Essay by Eric Worrall
Professor Aled Jones exposing the “myth” that renewables are too expensive and utterly reliant on government subsidies.
‘Decarbonisation is too expensive’ – how to sell climate change action to bean counters
Published: September 29, 2022 1.20am AEST
Aled Jones
Professor & Director, Global Sustainability Institute, Anglia Ruskin University…
With fellow academics, I studied instances from the past 30 years when governments succeeded in using public investment and regulation to rapidly scale up the deployment of renewable energy technologies like solar panels and wind turbines.
We found that the traditional approach to making energy policy – carrying out cost-benefit analyses, otherwise known as bean counting – tended to impede the roll-out of renewable energy because it misconceived the economy as something static which always operates in an optimal way. This perspective assumes that policy can do little to disrupt the structure of existing markets. The meteoric rise of entirely new sectors over the last decade, such as the global electric vehicle market and offshore wind, show that policy can in fact drive radical changes.
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Myth one: decarbonisation will make electricity expensive
Subsidising low-carbon technology is an investment, not a cost. A recent study suggested it is an opportunity for the global economy with a potential return of US$12 trillion.
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Myth two: renewables need massive subsidies
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Renewables now compete with and even beat the cost of generating power from fossil fuels. Offshore wind, for example, produces electricity at about a quarter of the current price charged to consumers in the UK – a price set by the wholesale cost of gas. Building new wind turbines no longer relies on subsidies.
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Myth three: jobs will disappear
The transition from fossil fuels in energy systems will shed nearly 3 million jobs in mining, power plant construction and other sectors. But it is expected to create more than 12 million new ones in transport, renewable power generation and energy efficiency by 2030.
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If we continue to fuss about the costs of action then by 2050 there won’t be very many beans left to count.
Read more: https://theconversation.com/decarbonisation-is-too-expensive-how-to-sell-climate-change-action-to-bean-counters-190801
An essay which starts by dissing “traditional” cost benefit analysis pretty much sets the tone for the rest of the claims.
Professor Jones “Myth 1” claim that renewables will not increase power bills isn’t borne out by the evidence. If renewables were cheaper than reliables, California would have the cheapest electricity in the America.
Even President Obama didn’t claim renewables would reduce energy prices.
Professor Jones’ “Myth 2” claim that renewables are not utterly dependent on government subsidies is also refuted by the evidence. Tens of thousands of Spanish entrepreneurs were bankrupted when the Spanish socialist government abruptly and retrospectively cut renewable subsidies in 2010. If Renewables were competitive, and subsidies are simply an accelerator for a transition which will happen anyway, there wouldn’t have been a wave of Spanish bankruptcies when the subsidies were pulled.
Professor Jones’ response to the third “myth”, that renewables will boost prosperity by creating more jobs, is the most interesting of his claims.
I agree with Professor Jones that a genuine switch to Net Zero would create more jobs – but they would be miserable, poorly paid jobs.
Basic economics dictates if you have to hire more people to perform the same service, there is less money available to pay the extra workers. Replacing 3 million jobs with 12 million jobs to produce the same amount of electricity as before does not create wealth, it destroys wealth. Quadrupling the number of workers to produce the same electricity means either the wages which used to be paid to 3 million people now have to be stretched to pay 12 million people, or the service the 3 million people used to provide is now 4x more expensive. Most likely a mixture of both price increases and wage cuts.
Economic growth and wealth creation is about getting more done with less, the primary goal should not be to create jobs – more jobs are created as a side benefit of a growing economy. Our comfortable modern existence is only possible because our ancestors focussed on growth rather than jobs. As a consequence we’re a lot better at getting work done than our ancestors.
Consider a farmer working a field. A few centuries ago, working a large field required an entire team of people. But nowadays a large field can now be plowed or reaped by a single farmer driving a large agricultural machine, or even a robot machine which doesn’t need any direct oversight. That way, instead of say 20 people being paid from the profits of that field, most of the profits go to one person, the farmer who owns the machine – minus the cost of refuelling and maintaining that machine.
This reduced need for farm workers does not mean 19 people are now jobless – it means those 19 people who are no longer required to work the field are liberated to find other, better paying jobs which also use machines to amplify human labor – which is exactly what happened during the urbanisation which occurred during the Industrial Revolution.
