A FATUOUS OBSESSION; in a Devastating Article, Former Chancellor NIGEL LAWSON Accuses the Coalition of Risking Britain's Economic Recovery with an Absurd Energy Policy That's Damaging Industry and Adding Hundreds of Pounds to Every Family's Annual Fuel Bill ... by Stealth; SATURDAY ESSAY
Byline: by Nigel Lawson
LAST weekend, some 52 (for the most part little known) economists signed a letter to the Observer newspaper calling on the Government to retreat from its commendably firm determination to reduce substantially, during the lifetime of this Parliament, the appalling budget deficit it inherited.
I am reminded of my own time as a Treasury Minister when, in March 1981, no fewer than 364 (rather better known) economists signed a letter to the Times claiming that 'present policies will deepen the recession, erode the industrial base of our economy and threaten its social and political stability' and should be abandoned forthwith.
In fact, from that moment, the economy embarked on eight years of uninterrupted growth.
I have no doubt that Chancellor George Osborne will, rightly, ignore the bad advice of the 52, just as we did of the 364. And indeed the International Monetary Fund has sensibly encouraged him to stand firm.
The economy is already recovering, slowly but incontrovertibly, from the recession.
However, there is a threat to that recovery -- and the bitter irony is that this is of the Government's own making.
It is not the very necessary reduction and eventual elimination of the budget deficit. It is the Government's so-called climate-change policy of 'decarbonising' the British economy -- the replacement of carbon-based energy with substantially more expensive non-carbon energy, in particular wind power.
THE ostensible purpose of this policy is to prevent what is customarily described as catastrophic global warming.
Now, there are at least two major problems with this.
The first, as more and more eminent scientists are finding the courage to point out (the most recent being the distinguished physicist Professor William Happer of Princeton University), is that it is far from clear that there is a serious problem -- let alone a catastrophic one -- of global warming at all.
My think-tank, the Global Warming Policy Foundation, has just published a devastating analysis by the former Head of the Civil Service, Lord Turnbull, demanding that politicians 'stop frightening us and our children' about the threat of global warming.
He calls on Whitehall and ministers to consider the damaging economic impact of blindly following the 'climatechange agenda'.
While it is scientifically established that increased emissions of carbon dioxide into the atmosphere from the use of carbon-based energy, such as coal, oil and gas, can be expected to warm the planet, it is uncertain how great any such warming would be, and how much harm, if any, it would do.
The second major problem with the British Government's policy is that even if it were thought to be desirable to cut back drastically on carbon emissions, this can have an effect only if it is done globally.
For the UK, responsible for 2 per cent of global emissions, to go it alone is futile folly.
And the complete failure of the UN-sponsored environment jamborees -- in Cancun last year and Copenhagen the year before -- to achieve a global decarbonisation agreement clearly shows that this is not happening and, in my judgment, is not going to happen.
China, the biggest global emitter, has made it clear that it will not accept any restraint on its use of carbon-based energy, as has India. (The annual increase in China's emissions, incidentally, is greater than the UK's total emissions.) And the U.S., the second-largest emitter, has made it clear that without China and India on board, there is no prospect of the U.S. signing up to anything.
The plain fact is that the world relies on carbon-based energy simply because it is by far the cheapest available source of energy and is likely to remain so for the foreseeable future.
The major developing countries, in particular, are understandably unwilling to hold back their development and condemn their people to avoidable poverty, by moving from relatively cheap energy to relatively expensive energy. …