One of the more blunt points made on this blog from time-to-time is that mediocrity explains a substantial part of environmentalism’s ascendency. It is a rot within public institutions of all kinds that can explain their greenish hue. To take one recent example, the liberties taken by climate change psychologist, Stephan Lewandowsky demonstrate the intellectual poverty that now thrives within the academy. This manifests as activism, poorly disguised as research, which expresses nothing but cynicism, not just towards climate sceptics, but the wider public. Another, more visible example is the ailing broadsheet newspaper. In particular the Guardian and Independent. Their shrill alarmism is owed in no small part to their journalists simply being incapable of making any sense of the world. This disorientation finds comfort in catastrophic storylines, that provide it with simple moral categories that in any other era would be laughed at in a B-movie plot.
But mediocrity is most troubling where it grips our political, democratic institutions. Political parties have over the last few decades lost their ability to connect with the public, and struggled to identify themselves at all, let alone as distinct to the others, leading, it has been argued on this blog, to a banal political consensus on climate change emerging over the course of the 1990s and 2000s. It at first seemed like a way to connect with the public — through fear, and through the growing network of NGOs. But also, it emerged because the possibility of being responsible for saving the planet is far more attractive a proposition to the vacuous politician than is responding to a disconnected constituency’s wants and needs.
If there is a face that epitomises all this mediocrity, it is this one:
Leader of the opposition Labour Party, Ed Miliband has written an ‘exclusive’ for the Green Alliance Blog, called ‘Government must lead the way to a more sustainable capitalism’. Says Miliband,
The world economy is struggling to recover from a crisis caused by inadequately regulated financial activity. Governments are dealing with deficits that are too high and growth that is too low. And, long before the credit crunch, people in the middle were struggling with squeezed living standards. For too long, economies have encouraged wealth creation focused on short term returns which failed to reward productive behaviour and skewed distribution towards the top. It is a problem that requires a fundamental re-examination.
This economic chaos is one arc in Miliband’s story. The other, predictably, is the environment…
But there is a further, deeper crisis underlying this. This is the crisis of the global environment which is now rebounding on the real economy. Resource scarcity is affecting prices, for example failed crops in one part of the world lead to rocketing food prices in another part. Energy prices have continued to rise despite the global slowdown. These are resource scarcities right at the heart of the global economy.
Let’s take the first arc first. I am never sure about claims that this is a ‘global’ economic crisis. There is plenty of growth elsewhere in the world. China’s GDP growth is still at around 10%. The Indian economy grew by 6.9% last year. And we have already talked about nearly a third of the world’s population. The world economy in fact grew in 2011, by 2.7%. Check out this Google app, which shows how the UK economy compares to the rest of the world.
When politicians put their own crises into a global context, we have to ask where they are passing the buck to. In the first case, they blame forces beyond their control. And then the remedy, of course, is ‘regulation’. Miliband rose through the ranks of the Labour Party whilst it was in power, and, it seems, while markets were inadequately regulated, and while ‘people in the middle were struggling with squeezed living standards’. He was closer to the squeezers than he now admits, in his claim to be able to protect the squeezed with… we know not what, because he gives us no adequate explanation of what ‘adequate’ regulation amounts to. He emphasises instead that the deeper crisis is in the environment, which is now ‘rebounding on the real economy’.
Here, Miliband confuses commodities for resources. His claim is that high food and energy prices are owed to resource shortages. But a failed crop is not an instance of a ‘resource shortage’. A crop is not a ‘resource’. One food commodity, for instance, which has seen considerable price increase as a result of the US drought is maize, much of which was grown for biofuels. It would be madness, wouldn’t it, if resources were really running out, to use them for fuel. As Daniel Ben Ami points out…
It is still tragically true that there are about one billion people in the world who go hungry. Solving this problem demands not only improvements in food production and distribution but economic development more generally. For instance, for those without electricity it is much harder to store food to stop it rotting. Roads are also often needed for efficient transportation.
