Posts in Category: Politics

Brexit predictions

Wednesday 29th June 2016

So Leave won it. Probably fair to say it’s not the result anyone expected, but there we are.

As I write, the pound has slumped, markets hugely down, and both main parties are looking for new leaders1.

I called the result completely wrong, but here’s my stab at predicting what will happen next:

  • There will be a recession this year. There would probably have been a recession in the next year or so anyway, but the referendum means it will happen sooner.
  • The £ and markets will recover. The current turmoil is due to uncertainty as much as anything else; once we know what Brexit looks like, things will improve as people gain confidence again.
  • We will leave the EU. Despite the result this isn’t actually a given, but I think politically it would be very difficult not to leave, given the result. That being said…
  • The UK will join/stay in the European Economic Area. This keeps us in the single market, and will retain the freedom of UK nationals to live and work in the EU (and vice-versa). This point is too important to the UK economy that I can’t imagine a scenario in which some variant of this doesn’t happen. This will mean that despite the illusion of change, things will essentially stay the same2.
  • Boris won’t be PM. I’m not sure about this – at the moment he’s the frontrunner – but I think he has too many enemies amongst the Tory party. That said, I wouldn’t be surprised if he does become leader, because the party is currently going about things in a pretty grown-up way. In stark contrast to…
  • Labour. I think we’re witnessing the death throes of the Labour party. The Parliamentary party will force a leadership election, Corbyn will stay on the ballot and will win – again – with the membership. I think at this point Labour has to split, with the grown-ups leaving to create a modern left-wing party (think New Labour without the baggage). This will leave the lunatics free to do what they want with Labour, and pave the way for the party to fizzle into insignificance.
  • There will be another General Election before 2020, but not in 2016. Labour (or their successor) needs to sort themselves out before they vote for that.
  • Nicola Sturgeon will pretend to call for a second Scottish referendum, without ever really asking for it. She knows she’d lose, and that even if she wins establishing an independant Scotland would be an impossible task.

I guarantee I’ll be wrong about half of this (I’m less certain about the party political stuff), but thought I’d put it out there anyway.

  1. Corbyn hasn’t technically left Labour yet, but it must happen soon []
  2. Hurrah for modern politics! []

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Tuesday 21st May 2013

There’s an argument made that the reason the UK’s economy is struggling is because the government is cutting spending. This line of logic originates with the work of John Maynard Keynes, who theorised that economic output is influenced by the total amount of spending in the economy, called aggregate demand. He argued that aggregate demand drops in recessions, and that when this happens the government should provide fiscal stimulus to make up the shortfall.

A key signal of aggregate demand is the unemployment level: higher unemployment, lower aggregate demand. In other words: in a recession lots of people lose their jobs, and so there is less spending in the economy, therefore the government should spend more money to make up the difference.

It’s an interesting idea and it might even be true. However, it is argued that this is the situation that Britain is in now, and so more fiscal stimulus is needed to help the recovery. But that doesn’t really stack up.

The signal for aggregate demand is unemployment, and one of the curious things in Britain throughout the downturn is that unemployment hasn’t actually risen that much, compared to the change in economic output. In fact, the drop in labour productivity during the downturn has had a lot of economists somewhat puzzled.

So if unemployment hasn’t risen, there can’t be a problem with aggregate demand. Fiscal stimulus solves aggregate demand. So why do we want more fiscal stimulus?

In fact, you could possibly argue the opposite. Yes, there have been real cuts in government spending, but actually they haven’t been that significant. The British government is still spending a historically high amount, and still has one of the largest deficits in the world. So the government has been providing fiscal stimulus, and that’s why unemployment didn’t rise as much. It might be true, I have no idea. It’s an interesting idea though, and if it is true it surely vindicates a lot of the Keynesian viewpoint.

So why is no-one making this argument?

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Well played, sir

Friday 2nd November 2012

So you’re a Republican Governor. You’ve been in the role since 2009, and coming up to the end of your first term. You’re the first Republican to win a statewide election in your state in over a decade, and during your time as governor you’ve built up a formidable reputation. Although people told you that you should, you elected not to stand for the Republican Presidential nomination. So some other guy gets nominated, and obviously as the election nears you play your part. Talk him up, talk down the other guy. All standard stuff.

And then a fucking big storm hits your state. And then you do this.

Governor Christie, well played.

