Snow blankets London for Global Warming debate

How Parliament passed the Climate Bill
By Andrew Orlowski

The Register

Snow fell as the House of Commons debated Global Warming yesterday - the first October fall in the metropolis since 1922. The Mother of Parliaments was discussing the Mother of All Bills for the last time, in a marathon six hour session.

In order to combat a projected two degree centigrade rise in global temperature, the Climate Change Bill pledges the UK to reduce its carbon dioxide emissions by 80 per cent by 2050. The bill was receiving a third reading, which means both the last chance for both democratic scrutiny and consent.

The bill creates an enormous bureaucratic apparatus for monitoring and reporting, which was expanded at the last minute. Amendments by the Government threw emissions from shipping and aviation into the monitoring program, and also included a revision of the Companies Act (c. 46) "requiring the directors’ report of a company to contain such information as may be specified in the regulations about emissions of greenhouse gases from activities for which the company is responsible" by 2012.

Recently the American media has begun to notice the odd incongruity of saturation media coverage here which insists that global warming is both man-made and urgent, and a British public which increasingly doubts either to be true. 60 per cent of the British population now doubt the influence of humans on climate change, and more people than not think Global Warming won't be as bad "as people say".

Both figures are higher than a year ago - and the poll was taken before the non-summer of 2008, and the (latest) credit crisis.

Yet anyone looking for elected representatives to articulate these concerns will have been disappointed. Instead, representatives had a higher purpose - demonstrating their virtue. And for the first 90 minutes of the marathon debate, the new nobility outdid each other with calls for tougher pledges, or stricter monitoring. Gestures are easy, so no wonder MPs like making them so much.

It was all deeply sanctimonious, but no one pointed out that Europe's appetite for setting targets that hurt the economy has evaporated in recent weeks - so it's a gesture few countries will feel compelled to imitate.

The US Senate has Senator James Inhofe, but in the Commons, there wasn't an out-and-out sceptic to be found. It was 90 minutes before anyone broke the liturgy of virtue. When Peter Lilley, in amazement, asked why there hadn't been a cost/benefit analysis made of such a major change in policy, he was told to shut up by the Deputy Speaker.

(And even Lilley - one of only five out of 653 MPs to vote against the Climate Bill in its second reading - felt it necessary to pledge his allegiance to the Precautionary Principle.)

It fell to a paid-up member of Greenpeace, the Labour MP Rob Marris, to point out the Bill was a piece of political showboating that would fail. While professing himself a believer in the theory that human activity is primarily the cause of global warming, he left plenty of room for doubt - far more than most members. The legislation was doomed, Marris said.

MP Rob Marris

Marris had previously supported the 60 per cent target but thought that 80 per cent, once it included shipping and aviation, wouldn't work. We could have a higher target, or include shipping and aviation, but not both.

He compared it to asking someone to run 100m in 14 seconds - which they might consider something to train for. Asking someone to run it in ten seconds just meant people would dismiss the target.

"The public will ask 'why should we bother doing anything at all?'"
Out of bounds

The closest thing to a British Inhofe is Ulsterman Sammy Wilson, Democratic Unionist Party, who'd wanted a "reasoned debate" on global warming, rather than bullying, and recently called environmentalism a "hysterical psuedo-religion". Wilson described the Climate Bill as a disaster, but even colleagues who disagree with his views of environmentalism are wary of the latest amendments.

The Irish Republic is likely to reap big economic gains if it doesn't penalise its own transport sector as fiercely as the UK pledges to penalise its own in the bill. Most Ulster MPs were keenly aware of the costs, and how quickly the ports and airports could close, when a cheaper alternative lies a few miles away over the border.

Tory barrister Christopher Chope professed himself baffled by the logic of including aviation and shipping. If transportation was made more expensive, how could there be more trade?

"As we destroy industry we'll be more dependent on shipping and aviation for our imports!" he said.

"When the history books come to be written people will ask why were the only five MPs... who voted against this ludicrous bill," he said. It would tie Britain up in knots for years, all for a futile gesture, Chope thought.

However, Tim Yeo, the perma-suntanned Tory backbencher who wants us to carry carbon rationing cards, said it would "improve Britain's competitiveness". He didn't say how.

Lilley impertinently pointed out that no cost/benefit case had been
made for handicapping shipping and aviation. It was the first mention
in the chamber of the cost of the commitments being discussed.
Estimates put the total cost of the Climate Change Bill at £210bn, or
£10,000 per household - potentially twice the benefits.

Quoting Nordhaus, Lilley noted that Stern ("Lord Stern - he got his
reward") had only got his front-loaded benefits by using improbable
discount rates - and then only half the benefits of making drastic
carbon reductions will kick in by the year 2800. The government has
said it wasn't using Stern's discount rates to calculate the cost of
shipping and aviation restrictions, but a more sensible and traditional
rate of 3.5 per cent instead - yet it refused to reveal the costs.
Lilley asked:

"I ask the house - is it sensible to buy into an insurance policy where the premiums are twice the value of the house?"

