Daily Earth Hour: North Korea

Popular wisdom holds that celebrating Earth Hour has been about the preservation of the environment.

But popular wisdom doesn’t even attempt to scrutinize on the possible agenda behind Earth Hour, except to swallow hook, line and sinker about the supposed truism of Earth Hour/Earth Day advocacy.

Yet there is a living example of Earth Hour/Day. 

And that country is North Korea

Fantastic photograph from National Geographic (as of February 2014) depicting a predominantly light deprived North Korea. From National Geographic

Since the mid-1990s, when fuel stopped flowing from the defunct Soviet Union to North Korea, the famously hermetic country has descended into darkness.

Newly released photos taken from the International Space Station last month reveal just how energy bankrupt North Korea has become. The photos, and a time-lapse video of the region, show the country as almost completely black, in contrast to the bright lights of neighbors like South Korea and Japan.

In South Korea, each person consumes 10,162 kilowatt hours of power a year. North Koreans each use just 739. Other than several small spots of light, including the brightly illuminated capital of Pyongyang, the country just about blends in with the surrounding black ocean.

And North Korea has not been an environmental paradise. To the contrary North Korea has been an environmental disaster. From Wikipedia.org…

Air pollution

According to the United Nations Environment Programme in its 2003 report on North Korea, titled DPR Korea: State of the Environment 2003, air pollution is a perplexing problem. Owing to more coal being burnt to cater to the growing population's needs, the rate of air pollution in the country has been growing.

Water pollution

An unidentified river in North Korea, photographed in September 2008. The North Korean waters are heavily polluted and thereby unfit for human consumption.

Industrialisation and urbanisation causes the water to be polluted and unsanitary for human use.

Urbanisation

North Korea's bid to become an urban nation has seen it sacrifice the tranquil environment of the country. Wildlife is scarce in the country, and "[t]he landscape is basically dead", according to Joris van der Kamp, a Dutch scientist who visited the communist nation after being invited to. This situation is described as "so severe it could destabilize the whole country".

Deforestation

To satisfy ever-growing demands, more and more trees in the country have been chopped down to produce fuel for the people. Without these trees, soil erosion easily occurs when the wind blows or when the rain flows. This in turn burns a big hole in the North Korean government's pocket.

This PBS March 2013 report says North Korea have been at the verge of an environmental collapse

North Korea has been hiding something. Something beyond its prison camps, its nuclear facilities, its pervasive poverty, its aching famine, its lack of energy—electrical, fossil, or otherwise. What the hermit kingdom has been covering up is perhaps more fundamental than all of those: an environmental collapse so severe it could destabilize the entire country. Or at least, it was hiding it.

To achieve “earth hour” hardly means about the environment but rather to embrace poverty and despotism.

So before you celebrate Earth Hour think of North Korea.

Watch the late great comedian George Carlin deal with the hypocrisies of "Saving the Planet"

The Phisix Amidst the Korean Peninsula Stand-Off

Domestic headlines continue to banner on the verbal showdown and belligerent artifice between the US and North Korea.

DPRK’s Declaration of War and War Posturing

While I think that this seems more a vaudeville than of a real threat, geopolitical brinkmanship can always deteriorate into a real thing. Inflated egos of political leaders may impulsively react on events that could push posturing into a full scale war. All that is needed is an event that may serve as the Casus Belli[1].

North Korea or Democratic People's Republic of Korea (DPRK) has already declared a “state of war”[2] with its wealthier kin, South Korea or Republic of Korea (ROK) last March 30, 2013. But through the week, all that has occurred have been the mobilization or a show of force from contending parties. 

Yesterday North Korea reported to have moved its two medium range missiles, the Musudan missiles, which has a range of 1,865 miles and has the capability to strike at South Korea, Japan and US bases in the Pacific, supposedly for a missile test[3]. 

Yet despite all the North Korean rhetoric and propaganda about launching a nuclear war with the US, her nuclear missiles hardly have the range and capability to reach the US[4].

On the other hand, the US has transferred anti-ballistic missile defence system to Guam[5] along with several B-1 ("Bone") Lancer strategic long-range bombers.

The US has also “secretly” deployed the E-6 Mercury “Doomsday plane” which has been reportedly “tasked with "providing command and control of U.S. nuclear forces should ground-based control become inoperable" and whose core functions include conveying instructions from the National Command Authority to fleet ballistic missile submarines and also to further command post capabilities and control of land-based missiles and nuclear-armed bombers”, according to the Zero Hedge[6].