You can see the logic. This guy is good. He’s done a good job as Governor of New Jersey, and had he stood I think he would’ve had a very good chance of getting the nomination. So why didn’t he stand? Well, if your assessment that the incumbent is likely to win, you might not want to stand against him. Because if you do, and lose, then that’s it, that’s your shot. Surely better not to run, to try in 4 years against the next Democratic nominee, who won’t have the advantage of incumbency. As a bonus, you can spin it as loyalty to the people who elected you as governor, and by distancing yourself from the election now, you also distance yourself from the nutters that currently comprise the GOP.

I kinda hope this is right. Christie seems to have done a good job as Governor; he’s done sensible stuff, and has actively tried to work with the other party. He would be a substantially better President than either of the numpties that are currently on offer (although I realise that isn’t saying much).

Of course, all this is skewered if Romney wins next week. On the subject of that… I think I’m right in saying that in the UK, most people would see Obama as the better candidate. In fact I think I saw a thing in the news recently about the results of a survey carried out which said that, if they had a vote, something like 75% of Britons would vote for Obama. I’m not sure why, because Obama has been a fairly mediocre President. Sure, he’s been better than Bush Jnr, but I don’t think that’s really an acceptable benchmark. So I’m biased towards Romney purely because he’s The Other Guy.

But would he do a good job? During the campaign Romney has been chameleonic, blending himself to fit in with the views of whoever’s nearby, to try to win their vote. That’s probably logical. I think he’s generally a moderate candidate, and he’s had to at least appear more hardline to win the support of the whackjobs in his party in order to secure the nomination. My instinct is that he’d probably be marginally better than Obama as a president, but it’s really hard to tell because he’s currently saying anything to win votes. So of the two, if I had a vote, I’d pick Romney over Obama; I’d prefer to take a chance on someone who’s unknown, rather than stick with someone who we know has done a bad job. But the choice is kinda like picking which limb you’d like to cut off; there’s no good answer, only a least bad one.

But we need Obama to win so Christie can stand in 2016, so that America can have a decent President for the first time since Clinton left office… Obama for President!

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Thursday 28th June 2012

A little while ago the US Supreme Court upheld President Obama’s healthcare reforms, officially named the Patient Protection and Affordable Care Act, but called Obamacare by everyone else. The latter takes less time to type, so that’s what I’m gonna call it for the rest of this post… Anyway, rather predictably the reaction seems to be fairly mixed. One group thinks judging the individual mandate (I’ll come to it in a minute) constitutional is a grave mistake and, ahem, “un-American”. The other group seems to largely think that the first group is nutty, and that Obamacare is a Very Good Thing Indeed. My reaction was to realise that I don’t really know what Obamacare is all about, and to try to find out.

So I’ve spent a little bit of time doing that. I’m still not entirely sure I’ve got all of it, so I might’ve missed things out or misunderstood them, but from what I can ascertain here are some of the key features of the reforms.

Firstly, they’ve introduced an individual health insurance mandate. This says that individuals who do not receive public health insurance (Medicare or Medicaid) or private insurance through their employer, must purchase an approved private insurance policy, or otherwise pay a penalty. This is the basis of the question of constitutionality; because it essentially requires individuals to purchase a service from a private company, whether they want to or not. I kind of have some sympathy with this; it is a restriction of freedom, even if it is relatively trivial in comparison to other types of restrictions. I believe that the motivation for introducing this change is that uninsured patients cost more money, because they don’t get problems looked at until they’re severe enough to take them to A&E, where (presumably) someone else picks up the tab.

So that is a trade-off between individual liberty and overall utility. Personally, I can see both sides of that argument, and I think that either opinion is a respectable one to hold. As it turns out, I think that the Supreme Court ruled that the individual mandate is unconstitutional, but that the penalty you must pay if you don’t want to have insurance is actually a kind of tax, and it is constitutional for the government to impose such a tax. Interesting argument. Mostly I reckon that this basically highlights one of the key problems with having a constitution, but that’s something for another day.

Another effect of the reforms is to impose more stringent restrictions on the providers of health insurance. Insurers can no longer stop offering coverage to people who get sick. Insurers are also required to offer the same rates to applicants of the same age or who live in the same location. So they can’t hike up someone’s rates because they have a history of poor health, or are recovering from illness.

I can understand why some people might be upset at these changes. Insurers might end up losing money on some policies, and people who are always healthy might have to pay more for their policy to subsidise the loss-leading policies of people who are ill. But really, these are pretty poor arguments. If you get ill, that’s a shitty situation in itself. Being ill and then being told you have to pay more insurance – or that it’s being dropped entirely – is a bit of a kick in the teeth. It seems to me to be a good thing to try to stop that from happening.