… the fact of relative scarcity pushing food prices is a question of capacity to produce it — hardware, labour, and social matters — not simply matters of material resources. Just as Miliband kicks the question of the UK’s economic fortune into the ‘global’ long grass, he waves his hands at the problem of the scarcity of commodities driving up prices to make it a matter of dwindling ‘resources’. Taking these two points together, then, it would seem that Ed Milibands economic illiteracy, and his failure to take responsibility for extant problems or their solution is owed to the fact that he simply has no idea how to create wealth. Our economic situation appears to be a global problem. The problem of high prices seems to have a natural origin. But it is only in Milband’s head — his ideology — that dwindling resources causes rising food prices. We could grow more food. And we could stop wasting money on biofuels.
And the same is true of energy prices. We could dig more coal, pump more oil and drill more gas, to bring more of each on stream. But this would not necessary produce any easily determined change in price. It is a mistake to claim, as Miliband has, that price is a function of scarcity. And neither is it true that reduction in demand will necessarily produce a drop in prices. This is especially true in the case of commodities such as oil, which are in many cases produced according to quotas. And on all other timescales, the price of energy commodities is driven by many factors, such as speculation about the political situation in oil producing economies. Here, for instance, is a chart produced by WTRG Economics showing the price of oil, with world events superimposed over them.
The events following 9/11 and the invasion of Afghanistan did more to increase the price of oil than anything else. Yet greens are the first to claim that the War on Terror was about securing supplies of cheap oil, and that prices rose because of scarcity.
And is it even true that energy prices are rising? Here are a couple of neat little widgets that show a slightly more complicated story than Miliband presents. As they show, we see nothing now like the prices we saw in 2008.
The presentation of a crisis is intended to do one thing. Miliband continues…
The truth is that the economic and environmental crises have a lot in common. They have a common cause: markets without proper regulation; a common victim: working people who suffer the consequences of a problem they did not create; and a common solution: strong and active government that does not leave people to their fates.
Miliband has no idea how to create a strong government. Hence his recourse to scaremongering. He has no real understanding of the economic crisis, nor of any possible solution. Any bloke at the pub could tell you that ‘markets without proper regulation’ caused the UK’s economic problems. But the solution could be any number of things. His following words are just as hollow:
It’s at these moments of crisis that we need to think about what kind of society we are and what kind of country we want to become. Britain needs an economy that is more resilient, more genuinely competitive, more focused on the long term and one that people feel is fairer, an economy that works for working people. Not only do we need growth, we need growth that is inclusive and sustainable. It is not a choice between creating jobs and saving the planet. We have to do both.
Notice here, that Miliband’s appeal for resilience, for identity, and for unity — this national introspection — belies, again, his inability to forge a political project that can create these things. A political leader, on the other hand, with the ability to mobilise the voting public with any kind of political vision, would not be so conscious of what is lacking. Asking us ‘to think about what kind of society we are’ means that Miliband is as confused about it as any of us. If it were otherwise, it would not need saying. Pointing out that we need ‘an economy that is more resilient’ draws our attention to the fact that Miliband doesn’t have a programme for creating it. If it were otherwise, he would need say no more than the name the programme to which we would already be committed. The emphasis on ‘inclusiveness’ and ‘sustainability’ reveal no more than Miliband’s anxiety about the future, and his impotence to deliver ‘inclusivity’. If it were otherwise, Miliband would say what it was that would make things ‘inclusive’, and make the future more certain. These concepts are political ideas with no objects — slogans that are no more tangible than the concepts themselves. When people build stairs, they do not start by making promises to make us taller. If Miliband is a carpenter, he has made a hollow promise. Being committed to elevation is one thing. Realising such an ambition is another. Attaching oneself to hollow slogans, and vapid political concepts is easy. And that is why Miliband needs to emphasise crisis.
When I was secretary of state for energy and climate change the mission to create jobs through clean energy and low carbon manufacturing was at the heart of my plans. At a time when the British economy is desperately in search of new sources of growth, the potential for a green industrial revolution is huge. This is the time to stand proud and declare that we want lead the world in the low carbon, resource efficient technologies of the future. The countries that make the leap first will be the successful economies of this century, exporting technology around the world to cities seeking cleaner air and lower emissions.
Here is a chart showing UK unemployment.
But is this, as Mandelson claims, an industrial revolution? A genuine industrial revolution should make it possible to produce things more efficiently, creating greater dynamism within the economy. But this green “industrial revolution” yields no net benefit. What are called opportunities are generated at a net cost, absorbing money and labour that might be better spent on producing real industrial development, or public services such as schools and hospitals. Stagnation is spun as progress. For example, it is China’s industrial dynamism, not the UK’s, which has created markets for reclaimable materials. It is only by intervention and legislation that the UK is even able to collect plastic bottles, never mind reprocess them.
