April 2011

Don\’t reduce the solar feed in tariff, abolish it

Noble said that a fall in solar costs meant the government could avoid excessively reducing payments large solar schemes by cutting the rate of all solar tariff payments: \”The cost of solar is falling, because solar panels are getting cheaper and the labour costs are coming down as bigger players and more competition enter what was once a cottage industry. We think the feed-in-tariffs [currently 43.3p/kWH for solar photovoltaics] could come down by as much as 30% and still make financial sense for consumers.\”

Feed in tariffs went live one year ago, in April 2010. Here we have one of the scheme\’s supporters saying that costs have come down by 30% in just that one year.

BTW, the vast majority of this is in the cost of the solar cells themselves, not the installation costs. Cells are declining in price by over 20% a year all on their ownsome. And of course that is not driven by the subsidy scheme in the UK: it\’s technological advance. Even if we do want to attribute that to subsidy, it\’s the Chinese, German and Spanish subsidies driving that.

And at those sorts of cost declines we\’ll end up with solar being cost competitive in a very few years. Under 4 in fact if costs decline on a straight line basis. A little longer if they decline by 30% a year (ie, the difference between declining by 30% of 45 p, or by 30% of the remaining balance).

And of course this means that we\’re entirely lunatic to offer people 25 year subsidies to install the current, inefficient, technology when we know that an efficient one is just around the corner. So we should abolish the subsidy right now.

Oh, and if you\’re going to argue that, well, it\’s not actually going to decline in cost to where it does beome efficient, then, well, we don\’t want the subsidy anyway, for it\’s not going to achieve its goal of creating cost effective solar cells, is it?

Either way, abolish the feed in tariffs.

The greenhouse gas problem

This list from The Guardian rather shows what the problem is:

Road transport (10.5%)
Air transport (excluding additional warming impacts) (1.7% )
Other transport (2.5%)
Fuel and power for residential buildings (10.2%)
Fuel and power for commercial buildings (6.3%)
Unallocated fuel combustion (3.8%)
Iron and steel production (4%)
Aluminium and non-ferrous metals production (1.2%)
Machinery production (1%)
Pulp, paper and printing (1.1%)
Food and tobacco industries (1.0%)
Chemicals production (4.1%)
Cement production (5.0%)
Other industry (7.0%)
Transmission and distribution losses (2.2%)
Coal mining (1.3%)
Oil and gas production (6.4%)
Deforestation (11.3%)
Reforestation (-0.4%)
Harvest and land management (1.3%)
Agricultural energy use (1.4%)
Agricultural soils (5.2%)
Livestock and manure (5.4%)
Rice cultivation (1.5%)
Other cultivation (1.7%)
Landfill of waste (1.7%)
Wastewater and other waste (1.5%)

Assume that we really do want to reduce emissions by 80%. No, go on, just assume it.

OK, there\’s some biggies that would be, not trivial, but at least one can see how they might be reduced. Deforestation for example. But I get 13% of emissions from agriculture as being irreducible (that\’s not including agricultural energy use). Sure, some comes from nitrogen fetilisers: but without those then we\’d need to use manure, which means more animals, and thus more methane from that source instead. I also get 10% from cement, iron and aluminium. No, there\’s not really any way to deal with those either. You\’ve got to use coal (or at least carbon in some form) to make iron, energy to make aluminium and the production of cement is really driving the CO2 off the original mineral. That\’s actually what you\’re setting out to do. Yes, you can substitute for some of the cement, use fly ash for up to 40% of the cement in concrete for example. But fly ash comes from burning coal….

Only 30% comes from all forms of transport, heating, lighting etc: OK, if all of that goes \”green\” then presumably we\’ll not have the 8% from coal and oil/gas extraction. But even if we do end up with a \”zero carbon\” energy generation system, we\’ve still got 23% from those industries, food and metals, that we cannot get to zero carbon.

Which means that we cannot, if we really do have to reduce emissions by 80%, actually manage to do it. It\’s just not possible.

Unless, of course, we follow the more excitable greens and hugely cut the number of people or stop having an industrial culture.

Does this mean that these more excitable greens are therefore correct? Well, no, I don\’t think it does, for I can\’t see any way that the world (which is a euphemism for the 7 billion people in it) is going to agree to give up iron and steel, eating, nor their own of their childrens\’ lives to save the poley bears. Just isn\’t going to happen.

Which means, in the end, that the only viable solution is going to be a method of extracting greenhouse gases: either at their point of production or out of the atmosphere.

Anyone with any ideas? Freeman Dyson seems to think that we could do it through agriculture, stick the carbon in the soil through a change in farming practices. Anything else?

