And the good news is?

Sunday, September 21, 2008

And the good news is?

You can read it any which way, but The Sunday Timesis telling us that EDF is poised this week to finalise the long-awaited £12 billion takeover of British Energy (BE), thus acquiring its nuclear generation assets.

This deal has caused considerable concern. EDF is 85 percent owned by the French government and the prospect of the entire UK nuclear generation capacity coming under the control of the French has considerable ramifications.

However, in what appears to be a new development, EDF is suggesting its willingness to hand back two key nuclear sites to the government for auction later this year. Power companies will be invited to tender for these, with Germany's RWE and Eon, Spain's Iberdrola and Sweden’s Vattenfall expected to make bids.

The two sites named are Dungeness, on the Kent coast, and Bradwell, in Essex, to which will be added other sites on which there are non-operational nuclear plants. This, it is hoped, will create one or more competitors to EDF, and speed up the construction of new reactors, with multiple sites under development at the same time. 

If the BE takeover is successful, EDF is expected to press ahead with the construction of reactors at Hinkley Point in Somerset (pictured) and Sizewell in Suffolk, with a possibility that two reactors will be built at each site. 

The timing of this development has considerable political significance. With the Labour Party conference in progress, Westinghouse, the Japanese-owned nuclear reactor group, is planning tomorrow to attend with to launch a report claiming that the construction of its plants could bring a £30 billion boost to the British economy. 

John Hutton, the energy secretary, who is to attend the launch, has been quick to capitalise on this, saying: "This report illustrates why I am so determined to press all the buttons to get nuclear facilities built in this country at the earliest opportunity."

This positions the Labour Party – under attack from all sides – as offering serious options for resolving the anticipated energy crisis. This is in stark contrast to the Conservative opposition which has yet to show its hand on energy and – according to its interim findings from its energy review - regards nuclear energy as a "last resort".

There is already some muttering in the ranks about the lack of any coherent direction from the Conservatives on energy. On Gordon Brown's handing of the economic crisis, The Independent newspaper is reporting that Labour has enjoyed a "bounce" at the expense of the Conservatives. According to one poll, it has nearly halved the Tory lead, from 21 points to 12.

If Labour can capture the high ground on energy – which it has already begun to do - the Conservatives could look extremely flat-footed. Then, this blog's predictions about Labour giving the Conservative a harder time than they expected might edge closer to reality.

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A totally avoidable disaster

Right on cue, following the report that the EU is planning to "reform" the CFP, The Scotsman reveals that half of Scots cod catches are being thrown back into the sea

Described by fishermen's leaders as "a monumental moral disaster", this is a direct and inescapable consequence of the EU’s idea of fisheries management which in this case has led to a "staggering total" of 12,000 metric tons of marketable cod, with a potential value of £25 million, being discarded.

These data come from marine scientists at the government's Fisheries Research Service in Aberdeen. They show that, from a survey, carried out between January and June, 40 percent of landings of cod by weight are having to be discarded to prevent the fleet breaching the EU's quota restrictions.

At least 90 per cent of the catches are above the minimum marketable landing size, yet the above quota fish are being thrown back dead. 

Unfortunately, it does not seem as if the fishermen have any better idea of how to deal with this issue than the EU. At a meeting involving industry representatives, scientists, environmentalists and policy-makers in Edinburgh next Thursday, the Scottish White Fish Producers' Association (SWFPA) will making its own pitch.

It will suggest that the Scottish fleet is given an increase in next year's cod quota in return for cuts in the number of days they spend at sea and fishing ground closures.

What it cannot suggest, however, is that the quota system is abandoned altogether – that being the bedrock of the CFP management system and thus beyond change – together with a total ban on "discards".

As we have been pointing out, most recently here, these measures together with the adoption of selective fishing techniques and a regime of "days at sea" controls on fishing effort, allocated by class of boat, would go a long way towards removing the obscenity of this waste.

However, as always, the EU is unable to respond, necessarily maintaining the core of a flawed system as the only such system which can be administered by a remote, supra-national authority controlling a multinational fleet.

At its heart, therefore, the CFP is irredeemably flawed because the EU is irredeemably flawed, which is why we will continue to see headlines of the type offered by The Scotsman and nothing at all will be done about then, other than continue cutting the sizes of the fleets as fish stocks contract as a result of the poor management.

The tragedy is that this mad-made and totally avoidable disaster exists only because UK politicians have neither the guts nor resolve to do anything about it. It is one of the prices we pay for continued membership of the EU – although paid by the fishermen and us, the fish buyers, rather than the loathesome politicians who so carelessly allow a valuable national resource to be destroyed.

