Dear Friends of the Earth: you really don\’t want to use this argument

On the subject of shale gas:

\”Any money and investment that is going to gas is money that is not going to renewables,\” said Brook Riley, campaigner at Friends of the Earth. \”This is a threat to renewables.\”

Could be, yes. This is the concept known as opportunity cost. We can only use an economic resource, like capital, once, to do one thing. And yes, if we go gung ho for gas then perhaps we\’ll not be going so gung ho for renewables.

But, the reason you don\’t want to be using this argument is the following:

These assumptions are backed up by an economic analysis commissioned by the European Gas Advocacy Forum (EGAF) based in part on work by McKinsey, a consultancy which found that Europe could save about €900bn by 2050 if it met its emissions targets through investment in gas rather than renewables.

I don\’t insist that that number is correct, but let\’s pretend it is for a moment.

So, if we go for renewables rather than gas we have that same opportunity problem. We\’ve used €900 billion to go for renewables rather than do something else with that capital.

You know, like invest in the Third World, sort out farming, comfort the afflicted, provide contraception to the 200 million women who desire it but don\’t have it, insulate buildings, tend to hte elderly.

You see, resources are scarce, we cannot do everything we desire to do. Thus we must make choices and the choice to do one thing means that we cannot do another.

If we can meet our climate change targets €900 billion cheaper than we open up €900 billion of other possibly desirable things that we can do.

Which is why you really don\’t want to be using the opportunity cost argument against shale gas. For exactly that argument about renewables is going to come back and bite you on the arse €900 billion times.

Let us put this another way. By your very own arguments, going or renewables rather than gas is going to make us, collectively, €900 billion poorer. If we go your way we get energy and the climate sorted. If we go gas we get energy and the climate sorted plus €900 billion to spend on other things.

Now, I think that there\’s €900 billion\’s worth of things we can do to make he world a better place. Don\’t you?

5 comments on “Dear Friends of the Earth: you really don\’t want to use this argument

  1. While you’re right to take the FoE campaigner to task for a silly argument, the main thrust of the piece was around whether shale gas can really do all the industry lobby group claims it can do in terms of reaching emissions targets. The latest paper – which is based upon best available rates of mitigating emissions while extracting – would appear to indicate that it can’t when its lifecycle is taken into account: http://www.eeb.cornell.edu/howarth/Howarth%20et%20al%20%202011.pdf

    Attacking only part of the silly environmentalists’ argument is a bit unfair.

  2. Is anyone ever going to drill down to the underlying assumption that curbing emissions is a useful thing to do?

    The entire commentariat, bloggers, talking heads, old MSM, all of you, need to spend August in Yellowknife, or a similar place in Siberia. You might understand what a huge benefit global warming would be.

  3. 900bil : 40 yrs = 22.5bil / year on average in savings. How much are we currently subsidizing green/renewable energy?

  4. I thought the environmentalist argument against shale was that it wasn’t as friendly as originally assumed, as well as contaminating its surroundings and forcing cleaning costs for the damage it causes (not that the evidence is strong for this case). This is perhaps just a bad, and weird, bit of argument, or worse still – stating the bleedin’ obvious; if you buy 100p worth of cola bottles with your £1 coin then you can’t have 100p worth of milk bottles.

  5. The trend at the moment is to argue for limited cuts in CO2 emissions now with the intention of ramping them up later. Of course gas is going to be the technology of choice. It’s a classic example of low-hanging fruit. More expensive than coal but lower emissions per kWh and cheaper and more reliable than renewables. Switching from coal to gas can achieve the limited cuts being proposed all by itself. The smoke and noise you hear from FoE is all about them realising they’ve been lied to.

    But if I were investing in it over a 30 odd year period I’d be very worried about that “ramp it up later” caveat.

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