Can't fool Mother Nature

Successfully mitigating the adverse impacts of climate change will not be easy. It will require making major changes in the way that we generate electricity and transport ourselves in relatively short order. Our lifestyles -- including those of the rich, famous and infamous -- will be affected. Guardians of the status quo will be upset.

We have what we need to get the job done with the possible exception of one very important thing -- time. And because time is of the essence, we can't afford to play political games with our future.

It's clear that politics and climate change won't mix. A recent op-ed in the Wall Street Journal entitled "California's Energy Colonialism" accuses state officials there of making false claims when it comes to that state's leadership in combating climate change. In a nutshell the author says that California has been able to shrink its environmental footprint significantly in large part by relying on the importation of "dirty" energy from beyond its borders.

This kind of "cooking the books" -- if true -- may gain short-term political currency, but in the end it's bad business. We're better off knowing the truth than becoming unknowing victims of "beggars' beliefs". (GW)

Lazy, short-sighted and irresponsible

By David Gow
Guardian.UK
May 7, 2008

A leaked government memo to British MEPs about how the UK plans to reach the EU's ambitious target of increasing its use of renewables in energy consumption tenfold to 15% by 2020 from the current 1.5% has provoked anger and disbelief among green campaigners.

"Lazy, short-sighted and irresponsible," is how Caroline Lucas, Green MEP, describes it.

The memo recommits Britain to its target (part of an overall EU one of 20%) but is shot through with references to "cost-efficiency" (seven) and "flexibility" (14) - and demands more of both, with officials refusing to say what that means. It suggests that ministers plan to trade their way to the target, importing renewable energy from elsewhere in the EU - Romania perhaps - and even outside Europe.

The government is even demanding relaxation of proposed rules governing the admission of large-scale projects such as the Severn Barrage towards the meeting the targets - even if they are not fully operational until after 2020. "They now want to extend this and weaken the criteria even further after exerting pressure to include this clause in the renewables directive," said Frauke Thies, EU renewables campaigner at Greenpeace. "They're trying to water it down here and every which way. And their trading plans will meet a lot of resistance."

Lucas says it "beggars belief" that the government is failing to meet the UK's potential for renewables, "shutting its eyes, closing its ears and burying its head" towards all the arguments in favour of incentives for investment - unlike the Germans whose feed-in tariffs have produced a surge in solar and wind power.

Malcolm Wicks, energy minister, insists that the commitment hasn't wavered and Britain has taken just 20 months to produce the second gigawatt (GW) of wind power when the first one took 14 years, putting it on course to be the world's leading offshore wind park. But any energy package has to take "pragmatic" account of the costs: an extra €25.6bn for the EU by 2020 when Britain's share will be €6.7bn or a quarter compared with the comparable cost of fossil fuels.

In March last year the EU summit proclaimed policies and targets designed to make the bloc a global leader in fighting global warming, handing a "first mover" role to its companies. Sadly, not only has Britain failed to match this enthusiasm but rowed substantially backwards since. It's not for nothing that senior UK officials admit that the reality of the credit crunch and economic slowdown has tempered that ardour - and across the EU as a whole.

Turkey uneasy

Back in Turkey after an absence of two years and the streets of central Istanbul continue to be swamped by mainly young, ambitious people while the traffic congestion and pollution are worse than ever. But there is a palpable air, too, of unease and not just because of the immediate aftermath of the violent police crackdown on May Day demonstrators in and around Taksim Square.

There is a renewed economic instability coming on top of the political unrest caused by the growing tensions between the state and the ruling AKP party of premier Recep Tayyip Erdogan which won a landslide election victory ten months ago. Inflation last month hit 9.7% and the central bank governor Durmus Yilmaz expects it to reach an annual rate of 9.3% compared with a target of just over 4% - and it shows no sign of abating next year as energy and food prices soar.

It's hardly a rerun of the crisis of the early years of the current decade when the IMF bailed the country out with a $10bn loan that expires this week and the currency, the lira, sank to the bottom of the Bosphorus. But the lira has lost 8% of its value against the dollar this year and trades close to 2:1 against the euro. Interest rates, which had been falling until February, are now set to rise by between 1% and 2%. Economic growth, which averaged more than 7% for four successive years, is now expected to be 4% at most.

But Erdogan's government is unfazed, with the foreign minister Ali Babacan claiming on Sunday that Turkey has been little affected so far by the credit crunch. He said the country became the world's 17th largest economy in 2007 when national income rose to $660bn and foreign investment reached a record $22bn or more than double that of 2005. And the goal of making it the 10th economy in the world remained on track.

Ministers have now embarked on a $17bn spending programme, partly financed by continuing privatisation receipts and certain to reduce the primary budget surplus in an effort to reboot growth. They insist that economic reforms, partly brought in to ease accession to the EU, will continue. But there's even less optimism now that EU membership - supported by only 40% - is a tangible goal. Even by 2020.

Party-pooping

It's probably passed unnoticed in Britain but this week has seen the start of celebrations of the 10th anniversary of economic and monetary union (EMU) in the run-up to the coming of age of the euro in January next year. Eleven of the then 15 EU countries said they had met the criteria for joining EMU on May 2 1998.

The European commission, in party mood, is now proposing that, eventually, the eurozone will speak with one voice in international fora such as the IMF. ("Not today, not tomorrow and probably not the day after tomorrow," senior officials say wistfully.) There will also be greater pressure on the now 15, soon to be 16, members to co-ordinate and converge their policies even more closely.

EMU and the euro, the word is here in Brussels and in Frankfurt, have been a huge success. Price stability has been achieved - with inflation, up to 10% in the 1980s, brought down to around 2% (though now above 3%). Budget deficits have been brought under control, 15m jobs have been created, unemployment is down to 7%, foreign investment is up to 35%, and the single currency now accounts for 26% of foreign currency reserves.

The downside is lower growth potential and productivity increases than in the US, continuing divergences of inflation and growth, inadequate structural reforms - and the euro as scapegoat for national economic failures (France and Italy). So the party mood is quite sober after all.

But, says Tom Mayer, chief European economist at Deutsche Bank, a hangover may ensue. His most likely scenario for the next decade is not for countries in surplus, led by Germany, which now has record exports and a zero budget deficit, to lead a breakaway from their southern neighbours and set up a new hard currency core. It is, rather, that they "inflate away their competitive advantage" with the effect that inflation will be higher and the euro weaker.

In today's volatile environment such forecasting is highly uncertain. But there is, at least, one undying certainty: when they celebrate the 20th anniversary of the euro in 2019, Britain will not be invited or even a gatecrasher among the 25 or 26 members. We'll still be reporting on the wicked federalists - and inventing new ways to be the ghost at the party.