Tuesday, July 15, 2008

Britain leads on the post-oil economy - and positive feedback loop on corn prices

Britain's Prime Minister Gordon Brown is persuaded that we're entering the post-oil world.

The Oil Drum includes his speech and a summary of key points:
The Oil Drum | The post-oil energy economies of the future - by Gordon Brown:

* Expansion of nuclear
* Expansion of renewables, possibly including Severn barrage
* Discussion of solar energy with Mediterranean states
* Tax breaks for energy efficiency measures
* Electric vehicles are placed on the agenda
There's no reference, however, to a Carbon Tax or Carbon permit trading; this is speech about energy, not global climate change.

That's one heck of an omission. We have vast reserves of coal and tar sands to burn; if we switch to electric cars without a massive carbon tax on coal we're slitting our throats.

So this is impressive because of what it says about our energy future, but it's only the easy part of the policy debate.

In a related vein, isn't there a positive feedback loop emerging from the use of corn to produce energy? Biofuel corn is an energy intensive crop with a minimally positive return on energy inputs, so, after other costs are accounted, isn't it as though we're burning 10 barrels or oil to create nine barrels of oil? This can only happen because of twisted bipartisan governmental subsidies, but it means the price of corn will keep spiraling upwards as long as the subsidies last.

At some point the corn biofuel program will then consume the entire economic output of the US. Hmm. Maybe China will support it?

Since we get the government we deserve, what does that say about how bad we Americans have been?

Update 7/16/08: Great comment pointing out that Gordon Brown doesn't need to speak about Carbon credit trading since his listeners know the UK and EU have a fully operational program. I knew that, so this reminds me how tricky it is to interpret international statements -- there's always context I might know but haven't really integrated.

2 comments:

simhedges said...

It may be that there is no mention of Carbon trading because the UK we have had a carbon (Emissions) trading system in place since 2002, replaced by an EU wide scheme in 2005. The scheme needs expansion in depth, but it is there. The EU also has targets for generating via renewables, and our government is also looking at Carbon Capture to deal with the coal power station issue (although we have no tar sands!).

John Gordon said...

Thanks, great point. I added a comment to my original post providing this context.

I knew of the EU trading scheme, but it's one thing to know it and the other to place a speech in the context of national/regional policy. My bad!

The EU and the UK have been leading the west on so many topics for years. We can only hope an Obama presidency will help.

We don't hear much about Japan (which is why I wrote "the west") but I think their carbon output and energy/output ratio is actually quite low. They seem to be very quiet on the topic however.