Thursday, December 24, 2009

The Narrow View of Climate Alarmism

Regular readers of The Nexus may recall a recent post about the film The 11th Hour.

While some of the ideas in the film were actually largely constructive in nature, it's difficult to cover all the ideas discussed in the film that are actually destructive in nature.

Fortunately, a recent speech by Naomi Klein, featured on ForaTV, has given a second opportunity.

In the video, Kelin talks about some of the things that weren't discussed at the Copenhagen Conference. In particular, Klein was disillusioned that windfall taxes on the oil and gas industry weren't part of the final (non-binding) agreement reached at the conference.

After taking a brief time to complain about the Fort MacMurray oil sands, Klein accuses the oil industry and its corporate lobbyists of preventing a "fair climate deal".

In The 11th Hour, James Woolsey excitedly talks about the need for research in development into renewable energy technologies, which he describes as the "killer app to defeat big oil".

"Human greed", they insist, is bad. And so the greedy corporations that are "big oil" must be destroyed.

But what individuals like Klein and Woolsey fail to understand is that "big oil" and the "oil and gas industry" is actually an extremely ill-conceived concept. The "oil and gas industry" is actually the energy industry, and "big oil" companies are actually energy companies. Oil and gas are merely resources tapped for the provision of energy for profit.

And therein lies what Klein and Woolsey either don't understand, or fully understand and simply abhor.

The destruction of the energy industry as it exists today isn't necessary in order to develop renewable energy resources. Rather, providing the energy industry with an incentive to develop these energy resources by making them potentially profitable is the key.

The "windfall profits" that Klein so abhors the energy industry earning off the production and sale of oil actually resembles one of the largest and most reliable pools of liquid capital in the world today.

Not only would Klein and Woolsey's fantasy "solution" to the climate crisis -- insomuch that there actually is such a crisis, and this is now ever-increasingly in doubt -- be destructive to the livelihoods of those who earn their living producing oil and natural gas (energy), but it also threatens the livelihood of companies that would gladly invest in the research and development of alternative energy sources if only it were economically viable and profitable.

On the other side of the coin, taxing what Klein would deem to be "excessive" profits by large energy companies eliminates the incentive to produce at a level that would produce those profits.

The energy industry won't simply continue to produce at current levels regardless of the hand of government reaching deep into its pockets. Rather, it will simply decrease its level of production in order to stave off excess taxation.

Moreoever, the energy industry won't gladly absorb the additional costs of those taxes. Rather, the costs of those taxes will be handed down in the form of higher energy costs for consumers, lower wages for employees, decreased safety standards, and downgraded measures for environmental protection.

In other words, Klein's "miracle solution" to a crisis that continually looks less and less like a crisis, will create a surplus of of new externalities that will increase the economic, social, human and environmental costs of energy, without ever producing the windfall of revenue for alternative energy R&D that the energy industry could produce under current conditions.

To put it more succincly, Naomi Klein and James Woolsey would kill the goose that could lay the golden egg of renewable energy simply because they can't be bothered to convince the energy industry -- or "big oil", as they insist on reducing it to -- to invest in renewable energy and would rather coerce it.

All of this in the name of their own narrow view of climate alarmism.


  1. Great post. The targeting of one resource from Alberta makes little sense.

    Is the resource from the Middle East better?

    What alternative resources are available to replace the fossil resources?

    Will China, US and EU wean themselves of use fossil resources for renewable energy in a substantive scale?

    How much will that cost? Who will pay for it?

    The consumers of energy will vote as always to use the cheapest supply of energy to meet their needs. The alarmists cherry pick per capita as a means to slam Canada regarding our Carbon footprint.

    How do progressive decry unfair burden on HST than demand we pass a much larger COST for use of energy through the current renewable energy alternatives?

    Our size, geography, location in relation to the equator the per capita stat is highly biased in making a fair comparison.

    Is Naomi ignoring the costs of comparing the use of Fossil Energy fuel vs the much more expensive renewable energy?

  2. I think it highlights the way that conservatives want to approach these issues, and the way that "progressives" want to approach these things.

    The conservative approach is largely to utilize economics, and provide the incentives necessary for people to work toward the solution of their own problems. The progressive approach is to imbue the state with the powers of social engineering, and coerce people into following their programme.


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