"It's the Stupid Economy"

by | Jul 13, 2012

According to my ‘favourite’ newspaper

Bill Clinton: cutting use of natural resources would help US economy
Former president says US would recover faster from financial crises if more effort was made to use resources sustainably

Clinton was speaking to the Re|Source conference in Oxford, and features a line-up of individuals with international profiles. Fiona Harvey of the Guardian was there, and had this to say about Clinton’s recipe for America’s recovery:

“We can grow even faster if we use less energy,” said Clinton in a conversation with the Guardian at the Resource 2012 conference in Oxford on Friday evening. “We have studies that show this. All that we need to do is find ways to finance this.”

He said the current financial system favoured the building of major projects such as coal-fired power stations, despite their energy intensity, because the value of energy efficiency was underrated.

Big financial backers are used to weighing up the finances of major infrastructure works, because they have long developed the financial models to work out the payback on their investment over the project’s lifetime.

But financing efficiency projects is more complex, and has received much less attention from investors, because the payback is spread more diffusely – among thousands of companies and individuals.

“This is the problem with going aggressively for efficiency, as we need to,” Clinton said. “If I want to finance efficiency savings, I need to go to lots of people and add all those savings together. But if I want to build a new coal-fired power station, I go to a few [backers] and I’ve done it.”

“We can grow even faster if we use less energy”… Has Clinton discovered some new principle which contradicts all existing scientific knowledge? Have the laws of thermodynamics changed? Does this hold true for any amount of ‘less energy’ used? Could we use less and less energy indefinitely, and ‘grow’ indefinitely? Is less, really, and in fact, more?

Of course not. And dear old Bill is confused about the difference between ‘using less’ and ‘efficiency’. He believes that somehow, inefficiencies are built into some kind of ‘system’. He believes you can change the system by ‘financing efficiency projects’. And this will somehow made it possible to ‘grow faster’.

This is nonsense, of course, unless you’re facing a shortage of the resource in the first place. We’re not. There are plenty of resources. But they are expensive at the moment. So it could be argued that making processes more energy efficient might lower the total cost of energy, leaving more money for other things. But this would depend in the first place on the ‘efficiency project’ being worthwhile. You could install a $million worth of things that improve efficiency, but only realise $100,000 worth of fuel savings a year. And then you’d have to decide whether you’d get a better return on the $million spent on efficiency, or some other thing.

Clinton wants to make efficiency an end in itself. This is a reinvention of the concept of ‘efficiency’. And as discussed in a recent post here, this reinvention of ‘efficiency’ in environmental terms, cannot produce growth, except in the twisted logic of environmentalism. Making this reinvented ‘efficiency’ the end of policy and of the production of energy means precisely the opposite of ‘growth’.

Nobody ever needed to tell the designers and financiers of of power stations to be ‘efficient’. If a team of designers could not produce increasingly efficient generator designs, they would quickly find themselves working in other fields. (Perhaps they might find themselves either working on the Guardian, or advising former presidents). And if financiers did not put emphasis on efficiency in their briefs to designers, they would soon find their stock falling. Designers being able to produce something more efficiently than existing systems is what makes financiers get their chequebooks out. And it’s not as if there is no incentive, what with oil prices being what they are.

But environmentalism holds that there is only one form of ‘efficiency’. And it’s not for anyone else to determine what the measure of ‘efficiency’ is — i.e. to make calculations of something’s efficiency in the terms that are of interest to them. Environmentalists believe they have invented — rather than reinvented — ‘efficiency’, and that nobody had ever heard of it.

And it’s an interesting rhetorical trick, a bit like the invention of the concept of ‘sustainability’. To be critical of ‘sustainability’ would sound like being critical of something that common sense tells you is right. Who is for ‘unsustainability’? It’s only when we look at the endless stream of nonsense that is produced by advocates of ‘sustainability’ that we discover that the common sense understanding of ‘sustainable’ is not the principle operating within the agenda. They’re talking about ‘sustainability’ in terms strictly narrowed by environmentalism. Nobody is against efficiency.

‘Efficiency’, says Clinton… And the room gives him a standing ovation, as though, for centuries, it had been the missing part of liberte, egalite, fraternite.

What does Clinton know about ‘efficiency’? What is the reason he was invited to the Re|Source conference? For sure, he might be able to shed some light on what happened in politics during his reign. But what does he really know about how much CO2 a power station produces? As much as Al Gore? He’s a celebrity, of course, and that’s why he turned up. He was briefed on what to say by his researchers. He’s just an actor. This was just a performance.

And the performance is extended onto the pages of the Guardian, where another actor, playing the part of a journalist called Fiona Harvey, penned the article. It looks like journalism. It looks like an article in a newspaper. But a vital component is missing from the scene, making it it impossible to suspend disbelief, and to find the performance convincing. The journalist has suspended disbelief. She believes the play she is in. And she forgets to notice that Clinton is talking unmitigated bullshit.