Stop right there, heretic.

Liilley was "building a broad case on a narrow foundation", the
Deputy Speaker told him. "I really must direct him to the specific
matter that's included in these clauses and amendments."

Earlier, the Tories had said they would be tougher on carbon than
Labour, and the Lib Dems the toughest of the lot. Much more
representative of the tone of the debate was Nia Griffith, the NuLab MP
for Lanelli.

Her comments are worth repeating (Hansard link to follow today)
because language tells us a lot - not only about the bureaucratic
ambitions of the exercise, but how the modern politician thinks about
governing.

Griffith told the House that the Bill was "a process not an end in itself", and had great value as a "monitoring tool".

MP Nia Griffith

"It's the targets that make us think," she said. She also used the
phrase "raise consciousness" - as in, "it must raise consciousness
amongst nations that follow suit."

In other words, if you take a gesture, then pile on targets and
penalties, you will change people's behaviour. Maybe she hasn't heard
of Goodhart's law.

Yesterday, however, it seemed that the only MPs exhibiting enough
"consciousness" to actually think - and ask reasonable questions about
cost and effectiveness of the gesture - got a good telling off.

The Bill finally passed its third reading by 463 votes to three. ®

Andrew welcomes your comments

Bootnote

The Met Office - one of the keenest advocates of the theory of
man-made global warming - predicted this weather for London yesterday.

At 9pm, after snow had been falling for three hours in the city, we
learned that, "BBC Weather forecasters say... an area north west of
London will get more snow through the evening and it is likely to move
further south".

Weather isn't climate, of course. But you can still be equally hopeless about predicting both.

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Government black boxes will 'collect every email'

The Independent
Home Office says all data from web could be stored in giant government database


By Robert Verkaik

Internet "black boxes" will be used to collect every email and web visit in the UK under the Government's plans for a giant "big brother" database, The Independent has learnt.

Home Office officials have told senior figures from the internet and telecommunications industries that the "black box" technology could automatically retain and store raw data from the web before transferring it to a giant central database controlled by the Government.

Plans to create a database holding information about every phone call, email and internet visit made in the UK have provoked a huge public outcry. Richard Thomas, the Information Commissioner, described it as "step too far" and the Government's own terrorism watchdog said that as a "raw idea" it was "awful".

Nevertheless, ministers have said they are committed to consulting on the new Communications Data Bill early in the new year. News that the Government is already preparing the ground by trying to allay the concerns of the internet industry is bound to raise suspicions about ministers' true intentions. Further details of the database emerged on Monday at a meeting of internet service providers (ISPs) in London where representatives from BT, AOL Europe, O2 and BSkyB were given a PowerPoint presentation of the issues and the technology surrounding the Government's Interception Modernisation Programme (IMP), the name given by the Home Office to the database proposal.

Whitehall experts working on the IMP unit told the meeting the security and intelligence agencies wanted to use the stored data to help fight serious crime and terrorism, and said the technology would allow them to create greater "capacity" to monitor all communication traffic on the internet. The "black boxes" are an attractive option for the internet industry because they would be secure and not require any direct input from the ISPs.

During the meeting Whitehall officials also tried to reassure the industry by suggesting that many smaller ISPs would be unaffected by the "black boxes" as these would be installed upstream on the network and hinted that all costs would be met by the Government.

"It was clear the 'back box' is the technology the Government will use to hold all the data. But what isn't clear is what the Home Secretary, GCHQ and the security services intend to do with all this information in the future," said a source close to the meeting.

He added: "They said they only wanted to return to a position they were in before the emergence of internet communication, when they were able to monitor all correspondence with a police suspect. The difference here is they will be in a much better position to spy on many more people on the basis of their internet behaviour. Also there's a grey area between what is content and what is traffic. Is what is said in a chat room content or just traffic?"

Ministers say plans for the database have not been confirmed, and that it is not their intention to introduce monitoring or storage equipment that will check or hold the content of emails or phonecalls on the traffic.

A spokesman for the Home Office said that Monday's meeting provided a "chance to engage with small communication service providers" ahead of the formal public consultation next year. He added: "We need to work closely with the internet service providers and the communication service providers. The meeting was to show the top-line challenges faced in the future. We are public about the IMP, but we are still working out the detail. There will a consultation on the Communications Data Bill early next year."

A spokesman for the Internet Service Providers Association said the organisation was pleased the Home Office had addressed its members and was keen to continue dialogue while awaiting a formal consultation.

Database plans were first announced by the Prime Minister in February. It is not clear where the records will be held but GCHQ may eventually be the project's home.

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Dr Doom sees gloom for global bourses

Swiss financial guru sees gloom for global bourses - swissinfo

Swiss financial guru Marc Faber tells swissinfo he sees hard times ahead for the world's stock exchanges and even state bankruptcy for the United States.

