The IEA’s Sustainable Recovery Plan Is Not Sustainable

[Update: A previous article of Mr. Doshi’s was posted by mistake and this is now corrected. My apologies to readers who commented before the error was corrected`cr]

Reposted from Forbes

By Tilak Doshi,

Governments of the world, take note. The International Energy Agency has a plan for you. If you take the sagely advice of the IEA’s technocrats, you will do your citizens a huge favour as you struggle to recover from the ravages of the global Covid-19 pandemic. You will not only boost economic growth and increase employment but also push global greenhouse gas emissions into structural decline. Government planners of the world, unite! Help your people become richer while saving the world from climate change. Get your free copy of the plan, hot off the press (published June 18th).

Alas, some of the world’s more sceptical citizens might be forgiven if they reach for their book of President Ronald Reagan’s quotes and come up with this: “The most terrifying words in the English language are: I’m from the government and I’m here to help.” While it is right to be wary of plans that promise a world where ‘all good things go together’, the considered views of the IEA – the world’s leading source of energy data and analysis — deserve our careful attention.

The plan comes with clear instructions (even if batteries are not included). Planners should “integrate” energy policies into government responses to the economic shock caused by the Covid-19 crisis. By integrating energy policies into governments’ recovery plans, they would “accelerate the deployment of modern, reliable and clean energy technologies and infrastructure”.  What exactly are these energy policies that need to be integrated in the “Sustainable Recovery Plan”? Lets get into the weeds a bit.

Most of the “millions of new jobs” created through the plan “would be in retrofitting buildings to improve energy efficiency and in the electricity sector, particularly in grids and renewables.” Other employment generators would lie in promoting energy efficiency in industries and supporting low carbon vehicles and transport infrastructure. The IEA notes that “the costs of leading clean energy technologies such as wind and solar PV are far lower, and some emerging technologies like batteries and hydrogen are ready to scale up”.

This is not the place to delve into detailed assessments of these energy policies touted by the IEA. But an overview serves to put across the point that the “science” of energy policy is neither straightforward nor consensual. Lets start with that hardy perennial “energy efficiency”, ceaselessly emphasized in countless “roadmaps” published by the many agencies and thinktanks working on energy affairs over the past few decades. Perhaps the first question that arises to anyone that does business for a living is why would businesses not be “efficient” in energy use or in any other area in which money can be saved? Why would businessmen not be aware of “efficiency” when their very survival in competitive markets depends on being able to maximize their output at least cost of inputs? 

Is it true that there is under-investment in cost effective energy-conservation technologies? For good reason, economists are sceptical that unexploited profit opportunities can exist for long. Twenty dollar bills can indeed be found on sidewalks but it is unlikely to be a common occurrence. Like nature abhorring vacuums, the continued existence of unused but profitable options to save on energy is precluded by competitive markets. Rational choice suggests that observed behaviour could well be optimal despite apparently “expert” cost-benefit calculations. Entrepreneurs betting their own money on energy technologies would, one would presume, be intelligent adopters of technology choice in a competitive world. It is unlikely that otherwise savvy businessmen are clueless on how to save money on energy choices. If that were not to be the case, one would have to re-write the history of capitalism not as the achievements of entrepreneurs risking their capital and skin but as plans carried out by the prescient salariat of bureaucratic organizations.

We are told of the “tremendous energy savings” that “leading clean energy technologies such as wind and solar PV” offer us. This is in keeping with the endless stream of green success stories pervading the media with assertions that wind and solar power are already competitive with gas and coal-fuelled power plants. Rigorous economic analyses of the hidden costs of unreliable, weather-dependent solar and wind power have countered such claims. Energy analysts would be hard put to cite examples of wind and solar energy projects that do not require government subsidies. Indeed there would be no need for the IEA exhortations for governments to support technologies that are allegedly already competitive with fossil fuels. Warren Buffet explained in refreshingly honest terms that “on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.” The average consumer also rightly baulks when asked to bear heavy financial burdens of retrofitting homes and buying electric vehicles to cut emissions.

It would seem that the IEA’s sustainable recovery plan for governments intent on extricating their economies from the world’s sharpest downturn since the Great Depression will not have much impact on Asia’s planners. Just last week, the Indian government announced a radical reform initiative aimed at attracting global investments in the long over-regulated coal mining sector. According to government spokesmen, opening the coal sector to private investment will generate jobs, reduce dependence on fuel imports and stimulate the economy towards a targeted US$ 5 trillion GDP. In neighbouring China, authorities intent on jump-starting an economy stricken by the Covid-19 lockdowns approved nearly 10 gigawatts of new coal-fired power generation projects in the first quarter of 2020. This capacity roughly matches the amount approved for all 2019. Coal-based power projects will play a similarly important post-Covid-19 economic recovery role in other parts of Asia such as Pakistan, Indonesia, Vietnam and even in wealthy Japan. The case for cheap coal-based power generation in emerging Asia, as in other developing countries, remains robust.