In other words, should there be a full scale war, such may include the use of nuclear weapons. The outcome, hence, is likely to be devastating and cannot be compared to any previous conventional wars.

Thus any comparisons with modern wars as the 1982 Falklands War between the UK and Argentina[7], the 1991 US-Iraq Gulf War[8], the 1999 Kargil war between India and Pakistan over the Kashmir region[9], the 2003 US Invasion of Iraq[10], the Afghanistan War[11] or the 5 day South Ossetia war between Russia and Georgia[12] represents apples-to-oranges.

South Korea and the US will have to deal with North Korea’s 12-27 nuclear weapons with a TNT yield of 6-40 kilotons[13]. The atomic bombs that leveled Hiroshima “Little Boy” gravity bomb and Nagasaki “Fat Man” gravity bomb had TNT yields of 13-18 kilotons and 20-22 kilotons respectively[14].

Why is War Unlikely; North Korea’s Geopolitics of BlackMail

In 2010 I expressed doubts that a war in the Korean Peninsula will take place. I still maintain such skepticism.

Why?

North Korea is an impoverished state whose weapons are mostly dilapidated and obsolete, and whose vaunted millions of soldiers are likely to be starving, ill equipped and poorly trained[15].

And in spite of the North Korea’s vaunted war machinery, wherein much of the misallocation of the nation’s resources had been directed, the North Korean army is in a state of dilapidation and obsolescence: they seem ostensibly good for parades and for taunting, but not for real combat…

Thus, based on socio- political-economic and military calculations, the North Koreans are unlikely to pursue a path of war, because the odds are greatly against them. And their political leadership is aware of this.

And as I previously pointed out, North Korea is the embodiment of the environmental politics of known as “Earth hour”[16]. Except for the North Korea’s capital, Pyongyang, satellite photos reveal that at night, the entire country has mostly been dark or without light, which is in stark contrast to South Korea (left window).

Moreover, North Korea has recently been plagued by hyperinflation[17]. 

Since July 2010, price inflation as measured by rice prices has pole-vaulted by 5x. So we can’t discount that such war histrionics may have been meant to divert public’s attention from internal economic woes, and instead, like typical politicians North Korean leaders have used foreigners as scapegoats for policy failures.

Except for nuclear weapons, North Korea isn’t likely to win a conventional war against South Korea, even without US support.

South Korea can afford to defend herself with a modern well equipped well trained army given the wide difference of her economic growth[18], capital surpluses and wealth disparities. But the problem is that she may have substantially relied or delegated to the US much of the home or national defense duties.

Given such reality, political leaders of North Korea have long used nuclear weapons as bargaining chips to indulge on the geopolitics of blackmail. 

So unless North Korea’s Kim Jong-un has gone rogue and suicidal, the odds are that North Korea’s Kim will unlikely take on this war path. 

Besides, Kim’s wife Ri-Sol-ju has reportedly given birth to their first baby in secret[19]. A war would mean sacrificing both their political privileges and their lives. And they know this.

Yet a conventional war may perhaps open the gateway for ordinary North Koreans to make a mad dash out of their highly repressive country. 

And it isn’t also far fetch to think that a war may inspire many of North Korea’s military to immediately surrender or pledge allegiance to the South or mount a mutiny, given the horrors of the North Korean dictatorship. Just recently a North Korean official was executed by mortal shell for infringing on the rules covering the 100 day mourning period for the late King Jong il[20].

Of course such faceoff hasn’t been all about North Korea’s fault.

Aside from the sanctions imposed by the UN due to DPRK’s third missile tests, North Korean leaders may have been traumatized by recent US military air exercise involving heavy bombers[21].

Notes the historian Eric Margolis[22],

During the 1950-53 Korean War, US B-29 heavy bombers literally flattened North Korea. That’s why North Korea reacted so furiously when US B-52 heavy bombers and B-2 Stealth bombers skirted its borders late last month, triggering off this latest crisis. The B-2 can deliver the fearsome ‘MOAB’ 30,000 lb bomb called "the Mother of All Bombs" designed to destroy deep underground command HQ’s (read Kim Jong-un’s bunker) and underground nuclear facilities.

The real threat from a realization of a full scale war really hasn’t really been just about North Korea’s nuclear missiles but about the possible involvement of other nations as China, whom has long been North Korea’s key ally, and of Russia whom has had on and off relationship with the DPRK[23]. Although recently China’s leaders have expressed concern over the bellicose rhetoric of North Korea’s leaders[24], events may turn out differently once the shooting war begins. 