He also believes that stock exchanges will stay at low levels for a long time.

Faber, otherwise known as Dr Doom for his contrarian views on the economy, has lived in Asia for the past 35 years.

He is a jack-of-all-trades: investment adviser, financier, best-selling author and the compiler of a monthly economic publication called The Gloom Boom and Doom Report.

Faber sits on various boards of directors and investment committees.
swissinfo: You prophesied the stock market crash of 1987 and the Asia crisis and became a celebrity as a result. Did you see this crisis coming too?

Marc Faber: It was quite clear we had a credit bubble. I had been warning about that for years and not only in the mortgage sector. But what surprised even me was that [US insurer] AIG would almost disappear and that UBS shares would fall under SFr20 ($17.20).
swissinfo: How did it come to such a situation?

M.F.: A credit bubble has been growing for 25 years. We've seen, in particular over the past seven years, an unbelievable credit growth, which fuelled economic development. Then there were structural changes in the economy, for example the sinking saving ratios that have had an effect on consumption and growth rates.

The situation worsened in 2001 in the United States when the central bank lowered the interest rate from 6.5 per cent to an unheard of one per cent in 2003. This ultra-expansive monetary policy led to a credit growth that was five times higher than growth of the economy. A bubble growth and later the crash were the logical consequences.
swissinfo: Have we reached rock bottom?

M.F.: I think we're near it. But I also think we'll stick at this low point for a long time. Anyone who thinks that everything will soon be rosy again is naive. It's quite possible that worldwide stock exchanges will experience a similar development to that witnessed in Japan over the past two decades [the Nikkei index has fallen from 39,000 points to under 8,000].

Japan also shows that the large amount of money injected to stimulate the markets didn't have the desired effect – but it did produce huge holes in the state coffers.
« I do not see a single catalyst that could lead to a new bull market in the world. »

Marc Faber
swissinfo: You are known for swimming against the tide of conventional wisdom. But you are right in line with the prevailing pessimism.

M.F.: Not quite. I'm even more pessimistic than most (laughs). Look at it like this, between 1980 and 2007 people saved from their capital gains and not their income, as their income was spent. That was fine while property and shares increased in value every year. Today these people are highly indebted and are only beginning to save more by putting the brake on their consumption.

That's how every economy goes to the dogs – with or without injection of capital by governments. With the best of wills, I do not see a single catalyst that could lead to a new bull market in the world. At the moment, everything has gone down the drain.
swissinfo: How does the present crisis differ from previous ones?

M.F.: In the past few years everything went up – shares, commodities, consumer goods, real estate values, art and even bonds. Such a combination is extremely unusual. We saw the biggest investment bubble in the history of humanity. The current situation is possibly worse than the global economic crisis of 1929. And that is thanks to Alan Greenspan and Ben Bernanke [the former and current US Federal Reserve Board chairmen]. These two gentlemen must account for massive errors.
swissinfo: Governments are offering guarantees and are pumping thousands of billions into the markets. Is that a mistake?

M.F.: Yes. The losses are there and someone has to bear them. There are two possibilities. Banks go under and the stakeholders are left with nothing, as is the case with Lehman Brothers, or governments pump money into the financial system so that the incompetent financial clowns in Bahnhofstrasse [Zurich's financial centre] and Wall Street can continue to eat in fancy restaurants.

I am clearly in favour of the first because the consequences of these state interventions are massive budget deficits. To finance these, governments have to acquire money. For that they have to borrow money, which makes state debt and interest payments soar. US economists have come to the conclusion from the trends that there will be a US state bankruptcy.
swissinfo: Do you share that view?

M.F.: One hundred per cent. The US government will in future have new debts of at least $1,000 billion (SFr1,165 billion). That's on top of the current state debt of $10,000 billion. And that doesn't take into account state programmes to stimulate the economy. The government will have no other choice than to print money, which in the long term will lead to inflation.
swissinfo: How do you see the near future?

M.F.: More positively. The markets are totally undervalued so I reckon on a short-term recovery of easily 20 to 30 per cent.
swissinfo: When?

M.F.: In the next two to three weeks.
« If you drop a tennis ball with only a little air in it, it doesn't bounce very high! »

Marc Faber
swissinfo: That's not exactly very much in view of the massive losses.

M.F.: No. If you drop a tennis ball with only a little air in it, it doesn't bounce very high!
swissinfo: Are you calling into question the concept of making money from shares?

M.F.: No. The idea is still valid but you have to be realistic. Adjusted for inflation and with a long-term perspective you could earn on average three per cent with US shares. The long-term promises of eight per cent made by bankers and pseudo investment advisers to lure their customers are absolute rubbish.
swissinfo: It looked for a long time as though Switzerland would get away with just a black eye. What is your view?

M.F.: The export industry will be extremely hard hit. People in Switzerland will have to accustom themselves to bankruptcies, particularly in the machine industry.

swissinfo, based on an article in German by Fabian Gull in Bangkok

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