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Forward To The Past!

November 29, 2020
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By Paul Homewood

  h/t Philip Bratby

 

 

 Victory Portsmouth um 1900.jpg

HMS Victory was built from 5500 oaks

Demand for timber to construct British naval vessels in the 1800s and earlier seriously depleted the country’s forests. Some estimates say that England’s woodlands shrunk from an estimated land coverage of 15% in 1086, England’s forests and woods had dwindled to just 5.2% by 1905.

Fortunately thanks to the steel industry, our forest cover is back to 13%.

However, it might not be for long if the eco-loons get their way:

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What is the real cost of green hydrogen?

November 28, 2020
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By Paul Homewood

 

h/t Dennis Ambler

 

 

There’s an informative, but also rather garbled, article in Euractiv concerning the cost of hydrogen

 

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Green hydrogen is much in the news. In October Cap Gemini published a report called “Net Zero 2020”. Page 36 had a section on green hydrogen with the declaration “At around €6 per kg, green hydrogen is not competitive today with fossil energies (parity at €1/kg equivalent to €25/MWh)”.

Last week another hydrogen organisation announced itself “the Renewable Hydrogen Coalition” accompanied by (yet another) report on green hydrogen which contained (yet another) price estimate for green hydrogen – €6/kg.

Absent from the above is any explanation as to how these price were derived, a common feature of reports and blogs on the subject.

The EU and green hydrogen

Given recent European Commission publications (e.g. Hydrogen Strategy) and declarations by various EU Member States such as Germany, green hydrogen now has a prominence which contrasts with its position at the start of the year.

However, the starting point for green hydrogen policy development in the EU and Member States has to be a good understanding of how current green hydrogen prices are formed, where they currently stand and their likely future trajectory. What follows  provides a true and clear view of green hydrogen price formation with current and future price developments.

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Radio-Canada Ombudsman Finds Standards Violations in Inaccurate Reporting on Extreme Rainfall Trends in Canada

November 28, 2020
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By Paul Homewood

 

Robert Muir, who runs the CityFloodMap website has sent me news of his successful complaint against a woefully inaccurate report by Radio Canada International.

Robert, who is based in Toronto describes his site:

 

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His complaint was against this report:

 

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A new study by Environment and Climate Change Canada (ECCC) confirms what many have been saying, that climate change has made rainfall events more frequent and more severe and the changes are dominated by human activity. This includes burning of fossil fuels, but also development onto natural green spaces for such things as agriculture and expansion of cities.

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Future Energy Scenarios & Peak Demand

November 27, 2020
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By Paul Homewood

 

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https://subscribers.nationalgrid.co.uk/t/d-l-cljkdul-jiwdisdl-y/

 

In our discussions of the grid capacity needed for EVs, I mentioned reading that the National Grid said the extra required would be tiny, maybe 5 GW or so.

We can check, because last summer they published this year’s Future Energy Scenarios (FES).

I did a full analysis here. 

The FES does not say how much extra capacity we need for EVs on their own, but it does tell us how much we would need in a Net Zero scenario in total, ie including heat pumps and other electrification as well as cars. In essence, individual parts of the plan cannot be quantified separately as they are all an integral part of the whole.

There are four scenarios, but the one that is relevant is Consumer Transformation. System Transformation involves maximising hydrogen, and the other two speak for themselves:

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And this is the key chart, showing that peak demand would rise from around 60GW to 96GW:

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Electric Car’s Carbon Footprint Criticised In New Report.

November 27, 2020

By Paul Homewood

 

Whoops!

From the Telegraph:

 

 

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Coal Outperforms Wind Power In UK Wind Week!

November 27, 2020

By Paul Homewood

 

 

h/t Joe Public

 

 

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https://twitter.com/nationalgriduk/status/1331296025793998858

With an impeccable sense of timing, some bright spark decided to make this UK Wind Week.

Perhaps they should have called it UK NO Wind Week!

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Central Banks And Climate: A Case Of Mission Creep

November 26, 2020

By Paul Homewood

 

 

We are well accustomed to Mark Carney’s efforts to turn the Bank of England into the Bank of Green.