Remember the Casus Belli of World War I had been the assassination of Archduke Franz Ferdinand of Austria[25], which invoked the assembly of opposing alliances that lead to the outbreak of war[26]. The opposing alliances then consisted of the Allies (based on the Triple Entente of the United Kingdom, France and Russia) on one side. And the Central Powers (originally the Triple Alliance of Germany, Austria-Hungary and Italy; but, as Austria–Hungary had taken the offensive against the agreement, Italy did not enter into the war), on the other side.

The US Military Industrial Complex and Stock Market Scenarios

Lastly the US seems to have been itching for a war either with Iran or with North Korea. Yet North Korea has long served as a useful public bogeyman which benefited of the US military industrial complex and the neoconservative politicians who support them.

The existence of a “bellicose” and “provocateur” DPRK has justified US military power build up in Asia. Jack A. Smith writing at Anti-War.com[27] 

Washington wants to get rid of the communist regime before allowing peace to prevail on the peninsula. No “one state, two systems” for Uncle Sam, by jingo! He wants one state that pledges allegiance to — guess who? In the interim, the existence of a “bellicose” North Korea justifies Washington’s surrounding the north with a veritable ring of firepower. A “dangerous” DPRK is also useful in keeping Tokyo well within the U.S. orbit and in providing another excuse for once-pacifist Japan to boost its already formidable arsenal.

Not only “war is the health of the state”[28], war signifies as good business for the politically anointed since defense industry benefits from subsidies or wealth transfer from taxpayers to politicians and military industrial complex.

So how the Korean Peninsula standoffs affect the domestic and the regional stock markets?

I see four potential scenarios with different outcomes. 1. No war. 2. Limited conventional war. 3. Limited war but with use of nuclear weapons. 4. World War III.

The stock markets will hardly be affected given the first two situations: no war or a limited conventional war. I lean towards the first scenario.

Nonetheless if the second condition occur, central banks are likely to inflate more. US monetary base surged during World War II, and also climbed during the Vietnam War.

If nuclear weapons will be used, the stock markets may be affected. But this will largely depend on the location and the extent of the damages.

Remember if DPRK’s Kim will go berserk and become suicidal then he may wish for retribution or make a statement against the West. Thus we should not dismiss the possibility that the DPRK may target nations with the least anti-ballistic defence or nations who are most vulnerable to their missiles. This puts Southeast Asia on such a list.

In this nuclear age, World War III means that we can kiss the stock markets goodbye and pray that we survive the nuclear holocaust.

Ignoring all these would signify as “denigration of history” or the false assumption that one is immune from misfortunes or disasters.

---

[1] Wikipedia.org Casus belli

[2] Bloomberg.com Mongolia Seeks to Play Peacemaker as North Korea Declares ‘War’ March 30, 2013

[3] Guardian.co.uk North Korea readies missile launch as fears of a covert cyberwar grow April 6, 2013

[4] Foreign Policy Blog Battle of the maps: North Korea's actual missile capability vs. North Korea's threatened missile capability March 29, 2013

[5] Reuters.com Extra line of defense – graphic of the day April 4, 2013

[6] Zero Hedge US Secretly Deploys B-1 Strategic Bombers, E-6 "Doomsday" Planes Near North Korea April 5, 2013

[7] Wikipedia.org Falklands War

[8] Wikipedia.org Gulf War

[9] Wikipedia.org Kargil War

[10] Wikipedia.org 2003 Invasion of Iraq

[11] Wikipedia.org Afghanistan War

[12] Wikipedia.org Russia-Georgia War

[13] Wikipedia.org North Korea and weapons of mass destruction

[14] Wikipedia.org Nuclear Weapon Yield

[15] See Will A War Break Out In The Korean Peninsula? November 28, 2010

[16] See Earth Hour: North Korean Version March 31, 2010

[17] Steve H. Hanke, North Korea’s Hyperinflation Legacy, Part II Cato.org December 7, 2012

[18] Washington Post Kim Jong Il’s economic legacy, in one chart December 19, 2011

[19] CSMonitor Did Kim Jong-un and his wife have a baby? March 5, 2013

[20] Daily Mail North Korean official is executed by MORTAR SHELL for drinking during 100-day mourning period for late 'Dear Leader' Kim Jong-il October 24, 2012

[21] Bloomberg North Korea Vows Military Action Against More U.S. B-52 Flights March 20, 2013

[22] Eric Margolis War in Korea April 6, 2013

[23] Wikipedia.org North Korea–Russia relations

[24] Washington Post China expresses concern over North Korea’s rhetoric April 7, 2013

[25] Wikipedia.org Assassination of Archduke Franz Ferdinand of Austria

[26] Wikipedia.org World War I

[27] Jack A. Smith, Behind the US-North Korean Bluster Anti-war.com April 4, 2013

[28] Randolph Bourne War is the Health of the State Bureau of Public Secrets

How Earth Hour Policies (Green Energy) Hurt Consumers: UK Edition

In UK, the push for green energy has only been prompting for higher energy bills.

