Irwin Stelzer
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FOOD-PRICE inflation so severe that central banks are forced to raise interest rates to growth-stifling levels; corn prices so high that poor Mexicans can’t afford their tortillas; massive deforestation to make way for more corn and palm oil; poor farmers pushed off their land to make room for carbon-offsetting plantings paid for by rich jet-setters; and Al Gore for president.
These are some of the unintended consequences of hastily conceived environmental policies. In America, President George Bush has decided that we can plant our way out of dependence on foreign oil. He envisages a future in which America’s fuel will come from planting above ground rather than drilling below it. In Europe, Angela Merkel and Tony Blair have hit upon carbon trading as the solution to global warming, and the man whose mirror assures him that he is the greenest of them all, David Cameron, has a wind turbine on his roof to generate enough electricity to power his hairdryer.
With the possible exception of Gordon Brown, none of these hitch-hikers on the environmental band-wagon worries much about the cost of these policies, or has given the slightest consideration to the only consequences that are certain — the unintended consequences, some of which I have listed above. And Gore, the former vice-president turned Academy-Award-winning movie producer (and waiting in the wings to enter the race for the Democratic nomination for president), says our choices are action today, or desertification and flooding will be upon us very soon.
Speaking of the Academy Awards, the stars, starlets and wannabes participating in this exercise in self-adulation poured into the hall from their limousines and private jets, but assured us that the entire flood-lit affair was carbon neutral. They had purchased what are known as “carbon offsets”, a system by which they pay others to curtail carbon emissions, or fund renew-able-energy sources. These deals, which are running at an annual rate of about $100m and rising, according to Business Week, “have become one of the most widely promoted products marketed to cheque-book environmentalists”.
Small problem. The offsets were purchased from TerraPass, holder of a portfolio of offset projects, which include a garbage dump in Arkansas managed by Waste Management. TerraPass has purchased thousands of tons of gas reductions resulting from Waste Management’s decision to burn off the methane produced by decomposing trash. But the company’s managers and state regulators told Business Week that the decision to burn off the methane had “nothing to do with TerraPass’s efforts”. Or with the offsets purchased by the Hollywood greens.
There are more such stories, but you get the idea: the reductions in greenhouse-gas emissions claimed by those intent on being green without changing their lifestyles are often bogus — they would have happened without the purchase of offsets.
That is the least of the problems created by the new environmental panic. The rainforests of Indonesia and Malaysia are being destroyed to clear acreage for the production of palm oil, used as a biofuel. And in many countries poor farmers are having their land confiscated so that rich consumers can plant trees to lighten their carbon footprints.
Rich American agribusinesses are also cashing in on the huge subsidies made available by the government’s decision to subsidise ethanol and biodiesel production from corn, sugar and other crops. Ethanol from corn is a particular favourite of all the presidential candidates vying for votes in corn-growing Iowa, with the honourable exception of John McCain, who knows a boondoggle when he sees one. Crop prices are up, and so are land values.
The result is a problem for central banks. In the past, spikes in food prices have been seen as temporary, usually weather-related, and requiring no reaction from the inflation-controllers. But this rise might be a plateau rather than a spike: chickens and cattle are more expensive to feed, so farmers are keeping fewer of them, driving up the price of eggs, beef and dairy products. This food inflation is felt most keenly in poorer countries, where food accounts for a larger part of the average budget than in the developed world. But even in the richest countries, central bankers are wondering whether to raise interest rates to cool growth sufficiently to offset the effects of rising food prices.
None of this means policymakers should avoid confronting the possibility that the planet is warming, and the further possibility that the cause is human consumption of fossil fuels. We can’t be certain, despite Gore’s movie and the heated press releases that accompany more balanced scientific reports. But there is enough evidence to warrant sensible steps to cut carbon emissions.