Another restriction has been the banning of coverage caps. Previously, many (most? all?) insurance policies had clauses which capped the amount they’d pay out for healthcare, either on an annual or a lifetime basis. So someone might get ill, have a load of expensive healthcare, and then get to a point where they’d reach their coverage cap and their insurance provider would stop paying for treatment. Again, this seems to be a pretty shitty practice, so it’s probably good that they’ve banned it.

The reforms also see changes to Medicare and Medicaid, as well as the introduction of subsidies to help people pay for private insurance. Medicare and Medicaid are publicly-funded health insurance schemes, for the elderly and the poor. They’ve been expanded, so more people can access them. Subsidies are for those who earn too much to qualify for public health insurance, but earn less than a certain threshold. Taxes on high earners (over $500,000pa) have been raised to help fund these programmes. I suppose this makes sense; if you’re gonna mandate that people have health insurance, at least help them out a little. But it does highlight one of the problems of the scheme, which I’ll come back to later on.

The American right think this is all a terrible idea, and keep banging on about “socialised healthcare” and mentioning communism. From what I can gather, it isn’t socialised medicine at all. It’s an expansion of socialised healthcare insurance with the expansion of the base for Medicare and Medicaid, but it’s an expansion of private health insurance too. One of the problems with the scheme – the thing they’ve used to try to get it reversed in the courts – is that it requires people to pay money for private health insurance whether they want to or not. You can’t get upset about that whilst also claiming that the plans introduce communism into American healthcare. The two positions are contradictory.

The scheme is an expansion of health insurance to try to get 100% coverage; it’s also an attempt to try to ensure better healthcare by reining in some of the weird behaviours of private insurers (coverage caps etc). Judged purely on the basis of “how to make a good healthcare system”, it actually seems like a fairly decent idea. We know that public health insurance with private health provision can work well; that’s what they have in much of Europe, and those systems generally outperform other forms of healthcare system. It seems like the reforms fix some of what is wrong with American medicine – the lack of access – to try to move it closer to those types of European health systems. This seems to me to be a good idea.

What I find fascinating is that so many people in Britain are so supportive of these plans. The British Government is trying to introduce a health system that is sort of a hybrid between socialised medicine (i.e. provided by the state, what we have now, doesn’t work very well) and what Obama has just introduced. If the British Government went the whole hog and introduced the changes that Obama is making, there would be uproar. Why are these changes good in America, but bad in Britain?

Some other thoughts. These changes might make the health system better, but they’re also likely to cost a lot of money. The increased taxation (on individuals, and on business) will reduce economic growth, as will the imposition of more regulation on employers and individuals. I also don’t really understand why the government has increased taxes on medical supplies; ostensibly it must be to pay for these changes, but the cost will surely get transferred back to those who pay for treatment. To put it another way, the tax they’ve introduced to pay for more medical treatment will increase the cost of medical treatment. Doesn’t seem clever to me.

In the past few years, the key problem that’s faced every government has been how to deal with the economy; that’s what every world leader should be laser-focussed on. Instead, Obama spent a lot of time and effort trying to pass these reforms. But not only did he get distracted by them, the changes he’s made have actively made it harder for the economy to recover. Now, the reforms might be great; they might make healthcare in America much better, and perhaps that justifies it all. But the fact that he let this distract him from the economy – the major concern of our time, and most likely the fundamental issue of his presidency – surely calls his judgement into question.

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Stop Kony. And then what?

Thursday 8th March 2012

So you’ve probably seen the Kony 2012 video, or at least heard of it. I only got around to watching it this morning, and to be honest it made me feel rather uncomfortable. Not uncomfortable because of  Kony and his Lord’s Resistance Army (although clearly he and it are thoroughly unpleasant), but rather because of the style and presentation of the film. There are a few things which irked me, but my main problem is that it spends more time showing the film maker (and his son) and showing all the stuff he’s doing, than it does explaining what’s happening and why.

Here’s part of an article from Foreign Affairs magazine a few months ago (emphasis added):

“During the past decade, U.S.-based activists concerned about the LRA have successfully, if quietly, pressured the George W. Bush and Obama administrations to take a side in the fight between the LRA and the Ugandan government. Among the most influential of advocacy groups focusing specifically on the LRA are the Enough project, the Resolve campaign, the Canadian-based group GuluWalk, and the media-oriented group Invisible Children. Older agencies, from Human Rights Watch to World Vision, have also been involved. In their campaigns, such organizations have manipulated facts for strategic purposes, exaggerating the scale of LRA abductions and murders and emphasizing the LRA’s use of innocent children as soldiers, and portraying Kony — a brutal man, to be sure — as uniquely awful, a Kurtz-like embodiment of evil. They rarely refer to the Ugandan atrocities or those of Sudan’s People’s Liberation Army, such as attacks against civilians or looting of civilian homes and businesses, or the complicated regional politics fueling the conflict.”