The editorial of UK’s news outfit the Telegraph decries on the political obsession for green energy (hat tip AEI’s Professor Mark Perry)

With the worst snow conditions in the country since 1981, it’s worrying, to say the least, that gas supplies are running low. A month ago, The Sunday Telegraph warned in this column of the problems of an energy policy that puts expensive, inefficient green power before coal-fired and nuclear power. There have been a few signs that the Coalition is at last turning its attentions to the issue but, still, not nearly enough has been done. Now we are reaping the consequences. Because of a misguided faith in green energy, we have left ourselves far too dependent on foreign gas supplies, largely provided by Russian and Middle Eastern producers. Only 45 per cent of our gas consumption comes from domestic sources. All it takes is a spell of bad weather, and the closure of a gas pipeline from Belgium, to leave us dangerously exposed, and to send gas prices soaring. Talk of rationing may be exaggerated, but our energy policy is failing to deal with Britain’s fundamental incapacity to produce our own power.

Ed Davey, the Energy Secretary, may have granted planning permission this week to a new nuclear power station, Hinkley Point in Somerset. But one nuclear power station, with two new reactors, isn’t nearly enough. Moreover, it will take a decade to build and, even then, will only provide seven per cent of the country’s energy needs.

It is time for the Coalition to tear up its energy policy before the lights really do go out. The first priority must be to repeal the Climate Change Act of 2008, with its brutal, punishing targets: reducing carbon emissions by 80 per cent by 2050, and 26 per cent by 2020. These targets have already had a disastrous effect, forcing the closure of coal-fired power stations, and increasing tax-funded subsidies on wind power. Next month, electricity bills will soar even higher, thanks to a new tax on carbon dioxide produced by coal-fired and gas-fired power stations.

There are good intentions behind a green energy policy, and no one would wilfully want to damage the environment. But green technology – in its current incarnation, anyway – is just too inefficient and expensive to meet our energy needs. In some of the worst weather for more than 30 years, green power still only provides a tiny fraction of our energy needs. Solar power is of limited use in our cold, dark, northern climate. And wind power isn’t much better – cold weather doesn’t necessarily mean windy weather.

As previously pointed out, earth hour/green energy policies are essentially misanthropic for such policies promote economic hardship and even death. The above is just an example.

Popularity or popular themes don’t make ideas valid or sound. Take it from Albert Einstein: 

What is right is not always popular and what is popular is not always right

Earth Hour: Keep Lights ON!

Many people will fall again for the demagoguery of celebrating “earth hour” purportedly for “saving” the environment. 

Most of them will simply follow “feel good” popular politically correct themes rather than understanding the real dynamics or “crony based” green energy politics behind them.  

This serves as example of the Bandwagon effects, not only in the marketplace, but also in the realm of the politics of environmentalism.

Earth Hour advocates avoid explaining the cost benefit tradeoffs between their populist pseudo-environmental interests (which are principally based on highly flawed computer simulations*) and the economic and social value of electricity to humanity. 

*people's lives are supposed to be determined by computer models which can't even predict economies and the markets! Queen Elizabeth even took to task the London School of Economics for failing to predict the 2008 crash.

They fail to take into account that “electricity is the backbone of modern life”. On the other hand, they elude discussing the costs of their themes from which life without electricity equals poverty and death.

North Korea or the medieval life are great examples of life without electricity.

So advocates of earth hour are basically misanthropists. They want people to suffer in the name of preserving the "environment" (ahem, promoting the interests of cronies and of the political class)

 

The following video from the Copenhagen Consensus eloquently showcases the benefits of electricity.

Danish environmentalist Bjorn Lomborg gives further explanations on the benefits of electricity at the Slate.com: (hat tip AEI’s Professor Mark Perry) [bold mine]

Electricity has given humanity huge benefits. Almost 3 billion people still burn dung, twigs, and other traditional fuels indoors to cook and keep warm, generating noxious fumes that kill an estimated 2 million people each year, mostly women and children. Likewise, just 100 years ago, the average American family spent six hours each week during cold months shoveling six tons of coal into the furnace (not to mention cleaning the coal dust from carpets, furniture, curtains, and bedclothes). In the developed world today, electric stoves and heaters have banished indoor air pollution.

