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Green fanatic wants to impose wealth destroying policies
Gerard Jackson
According to Cathy Zoi Australia could be leading the world turning sun beams into electricity. (The Australian, Let’s follow the Americans on greener energy 18 October 2006). Like all green fanatics she is opposes to nuclear energy despite the fact that her precious little sun beams are generated by the sun, which is a gigantic nuclear plant. In a former incarnation Zoi was New South Wales Konservation Kommissar — otherwise known as the executive director of the state’s Sustainable Energy Development Authority — and before that she was chief of staff for environmental policy in the Clinton administration.
To get an understanding of this women’s ignorance of matters scientific and economic we need only refer to another of her articles in which she argued for “sustainable energy” (Time to flick the switch, The Australian Financial Review, 17 May 1999). The article was filled with the usual claptrap about the thousands of jobs that renewable energy would create followed by a list of alternative energy sources like wind, solar, bio-mass, etc. All of which was intended to convey the impression that these technologies were genuine alternatives to centralised electricity generation.
What she didn’t say, and probably couldn’t grasp, is that there is no possible way these alternatives could compete with power stations. This is not to deny that they cannot play a role, only that the role would have little significance. This is not because of so-called market imperfections or capitalist greed (if it were the latter, capitalists would be rushing to invests in these technologies) but because of their natural limitations. Solar power, for example, is limited by the physical fact that the maximum amount of solar energy that strikes the earth is approximately 0.9 kW-hour per square metre, and then only under short-lived optimum conditions. A child with a calculator can do the rest.1
Wind power fares no better because it too is subject to the laws of nature. The maximum amount of power is proportional to the third power of the wind speed. This means that an efficiently designed windmill with 2.5 metre diameter blades and a wind velocity of 16 kilometres will produce about 110 watts. Now the maximum amount of energy that can be theoretically extracted from the blade area is 59.3 per cent, known as a Betz . So far engineers have only succeeded in achieving about 70 per cent of a Betz. In other words, wind power, like solar power, is very dilute.
What these facts mean for wind power were brought home in a 1978 study by the Swedish Power Board. It calculated it would take 1,500 windmills, each about 60 metres tall, to replace a 1,000MW nuclear plant. An American study carried out by Westinghouse Power Systems at about the same time found that to supply 20 per cent of the country’s electricity supply the US would have to build windmills with 500 foot blades, 500 foot apart, in rows from Canada to Mexico and from coast to coast, with each row being 30 miles apart. In addition, the wind would have to blow at a constant 24 mph for every windmill. The British calculated in 1978 that it would take 20 million windmills with 100 foot diameter blades to meet the country's electricity needs. For America, it would have something like 250,000 windmills with 300 foot blades.
These are facts that the greens’ media allies never publish. And it is a damned disgrace that
So-called government environmental departments refuse to acknowledge them. If these alternative energy sources were anywhere near as efficient as Zoi claims they would have no trouble making their way in the market place. There certainly would be no need for bribes, tax subsidies and out and out coercion.
Let’s now take a quick look at a few other myths. Greens state that renewable energy employs more people for the same output of energy. True. What most of them obviously don’t understand is that this means these technologies are low-output high-cost energy producers, which is why the market place ignores them. Therefore, if it requires four times as many workers to produce the same amount of electricity then productivity will have undergone a drastic decline. Does anyone really think that substituting labour intensive processes for capital intensive ones raises real wages? It seem that Zoi does. If she and her supporters were consistent they would urge the car and mining industries to abandon roundabout methods of production in favour of labour intensive techniques that would lower output. Put another way: why use bulldozers, for example, when you can use thousands of workers with picks, shovels and wheelbarrows?
Turning a capital intensive economy into a labour intensive one is called deindustrialisation. yet this is what her policy amounted to. Imagine what such a policy would do to living standards, output and prices.2 What raises living standards is capital a accumulation, not capital decumulation. Another argument is that we should conserve energy rather than build more power stations. That there is no shortage of energy never occurs to these geniuses. We cannot destroy or create energy, only convert it from one form into another. What is scarce is capital goods: the means by which we convert energy into a means of doing work for us.
Therefore ‘conserving energy’ only makes sense where the benefits of doing so exceed the costs of investing in new power plants. But we can only know this through the market process.
Now it is true that in a free market people will generally reduce their consumption of energy when its price rises. But this serves to encourage companies to develop profitable means of reducing their costs of production and hence unit costs which then causes demand and output to expand. However, where energy is more efficiently used the demand for energy will still rise.
The reason would be obvious to a first year undergraduate economics student. More efficient use is an equivalent of a price fall. Reduce the price and demand will rise. This was demonstrated by Herman Inhaber and Harry Saunders in their article Road to Nowhere (The Sciences, published by the New York Academy of sciences, 1994). The authors gave historical examples to support their case. A particularly amusing one, at least to me, was the way the Danish government's policy of energy conservation actually stimulated the demand for more energy and thereby demonstrated that ‘energy conservation’ often backfires.
It should be clear that forcibly moving investment into alternative energy sources does not make economic sense, i.e., it wastes capital. This is because if we are running out of so-called non-renewable energy sources then why leave them in the ground? Why not just use them? As this process continues their prices will rise and this will have the effect of shifting investment into other alternative sources by which time technology will have advanced much further. But the truth is that we are not running out of resources. So if these energy alternatives are so costly and inefficient why do greens support them? The answer lies in the question. More intelligent greens (among whom I not place Zoi) fully understand that these so-called energy policies would savage living standards and that’s why they support them.
For example, Amory Lovins said: “It would be little short of disastrous for us to discover a source of clean, cheap abundant energy”.
Paul Ehrlich was even more blunt: “Giving society cheap abundant energy . . . would be the equivalent of giving an idiot a machine gun”.
Ernest Callenbach, another green, made it clear in his book Ecotopia that alternative energy sources should be used precisely because they will raise energy prices and thus slash living standards.
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How the Bracks’ Government will cut Victorians’ living standards
Gerard Jackson is Brookes’ economics editor
BrookesNews.Com
Monday 23 October 2006