Greater efficiency means everyone has a chance to work fewer hours for more money. Employee rights advances like the 40 hour work week was only possible because we all got richer, because it was no longer necessary to work the fields by hand, because most of us don’t have to work our butts off just to get the basic necessities.
If you want a glimpse of life before the industrial revolution, just visit a really poor country. But even the poorest countries today are better off than our ancestors were.
The USA, Australia and Britain have already had a taste of this downward pressure on prosperity, especially places with high renewable penetration. How much did you pay last time you filled your gas tank? How painful was your last household energy bill? At what point is the green fairy supposed to turn everything around, and make all that magic renewable energy cheaper? How many homeless people are required, to convince places like California they might have made a mistake?
Even Professor Jones’ final claim that “… there won’t be very many beans left to count“, a reference to the alleged climate threat to coffee, couldn’t be more wrong. In Australia there is a company called Jaques Coffee which grows a delicious, award winning low altitude tropical coffee – their coffee plantations are only 1200ft above sea level, as opposed to 3000ft+ for most premium coffees. Jaques exports their product all over the world. How did they produce a delicious coffee which grows at a lower altitude than most other premium coffees? Because Australians have been selectively breeding low altitude coffee varieties for more than a century – we simply don’t have access to high altitude tropical highlands like East Africa and South America.
This green nonsense will only get worse, if we allow our politicians to continue listening to academics like Professor Jones, if we fail to challenge the absurd economic narratives of climate advocates, and if we allow our politicians to continue pushing forward with heavily subsidised, impossibly expensive renewable energy.
“when governments succeeded in using public investment and regulation”
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Investing borrowed money is more accurately described as gambling.
Closer to THEFT.
The big misleading tricks of Aled Jones that drives to false conclusions are two: 1) he (intentionally) confuses investment cost with capital cost, bein only the latter a cost of electricity which for NCRE can be between 2 – 6 times greater than that of thermal sources, regardless any decrease in wind-solar investment cost. 2) In ‘myth 2’ he only considers de facility cost of electricity and not the GRID cost of electricity. Not even talk about ‘mytg 3’ : what about the opportunity cost of loss of competitiveness, capital flee and the generation of huge unemployment? From bottom to top, fake.
The big misleading tricks of p. Aled Jones that drive to false conclusions are two: 1) he (intentionally) confuses investment cost with capital cost, being only the latter a cost of electricity which for NCRE can be between 2 – 6 times greater than that of a thermal source, regardless any decrease in wind-solar investment cost. 2) In ‘myth 2’ he only considers de facility cost of electricity and not the GRID cost of electricity. Not even talk about ‘mytg 3’ : what about the opportunity cost of loss of competitiveness, capital flee and the generation of huge unemployment? From bottom to top, false.
Carefully select some ‘studies’ such as the above which indicate that we’re entering The Promised Land of green power, and that backup power from traditional sources is a laughable waste of time and money.
Carefully select some trusted ‘news’ agencies with wide audiences, and have them blast their stories and opinions about the ‘studies’ loudly and frequently. That will bend public herd mentality in the correct direction, and be a signal to politicians that preaching to that choir will result in votes.
Also send some baksheesh to purveyors of scathing comments blackening the names and employment of any scientists who trust their instruments and report any news contra the above logrolling.
Presto! The politicians will eagerly leap into ’emergency’ mode and declare that Even More Investments must be made into green power, and that ‘misinformation’ be muzzled.
But do consider some personal investments into Arctic clothing items, because there’s a long cold winter on the calendar.
Renewable energy is only intermittent electricity from breezes and sunshine and NEITHER wind turbines, nor solar panels, can manufacture products or fuels for society.
Everything that needs electricity is made with the oil derivatives manufactured from crude oil. In an all-electric world, there will be nothing to power without oil.
All parts for renewables are all manufactured from crude oil. These manufactured items from oil did not exist before 1900. Ridding the world of crude oil would eliminate wind turbines, solar panels, and vehicles!
Whenever you hear someone declare that the economy is sub-optimal and only massive amounts of government regulations or subsidies can fix this problem, you know you are listening to a socialist/communist who wants to spend your money on themselves.
Figuring out the actual cost of something is just “bean counting”.