“Are these new jobs in these new industries going to be wealth-creating ones, or are they simply going to be reliant on funding which has to come from somewhere else? You can’t just create new jobs in a sector which is politically appealing without there being knock-on effects further on in the economy,” says Tom Clougherty Executive Director of the Adam Smith Institute.
You don’t need to be a free-market advocate or climate sceptic to see the point. The green sector can’t yet stand on its own two feet. If we want to create more jobs, it might be more sensible to invest in sectors that are capable of producing wealth, rather than merely absorbing it.
Miliband’s ‘green industrial revolution’ did not happen. The number of people out of work continued to rise. Any claim that the green sector is producing growth makes its case by obscene omission. As I pointed out earlier this year, claims about the green sector are hopelessly one-sided.
The UK’s exports to the global wind power sector are a measly £500 million, compared to its domestic market of £4.1 billion. It’s almost inconceivable that most of that market doesn’t substantially reflect a similar ratio. And those 31,400 jobs… Given that the wind sector was subsidised, just through the ROC’s scheme, to the tune of £609.6 million that same year, we can calculate that each job was subsidised to the tune of £19,414.18. That is a problem that the REA simply do not have an answer to. The growth in the sector can only be called ‘growth’ if, in the meantime, can find the £19,414 for each of the existing 31,400 employees in the sector, and the same for each job in the sector that REA and Innovas claim will be created between now and 2020.
Miliband and his successor — no less a zealot — Huhne, have failed to make the UK a net exporter of green energy technology. And throughout the EU, where the regulatory frameworks that Miliband is so keen on, and which have created the seemingly perfect conditions for a ‘green industrial revolution’, renewable energy manufacturers are shutting down in the face of competition from the East. In China, wind turbine factories are powered by coal-fired power stations, which are being built at a rate which means their consumption of coal increases by the UK’s entire annual consumption every seven weeks. A UK-based ‘green industrial revolution’ was, from its conception hopelessly implausible. And so it remains. All it does it increase the cost of energy to industrial and domestic consumers, putting any chance of an actual industrial revolution further and further into the future. It gets worse…
But this will require a much more active role for government. Almost all the technological revolutions that have spurred new waves of growth in the past have sprung from government activity. Investing in the infrastructure for a low carbon economy will both kick start the growth that is currently missing and make our economy resilient to price shocks in an age of scarcity. It is governments which set the low carbon targets and correct market failures; and the degree of support for policies shown by governments is a major part of perceived risk for investors. To attract the investment we need, governments must cover that risk and commit to a clear goal of decarbonising the power sector by 2030, as the independent Committee on Climate Change has recommended. We need to create instruments that will give the private sector the confidence it needs to invest in new low carbon sources of energy. This is, in principle, what the Green Investment Bank is for, but investors will not be fooled by a bank without proper powers.
Even if it were true that ‘all the technological revolutions that have spurred new waves of growth in the past have sprung from government activity’ — which it isn’t — it does not follow that ‘government activity’ will produce either a ‘technological revolution’ or ‘new waves of growth’. But it can produce their opposites. It can absorb the potential for technological revolutions, and it can absorb wealth. Were a government to get behind the design of some perpetual motion or ‘free energy’ machine on the internet, for instance, the laws of physics would remain the same, in spite of official support for it.
The mistake Miliband makes is to conceive of ‘green energy’ — which, let us remember, may not ever compete with nuclear, coal, or gas, and cannot yet stand without subsidy — as a ‘technological revolution’. It seems to be axiomatically true to me that less dense sources of energy can never produce as much useful energy as more dense sources of energy. Therefore, there is no possibility of any kind of ‘technological revolution’ in renewable energy. Even if renewable energy could be produced as cheaply as oil, coal, or gas, it will not be ‘revolutionary’ in the sense that it could not produce a positive qualitative transformation of society as did the arrival of, for example, the steam age. Consider the facts: the use of coal, diesel, petrol, oil, and uranium created new possibilities: for travel, for leisure, for work. The very character of life was altered by the production of energy. Renewable energy cannot allow us to move beyond the things that constrain us now. It may, one day, given some kind of miracle, offer merely a continuation of what we enjoy now.