I think what mostly made me uncomfortable about the video is not that the film makers simplified the situation, it’s that they barely try to talk about it at all. Kony may be a terrible person, but history has shown that when powerful states intervene in a region to remove one person, the likelihood is that someone else will step into the power vacuum. To quote Foreign Affairs again (emphasis added):

“Beyond the ins and outs of dealing with Kony, the political challenges in the region are simply too massive for Obama’s new operation to yield much fruit. The violence in Uganda, Congo, and South Sudan has been the most devastating — anywhere in the world — since the mid-1990s. Even conservative estimates place the death toll in the millions. And the LRA is, in fact, a relatively small player in all of this — as much a symptom as a cause of the endemic violence. If Kony is removed, LRA fighters will join other groups or act independently.

Until the underlying problem — the region’s poor governance — is adequately dealt with, there will be no sustainable peace. Seriously addressing the suffering of central Africans would require engagement of a much larger order. A huge deployment of peacekeeping troops with a clearly recognized legal mandate would have to be part of it. Those forces would need to be highly trained, have an effective command structure, be closely monitored, and be appropriately equipped with sophisticated surveillance equipment and helicopters, among other things. It would require a long-term commitment and would be targeted not only at chasing the LRA. Moreover, it would make the protection of the local populations a key priority. Finally, the deployment of such a force would need to have emerged from concerted efforts in international diplomacy[…] not as a knee-jerk reaction to the most recent media splash.

I’m not trying to say that it’s a bad idea to get rid of Kony, I’m saying that I don’t know enough about the situation to be able to form an opinion. And it unnerves me that people can form an opinion based upon just seeing that film, that they’re so willing to jump on a bandwagon seemingly without question. Because to my mind, to be able to form an opinion on something like this would take a lot of time and effort to learn about the complexities of what’s going on in the region; watching a 30 minute propaganda film just isn’t enough to allow anyone to say what should or shouldn’t be done.

P.S. This blog post by a Ugandan journalist makes some other very excellent points:

“Many African critics unsurprisingly are crying neo-colonialism. This is because these campaigns are disempowering of their own voices. After all the conflict and suffering is affecting them directly regardless of if they hit the re-tweet button or not. At the end of the day the Kony2012 campaign will not make Joseph Kony more famous but it will make Invisible Children famous.”

And… Oh, basically go and read all these links if you’re at all interested in this issue. You’d do much better to spend half an hour reading through some of those, than to spend it watching the video.

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Comparing two Observer articles…

Sunday 5th February 2012

First from a 2001 article by Andrew Browne, then the health editor of the Observer:

“Even as you read this, in almost every hospital in the country, there will be elderly, vulnerable people left for hours and sometimes days on trolleys. Each year, thousands of British people – the young, the old, the rich, the poor – die unnecessarily from lack of diagnosis, lack of treatment and lack of drugs. They die and suffer unnecessarily for different reasons, but there is just one root cause: the blind faith the Government has in the ideology of the National Health Service, and our unwillingness to accept not just that it doesn’t work, but that it can never work.”

“…we must abolish the NHS as we know it, abandon our unique obsession that all health care should be free, and become as comfortable with mixed public and private medicine as they are elsewhere in the developed world.”

It’s tragic that so many of his criticisms still seem to be valid.

Secondly, Ed Miliband on the Government’s proposed healthcare reforms:

“That bill remains what it was in the beginning: a misguided attempt to impose a free market free-for-all on our National Health Service.”

As Browne noted, other countries have mixed private and public health systems. Those healthcare systems are the best in the world. Miliband is criticising the reforms because they’re too similar to the best healthcare systems in the world.

Words fail me.

From the first article again:

“The noble ideology of communism had to be ditched because it didn’t work. So the noble ideology behind the NHS should be ditched because it costs lives. We should ditch the ideology and ditch the NHS.”

Quite right.

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How to make a stimulus stimulating

Tuesday 13th December 2011

Here’s an interesting video on why the American stimulus has pretty much failed to do what it was designed to do:

I’m not going to claim that it definitively explains why the stimulus didn’t work. As far as I can tell it was made by a libertarian think-tank – so possibly some bias there – and it really only gives anecdotal evidence. Nevertheless I think it’s objectively fair to say that the American stimulus did fail, that we know that governments aren’t very good at spending money efficiently*, and so at the very least the explanation that is given in the video is plausible.