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It isn't working very well

The Ryder Cup tournament, the 37th event now in its final day in Louisville, Kentucky, is supposed to be the ultimate expression of the "European" ideal, having been hijacked by the European Union which is taking every opportunity to display its hated emblem.

We explained the background to this some time ago, but the post is as relevant today as it was then.

Unfortunately for the poor dears in the EU – and the huge publicity budget devoted to promoting their "European identity" – the idea hasn't really taken off. Certainly, the English fans pictured above do not seem to have got the message.

Hey ho! There's always the 2012 Olympics.

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It's the ordinary folk who carry the can

"Taxpayers in Britain face up to 5p in the pound in extra taxes because of the credit crunch created by the banks, leading economists have warned," saysThe Sunday Times, bemoaning in its leader that, "It's the ordinary folk who carry the can."

Indeed they do and it was ever thus but, while the paper is rightly getting excited about this latest raid on our wallets, another one is around the corner which will cost us, potentially, even more.

We are, of course, referring to our favourite hobby-horse, the EU's emission trading scheme (ETS) which, with other levies and taxes, is set to add anything up to £15 billion a year to our bills (no one knows precisely how much – so this is a conservative estimate) – also, by some strange coincidence, equivalent to 5p in the pound in extra taxes, and that is likely to be only a start.

Worst still, this "tax" is regressive, which means those on lower incomes are hit proportionately harder than the wealthy.

That the vultures are gathering to feed off this new income stream is already evident from this piece, where the boss of the consultancy LECG, Chris Osborne, is exulting in the prospect of a new "dot-com boom".

That snouts are already in the trough is clear from our other piece and, in a shameless appeal to the greed dominating the financial markets, the Carbon Trust is advertising in the business press a "business opportunity worth £1.2 billion in the UK". Aimed at encouraging investment in "low carbon markets" and "creating new products" it directs readers to its website, where no end of money-making scams await those who join the "green-con boom".

Amazingly, the political classes seem to be totally unaware of what awaits us. This is perhaps indicated by a post in Conservative Home today which "reveals" the exclusive news that a senior frontbencher has told the site that, "as part of an ongoing review of economic policy, higher green taxation is very unlikely to feature in the next Conservative manifesto."

My comment on the site puts this in perspective, noting that unless the Conservatives are prepared to address the costs already in the pipeline - and in so doing confront existing and planned EU initiatives - a commitment to avoid further green taxes is of very little value. The damage is already done.

This leads one to the inevitable question, "can politicians be that ignorant?" Can they be so ignorant that they are apparently so heedless of what it to come that they can make statements as utterly facile and meaningless as appears on the Conservative Home site. This we have already answered - yes they can! – which makes Booker's column today a timely corrective.

In his piece, he picks up on some of our work and the connection between Lehman Brothers and the climate change industry, and between the company and those two great climate change evangelists, al Gore and James Hanson (pictured above).

What we have not yet fully explored, however (but, no doubt will) are theemerging plans to combine the UN's "clean development mechanism" with the EU's ETS, thus creating a truly global market in snake oil carbon credits, worth perhaps trillions of dollars once the US comes on board.

What drives this development is the growing realisation by European governments – and the EU commission – that the emissions reductions targets they have set themselves for 2020 and beyond are unachievable without massive damage to the economies of developed nations and, in particular, the need to force electricity generators to shut down their plants, leaving their customers cold and in the dark.

The net effect of such a development will be to extract the teeth from the ETS and related schemes, depriving it of its capability to drive down emissions, which was the supposed rationale of the scheme. All that will be left is a bloated financial market, trading in the ultimate snake oil product, carbon credits, for the enrichment of the few and the impoverishment of the many.

That Lehman Brothers – and before them Enron – were so keen on this scheme tells you all you need to know. It comes from the same stable as the securitisation packages of sub-prime mortgages, a financial empire built on foundations of sand.

Many people warned of the dangers of the "credit crunch", but some of those who are popping up now are exposed to accusations of being wise after the event. Yet, in the "green-con boom", the wiz-kids are preparing the ground for another financial bubble – a "climate change crunch" if you like - the consequences of which will be just as damaging as the present crisis.

And, as The Sunday Times so rightly observes, "It's the ordinary folk who carry the can." Booker, as he is so often, is being wise before the event. Can we please have some grown-up politicians to join him?

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