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Tim Worstall has picked up on the DECC energy pathways report and notes something intriguing: although the costs of the individual elements of the energy mix in the new regime are acknowledged to be higher than at present, the overall cost is said to be lower! But Timmy has managed to work out how this particular piece of government mathematics works:

So, how is it that they have squared the circle? How have they concluded that the new, greener, energy system made up of more expensive components is going to be cheaper? The answer is here at the report site:

The total energy system cost of tackling climate change could be similar to doing nothing and may even be cheaper than remaining fossil fuel dependent (even if fossil fuel prices are not high).  For example, taking action could save £84/person/year over the next forty years based on a pathway from the cost-optimising model, MARKAL.  In the MARKAL pathway, energy use per person in 2050 is half today’s levels; around three quarters of this is due to uptake of more efficient technologies.

And that’s where our lie is. They are not saying that producing the same amount of energy is going to be about the same price with the new technology. They’re saying that producing half the amount of energy is going to be about the same price.

Perhaps understandably, Tim’s article is entitled “Lying with Numbers“.