HC 517 The Economics of Wind Power


Submission from Viscount Monckton of Brenchley

Is CO2 mitigation cost-effective?

1. Summary: C ost/benefit c ase studies demonstrate that UK renewable-energy subsidies intended to mitigate manmade CO2-driven global warming are almost the least cost-effective deployment of taxpayers’ money, in any sector, for any purpose, anywhere , ever . Individual mitigation measures such as wind farms reduce only a minuscule fraction of global CO2 emissions; consequently the cut in CO2 radiative forcing and thus in warming is negligible . Y et the cost of CO2 mitigation measures (where there is enough government transparency to determine it) is so heavy that the cost of abating warming by such measures would be 10- 4 000 times greater than the cost of climate-related damage resulting from doing nothing. CO2 mitigation strategies cheap enough to be affordable will be ineffective: strategies costly enough to be effective will be unaffordable. Therefore, all CO2 mitigation subsidies should cease. The premium mightily exceeds the cost of the risk, so don’t insure.

2. Cost s greatly exceed benefit s : The following case studies show that o n optimistic governmental estimates the cost of CO2 mitigation would exceed the cost of climate-related damage arising   from inaction approximately tenfold. As to wind farms, on highly optimistic assumptions (excluding maintenance and downtime cost, CO2 emissions from installation; cost of maintaining spinning reserve; hidden cost of artificial increases in the cost of fossil-fuelled electricity; environmental cost in water-table destruction by neodymium extraction, landscape destruction, lost tourist revenue and killing of birds and bats), subsidy to Thanet will cost 30 times inaction; subsidy to Scotland’s onshore windmills may be similarly cost-ineffective (but there is insufficient transparency as to costs); and the cost of gesture-policies such as installation of individual small turbines is 5 00 times greater than the cost inaction.

3. Scientific basis: IPCC’s central projections are adopted here ad argumentum. However, it is becoming clear that the official estimates are exaggerated. There has been no statistically-significant warming for close to two decades; sea level over the past eight years has risen at a rate equivalent to just 1.3 inches (3 cm) per century; hurricane activity in the past two years has been at its least in the satellite record; global sea-ice extent has scarcely declined in the 30 years since its 20 th -century peak; ocean heat content is rising at less than a quarter of the predicted rate; and, from all natural and manmade causes, global temperature has risen for 60 years at a rate equivalent to just 1.2 C°/century. If the IPCC’s central projections are exaggerated, the cost-ineffectiveness of measures to mitigate global warming, including wind farms, will be worse – and perhaps far worse – than shown here.

4. IPCC projects that CO2 emissions this century will cause 1. 5 Celsius warming by 2100. So the world would be only 1. 5 cooler by 2100 even if all CO2 emissions had ceased in 2001. IPCC also expects 0.6 C° "committed warming" and 0.7 C° from non-CO2 greenhouse gases. CO2 mitigation will have no effect on the former and only a marginal effect on the latter.

5. CASE HISTORIES : Three non-wind and three wind strategies p osition various wind - power strategies in the spectrum of mitigation policies. Mon etary values are in US dollars.

5a. UK Climate Change Act: At an officially-estimated cost of $1.2 tn by 2050, discounted at 5% p ,a . to $835 bn, the Climate Change Act aims to cut 80% of UK emissions, which are 1.5% of world emissions. Business-as-usual CO2 concentration of 510 ppmv in 2050 would fall to 508.6 ppmv via the Climate Change Act, abating just 0.006 K warming. If global CO2 mitigation measures were of similar cost-effectiveness, the "global-abatement" cost of forestalling IPCC’s predicted warming to 2020 would be $113 tn , or $16,000/head of global population, or 6.8% of global GDP. On this basis mitigation would cost almost 10 times the projected climate damage arising from inaction. In practice, the outturn is likely to be far worse than this, because Government estimates of the cost of cutting 80% of UK emissions by 2050 are optimistic.

