at the Citizen Power Alliance 2010 Wind Conference
The Poverty of Renewables
The Poverty of Renewables
MIAMI – According to UN Secretary-General Ban Ki-moon, “Climate change harms the poor first and worst.” This is true, because the poor are the most vulnerable and have the least resources with which to adapt. But we often forget that current policies to address global warming make energy much more costly, and that this harms the world’s poor much more.
Solar and wind power was subsidized by $60 billion in 2012. This means that the world spent $60 billion more on energy than was needed. And, because the total climate benefit was a paltry $1.4 billion, the subsidies essentially wasted $58.6 billion. Biofuels were subsidized by another $19 billion, with essentially no climate benefit. All of that money could have been used to improve health care, hire more teachers, build better roads, or lower taxes.
Forcing everyone to buy more expensive, less reliable energy pushes up costs throughout the economy, leaving less for other public goods. The average of macroeconomic models indicates that the total cost of the EU’s climate policy will be €209 billion ($280 billion) per year from 2020 until the end of the century.
The burden of these policies falls overwhelmingly on the world’s poor, because the rich can easily pay more for their energy. I am often taken aback by well-meaning and economically comfortable environmentalists who cavalierly suggest that gasoline prices should be doubled or electricity exclusively sourced from high-cost green sources. That may go over well in affluent Hunterdon County, New Jersey, where residents reportedly spend just 2% of their income on gasoline. But the poorest 30% of the US population spend almost 17% of their after-tax income on gasoline.
Similarly, environmentalists boast that households in the United Kingdom have reduced their electricity consumption by almost 10% since 2005. But they neglect to mention that this reflects a 50% increase in electricity prices, mostly to pay for an increase in the share of renewables from 1.8% to 4.6%.
The poor, no surprise, have reduced their consumption by much more than 10%, whereas the rich have not reduced theirs at all. Over the past five years, heating a UK home has become 63% more expensive, while real wages have declined. Some 17% of households are now energy poor – that is, they have to spend more than 10% of their income on energy; and, because elderly people are typically poorer, about a quarter of their households are energy poor. Deprived pensioners burn old books to keep warm, because they are cheaper than coal, they ride on heated buses all day, and a third leave part of their homes cold.
In Germany, where green subsidies will cost €23.6 billion this year, household electricity prices have increased by 80% since 2000, causing 6.9 million households to live in energy poverty. Wealthy homeowners in Bavaria can feel good about their inefficient solar panels, receiving lavish subsidies essentially paid by poor tenants in the Ruhr, who cannot afford their own solar panels but still have to pay higher electricity costs.
The list goes on. In Greece, where tax hikes on oil have driven up heating costs by 48%, more and more Athenians are cutting down park trees, causing air pollution from wood burning to triple.
But climate policies carry an even larger cost in the developing world, where three billion people lack access to cheap and plentiful energy, perpetuating their poverty. They cook and keep warm by burning twigs and dung, producing indoor air pollution that causes 3.5 million deaths per year – by far the world’s biggest environmental problem.
Access to electricity could solve that problem, while allowing families to read at night, own a refrigerator to keep food from spoiling, or use a computer to connect with the world. It would also allow businesses to produce more competitively, creating jobs and economic growth.
Consider Pakistan and South Africa, where a dearth of generating capacity means recurrent blackouts that wreak havoc on businesses and cost jobs. Yet the funding of new coal-fired power plants in both countries has been widely opposed by well-meaning Westerners and governments. Instead, they suggest renewables as the solution.
But this is hypocritical. The rich world gets just 1.2% of its energy from hugely expensive solar and wind technologies, and we would never accept having power only when the wind was blowing. Over the next two years, Germany will build ten new coal-fired power plants to keep the lights on.
In 1971, 40% of China’s energy came from renewables. Since then, it has powered its explosive economic growth almost exclusively with highly polluting coal, lifting 680 million people out of poverty. Today, China gets a trifling 0.23% of its energy from wind and solar. By contrast, Africa gets 50% of its energy today from renewables – and remains poor.
A new analysis from the Center for Global Development quantifies our disregard of the world’s poor. Investing in renewables, we can pull one person out of poverty for about $500. But, using gas electrification, we could pull more than four people out of poverty for the same amount. By focusing on our climate concerns, we deliberately choose to leave more than three out of four people in darkness and poverty.
Addressing global warming effectively requires long-term innovation that makes green energy affordable to all. Until then, wasting enormous sums of money at the expense of the world’s poor is no solution at all.
‘The Road to Serfdom’ at 70: Hayek’s Relevance in the Age of Obama
The fundamental insights and truths of his [Hayek's] analysis about the dangers from an ever encroaching paternalistic and interventionist government are no less valid now than when he wrote The Road to Serfdom in the midst of the Second World War.
Consider these things:
Mounting corruption from special interest groups feeding at the trough of government spending;
The misuse and abuse of intrusive power into people’s lives in the name of ‘national security’;
The imposition of a paternalistic scale of values concerning presumed ‘fair wages’ and ‘progressive’ redistribution of income and wealth;
A national health care plan that is so problematic that its short-term welfarism could turn into –single-payer’ (government) socialism;
An ‘all of the above’ energy policy that is rigged against consumer-driven dense energy and rigged for government-enabled dilute energy;
The misguided and dangerous presumption that those in political power know better how people should live than those people themselves; or
The arrogant discarding of the Rule of Law and constitutional procedures and restraints.
All of these fearful trends in modern-day America show why reading and learning the lessons offered in Hayek’s Road to Serfdom is as important now as it was in 1944, when the book first appeared in print.
Read the entire article:
WIND TURBINES ARE CLIMATE-CHANGE SCARECROWS
|Wind Turbines Are Climate-Change Scarecrows|
By Robert Bryce, senior fellow at the Manhattan Institute
For years, the wind-energy sector and renewable-energy advocates have repeatedly claimed that wind turbines are essential to the fight against carbon dioxide emissions and catastrophic climate change. Here’s the reality: Wind turbines are nothing more than climate-change scarecrows...
Over the past few years, the U.S. and other countries have been subsidizing the paving of vast areas of the countryside with 500-foot-high bird- and bat-killing whirligigs that are nothing more than climate talismans. Wind turbines are not going to stop changes in the earth’s climate. Instead, they are token gestures — giant steel scarecrows — that are deceiving the public into thinking that we as a society are doing something to avert the possibility of catastrophic climate change.
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