Similarly, electricity has allowed us to mechanize much of our world, ending most backbreaking work. The washing machine liberated women from spending endless hours carrying water and beating clothing on scrub boards. The refrigerator made it possible for almost everyone to eat more fruits and vegetables, and to stop eating rotten food, which is the main reason why the most prevalent cancer for men in the United States in 1930, stomach cancer, is the least prevalent now.

Electricity has allowed us to irrigate fields and synthesize fertilizer from air. The light that it powers has enabled us to have active, productive lives past sunset. The electricity that people in rich countries consume is, on average, equivalent to the energy of 56 servants helping them. Even people in Sub-Saharan Africa have electricity equivalent to about three servants. They need more of it, not less.

This is relevant not only for the world’s poor. Because of rising energy prices from green subsidies, 800,000 German households can no longer pay their electricity bills. In the United Kingdom, there are now more than 5 million fuel-poor people, and the country’s electricity regulator now publicly worries that environmental targets could lead to blackouts in less than nine months.

Today, we produce only a small fraction of the energy that we need from solar and wind—0.7 percent from wind and just 0.1 percent from solar. These technologies currently are too expensive. They are also unreliable (we still have no idea what to do when the wind is not blowing). Even with optimistic assumptions, the International Energy Agency estimates that, by 2035, we will produce just 2.4 percent of our energy from wind and 0.8 percent from solar.

To green the world’s energy, we should abandon the old-fashioned policy of subsidizing unreliable solar and wind—a policy that has failed for 20 years, and that will fail for the next 22. Instead, we should focus on inventing new, more efficient green technologies to outcompete fossil fuels.

If we really want a sustainable future for all of humanity and our planet, we shouldn’t plunge ourselves back into darkness. Tackling climate change by turning off the lights and eating dinner by candlelight smacks of the “let them eat cake” approach to the world’s problems that appeals only to well-electrified, comfortable elites.

So we can’t discount of the "conspiracy theory" where one of the other possible subsidiary reasons for the massive printing of money by central banks could have been meant as subsidies for green energy via the pushing up or inflating prices of fossil fuels, which should make "unreliable" "inefficient" and "costly" green energy "competitive".

Unfortunately, markets know better. The free-market based Shale energy revolution has been proving to be the likely “environmental friendly” alternative more than the politically blessed “green energy” that has been founded on disinformation.

Massive Earth Hour (Blackouts) in India

Massive power outages in India has affected more than half of the population.

From the Bloomberg, (bold highlights mine)

India’s electricity grid collapsed for the second time in as many days, cutting off more than half the country’s 1.2 billion population in the nation’s worst power crisis on record.

Commuter trains in the capital stopped running, forcing the operator, Delhi Metro Rail Corp., to evacuate passengers, spokesman Anuj Dayal said. NTPC Ltd. (NTPC), the biggest generator, shut down 36 percent of its capacity as a precaution, Chairman Arup Roy Choudhury said by telephone. More than 100 inter-city trains were stranded, Northern Railway spokesman Neeraj Sharma said, as the blackout engulfed states in the north and east.

So what went wrong?

From the same article…

State-owned Power Grid Corp. of India Ltd., which operates the world’s largest transmission networks, manages power lines including in the northern and eastern regions. NTPC and billionaire Anil Ambani-controlled Reliance Power Ltd. (RPWR) operate power stations in north India that feed electricity into the national grid. The northern and eastern grids together account for about 40 percent of India’s total electricity generating capacity, according to the Central Electricity Authority.

The grids in the east, north, west and the northeast are interconnected, making them vulnerable, said Jayant Deo, managing director of the Indian Energy Exchange Ltd. The outage has also spread to seven additional states in the northeast, NDTV television channel reported.

“Without a definitive plan by the government to gradually bring the grids back online, this problem could absolutely get worse,” Deo said.

Singh is seeking to secure $400 billion of investment in the power industry in the next five years as he targets an additional 76,000 megawatts in generation by 2017. India has missed every annual target to add electricity production capacity since 1951.

Well in reality, the root of the problem hasn’t been about ‘definite plans’ by the Indian government, but rather largely due to India’s statist political economy.

Again from the same article…

Improving infrastructure, which the World Economic Forum says is a major obstacle to doing business in India, is among the toughest challenges facing Singh as he bids to revive expansion in Asia’s third-largest economy that slid to a nine- year low of 5.3 percent in the first quarter.

