McDermott, Verde, Laing and Mejean take on Lomborg in the Financial Times.
As I have argued before, Lomborg plays a useful role in cooling down the overly ambitious climate policies promoted by European leaders — but he also tends to get his details wrong.
Bagues and Zinovyeva have an intriguing piece over at Vox. There’s evidence that all-male promotions committees discriminate against female candidates (in Spain). The solution is sex quotas for committees. As women are underrepresented in higher ranks, this would put a disproportionate burden on the current generation of female senior academics. A neat intergenerational trade-off so.
Bagues and Zinovyeva’s propose to use sex quotas, but small ones. This may satisfy all concerns.
Minister Gormley has announced new targets for greenhouse gas emission reduction: 2020 emissions are to be 10% below 1990 levels (29% below 2005 levels) , 2030 emissions 40% below 1990, and 2050 emissions 80% below 1990.
EU legislation has that Ireland should cut 2020 emissions by some 20% below 2005. The EU has committed itself to 30% if there is a meaningful global agreement on emission reduction (which is as unlikely as ever). The Environment Council has repeatedly tried to remove the conditionality of the 30%, but has been rebuffed by the European Council. The government now argues that Ireland should unilaterally adopt the 30% (well, 29%) target.
It will be hard enough to meet the EU target, as illustrated here (after Devitt et al., 2010). According to the low growth scenario, Ireland will fall short some 5.5 mln tonnes of CO2 equivalent of the EU target — and 13.5 mln tonnes of the new government target. Today’s permit price is 14 euro/tCO2. Under the EU target, Ireland would need to spend 80 million euro per year on importing permits (the model imposes a carbon tax equal to the permit price, so buying permits is cheaper than increasing domestic emission reduction). Under the new government target, this would by 190 mln euro.
The new government target is less stringent than that proposed by the Oireachtas Joint Committee on Climate Change and Energy Security.
Referring to my earlier remarks about an ESRI paper, here’s the verbatim conclusions of the paper.
Seán Diffney, John Fitz Gerald, Seán Lyons, Laura Malaguzzi Valeri, “Investment in electricity infrastructure in a small isolated market: the case of Ireland”, Oxford Review of Economic Policy, Volume 25, Number 3, 2009.
The new All-Island market structure appears to have performed broadly as expected. The rules provide for a transparent and efficient operation of the market, encouraging plant availability. Investors are clearly relying on the capacity payment regime to ensure that electricity is priced at long run marginal cost in the future. Lyons et al. (2007) suggest that the calibration of the capacity payments regime is broadly appropriate. The one area which may need further consideration is the handling of wind generation within the capacity payments regime.
In this article we evaluate the costs and benefits to the Irish system of meeting the government’s target for 2020 for 40 per cent of electricity to be generated by renewables, primarily wind. We find that high wind generation is economic when fuel prices are high and that a high level of wind penetration will occur without further expensive incentives. Unless fuel prices or carbon prices are low in 2020 consumers are likely to benefit from a high level of wind generation on the system. This is consistent with the results in DCENR and DETINI (2008) and CER and NIAUR (2008). The target for a high level of wind generation in the Republic will not adversely affect consumers in Northern Ireland and may actually benefit them in the case of high energy prices. While low fuel or carbon prices could see consumers in both jurisdictions paying a higher electricity price, this premium would be likely to be small. A high level of wind generation would provide a hedge against high fuel prices.
To be sure of the net effects of wind generation it would be important to not only measure its positive externalities, but also its negative externalities. In this study we have internalised part of the negative externalities wind generation imposes on existing thermal plants by curtailing wind generation to limit thermal plant cycling. We have not however attempted to estimate the possible negative environmental externalities of wind farms.
We find that investing in a lot of wind generation is economic only if there is also parallel investment in interconnection. This allows wind to generate whenever it is available instead of being curtailed at times of low demand or imposing additional costs on thermal plants by making them ramp up and down. This implies that the total capital costs associated with an investment in high wind generation will be substantial. Therefore, in order to minimize the cost of the system to the consumer policy should concentrate on minimising the cost of this investment. One measure to achieve this is already in place, regulatory certainty: because the establishment of the new market required co-ordinated legislation in two jurisdictions it will be difficult to change. This should provide additional reassurance to investors.
Second, given the comparative youth of the SEM, avoidance of regulatory risk is at a premium. The regulators should avoid making unnecessary changes to the framework or parameters while market participants gain confidence and knowledge about how the system works.
Third, the financing of the essential network infrastructure, including interconnectors should be done on the basis that it is part of the regulated asset base of the state owned (or in the case of Northern Ireland mutual owned) company. As such it should attract a low cost of capital which will be crucial to ensure that the costs for consumers on the island of Ireland are minimised. In any event, merchant interconnectors would be unlikely to supply the socially optimal level of interconnection, given their higher cost of capital and decreasing returns to investment. It should be noted that these results are based on the assumption that interconnection operates as a perfect arbitrageur, allowing electricity to flow from the low price to the high price jurisdiction when ever there is a price difference. In practice this is unlikely to hold, so studying the specific behaviour of interconnection flow is important to assess the returns to the system. If the interconnector does not operate optimally a much larger infrastructure investment could be needed to obtain the same effect, possibly causing the high wind scenario to become too expensive. This highlights the importance of implementing an appropriate regulatory regime to cover all of the interconnectors between Ireland and Great Britain.
Finally, to facilitate the continued development of competition, the ownership of the transmission system in the Republic should be transferred to EirGrid, the government-owned operator of the electricity system, and the Irish government (as shareholder) should ensure that appropriate pressure is put on operating costs in the ESB.
I guess you have to speak Ukrainian to work for Kind Fairy, but this business model can be used in other languages too.