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Economics - May 4

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Many more articles are available through the Energy Bulletin homepage

Chinese subsidies boost rural consumption

Julian Liu, BBC Online

For Liu Shiying, there is only one room in her house for the family's brand new refrigerator: the master bedroom.

"It's safer that way," says the 51-year-old rice farmer.

"It's the most expensive item in the house. The kitchen is too smoky and dusty for it and there's no electricity in the kitchen."

The refrigerator with freezer, stuffed top to bottom with dried fish from the nearby Yangtze river, cost about 2,000 yuan ($300; £200), the equivalent of several months of harvest here in central China.

...But in an effort to get thrifty Chinese to spend more money, Beijing expanded a pilot programme to subsidise electronics purchases for farmers in February.

The government pays 13% of the retail price for designated models of refrigerators, washing machines, colour television sets, mobile phones and personal computers.

Official figures show rural electronics purchases surged by 70% in March from the previous month. The scheme is expected to run till 2012.

...China's 700 million farmers are still poor compared with their urban counterparts.

But Beijing is keen to tap their collective spending power, as the Chinese economy experiences its worst slump in 20 years.

(30 April 2009)

It can be done but what is it we are doing?

Carl Mortished, Times Online
"Oh Lord, make me carbon-neutral, but not yet.”

If St Augustine were in charge of UK energy policy, he might utter such a prayer. The sheer scale and cost of putting Britain on the path towards zero carbon is only beginning to become apparent.

In its report, published on Thursday, the UK Energy Research Centre suggests that a carbon price signal of £200 a tonne, 15 times the present level, is needed if we are to reach the Government's target of an 80 per cent reduction in CO2 emissions by 2050.

Small wonder, then, that the centre is dismissive of the Government's aspiration of generating a third of electricity from renewables by 2020. That we have barely started — wind accounted for about 1 per cent of power generation last year — is reason enough to be sceptical. What is more important, however, is not whether we match some politically inspired timeline (always just beyond a minister's career horizon) but whether the practical steps that must be taken to get even halfway towards the desired goal are affordable.

...More relevant is the rarely asked question whether the public wants the British power industry to undertake this challenge, when the costs are fully understood. If we are to go down this road, we are more or less saying goodbye to a free market in energy. At present, power companies selling electricity generated from nuclear, coal or gas bid their capacity into the grid but must buy a certain amount of wind power — the renewable obligation.

...The solution, suggested by some, is to have a clever system that can prioritise wind. When it blows hard, the proposed 30GW of wind-generated power would become the base load. Every electron from every whirligig would be used — nuclear, coal and oil would pick up the slack.

That would make best use of the resource and it would cut out more carbon, but it would turn the market on its head. Instead of a system that rewards the most efficient and cheapest source of power, we would have a command to buy the most expensive and unreliable. By government diktat, the stuff that powered your fridge would be gold dust, not coal dust.
(30 April 2009)

Prosperity without Growth? - The transition to a sustainable economy Report in PDF format

Professor Tim Jackson, Economics Commissioner, Sustainable Development Commission
Prosperity Without Growth? says that the current global recession should be the occasion to forge a new economic system equipped to avoid the shocks and negative impacts associated with our reliance on growth. Ahead of the G20 Summit in London, the report calls on leaders to adopt a 12-step plan to make the transition to a fair, sustainable, low-carbon economy.
Sent in by EB contributor driller. You can download the pdf here.

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