Tussles over policy making with allies in the ruling coalition, corruption allegations and defeats in regional elections have weakened Singh’s government since late 2010.

Must I forget, artificial electricity demand has partly been boosted by India’s central bank, the Reserve Bank of India (RBI), who passes the blame on others.

Again from the same article

The Reserve Bank of India, which has blamed infrastructure bottlenecks among others for contributing to the nation’s price pressures, today refrained from cutting interest rates even as growth in the $1.8 trillion economy cooled to a nine-year low in the first quarter.

Indian consumer-price inflation was 10.02 percent in June, the fastest among the Group of 20 major economies, while the benchmark wholesale-price measure is more than 7 percent.

The last time the northern grid collapsed was in 2001, leaving homes and businesses without electricity for 12 hours. The Confederation of Indian Industry, the country’s largest association of companies, estimated that blackout cost companies $107.5 million.

Chart above from global-rates.com and tradingeconomics.com

India’s bubble ‘easy money’ (upper window) policies in 2009-2010 fueled a stock market recovery (below window) in 2010.

On the other hand, the then negative interest rate regime also stoked local inflation (pane below policy interest rates).

This has prompted the Reserve Bank of India to repeatedly raise policy rates or tightened monetary policy. The result has been to put a brake on India’s economy and the stock market rebound.

Part of the Indian government’s attack on her twin deficits, which has been blamed for inflation through the decline of the currency, the rupee, has been to turn the heat on gold imports and bank gold sales.

Aside from demand from the monetary policies, electricity subsidies has also been a culprit. Farmers have been provided with subsidized electricity. Such subsidy has not only increased demand for power but also put pressure on water supplies.

Environmentalists would likely cheer this development as ‘Earth Hour’ environment conservation.

Yet India’s widespread blackouts are evidences and symptoms of government failure.

Rampant rolling blackouts extrapolate to severe economic dislocations which not only to means inconveniences but importantly prolonged economic hardship.

The Unraveling Global ‘Earth Hour’ Energy Industry Bubble

Like the welfare state, the supposedly politically correct environmental position represented by green energy projects are being exposed for what they truly are—delusions of grandeur.

Political support for green ‘renewable’ energy has been diminishing in Western nations.

From the Wall Street Journal, (bold emphasis mine)

The green economy strikes again, or shall we say strikes out. Oakland-based Solar Trust of America filed for bankruptcy this week, leaving its planned multibillion-dollar plant in California on ice. The company declared itself insolvent after its parent—Germany's Solar Millennium—filed for bankruptcy in December, and Solar Trust realized it wouldn't be able to pay a $1 million rent check due April 1.

Solar Millennium, in turn, had been hoping to sell a controlling stake in Solar Trust to the German company, solarhybrid, until solarhybrid also filed for bankruptcy in March. Then there's Q-Cells, another German solar company, which also filed for bankruptcy this week, sharing that fate with Solon, the Berlin-headquartered photovoltaic firm that went bust in December.

This cascade of insolvencies comes after Germany decided last year to slash the above-market prices it forces utilities to pay for renewable energy sources and to cut the subsidies that have locked German taxpayers into €100 billion in handouts to the solar industry. Even before the subsidy cut, German solar manufacturers were struggling under price pressure from China, which has responded to Western subsidies by ramping up its own production, undercutting higher-cost European and American producers in the process.

Greens in Germany and beyond are protesting that if only governments would continue soaking taxpayers to prop up solar, wind and other low-carbon favorites, these technologies would be viable. But even that is far from clear. Q-Cells and others had responded to Chinese competition by outsourcing some of their own production to Asia to cut costs. That wasn't enough to save them.

The real story is that green manufacturing, which was supposed to be the planet's salvation and Europe's new industrial base, proved to be as vulnerable to low-cost competition as many other industries. Far from creating a sustainable comparative advantage, German subsidies sparked the very rivalry now putting its home-grown industry out of business.

The Italian government appears to have taken note of these economic realities and last weekend said it would slash "excessive" subsidies for solar and wind power. Industry Minister Corrado Passera uttered the obligatory promise that Rome remains committed to generating a carbon-free, wind- and sun-powered economy, but that "we need to do so without overreliance on taxpayer resources."

So economic reality has been prevailing over mass hysteria.

Aside from gross mismanagement, mainly due to the moral hazard of political support which has been wasting taxpayers money, competition from Asia has added to the industry’s woes.

