Tuesday, September 10, 2013

The Green Energy Religion Meets the Real World

There are many times when Ambrose Evans-Pritchard delivers the goods, as he (unknowingly) does (for the most part) this time in an article entitled “Brussels fears European 'industrial massacre' sparked by energy costs.”

It seems political leaders in Europe have figured out that there are consequences for allowing faith to substitute for markets when it comes to energy:

"We face a systemic industrial massacre," said Antonio Tajani, the European industry commissioner.

Mr Tajani warned that Europe's quixotic dash for renewables was pushing electricity costs to untenable levels, leaving Europe struggling to compete as America's shale revolution cuts US natural gas prices by 80pc.

Who is Mr. Tajani?

Antonio Tajani (born 4 August 1953, in Rome) is an Italian politician. He is the current European Commissioner for Industry and Entrepreneurship and has also been one of the five Vice-President of the European Commission since May 2008. Before his current role, he was the European Commissioner for Transport.

Perhaps he has a background in Industry or entrepreneurship?  Or in transport, as his prior portfolio might demand?

After attending Liceo Torquato Tasso in Rome, he earned a degree in Law at the Sapienza University of Rome.

Tajani was an officer in the Italian Air Forces. After attending a specialized air defense course at Borgo Piave di Latina, he became radar controller for air defense at the Italian Air Force radar base of San Giovanni Teatino.

Tajani has been a professional journalist, editor of parliamentary affairs for the weekly "Il Settimanale", presenter of Rai Radio 1 news programme, and head of the Rome editorial office of the newspaper "Il Giornale". He was special envoy to Lebanon, the Soviet Union and Somalia. Besides Italian, he speaks English, French and Spanish.

Lawyer, military officer, and journalist.  Oh, and a political advocate and politician: advocating for the return from exile of the House of Savoy, various political appointments, various successful and unsuccessful runs for office, etc.

These qualifications led him to his EU commission posts on industry, entrepreneurship, and transport….

With this list of qualifications, he has come up with some rather entrepreneurial plans:

On the 15 April 2010 a headline in the British newspaper, The Sunday Times, proclaimed that European Commissioner Antonio Tajani had unveiled a plan declaring tourism a human right.

That’s a good one.

With the goal of promoting competitiveness and sustainable development of the European automobile industry, Tajani presented in November 2012 il Piano d'azione the Action Plan CARS2020. The Plan focuses on a transition towards more energy efficiency and alternative energy sources, as well as technologies and advanced materials for the production. (emphasis added)

An alternative energy proponent.  Now complaining about the push for alternative energy.

"I am in favour of a green agenda, but we can't be religious about this. We need a new energy policy. We have to stop pretending, because we can't sacrifice Europe's industry for climate goals that are not realistic, and are not being enforced worldwide," he told The Daily Telegraph during the Ambrosetti forum of global policy-makers at Lake Como. (emphasis added)

The green agenda a religion?  Pretend?  Not realistic?

It is all fun and games until the consequences become overtly obvious, isn’t it?  Lavish meals, private jets, nightly entertainment.  Junkets to Lake Como.

"The loss of competitiveness is frightening," said Paulo Savona, head of Italy's Fondo Interbancario. "When people choose whether to invest in Europe or the US, what they think about most is the cost of energy."

Why wasn’t this frightening five or ten years ago, before all of the wasted investment and destroyed capital?

European president Herman Van Rompuy echoed the growing sense of alarm, calling it a top EU priority to slash energy costs. "Compared to US competitors, European industry pays today twice as much for electricity, and four times as much for gas. Our companies don't get the rewards for being more efficient," he said.

Of course European companies (or more accurately, their customers) don’t get the rewards for being more efficient.  The efficiency is drained by the political and bureaucratic leaders.  It is drained by those employed in favored industries.  It is people like Herman and Antonio who gain the rewards for improved efficiency.  Well, until the capital has been consumed.

Never fear – they have a solution:

Mr Tajani said the crisis is compounded by the tight monetary policy of the European Central Bank, which has failed to alleviate a serious credit crunch for small firms in Italy, Spain, and the eurozone periphery.


"The euro is far too strong and it is making it very hard for our companies to compete with the Chinese. We need a real central bank, like the US Federal Reserve or the Bank of England, willing to promote growth," he said, in an unusually blunt criticism of a fellow EU institution.


"The ECB should be lending to small firms, just as the Bank of England is doing. It is impossible for us to bring down unemployment or cut our public debt without a strong industrial policy that revives small business," he said.


Guy Verhofstadt, leader of the European liberals, said it is time to broaden the ECB mandate to include growth, warning that the eurozone is at risk of chronic stagnation and a "Japanese winter" unless the central bank goes beyond short-term measures.

And print.

Don’t deal with the underlying issues.  Print.

First, this article is a treat because it offers a direct example of the consequence of folly – in this case, the folly of the nonsensical green agenda – folly based on farcical science.  As capital is consumed, the world will increasingly have to give up on such “religions” and will no longer be able to “pretend” that fabricated problems are real.  There won’t be the capital to sustain the uneconomic activities.

Second, in this article Ambrose finds the nuggets of truth behind one of the main purposes of central control over money and credit.  One of the beneficiaries is the bureaucrats.  Instead of solving the underlying problems – eventually unavoidable as real capital cannot be printed, but can be destroyed – print such that more capital can be consumed by the non-productive.

Does Ambrose mention this?

You know the answer.

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