For the sake of argument, let’s assume that a stimulus was the right response for America in 2009, and that the problem was that the money wasn’t spent very well. Well, surely a more sensible approach would’ve been to use the stimulus money to lower taxes? Increasing the personal allowance on income tax (assuming they have this in America; I know it works differently because of State and Federal governments) seems like one reasonable way to do this, which would be pretty progressive too I imagine. Take less money from people so that they have more to spend, because people tend to spend money more usefully than governments do.

I suppose that it’s possible that the actual result might have been that people would’ve paid back some of their debts, rather than spend more money. I’m not sure if that would necessarily be a bad thing, but I guess it’d detract from the actual aim (to quickly stimulate growth). But if that’s true, it doesn’t necessarily follow that tax cuts would be less effective at stimulating growth than extra government spending was. And I think it’s pretty certain that if people used tax rebates to pay off debt, it’d do much less damage than does wasted government spending. If the stimulus is used to pay back debt, then we can probably think of it as a “deferred” stimulus; debt is paid off now, so that people can spend more in the future.

I’d like to make clear that I don’t necessarily think this is what the American government (or the British, for that matter) should’ve done. Fundamentally, I think that the economy would’ve been in a better situation in taxes and government spending were generally lower, particularly in the boom years. And I’m not really a fan of Keynesian economics in general (it seems way too full of magical thinking for my taste). But if we decide that a stimulus is a good idea, then it seems to me that cutting taxation – taking less money from people when times are tough – would be much more effective.

I do wonder why so few Keynesians seem to advocate this course of action though…

I realise that lately I’ve tended to write lots about economics and finance and politics. Mostly that’s because it’s topical and I find it interesting, and because I’m learning about this stuff and writing about it is a good way for me to get things clear in my mind. If I write something, I like to be pretty sure that it’s accurate, so I end up going away and reading lots more. Today I’ve been learning about how fractional reserve banking works (which is rather less intuitive than I thought), so I guess this entry could’ve been even drier…

Anyway. My next blog post will probably be about aeroplanes.

* Lots of studies (for example) which have compared growth rates and tax rates in different countries show that there’s a negative relationship between the rate of tax (and thus the size of government) and growth rate (i.e. bigger government leads to less growth and poorer people). I did read one interesting paper recently (which I now can’t find) which found that up to a point, an increase in government increases growth. But that above a (comparatively low) level, the relationship is negative. That kinda makes sense; government is useful for some things. A country with a small government which – for example – just maintains the rule of law (i.e. provides courts, police etc) might be expected to have more growth than a country that doesn’t have these things. The trick is finding those things that the government can genuinely deliver efficiently, and stopping it from doing other stuff (in practise, it’s easy for politicians to pander to special interests; its a good vote winner).

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Thinking about climate change

Wednesday 23rd November 2011

Climate change is a significant topic that affects the lives of pretty much every living human. As such, discussions about the subject can often get quite heated, with two distinct camps. One side says that climate change is caused by carbon dioxide emissions, and that the consequences for humanity will be absolutely dire. The other side seems to claim that the climate isn’t changing, or that the other side are making things up. To stoke up their claims both sides resort to bad science, misrepresentation of good science, and lots of good old ad hominem attacks. Here are a few things which we know to be true, at least as far as we can be sure about these things:

  1. Climate is changing. It always has, it always will.
  2. Global temperatures have risen.
  3. CO2 levels in the atmosphere have risen in the last circa 200 years, driven by industrialisation.
  4. CO2 is a greenhouse gas. Its presence in the atmosphere does have a warming effect (we’re dependant upon this for our survival!)

Sensible discussion of the topic has to start from at least these facts, as they represent the state of our current knowledge. It is ridiculous to claim that any of these 4 are untrue, because as far as we know all the evidence suggests that they’re not. But equally, sensible discussion of this topic cannot simply stop here. Because these facts raise some questions which need to be answered before we can devise any meaningful response to this issue:

  1. To what extent does CO2 cause changes in temperature? If there is x amount of CO2 added to the atmosphere, what is the corresponding change in temperature?
  2. To what extent is this a problem? What is the cost of doing nothing to stop climate change?
  3. If we can find ways to reduce/stop CO2 emission, what are the costs of doing so?