Notice how the socialists denigrate anything that shows how useless their scams are.
I plan to update this when we get the next inflation uplift data actuals in a couple of months, but meantime here’s a chart showing what actual CFD renewables average prices have been: there will be minor wobbles in the lines reflecting which wind farms were more or less windy meantime.
Anything not on a CFD has been getting at least full market price, including the most recent wind farms that are supposed to be so much cheaper, who simply have used their contractual option not to commence the CFD, as well as the earlier ones that are getting ROC subsidies on top of market prices, which are typically another £100/MWh, but run as high as about £175/MWh for floating wind.
I haven’t read everyone else’s comments yet, but the headline only has one answer: “Make the numbers add up”!
The problem with the whole “renewables” argument is that it fails every test of the supply-demand equation. Fix that issue and economists will get on board.
He certainly can’t do energy economics, but he has a namesake who can sing, and became a child star with this perhaps appropriate number
Climate Activists should use the Green Paradox to their advantage to get people on board and accelerate transitioning to a less carbon intensive future. But it requires accelerating fossil fuel use in the short/medium term, which is scary.
Transitioning to a more diverse & secure energy future will take an increase in fossil fuel use in the short term. ( see Judith Curry’s excellent essay on the IRA.)
The best climate outcomes are near the highend emissions early on. Developing economies protects against weather. Our best path is high emissions early, focusing on transition to nuclear and natural gas and a mix of renewables as #AntiFragileEnergy policy.
https://mobile.twitter.com/aaronshem/status/1575455343970324480
#AntiFragileEnergy #GreenNUCLEARDeal #HighlyFlexibleNaturalGas #IncineratePlasticPollution #WasteToEnergy #FissionFuture
https://web.mit.edu/krugman/www/opec.html
Politicians and academics have created a self-licking ice-cream cone.
This guy is a disgrace, the worst part is he got paid for producing trash. I could have got better results with the stroke of a pen. Stop subsidies tomorrow, we’ll see who is right and who is wrong. I won’t charge you anything.
AOC has a degree in economics.
Did they go to the same school?
Or do they just have the same goal?
(Which ISN’T “Saving the Planet”!)
Myth Zero: Professor Jones knows it all
If subsidies are not necessary, cut them immediately.
In terms of the 12 million jobs, I assume many of them are farm related as the climaggedons are determined to outlaw fossil fueled farm equipment.
They are selling a much poorer future.
Did this really happen. There has not been a lot of jobs lost in the fossil fuel sector. They are needed to provide back-up capacity.
There is evidence of the maintenance in fossil fuelled power station suffering so any reduction of numbers is leading to lower availability.
If the power plant is not producing energy, is a job at it still a energy sector job? A lot of shutdown plants still have maintenance and security staff.
As you point out, backup & peaker plants still use staff. They probably require more than a baseload plant would, since quick changes in production are much harder on the physical plant than continuous operation.
Rather like France (and this is actually said by the French – sacre bleu), prof Jones wants the rest of the world to be communist, while he remains a capitalist.
Anglia Ruskin is welcome to him – no doubt he’s right at home.
One of the interesting things the late Ayn Rand remarked on was that; American’s either discovered (or refined) the idea that wealth can be created. Prior to the industrial revolution wealth was measured by the amount of things you could accumulate.Land, jewels, “slaves” etc. The Americans said if I have an idea for a new product or process, I can sell that idea or process to someone who wants to use it. It was a totally revolutionary way of looking at wealth.
Professor Jones is just pushing #ClimateScientology & sucking from the public teat while doing it.
We already knew that climate scientists were incompetent. Now we learn that climate economists are as well. At least the climate realm is consistent.
Cost benefit stiudies are not the same as “bean counting” (aka bookkeeping). The former is an estimate or projection based on assumptions whereas the latter is fact. It would improve public policy decision making enormously if cost benefit studies were reconciled to actual outturns after the event.
It would show the impact of wishful thinking, pol.itical pressure and also provide the incentive and information to improve cost benefit studies. Maybe that is why id never happens.
Jiust as Professor (sic) Ferguson has never had to reconcile his epidemiology forecasts with outturn. If he had done that he might have avoided some of the many many disastrous errors or else he might have taken up anothe profession mpre suited to his skill set.