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It's said that, when investing, the reaction to the news is more important than the news itself.
Keeping with that theme I have been expecting, and have now begun to notice, a subtle change in tone from politicians, other officials and MSM on the subject of energy policy and direction compared to the pronouncements following the cyclical peak in crude oil back in July.
Will the NND take longer to arrive than anticipated?
Way back then [$147 oil seems like a long time ago, doesn't it :rolleyes:] there was much talk of completely restructuring economies around [pick your favourites from: alternate/renewable/green/carbon-free/responsible/secure] energy. Imbedded in these policy proposals were all manner of new taxation ideas to change behaviours by discouraging the use of [pick your favourites from: hydrocarbons/"dirty" oil/imported oil/carbon fuels/non-renewables/polluting energy].
Human nature being what it is, "saving the planet" from the evils of carbon emissions and "Big Oil" sounds fine. Until it actually starts to hit home in people's wallets. The trade-off between an immediate, measurable and personal cost versus a deferred, ambiguous, and shared benefit always seemed a tough political sell to me. In hard economic times, might it become nearly impossible?
The belated recognition of faltering economies, contracting business activity, rising unemployment, and the spreading disease of falling home prices (the last being an unfamiliar but deadly situation for elected officials :p) seems to be taking the edge off talk of society-reforming, climate-change motivated taxation and spending policies.
I was in the UK in late July when the utility companies started announcing stunningly large immediate increases in electricity and natural gas rates (20% to 45%). That precipitated the usual "band-aid" proposal from government. This has surfaced a delayed recognition that part of the problem just might be the past & present policies of the government itself. The middle class is not amused. And the poor, who were led to expect another "costless" (e.g. free) benefit, are probably not that happy either...On another front, the colonials in Canada, formerly desiring a reputation as progressive, sensitive, environmentally-aware citizens of the planet, seem to have had a remarkable change of heart. And in an equally remarkable short time - measured in weeks :eek:. The Government of British Columbia introduced, with much fanfare and, according to the polls, considerable public support, a new carbon tax on July 1, 2008. Since then the government's popularity has been sinking steadily.
From the pro-carbon tax "Carbon Tax Center" website [http://www.carbontax.org/]:The federal election campaign now underway in Canada pits the Liberal Party, with its "revenue-neutral" carbon-tax campaign platform, against the Conservative Party, that announced this week it would cut federal taxs on diesel fuel and aviation (jet) fuel if re-elected.
The proponents of taxing carbon are suddenly finding they must navigate a public opinion minefield using ever more twisted logic. The leader of the Liberal Party of Canada, on the one hand advocating increased taxation of carbon fuels to discourage their use, was reported this week in the Vancouver Sun thus: "The Liberal leader also said that he would toughen up the federal Competition Bureau to prevent petroleum companies from colluding to drive up gas prices." No prize for guessing which of these two positions is playing better with the ballot-casters.
So the questions that arise include:
Keeping with that theme I have been expecting, and have now begun to notice, a subtle change in tone from politicians, other officials and MSM on the subject of energy policy and direction compared to the pronouncements following the cyclical peak in crude oil back in July.
Will the NND take longer to arrive than anticipated?
Way back then [$147 oil seems like a long time ago, doesn't it :rolleyes:] there was much talk of completely restructuring economies around [pick your favourites from: alternate/renewable/green/carbon-free/responsible/secure] energy. Imbedded in these policy proposals were all manner of new taxation ideas to change behaviours by discouraging the use of [pick your favourites from: hydrocarbons/"dirty" oil/imported oil/carbon fuels/non-renewables/polluting energy].
Human nature being what it is, "saving the planet" from the evils of carbon emissions and "Big Oil" sounds fine. Until it actually starts to hit home in people's wallets. The trade-off between an immediate, measurable and personal cost versus a deferred, ambiguous, and shared benefit always seemed a tough political sell to me. In hard economic times, might it become nearly impossible?
The belated recognition of faltering economies, contracting business activity, rising unemployment, and the spreading disease of falling home prices (the last being an unfamiliar but deadly situation for elected officials :p) seems to be taking the edge off talk of society-reforming, climate-change motivated taxation and spending policies.
I was in the UK in late July when the utility companies started announcing stunningly large immediate increases in electricity and natural gas rates (20% to 45%). That precipitated the usual "band-aid" proposal from government. This has surfaced a delayed recognition that part of the problem just might be the past & present policies of the government itself. The middle class is not amused. And the poor, who were led to expect another "costless" (e.g. free) benefit, are probably not that happy either...
Gordon Brown's energy bill problem
Last Updated: 4:01pm BST 05/09/2008
Gordon Brown is under fire today after signalling that giving £100 energy bill vouchers to the poorest families is unlikely to happen. It was an ill-conceived idea, and given that Downing Street trailed the idea extensively, the backlash to its u-turn is entirely of its own making.