Of course, the most important factor is that there is no such thing as a free lunch, or the Santa Claus Principle, as most political zealots believe.

And considering the tremendous financial pressures to survive the welfare state, politicians see the latter as more of a priority than sustaining the economically unviable green industry, which ironically, has been contributing to the welfare state’s financial burden.

Under fiscal pressure from the ongoing debt crisis ordeal, Spain has also cut subsidies to unfeasible political pet projects.

From Bloomberg, (bold emphasis mine)

Spain halted subsidies for renewable energy projects to help curb its budget deficit and rein in power-system borrowings backed by the state that reached 24 billion euros ($31 billion) at the end of 2011.

“What is today an energy problem could become a financial problem,” Industry Minister Jose Manuel Soria said in Madrid. The government passed a decree today stopping subsidies for new wind, solar, co-generation or waste incineration plants.

The system’s debts were racked up as revenue from state- controlled prices failed to cover the cost of delivering power. Costs have swollen in the past five years because of an increase in regulated payments for the power grid, support for Spanish coal mines and subsidies for renewable energy plants…

Spain’s decision is a “first step” to rein in debts, and officials are working on a broader package of measures, Soria said. The nation isn’t planning a levy on hydropower or nuclear plants, nor will it take on power-system liabilities, he said.

The Spanish action follows Germany’s announcement last week that it would phase out support for solar panels by 2017 and the U.K.’s legal battle to reduce its subsidies for the industry.

Spain was an early mover in developing renewables plants, and support for wind energy helped Iberdrola become the world’s biggest producer of clean power, with plants in the U.S. and Brazil. The industry sustains about 110,000 Spanish jobs, according to the Renewable Energy Producers Association.

The government is wrestling with competing priorities as it struggles to convince investors it can meet a target to cut the budget deficit to 4.4 percent of gross domestic product this year, from 8 percent last year, while trying to create jobs in a country where 23 percent of workers are unemployed.

Oooooh that ought to hurt.

A relevant quote from Warren Buffett on bubbles,

Only when the tide goes out do you discover who's been swimming naked.

Apparently green energy has been caught swimming naked and whose bubble seems to have been pricked.

Yet those proposing to promote green energy in the Philippines through the same political route of subsidies (whether consumer or supplier based) ought to open their eyes and see what has been happening abroad.

Any industry that cannot survive on its own [because the consumers don’t want them] and which requires political fiat to thrive extrapolates to a redistribution of resources from the economy to the political privileged groups. This is rank crony capitalism.

And crony capitalism results to huge wastages, economic inefficiency, discoordination of the economy and corruption among the many other nasty side effects. And this accounts for as the reverse Robin Hood where the poor and the middle class subsidizes the rich cronies (through taxes and inflation).

Worst is that the underlying (feel good) dogma of such environmental political religion has been founded on supposed infallibility and omniscience of computer based models.

As the great H.L. Mencken wrote,

Civilization, in fact, grows more and more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.

Earth Hour Myth: Life in Medieval Europe

For earth hour enthusiasts, take into account the lifestyles of the 14th & 15th centuries in Europe [quoted from Will Durant’s 1957 volume The Reformation by Professor Don Boudreaux]

Social and individual hygiene hardly kept pace with the advances of medicine. Personal cleanliness was not a fetish; even the King of England bathed only once a week, and sometimes skipped…. In all Europe – not always excepting the aristocracy – the same article of clothing was worn for months, or years, or generations. Many cities had a water supply, but it reached only a few homes; most families had to fetch water from the nearest fountain, well, or spring. The air of London was befouled by the odor of slaughtered cattle, till such carnage was forbidden in 1371. The smell of latrines detracted from the idyllic fantasies of rural life. London tenements had but one latrine for all occupants; many houses had none at all, and emptied their ordure into the yards or streets. Thousands of privies poured into the Thames; a city ordinance of 1357 denounced this, but the practice continued.

No electricity, no fossil fuels, no automobile (as well as no consumer gadgets iPad, mobile phones, computers etc...), no industries and basically little infrastructure and economic progress-- but looks very earth friendly, no? Or is it?

Yet is this the life that we desire?

Or is the environmental politics of earth hour all about the promotion of social control by would be tyrants and the advancement of the economic and financial interests of a few?

How Environmental Politics Pollutes

Professor Donald Boudreaux writes,

I speak of polluted perceptions of reality.

Wildlife made ugly and ill by spilled oil make for vivid images. And photos of such misfortunes do indeed reveal a risk of oil drilling -- namely, temporary spoliation of some parts of the natural environment.