We have probably all half sensed the dangers inherent in it, but have found it difficult to put into words.

Step forward John H Cochrane, who has penned this excellent article explaining the path we are all heading down:

 

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The following is adapted from John H. Cochrane’s remarks at the European Central Bank’s Conference on Monetary Policy: Bridging Science and Practice. His full presentation about the challenges facing central banks is here.

Central banks are rushing headlong into climate policy. This is a mistake. It will destroy central banks’ independence, their ability to fulfill their main missions to control inflation and stem financial crises, and people’s faith in their impartiality and technical competence. And it won’t help the climate.

In making this argument, I do not claim that climate change is fake or unimportant. None of the following comments reflect any argument with scientific fact. (I favor a uniform carbon tax in return for essentially no regulation, but this essay is not about carbon policy.)

The question is whether the European Central Bank (ECB), other central banks, or international institutions such as the International Monetary Fund, the Bank for International Settlements, and the Organization for Economic Co-operation and Development should appoint themselves to take on climate policy—or other important social, environmental, or political causes—without a clear mandate to do so from politically accountable leaders.

The Western world faces a crisis of trust in our institutions, a crisis fed by a not-inaccurate perception that the elites who run such institutions don’t know what they are doing, are politicized, and are going beyond the authority granted by accountable representatives.

Trust and independence must be earned by evident competence and institutional restraint. Yet central banks, not obviously competent to target inflation with interest rates; floundering to stop financial crisis by means other than wanton bailouts; and still not addressing obvious risks lying ahead; now want to be trusted to determine and implement their own climate change policy? (And next, likely, taking on inequality and social justice?)

We don’t want the agency that delivers drinking water to make a list of socially and environmentally favored businesses and start turning off the water to disfavored companies. Nor should central banks. They should provide liquidity, period.

But a popular movement wants all institutions of society to jump into the social and political goals of the moment, regardless of boring legalities. Those constraints, of course, are essential for a functioning democratic society, for functioning independent technocratic institutions, and incidentally for making durable progress on those same important social and political goals.

It’s Not About Risk

The European Central Bank and other institutions are not just embarking on climate policy in general. They are embarking on the enforcement of one particular set of climate policies—policies to force banks and private companies to defund fossil fuel industries, even while alternatives are not available at scale, and to provide subsidized funding to an ill-defined set of “green” projects.

Let me quote from ECB executive board member Isabel Schnabel’s recent speech. I don’t mean to pick on her, but she expresses the climate agenda very well, and her speech bears the ECB imprimatur. She recommends that

[f]irst, as prudential supervisor, we have an obligation to protect the safety and soundness of the banking sector. This includes making sure that banks properly assess the risks from carbon-intensive exposures. . . .

Let me point out the unclothed emperor: climate change does not pose any financial risk at the one-, five-, or even ten-year horizon at which one can conceivably assess the risk to bank assets. Repeating the contrary in speeches does not make it so.

Risk means variance, unforeseen events. We know exactly where the climate is going in the next five to ten years. Hurricanes and floods, though influenced by climate change, are well modeled for the next five to ten years. Advanced economies and financial systems are remarkably impervious to weather. Relative market demand for fossil vs. alternative energy is as easy or hard to forecast as anything else in the economy. Exxon bonds are factually safer, financially, than Tesla bonds, and easier to value. The main risk to fossil fuel companies is that regulators will destroy them, as the ECB proposes to do, a risk regulators themselves control. And political risk is a standard part of bond valuation.

That banks are risky because of exposure to carbon-emitting companies; that carbon-emitting company debt is financially risky because of unexpected changes in climate, in ways that conventional risk measures do not capture; that banks need to be regulated away from that exposure because of risk to the financial system—all this is nonsense. (And even if it were not nonsense, regulating bank liabilities away from short term debt and towards more equity would be a more effective solution to the financial problem.)

