Guest Post by Willis Eschenbach
Let me start with a couple of the most callous and heartless quotes that I know of. Here’s a description from Politico of the first one:
President Barack Obama’s Energy secretary unwittingly created a durable GOP talking point in September 2008 when he talked to The Wall Street Journal about the benefits of having gasoline prices rise over 15 years to encourage energy efficiency.
“Somehow,” Chu said, “we have to figure out how to boost the price of gasoline to the levels in Europe.”
And here’s the second quote, from President Obama:
“Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket, regardless of what I say about whether coal is good or bad, because I’m capping greenhouse gases”
In agreement with the beliefs of President Obama and Secretary Chu, and a vain attempt to fight the imaginary menace of CO2, the countries of Europe have driven up the price of energy. This is supposed to make people use less of it, and thus reduce CO2 emissions.
As a result of the European policies, the current energy price situation looks like this:
Not a pretty picture …
So consider the effect of this on the poor. To begin with, the poor spend a much larger part of their income on energy than do the rich.
Now, the energy prices in Europe are more than twice what they are in the US. So if the US doubled to match the fantasies of Secretary Chu and President Obama, the richest fifth of the nation would only be paying 10% of their income for energy … but the poorest fifth of the nation would be paying close to half of their income for energy. And as I pointed out about the poorest of the poor in my post “We Have Met The 1% And He Is Us“,
Those people have no slack. They have no extra room in their budgets. They have no ability to absorb increases in their cost of living, particularly their energy spending. They have no credit cards, no credit, and almost no assets. They have no health insurance. They are not prepared for emergencies. They have no money in the bank. They have no reserve, no cushion, no extra clothing, no stored food in the basement, no basement for that matter, no fat around their waist, no backups, no extras of any description. They are not ready for a hike in the price of energy or anything else.
(In passing, let me suggest that you might enjoy reading that post, which discusses this issue of energy and the poor in some detail.)
The result of all of these factors is what is called “energy poverty”. That’s where you don’t have enough energy to keep your home warm. That’s where you’re a single mom with three kids and your old car you need to get to work drinks gas faster than your ex-husband drank whiskey … so if gas prices double your kids will do without something important. That’s where you and your family sit in the cold and the dark and shiver because you can’t pay your energy bills.
And that’s where a study from the Jacque Delors Institute says (emphasis mine):
During this winter of 2020-2021, hundreds of millions of Europeans are constrained to stay at home because of lockdowns and curfews instituted to contain the propagation of COVID19. For millions of them, this means staying in poorly heated houses, which causes both discomfort and a threat to their own health.
This policy paper gives an overview of the state of energy poverty in the European Union (EU) and the way this issue is currently addressed by Member States and by the EU. While it appears that energy poverty has generally been decreasing over the last years, in 2019 there were still over 30 million Europeans who claimed to be unable to heat their home adequately in the winter.
Thirty million Europeans, many of them pensioners, many of them kids, all of them poor, sitting in unheated houses … that’s about the population of California. Or for the folks across the pond, it’s about the population of Hungary, Austria and the Czech Republic combined. Again per the report, Bulgaria, Lithuania, Greece, Portugal and Cyprus are the countries with the highest share of the population who are unable to heat their homes.
Now, there’s an old saying, “No pain, no gain.” Me, I think that’s crazy because I’ve had lots of painless gains. But if there is pain, well, there should at least be some gain to go along with it. So … shall we take a look at the purported gain in the question of CO2 emissions?
I mean, all those countries signed on to the Paris Climate Discord, they all have followed President Obama’s and Secretary Chu’s theories and drove their energy prices through the roof to reduce greenhouse gases, so now at the end of the day there must be some real gains in per capita CO2 emissions, right?
Here you go:
Thirty million Europeans are freezing in the winter, unable to heat their homes, and for what?
For nothing. Zip. Niets. Diddley-squat. Ingenting. Zero. Nada. Rien. Nichts. Not one thing.
Despite Europe creating widespread energy poverty, despite the US not being in the Paris Agreement, the US has reduced emissions more than any of the countries shown above. Europe is condemning old people and children to shiver in the dark and cold, and for absolutely no gain at all.