The call for sustainability, the rallying battle cry in the anti-fossil fuel crusade, permeates the social discourse everywhere. Private companies signal their commitment to it in advertisements, annual reports, management speeches and glossy PR brochures. Thinktanks and “development experts” dedicate a voluminous literature to the concept while environmental NGOs and activist shareholders shrilly proclaim its centrality to business investments and government policy. “Green” recovery programs may be all the rage among government planners in Western Europe, the UK and in Democrat-held states in the US. Yet they have no such purchase among their counterparts in developing countries who are well aware that true sustainability means delivering higher standards of living for the striving masses. Economic growth performance is what retains legitimacy for governments in office, not expensive bets on avoiding complex model-based predictions alarmingly described in the West as “climate emergencies”. For governments in developing countries, the IEA’s “sustainable recovery plan” is anything but sustainable.

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37 thoughts on “The IEA’s Sustainable Recovery Plan Is Not Sustainable

  1. “chairman of the World Economic Forum Klaus Schwab calls for the Great Reset of capitalism, seeing a silver lining in the pandemic which showed how quickly radical changes in lifestyles are possible”

    … and how sad for the climate people that the silver lining of the radical changes in lifestyles did not produce a silver lining in the continued rise of atmospheric CO2 concentration unabated. As we say in Thailand, “HOW CAN??”

    I looked into the “how can” for the esteemed Herr Klaus Schwab and here is what I found.

    https://tambonthongchai.com/2020/05/18/12479/

  2. And here in South Africa which has a perfect mirror of the world’s population, wealth distribution, educational levels, with parts enjoying first world standards of living and amenities, and other parts suffering from low education levels, primitive living arrangements and cultural levels varying as widely as economic ones, we also have the same loony economic ideas — barely re-hashed above the Stalinism levels at one end and over- intelectualised post-modern utopianism, gender politcs and an aver reaching victimhood that poisons everthing at the other.
    God help us, please because the intellectuals insist on using us as an experimental laboratory. Cocid has already stuffed the parts of the economy that used to work, and are bent on creating one that does not and has never worked anywhere– the only difference is that its proponents will wear a Green rather than a Red or Black shirt.

    • And at precisely the same time with the COVID lockdown, despite significantly reduced power demand, South Africa is again having power outages.

  3. I agree, this obsession with carbon footprints, reducing greenhouse gas emissions and fighting climate change has been successfully oversold.

    I live in Ontario, Canada and the delusion runs deep…almost everyone with a post secondary education, all of our governing, corporate, academic and media elites support the AGW scary narrative.

    Madness.

  4. None of this is surprising. Global governance and redistribution are the left’s answer for everything. It’s dogma.

    It’s dogma with no factual basis. Socialism in all its forms (including fascism) has failed everywhere it’s been tried.

    • ” Socialism in all its forms (including fascism) has failed everywhere it’s been tried.”
      Ah – but this time it is going to be different!
      (Like it was going to be different before the last time it failed!)

      • You left out that by definition that most people have to be taken advantage of under the political system and that is why it requires a totalitarian authority. Which is why it always fails.

      • One definition of insanity is doing the same thing over and over, hoping for a different result….

  5. Anything that His Royal Highness Prince Charles recommends is worth of a good look. Long live the Queen.

  6. Unfortunately, it these nutters have their way, we all will pay the price. And who will be held accountable when the “Green” covid recovery results in even more economic disaster?

  7. I was the North American Energy Manager for one of the worlds largest auto companies.

    We led all industries in reducing energy waste and improving energy efficiency.

    Yes, opportunities to improve efficiency still existed (and I am sure still exist today) but as you attack the problems economic realities step in, payback increases and large opportunities are more difficult to find; many of which require the replacement of large very capital intense systems.

    Businesses exist to make a profit. Energy reduction programs must compete with product development for funds. Without product development market share drops and so does profit margin.

  8. Years ago my father went to visit one of his old friends in the Seattle area. Don was a Rhodes Scholar and served in the OSS during the war. Brilliant guy, but life-long Communist. One of his sons was actually president of a state Communist party for a while.

    Anyway, we sat in Don’s living room, which had shelves wall to wall and floor to ceiling piled with books sometime in the late ’80s and in the course of discussing current events Don stated “That bastard Gorbachev has betrayed the Revolution; he wanted Communism to fail”, and went on to claim that all the General Secretaries had deliberately sabotaged the Soviet economy so it would fail.

    I thought to myself “what does it say about a system that all the people who emerge as its leaders are determined to destroy it?”, but I had enough sense to not say it aloud. I just listened as Don continued his rant, the gist of which was the system is perfect; any failings are due to incompetence or wilful sabotage.

