Francis Menton: When the costs hit home, nobody will give up fossil fuels
The article below was written by Francis Menton at the Manhattan Contrarian:
As noted in my post this past Sunday, no amount of fake happy talk in the so-called “Glasgow Climate Pact” can obscure the obvious fact that nobody agreed to anything. To read the text of the “pact,” everybody claims to think that this whole “decarbonization” thing to “save the planet” is real. We’re all going to do something really, really significant, but it will be next year, or maybe the year after that. And meanwhile, nobody has made any remotely serious effort to cost this thing out. Are we talking about a ten percent increase in the cost of energy for this decarbonization project, or will it be a doubling, or maybe a tripling — or maybe even a multiplication by ten?
With tens of trillions of dollars at stake in the world economy, let alone the majority of humanity at risk of energy poverty, you would think that we would be far down the road toward detailed engineering studies of what the decarbonized energy world will look like and exactly how much it will cost. But it is exactly the opposite. Everywhere — or at least everywhere in the Western countries — government functionaries with degrees in English or Political Science (or maybe Gender Studies) issue edicts that carbon emissions will be reduced “50% by 2030” or “90% by 2050,” without any knowledge or understanding of how that may be accomplished.
So, as the costs of attempting to “transition” away from fossil fuels start to hit home, will anybody actually go through with the project? I think that the chance of that is about zero. China and India show how it works. To judge by their actions (rather than their words), they have long since figured out that solar and wind energy can’t succeed in running a modern economy, so they mouth empty platitudes to placate the Western zealots, make unenforceable promises that only come due after everyone is dead, and forge ahead with massive development of coal power. And even more telling are recent developments in Western jurisdictions. When the first hint arrives that fossil fuel restrictions are going to impose cost increases large enough for meaningful numbers of voters to notice, even the bluest of blue U.S. states take about three minutes to abandon their “decarbonization” promises.
For the latest from India, check out this piece from Reuters today headlined “India’s Jindal plans to start building Botswana coal mine in 2022.” Recall first that at the just-ended COP26 in Glasgow, India supposedly “pledged” to achieve “net zero” carbon emissions by 2070. You would not be wrong to infer that the year 2070 was selected to be safely after all current world leaders are long since at least retired, and most likely dead. Today’s Reuters piece, on the other hand, gives the here and now:
India’s Jindal Steel & Power Limited . . . will start building a coal mine in Botswana’s southeastern Mmamabula coalfields in 2022, aiming to supply the export market and a planned coal power plant, a company official said. The Indian industrial giant aims for the mine to produce 4.5 million tonnes of coal per year.
It’s a big project, but a tiny part of the proven coal resources of the African country of Botswana:
Despite the global shift from coal, Botswana is pushing ahead with developing its estimated 212 billion tonnes of coal resources.
To put this in context, the U.S. currently produces well less than 1 billion tons of coal per year.
Or consider Japan. With oil prices currently spiking, you might think that a Westernized country like Japan would welcome the cost increases as a convenient means to incentivize the people to use less of the stuff. But the price increases have been large enough for the people to notice, and when that happens the politicians pull up short of forcing the people to become pooer. According to Japan Times on November 17, the Japanese government is putting together plans to provide subsidies to oil wholesalers to keep retail prices from going any higher:
The government plans to provide subsidies to oil wholesalers if domestic gasoline prices surpass certain levels, industry minister Koichi Hagiuda said Tuesday. The financial assistance is aimed at encouraging oil distributors to limit their wholesale prices in order to prevent an excessive rise in retail gasoline prices amid crude oil price surges. The aid program has no precedent in Japan, according to government officials.
But perhaps most notable is what has happened in recent days in some of the bluest of blue U.S. jurisdictions. In 2010, some twelve Northeast states, plus the District of Columbia, entered into a kind of agreement to agree to form something called the “Transportation and Climate Initiative.” The language of the official document was all about “reducing greenhouse gas emissions”; but in practice this was from the get-go intended as a cap-and-trade scheme, which would use a restricted and decreasing supply of permits to gradually force up the price of transportation fuels (mostly gasoline), and thereby force the people to use less of them. The signatories to the initial document included all of the New England and Mid-Atlantic states.
The Boston Herald has a piece yesterday (November 18) summarizing the TCI program and its current status. First, as to the intent of the program and how it would work:
TCI would have capped carbon emissions by forcing fuel companies that exceeded limits to buy additional permits and invest those proceeds into green transportation and climate-resilient infrastructure. It aimed to reduce vehicle emissions by 26% by 2032.
Well, gasoline prices are now up about 50% since President Biden took office in January 2021. Perhaps you might think that the TCI states would be unable to contain their excitement, and would be plowing ahead to raise prices still further and force a rapid decline in consumption. But actually the opposite is occurring. First of all, only a handful out of the twelve original states plus DC moved forward to join the compact:
Initially, 12 states plus the District of Columbia were in talks to enter the agreement, but just Massachusetts, Connecticut, Rhode Island and D.C. eventually signed a memorandum of understanding by December 2020.
And now, with gas prices rapidly rising, what politician wants to be seen as forcing them up still higher? So even the few deep-blue states that had joined TCI are now heading for the exits. The Herald reports that Connecticut pulled out of the compact on Tuesday (November 16); and yesterday (November 18) Massachusetts followed:
Gov. Charlie Baker has pulled the plug on a regional climate initiative that would have capped tailpipe emissions and was projected to hike gas prices at a time of record inflation, admitting the multi state-deal is “no longer the best solution.” He backs out of the Transportation and Climate Initiative just days after Connecticut did.
A Massachusetts group called Mass Fiscal Alliance calls it correctly:
“TCI is a regressive gas tax scheme that would have hurt (the) middle class and the working poor the most. It’s such wonderful news to see that Massachusetts families will not be forced to endure the economic hardship TCI would have imposed upon them,” said [Mass Fiscal Alliance] spokesperson, Paul Diego Craney.
Meanwhile, New York moves ahead with its ignorant bureaucrats issuing edicts for the end to fossil fuels a few years out. At this point the voters remain almost entirely unaware of what is coming. But when the costs start to hit home, will we actually stay the course? No, we won’t. It will be fun watching the process unfold.