Essay by Eric Worrall
Professor Aled Jones exposes the “myth” that renewable energy is too expensive and completely dependent on government subsidies.
‘Decarbonization is too expensive’ – how to sell climate change action to the bean counter
Published: September 29, 2022 1.20 a.m. AEST
Aled Jones
Professor & Director, Global Sustainability Institute, Anglia Ruskin University…
With fellow scholars, I studied the cases from the past 30 years when governments have successfully used public investment and Regulations to rapidly scale the deployment of renewable energy technologies such as solar panels and wind turbines.
We find that the traditional approach to energy policymaking – implementation cost-benefit analysisalso known as counting beans – tends to hinder renewable energy deployment because it misinterprets the economy as something static works optimally. This view assumes that policy can do little to disrupt the structure of existing markets. The meteoric rise of entirely new sectors over the past decade, such as the global electric vehicle market and offshore wind, suggests that policy can in fact spur radical change.
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Myth one: decarbonizing will waste electricity
Subsidies for low-carbon technology are an investment, not an expense. A recent study shows that this is an opportunity for the global economy with the potential to return 12 trillion US dollars.
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Myth #2: renewables need big subsidies
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Renewable energy is now competing with and even beating the cost of generating electricity from fossil fuels. For example, offshore wind generates electricity at a quarter of the current price is charged to consumers in the UK – a price due to the wholesale cost of gas. The construction of new wind turbines no longer relies on subsidies.
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Myth #3: Jobs will disappear
The transition from fossil fuels in energy systems will reduce nearly 3 million jobs in mining, power plant construction and other sectors. But it is expected to generate more 12 million new ones on transport, renewable power generation and energy efficiency by 2030.
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If we continue to worry about the cost of action, there won’t be many beans by 2050 left to count.
An essay that begins by dissecting the “traditional” cost-benefit analysis pretty much gives voice to the rest of the claims.
Professor Jones “Myth 1” assertion that renewable energy will not increase electricity bills is not proof. If renewables were cheaper than reliable energy, then California would have the cheapest electricity in America.
Even President Obama did not claim renewable energy would lower energy prices.
Professor Jones’ “Myth 2” assertion that renewables is not entirely dependent on government subsidies is also refuted by the evidence. Tens of thousands of Spanish entrepreneurs went bankrupt when Spain’s socialist government abruptly and retroactively cut renewable subsidies in 2010. If Renewables were competitive and subsidies were simply the engine driving the transition that would happen, there would not have been a wave of bankruptcies in Spain as subsidies were pulled.
Professor Jones’ response to the third “myth”, that renewables will boost prosperity by creating more jobs, is his most interesting claim.
I agree with Professor Jones that the move to Net Zero will indeed create more jobs – but they will be miserable, low-paying jobs.
Basic economics says that if you have to hire more people to perform the same service, there will be less money to pay the extra people. Replacing 3 million jobs with 12 million jobs to produce the same amount of electricity as before does not create wealth, it takes away wealth. A quadrupling in the number of workers to produce the same electricity means that the wages that were once paid to 3 million people must now increase to pay 12 million, or the service that 3 million people once provided now. Now 4 times more expensive. Most likely a combination of both price increases and wage cuts.
Economic growth and wealth creation is about doing more with less, the main goal should not be job creation – more jobs are created as a side benefit of a growing economy. Our modern comfortable existence is only possible because our ancestors focused on growth rather than employment. As a result, we get things done far better than our ancestors did.
Consider a farmer working in a field. A few centuries ago, to work in a large field required a whole group of people. But today a large field can be plowed or reaped by a single farmer driving a large agricultural machine, or even a robotic machine, without any direct supervision. That way, instead of saying 20 people get paid from the profits of that field, most of the profit goes to the one person, the farmer who owns the machine – minus the cost of refueling and maintaining that machine.
The decrease in demand for agricultural labor does not mean that 19 people are currently out of work – it means that the 19 people who are no longer required to work in the fields are freed to find other, higher paying jobs, simultaneously using machines to amplify human labor – exactly what happened during the urbanization that occurred during the Industrial Revolution.
Greater efficiency means everyone has the opportunity to work fewer hours for more money. Workers’ rights advances like the 40-hour workweek were only possible because we all became richer, because it was no longer necessary to work in the fields by hand, because because most of us don’t have to do manual labor just to get basic needs.
If you want a glimpse of life before the industrial revolution, just visit a really poor country. But even the poorest countries today are better off than our ancestors were.
The US, Australia and the UK have already experienced this downward pressure on prosperity, especially where renewable energy penetration is high. How much did you pay the last time you filled up your gas tank? How painful was your last household energy bill? When is the green fairy tasked with turning the tide and making all that magical renewable energy cheaper? How many homeless people does it take to convince places like California they might have made a mistake?
Even Professor Jones’ final statement that “… there won’t be many passes left to count“, A reference to the alleged climate threat to coffee, couldn’t be more wrong. In Australia there is a company called Jaques Coffee where delicious, award-winning tropical coffee is grown – their coffee plantation is just 1200ft above sea level, as opposed to 3000ft+ for most premium coffees. Jaques exports their products worldwide. How do they make a delicious coffee that grows at a lower altitude than most other premium coffees? Because Australians have been selectively breeding low-altitude coffee varieties for over a century – we simply don’t have access to high-altitude tropical highlands like East Africa and South Africa. America.
This green nonsense will only get worse, if we allow our politicians to continue listening to academics like Professor Jones, if we don’t challenge silly economic stories. of climate advocates, and if we allow our politicians to keep pushing with heavily subsidized, expensive renewables can’t be.
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