But think before you legislate. The EU introduced an emissions trading scheme that California intends to copy — and watched greenhouse-gas emissions rise by 30m tons, or about 1.5%, because too many permits were issued. Europe’s four biggest power producers pocketed €8 billion (£5.4 billion) from the sale of their excess permits, and UK generators an estimated £1 billion. That doesn’t mean all such trading schemes are flawed, but it does suggest that haste makes more than a little waste.
Cap-and-trade, properly done, and carbon taxes, properly levied, should be explored as ways of getting the costs of pollution reflected in the prices consumers pay. That would provide an incentive to entrepreneurs to come up with efficient alternatives to fossil-fuel consumption, and relieve governments of attempting to pick winners. There are efficient ways to cut emissions, but it will take patient thought rather than headline-grabbing to discover them.
Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute.
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Whenever governments get involved with agriculture they invariably get things wrong. Mainly because so many governments today are elected or defeated by an urban majority. Led by a very urban based Media information monopoly. Of course, if you use 28% of top quality agricultural soils to grow grains for Ethanol production, then food prices will rise, add to that a massive tonnage of USA grain will not be available for export to most of the middle east, then count in the fact that the world population is increasing at one and a half million every week. Suddenly things begin to look very different.
DAVID VINTER, LOUTH, LINCS. , UK.
All such gloom and doom is depressing. Can't even smoke in bars anymore,both my grandfathers were heavy smokers and died in their early 60's but their wives lived til the late 90's.So much for second hand smoke.
Im pretty sure we can't change the climate of the planet but thats not stopping everyone from buying in to it,thanks to the media frenzy. The end result will be a world wide depression with lots of famine and joblessness.
Even though Im not a proponent of global warming Im going to sell my paid off truck and take the bus or walk and invest the proceeds in silver and gold, I'll borrow my wifes Corolla when I need a car.
No smoking,no eating meat, no driving, no free speech,its not looking good to me.Very controling.
Mike, Pittsburgh, Pa
Whenever any Government becomes involved in the latest hysteria-watch out. There are many ways of producing oils from plants. Each with its pro's and cons. You will not read about this as the " answer" has been found. The American way with maize is the least efficient, but who cares, it sounds good. ALL bio fuels release NOX. Ever heard of it? Not nice stuff. There are always trade-offs. Politicians, whose horizon is the next election, NEVER get beyond stage one thinking. Re Rain Forest, I prefer jungle, more trees are being planted around the world than are being used for products, ground clearance etc;. Check the estimated number of tree's in 1500 USA, with todays number. Carbon Trading-give me a break!! Today is the coldest day I have known in 30 years. I guess this is an anomaly on our way to becoming crispy critters. Watch this word " ANOMALIES " It will describe everything that does do not conform to the Global Warming hysteria. Today is an anomaly. Got it.?
Desmond Taylor, Houston, USA Texas
This should be an article on the front page!
Jane Reynolds, Whissendine, UK
Surely weather patterns have as much to do with global warming or cooling,as how can anyone measure the output of the sun . Is it possible for the sun to produce a degree or two more heat in a given timescale and therefore give the impression we will all get hotter and hotter or conversely a couple of cold summers and the doom and gloom brigade suddenly predict another ice age? Surely the answer is we really don't know all the answers but until we do what a good excuse for the powers that be to extract even more taxes to be wasted on employing another strata of useless bureaucrats. I recently had to spend an extra £80 tax on two return flights from UK to Cyprus, , oh well , I suppose Blair and Brown deserve the massive pensions they will recieve on retirement, a little bit extra won't hurt. What about the millions of people who have little or no pensions ,and the raid on pension s by Brown , the global warming is another excuse for more tax, nothing else. stuart broady
stuart graham broady, woodford, uk
T. Mustin of Canada is perhaps fortunate that normal life expectancy will ensure he won't be around to test the validity of his assertion. Hopefully his descendants (if any) can do it for him, in a 100 years time: lauding his prescience or berating his stupidity.
