There are signs of green economic turmoil everywhere
Green and clean, that’s how politicians all over the world like to describe their national energy profiles. From Europe to North America to China, action plans and policies are in place, subsidies have been dispersed and new ideas are in constant production. In Washington Thursday, Prime Minister Trudeau brought his Liberal green message to Washington, telling the U.S. Chamber of Commerce that green industries are the backbone of a strong economy.
Maybe it depends on what “backbone” means and on one’s definition of a “strong economy.” The latest news on green and clean energy fails to support the standard definitions of either concept. In the wake of government action around the world, industrial plants are closing, so-called green operations are failing, prices are soaring, subsidies are rampant, jobs are being lost, competitiveness eroded and energy consumers, especially the poor, are threatened by regressive carbon taxes.
What’s green and clean is turning catastrophic.
Scanning news stories and the work of the Global Warming Policy Foundation in London, there are signs of green economic turmoil everywhere. Here’s a sampling, in no particular order.
1. Albengoa, the Spanish green-energy giant, filed for bankruptcy protection in the U.S. this week. With help from subsidies, the company built giant wind and solar farms all over the world, from Arizona to Uruguay. Shares once worth $25 are now all but worthless.
2.In a posting this week, Benny Peiser, head of the Global Warming Policy Foundation, urged the British government to delay carbon-control plans and scrap the country’s unilateral Carbon Floor Price, which is contributing to a crisis in the U.K. steel sector and other energy-intensive industries.
3.One of those U.K. steel companies, owned by Tata of India, is up for sale with no buyer in sight, threatening thousands of jobs and generating a national economic crisis that forced Prime Minister David Cameron to end a personal vacation and fly home. Among the causes of the steel crisis: green energy and carbon taxes.
4.In China, the National Energy Administrator has stopped approving wind turbines because energy is being wasted and parts of the national grid are being disrupted.
China has claimed to be on a big green streak. It may be closing old coal plants and steel mills that produce smog, but it is not doing all that much on the carbon front. If dirty coal plants are closed, they are replaced by cleaner coal and gas — that is, fossil fuels.
5.The Wall Street Journal reports that many U.S. states — Arizona, Colorado, Louisiana, Utah and others — are thinking of cutting back on subsidies to homes with solar panels. “What is in danger of being overlooked is the harm inflicted on the 96 per cent of our customers who do not have solar.” Those non-solar customers pick up the subsidy.
6.Sunedison, the U.S. clean-energy giant and a Wall Street darling, appears to be heading for bankruptcy.
7.Subsidies to wind appear to be soaring in Ontario. The website Wind Concerns reports that for the first two months of this year, 425,000 megawatt hours (MWh) of wind power were spilled — which means power consumers will have to pay $120 per MWh for wind power that never reached consumers or was not produced. On an annualized basis, that would add $300 million to electricity costs with no electricity to show for it.
8.Speaking of Ontario, a Forbes article on Wednesday details job losses and lost investment brought on by the province’s green-energy policies. “Ontario is probably the worst electricity market in the world, “ says Pierre-Olivier Pineau of the University of Montreal.
9.Pineau’s view of Ontario might be debated by Europeans, where green-energy policies — regulations, US$100 billion in subsidies, fracking bans and assorted carbon prices and trading — have sent European electricity prices through the roof. Robert Bryce, in a review for the Manhattan Institute, reports that, since 2005, industrial electricity prices rose 133 per cent in the U.K., 64 per cent in Spain, 49 per cent in France and an average 46 per cent across the EU. Is this a model for North America?
10. In Germany, the business paper Handelsblatt last week ran a feature. “How to Kill an Industry: Germany’s massive push into renewable energy has a dark side. As green policies drive up the cost of power, entire industries are shrinking.” Utilities are losing billions, surplus energy is being dumped on neighbouring countries and industries are moving to Asia.
11.Another green-energy fantasy, the Powerwall, just bit the dust. Touted not too long ago by Elon Musk, the US$5 billion e-car subsidy grabber, the Powerwall was seen as a potential miracle electricity-storage system for homeowners. It was scrapped this week. Never mind the economics, the chemistry didn’t work.
12. Speaking of Telsa, the multi-billion-dollar electric-car subsidy seeker on Thursday announced its new Model 3, a $35,000, smaller e-car that still qualifies for $8,000 in subsidies at the retail level for buyers.
13. Carbon taxes, promoted by Trudeau and President Obama, come with big social costs that few want to talk about. A 2009 U.S. study estimates that the carbon-tax burden is a giant regressive tax that is likely to fall disproportionately on people with lower income. There may be fixes to the punishing impact, but none appear to be all that easy to implement.
14. Finally, a survey of top executives conducted for KPMG and The Globe and Mail shows that more than 50 per cent believe the objective of completely eliminating fossil fuel use by 2050 is “not worthwhile.” Nobody said it might lead to another green catastrophe, but that wasn’t one of the choices in the survey questions.