Next, we contemplate a pervasive regime essentially of shame, boycott, divest, and sanction

[to] link the eligibility of securities . . . as collateral in our refinancing operations to the disclosure regime of the issuing firms.

We know where “disclosure” leads. Now all companies that issue debt will be pressured to cut off disparaged investments and make whatever “green” investments the ECB is blessing.

Last, the ECB is urged to print money directly to fund green projects:

We should also consider reassessing the benchmark allocation of our private asset purchase programs. In the presence of market failures . . . the market by itself is not achieving efficient outcomes.

Now you may say, “Climate is a crisis. Central banks must pitch in and help the cause. They should just tell banks to stop lending to the evil fossil fuel companies, and print money and hand it out to worthy green projects.”

But central banks are not allowed to do this, and for very good reasons. A central bank in a democracy is not an all-purpose do-good agency, with authority to subsidize what it decides to be worthy, defund what it dislikes, and force banks and companies to do the same. A central bank, whose leaders do not regularly face voters, lives by an iron contract: freedom and independence so long as it stays within its limited and mandated powers.

The ECB in particular lives by a particularly delineated and limited mandate. For very good reasons, the ECB was not set up to decide which industries or regions need subsidizing and which should be scaled back, to direct bank investment across Europe, to set the price of bonds, or to print money to subsidize direct lending. These are intensely political acts. In a democracy, only elected representatives can take or commission such intensely political activities. If I take out the words “green,” the EU member states, and EU voters, would properly react with shock and outrage at this proposal. If the ECB bought different countries’ bonds at different prices and in different quantities to reward those making greater progress on “green” policy implementation, there would likely be an outcry.

That’s why this movement goes through the convolutions of pretending that defunding fossil fuels and subsidizing green projects—however desirable—has something to do with systemic risk, which it patently does not.

That’s why one must pretend to diagnose “market failures” to justify buying bonds at too high prices. By what objective measure are green bonds “mispriced” and markets “failing”? Why only green bonds? The ECB does not scan all asset markets for “mispriced” securities to buy and sell after determining the “right” prices.

Here are two interpretations of the ECB’s proposal:

One: we looked evenhandedly at all the risks to the financial system, and the most important financial risk we came up with just happens to be climate.

Two: we want to get involved with climate policy. How can we shoehorn that desire into our limited mandate to pay attention to financial stability?

Who Gets the Green Light?

How should we judge the proposal? I think it’s pretty obvious that the latter interpretation is true—or at least that the vast majority of people reading the proposal will interpret it as such. Feeding this perception is the central omission of this speech: any concrete description of just how carbon sins will be measured.

At face value, “carbon emitting” does not mean just fossil fuel companies but cement manufacturers, aluminum producers, construction, agriculture, transport, and everything else. Will the carbon risk and defunding project really extend that far, in any sort of honest quantitative way? Or is “carbon emitting” just code for hounding the politically unpopular fossil fuel companies?

In the disclosure and bond buying project, who will decide what is a green project? Already, cost-benefit analysis—euros spent per ton of carbon, per degrees of temperature reduced, per euros of GDP increased—is lacking. By what process will the ECB avoid past follies such as switchgrass biofuel, corn ethanol, and high-speed trains to nowhere? How will it allow politically unpopular projects such as nuclear power, carbon capture, natural gas via fracking, residential zoning reform, and geoengineering ventures—which all, undeniably, scientifically, lower carbon and global temperatures—as well as adaptation projects that undeniably, scientifically, lower the impact on GDP? Well, clearly it won’t. The ECB is embarking on one specific kind of green policy, popular at the cocktail parties at Davos, but having little to do with cost-benefit analysis or science of climate policy.

If the ECB crosses this second Rubicon—buying sovereign and corporate debt was the first—be ready for more. The IMF is already pushing redistribution. The US Federal Reserve, though it has so far stayed away from climate policy, is rushing into “inclusive” employment and racial justice. There are many problems in the world. Once you start trying to shape climate policy, and so obviously break all the rules to do it, how can you resist the clamor to defund, disclose, and subsidize the rest? How will you resist demands to take up regional development, prop up dying industries, subsidize politicians’ pet projects, and all the other sins that the ECB is explicitly enjoined from committing?

