Towards a Soviet-Style economy

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Yesterday I attended a lunch debate to discuss the crisis in the steel industry – just days after the news broke of the problems in Redcar.   This morning, a breakfast meeting on the problems of the fertiliser industry, facing revisions to the ETS – the EU’s perverse Emissions Trading System, of which I have often written.

At both events I managed to get my tuppenceworth in – or (with due modesty), maybe a good sixpence’ worth.  Our man from the Commission (DG Climate Action) Mr. Jos Delbeke  was bullish in respect of the up-coming Paris Climate summit.  It differed from the Kyoto process (he said) because it involved countries volunteering their own commitments to reduce emissions, rather than the Kyoto process’s top-down approach, where targets were allocated to major emitters (but only in the developed world).

He said that commitments already tabled covered 60% of global emissions, and he expected that this figure would reach 90% by December. (My colleague Stuart Agnew suggested later that all fertiliser production would end up in the remaining 10%).

Delbeke explained that 57% of allocations of CO2 emissions permits already agreed by the European Council would be auctioned, while the remaining 43% would be allocated to large energy users to combat “Carbon Leakage” – or in plain English, to try to prevent firms from moving abroad to escape the EU’s perverse policies.  There would be an on-going process of “benchmarking”, designed to place obligations on companies to achieve and then improve on “best practice” for emissions reduction in their industry.

There would be funding via the EU Investment Bank  to finance and support R&D directed to reducing emissions.

In my response, I questioned the rosy predictions for the Paris Climate Conference.  There would be a major confrontation between the developed world and the rest, as developing countries went about with their rather large begging bowl, seeking to lay a guilt trip on the West for the “adverse climate impacts on poor countries”, and to demand compensation.  Perhaps 90% of countries would submit plans – but did anyone seriously think that those plans would be implemented?  Would developing countries sacrifice growth, progress and prosperity on the altar of climate alarmism?  I think not.

Delbeke had criticised Kyoto for its “top-down” approach, yet the ETS plan was itself a top-down approach.  A predetermined volume of emissions permits were to be allocated – but what if they were not enough?  I pointed out that our breakfast debate concerned the fertiliser industry (part of the larger chemicals industry).  Vitally important, but only one of many energy-intensive industries.  I mentioned that I’d been at the steel debate the day before, and seen exactly the same problem, and I listed some of the other industries in the same bind – aluminium, cement, glass, petroleum refining.

It is not that these industries are threatened with carbon leakage – they have been experiencing it for years, and the pace is accelerating.  Jobs are being lost.  Plants closing.  Investment moving abroad.

The EU’s ETS faces a Catch 22.  If it limits allocations, the exodus of industry will continue.  If it provides sufficient allocations to maintain competitiveness, the whole ETS will be blown away, and become a dead letter.

But there is a deeper and more fundamental problem, and that is the massive level of regulatory intervention which the Commission is now proposing.  Bureaucrats will decide what industries qualify.  What allocations they receive.  What benchmarks they are required to meet.  And what R&D funding they will get.

Think of the bureaucracy.  The field day for lobbyists and lawyers.  The barriers to entry and to investment – and indeed to innovation.

But it’s even worse than that.  The level of regulatory intervention has become so massive and all-consuming that we really can’t pretend to have a free-market economy at all any more.  It still retains some of the trappings of a free market, but regulatory control is now so far-reaching and intrusive that we are talking, in effect, a centrally-planned economy, Soviet-style.  Five year plans, Commissars in black limousines.  It’s all there.  And it’s another reason why we shall be better off out!

Stuart Agnew’s contribution:  My good friend Stuart Agnew MEP, a farmer and UKIP’s Agriculture Spokesman, spoke after me – we gave them both barrels!  He made a brilliant and telling point.  While we were discussing fertilisers, he reminded them, we should recall that the most important fertiliser of all is CO2.  “Without chemical fertilisers, I should be able to grow a limited crop.  Without CO2, I could grow no crop at all”.  Nice one, Aggers.

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10 Responses to Towards a Soviet-Style economy

  1. Sue Jameson says:

    Steel industry and air pollution: Belgian “CO2 champion” plant bought off forged Chinese carbon credits | VoxEurop.eu: European news, cartoons and press reviews http://bit.ly/1OumC6u

  2. kevin says:

    Its not just heavy users of lecky that are in trouble the whole banking IT and retail sector requires security of supply. I’m struggling to think of a single sector that has a rosy future. Property perhaps in the short term but long term just yogurt knitting and rural krafts.

    • Flyinthesky says:

      That’s the problem with modern society, we totally rely on security of supply and that’s the core issue we should be working to. Sorry you can’t have any of your own money , computer’s down. Tesco, we can’t sell you anything, computer’s down. It would be Armageddon in days. These loons are playing with the basic fabric of society. Not only that they are exporting the capability.
      I’m no fan of nationalisation by any means, historically government departments couldn’t run a raffle. but fundamental utilities should be British owned and managed. Autonomous energy security should be the paramount interest of any government.

      What no-one is prepared to admit is a lot of our growth and spending power is based on what we think, and are encouraged to think, to be adequately monetised, our property is worth. It is finite and this reality is not too far away.

  3. Brin Jenkins says:

    After the WW2 conflict was finished, I was educated at Coatham and lived in Redcar, this is the Town the Jenkins family lived in for 150 years. I could weep for the cultural devastation wreaked upon them, my own people. Unthinkingly they were mostly Labour supporters and non of them saw what was coming until it was too late.

  4. omanuel says:

    Thank you for your continuing effort to return society to sanity.

    The Pope’s visit and endorsement of the AGW tale suggests a missing piece to the 70-year mystery.

    Was the current worldwide demise of civilization the result of an unreported merger of totalitarian aspirations of Stalin and the Pope after WWII to forbid public knowledge the core of the Sun is the Creator & Sustainer of every atom, life and planet in the Solar System?

    https://dl.dropboxusercontent.com/u/10640850/Solar_Energy.pdf

    Popes never liked Copernicus’ 1543 discovery the Sun controls planet Earth. FEAR of that reality perhaps intensified after the atomic bombs of WWII revealed the awesome power of the solar nuclear furnace.

    The harsh conditions of Japan’s 1945 surrender may reflect the Pope’s lingering anger at Copernicus’ 1543 discovery the Sun controls planet Earth and a desire to eliminate the Shinto religion’s tenet (belief) the Sun plays a dominant role on planet Earth.

    https://dl.dropboxusercontent.com/u/10640850/Humanity_Lost_WWII.pdf

    If so the consequences for society are enormous today.

  5. I am quite serious about this:
    As the Numpties in charge of the EU – the Commissioners – make more and more of a mess of our continent, which they are doing at the moment in the present, which they are already causing for our future and which they have done in the past. (I am not going to give a list, because I do not need to), More Europe is going to become a necessity.
    The immigration crisis is on the top of the list at the moment: see how the “States” cannot solve it! See how Our Dear President is trying to lead us against the tide of Selfish People!
    What we need is strong government, by experts, from the centre. If the Russian threat (Thank you Baroness Ashton) gets stronger, we will have to fight – together.

    Poverty, Equality, Grime, Homelessness, Loneliness in a Collective, Compulsion with draconian laws and penalties, superb police, informants, surveillance. It is all there at the moment: all it needs is for a strong government to “improve it”.

    1984 comes to Airstrip One.

  6. Derek says:

    Thank you Roger for putting the case for sanity. I fear the leaders of the EU are into this so deep that they simply dare not advocate a change of policy. When are those like yourself going to gain power and undo this nonsense?

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