    Years later, Don doesn’t seem so crazy anymore. Why is it that the people who have benefited the most from a relatively free-market Republic with individual property rights and limited government seem determined to end it? It seems intellectuals are drawn to Communism like moths to a flame; they simply can’t resist.

    Access to reliable and affordable energy supports the expectation that modern life will be something other than “nasty, brutish, and short”. The goal of an energy policy should be to make it more reliable, more available and cheaper. Instead, we have bureaucrats, academics and “thought leaders” promoting plans to achieve exactly the opposite.

    Poverty is a state you should want to escape from, not a goal you should aspire to.

    • AW said: “It seems intellectuals are drawn to Communism like moths to a flame; they simply can’t resist.” This has always perplexed me. The failures of Marxism are numerous and there for all the world to see but still the ideology persists like mold on bread. How many of those believers would be willing to lower their living standards drastically to spread the wealth? Just like AGW it’s a scam to suck in the disenfranchised and those with a low information threshold. The elite see themselves immune to the downfall but in reality they are the prime targets to be replaced by the new elites.

      • “The elite see themselves immune to the downfall but in reality they are the prime targets to be replaced by the new elites.”

        ^This. Could be that we as a culture need to either have two definitions of “intellectual” that mean exactly the opposite of each other, or less confusingly, make up a new term for people like that.

        Something that implies “drooling slack-jawed cretin” but punchier.

      • Conquerors always get rid of the useful idiots first. Simple reason. The useful idiots have already proven that they are willing to betray others in exchange for promises of free stuff.

      • But you see, Marxism just needs to be done correctly and it will work brilliantly. When you reel off the great run of raging successes they always have a ‘but’. Venezuela was doing just fine until the USA interfered they claim. That underpins a lot of their stupidity. After all, East Berlin hardly needed a wall to stop the flow of those longing for life in DDR did it?

    • To a large degree, intellectuals have come to take the view that they are incapable of error. They are just too smart to make any major mistakes.

      They don’t trust average people, they don’t believe average people are smart enough to run their own lives. In their minds the only way for society to move forward is for these intellectuals to take charge of everything.

      These intellectuals always fall in love with any political plan that puts them at the top of the heap and forces the unwashed masses to obey them.

      • Very true. It particularly is so with intellectuals who feel that society has not rewarded their brilliance with cash comensaurate with their opinion of themselves. Those in the sociology departments and the liberal arts are especially prone to this.
        The French called this the Treason of the Intellectuals, having identified the phenomenon in the years between the world wars 1920-1940. I am not sure of my French buit I think i it was called “le trahison des clercs”.

    • Academia’s self selection 9:1 Democrat to Republican

      A new study investigating the political affiliations of college professors has found that Democratic-leaning professors vastly outnumber Republicans.

      According to research conducted by the conservative-leaning National Association of Scholars, Democratic professors outnumber their Republican colleagues by a ratio of 8.5 to 1 on top college campuses.

      Could “inbreeding” and lack of testing assertions have degraded academia to such an abysmal low level?
      https://www.washingtonexaminer.com/opinion/democratic-professors-outnumber-republicans-9-to-1-at-top-colleges

      • “Could “inbreeding” and lack of testing assertions have degraded academia to such an abysmal low level?

        I think it’s due more to Conquest’s 2nd Law, i.e. “Any organization not explicitly right-wing sooner or later becomes left-wing.”

        I don’t know if you have noticed as I have but at least from my experience (I’ve been around for 77 years now), conservatives when hiring someone could care less about their politics. They just want to hire the most competent person they can find to do the job. On the other hand, since liberalism is a belief system that assumes the ultimate goodness of mankind and is not based on logic, liberals will only hire other liberals that believe as they do. They can’t tolerate have their beliefs questioned.

        • Joe, I don’t think that’s an accident. Look up the “Long March through the Institutions”. It’s been explicit left-wing policy since the middle of the last century. Not just academia, but government agencies, media, etc.

  9. All substaintially plans are unsustainable. This is one axiom of life that should be drilled into everybody!

  10. A lot of these guys are brilliant, but confess to having no interest in nor understanding of economics.

    Thus, Dunning-Kruger kicks in.

    Of course, Ludwig von Mises’ 1930s treatise on why socialism is bound inevitably to fail was conveniently buried and so their belief error remains largely unchallenged.

  11. Life has never been better for humanity as a whole.
    Nevertheless the delusional greens continually howl about taking us back to the dark ages.
    Incidentally these are invariably people who benefited enormously from the current system. So why is that? People should give a long hard think to why so many billionaires wish for an autocratic government.