To think about those three questions, I’ll break them down into the appropriate subject areas. Question 1 is about the science, about working out what’s happening with the climate. Question 2 is about how we can deal with the effects of climate change and the cost of doing so, and so is really about engineering. And the heart of the third question is about reducing the reliance on energy sources which cause CO2 to be emitted (as energy use is the principal cause of CO2 emissions).


When we’re talking about climate, we’re talking about a huge, chaotic system. To start to understand how it works, we’re talking about modelling the flow of fluids (namely water and air) across the entirety of the Earth’s surface, taking into account countless different variables and the way they interact with each other. This is really hard to do, at least with any accuracy. And it’s really hard to look at such a system and to derive the effect that one particular variable has (namely CO2 concentration). So to come back to the first question I posed. Do we know the extent to which CO2 causes warming? No, we don’t. We can run all kinds of models to find some sort of estimate, yes, but finding out whether that model is accurate is not a trivial problem.

There’s lots of confusion about this, it seems. One side of the climate debate tries to make out that climate change is caused by anything but the activities of mankind, whilst the other is pretty set on the idea that it’s all down to CO2. Both sides vilify the other, and that doesn’t really make any sense. We can’t yet say – with any certainty – what effect the CO2 generated by our activities is having on the environment; but CO2 is a greenhouse gas, so it really isn’t a leap to say it’s having some effect.

A good example of this problem can be found when we examine the temperature change over the last decade, and compare it with the change in CO2 concentration in the atmosphere:

Temperature data are global averages from the HadCRUT3 dataset of temperature records. CO2 concentrations recorded at Mauna Loa Observatory, Hawaii.

The basic theory is that CO2 is causing mean temperatures to increase, and yet looking at the above graph, it’s rather hard to find such a relationship. HadCRUT and BEST both show that there has been no warming in the last decade (in fact, the HadCRUT data used here show that mean temperatures have decreased very slightly), even though CO2 concentration has steadily increased. More than likely, we can’t draw too many conclusions from this; 10 years is quite a small period of time when discussing climatic events which take place over a significantly longer amount of time. But at the very least, it causes us to question the claims about the significance of CO2. Because if CO2 really is as dangerous as we’re told, has such a dominant effect that we need to make drastic steps to reduce the amount we emit, we really should have seen accelerated warming in this period.

Now, for the sake of clarity, I am most definitely not saying that CO2 does not cause warming at all; simply that we haven’t properly quantified the warming effect that’s caused by our CO2 emissions. And that, whilst the temperature rose during the 20th century, we probably don’t know the whole story of why that happened; most likely it’s been caused by a number of things, and human activity could be a large or a small component (for instance, we know that solar activity has increased during the last few decades). Climate is variable, it always has been and it always will be, and so there isn’t a steady baseline to make comparisons from. We can’t say that CO2 and temperature have both risen, therefore increased CO2 has caused the temperature rise; it simply isn’t that straightforward. And it’s rather foolish to dedicate lots of resources to the cessation of CO2 emission, when we don’t know whether that really is causing unnatural climate change.


So. For the sake of argument, let’s ignore everything I’ve just said. Let’s make the assumption that CO2 is driving climate change, and that if we continue to pump it into the atmosphere it’ll cause a global temperature rise that will cause the environment to change. How could we deal with that?

Fundamentally, this is a problem about the maintenance of the natural and built environment. That’s not a new issue, we’ve been doing this for millennia, and engineers have been doing it using a scientifically rigorous approach for centuries. It’s what Civil Engineering is all about, and we’ve gotten pretty good at it by now. So, let’s look at one particular issue that is likely to be a problem, should global temperatures continue to rise: higher sea levels.

The first step in solving an engineering problem is to work out what exactly the problem is, so we’ve got to find out how much the sea is likely to rise. At the moment, the consensus seems to be that the sea level will rise between 75cm and 2m in the next 100 years. It’s quite hard to visualise what that looks like, what that really means for us. Happily it’s quite easy to model this, to see which bits of land will be flooded after a given change in sea level:

Map of British Isles with 2m rise in sea levels. Areas of land which are below the increased sea level are shaded blue. Source:

Not a particularly significant change, actually. The worst-affected area is landlocked anyway, so I guess it might not be encroached by the sea, although flooding may become more likely. But if we really wanted to, these are problems which we can easily solve. If a place is under threat from a 2m sea level rise, then we can build a dyke (or similar) to stop it from being flooded. If flood risk in a region is increased, then there are lots of techniques we can use to deal with that too. Or, in some cases it might be best to simply move away from the areas which are likely to flood, as there’s still plenty of higher land left. None of these approaches should really be that costly, certainly in comparison to some of the alternatives.

