Wow. Just out of a Prof Dieter Helm lecture at LSE. “Climate Change Policy, and why has so little been achieved”. To paraphrase Ted Theodore Logan, Dude laid down the smacketh in a most bodacious way. I didn’t see Nick Stern in the audience. He must have had advance warning of what was coming. Helm started with a growing tribute to his Lordship, how could he not, he was on enemy territory after all. But after calling him the most important economist in the UK right now, alongside Mervyn King, he proceeded to calmly, and very eloquently dismember Nick’s very own Stern Report.
This was no Hallowe’en slasher. Helm is more expert a surgeon. He took aim only at crucial organs and arteries. He chose his spots and cut with the finest of Japanese steel.

For the second time in a week I listed as a speaker told his audience that we are now in the post-science phase of dealing with climate change. The science they have argued is good. Beyond repute in fact. Helm made the point that practically every university on the planet is currently contributing to climate change discourse, and there is remarkable consensus. We’ve passed 350ppm CO2 and are approaching 400 and 500. We all know what comes next. His point here was that the ‘we’ includes our politicians. A politician who now rejects the science of climate change finds himself on the lunatic fringe.

“So why the fuck has there been NO major policy advances in the past 20 years” Helm didn’t say. But that’s what he meant. If we can answer that question maybe we can start to chart a policy course through Copenhagen and beyond.

This begs the question from the Oxford prof, “what bits of economics are painful to policy process”. He spent the rest of the lecture laying some of these out.

–
Now for a word from standard economic orthodoxy.

GDP, given a growth rate of 3% per annum, will be 4x today’s GDP by 2100.
=> We’ll all be 4x “wealthier”
=> 2100 consumption will be 4x today’s consumption
Coal as a % of our energy source goes something like
25% today
28%
30% 2100
Ee-KKKKKK-er!!!!!!

And now back to our scheduled programming.
–

Paraphrasing Prof Helm:
PEAK HYDRO CARBONS IS A BULLSHIT PROPOSITION
We’re not running out of coal. Gas is ok. Oil will continue to be found, as the Arctic melts this gets even easier. Certainly we’re good for at least a century.

Ok, let’s fly through some more points.

Economists mix up manmade vs. natural capital.
There’s a one:one replacement value put on them
Sure there might be no more swallows flying north for the summer, but hey, I’ve got my iPod.

There’s a political truism. Tell your electorate a policy can be achieved cheaply. Fail. When the electorate realise the ruse you’re in trouble Mr. Politician. This is about to happen. Example: the argument that mitigation can be achieved for ~1% GDP.

The utility of tomorrow.
Is the utility of a person in 2100 equal to that of a person living today?
Sure about that?
How about people in 3100?

Fuck that. How about people today?
Does, for a politician/economist, a person in their own constituency have the same utility as some dude hanging in Jo’berg?

Stern argues yes to the above and uses those assumptions in his Economic Review. Bad Economist says Helm. You’re changing the game. While nobody would argue with the virtue of the model, around here, “shit ain’t like that. It’s all fucked up” (Ice-T). Modern society simply does not value us as equal. So why should modern economics.

Onwards. All our leaders are quoting the 1% GDP cost of climate change mitigation. Guys. GET REAL. It cannot be done for that low low price. Pay peanuts, get monkeys. Get me?

[Sidenote here for the RHUL massive: Sustainable development is still playing this GDP/Policy game. It's not the rules of the game that need to change. It's the game itself.]

Helm at this juncture takes us on a history lesson, and in the process flattens the Kyoto framework. Framework?!?, what he meant to say was house of cards. An EU joint in the biggest of ways. The whole deal was setup to make the EU look good, and the “cuts” already achieved by Euroland are a mere sleight of hand. This analysis merely backs up postings made right here on Keepfakingit.com earlier this month.

Helm doesn’t leave it at that though. He contends that by signing up to Kyoto, the EU may have made matters worse than doing anything at all! The logic being that by offshoring CO2 to the dev world via dubious CDM deals, more hot air has actually been created than would have been in existence if, for example, all our coal was still made in Wales. As opposed to making it in China, where coal fired electricity is of a higher CO2 intensity, and it then has to be shipped all the way back to Llandudno for that great new PPP housing deal. To make a point here, and he was up front in saying he has no numbers to back it up, Helm puts it out there that G.W. Bush may have done more good than harm by keeping the US of A out of Kyoto. Big statement.

So where is Helm going with this? Well he’s about to flatten the EU ETS calling it a lobbyists dream and rent capture and rent seeking of the highest, or is that lowest order. The volatile prices produced are good for the traders (here that Clark?) but bad for long term investors as there is no long view on carbon price produced. The simple fact is the incentive to cheat here is Massive.

After offloading on his audience about ETS, 2020-20-20 is never going to get the time of day. And it doesn’t. Easy target for an economics prof though so no points there.

So finally to where we all want to get to. Copenhagen. Zero optimism here. Bottom line forecast:
US do nothing on 1990 levels
EU keep on keeping on. That is dress up dubious cuts as real progress.
India gets 4x emissions permissions.
China sets its stall out for 40% US, 40% EU and 1% GDP acquisition from each of the EU and the US. Think they’re going to get it? No. But that’s not really the point.

The only solution’s another revolution
I’m not sure how much of the above makes sense out of context but my notes look good to me. In summary, here’s what went down:

If Helm were at the helm…

• COAL is the BIG ISSUE – Need to start cutting it NOW.
• Energy demand is going up with GDP. This has to stop.
• We need Nukes and we need CCS and we need them now.
• Sorry guys, 1% GDP is not going to take our problems all away.
• Biodiversity is bigger than climate change. We might solve climate change, but by then 50% of all species on the planet will be KIA.
• Why the fuck are politicians BORROWING money to support unsustainable GDP growth. Stop N.O.W.
• Carbon taxes, all EU countries will have them within five years.
• And while they’re at it they’ll be taxing carbon on the borders too. Take that China-import-export market.

Now, if you’re still interested, go read the good professor’s book.