What is far more likely, however, is that renewable energy will limit the possibility of development. This is because renewable energy, being ‘ambient energy’ is only available at any moment in limited quantities, whereas despatchable forms of energy are produced from existing resources. You can’t stockpile wind or sunshine. And even if you could store it in some other form, you do so at significant added expense, with added hardware. For any conceivable advances in the production in renewable energy and energy storage, there are at least as many conceivable advances in the exploitation of coal, gas, oil, nuclear fission and fusion and so on. For the foreseeable future, no such development in renewable energy can expand the possibilities for us here on Earth. And so Miliband’s bizarre logic manifests as bizarre technology: in order to make renewable energy feasible, mandatory ‘smart meters’ will be installed in our homes, capable of turning off our appliances, and even interrupting the power supply completely, so that the grid can cope with variation in supply — when there isn’t enough wind. (Assuming, of course, that we don’t face blackouts sooner than the smart meter rollout).
The development of technology that turned oil, coal, and gas and uranium into useful energy brought heat and light to homes, and made possible journeys across distances that to the ordinary person were all but inconceivable. The wind turbine and smart meter will turn your fridge off. That is the reality of Ed Miliband’s ‘green industrial revolution’. It is a ‘revolution’ only in the sense that a coup d’état that throws out a democratic government in a thriving economy, to turn it into an austere dictatorship is a ‘revolution’. It is regression.
The point then, is that green energy, however a noble idea it is, cannot produce ‘growth’. Period. Yet Miliband believes that, once our lives are powered by solar panels and windmills, all will be well with the world…
Making markets work more efficiently can be our ally in supporting both our long term national interest, and also the current financial interests of individuals. That is why we also need to reform our energy market. Just six companies supply more than 99 per cent of consumers’ electricity and gas. They also generate two thirds of the country’s electricity. This stops the market from being open. One result is that when wholesale prices go up, so do people’s bills. Yet when wholesale prices come down, too often bills do not. This is caused by a lack of transparency in the market and the fact that having just a few large dominant firms means the price is never forced down. The market needs to be opened up to new entrants. We are looking at ways to encourage all energy companies to sell the power they generate into an open pool, so that any retailer can buy it, thereby encouraging more competition.
Miliband moves from the idea of ‘efficient markets’ to energy market reform as though it was not a nonsequitur. The ‘Big Six’ and the current government’s demonisation of them has been discussed here before. No doubt energy companies are out for themselves. But Miliband’s paints a misleading picture of robber-barons. In fact, the recent OECD/IEA study which is cited as proving that fossil fuels are more heavily subsidised than renewables (but which in fat demonstrated precisely the opposite) casts doubt on Miliband’s claim that the UK energy market is not open:
The United Kingdom has been a pioneer in deregulating and liberalising energy markets through price decontrol, the closure of inefficient coal mines, the removal of subsidies, privatisation and the introduction of competition and open access to electricity and natural gas networks, regulated by an independent regulatory body. Today, there is virtually no state ownership of energy assets and all markets are competitive.
In today’s Britain, are there many sectors where there are as many as six competitors? Do we get as much choice about where we get our water? Our mobile phone? Our food? There are more energy companies than there are supermarket chains in my home city. And are they really ripping us off? The analysis produced last year, suggests otherwise.
The profit margins of energy retails are far less than Miliband claims. The reason there are only six big players, then, might be owed to the fact that the margins are so small, and the market competitive. It is hard to see how new players might make any profit.
Miliband, like the DECC ministers last year, aims to channel popular discontent with rising energy prices. This cynical move is moreover an attempt to remove himself from blame for having caused them. Not directly, as we may think, by building windfarms, but by the opportunity cost created by over-emphasis on them and other renewables. The current and previous government did not have any ambition to make energy cheaper. This was revealed recently by Ed Miliband’s Special Envoy for Climate Change and the Environment, Barry Gardiner MP, who is quoted by Energy Live News,
The Government wants people to believe their electricity will become cheaper. It will not. It will become much more expensive.
