Tuesday, 29 November 2016

Why leaving the EU is a bit like building nuclear power stations


Britain's efforts to leave the EU are a bit like trying to build nuclear power stations, that is it takes a lot longer than you expect, you're not quite sure it will actually happen and it is very expensive.

Of course we have to decide what Brexit actually means. Whatever the status of the 'have our cake and eat it' notes may be as reported in The Times this morning, this will be viewed as fantasy by many except if you take the Daily Mail very seriously. Leaving the EU could actually be much like Norway or Switzerland's position in that we take all of the rules, including rules on free movement of people. We just won't have any say on them. That'll mean we can whinge all we like with the absolute assurance that we can't do anything except shout at the foreigners rather than speak their language. A perfect English sereotype!

However the notion that we can leave and have some sort of Canadian-plus style of free trade agreement with the EU any time soon (as implied in the Times story) is stretching things too far. Like Hinkley C, such a thing might be possible in theory in many years to come, but in the near-term it is not going to happen. In terms of the EU a Swiss-type agreement is much more likely.
That's because trade deals take an awful long time to negotiate, and as we have seen with the EU-Canada agreement, are fraught with the difficulties of getting every EU nation to agree with it. It's taken 7 years to negotiate this agreement, and it is not finished yet.

Sure, the UK could agree a quickie-ish exit from the EU, within or around 2 years as stipulated in the much-mentioned article 50. That would be covered by the Article 50 injunction that a leaving deal would be agreed by a qualified majority in the EU. But the subsequent agreeement detailing trading relationships would have to wait, leaving the UK having to face trade tariffs in the (could be very lengthy) meantime.  The Government has already given assurances to British industry that this will not happen of course (Nissan, CBI etc). So what's to give?
Well, not the EU, since it is sticking very hard to the principle of free movement in its negotiations with Switerland who seem to be accepting a face-saving compromise in order to stay in the Single Market. So, logic has it that the UK might get a more speedy deal if it simply accepts a Swiss type deal, since that appears to be much more a la carte than much else on offer. The Government would trumpet that it has got a concession that British employers could, if they wanted, give British people first peiority in job appointments, but that would be all they could do apart from reinstate the social security chnages that were agreed by David Cameron.

Even that of course maybe looking on the hopeful side because that will enable an optimistic reading of what is possible within two years.

Of course you might say, and UKIP et al seem to be saying this, why not just leave and take the tariffs. Well, we're back to the assurances given to Nissan etc, which rules that out, and anyway business will riot (not a pretty picture). So using the chess analogy, the Government is in check, and can't get out of check within several years unless it concedes staying in the Single Market. The effective choices of the UK Government become reduced either to staying in the EU as we are at the moment under some temporary basis, or doing a Swiss or Norweigian style deal. Given that the Government does not want to go into a General Election in 2020 without any imminent prospect of leaving, the UK Government is in a very weak negotiating position. It will have to accept what is offered. A Swiss deal is almost certainly the best it will get (although there's plenty of Remainers who will still say that full membership is still best!).

Those are the rules of the game, and the only plausible way out of it is if the game, that is the EU, collapses in the meantime. Much as Nigel Farage seems to want this, the collapse of the euro at least is not something that anyone who has money in a bank would wish for.

Below (underneath the link to the Times article) is a link to a UK Government discussion of leaving the EU. see page 14 in particular


http://www.thetimes.co.uk/article/have-cake-and-eat-it-aide-reveals-brexit-tactic-wrj58bjbn

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/503908/54538_EU_Series_No2_Accessible.pdf

Monday, 14 November 2016

Why Trump might not make much of a difference to action on climate change

The election of Donald Trump probably means that, one way or another, the USA will pull out of the Paris Agreement on climate change, but this may make less difference to how much carbon the world would have emitted than what you might think.

For a start the Paris Agreement already has enough national states as signatures representing a high enough proportion of global greenhouse gas emissions to remain valid with a US withdrawal. The Agreement  requires there to be signatories representing at least 55 per cent of global emissions, and there's more than that left in the agreement without the USA.

Second, internally, such downwards pressure on carbon emissions as there is is mainly bound up with technological changes or policies that are likely to continue anyway. Coal consumption in the US has fallen by around a quarter since 2008, but. according to a recent paper published in The Electricity Journal this has very little to do with Obama, and almost all to do with the increased availability of cheap natural gas. The growth in production of shale gas has been the factor that has reduced the demand for coal and led to the closure of increasing numbers of ageing coal fired power plant. Another factor reducing coal use is the growth of renewable energy - mainly wind and solar. These technologies are promoted by a bi-partisan Congressional agreement on a policy of production tax credits (wind) and investment tax credit (solar). These will  decline in force and run out in 2020. However, many Republican Congressmen are relatively sympathetic towards renewable energy, and there are possibilities that some form of tax credit support could be renewed. The Republicans may not care much for the climate issue, but they are interested in helping people, including often the renewable energy industry, make money.

