Saturday, January 05, 2013
Looking for a widget!
Help wanted! We thought we'd found a multiple blog widget so you can follow all pages in one simple device, but the one we got can't be installed by readers. Anyone out there know a good one?
Friday, January 04, 2013
Airbrushing out The Queen
My wife asked me what this was, on the back of a pound coin:
... and on further investigation it seems that ever since this little metal thing was introduced into our system of exchange, the Royal Arms have been omitted (except for the 1988 design) in favour of a cycle of images from the regions.
Doubtless we'll be told not to take it too seriously, but it seems to me that the 1.5 billion pound coins are being used as yet another method to condition us to accept the "inevitable" breakup of the Union.
Another subliminal point, maintains the wife of a friend, is that the change from a banknote to a small coin was to help us not to expect so much for our money.
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
It's the Arms of the City of London:
... and on further investigation it seems that ever since this little metal thing was introduced into our system of exchange, the Royal Arms have been omitted (except for the 1988 design) in favour of a cycle of images from the regions.
Doubtless we'll be told not to take it too seriously, but it seems to me that the 1.5 billion pound coins are being used as yet another method to condition us to accept the "inevitable" breakup of the Union.
Another subliminal point, maintains the wife of a friend, is that the change from a banknote to a small coin was to help us not to expect so much for our money.
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Thursday, January 03, 2013
Nick Drew: Solar power the worst option for reducing carbon emissions
See The Energy Page for an industry expert's assessment.
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Nick Drew: Solar fad a waste of money
Energy expert and journalist Nick Drew has written a new piece for The Energy Page on cost-effective ways to reduce carbon dioxide emissions. Turns out that the fashion for roof-mounted solar panels is just about the worst possible option - read the full story here.
Nick is a regular contributor to the Capitalists@Work blog.
************
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Solar Power is Daylight Robbery
The UK government is very fond of claiming that its decarbonisation policy is being delivered at least cost to UK citizens. Irrespective of whether one supports the policy goal, one would at least like to believe them on the cost.
Sadly, their claim is a blatant falsehood; and we can see why this is by utilizing the government's own methodologies.
A very standard way of presenting the cost-effectiveness of measures that can reduce CO2 emissions is the Marginal Abatement Cost Curve (MACC) and we will look at some examples below. The basic concept is simple: for each measure, calculate the cost per unit of CO2 emissions reduced, and rank them from cheapest to most expensive on a bar-chart. If we pick (e.g.) a particular market segment, we can additionally plot the total absolute potential for CO2 abatement each measure can deliver in that sector (e.g. in tonnes), by making the width of each bar correspond to the amount.
Having ranked them thus, for a given target amount of reductions we can directly read off the cost of the most expensive measure required to achieve the target. And why would anyone institute measures that cost more than absolutely necessary ? Surely, they would exhaust the potential of the cheapest measures first, before proceeding to the more expensive.
Before looking at UK examples, it is interesting to note that in every MACC example one ever sees, the cheapest abatement measures are in fact profitable - that is, they pay for themselves - in some cases, handsomely so: their 'cost' is not just cheap, it is negative. (We will consider what this means in policy terms another time.) Our first example shows this aspect clearly: it comes from DECC and is the MACC of the total potential abatement identified in the UK 'non-traded' sector (the part of the economy not subject to the EU Emissions Trading Scheme), for the period 2023–27.
As can be seen, at the left-hand side there is around 90 MtCO2e abatement potential that pays for itself. We should only need to start paying for abatement if the target was in excess of that amount. The weighted average of the cost (by a complex calculation) is £43 per tonne, which coincides with an abatement potential of around 130 Mt - well over half the total. Even the most expensive measures plotted come in at under £250 per tonne.
This, then, is a baseline of sorts, and certainly gives some background perspective for considering the next chart, which is the detailed MACC for abatement potential in the UK residential sector through to 2020.
Note that solar power (PV generation) is well to the right of the curve, with a cost that towers over most of the measures available. (Solar water-heating is even worse.) Secondly, at £265 per tonne it is more expensive than any of the measures from the previous MACC.
A very obvious conclusion must surely be that solar power should not be receiving public money (via whatever mechanism) until the vastly greater potential that is available at very much less cost has been comprehensively exploited. Needless to say, the opposite is the case: residential solar power installations are heavily subsidized via our electricity bills, while huge amounts of cheaper - much cheaper - abatement potential lies dormant.
No end of sophistry is offered to defend this state of affairs. Costs of PV are falling all the time; many jobs have been created (mostly in China, of course); we need to create a level playing-field for all technologies (whatever that means). And there are all manner of nuances relating to the interpretation of MACCs - as DECC is keen to tell us (Box B5 here).
