Author: Richard Tol

Economics, voodoo, and climate policy

John Gibbons is having a go at Bjorn Lomborg. Mr Gibbons argues that Lomborg has a PhD in spin, while in fact he has a PhD in political science. Gibbons oddly suggests that Lomborg is behind “climategate”, and refers to economic models as “voodoo”. Most seriously, Gibbons suggests that statisticians and economists have no relevant expertise on climate science and policy.

Climate is defined as the 30 year average weather. Statistics is therefore at the core of climate science.

Greenhouse gas emissions are caused by economic activity. Emission reduction already costs a heap of money, will cost a lot more in the future, and would cost a whole lot more if economists do not help design abatement policies. Economics is therefore at the core of climate policy.

Latest EPA projections

The EPA has released its latest forecasts for the emissions of greenhouse gases up to 2020. It confirms that Ireland will not need to buy additional CO2 permits on the international market. We may even have too many, but the NTMA is not allow to sell any excess for reasons that entirely escape me. The EPA also confirms that Ireland is unlikely to meet its 2020 target (although Greece may lend a helping hand) even in the “optimistic” scenario, which assumes that emissions fall if there is a government report that tells them to.

20 million euro for NEW energy research centre

The government will establish the European Energy Research Centre at the Tyndall National Institute, and provide initial support of 20 million euro. See here.

Tyndall has no prior experience with energy research, and I must admit that I was unaware of its existence until the 20 million euro rumour emerged a few months ago. Wikipedia has an interesting entry. Then again, sometimes it is good to start with a clean slate.

Wave power again

Breda O’Brien argues that it is high time to gamble on wave power in today’s Irish Times.

She hails Danish wind power as an example. The Danes heavily invested in wind power for two decades before benefiting handsomely from German subsidies. The Danes were alone for a long time, while Irish wave power lags behind Scotland, the USA, and Portugal. And other renewables are far ahead of wave power. It is a gamble indeed.

O’Brien argues that wave power will bring a substantial amount of jobs in construction and manufacturing. That may be. Wave power devices have heavy and simple components that are best built close to the shore off which they are deployed. Wave power will be first commercialized in Ireland, if anywhere, because our waves are the best in the world. Those construction jobs will come to Ireland regardless of who invented the technology.

O’Brien picks a winner. That is best left to the market. We should prepare ourselves for a range of possible futures rather than pretend that we can accurately predict technological change and develop skills  to match our preferred forecast.

Warmer Homes

I was wrong. I previously argued that subsidies for home insulation are an expensive way to reduce carbon dioxide emissions. The SEAI has now release a post-hoc assessment of the Warmer Homes Scheme. The executive summary puts a brave face on, but if you have a look at the detailed results, you soon discover that the Warmer Homes Scheme seems to have had no noticeable effect on fuel use (and hence emissions), poverty, comfort, or health. Most results are insignificant, a few are significant with the right sign, and a few significant with the wrong sign.

One of the striking results is that the control group (without subsidies) have put in about as much insulation as the intervention group (with subsidies).

The research is not brilliant, so perhaps there is more to it, but for now the conclusion must be that the Warmer Homes Scheme is an expensive way to achieve nothing.

The SEAI should be praised for studying the impact of their interventions and for publishing the results.