  12. How about “The reduction of the size and interference of government” as a sound basic principle that will benefit all people but those addicted to government handouts?

    This would allow the best most economic energy sources to be tapped as needed.

  13. It’s not sustainable; but, with fading memories, secular incentives, and em-pathetic appeals, it is renewable.

  14. There are several factors which prevent us from achieving the lower energy prices desperately needed:
    1. The lack of truly open, competitive free markets. Instead, we have crony capitalism propped up by subsidies and other government supports which distort and even destroy such necessary markets. Stripping out all subsidies and other government supports would re-create this needed commodity market. Suppliers
    would then need to do the necessary R&D and provide innovative more efficient and new systems which could drive down their unit power costs; simply to maintain their market share and even to survive.
    2. Governments and too much of the media fail to insist upon or provide proper, honest and meaningful cost comparisons of the unit costs of power from various power generation systems, particularly with comparisons of fossil-fuelled and renewable systems’ unit power costs. As an example: the costs for up to 100% capacity dedicated and always available base load standby power generation and enhanced and extended power transmission works, as well as the massive amounts of land or even sea needed to be included when renewable power costs are considered. These additional works are required to accommodate low/no winds, sun or tides conditions, the remoteness and relatively small unit capacities of many renewables systems all need to be included for within the overall power generation system when WT’s, SP’s. The standby units would also need subsidies to make them commercially viable, due their being inefficiently run intermittently and below efficient loadings. Base load systems need none of these additional works and subsidies. The renewable power industry conveniently ignores these massive additional costs and dishonestly never quotes them when they claim cheaper prices to the consumer. This needs stamping on!
    3. By all means include savings in supposed, but only vaguely valued, future costs of rectifying and remedying claimed damages due to CO2, but always use the CO2 emissions of standby plants used with renewables as well as the savings due to CO2 emmissions.
    4. Overall have the Team A v. Teanm B public debate between alarmist and denier experts that Trump promised and in all other countries. The real total cost comparisons need to be transmitted.

    • Before including the alleged costs of CO2, shouldn’t you also include the well known benefits of CO2?

  15. Another international agency has taken the globalist agenda path.

    Is anyone still doing their jobs out there? anyone?

    • Well, not in South Africa! Here, a government (civil serpent) job seems to be something you HAVE, not something you DO! (h/t to Denis Beckett)

  16. From the article: “Rational choice suggests that observed behaviour could well be optimal despite apparently “expert” cost-benefit calculations.”

    I love it!

    “I’m from the government, and I’m here to screw you up.”

  17. From the article: “According to [Indian] government spokesmen, opening the coal sector to private investment will generate jobs, reduce dependence on fuel imports and stimulate the economy towards a targeted US$ 5 trillion GDP. In neighbouring China, authorities intent on jump-starting an economy stricken by the Covid-19 lockdowns approved nearly 10 gigawatts of new coal-fired power generation projects in the first quarter of 2020. This capacity roughly matches the amount approved for all 2019. Coal-based power projects will play a similarly important post-Covid-19 economic recovery role in other parts of Asia such as Pakistan, Indonesia, Vietnam and even in wealthy Japan. The case for cheap coal-based power generation in emerging Asia, as in other developing countries, remains robust.”

    Meanwhile, the EU and the UK and Australia and New Zealand continue to bankrupt themselves trying to reduce their CO2 production, which is a tiny little bit of world production. Someone is disconnected from reality.

    The Western Democratic Nations really have become an Idiocracy.

    Idiocracy is another description for Leftist government. Leftists start out with a delusional ideology and it just gets worse from there, if they are given their heads.

    It’s mass delusion on the Left in the best of times, and the Human-caused Climate Change Hoax has put them over the psychotic edge. And then there are those on the Left who are not fooled at all, but use the Human-caused climate change narrative as a means of gaining political power and wealth.

    Well, while the Western Nations struggle in delusion, the rest of the world moves on and moving on means producing more, not less, CO2. Western nations efforts to reduce CO2 won’t make a dent in worldwide CO2 levels. That’s just reality. The sooner the Western nations figure that out, the better for them.

    The Climategate Charlatans have done great harm to the world, like the Chinese leadership has done great harm to the world. The Chinese foisted the Wuhan virus on the world, and the Climategate Charlatans foisted the Human-Caused Climate Change/Global Warming Lie on the world, with their dishonest manipulation of the atmospheric temperature records, giving a false picture of reality. Both the Chinese leadership and the Climategate Charlatans did these things deliberately and their dishonesty caused, and is causing great harm to humanity.

    Liars. There are lots of liars in the world. As the old saying goes: “Don’t believe anything you hear, and only about half of what you see.”

  18. As in the case of an event horizon, we are not sure when we crossed over to the point where reason cannot escape the force of money grubbing and climate crusades gravity.

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