Lawson In Australia: ‘Saving The Planet’ Will Destroy The Economy

  • Date: 25/06/11

MARGARET Thatcher’s one time right-hand man Nigel Lawson is not so much a climate sceptic as sceptical of the necessity for action, let alone the ways we are tackling climate change.

Lawson will be in Sydney in six weeks to expound his views at a public debate on the proposition: “We need a carbon tax to help stop global warming.”

The combatants themselves should raise temperatures. The former British chancellor of the exchequer and energy secretary will lead a negative team comprising former Keating government minister Gary Johns and University of Adelaide geologist and author of the sceptic’s bible Heaven and Earth, Ian Plimer.

The affirmative will be put by two former opposition leaders, John Hewson and Mark Latham, backed by University of NSW climatologist Benjamin McNeil.

Lawson says it is scientifically established that increased carbon dioxide emissions will warm the planet, but adds, “it is uncertain how great any such warming would be and how much harm, if any, it would do”. He urges governments “to consider the damaging economic impact of blindly following the climate change agenda”.

He dismisses as “complete nonsense” the argument that Australia has a special responsibility as a carbon-intensive economy and big coal producer to show global policy leadership.

“If China wants to develop and wants to increase productivity through, among other things, increasing electricity output rapidly and has been building coal-fired power stations and wants to import the coal to fuel them from Australia, I think you would be mad if you didn’t supply it,” he tells The Weekend Australian.

Lawson sees continuing strong demand for Australian coal despite promises by China and India to reduce their energy intensity, calling the pledges “cover”. “Economic development happens because of increased economic efficiency,” he says. “That means increasing labour productivity and that also means increasing the productivity of the other factors of production of which energy is one of the most important.”

Lawson adds the development of a less energy-intensive services sector is one of the characteristics of economic development. But he adds: “That doesn’t mean energy consumption will decline. Energy consumption will rise. Carbon consumption will rise because economic growth will trump the lesser amount of energy used for each particular unit of output.”

He calls energy intensity promises by China and India “convenient cover for their saying, quite rightly, ‘no way are we going to impede or in any way slow down our economic development by having restrictions on the use of carbon energy’. They go for carbon intensity rather than carbon emissions, which they can be perfectly confident is bound to decline through a process of development as it has in every country in the world.”

Lawson warns our politicians not to hold up his own party’s policies as exemplars.

Julia Gillard regularly points to British Prime Minister David Cameron’s environmental plans to embarrass the Coalition, but Lawson says Tory backbenchers “are increasingly uncomfortable and indeed hostile to policies [that] are being proposed on the climate change front, which mean higher energy costs, which are bad for consumers … and bad for British industry”.

He points out Cameron and his ministers have a plan B. “The government has said it will review the matter in January 2014 in the light of what other European countries are doing and this is clearly a get-out clause, this is clearly new, and it was clearly put in at the behest of the Treasury as both the Treasury and Treasury ministers are very concerned at the cost of going it alone.”

Economics and energy security are at the core of Lawson’s critique of the climate policy debate. “The world relies on carbon-based energy simply because it is by far the cheapest available source of energy and is likely to remain so for the foreseeable future,” he says. “The major developing countries, in particular, are understandably unwilling to hold back their development and condemn their people to avoidable poverty by moving from relatively cheap energy to relatively expensive energy.”

Lawson heralds new developments that permit extraction of gas from shale in an economic way as “one of the most remarkable technological developments there has been”, saying the shift from coal to gas that is set to follow will cut emissions.

“This is carbon energy but the amount of carbon dioxide produced per terawatt of energy generated from gas is half that from coal,” he says. “You don’t eliminate carbon emissions but you reduce them quite considerably by moving from coal to gas. Of course the environmentalists are appalled by this because they believe that carbon energy has to be eliminated altogether but that’s not going to happen.”

Lawson returns once again to the cost of renewable energy. “If renewable energy is cheaper than carbon energy, then that’s fine,” he says, “but for the present time and in the foreseeable future most forms of renewable energy are massively more expensive.”

Lawson dismisses as economic illiteracy claims of a green jobs boom powered by renewables that will mop up unemployment from the structural adjustment to a low-carbon economy, recruiting one of the great classical liberals to back his case.

“The French 19th-century economist Frederic Bastiat said you might as well go round breaking windows saying you’re creating jobs for glaziers. The fact is you can’t look at just one sector. The government can create jobs by employing large numbers of people to build statues of prominent politicians. You can always create jobs in a particular area.

“What you’ve got to be concerned about are jobs in the economy as a whole and you don’t create jobs in the economy as a whole by promoting something [that] is wholly uneconomic and has to be subsidised.”

Lawson has strong views about what decarbonisation means. “The plain fact is the total economy will be harmed. A lot of these green jobs will be in China. The Chinese can see there is a market in the West for solar panels and other things so they are producing them very much more cheaply. In so far as there are jobs they will be there, not in the consuming countries.”

The Australian, 25 June 2011