Certainly Trump is likely to want to short-circuit Obama's 'Clean Power Plan' which was being pursued through the aegis of the Environmental Protection Agency, although even here, many states will continue with their own clean power plans. Trump may order the reversal of the regulations restricting mercury and toxic emissions, compliance with which makes coal plant more expensive. However, as stated already, coal power plant are being retired without this measure anyway. In addition it is unlikely that the revision of standards to allow more mercury and toxic emissions will please many people given that the EPA estimates that otherwise between 4000 and 11000 people will die each year from poisoning by these toxics. Resistance to Republican initiatives to pare down environmental regulations may prove to be rather sturdier and more effective than the anti-environmentalists bargain for.

Third, there is the global impact of Trumps' protectionist trade strategies to consider. Trade restrictions on China, and quite possibly even the EU, may help relieve competitive pressure on some US industries, but they will, overall, make the world poorer. China's economy is less robust than it appears, with rising levels of bank debts and it is vulnerable to US pressures to increase the value of its currency. Indeed, my outlook is that there will be anything from a global slowdown in economic growth to a full-blown world economic meltdown. This of course, to a greater or lesser extent, will have a downward pressure on carbon emissions and probably more than offset the impact of Trumps's reversal of Obama's internal energy measures. On top of that of course, there are suggestions that the EU could impose a carbon tax on US imports to offset reductions in environmental performance by UK goods and services. This idea actually comes from Nicolas Sarkozy.

Some references:

https://www.epa.gov/mats/healthier-americans

http://www.sciencedirect.com/science/article/pii/S104061901630121X

http://www.forbes.com/sites/stevekeen/2016/03/27/the-seven-countries-most-vulnerable-to-a-debt-crisis/#35b8777a4edc

http://grist.org/briefly/nicolas-sarkozy-proposed-a-carbon-tax-on-american-made-goods-if-trump-pulls-out-of-climate-accord/?utm_content=buffer8f4d0&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

Sunday, 9 October 2016

Why I was right to predict that UKIP would become the largest party

Some time before the EU referendum I predicted that a 'leave' vote would make UKIP the largest party. Well, I am very sad to admit that I was absolutely right. It's just that the Conservative Party has morphed into UKIP-lite.

My argument ran that as it became obvious that the UK could not simultaneously remain in the EU's Single Market for economic purposes and have solely British control over immigration rules then support would shift to UKIP and the Tories would split. What has happened is that the Government has stolen UKIP's clothes and is heading for chauvinism and economic isolation. There's a joke being made to Americans now. Why not come over and buy some property here? You'll get a nice house and change from $100!

The proposed rules about companies saying how many 'foreigners' are employed is a measure bound to inflame prejudice and threaten the livelihoods of people who have settled here in good faith. It is being reviled around the world as a sign of how the last country in Europe to embrace xenophobia in the 20 the century has taken the lead in this ignoble pursuit in the 21st century.

But perhaps the most ludicrous action of all in this package of petty chauvinism announced at the Tory Conference are the proposals to limit 'foreign' students. Apparently Amber Rudd is considering proposals so that overseas students will only be able to obtain work visas if they study at some universities, rather than 'lower quality' courses. According to one of her advisers quality will be measured by whether the universities are one of the two dozen members of the Russell Group of universities.

This proposal would do little, if anything to reduce overseas student numbers as the Russell Group universities would simply expand the intake to recruit the students who would have gone to non-Russell Group universities before. Meanwhile it would do severe financial damage to the rest. It would be an incredible piece of policy nonsense given that recently the Government proposed to ruin the top universities by linking home student fee rises to how well the universities scored in the National Student Survey (NSS) (see previous blog on why this is nonsense). That would mainly favour the non-research intensive universities who tend to do better in NSS scores.

I struggle to understand how it is that a Programme we run at Aberdeen University (or at places like the Science Policy Research Unit at Sussex, Robert Gordon University also in Aberdeen etc) is 'lower quality' to one organised at a university in the Russell Group. But it is now. Because Amber Rudd says so. They'll be no NSS on that one I'm sure!

Of course if Amber Rudd fails to divide and rule the universities she may use the option of simply stopping overseas students getting work visas at all. But if this leads to large cuts in income from overseas students then then that would even more surely ruin the universities more thoroughly than will happen anyway with the loss of EU research income and the decline in numbers of EU students studying in the UK.