These problems can be solved, and in many cases are already being solved. It’s also worth mentioning that on the global scale, climate change might actually cause positive effects in some locations, for example by moderating the climate of places which are currently very cold. And so when we examine these issues to try to think about how to deal with the possible effects of climate change, it quickly becomes apparent that this is something that we know how to do, and that climate change really isn’t the end of the world.


Now let’s go even further with our assumptions by saying that we’ve decided that we should try to reduce the amount of CO2 we emit. The largest cause of anthropogenic CO2 emission is the burning of fossil fuels for energy. Therefore to make a meaningful reduction in emissions, we must use alternative sources of energy as much as possible.

Several countries have agreed to targets to reduce their CO2 emissions, and there are several policies which are in place to try to achieve this. Firstly, there are high taxes on CO2 emission, in order to discourage activities which cause pollution. There are also subsidies available for the production of certain (supposedly) sustainable sources of energy – wind power, solar power, etc. – to encourage people to install these facilities. And to try to make current fuels “greener”, a certain amount of bio-ethanol is blended with petrol and diesel used for transport.

There are problems with this: it’s expensive, and often grossly unfair. Taxes on energy affect everyone; directly in the price we pay for transportation, heating and electricity, and indirectly in the price we pay for goods. You might argue that, well, we’re wealthy, and we can afford it. And we probably can. If we think it’s an acceptable trade-off, then we can probably afford to sacrifice some luxuries, or lose a certain amount of investment – and jobs – even with the current state of the economy. It makes life difficult for ourselves, but not impossible.

Subsidies are less excusable. It’s the classic argument that subsidies distort the market and make it less efficient. Which is a good argument; we want to use alternative sources of energy when it’s actually efficient to do so, not just because we think we should, as that simply makes energy more expensive than it needs to be. This is also deeply unfair, as it benefits those who can afford to invest in “green” energy, at the expense of those who cannot. Frankly, I think it’s inexcusable to drive up energy prices for the majority with a scheme to provide cheap energy to the minority who are wealthy enough to buy into the scheme.

On the subject of unfairness, there’s also a broader point to be made. Firstly, we’re telling poorer parts of the world that they need to not emit CO2, but often the only affordable sources of energy available in such parts of the world are those which cause lots of CO2 to be emitted. So in a way, we’re asking less developed parts of the world to stay undeveloped, to stay poor. Which limits access to things like healthcare and education in those parts of the world, and so undoubtedly causes a huge amount of damage (or rather, it would if they all listened to us).

On top of this, we impose “green” policies which directly cause actual damage. For example, the requirement that fuels be blended with bio-ethanol has had the effect of raising the price of some foods. This increased price has meant that some people simply haven’t been able to afford to eat, which is thought to have caused at least 192,000 extra deaths last year. Some of the poorest people in the world are being starved because we want to burn their food to reduce our CO2 emissions. Whatever your views on climate change, that should make you mad.

What should we do?

The point that I’m trying to make is that our approach to climate change needs to be more intelligent. The science is very complicated, and probably not well-understood enough to be the basis of policy decisions which can have profound effects. We cannot say with confidence that we are the cause of the changes in climate that we observe.

Given this, it seems sensible to have a different approach to dealing with climate change: to analyse the costs and the benefits of the situation, to work out what really is the best course of action.

The cost of doing something about the possible threat of anthropogenic climate change is massive, as it calls for a fundamental change in the way we do things. It calls for us to abandon the sources of energy which allow us to access many of the resources we need to maintain our standard of living, and it calls for us to deny poorer parts of the world the opportunity to grow and develop and improve their basic standard of living. That is a massive cost. Given that the modest things we’ve already done have resulted in hundreds of thousands of deaths, it’s scary to consider the possible cost of doing more.

Additionally, the potential benefits of reducing CO2 to combat climate change are comparatively small. All we’d do is avoid a certain amount of engineering work which would be required to adapt to the changing environment. It’s not clear that we’d save all that much; the built environment will need to be maintained in the coming years regardless of climate change, and so all we’d do is change the parameters of problems that need to be solved anyway. But solving those problems becomes infinitely easier if we maintain our access to cheap, abundant energy.

Fundamentally, it seems to me that our response to the possible threat of anthropogenic climate change is wholly disproportionate. We’re causing more harm than we could ever hope to stop; we’re spending lots of money (and causing lots of deaths) for solutions that might not work, for a problem that probably isn’t that severe. Whatever way you slice it, that isn’t an intelligent trade-off.

