the truth? You tell me….

niceguy
Reply to  J Mac
May 7, 2020 11:54 pm

And reward political backers.

Either stop that corruption or stop pretending, and remove all laws limiting political donations.

And stop that joke of ultra restrictive, non conservative, non constitutional Citizen United decision where financing of political speech is allowed … with exceptions which are traps that will be exploited, or Rosensteined, by the next DOJ/FBI lowlife. We saw that with Cohen’s admitted “crime” involving unnamed Donald Trump. The theories re: dotations “in kind” of former FEC chairwoman are an abomination.

Coach Springer
May 7, 2020 5:10 am

Reading the headline of some people calling their arguments a “study”:

Study: Husband finds that his wife really is a bitch.

Danley Wolfe
May 7, 2020 2:15 pm

AAAS/ Science magazine ran a guest editorial similar in nature, in the May 1, 2020 issue – Vol 368 Issue 6490, titled ” A COVID-19 recovery for climate,” which says iter alia —

“In response to the coronavirus disease 2019 (COVID- 19) pandemic, countries are launching
economic recovery programs to mitigate unemployment and stabilize core industries. Although
it is understandably difficult to contemplate other hazards in the midst of this outbreak, it is
important to remember that we face another major crisis that threatens human prosperity—
climate change. Leveraging COVID-19 recovery programs to simultaneously advance the climate
agenda presents a strategic opportunity to transition toward a more sustainable post–COVID-19
world.”

“The pandemic directly threatens individuals and health systems, whereas climate
change undermines broader natural and human systems. COVID-19 requires responses within
days and weeks, whereas reactions to the climate crisis appear less acute. Nevertheless, science
suggests that climate impacts will worsen the longer we wait. So, we are faced with overlapping
crises that require immediate societal mobilization.”

“Where, then, should we begin to focus in building back jobs and the economy while also
transitioning toward a more sustainable future? One strategy would be to use recovery funds to
stimulate innovation for the low-carbon energy transition. This might involve promoting new
infrastructure, business models, and industrial capacity in renewable energy technology, energy
storage, electric vehicles, and charging stations through tax credits and other measures. An
example would be supporting the diffusion of electric delivery vehicles, given the rise in ecommerce.
But transitioning entire sectors is a long-term endeavor that requires continuous
adaptation and attention to context.”

I have different thoughts. This global crisis should be a time for pause and a sanity check – to consider that while it’s well and good to work at continuing the development of alternate energy sources, it is also a time to gut check the fact that oil and gas are going to be in any conceivable scenario much less expensive that alternative energy sources and they will be around for a long time coming, so get used to it. And make sure we take advantage of it to help fund other things like coronavirus research ~ to develop failsafe prevention measures to prevent future health crises.

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