Lords of misrule
May 2, 2013
Bishop Hill in Climate: Parliament, Energy: grid

I thought yesterday's Liberum Capital note was very interesting, particularly the suggestion that investors reckon that government energy policy is risible. When one thinks about it, the idea that voters would tolerate the vast spike in energy costs that our political masters seem to want is preposterous.

It's interesting then to see today's House of Lords report on EU energy policy (see here, BBC coverage here). Their lordships have decided that there are two things putting off potential investors: the incorporation of a minimum carbon price into the ETS and the lack of a requirement for a fixed proportion of renewables in the energy mix by 2030.

The calculation seems to be that investors will be enticed in if the public are fleeced sufficiently; big bad capitalists will simply be unable to resist all that easy money. Liberum, on the other hand, seem to have thought things through a little further, asking themselves whether the public will tolerate being fleeced to the extent envisaged in Westminster and Brussels. They conclude, correctly in my opinion, that transfers to big business on this scale will be seen as intolerable.

The difference in opinion between the real world and the political world is rather stark, don't you think?

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