Look, I don’t think CO2 is the secret knob that controls the climate. I think that’s a simplistic scientific misrepresentation of a very complex system. As a result, I think that the “War On CO2” is a destructive, costly, and meaningless endeavor.
However, perhaps you do think that the climate, one of the more complex systems we’ve ever tried to analyze, is ruled by just one of the hundreds of different factors affecting the system. If so, I presume you think the European actions are justified because you believe you will be helping the poor people in the year 2050 or 2100.
So … if those are your motives I ask you, I beg you, I implore you, don’t wage your war on CO2 by screwing today’s poor to the floor!
Because I can assure you, possibly helping tomorrow’s poor by actually hurting today’s poor is a crime against humanity, one you absolutely don’t want to have on your conscience.
My best to all, regardless of your views regarding the climate control knob,
w.
PS—Misunderstandings are the bane of the intarwebs. Accordingly, I ask that when you comment you quote the exact words you’re discussing, so that we can all know who and what you’re talking about.
It can help to think of America and its energy needs from Frontier times. Those wagon trains heading west captured energy from the growth of plants, heat from burning wood and so on. It was there to be taken, since the Frontier people had not evolved fancy social laws.
Next, small shows of oil we found, then rather quickly on the time scale of people, there was enough oil to meet the needs not only of the local users, but a surrounding community. Oil shifted to being a market commodity. Those who could produce it at low cost could make a good profit as users bid amongst suppliers in a Free Market. That is when the good times ended.
That is when governments decided that they needed some of the oil money. Governments had scarcely any part in discovering new oil, but they inserted themselves as bodies able to regulate the oil, by manipulating volume and sale prices. They did this by coercion, with threats of taking away government services from those who declined to enter this game of destruction of true Free Enterprise.
Oil prices and availability became a large part of government revenues. Individuals could no longer easily explore for themselves and fill their needs from their own discovery. It has all become too bogged down with complications like access to land, deals with land owners, agreements with shipping and storage companies and so on. Easiest just to front up to the petrol pump and pay the price including taxes.
The price of oil therefore and evermore included a slab that was the government’s take. The government, being less creative in thinking than the explorers who did the valuable work, took large or small slabs depending on how well they had managed their debt. The whole process of determination of the government “take” became separated from the actual economics of oil supply and demand, growing or shrinking reserves in this place or that and so on.
Economists and accountants devised many wondrous new ways to name and justify this government take, which is now practically unrelated to reality. It is now a tool for political manipulation. Not just the price, but also the demands, like “You shall not frack” or “You shall not enter Federal lands.” What was once a way to improve on burning firewood at the frontier became a political instrument, able to be used to wage war on particular groups in society like political opponents.
And on those pushing for energy supply without future oil. That step is sheer madness. It has the capacity to destroy national wealth and harmony and it will sadly now do just that.
So, what is the lesson? More of the poor have to go back to burning firewood, like the Frontier settlers did out of need. Some powerful forces are working to take us back to frontier poverty, to more greatly enrich themselves. This is not fair and it is stupid from many aspects.
The greater numbers of people about to become poor are going to reject this future planned by others. They are going to dilute the ability of various rogues to take them back to being poor and that will almost certainly involve bloodshed.
All of this could have been avoided if the hard, proper science had been adopted instead of the unproven speculations of impending doom that politicians globally seem to have been forced into accepting.
What a terrible penalty the word will pay for not getting its science right.
Taxes are not theft per se, the nation as a whole has to build and maintain the infrastructure that enables the exploitation of resources, recources that, by definition, belong to the nation. The whispers of Bolsh sound sweet, but they distract you from the reality lived by people with dirt under their fingenails.
Taxes used to fund government charity, as apposed to government services, most definitely ARE theft.
The government is supposed to provide for the *general* welfare, not for individual welfare.