There's no good argument for doing this, bar the notion that this may nominally cut the numbers of so-called immigrants (students are counted in this list). It is ludicrous to claim that the students I teach at my and other universities are low skilled people, presumably who will put out British people out of jobs picking fruit or cleaning toilets. No they might compete with university lecturers for their jobs of course - but I can assure you that very, very, few of us mind about that!

But facts and expert opinion have departed from being regarded as having any relevance in UKIP Britain. Experts are weak liberal internationalists who have no country.  The Prime Minister has sacrificed her country in the race to save her Party by transforming it into UKIP.

Saturday, 8 October 2016

Social Science research boosted by right-wing Tory ex-Minister

Peter Lilley, the ex-Tory cabinet minister, gave an unexpected boost to social science research when he implied that social science research was needed to estimate the impact of an administrative change he brought in when he was a minister in the 1990s. But what this (surprising?) boost does illustrate is that there is some hope to defend social science research from what I hear as the increasing howls of 'what's the point of all this' that I hear these days. This is especially strong after the EU referendum and the Brexiteer sneering at 'experts'.

Peter Lilley, in a Radio 4 Programme (broadcast earlier today) was actually discussing whether civil servants, in preparing lists of policy options, should include an option 'of doing nothing'. When asked whether this had led to long term changes in how policies are assessed he responded 'that's something for social science research to determine'! So get your ESRC applications in now, folks (although jolly good luck, because these days only about one in ten or so of proposals get funded!).

This boost was a little unexpected partly because the intensity of dismissal of social science research has strengthened in the wake of the EU referendum, with social scientists being attacked as being 'shamen' in one memorable attack from a right wing opinion leader that I can remember. It's nice to have somebody on the political right who thinks it is sometimes useful.
Of course lots of people say that we social scientists should just focus on teaching.  Now we have to do this of course, as well as research, but what all those wailing at us for spending so much time on research fail to answer is that when we do put a lot of effort into teaching:

Where exactly do we get the material to teach from?

I ask this question when people tackle me on the way that (so they say) academics 'waste' time on doing research when they could be helping students. and I must say that the responses seem pretty thin. People seem to simply ignore the point I make, or refer to some 'body of knowledge' out there which we can use. But where on earth do people think this 'body of knowledge' comes from? The Guardian, or Times perhaps? Well, they in fact tend to either recycle un-evidenced opinion or, wait for it, research published by academics. Or perhaps the Daily Mail? I won't comment in that one. Besides providing students with material to discuss and learn, social science research can answer a lot of questions that the people want to know about (including Peter Lilley it seems).

The Government have got very confused about all of this in their proposals for a 'Teaching Excellence Framework'. Initially at least, they seemed to be moving towards a proposal whereby the universities that did best in the national student satisfaction surveys league tables were allowed to increase their fees. Which seems ok at first sight until you understand that, as a very general rule, the universities that students most want to get into (ie research intensive universities) happen to be the ones that tend to come often towards the bottom of the 'teaching satisfaction' league tables. So would they be starved of funds and forced to sack the boffins?

So what does the Government want to do? Destroy places like Imperial College, and the LSE that don't do well enough in student satisfaction surveys but who generate very high quality research as represented by international league tables? Despite the fact that students want to get into these sorts of places most of all!  Of course, as we can see in Scotland, which boasts lots of top-rated universities (eg Edinburgh and Aberdeen, and others), a fees system is not necessary for UK students.

But maybe the universities should not expect too much help from the Government. After all they are tainted with the liberal internationalism that is so hated now by Brexit Britain.

There is an irony that, unintentionally, the Brexiteers, by bringing down the value of the pound, have made studying in Britain a lot more attractive for overseas students. This might go some way to replacing the loss of EU funds for research if it leads to increased numbers of students coming in from abroad. But I suspect Theresa May will order her ministers come up with some 'options' to put a stop to that sort of comeback!
Of course doing nothing to limit overseas students numbers would be one option that the universities would favour! But will a 'doing nothing' option be on the cabinet committee agenda?
By the way, if you want to join in (or just look at) the 'Energy Politics' facebook group at the University of Aberdeen go to https://www.facebook.com/groups/1110798358955201/




Monday, 26 September 2016

Ofgem action against small generators threatens to destabilise capacity market

In pursuit of a complete failure to understand the problems with its own 'capacity market' Ofgem seems about to make things a whole lot worse by reducing capacity margins - by taking away the incentives to a lot of small scale generators whose existence helps to keep the electricity sector running.