But precisely because such spills are relatively rare (and getting rarer), we don't see such images routinely. So when these images are presented to us, they stir our emotions.

Trouble is, by focusing on such photos we get a distorted view of the bigger picture, one that includes oil's manifest benefits.

How many of us reflect on the benefits that we enjoy from asphalt? Asphalt makes road construction and repair less costly. So we in the industrialized world daily drive to school, work and play on clean, smooth roads that would not exist, or that would be less smooth and wide, were it not for this unassuming product made from petroleum.

Asphalt is so common that we take no notice of it. Yet if it disappeared tomorrow, we'd all suffer noticeably.

The same is true for, say, plastic wrap. We give this stuff nary a thought. Yet because bacteria cannot pass through it, those thin sheets of plastic keep meats, vegetables, dairy products and breads fresher -- and protect us against food poisoning.

Fact is, gasoline and aviation fuel aren't the only products produced with petroleum. Our modern lives are full of too many such products to count.

And not only are petroleum-based products all around us and practically indispensable -- they're also inexpensive. Yet we pay no attention to these everyday wonders.

This fact is why photos of oil-covered wildlife are dangerous: They make us aware of petroleum's risks while we remain oblivious to petroleum's benefits.

In the real world petroleum is an astonishingly beneficial, versatile and inexpensive resource. In the fantasy world of too many people, however, petroleum is a vile substance that does little beyond enriching a few sheiks and billionaires while it kills both the planet and humanity.

But in fact our world is incalculably better and even cleaner because of petroleum -- which is why it is especially regrettable that newspaper pictures of the likes of plastic wrap and asphalt would not grab readers' attention with anywhere near the impact of pictures of oil-covered animals.

Sounds familiar?

It’s been a common practice by sensationalist media to tunnel on accidents or disasters and blame them on people's actions to justify all sorts of political interventionism (to the delight of or in the interests of political authorities).

First, is to deal with the public’s emotions by manipulating images to project a political message.

Then with an audience carried away by the desire to assist, the next step would be to strongly advocate for interventions. This will likely be augmented by ‘scientific papers’ backed by institutions with political biases.

Never mind if such interventions would mean siphoning of valuable resources away from productive activities (that leads to nastier effects on future accidents or disasters). Never mind the unappreciated benefits to consumers as discussed above. And importantly, never mind the consequences of the alternative.

Short term becomes the imperative. Control becomes the primary tool to achieve a questionable end. Freedom of choice is sacrificed for political expediency and presumptiveness.

Think bans on Plastic bags. Philippines have been moving into this direction. They all emerged from the same focusing effect allegedly meant to save the environment.

Yet unknown to most, these are the types of environmental policies that advocates societal atavism (regression).

They go against the desire of the consuming public. That’s why bans are mandated proscriptions. Otherwise the public would vote with their money and plastic bags would disappear with no political coercion required.

Interventionist environmental politics assumes that we don’t know what’s good for ourselves.

Yet studies suggest that bans on plastic bags have been exaggerated.

Moreover, what are the alternatives? Paper bags? Are paper bags more environmental friendly?

No, according to biodeg.org

The process of making paper bags causes 70% more atmospheric pollution than plastic bags. Paper bags use 300% more energy to produce, and the process uses huge amounts of water and creates very unpleasant organic waste. When they degrade paper bags emit carbon dioxide, and will emit methane in anaerobic conditions.

A stack of 1,000 new plastic carrier bags would be around 2 inches high, but a stack of 1,000 new paper grocery bags could be around 2 feet high. It would take at least seven times the number of trucks to deliver the same number of bags, creating seven times more transport pollution and road congestion.Also, because paper bags are not as strong as plastic, people may use two or three bags inside each other. Paper bags cannot normally be re-used, and will disintegrate if wet.

Notwithstanding, politicians don’t see where papers originate from: the forests.

In short, bans on plastic bags protects, promotes or subsidizes logging. So consumers are not only being punished through inconvenience, they are needlessly faced with a political devil and the deep blue sea, through higher costs--all in the name of saving the environment. Yet this is another example where the cure is worse than the disease.

Like earth hour (which impliedly condemns modern electricity and promotes candles), these feel good policies will have a serious blowback. Unfortunately, since politicians are unaccountable for their actions, they will keep implementing noble sounding (vote generating) but unrealistic and uneconomical regulations with nasty unforeseen consequences.

Interventionist environmental politics not only pollutes the environment, at worst it pollutes people’s mind.