Besides the interstate highway system exactly what infrastructure do you think the federal government has built? It’s actually almost none, probably less than 1%. Sate, local, and private funds have built this nation’s infrastructure, from bridges, to farm-to-market roads, to sewer treatment plants, to railroads, to water treatment plants, to telephone systems, to power utility systems, to schools, and on and on and on!
Isn’t the actual phrase “promote” the general welfare? Big difference between promote and provide.
There are plenty of cases in which a tax/price increase was introduced to lower consumption. How many of these increases did indeed lower consumption? None.
So why do we still pretend that these hikes lower consumption?
Willis, you are a villainous monster; apparently:
That quote is from a despicable piece of propaganda* that – even in its mere conception – celebrates a vicious despotism. The protagonist is “out of his mind” but the real derangement is in the sick minds of the ideologues who think their dangerously incendiary demonisations are even remotely justifiable!
* https://www.propublica.org/article/the-climate-crisis-is-worse-than-you-can-imagine-heres-what-happens-if-you-try
What a poor PATHETIC LITTLE MAN that guy is.
Best course of action would be for the wife to pack up the kids and move out.
Living with someone with a DEEP MENTAL ILLNESS is not good for children.
Tantamount to CHILD ABUSE….
Here in Massachusetts- many people claim CO2 is the climate control knob. Then I ask them if they have cut back on THEIR use of fossil fuels- and they vanish. And I ask them if they want a huge, ugly solar or wind “farm” next to THEIR home, and they continue to stay out of site with no reply.
No UK prices? We’re still in Europe regardless of leaving the EU.
I picked the ten European countries with the highest petrol prices.
w.
There appears to be absolutely nothing we can do about. In whoopie’s words we just have to “suck it up”
I wonder how much the lack of heat in northern Europe has contributed to COVID deaths, by physically stressing people and compromising their immune systems.
What is this? Has Europe/UK gone back to the Middle Ages and only those living in castles can have heat and cook their food? What in the blue-eyed blinking world is wrong with the people running those countries?
It is apparent from the graphs that the United States has a distinct advantage in economic competition because of our cheaper energy prices. This difference is why many companies are moving some, or all, of their operations to the United States. Thanks, former president, Trump.
But you Europeans can cheer up a little. Our fearless new leader, Zhou Bai-den (the other day he said he got shot at in the past, but no evidence of such, so I guess he’s lying again) will level the playing field with his attempts to cripple the U.S. fossil fuel industry and his attempt to change the Earth’s weather by building windmills and solar farms. No doubt these efforts will increase costs in the United States drastically, and companies won’t want to move here anymore.
Zhou is also said to be considering raising the corporate taxes to the point that the U.S. will no longer be competitive with other nations. Right now the U.S. corporate tax is slightly below everyone else that matters. Zhou has to have that tax money for his windmills. And to buy more votes.
may have been the same sniper fire that Hillary experienced in Bosnia. or perhaps he was riding in the helicopter with Brian Williams over iraq.
What is it with leftist and their false claims of being shot at?
Mr. Eschenbach
I took your advice and read “We are the 1%…”. I have been put in my place. I am of course aware of the disparities, but to have them so eloquently illustrated is itself a treasure, and a cold slap to anyone with a conscience.
Mark
Thanks for your kind words, Mark. I’ve had the privilege in my life of wandering to places where few people venture, and I’ve done my best to bring back what I’ve learned.
Here’s the link again for anyone who missed it.
w.
Willis, I too very much enjoyed your “We are the 1%…”. After two stints in the Peace Corps teaching science (Malaysia 1974-75, Liberia 1984-85) like you my eyes have been opened to the level of wealth that we take for granted in the USA. My question for you is, when are you going to publish “Retire Early…and Often”? You are, in my view, perhaps one of the best writers of our era.
Working on it, Wayne … thanks for the encouragement and the kind words.
w.
Well here we go again: comparing raw electricity prices is comparing apples and pears. Europeans use much less electricity per household than US households. You’d need to look at annual bills on some comparative basis to get a fair comparison.