Ritchie misunderstands Glencore\’s tax affairs

Not all that surprising, Ritchie manages to misunderstand most things.

As a private Swiss-based company, the tax charges in the trading business are borne by its employees. The partners – about 485 employees – accumulate tax liabilities during their work career and pay them when they cash their shares at retirement as income tax.

So, the reason that Glencore doesn\’t pay much corporation tax is because it\’s not taxed as a corporation. It\’s taxed as a partnership, an LLP if you like, with a deferral available to the partners who are liable for the tax.

Absent that deferral part, it\’s taxed in exactly the same was that Murphy Deeks Nolan was when Ritchie was running it. Profits are assigned to the partners, the partners pay tax on those profits as if they are the partners\’ incomes.

All very simple and nothing to get upset about.

It was due to to the fact that Switzerland let them trade virtually tax free, providing a wholly artificial competitive advantage.

Oh, really? Did Murphy, Deeks, Nolan trade virtually tax free? Wouldn\’t be the first time Ritchie has ranted about tax rules that he himself has used of course but I rather think that wasn\’t the case. It\’s just that partnerships are not taxed as corporations, they\’re taxed as partnerships.

Who has suffered from this? Well, you have. Prices are too high as a result of the actions of this monopolist.

Gosh, that\’s innovative. The absence of taxation leads to higher prices to consumers? Can\’t quite see it myself I have to admit.

Who else has suffered? Undoubtedly the poorest countries in the world have, who have not enjoyed prices they should have been paid if a freeer market had existed.

My word, another innovative theory. That the absence of taxation leads to lower prices to producers.

And let’s note: this is not the result of free market action. This is the result of state subsidy. The Swiss state chose to subsidise Glencore by way of not charging it to tax that it would have been charged elsewhere.

No, Glencore itself is paying tax as if it were a small accounting partnership in Wandsworth. You know, it\’s the partners who pay the tax, not Glencore? Like Mr Murphy did at Murphy Deeks Nolan?

Agreed that the partners themselves are getting a deferral, but Glencore ain\’t.

The rest of Ritchie\’s rant is just that, a rant based on Our Favourite Retired Accountant not understanding the tax system he\’s complaining about.

BTW, I\’ve said this before: I hold no candle for Glencore, wouldn\’t trade with them if you paid me to do so. But that Ritchie can be wronger than Glencore is a surprising fact of life.

Maddy Bunting misunderstands sweatshops yet again

She\’s just not getting the point:

I refute your contention thusly:


Paul Krugman, Nobel Laureate in Economics:

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.
Why, then, the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land–or of a Filipino scavenging on a garbage heap?

The main answer, I think, is a sort of fastidiousness. Unlike the starving subsistence farmer, the women and children in the sneaker factory are working at slave wages for our benefit–and this makes us feel unclean. And so there are self-righteous demands for international labor standards: We should not, the opponents of globalization insist, be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions.
And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard–that is, the fact that you don\’t like the idea of workers being paid a pittance to supply rich Westerners with fashion items.

In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.

Sure, sweatshops are shitty: but they\’re better than anything else on offer, which is why people choose to work in them.

And the way to make them better is to buy ever more stuff from them, so that demand for labour increases and thus wages rise.

Deoborah Orr channels Karl Polanyi

Well, sorta:

Rather channelling Karl Polanyi there.

But mediated sexual gossip offers salacious details without genuine involvement in the complexities of the real, painful, human consequences.

His point that trade with people you know, with whom you have an emotional and ongoing connection, was better than trade through an impersonal and widely extending market. You can see elements of this idea in the writings of the nef and the pronouncements of Caroline Lucas.

You\’re making rather the same point. Gossip about the sex lives of those we actually know, to whom we have a direct connection, is simply human. But when divorced from those connections, it\’s all a bit icky.

No, Egypt doesn\’t need more socialism

That\’s what it needs to get away from:

Much of the old regime is still in place in Egypt – the Popular Alliance\’s aim is to make people aware of alternatives

So what alternatives are those then?

Labour movements are continuing the revolution today. Their flagship cause has become the ongoing strikes in Shubra el-Kom, where disgruntled textile workers are calling for the nationalisation of their factory, which was sold to Indonesian owners at a fraction of its value in an example of the institutional corruption fostered by Mubarak.

The Popular Alliance has seized upon this, using the protests as a recruiting ground – highly effectively – and identifying itself with the struggle. Should the workers be triumphant, it would set a precedent for public ownership of hundreds more companies, while cementing the socialists as the workers\’ representatives.