As the article points out, David Miliband and Peter Mandelson were also in attendance.

Earlier in the conference, Miliband warned of the destructive effects of resource overuse and scarcity, and Mandelson called for an end to subsidies that encouraged the overuse of fossil fuels and an increase in support mechanisms for clean energy, such as sun and wind power.

Mandelson said: “Some kinds of subsidies are key to opening up the new world but on the other hand there are some kinds which are the biggest obstacles to making progress.

Isn’t it odd that when politicians say ‘environment’, journalists’ brains switch off. It’s as if there were no reason to be sceptical of these politicians’ words. No need to check the facts, or to scrutinise the logic… when the politicians are talking about climate change in the right way.


  1. Kevin

    Quite scary that he once was POTUS.

  2. geoffchambers

    It’s quite scary that he was possibly the most intelligent and well-educated President of the United States since WWII.
    If naive faith in environmentalism only affected the simpleminded, it wouldn’t matter so much, because the more intelligent would out-argue them. it’s precisely because it affects the well-educated, the far-sighted, the socially responsible – those who can see past their own self-interest and consider the good of mankind and the welfare of future generations – that it’s so pernicious.

  3. Alex Cull

    There’s an article on the MasterResource blog which references a paper by economist Roy Cordato, both making the reasonable point that “energy efficiency” by itself means little outside the context of economic efficiency:

    Lurking in the background, of course, is our old friend – behaviour modification. Supporting the Re|Source 2012 event, for instance, is the Stordalen Foundation, which also runs a project called GreeNudge, and which has links to the UK’s “Behavioral Insights Team”:

    While not making sense from a strictly economic point of view, “energy efficiency” as behaviour modification makes perfect sense. Obviously, if all of us existed in some sort of suspended state – not consuming anything, not travelling anywhere, not using energy or other resources at all – this would not actually benefit the great and the good, who (in the absence of advanced automation) still require our productivity to fuel their own purposes and projects (I’ve often suspected that apart from our labour – which is essential – many of our leaders would be happier if we simply did not exist.) But if we could be progressively trained to minimise our own requirements, at least, this would be the next best thing.

    The ultimate energy efficiency, then, would not be a matter of miles per gallon, when purchasing a car. It would be a nudge to purchase a heavily subsidised and less convenient EV. Or a nudge to decide not to purchase a car at all. Or a nudge to not travel anywhere, in the first place.

  4. Ben Pile

    Alex — interesting points about ‘Nudge’. Julia King of the Climate Change Committee was quite frank about the role of behaviour change after Roger Pielke Jr’s talk on the looming failure of UK policy a few years ago. The bulk of cuts were, in her preferred view, to come from people walking/using the bus rather than driving, etc.

    What amazed me about this was that she is a professor of engineering. So it seemed to me that she’d almost given up on the possibility of a proper engineering solution to the (largely imagined) problems she was tasked with solving, and had moved into the field of social engineering.

    I guess the logic is in there… If you believe you can simply ‘pull levers’ to ‘send signals to the market’, you can equally ‘send signals’ to consumers to make them change the way they act, by making things expensive, or inconveniencing people to reduce the convenience of the thing you want them to stop doing.

    I wonder if this is not a problem of demarcation. Just as the environmental psychologists have forgotten the boundaries of their studies, to ponder ways of making us observe environmentalism’s diktats, engineers seem to have eschewed sprockets and gizmos to pronounce on what makes us tick, such that the mechanism can be made more ‘efficient’.

  5. Alex Cull

    According to the Guardian’s live blog, behaviour change in relation to energy use also came up during the Re|Source event with a couple of talks by Sir Chris Llewellyn Smith. Until 2009, he was chairman of the council of ITER (nuclear fusion project) so, as with Julia King, you’d think he would be focussing on finding solutions to our putative energy problems strictly from a scientific/engineering perspective.

    But apparently not. “Changing human behaviour is difficult and if people save energy in one place, they think they can use more elsewhere.” And “the absence of a carbon taxation should be seen as destroying the planet.” “He calls for subsidies for renewables and that subsidies for fossil fuels should be cut.” Ah well.

    Couldn’t help smiling, by the way, when I read about Jeremy Grantham’s contribution:

    He says that it is possible to adapt to our current circumstances, but the likelihood of that happening is limited due to a lack of courageous politicians, vested interests, inertia and dedication to short-termism.

    By vested interests and short-termism, I wonder if he had in mind, say, people raking in huge sums from shares in companies such as Exxon and Suncor? Something I’m sure he’d never ever do, himself.

    Hopefully the SSEE will put videos of some of these discussions up on their website, at some point, as they sound rather interesting.