As an aside… I called Gardiner out for claiming that subsidies for fossil fuels were greater than for renewables on Twitter. In fact, I called him a liar. Some might say that this was strong language, but he was himself accusing people of lying so it didn’t seem out of place to point out that his claims were the lies. He threatened me with legal action, and demanded I remove the tweets. I didn’t, and have not yet heard from his lawyer.
Gardiner admits that renewable energy is more expensive than conventional generation. He knows it. And since he is so close to Miliband, we must assume that Gardiner has told him. If he hasn’t, what exactly is his Special Envoy for Climate Change and the Environment telling him?
It has long been understood that emphasis on emissions reduction will come at a price. Miliband and his successors have tried to fudge the issue with partial studies produced by dodgy think tanks and renewable energy lobbying groups, and by blaming the energy companies. The simple fact is, however, that if Miliband had made cheap and accessible energy a political priority at home and internationally, then it would be all the more a possibility. The buck stops with the man who took the job of Secretary of State for Energy and Climate Change. He knew prices were rising. His government made a commitment to reducing the cost of energy and the levels of ‘fuel poverty’. But rather than calling for more coal, oil and gas to be extracted he made it harder for these things to be used. He offered incentives to invest in more expensive forms of producing electricity. He pushed for higher emissions-reduction targets. He disincentivised the production of cheap energy. And now he has the nerve to say,
Energy bills are now one of the biggest costs that families face, but the complexity of the various tariffs on offer, currently over 400, means that 80 per cent of people are paying too much for their energy. Elderly customers often find it hard to shop around and make the market work for them. That is why a Labour government would ask the energy companies to charge all customers over the age of 75 the cheapest tariff for gas and electricity, enforceable by law.
This is nothing more than grandstanding. Why should only the over-75’s enjoy the protection of the law? Is it okay to rip off a 74 year old, but a crime to charge him over the odds the very next day? And what kind of promise is guaranteeing the ‘lowest possible tariff’ while he has done everything in his power to make electricity more expensive? It is a classic Labour Party move — to give with the one hand while taking much more away with the other.
We need growth to serve a purpose: raising aspirations, improving the quality of life, and passing on a better inheritance to the next generation. Sustainability is about the politics of hope and the human endeavour to create a better legacy. People are aware of the risks and opportunities facing us. Over half a million people signed a petition against the government’s plans to sell off our forests. Even more have joined the Fish Fight campaign lobbying for an end to the disgraceful practice of discards and calling for a sustainable fishing industry. Millions tuned into Frozen Planet to watch Sir David Attenborough’s plea to save the Arctic, a cause whose time has come.
All these things are, on Miliband’s view, a demonstration of the demand for ‘responsible growth’ — words that he can barely even say. ‘Rethponthible Growth’ is demanded, it would seem, not by demonstrations of public will at the ballot box, but a petition about forests and fishes, and a TV programme about polar bears… Scaremongering in each case. Even if more than half a million people in the UK care so deeply about such things, Miliband’s claim to represent the public will in this respect is defeated by the fact that nobody has been able to express a desire for an alternative to the party-political consensus on climate. Much less has the political establishment allowed its environment and energy policies to be criticised.
Miliband’s idea of ‘responsible growth’ seems to imagine that a regime of deliberately ‘irresponsible growth’ once reigned. But not even ‘growth’ is a problem the UK enjoys, responsibly or irresponsibly. Rather, the ‘responsible-‘ prefix is a caveat to any promise he makes to deliver anything positive at all. It’s a bit like ‘sustainable development’. ‘Sustainable’ is in fact interchangeable with ‘not’. Thus, ‘sustainability’ is a celebration of more primitive lifestyles, of lower living standards, and of regressive political ideas. Milband speaks about ‘improving the quality of life’ as though it had never been conceive of before, and that it was done without oil, gas or coal; without machines and wealth. Concepts like ‘human endeavour’ and ‘hope‘ come easily to vapid poseurs, who have only online petitions and a TV programme to draw from, but who struggle to get people to vote for them, much less out into the streets.
It’s all just so insipid…
This is something that goes to the core of Labour’s values of fairness, equality, and social justice. The great Attlee government was not just about the National Health Service and creating a post-war economy. It was also the government that legislated for our National Parks and to protect the diversity of our countryside. From ancient woodlands and wildlife rich wetlands, through to community orchards and local parks, there are some things that provide a value that cannot be captured by the free market. Times have changed, but the principle remains the same: markets have limits. The campaign against the forest sell off showed that the public gets this, as did opposition to the government’s planning reforms. Rather than being a barrier to growth, I see the environment as a source of inspiration and opportunity to create long term sustainable jobs; globally competitive businesses; reduce inequalities and the fairer distribution of resources and wealth.