A central bank that so blatantly breaks its mandates must lose its independence, its authority, and people’s trust in its objectivity and technical competence to fight inflation and deflation, regulate banks, and stop financial crises.

In sum, where is the analysis for this program? I challenge the ECB to calculate how many degrees this bond buying plan would lower global temperatures, and how much it would raise GDP by the year 2100, in any transparent, verifiable, and credible way. Never mind the costs for now: where are the benefits?

And how would the ECB resist political pressure to subsidize all sorts of boondoggles? If the central bank does not have and disclose neutral technical competence at making this sort of calculation, the project will be perceived as simply made-up numbers to advance a political cause. All of the central bank’s activities will then be tainted by association.

This will end badly. Not because these policies are wrong, but because they are intensely political, and they make a mockery of the central bank’s limited mandates. If this continues, the next ECB presidential appointment will be all about climate policy: who gets the subsidized green lending, who is defunded, what the next set of causes is to be, and not interest rates and financial stability. Board appointments will become champions for each country’s desired subsidies. Countries and industries that lose out will object. This is exactly the sort of institutional aggrandizement that prompted Brexit.

If the ECB crosses this second Rubicon—buying sovereign and corporate debt was the first—be ready for more. The IMF is already pushing redistribution. The US Federal Reserve, though it has so far stayed away from climate policy, is rushing into “inclusive” employment and racial justice. There are many problems in the world. Once you start trying to shape climate policy, and so obviously break all the rules to do it, how can you resist the clamor to defund, disclose, and subsidize the rest? How will you resist demands to take up regional development, prop up dying industries, subsidize politicians’ pet projects, and all the other sins that the ECB is explicitly enjoined from committing?

A central bank that so blatantly breaks its mandates must lose its independence, its authority, and people’s trust in its objectivity and technical competence to fight inflation and deflation, regulate banks, and stop financial crises.

The full account is here.

Motorway speed limits cut to 60 mph in bid to reduce carbon emissions

November 26, 2020

By Paul Homewood

 

h/t Dennis Ambler

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Highways England has kicked off a 12-month trial on sections of motorway in England.

In 2019, the transport sector accounted for 34% of the UK’s total carbon emissions, according to GOV.UK. It’s also the UK’s largest producer of emissions.

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Spending review ‘undermines UK green vision’-Harrabin

November 26, 2020

By Paul Homewood

 

 

Harrabin is throwing his toys out the pram again!

 

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The UK chancellor’s Spending Review has been accused of undermining the prime minister’s “green” vision by pushing ahead with a £27bn roads programme.

After several speeches in which Boris Johnson pledged to rescue the economy by “building back greener”, Rishi Sunak’s speech on Wednesday barely mentioned the climate.

He said he was pursuing the nation’s priorities.

Mr Sunak put detailed numbers on the PM’s recent green technology plan.

But he offered no increase on the £12bn Mr Johnson says the government has mobilised to tackle climate change – even though the sum is much less than what’s been agreed in France, Germany and others.

Environment groups are most angry at the roads programme. The chancellor said it would ease congestion, improve commute times and “keep travel arteries open.” It was essential, he said, because people are shunning public transport during the Covid-19 pandemic.

https://www.bbc.co.uk/news/science-environment-55077760

 

It is not the Spending Review which has “undermined” the green vision, it is harsh economic reality. (Not the Harrabin seems to have a clue what that is)

In fact, the PM’s 10-Point Plan made it obvious that the government could not commit to the barmy extremes demanded by Harrabin and his cronies.

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Fast-charging can damage electric car batteries in just 25 cycles

November 26, 2020

By Paul Homewood

 

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Fast-charging of electric batteries can ruin their capacity after just 25 charges, researchers have said, after they ran experiments on batteries used in some popular electric cars.

High temperatures and resistance from fast charging at commercial stations can cause cracks and leaks, said the engineers from the University of California, Riverside. 

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