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Tuesday, June 24, 2008

EU = environmentally unfriendly

Some people will excuse the most disastrous policy failures - as long as the "intentions" behind the policy were good.

They will explain away, cover up or distort the evidence of failure in order to protect good intentions from the harsh winds of reality.

The EU's environmental policies seem to be a particular case in point.

Example: being Emissions Trading obsessives we seized on this recent study from MIT with glee. But sadly, it is complete tripe.

They say that the scheme has been a great success:

"Verified emissions in 2005-06 were lower than EU emissions in 2002-04, even after allowing for plausible upward bias in the pre-2005 data."

"In a preliminary but detailed analysis of this data, Ellerman and Buchner (forthcoming in Environmental and Resource Economics) concluded that a reasonable estimate of the reduction in CO2 emissions attributable to the EU ETS lies between 50 and 100 million tons for each year, or between 2.5% and 5% from what emissions would have been without the EU ETS."

Why oh why are people still claiming that the first phase of ETS was a success? It clearly wasn't.

Firstly, there are simply no comparable numbers for 2002 or 2004. The data just doesn't exist, so no meaningful comparison can be made. For a supposedly academic paper to make such a glaring error is unforgivable.

Secondly, if you look at the numbers that do exist, it is crystal clear that emissions have gone up under the EU scheme - just under 2% up. EU industry now emits 37 million tonnes more Co2 than when the scheme started in 2005. That's the equivalent of the whole industrial output of Sweden and Ireland put together.

One response is to say that emissions would have gone up even more without ETS. But that quickly leads into an economist's fantasy world where more or less any number can be plucked out of the air by changing the baseline assumptions. Why say 50 million or 100 million tonnes? Why not virtually any other number?

The EU is a certainly world leader in talking about climate change.

But its record is poor: the failing ETS; a pro-biofuels policy which is good for the CAP but bad for the planet; a fishing policy the EU Commissioner responsible admits is "immoral", and a common agricultural policy which still promotes industrial farming. Such massive policy failures drown out the individual efforts of millions of people who have diligently remembered to turn down the thermostat and not leave the telly on standby.

But hey, you can never do the wrong thing as long as your intentions are good, right?

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