Ofgem runs on a piece of fantasy theory that the capacity market will work better if the 'distorting' benefits to so-called 'embedded;' generators are taken away. In fact the opposite it the case. Ofgem's concern that proposed big gas power stations cannot win bids at sufficiently low prices to put them into business partly because of the small generators is total nonsense. Without the small generators the price at which the required capacity will be supplied by the big power stations will increase not fall. The problem has to do with the principles and practice of the capacity market, and has nothing to do with the small generators who currently provide a valuable service. Ofgem's actions  are akin to destroying a table leg in order to save the table.

The central problem is that future prices for electricity that the power stations could sell on the wholesale power markets are very uncertain, and quite likely to fall. Given this it will require very high capacity market prices (which will put consumer energy bills up by large amounts) to evince the capacity that Ofgem wants from gas fired power stations.

A big part of the problem of course is that increasing parts of electricity supply are being paid for outside of the wholesale power markets, through the Renewables Obligation or contracts for difference. This will only increase in the future, especially if Hinkley C comes on line (whenever that may be). Note: this has nothing to do with so-called renewables 'intermittency' , it is to do with 'liquidity' being siphoned away from the wholeslae power markets to pay for low carbon energy sources - which has to be done of course, otherwise they will not come on line.

The answer to all of this is to offer new generators firm long term contracts so that they can have income guarantees in the future - this may involve some sort of 'take or pay' scheme for all generators at least, in the form of a contracts for difference arrangement as applied to the generators.   - But this approach is bound to end up being a lot cheaper than the Government's current approach which consists on the one hand of giving the capacity payments to every generator and on the other hand (in these proposals) of driving the small generators out of business by taking away the income they need to provide capacity to the whole of the system.

The problem has a lot to do with ideology. Ofgem and civil servants seriously believe that somehow in a world of decarbonisation you can run wholesale power markets according to some imaginary free market trading arrangement. People must learn to be more pragmatic and tear themselves away from economic models that have little bearing on the real world.
For the story on Ofgem's proposals see http://www.telegraph.co.uk/business/2016/09/24/industry-faces-160m-energy-hit-under-overhaul-of-power-plant-rul/

Tuesday, 20 September 2016

All green energy supporters should shun the Tories and join a Progressive Alliance

The Green Party and Jonathon Porritt have been organising campaigns to unite people to form a 'Progressive Alliance' that would co-ordinate efforts to defeat the Conservatives. There is hardly an area for which this is not more necessary than green energy. That means renewable energy and energy conservation.

Tories who oppose support for renewable energy are getting their way despite the fact that green energy is much more popular than nuclear power or fracking which is their preferred means of deriving energy. This is despite the fact that both of these options are much more difficult to deliver compared to renewables or energy efficiency.

Behind the spectacle of Hinkley C Point being, in reality, postponed again (until at least 2026) because of the inability of the nuclear industry to deliver, the Government refuses to offer contracts to several thousand MW of onshore wind that are in the planning system, or solar farms that could be quickly put together. It has postponed the issuing of contracts for new offshore windfarms. Targets for zero net energy housing have been abandoned. Local authorities have been stripped of their powers to make developers build buildings to a higher energy efficiency standard than the minimum requirements. As the UK leaves the EU the right wing will be straining at the leash to cut down the environmental protection rules, including EU inspired energy efficiency standards for machines and buildings. I could go on.......

All the Government seems likely to do now is to oversee the ramping up of incentives for fossil fuel power plant under the capacity mechanism and think of crazy schemes to fund nuclear power through back-door blank cheques.

Of course the predominantly anti-green Brexiteers hold green energy to ransom. Despite the fact that green energy is very popular the anti-green faction hides behind a front of xenophobia to push through policies that the public really does not want. It's classic right wing politics of course.

So it seems nothing will change until we get rid of the Tories. Divided the centre and left will fall. Together we can win.

See Jonathan Porrit's blog for some general further thoughts: http://www.jonathonporritt.com/blog/progressive-alliance-laying-foundations

Wednesday, 7 September 2016

‘The newest windfarm in Aberdeenshire – a good omen for renewable energy?’

‘The newest windfarm in Aberdeenshire – a good omen for renewable energy?’
Roger McMichael from the company ENGIE who are building the Cairnborrow windfarm in north west Aberdeenshire will be coming along to talk on Friday September 16th at noon in room New Kings (NK) 3 at the Kings College, University of Aberdeen. He will talk about renewable energy policy as well as the windfarm that is currently under construction. You can see some details of the windfarm at http://www.westcoastenergy.co.uk/…/work-begins-on-10mw-cai…/
You can see the position of New Kings Building at:http://www.abdn.ac.uk/about/campus/maps/view/36/
All are invited to this meeting.