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Benny Peiser: West’s Climate Policy Approach Is Wrong

Benny Peiser is a social anthropologist and director of Global Warming Policy Foundation in the UK. He places his views “somewhere between climate alarmists and skeptics.” While in Delhi, he spoke to Financial Chronicle about the impact of climate change policies on the lives of people.

Excerpts:

Is there a change in the debate on climate change after Copenhagen?

The whole political debate has shifted quite dramatically in Europe, partly as a result of the Climategate scandal and partly as response to the Copenhagen fiasco. What used to be a very popular theme for politicians who thought it would win them votes is turning into a liability. There’s a public backlash and a growing scepticism that Europe is burdening its own people and industry while the world is not following.

Why did this happen?

It’s a combination of factors. It started with the economic crisis. Job security, job creation and the economy became priorities number one, two and three. Environment concerns dropped down and became rock bottom. The second factor is that people realised they were paying a hefty price in their heating bills and energy bills for climate schemes which they don’t really like. And finally, you have all the scandals and blunders which led to a crisis of credibility at the IPCC. People have become very suspicious about the revelations in Climategate.

How strong is the impact of the scandals?

It has undermined the trust in reliabity of official government sponsored science. We have been told for ten years that there’s no debate; it’s settled and there’s complete consensus among scientists. That argument is no longer accepted by people. They have lost trust in the predictions by climate modelers where they made up a lot of alarmist scenarios which is at the heart of some of the IPCC problems. Not the least because people also realised that the warming [trend] of eighties and early nineties has not continued. Even the British media – largely the BBC, The Guardian, The Times — which used to unanimously take an alarmist position and sing from the same climate hymn sheet have suddenly started asking questions. Can you believe it: Journalists asking questions? So there’s quite a significant change and politicians are scratching their heads and don’t know what to do.

What has been the impact of climate related taxes in Europe?

The energy intensive companies where energy is a hefty chunk of their overheads are paying about 20 per cent of their energy bill as [as result of] climate taxes or green taxes or renewable obligations. They are concerned because other companies outside the EU do not have to. Many companies in the UK are worried whether they will be able to survive if Britain continued with its unilateral burden.

Suppose you accept the IPCC and the Kyoto Protocol what would this mean?

The answer is fairly simple. Given that all the alternative energies currently available are about two to three times more expensive than fossil fuels, energy prices would rise 50 to 100 per cent. The number of people living in fuel poverty in the UK is around seven million. This would double. Fuel poverty is defined as one where a family spends ten per cent or more of its earnings on fuel bills. It would also make a lot of EU companies go bankrupt as they would no longer be able to compete with anyone outside. If India has to cap its emissions, it would have to replace its conventional energy with something else and anything else would be very expensive. Earlier we were told by a number of analysts, including economist Nick Stern, that decarbonisation would be fairly cheap, not a real burden. Today people realise it would be much more expensive.

But wouldn’t a fall in carbon intensity be a gain?

When you have increase in energy efficiency, carbon intensity of production comes down. But this is cancelled out by the rising energy demand. So if you want emissions to be reduced, the only way is to swap convertional forms of electricity generation based on cheap fossil fuels with cleaner or greener energy which is two to three times more expensive. That in turn makes everything else more expensive. That’s why there’s a backlash against cap and trade in the US and in Australia. Everyone is getting cold feet.

How do you reconcile climate needs with growth in India and China?

The pressure on politicians in the EU is: why are you burdening us with taxes and price rises when China and Inda are not following? But the reality is that your and China’s energy demand will rise because of population growth, a rising middle class and increasing expectations. That’s why India and China will not sign a legally binding document. It has nothing to do with science — the governments realise that they would not be able to achieve any of that. For the next 20-30 years your emissions will rise significantly and there’s no alternative to that. When I met your minister of environment Jairam Ramesh, one of the officials remarked that in two or three years alternative energy sources would become economical. I said, yes, we have been hearing that for 30 years.

So what’s the risk of not taking steps to decarbonise?

First, even if the IPCC were right, that doesn’t mean you have to decarbonise. The worst case scenario is that in one hundred years we won’t be seven time richer but only six times. The long-term impact would diminish wealth creation to a manageageble level. Even if you fully and squarely accept the science, the policy approach advocated by the West is wrong.

Financial Chronicle, 8 March 2010