The Alliance has built on union demands to advocate a raft of populist reforms such as subsidised housing for the poor, free education and greater local representation through city presidents. These connect neatly with the core demands of the revolution for social justice, freedom and democracy, which will have cross-demographic appeal.


These are exactly the problems that face the Egyptian economy: the remains of Nasser\’s Arab Socialism.

What you don\’t nationalise you subsidise and the economy goes to cock.

Whether or not the UK needs more free markets is arguable ( I certainly think so but that\’s me) but what the Egyptian economy needs is to privatise huge swathes of the economy, reduce or eliminate subsidies.

For example, the government subsidises the price of bread.

Bread has stayed cheap even as Egypt\’s other food prices leaped upward by 17 percent last year – cheap because the government pays for most of it.

Twenty of the flat, round pieces of local \”eish\” – \”life\” in Arabic, the word Egyptians use for the staple – cost just one Egyptian pound. That\’s the equivalent of 17 U.S. cents for more than 2 kilograms (more than 5 pounds) of bread.


\”Without the subsidy, it would triple the price,\” said Abdul Elah H. al-Hamawi, president of the bakers\’ association in nearby Jordan. \”There would be a revolution!\”


Under the half-century-old system, a \”safety net\” for Egypt\’s poor, the government sells cut-rate wheat flour to bakeries for mandatory production of \”baladi,\” or local, bread.

\”Bread inspectors\” enforce the mandate, but leakage still occurs, as unscrupulous bakers siphon off flour to sell at higher rates to producers of finer, unsubsidized baked goods. Subsidized bread also \”leaks\” to better-off Egyptians, since anyone can buy it.


From wheat self-sufficiency, Egypt has become the world\’s biggest wheat importer. The government buys more than half the country\’s needs on the international market. A decade ago, the basic market cost for those imports was about $700 million a year. This year it could top $3.5 billion, for 10 million tons of wheat.

In Jordan, 99 percent dependent on imports, \”our budget has been increasing about 10 to 12 percent a year for the subsidies,\” Emad A. al-Tarawneh, that government\’s chief wheat importer, said in Amman.

Although global grain prices dropped in recent weeks because of world events, \”our prediction is that prices will continue to go up, same as in 2008,\” he said.

Here in Cairo, the agronomist known as the \”father of Egyptian wheat\” for his work improving the local crop, said the subsidy should end.

\”Otherwise the government cannot afford it all,\” Abdel Salam Gomaa said. \”And the rich are benefiting more than the poor. They don\’t buy to consume but to feed the cattle and animals\” – with bread cheaper than animal feed.

If people are too poor to buy food then you give them money to buy food. You don\’t go around making bread a third of the real price, for that introduces all sorts of distortions into the food supply.

What Egypt needs is less of this sort of idiot socialism, not more.

Greece will default

Can\’t see any way that it won\’t:

Greece, Ireland and Portugal enjoyed no respite as investors grew still more reluctant to hold their debt, taking the yields, or returns, offered by the governments\’ bonds to new highs.

The yield on two-year Greek debt passed 25pc for the first time, while yields on 10-year debt climbed further over 15pc.

Note that this is nothing to do with speculators, the ratings agencies, derivatives, credit default swaps or anything like that. It is purely and simply that people are not willing to buy the debt. And why should they, given that it\’s obvious that they\’ll not get paid back what they might pay for it?

My, how Catholic the European Union is

Potential cures for dozens of debilitating conditions are under threat from a European ruling that claims that making money from embryonic stem cell research is immoral, leading scientists have warned.

As one raised as a Papist I can see the logic being deployed. Good cannot come from an evil act. This was used a decade or more back to insist that British Catholics should not use the newer Rubella vaccine, for it had been created from the cells of an aborted foetus. That abortion itself was an evil act and thus good cannot come from the vaccine created out of it.

The monk who drafted this (entirely unsurprising, given Catholic moral teachings) opinion was in fact one of the history teachers at my old school.

Anyway, we can see at least elements of this in this ruling:

EU judges are considering a test case that could make it unlawful to patent applications using embryonic stem cells, or anything derived from them, on moral grounds.

Perhaps not \”you may not do this\” but at least \”you may not profit from this\” which amounts, in the end, to very much the same thing. For without profit no one will do it.

Despite the dreadfulness of the subject matter (\”is it OK to kill someone in order to save others?\”) there is a certain amusement in it all.

For those who insist that there are no moral concerns about embryonic stem cell research, hey, a blastocyst isn\’t a person so it doesn\’t matter, are exactly those who tend to argue that there are moral concerns over the use of money in the creation of blastocysts. No money should change hands for eggs or sperm for example. The Mary Warnocks of this world (purely as an example, I don\’t actually know what her views are on these two subjects, just a symbol for those who would do the moral philosohpy behind the law for us).