Then gasoline prices – well in the Netherlands they don’t drive nearly as much as in the US. It is a small country, there is excellent public transport and they are fanatical cyclists. In Norway there’s a massive incentive to EVs – in towns and cities that’s the vehicle of choice now. And Europeans more often drive small fuel efficient cars (not that there’s anywhere to go lately: it is a month since I filled the tank on my small car)
In Germany there is tax, unrelated to renewables, added to the electricity price. an odd choice, but its there.
US car use is on a completely different basis to Europe too.
Griff, I fear that’s all what I call “a difference that makes no difference”. My point remains. Expensive energy, regardless of how you justify it or dissect it, leads to energy poverty … as proven by the existence of 30 million people in Europe unable to heat their homes.
All of your objections don’t change that ugly fact in the slightest.
w.
“And Europeans more often drive small fuel efficient cars”
Circular logic at its finest. *Why* do they drive small fuel efficient cars? Could it be because of fuel prices? Or is it because of the roads? Or is it a combination?
If all your travel is in a town or city then an EV might make some sense although a hybrid would be a much better choice. The US is a much different place. Load up an EV in Topeka, Kansas with an entire Scout’s troop equipment, drive 600 miles to the foothills of the Rocky Mountains, then take a one-lane dirt road 40 miles up into the mountains where there is no electricity and no cell service to spend a week camping out. First off, you need off-road four-wheel drive with a compound low to navigate much of the climb. Secondly, how do you recharge that EV? It’s not like you can carry enough solar panels with you to do it with a truck already loaded with equipment. Thirdly, you need to be able to make the trip in one day because you can’t afford to stop somewhere and pay for lodging such as in a motel.
How many small European EV’s can handle such an outing?
Hi Willis, agree with you that energy in Europe is ridiculously overpriced.
But just let me put one experience here.
I lived in California Bay Area for four years. I lived in ridiculously overpriced apartment, despite paying 3200$ monthly for 900sqf, I had ancient electric heating, thanks to PG&E Tier system I was paying around 300$ monthly in December and January for electricity heating. Around 1000$ yearly.
Price of electricity was over 30c/kWh.
I would specify my state as on verge of housing and energy poverty. All this inspite of quite nice IT income over 120k. I have 3 kids.
After returning to EU, Slovakia, I’m paying 5c/kWh with natural gas heating. Costing me 700$ yearly, but heating double area in worse climate.
Price of electricity was 14c/kWh.
We are lucky that Slovakia has 85% of electricity from nuclear and water. Spared from green expensiveness. Actually it was ours and Czech nuclear which saved German and Austria’s ass from blackout in January.
I read that getting natural gas connection is going to be problem in California.
So it is not so black and white. But you are right, price of fuel in EU is pure stealing.
They are anti-development, anti-family and anti-human. Put those glasses on and then look at their policies.
Willis E,
Another immensely effective and informative article. This should be picked up by the media and published widely to facilitate a balanced public conversation. How to make that happen?
“So let me say that again, 60% of our emissions that need to be reduced come from you, the person across the street, the senior on fixed income, right … there is no bad guy left, at least in Massachusetts to point the finger at, to turn the screws on, and you know, to break their will, so they stop emitting. That’s you. We have to break your will. Right, I can’t even say that publicly.” – David Ismay, MA Gov. Charlie Baker’s under secretary for climate change, speaking to Vermont climate nazis, Feb 5, 2020.
Yes, higher energy prices will hurt the poor.
That’s when the gov’t will mandate energy rebates for the poor paid for by everyone else.
Until *everyone* is poor. Then we get to the shared misery of Democratic Socialism.
The existential threat is in the mirror, not outside.
I know one thing that we found in our analysis is that 60% of our emissions come from – as I have it started to say you and me, except you guys are in Vermont – 60% of our emissions come from residential heating and passenger vehicles. Let me say that again …60% of our emissions that need to be reduced come from you, the person on your street, the senior on fixed-income. Right now there is no bad guy left, at least in Massachusetts, to point the finger at and turn the screws on and no break their will so they stop emitting. That’s you . We have to break your will.