Perhaps, instead of mass delusion, climate change scepticism will be home sapiens Chicxulub asteroid?
Occam, Solihull, UK
Mr Stelzer mentions both carbon emissions and deforestation, but fails to point out the link between the two, which is as follows:
The equatorial rain forests "breathe in" carbon dioxide and "breathe out" oxygen. They are nature's way of providing us with the air we breathe. Unless deforestation is stopped, there is going to be a massive global crisis arising from this issue.
Edmund Burke, Kingston upon Thames, England
None of these facts will matter at all in the near term; at this point in the "debate," reason is a detour. A century from now this whole insanity will be a latter-day chapter in an updated edition of "Extraordinary Popular Delusions and the Madness of Crowds."
T. Mustin, Coronado, California
I never cease to be amazed by the fact that there is so much talk about cutting emissions from fossil fuels by so called "advisers", and yet so little action is taken. Technologies are here today which could be used NOW.
For instance, there is a transmission available NOW called Infinitely Variable Transmission (IVT) which would allow car manufacturers to reduce vehicle fuel consumption by up to 15% AND improve the vehicles performance by 10/12%. Is it used? NO! Why - I have no real idea other than the apparent intransigence on the part of transmission designers.
If you don't believe that this is available then go to the website of a UK company called Torotrak and see for yourself.
Neil , KL, Malaysia
Mr. Stelzer:
With all my respects, I didn't finish reading your article: too long and kind of boring and I am a 40 years old professional!
However it seems that you are against Al Gore and other people who worry for the environment?
I would recommend you to watch An Inconvenient Truth if you have done; then you might think differently...
Andres , Guayaquil , Ecuador
With patient thought... you will realise that you "don't stand a snowball's chance in hell" of altering the world's climate by reducing carbon emissions. Wake up and look at the bigger picture.
Kevin Cudmore, Auckland, New Zealand
There are some things that won't change until people's attitudes change, and other things that can be helped by sensible legislation. I don't think people who buy carbon credits display any change in attitude - that sounds like an entirely passive action prompted by the desire to ease environmental guilt without actually doing anything.
I think it's about time we made it compulsory for all new houses and business buildings to be fitted with some kind of solar panel. As the number sold rises, prices will fall, meaning the payback time will be shorter for existing home owners.
Sam, N Wales,
Somebody cut down the last tree on Easter Island. Whoever did it knew it was the last tree, because they could already see from one end of the island to the other. They knew that by cutting it down, there were condemning the island's population to slow starvation. But they went ahead and cut it down anyway. Because that's what human beings do.
Right now I'd say the really smart planners will be the ones basing their strategies on the assumption that we fail to arrest or reverse our growth in emissions....
Ian Kemmish, Biggleswade, UK
Let's try looking at some value for $$ instead of these ridiculous 'credits':
Since February 16, 2005, the Kyoto Protocol has cost US$ 323,777,787,290 while potentially saving an undetectable 0.003357696 °C by the year 2050.
Malaria cost US$ 283,675,641,890 in lost GDP and 5,828,000 lives over the same period.
[Source: www.junkscience.com (Steven Milloy)]
For further reading try work done by Bjorn Lomborg's 'Copenhagen Consensus' group with the UN - prioritizing solvable human issues. Personally, I hate wasted money and needless dead. Oh yes, you can add 5000 more of these tomorrow - thanks to Rachel Carson's brand of junk science!
Beth Geiser, Houston, TX
Once again our Governments have failed to legislate for the benefit and protection of the environment and will fail again until they stop legislating for the sake of the economy and not for the sake of the planet and the people who live on it (that'd be us). They keep legislating with the assumption that we all have to continue traveling, working, eating, building, in short consuming at the same rate as we do now. They know this is not sustainable but it would take too many unpopular choices to change all this and we all know how much Governments like popularity, even if holding on to it means self destruction.
Paolo, Dublin, Ireland