The Government wanted energy suppliers to fund the scheme, which would have inevitably raised Middle England’s energy bills even further for to pay an additional benefit to Labour’s client state. What the Government seems not to understand is that it is not just economically inactive households that are under pressure, but the middle classes too, which it has spent the past decade fleecing...
...Unfortunately, the Government’s policies over the past 11 years have been a major factor in higher prices. The introduction of a renewables obligation on all the energy suppliers has pushed production towards overly-expensive wind turbines which cannot provide the security of supply the country needs, nor provide electricity at an acceptable cost.
Meanwhile, the Government’s decade of dithering over the construction of nuclear power stations means it will be ten more years before we benefit from vital cheap supply they will provide...
Last Updated: 4:01pm BST 05/09/2008
Gordon Brown is under fire today after signalling that giving £100 energy bill vouchers to the poorest families is unlikely to happen. It was an ill-conceived idea, and given that Downing Street trailed the idea extensively, the backlash to its u-turn is entirely of its own making.
The Government wanted energy suppliers to fund the scheme, which would have inevitably raised Middle England’s energy bills even further for to pay an additional benefit to Labour’s client state. What the Government seems not to understand is that it is not just economically inactive households that are under pressure, but the middle classes too, which it has spent the past decade fleecing...
...Unfortunately, the Government’s policies over the past 11 years have been a major factor in higher prices. The introduction of a renewables obligation on all the energy suppliers has pushed production towards overly-expensive wind turbines which cannot provide the security of supply the country needs, nor provide electricity at an acceptable cost.
Meanwhile, the Government’s decade of dithering over the construction of nuclear power stations means it will be ten more years before we benefit from vital cheap supply they will provide...
From the pro-carbon tax "Carbon Tax Center" website [http://www.carbontax.org/]:
For months we've been touting the British Columbia carbon tax, and for good reason. Not only is BC's carbon tax the highest by far in North America ($10 per metric ton of CO2 this year, rising stepwise to $30 in 2012), but the rollout of the tax has seemed to be handled with great intelligence.
The Liberal Party provincial administration took pains to make the tax revenue-neutral (mostly via reductions in personal and business tax rates, a feature it underscored by sending B.C. residents $100 carbon tax dividend checks as a down payment in the week before the tax went into effect on July 1.
So we were dismayed to read in mid-July of a poll showing a clear majority of B.C.'ers opposed to the tax. Even the $100 dividends came off badly in the poll, with at least one respondent complaining that her check only served to remind her of the loathsome tax...
...The way in which tax cuts rise along with carbon prices is not transparent or seemingly automatic. The carbon tax revenue is not placed in a separate trust fund...but is blended with general revenue. It is then up to future legislatures to adjust the tax rates. This could reasonably make people skeptical...
The Liberal Party provincial administration took pains to make the tax revenue-neutral (mostly via reductions in personal and business tax rates, a feature it underscored by sending B.C. residents $100 carbon tax dividend checks as a down payment in the week before the tax went into effect on July 1.
So we were dismayed to read in mid-July of a poll showing a clear majority of B.C.'ers opposed to the tax. Even the $100 dividends came off badly in the poll, with at least one respondent complaining that her check only served to remind her of the loathsome tax...
...The way in which tax cuts rise along with carbon prices is not transparent or seemingly automatic. The carbon tax revenue is not placed in a separate trust fund...but is blended with general revenue. It is then up to future legislatures to adjust the tax rates. This could reasonably make people skeptical...
The proponents of taxing carbon are suddenly finding they must navigate a public opinion minefield using ever more twisted logic. The leader of the Liberal Party of Canada, on the one hand advocating increased taxation of carbon fuels to discourage their use, was reported this week in the Vancouver Sun thus: "The Liberal leader also said that he would toughen up the federal Competition Bureau to prevent petroleum companies from colluding to drive up gas prices." No prize for guessing which of these two positions is playing better with the ballot-casters.
So the questions that arise include:
- As the economy spirals down, with all the usual consequences on employment and so forth, will climate change and carbon taxes fall off the OECD political agenda?
- Could the recent demand destruction, falling prices and rising crude oil inventories defer immediate concerns about energy security [perhaps for a few years]?
- Could a "deflation scare" prompt OECD politicians to reverse anti-carbon motivated policies discouraging hydrocarbons, and undertake policies [such as fuel tax cuts and home heating subsidies] that actually increase consumption in an expedient effort to boost their recession-mired economies, and buy votes?
- If this all comes to pass, does it mean a material extension to the timeline before the advent of "The Next Bubble"?
- Or does it significantly increase the probability of that other, less desirable, outcome...No Next Bubble...?
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