Wikipedia names the super injunction names

This is amusing, isn\’t it?

The identities of four celebrities who obtained draconian injunctions to hide details of their extra–marital affairs have been disclosed on Wikipedia, the online encyclopedia.

Editors have done their best to edit the profiles back but given the way the site works, those revelations are still available in the history section.

Unfortunately, you\’ve got to have a good idea of who it is before you can find out who it is, for the revelations are in the profile pages: not, unfortunately, in a new page listing the subjects of the super injunctions.

So to find out who was shagging Imogen Thomas you\’ve got to have a good idea of which married premiership star was shagging Imogen Thomas in the first place. To find out which actor got an 80% discount on the Wayne Rooney price with Helen Wood (paying £195 rather than Rooney\’s £1,000) you\’ve got to have a good idea of who was getting a cut rate legover from Helen Wood.

Much to my bitter disappointment they don\’t seem to have revealed who is the \”prominent Yes to AV campaigner\” who has been dallying with a woman not his wife. Given that this is politics, not showbusiness or football (but do I repeat myself?), given that the practice of politics is in fact \”Trust Me!\”, I have a feeling that that\’s one where there is a public interest in knowing who it is.

If it\’s who I think it is (on the basis of no facts whatsoever, I might well be just listening to the gossip that confirms what I want to hear) it would also have most of us laughing like a drain at the revelation. And adding to the gaeity of the nation is also in the public interest I submit.

We know, for example, that it\’s not David Cameron, despite his wife just having had a child. Late pregnancy and those first couple of months after childbirth being prime time for a married man to have an affair. For Cameron is a prominent \”No to AV\” campaigner. Other than that, we\’re all rather in the dark really.

As it is intended that we should be.

Madame Nhu

Barbaric yes, but a certain wit to it:

Madame Nhu, who has died aged 87, was the archetypal \”dragon lady\” of Asian politics, a svelte and sinister woman who wielded immense power in the South Vietnamese regime of president Ngo Dinh Diem , her brother-in-law, until his assassination in 1963. She accumulated vast wealth and power, but was reviled for her puritanical social campaigns and her callous dismissal of Buddhist monks who burned themselves to death to protest against the brutal rule of Diem and her husband Ngo Dinh Nhu. \”I would clap hands at seeing another monk barbecue show, for one cannot be responsible for the madness of others,\” she wrote in a letter to the New York Times. The world was stunned by photographs of monks sitting shrouded in flames; Madame Nhu simply offered to bring along some mustard for the next self-immolation. She later accused monks of lacking patriotism for setting themselves alight with imported petrol.

The law protects those who seek to do us harm

Well, no, not really, despite the Telegraph leader telling us so.

The law protects those we accuse but cannot prove of seeking to do us harm.

If we can prove it then we can bang them up: there\’s no problem with jailing someone convicted of conspiracy to commit terrorist offences. Either in law or morality.

The law does though, rightly, protect those we think are dodgy, bad \’uns, but who haven\’t actually done anything to break any of the myriad laws we have determining what actions we may or may not take.

And this rightly is because we\’re all guilty, in the eyes of one or other of our fellow countrymen, dodgy bad \’uns who deserve to be dealt with. I can think of one retired accountant who regularly accuses me of all sorts of horrors for my support of personal and economic freedom for example.

Sure, there\’re many scumbags out there who arguably shouldn\’t be wandering the streets unfettered. But unless we can prove that they\’re to be left at liberty to do so: for in the words of the Great Larry Flynt, if the law will protect a scumbag like me you can be sure it will protect you.

Sir Fred Goodwin

Lord Oakeshott is interested in the bakground to Goodwin\’s super-injunction. You know, the one that says that we\’re definitely not to refer to him as a banker?

Lord Oakeshott’s question asks whether the events covered by the order took place while Sir Fred was chief executive of RBS.

He asks whether they might then be disclosed to the Financial Service Authority, the City watchdog, which is looking into the run-up to the bank needing a bail-out.

\”Sir Fred Goodwin\’s private life is not of public interest,\” it says.

\”But if the super–injunction were to be revealed to cover up a failing of corporate governance at RBS it would be of enormous interest to every taxpayer in Britain, the people who had to pay for the bail-out.”

Well indeed. Who or what Sir Fred might or might not had a legover with is, while of interest to the public not particularly in the public interest.

However, the coprorate governance of the bank is of huge public interest. So the relationship between the CEO and the various risk management officers is something that we would all like to see explored.