No amount of ratiocination, however, can deflect the accusation that subsidizing solar PV in the UK is indefensible from a cost perspective. And in straightened times, costs matter.
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Sadly, their claim is a blatant falsehood; and we can see why this is by utilizing the government's own methodologies.
A very standard way of presenting the cost-effectiveness of measures that can reduce CO2 emissions is the Marginal Abatement Cost Curve (MACC) and we will look at some examples below. The basic concept is simple: for each measure, calculate the cost per unit of CO2 emissions reduced, and rank them from cheapest to most expensive on a bar-chart. If we pick (e.g.) a particular market segment, we can additionally plot the total absolute potential for CO2 abatement each measure can deliver in that sector (e.g. in tonnes), by making the width of each bar correspond to the amount.
Having ranked them thus, for a given target amount of reductions we can directly read off the cost of the most expensive measure required to achieve the target. And why would anyone institute measures that cost more than absolutely necessary ? Surely, they would exhaust the potential of the cheapest measures first, before proceeding to the more expensive.
Before looking at UK examples, it is interesting to note that in every MACC example one ever sees, the cheapest abatement measures are in fact profitable - that is, they pay for themselves - in some cases, handsomely so: their 'cost' is not just cheap, it is negative. (We will consider what this means in policy terms another time.) Our first example shows this aspect clearly: it comes from DECC and is the MACC of the total potential abatement identified in the UK 'non-traded' sector (the part of the economy not subject to the EU Emissions Trading Scheme), for the period 2023–27.
 |
| Source: DECC |
This, then, is a baseline of sorts, and certainly gives some background perspective for considering the next chart, which is the detailed MACC for abatement potential in the UK residential sector through to 2020.
 |
| Source: Committee on Climate Change |
A very obvious conclusion must surely be that solar power should not be receiving public money (via whatever mechanism) until the vastly greater potential that is available at very much less cost has been comprehensively exploited. Needless to say, the opposite is the case: residential solar power installations are heavily subsidized via our electricity bills, while huge amounts of cheaper - much cheaper - abatement potential lies dormant.
No end of sophistry is offered to defend this state of affairs. Costs of PV are falling all the time; many jobs have been created (mostly in China, of course); we need to create a level playing-field for all technologies (whatever that means). And there are all manner of nuances relating to the interpretation of MACCs - as DECC is keen to tell us (Box B5 here).
No amount of ratiocination, however, can deflect the accusation that subsidizing solar PV in the UK is indefensible from a cost perspective. And in straightened times, costs matter.
* * * * *
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Wednesday, January 02, 2013
Does the stockmarket correlate with energy usage?
I've suggested recently that not only does modern money fail to act as a store of value, it is failing as a unit of account because of central bank/government interference in its quantity and distribution. It's an elastic ruler and its unreliable measurements are a factor in unsatisfactory decisions (misallocation of resources, as the monetarists say). So we look for alternative ways to assess relative advantage.
One more scientific-seeming (but complex) measure is energy. Professor Charles Hall adapted the notion of energy return on (energy) investment (EROI, or EROEI) from the biological sphere (where he began his studies) to human social-economic systems. This appears to be a promising method for analysing different forms of commercial energy production.
However, the entry linked above goes on to claim a correlation between the stockmarket and energy usage:
... a century's market and energy data shows that whenever the Dow Jones Industrial Average spikes faster than US energy consumption, it crashes: 1929, 1970s, the dot.com bubble, and now with the mortgage collapse.
I'm not so sure, and I've had a look for the evidence. So far, I've come across a study by the US Energy Information Administration of oil futures vs stock and other indices, and over the admittedly fairly short period covered, the correlation with the Dow is not uniformly high, though it has increased since the Credit Crunch:
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
One more scientific-seeming (but complex) measure is energy. Professor Charles Hall adapted the notion of energy return on (energy) investment (EROI, or EROEI) from the biological sphere (where he began his studies) to human social-economic systems. This appears to be a promising method for analysing different forms of commercial energy production.
However, the entry linked above goes on to claim a correlation between the stockmarket and energy usage:
... a century's market and energy data shows that whenever the Dow Jones Industrial Average spikes faster than US energy consumption, it crashes: 1929, 1970s, the dot.com bubble, and now with the mortgage collapse.
I'm not so sure, and I've had a look for the evidence. So far, I've come across a study by the US Energy Information Administration of oil futures vs stock and other indices, and over the admittedly fairly short period covered, the correlation with the Dow is not uniformly high, though it has increased since the Credit Crunch:
Granted, energy usage and energy prices are not necessarily tightly bound together, but does the above tend to disprove or prove the assertion that the Dow cannot long outrun energy use?
Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Subscribe to:
Posts (Atom)