Friday, June 08, 2007

Cap and Trade

It was only today that I finally really grasped just how dismal an idea the cap and trade, emissions trading, approach to carbon emissions control is. It isn't just that the particular EU scheme constitutes a subsidy of half a billion a year from British organisations to the rest of the EU; there is a more fundamental problem. It was when I saw this Excel file that I really 'got it'. That's every hydrocarbon user in the European Union Emissions Trading Scheme and their Annual Allocation of emissions from DEFRA under Phase I. The supposed market solution relies upon bureaucrats coming up with a quota for every plant in the country based on their emissions history and an estimate of how much they can cut.

It's reminiscent of some old Communist five year plan with government telling the private sector what it is capable of and should achieve, why is this considered the capitalist approach?

It relies upon the state being able to properly assess the technological possibilities in a host of industries, both in the present and the future. It is chronically vulnerable to manipulation by skillful or 'generous' businesses that can influence the decision over their quota. The trading system represents a huge great transaction cost for the public sector as NHS Trusts and the like who have no idea how to trade a commodity like an emissions permit make a mess of things. The skilled traders at Shell and BP, by contrast, have made a profit from the Emissions Trading Scheme.

In short: a hideous idea.

Thursday, June 07, 2007

Review of Charles Koch's "The Science of Success" in The Business

I have an article in todays The Business magazine about the stunning success of Koch Industries, Inc. and the book Charles Koch has written explaining how the ideas underpinning classical liberal politics and economics made it happen.

Article on ConservativeHome

I have an article responding to Ken Clarke's Democracy Taskforce report up on ConservativeHome's YourPlatform. It sets out how the Democracy Taskforce won't succeed in restoring trust in politics so long as politicians continue to try to do too much, too centrally.

Tuesday, June 05, 2007

The Global Warming Debate: Over?

I tend to avoid commenting on the science of global warming. I keep as up to date with the arguments as I can and am reasonably happy that I've done what I can to understand the state of play. For now, I'm happy to take the 'consensus' view, with a few reservations, and then analyse policy on that basis.

I'm not a scientist and I honestly doubt I can add any value to the scientific debate. Fortunately the intellectual argument over policy will not be settled by scientists but, as usual, by economists. That is a debate I can be a part of. Neither myself, Sir Nicholas Stern or Richard S. J. Tol are scientists, however, the other two are as important as any IPCC physicist to the debate over our policy response to climate change. Tol's assault on Stern's review is a decent introduction to why.

DK isn't so reticent about the science of climate change, has done a lot of reading and is convinced that the mainstream opinion is entirely wrong. He is understandably frustrated that Sunny Hurndall has written the entire debate off as settled, anthropogenic global warming won apparently.

What I found odd about the opinion that Sunny, and Ben Stewart of Greenpeace who started this argument by refusing to debate Dominic Lawson on 18 Doughty Street, advance is that they seem to be calling and end to the debate so quickly.

It seems understandable that Richard Dawkins has gotten somewhat tired of rehearsing arguments for and against evolution that have been much the same since 1859 when the Origin of Species was published. After 148 years it seems quite plausible that most of the interesting arguments have already been deployed. Unless some radical new evidence or theory comes up I'd say it is fair enough to put research and argument testing the basic theory of evolution by natural selection on the back burner. That Dawkins wishes to stop debating those who still want to rehearse the same arguments after well over a century in order to satisfy their own religious imperative seems understandable.

But global warming only became an object of serious debate in the late 1970s. Why should we believe that in that relatively short period of forty years all of the relevant arguments and important studies that will shape the 'final' scientific conclusion have seen the light of day? Surely it is quite plausible that new evidence or logic that might change the debate will emerge?

It worries me a lot that those who lobby for policies to curb emissions are so keen to end the debate early. Presumably they think it strengthens the political case for taking action, perhaps it does, but intellectually it is a shabby and arrogant way to behave.

The Ghost Cabinet on IT Procurement

I'm far from sold on this piece from the Ghost Cabinet 'Technology Ghost'. A few particularly problematic paragraphs stand out:

"No-one is looking at the use of technology across the whole of government."

Utterly untrue. The National Audit Office should do some more work on examining the government's record in delivering major Information Technology programmes but there are definitely organisations looking at the government strategy for IT in the aggregate. There is the Office of Government Commerce and the Cabinet Office's Delivery and Transformation Group (formerly the e-Government Unit) both of whom are responsible, within government, for government IT implementation. Then, in Parliament, there's the Public Accounts Committee which launched a report just yesterday on the lessons from successful projects for government IT procurement. Finally, from the private sector, the consultancy Kable is focussed on public sector IT expenditure.

"This is a historical mess. At some point in the past, each government department went and did their own thing, spending loads of money implementing essentially the same solution multiple times, and now we’re looking at spending loads more either doing it yet again, or joining them all up. No-one was empowered to put their hand up and say, ‘Hang on, does anyone think that a costly, massive database of everyone’s names, addresses and other information might be useful across government?’ And if they did, no-one was made to listen."

This paragraph is the biggest flaw in the piece. The whole problem with the NHS National Programme for IT (NPfIT) is that it attempted to impose a single solution across too large an organisation. Different sections have different legacy systems all of which need to be integrated into the new project or replaced and the data moved. Everyone has different objectives which need to be accounted for and which cause massive creep in the project's scope. Pretty soon you get the over £10 billion (that's a LOT of money) overspend that has marked the NPfIT. Doing this over all of government would take a big risk of facing the problems that have plagued the NPfIT again but on a much larger scale.