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The Eurozone

Wednesday 2nd November 2011

It’s a bit like a bad joke at the moment.

Last week, the Eurozone leaders announced their latest agreement to save the Euro. Essentially, what they announced was what it is that they’d like to do, but they haven’t really worked out the details of how they’ll do it. It’s only small details that are left to sort out, for example where exactly the money is going to come from…

So they haven’t really agreed much at all. And the stuff they did agree, doesn’t even solve the underlying problem. So for the umpteenth time, the EU leaders have just kicked the can down the road.

Straight after it was announced, some people were sort of facetiously wondering how long it’d take before the plan would fall apart. As it turns out, less than a week! Because the Greek leaders have decided to have a referendum about whether to sign up to the plans. EU leaders aren’t used to the concept of people having a say on Europe, so this has perplexed them. And everyone is worried that when the referendum takes place next year, the Greek voters will give the wrong answer.

Meanwhile, Greece is on track to have a primary surplus by 2012. Which will mean they can safely default, and the EU can go screw themselves…

What’s amazing is just how dysfunctional it is. The Eurozone leaders get to ponce around, looking self-important whilst managing to completely dodge the issue, making it all the more likely that the whole thing goes tits up. It would be quite hilarious to watch, if it weren’t all quite so serious.

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Ranting about occupations

Tuesday 25th October 2011

If you’ve seen the news recently, no doubt you’ve heard about the various “occupations” which are occurring in various places. It’s all spread from “Occupy Wall Street” in the States, and in the UK we have our own version in “Occupy LSX”, who are currently occupying that well-known fortress of capitalism, er, St. Paul’s Cathedral. Hmm, oh well.

As far as I’m aware, one of the main messages that they’re trying to get across is the idea of the “99 percent”; or the idea that 99% of people are struggling in the current economic climate whilst 1% are prospering, and that the 99% are angry. It’s a simple idea. Okay, for all sorts of reasons it’s also a little bit inaccurate, but the general thrust is good enough. Because fundamentally, the protesters are probably right to say that most people should be pretty pissed off at the state of our economy. But the protesters are angry at banks and stock markets (wtf?) and capitalism in general. This seems to me to be a little bit confused. Do they really want to dismantle capitalism?

A protest, last week.

Capitalism is generally taken to mean things like the right to private property and to free trade. And are the Occupiers honestly against those things? Well, if I went down to the  occupation camp and tried to pinch their big anti-capitalism sign, one of their tents, or the iPhones they use to post updates to Twitter (yes, the poor 99% who can afford some of the most expensive consumer electronics in the world), I think they’d be rather keen to uphold their right to private property. And are they against free trade? Well, by choosing how to use their labour, arguably they are exercising precisely that right. Because a part of free trade is the right to freely trade your own labour; and in this case, the occupiers have exercised that right by choosing to use their labour to protest the state of the economy (and so one can argue that implicit in their protest is the idea that they’re protesting against their right to hold that protest. Consistency FTW!). If the government (or anyone else) tried to remove that right – by arresting the occupiers, for instance – then I’m confident that they’d be pretty upset.

So to be angry at capitalism is, I think, a mistake. At least, it’s a mistake to be angry at properly-implemented capitalism. OccupyLSX shouldn’t necessarily direct their anger at the banks or stockbrokers (unless they own shares in a bank which has lost value, in which case, feel free). They should be angry at governments, for oh so many things. For allowing themselves to be open to lobbying, and bowing to the influence of vested interests. For meddling too much in the economy, trying to maintain the housing bubble which lead to this crisis. For the arrogance of the Euro project and repeating the mistakes of the past. For spending too much in the boom years, ramping up debts which we now need to repay. For breaking one of the golden rules of capitalism – that bad businesses must fail – by bailing out the banks which behaved so irresponsibly prior to the downturn.

The problem isn’t capitalism; at least, not capitalism in it’s proper form. The crisis is not the failure of economic liberalism, and the answer is not something like a laughably-impractical “Resource-Based Economy“. Actually, we want our government to be more liberal; to spend less, to leave more money in the pockets of the populace, and to not interfere in matters best left to the market. Because when you trace it back, a good chunk of our problems stem from bad government interventions, or the “crony capitalism” we see at present.

Of course, this would involve politicians deciding to make themselves less powerful. And I have a sneaking suspicion that the type of person most likely to want to be a politician, is not the type who is likely to take power away from themselves once they’ve gained it. So we’re probably screwed.

Photo by flickr user wheelzwheeler, licensed under Creative Commons.

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