  6. Phillip Bratby

    After his appointment as Secretary of State at the Department of Energy and Climate Change, Ed Davey was interviewed on the Andrew Marr show on 11th March this year. He used the following words about wind turbines “the new generation of turbines are much more efficient”. I questioned him about wind turbine efficiency and received a letter from him (presumably penned by a DECC official) to the effect that I was viewing ‘efficiency’ in the strict engineering sense (of course I was, as he was talking about engineering facilities). The letter then went on to ignore efficiency and describe the effectiveness of wind turbines and how the bigger, better wind turbines were having “the effect of reducing energy costs overall”. Complete nonsense of course! This is just another example of where words such as ‘efficiency’ are used incorrectly by politicians and bureaucrats to give misleading information to the public.

    I note that Wikipedia says this of efficiency “The term ‘efficient’ is very much confused and misused with the term ‘effective’. In general, efficiency is a measurable concept, quantitatively determined by the ratio of output to input. ‘Effectiveness’, is a relatively vague, non-quantitative concept, mainly concerned with achieving objectives”. No wonder politicians like to use the word ‘efficient’ when they mean ‘effective’.

  7. Robert of Ottawa

    I really despise this “subsidize energy efficiency” argument.

    Now, supposedly, we have to save energy because there isn’t enough to go round. Ignore the fact that very cheap forms of energy are readily available. So, to make the energy cheaper/more available, we should use less of it; even pay people to use less of it.

    Whopper, super-duper idea brainiac! How about addressing global hunger by paying people to eat less food?

  8. Alex Cull

    The term “food efficiency” is already used in physiology, I think, otherwise it would make a fine buzzword along the lines of “energy efficiency”, to be thrown around in the context of climate change, sustainability and so forth, as per this sort of article:

    “This is surely is one of the best win-wins for public health,” said Faculty President Professor Alan Maryon Davis. “Walking and cycling can help to reduce not only our waistline, but also our carbon footprint. So too can eating less meat and more locally grown fruit and veg – great ways to help save ourselves and the planet at the same time.”

    If we don’t want to eat less meat or eat more locally grown fruit and veg, however, the idea is that we can be prodded to do so by fat taxes (the stick) and subsidies on vegetables (literally – the carrot):

    That article references a paper published by the BMJ, which is behind a paywall but it’s possible to read the summary, also some comments here:

    Strategically, the goal is to create a price differential between healthier and less healthy foods. Raise the cost of the bad, lower the cost of the good, or both. Make the healthy choice the cheaper choice. Create economic incentives for health.

    @ Robert of Ottawa, re directly paying people to eat less food, apparently this has actually been tried!

  9. Vinny Burgoo

    Alex, here’s an unpaywalled version of the BMJ paper (no pix):


    It’s very short but I haven’t bothered reading it.

    It’s from the FotE-affiliated climageddonist ‘Oxford’ team that, in 2010, won wonky headlines about how eating less meat could save 45,000 British lives every year. The team is led, in a very real sense, by a CofE vicar. NTTAWWT. A recent sermon:


    (I haven’t read that, either.)

  10. Alex Cull

    @ Vinny, thanks! From the BMJ paper:

    Economists generally agree that government intervention, including taxation, is justified when the market fails to provide the optimum amount of a good for society’s wellbeing.

    Economists agree on this?

    The sermon, by the way, is definitely worth reading.

    Yesterday – in my capacity as a researcher into healthy diets – I went to the launch of the Government’s latest initiative to curb obesity. The Government is challenging us all – both consumers and producers of foods – to make our contribution to cutting calorie intake in the UK by 5 billion a day. This means that we will all on average need to cut calories by about 5% which would be enough to halt the rise in obesity and even to reverse it. And similarly food producers will need to sell us 5% less calories than they currently do. The challenge seems a bit like the national fast called by Queen Victoria in response to the calamity of the Indian Mutiny. OK the crisis is different but the call for restraint in what we eat is similar.

    Any snide comments by me at this point would be superfluous.

    At this precise moment I do not see how eating less calories or less meat and dairy makes us feel closer to God but I am sure it must.

    Well, you couldn’t meet a nicer bloke than God, as they say, and I’m sure that it’s what He would want. I’m fairly sure, anyway. Or am I really sure? Or…

    It is time, think, that we within the Church recaptured Biblical notions of fasting. How are we to do that? Well for starters we need to see fasting as cutting down on foods, real physical foods, and not merely as a metaphor for something else – abstinence from something we consider a luxury, for example. Food is not a luxury.

  11. Robert of Ottawa

    Poverty is Wealth!
    War is Peace!
    North Korea is Green!
    Clinton is Stupid!

    Clinton is a typical rich lefty elitist who doesn’t give a damn about “The People”. or “The Environment” It is “Socialism for you, but not for me – schmucks”



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