Bill Emmott - International Author & Adviser


The eco-cause has taken a bigger hit than BP
The Times - July 12th 2010

There is an uncanny resemblance between the arguments used last week to exonerate climate scientists at the University of East Anglia by the independent committee set up to investigate the scientists´ e-mail scandal and those used by BP to explain why it was less than open about what was happening during the early stages of its oil disaster in the Gulf of Mexico. It will be surprising if many environmentalists notice this. That is a pity, for clarity and logical thought about climate and energy are in short supply.

            The underlying facts were not altered by the UEA´s withholding of data and desire to emphasise the negative about climatic trends, for the scientists had the best of intentions when doing so, and it was in principle possible to find alternative interpretations from other sources: that was the view of the independent committee. A similar verdict was also delivered last week by the Dutch environmental assessment agency on errors in reports made by the Inter-governmental Panel on Climate Change, the most notorious of which was its writing of an obituary for the Himalayan glaciers at least a century too early.

            When BP looked on the bright side in its initially low estimates of how much oil was leaking from the ocean floor, and chose not to share alarming film of what was going on down there, it too thought it had the best of intentions: it was anyway throwing as much money and resources at solving the problem as any company or government agency could have, it had every possible incentive to try to stop the leak as quickly as it could, and making more images available would have been no help in finding a solution.

The outcomes from the two episodes stand in stark contrast to one another. In BP´s case the company´s reputation has been savaged and the whole disaster is likely to cost it at least $30 billion. Almost certainly both the chief executive and the chairman will lose their jobs—men whose asses President Barack Obama said he wanted to kick. Meanwhile Phil Jones, director of UEA´s Climate Research Unit and at the heart of the scandal, is keeping his job and simply being given a new title. So, for the time being, is Rajendra Pachauri, chair of the IPCC.

Why make this connection? Not to exonerate BP: the principle that polluters should pay for the consequences of their actions is sound, whether or not it is eventually found that the company´s safety procedures were negligent. All oil exploration companies will henceforth have to take account of the potential costs of a deepwater accident of this sort. Terrible though the experience has been, one silver lining is at least that it has put a price on the risks of deepwater drilling, which will both discourage it and act as an incentive to make the technology safer.

The company will likely survive: signs that the well is about to be sealed and that the clean-up costs are now more or less known have led its share price to rebound more than 20% from its low. It will struggle, for access to other oilfields may now become harder, and its reputation will take almost as long to clean up as the Gulf. But, unless it succumbs to a takeover bid, it will re-emerge to thrive again.

Damage to the climate-change cause from the scientists´ distortions may well last a lot longer. The idea that rapid rises in temperature during this century are an "inconvenient truth", in Al Gore´s words, that demand urgent action if catastrophe is to be avoided has taken quite a beating, now that the scientists´ chosen approach to "truth" has been inconveniently exposed. Recession, which has produced a temporary drop in greenhouse gas emissions from the rich countries, has naturally also dampened most people´s enthusiasm for paying higher prices now to pay for a cooler climate later.

The more contentious question is how bad a thing this damage is. The case for mitigating the rise in global temperatures rests on the notion that that rise will bring huge costs as well as risking sudden catastrophic outcomes. The idea of paying an insurance premium is one we can all accept. So is the idea of slowing down a trend to make it easier for us to adapt to it. What is not easy is to know how much to pay.

Lord Stern, in his famous 2006 report for the Blair government, argued that the interests of our great-great-grandchildren in the planet´s climate ought to be given roughly the same weight as our own. In other words we should pay heavily for a cleaner environment for people 100 years´ hence who Lord Stern´s calculations assume will be far richer than we are today. If you take that idea seriously, look at the national strike last week in India in protest at the government´s abolition of fuel subsidies. This admirable environmental (and budgetary) reform has not gone down at all well with today´s generation of Indians, who are disinclined to pay for their descendants´ better future.

A pause for cooler thought about climate change is actually likely to be as salutary as is the exposure of the true costs of deepwater drilling. At least it will be if it forces us to think harder about the relative costs and benefits of different actions. Paying higher electricity prices in order to fill the country and our continental shelf with wind turbines, a technology unlikely to make much progress in coming years, looks a lot less sensible today, in our time of austerity. So do costly tidal and thermal-power stations.

Nuclear power, a low-carbon technology that requires huge capital investment and has powered France safely for years, looks much more sensible with long-term interest rates so low. We cannot know which new technologies will emerge triumphant, but if one were to bet then solar power would look better than most, given our experience with improvements in other forms of electronics technologies in the past few decades.

Most of all, though, these episodes demand more humility from economists as from climate scientists and oil companies: in Britain, we must hope that the economist in charge of the government´s environmental policy, the Lib Dem Chris Huhne, persuades the government eventually to adopt the strategy disappointingly missing from George Osborne´s emergency budget: a simple carbon tax, with the proceeds used to cut National Insurance contributions and thus help boost employment. That way, consumers and companies will be left to make their own technological choices.


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