Massachusetts Undersecretary for Climate Change David Ismay in a meeting with the Vermont Climate Council back in January
Most of the difference in petrol prices is tax, that in Europe males up about 70% of the price.
https://www.aip.com.au/pricing/international-prices/international-price-comparisons
In Australia, with a pump price of about 134 cents/litre (A$), that includes an excise tax of 43 cents/litre and a 10% GST tax of 13 cents.
Success!
They will need a lot of support and services from the Party that “cares”.
With February temperatures falling to unexpected and inconvenient -15°C to -20°C , in Germany the problems for the poor will increase with even higher taxes on natural gas , fuel and electricity since January 2021! Of course with zero effect on CO2 emissions as you can see from Willis diagrams!
But still ~20% FFFs and dream-dancers vote for green morons willing to “save the planet” from overheating!
Unavoidable casualties. I don’t think the people pushing these policies actually care about such effects.
Willis,
Slight corrections to your article:
“In agreement with the beliefs of President Obama and Secretary Chu, and a vain attempt to fight the imaginary menace of CO2, the countries of Europe have driven up the price of energy. This is supposed to make people use less of it, and thus reduce CO2 emissions.
As a result of the European policies, the current energy price situation looks like this:”
Although most of the European countries do have very high gasoline prices, the price of the gasoline have nothing to do with menace of CO2. The gasoline prices have been like this forever already. Taxes on gasoline have been a way in European countries to collect money for many “free” things, such as “free” healthcare.
The situation with electricity prices are more complex than that. Some countries such as Germany or Denmark have increased their market price of the electricity considerably due to the “green electricity” policies – namely supporting rewenables by various means. Many other countries have not.
In Finland – being an example as I leave there – the electricity price is low and the while the pricing in your chart might be correct for small electricity user living in apartment, this does not lead to any energy poverty since the apartments are heated usually with district heating or with some other methods.
If you live in town house – like me – and the heating system is direct electricity – as I have – the price of electricity is much lower. Our house uses ~ 30000 kWh per year and we pay ~ 3200 euros for this electricity. If we would have heating based on heat pump, the electricity use would be less than half of this.
I would argue that in Finland there simply is no energy poverty. Yes, gasoline prices are high, but the cars are small also (compared to what you have in US). The support from the government for poor is on high level also and no-one needs to live in the cool apartment due to this.
In many European countries this is not the case, however. In UK – for example – many elderly with small pension might need to think, which is more important: to eat or to have decent heating in a house. This is also due to totally different building standards: Here in Finland there is never so cold that I could not use just my t-shirt in the house. Insulation standards are high and the energy prices for heating are low.
So, when we go full socialism, we won’t be paying 3x more for our energy to match Germany. We’ll be paying 6x more, as more money will be forced out of my check to pay for someone else’s energy who supposedly can’t afford it.
I take issue with your numbers on Norwegian electricity prices and our emission cuts.
On the bright side (or not) the gasoline price is correct.
Our electricity price is generally less than 10 cents /kWh. In Norway we pay separate bills for electricity and grid use. In later years, the total cost of electricity tends to be 1/3 power and 2/3 grid. Last year we had very low prices, and total cost was 6-8 cents per kWh. This year, due to the cold and thus importing nuclear from Sweden and wind from Denmark we will be around 9-10 cents on average for the year.
We have never had 25 cents average electricity cost. I have paid my bills here for 40 years plus.
When it comes to cutting greenhouse gas emissions, it is quite disingenious to show that figure without showing the starting point. Norway is already at 70% renewable energy in the overall energy system, not just the electricity part of it. The US does not reach up to our knees on that count. You guys can cut the easy, low cost parts. We don’t have those to cut.
Now, for the rest of your story I am with you. Energy poverty is real, and it will be here as well if the politicians keep things up. We are drabbed with the inefficient and unreliable wind/solar from Europe, and we are dragged into the very high electricity prices of Europe with ever larger interconnectors. But our story is different from the rest. Norway has a lot of hydropower, and because of this we are using electricity very differently from the rest. It has been reliable and cheap. Being locked into the European system means consumer prices go up while production prices stay low. The Europeans are used to electricity being expensive, we are not.