A rational, problem-solving, mind will always find centralisation tempting. It is similar to the logic that a major supplier like the NHS can be more efficient than an insurance based system as it can buy in bulk and spread fixed costs across a larger health service. The problem is that the centralisation creates complexities, variety and scale too large to be managed. The impossibility of managing the lumbering behemoths that centralisation has created leads to the inefficiency that characterises today's government departments.

It seems pretty clear that, instead of the centralisation that the 'ghost' is after government IT projects need to be more decentralised, more often It is far easier to manage and control small projects that the stakeholders can be properly kept in touch with.

Monday, June 04, 2007

Energy Security and Global Warming

Quite a few people, Peter Franklin for example, have argued that China will come onboard for CO2 reductions because they don't like being dependent upon foreign oil. The problem is that the Chinese have a solution in mind already for energy security. Lots of coal power stations. Hardly a result for our green friends.

In the US a similar trend is playing out. Attempts to push energy security up the agenda as a handy bonus that comes with addressing global warming are playing into the hands of "Big Coal". Bradford Plumer for the New Republic sets out how this is creating an opportunity for the ludicrously inefficient coal-to-liquid industry. Again, strategies for energy independence are very different to the kinds of strategies imagined to fight global warming.

In Britain the most obvious way of defending energy independence in the long term is probably a move towards nuclear power or some other technology. There isn't a crisis because in the meantime we will be fine so long as the North Sea doesn't wind down too quickly. At the moment we are only narrowly net importers of fossil fuels. The absolute worst policy for energy independence would be to place a windfall tax on profits from the North Sea. Exactly what Gordon Brown has done, the swine.

Those who want to argue for curbing emissions are disingenuous to fall back on illusory peripheral benefits like energy security. Doing so is a sign of intellectual, if not political, desperation.

Benedict Rogers On Pakistan

Over the weekend Benedict Rogers, of Christian Solidarity and the Conservative Party Human Rights Commission wrote a strong piece for ConservativeHome’s Platform arguing that more needs to be done to protect Pakistan’s Christian population. They certainly face very severe abuse and as a minority religious population in an increasingly radicalised Muslim country their position is clearly a risky one. However, I disagree with Rogers on his portrayal of the political realities in wider Pakistan.

He paints the Christian community’s problems as being very much a choice made by Musharraf. In particular he approvingly quotes Zahid Hussain saying “Pakistan’s failure to curb extremism owed less to the difficulty of implementing reforms than to the administration’s own unwillingness.” If the abuse of the Christian community were the only challenge facing the military leadership this might be an accurate description. At the moment Pakistan’s leadership faces a significantly more varied and large scale set of problems.

There is a touch of unreality in covering the troubles in the border provinces purely in terms of the abuse of and threat to the Christian community. Moderate Muslims are facing serious threats of death and actual abuse in what Gideon Rachmann, Chief Foreign Correspondent for the Financial Times, termed the “Talibanisation” of Pakistan. The border regions have always been somewhat lawless and that makes cracking down on radicalisation easier said than done. This isn’t Britain, or even China; the state’s writ has a distinctly limited authority.

Equally, there are direct threats to the regime’s stability in the cities. In Karachi there has been rioting connected to the Chief Justice’s challenge to Musharraf and his nationwide tour publicising that opposition. In Islamabad there has been Islamist rioting centred around the university. For a regime that can’t take its own existence for granted this is a very alarming development.

While I would on no account want to diminish the sufferings Rogers discusses they only involve a handful of people so far, albeit with a threat to many more, and things could get far worse. The one policeman Rogers describes being sent to defend a church under threat of attack from radicals may have been an insult, how can one man defend a church?

However, on the other hand it could be that he’s fulfilling a similar role to that played by US troops in South Korea. Should radicals assault the church he might stand up to them, they might have to kill him and they might face retribution for that infringement from the state. Were Pakistan to collapse in violent revolution that credible threat of sanctions to abusing the Christian minority would disappear. Then the scale of the horrors facing that community might become radically worse.

As such, it is very much in the interests of Pakistan’s Christian community that the military leadership use their limited resources to ensure stability. Pakistan could collapse in revolution if the military gets things wrong, if troops refuse to crackdown on fellow Pakistanis in the event of renewed riots. A Pakistani I’ve spoken to reckons this is unlikely to happen as the military can try the Roman trick of sending troops from different ethnic communities to enforce their will upon the others. However, it is enough of a possibility to be worrying and if things look bad another general could panic and split the military’s support for Musharraf.

Pakistan needs stability in order to make a steady transition towards democracy. Reform through a violent change would lead to a fragile democracy or, worse, the rise of a Khomeini like figure and a radical regime. In the transition the Christian minority might face an awful fate.

Rogers is right to highlight the abuse and danger the Christian community in Pakistan is facing. Pressure should be put on the Pakistani authorities to do more if they can. However, we should understand the very real hazards the Pakistani regime faces and the costs that all would pay in the event of a collapse.

Gore or the Unabomber?

Test your ability to differentiate between the rhetoric of environmental messiah, former Vice-President Al Gore and anti-technology terrorist the Unabomber with this easy quiz.