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Wednesday, 8 April 2009

Pulling numbers out of a hat

This morning's government "pwned media" (the BBC and the Independent to be precise) enlighten us that Mr Brown has pledged to aid economic recovery by 'building a greener Britain' .

Trials of electric cars, a roadside network of vehicle-charging points and incentives for environmentally-friendly carmakers are among planned measures, but Mr Brown told the Independent there was scant room for further fiscal stimulus.

He went on to say that green energy will create 400,000 jobs, a figure as much picked out of the air in the same way as his $5 trillion global financial stimulus last week. Don't get me wrong, electric cars are great. I love the Wrightspeed X1 (an Ariel Atom Lithium Ion deathtrap on wheels), and Tesla is making cars that look and feel like real cars. We don't need massive subsidies for green technology, but we would do well to emulate the German and just-about-everywhere-else system of feed in tarifffs. These don't have to be massively expensive, but a fixed minimum tariff and a guaranteed priority dispatch means that small project develeopers have a strong hand to play when they negotiate against the electricity companies. At present they get kicked from pillar to post by the large energy companies with the crummy ROC's - no price guarantees and no fixed term - so they can't get finance because all of the banks and funds have decamped off to the safer waters of German, French, Italian and Spanish projects. London is still the centre of European environmental project finance, but all the deals are on the other side of the channel.

Anyway, back to Brown's claims about non-existent stimuli and jobs. I remember the days when we called this lying. It fills me with as much confidence as claims by the government after WTC/911 that there were about 700, well 600, 500, 400, 300 and eventually an ever so quietly mumbled 72 British dead, although I would say the real figure is actually 48. It all depends what you mean by British, although I concede the government didn't have much wriggle room over the term "dead". At the time this troubled me greatly, and now I am beginning to see why.

If you put somebody in charge of a country, a company or any great endeavour, you want them to have a grasp of the situation, an appreciation for reality and an ability to run a back of the envelope calculation and come up with a meaningful answer. I have no idea whether Brown's $5 trillion fiscal stimulus has any basis. At $900 per person in the world I suspect not. Most people in the world don't earn that much in a year, and most of the money that has been spent so far is not stimulus but wound dressing. As for the 400,000 jobs, Brown doesn't say whether these are additional or replacement jobs - a job manufacturing electric cars may simply replace a job manufacturing petrol cars, and in the long term I would expect fewer car manufacturing jobs because electric cars are much simpler (no fuel tank, ignition, carburettor, alternator, petrol engine, smaller gear box, no crankshaft, probably no clutch etc).

So is there any basis for this 400,000 job statement? Probably not, but it is just another number thrown out by a dishonest politician who neither knows, cares nor understands its accuracy.

1 comment:

Anonymous said...

It is widely recognised that we have some serious generating capacity shortfalls to come in the UK and with lead times for commissioning new facilities in the order of 5 years whatever power option you may choose, maybe Brown is looking at 400,000 pedal powered micro generation facilities. Why not just give everyone a bicycle, we used to make the best in the World.