Well yes, Mr. Huhne

Huhne will say: \”If the oil price doubled, as from $80 last year to $160 this year, it could lead to a cumulative loss of GDP of around £45bn over two years. This is not just far-off speculation: it is a threat here and now.\”

And of course your own plans to douple, triple*, the cost of electricity will have exactly the same effet.

Making energy more expensive will have costs for the wider economy, whether it\’s via a general rise in global prices or through your tariffs, taxes and quotas.

*Exaggeration for effect.

4 comments on “Well yes, Mr. Huhne

  1. Huhne, a man with no scientific or engineering background, seems to me to genuinely believe we can replace liquid hydrocarbon fuels with electricity generated from wind/hydro/wave turbines. He should not be in this job if cannot see that our economy’s medium term energy requirements are for reliable, on-demand, low cost electrical power generation and cheaper hydrocarbon fuels. That means more coal, nuclear and gas (provided that shale gas and LNG fulfil their promise) power stations and increased incentives for North Sea/Atlantic margin O&G exploration.

    We can replace the internal combustion engine with batteries/fuel cells and electric motors when designs, which meet and exceed the performance and convenience of present day vehicles, are produced by the automobile industry. And when that happens, when those GWs of energy demand are transferred from ancient geological reservoirs, where is the electrical production going to come from to charge the batteries and run the electrolysis process. Huhne does seem to have asked himself this crucial question.

  2. He believes that green taxes will win him votes. He knows that oil price rises will not win him votes.

  3. It won’t have exactly the same effect. We are now an oil importer by something like 400k barrels a day. So another 50 pounds per barrel means a loss to the economy. The Govt putting taxes on something is a shifting of money around, the losses are much smaller (and if correcting externalities might be zero)

  4. <emWe are now an oil importer by something like 400k barrels a day.

    Aye, and by 2014, on current projections, the UK’s largest oil producer will be French. 🙂

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