5b. EU climate mitigation: The World Bank says EU carbon trading cost $92 bn/year in 2009 . Multiply this by 2.5 to allow for the EU’s non-trading mitigation measures. Then total EU mitigation cost is $2 trillion at present value to 2020, by when the EU optimistically aims to halt 20% of its emissions, which are 13% of global emissions. Business-as-usual CO2 concentration of 410 ppmv in 2020 would fall to 409.5 ppmv via EU mitigation measures. Warming abated would be 0.003 C° , and the global abatement cost would be $117 tn , or $17,000/head, or 21.5% of GDP to 2020. Mitigation would cost almost 20 times inaction.

5c. Offshore wind: Subsidy to Thanet, the world’s largest wind array, is $1.6 bn at p.v. by 2030. Rated output of the 100 turbines is 300 MW, but wind farms yield only 24% of rated capacity, so total output, at 72 MW, is 1/600 of mean 43.2 GW UK electricity demand. Electricity is 33% of UK CO2 emissions, which are 1.5% of global emissions. Business-as-usual CO2 concentration of 440 ppmv in 2030 would fall to 439.9996 ppmv as a result of the subsidy. Warming abated would be 0.000002 C°; and the global abatement cost of close to $300 tn is $42,000/head, or 30% of GDP to 2030. Mitigation costs almost 30 times inaction.

5d. Onshore wind: Wind power in Scotland yields 620 MW power, or 10% of Scotland’s mean 6 GW consumption, compared with nuclear power at 33$ and coal at 23%. Scotland’s wind farms contribute 1.4% of the UK’s mean consumption of 43.2 GW, which in turn accounts for 33% of total UK CO2 emissions, which represent 1.5% of global CO2 emissions. Accordingly, the fraction of global CO2 emissions forestalled by all of Scotland’s wind farms is 0.014 x 0.33 x 0.015, or less than 1/14,000 of global CO2 emissions. Over their 20-year life, Scotland’s existing wind farms would forestall 0.00002 C° of global warming by 2030, or only 1/2400 of the 0.05 C° threshold below which no instrument or method can detect a change in global temperature. Tripling the current installed capacity would triple the very large cost, and the warming forestalled would remain negligible.

5e. Gesture wind: Sandwell Council spent $9694 on a small wind- t urbine like one at a primary school in Oldbury that had generated 209 KWh over a year – enough to power a single 100 W reading-lamp for <3 months. Assuming no maintenance costs, and discounting revenues of $0.18/KWh for 20 years to $623 at p.v., net project cost is $9070. Little more than one four-trillionth of global emissions would be abated . G lobal abatement cost would be $5 quintillion, or $700,000/head, or 500% of global GDP to 2030 . M itigation would cost almost 500 times inaction.

5f. The $26,000 bicycle: In 2010 the Mayor of London set up what he called a "Rolls-Royce" scheme at US$ 130 m for 5000 bicycles (>$26,000 per bicycle). Transport emits 15.2% of UK CO2. Cycling is 3.1 bn of the 316 ,3 bn vehicle miles on UK roads annually. There are 23 m bicycles in use in the UK. The fraction of global emissions abated over 20 years would be 1.5% of 15.2% of 3.1/316.3 times 5000/23 m, or less than one 200-millionth. The global abatement cost of $40 trillion, or $5.8 m/head, or 40 00% of global GDP to 2030, implies that mitigation would cost 4000 times inaction.

6. Conclusions: The high costs of CO2 mitigation policies, and the negligible returns in warming forestalled, undetectable by any instrument or method, imply that focused adaptation to any adverse consequences of such warming as may occur in future will be very much more cost-effective than any attempts at mi tigation of that warming today.

7. CO2 mitigation strategies cheap enough to be affordable will be ineffective: strategies costly enough to be effective will be unaffordable. Therefore, all CO2 mitigation subsidies, including subsidies to wind farms, should cease at once. The question arises whether CO2 mitigation should any longer be attempted at all.

June 2012

Prepared 10th July 2012