Liberal Democrats

Total Economic Quackery

The All Party Parliamentary Group On Peak Oil (APPGOPO) has released a report backing Tradable Energy Quotas (TEQs) as "the fairest and most productive way to deal with the oil crisis and to simultaneously guarantee reductions in fossil fuel use to meet climate change targets". This should serve as a warning to classical-liberals that (a) not everything that uses market mechanisms is a free-market or liberal concept, and (b) despite the presence of one or two saner members in their midst (such as Vince Cable and David Laws), the Liberal Democratic party (to which APPGOPO's chairman, John Hemming MP, belongs) is still fundamentally a beard-and-sandals, Fabian, Rawlsian, meddling, fiddling, egalitarian bunch of moralizing whackjobs, who would happily suck all the fun and reward out of life in the name of "fairness".

TEQs, as the name suggests, is "an energy rationing system" where each adult receives an equal quota of energy (measured in carbon terms) that they are entitled to use annually, calculated as equal shares of 40% of the total amount of energy/carbon permitted to be consumed annually under a falling profile set by the Committee on Climate Change in accordance with the national Carbon Budgets that have recently been enshrined into law. This system is allegedly designed "to prevent the intense competition for fuels that will otherwise develop, and to ensure that every energy-user can access their fair share".

So far, so student-socialist, but the cunning of the modern socialist is that he has learned to dress his communist wolf in a capitalist fleece. So the remaining 60% is bought in weekly government auctions by banks and brokers (no rent-seeking opportunities there) on the instructions of their clients in all those organizations who want to be allowed to use energy. And trading is allowed between possessors of the initially-egalitarian personal quotas and of the auctioned rights. The system thus lays claim to be a "market mechanism", combining "social justice" with the efficiency of capitalism in the approved manner of the Third Way prophets.

It is, in this way, different only in detail of implementation, from other cap-and-trade mechanisms, though the details are particularly draconian and deluded. Capitalists (of the type that we need to save capitalism from) who extol the virtues of cap-and-trade and yet look at personal rationing like this and shudder, ought to ask themselves if they haven't been fooled by the inclusion of the word "trade" in an approach that is fundamentally about overriding the efficient allocation of scarce resources by means of state-imposed rationing. Trading mechanisms within these rationed systems are no more than publicly-authorised black markets, which have the same benefits as real black markets under state-rationed systems, but do no more to eliminate the inefficiency and iniquity caused by the distortions that result from such a system.

We are already familiar with a system that distributes resources on the basis of social utility and provides incentives for people to use more or less of the resource depending on its scarcity. It is called the free market.

Cleggover blunders again

Martha Kearney just nailed Nick Clegg (again). This time he's claiming he knows how much money will be brought in by removing various tax loopholes, but doesn't know how many people will be affected. He then comes up with a figure of 10%, but when pressed, can't tell Martha how many people 10% of taxpayers is.

Oh dear. A bit cavalier with other people's money is Nick (remember the pension-value mistake?). Maybe numbers aren't his forte.

LibDem magic - it will be so because we say so

Last Friday, the LibDems launched "new transport polices to create a zero carbon transport system by 2050." And no one noticed. Not even their website, which carried the press release, but doesn't seem to carry the document, Towards Carbon Free Transport.

We are given a few hints how they might achieve this mighty ambition, but are otherwise left to speculate. The hints are:

  • Introducing a distance charge on road freight, related to weight and emissions, as an incentive to shift freight to rail, raising at least £600m a year
  • Establishing a new 'Future Transport Fund' to fund a programme of investment on our railways; removing bottlenecks, providing more trains and reopening lines
  • Backing new North-South and East-West high-speed rail lines to the best European standards to replace internal flights
  • Toughening new legal limits on the average emissions of new cars sold in the EU, to be reinforced with a steadily declining total that reaches zero by 2040
  • Introducing a new 'Climate Change Charge' on internal flights, except life-line routes, starting at £10 per ticket to help fund the 'Future Transport Fund,' which will generate at least £150m a year

So we will still be using trains, planes and automobiles, but they will somehow magically become zero-carbon vehicles. I'm looking forward to discovering how the full document explains how they will achieve this miracle.

UPDATE: They have now (Monday, 8th August) provided a link to the report. As expected, it is a mixture of the sound and the fantastic. Detailed analysis is provided in the Comments.

PMQs & Climate Change

In today's PMQs, Ming Campbell asked the PM, with specific reference to the recent floods the following question:

"The Prime Minister was responsible for the establishment of the Stern report which as he will recall pointed out the severe economic consequences of climate change. Isn't it clear from the events of the past few weeks that we can not afford not to take the necessary steps nor indeed not to spend the necessary money in order to mitigate the effects of climate change."

To which Gordon Brown answered:

Do the LibDems know what "liberal" means?

Iain Dale has demolished in a few short words Ming Campbell's proposal to abuse local-authority powers to get more social housing built, so effectively that even the LibDem NorfolkBlogger agrees with him. This has provoked an unintentionally funny response on NorfolkBlogger's site from Tim Leunig, Lecturer in Economic History at the LSE, and original author of Ming's proposal:

"In what sense are CLAs illiberal?
1) Allow local authorities total control over how many houses are built in their area
2) Allow local authorities total control over what proportion are social houses
3) Will lead to lower house price inflation, so that hopefully your child and mine can afford to leave home in 2030

Freedom and social justice: a good combination, surely?"

In what sense is "total control" by the authorities "illiberal"? If you need to ask, Tim, you are probably beyond help.