… So trite…
The environmental crisis poses a big challenge to our politics because it is marked by a distance between the generation that needs to act and the generations that will feel the greatest benefit. Bringing about change requires government to play a greater role in making markets work to deliver the best possible outcome.
… And so very, very hollow…
Of course, if government was the only agent for change, a shift towards a more responsible, sustainable capitalism would be far harder. I will not deliver change alone but by building a coalition of business leaders from companies large and small, politicians, NGOs, social entrepreneurs, investors, employees, consumers, citizens, and trade unions. Such coalitions come along rarely in politics but when they do they make real change possible, driving out old orthodoxies and establishing new ways of conducting our lives together.
‘I will not deliver change alone…’, says Miliband, just in case we were really wondering how he was going to execute his master plan. The ‘coalition’ he imagines, however, screams loudly about its own impossibility. If Miliband could really mobilise so many movements and individuals, they would surely be standing behind him already. This crowd is a fantasy. The actuality is a scene as empty as the concepts he’s claimed to champion throughout his article. But let’s imagine anyone turns up to join this coalition. Who will they be? The companies he will seem to recruit will not be unlike the ones who now seem to have embraced the green agenda: they are either drawn to the subsidy tit, or forced there by endless environmental regulation. The NGOs will be the same old self-serving and cynical outfits who variously flirted with Cameron, Brown and Blair, but who had tantrums when the progress of the policies they demanded were slowed by democratic processes. The trades unions, if they turn up, will be remembering Milibands ‘these strikes are wrong‘ mantra, and will recall his urge to them to ‘put aside the rhetoric’ (oh, the irony). The citizens who do turn up will be a tiny slither of the mid-thirties percent who voted for him of the low-sixties percent who bothered to vote.
The job of politicians is not just to put forward some of the ideas that can contribute towards creating a more responsible and sustainable capitalism, it is to help build the coalition for change that will support and make these changes happen in practice.
The problem for Miliband, though, is that he can’t even put forward ideas at all, let alone ideas on which a coalition can form. ‘Responsible and sustainable capitalism’ is an idea which is transparently formulated in an atmosphere devoid of imagination — convenient, off-the-shelf prefixes are attached to a frank admission that he has no alternative, nor even any analysis of the problems he is seeking to address. It’s a clumsy attempt to connect with the idea that ‘something is wrong’, which is an idea that everybody has. Every conceivable solution to the problem that everybody senses is captured by the notions of ‘responsible’ and ‘sustainable’. Imagine your car has broken down. The problem is neither going to be identified nor remedied by your desire that the fix be ‘responsible’ or ‘sustainable’. Analyses of problems and their solutions requires more depth. Miliband proposes precisely nothing.
Miliband attempts to turn his own political and our economic problems into problems that are ‘environmental’ in character. The economy and the environment are synonymous on his account. He imagines that the entire country shares his values, and will thus get behind him, to join his ‘coalition’ because he watches BBC nature documentaries.
The ‘environment’ features so prominently in his thinking, partly because it is a prefabricated story to which he can turn, but also because lacking an understanding of the human world, the idea that a bad economy is the result of a bad environment is the easiest way for him to account for economic problems such as rising commodity prices. The environment is the cause that will rescue the nation from its loss of identity, its loss of values, the economic crisis, and the problem of widespread disengagement from politics. But commodity prices do not reflect simply resource scarcity, and people’s values cannot be estimated by their television viewing habits.
The phenomenon of Miliband is mediocrity gone supernova. But let’s not single him out. He epitomises the problem that afflicts many public institutions, and so makes visible for a moment the nothingness that passes for politics in today’s UK. The political establishment’s absorption of environmentalism is primarily, a response to its own vacuity, and to the problems caused by its own vacuity. Stories about crises take the place of ideas and vision. Nebulous conceptions of the natural world serve in lieu of an understanding of the human world. It is fitting that a cipher should stand as the leader of such a hollow political party, in such a turgid political contest as the one that exists between them and the coalition.