Adrian Corcoran

Bush may not know what’s going on around him, but surely today’s 5% rate of inflation shouldn’t come as shock to anyone with the slightest interest in what’s happening in the world, the economics editor of the national broadcaster stated “today’s inflation figure will come as quite a shock.” He wasn’t the only one, there was shock and hysteria all around today.

But if you look outside of Ireland, for just a second, you’ll see that Oil was at $112 a barrel yesterday, the price of wheat has increased so much that in the United States 2 million acres of land have been converted from conservation to tillage in the past couple of month. In Asia, there is wide spread security concerns following a doubling of the price of rice in the last 12 months.

Yes, that’s right, the stable diet of 3 billion people has doubled in price. Rice prices in particular have left the UN world food program with a budget hole of $500 million.

We’re been protected against a lot of this by the direction the euro has taken against the dollar and the pound, a few months ago, the government and economists should have been expecting a much higher jump in inflation today, and that shock they are feeling should actually be relief.

Food and Fuel are the two main drivers of our current rate of inflation, we’re lucky to be getting away with a 5% rate of inflation for the last 12 months, if you were a family in Vientnam, who on average speed 65% of their budget on food (mostly rice) you would be delighted with a 5% rate of inflation.

The real story here is in the global prices of food – not a 0.2% change in the rate of inflation in Ireland.

As for suggestions from the Unions and others, that the government need to take control of inflation, outside of closing the Irish economy to the rest of the world, there is nothing they can do which will have any significant effect. They don’t control world prices in food, energy or anything else, they don’t even control interest rates.

In Ireland we are lucky, for every 3 hours there are 2 in which it is windy enough to get full capacity from our wind turbines. In some parts of Europe it is as low as 1 in 3.

A common rebut to increasing our wind capacity is security of supply (or ability to match peak demand with generated electricity.)

The wind doesn’t always blow, we have no control over when it does. How can we be sure of our generation capacity if we don’t know when the wind will blow?

The usual solution is to match the wind capacity with backup from traditional generation plants.

But, intuitively, it seems plausible to suggest there is a link between when the wind blows and when we, as consumers, demand electricity. Think about what you do on a windy night? You head home, turn on the heating, cook some comfort food (more energy intensive, think Ovens Vs Woks), decide to stay in and watch TV instead of going out for a walk, etc… Would it be plausible to suggest you use more electricity when its windy?

Well it turns out it is very plausible. Taking data on wind generation and electricity demand in Ireland for the last three months, there is a direct, positive relationship between how much electricity we use and whether the wind blows.

Ends, the numbers:

I took 15 minute internals, on system demand and wind generation, from 01/01/08 to 28/03/08, 8419 observations and regressed them on each other, showing there is a direct correlation between system demand, and wind generation.

demand
wind 0.168 (4.79)**
Constant 3,543.679 (265.40)**
Observations 8418
R-squared 0.00
Absolute value of t-statistics in parentheses
* significant at 5% level; ** significant at 1% level

Following approval from the EU, as of January 2009 you will no longer be able to buy incandescent light bulbs in Ireland.

It’s hard to argue against promoting CFL usage over incandescent but is a ban the best way to achieve this? Bans have many negative effects; they create black markets, and make people feel they are under the control of a big brother style government.

So, instead of a ban what else could you do? You could tax incandescent bulbs in line with their carbon emissions.

Some Calculations, on a 20W CFL Vs a 100W incandescent:

Life of incandescent
2000 Hours
Watts savings
80 Watts
Energy saving over lifetime of incandescent
160 Kwh (Units of electricity)
CO2 per kwh (Unit)
550 g/kwh (From the back of my ESB bill)
CO2 from the life of incandescent
88000 g/kwh
In Tonnes
0.088 Tonne
Price/tonne
30 Euro (used in gov grid report)
Tax
2.64 Euro per bulb (additional tax compared to CFL)

These calculations use a price for carbon which the government has used recently. The result is that an incandescent bulb should have an additional tax of 2.64 Euro (in comparison to the 20W CFL bulb.)

Interestingly the tax is approximately equal to the current price difference between the two, if applied this tax would mean the CFL and the incandescent would be a similar price, people would then be more inclined to go for the CFL (lower running costs and longer life for no additional cost) but still have the option of the incandescent for situations where the CFL is just not suitable.

The question which plagues many economists is, where should such a tax be applied?

Should it be applied to the fuel source used in the generation of electricity, thus encouraging generators to use cleaner fuels, but not sending strong price signals to the end user (Who knows the cost of a unit of electricity? Or how much electricity an appliance uses?) If the tax is applied to the appliance at purchase, based on the expected life of the appliance, then the consumer can see exactly how much extra it is costing them – and give them direct encouragement to go for the more efficient option.

In his statement today Tory leader Cameron stated that his green taxes would not lead to new taxation and would instead replace other forms of taxation.

But Green taxation should not be about revenue generation; in fact a truly effective Green tax would not generate any revenue at all as it would encourage people to find environmentally friendly alternatives, think plastic bag tax in Ireland, if it is effective no plastic bags will be sold and hence no revenue generated, in reality however, it gives people a choice and if the tax is punitive the revenue generated will be insignificant.

Secondly, surely Green taxes should be new taxes, and any revenue generated should be ring fenced for use in environmental research projects. The result would be self extinguishing taxes, for example, revenue generated from a Green tax on home heating oil should be used for research into the development of renewable home heating solutions, thus making the use of home heating oil redundant and thus extinguishing the tax and revenue from it.

Ireland’s other All Ireland Party won their first seat in the Northern Assembly today. Congratulations to Brian Wilson from the Green Party.

Time for Sinn Fein to update their website and remove the description “Ireland’s Only All Ireland Party.”

Turkey need to learn from the lessons of the Chinese government, if you want to control freedom of speech on the Internet you need to do a lot more than block one website.

A study of productivity in Turkey over the next few days would show some interesting results, without youtube, people may actually get some work done.

Despite having the help of Google and Yahoo, despite the army of 30,000 internet “monitoring” officers, despite the fact the state operate the only ISP, the Chinese government have been unable to assert the level of control over the Internet they desire.

The next step in their censorship is the banning of the opening of new Internet Cafés, effective from July this year.

Its not as if there was a free for all in the Internet Café market up till now, with each new café requiring a licences from the Government. With the state controlling the only ISP, internet cafes are the only way for most people to get online.

Yesterday, in his annual address to the National People’s Congress, Chinese Premier Wen Jiabao, outlined his plans to cut pollution, perhaps he could kill two birds with one stone…

Delegates’ response to Wen’s comments on the environment

• Homosexual acts are punished by death
• Foreigners found to be infected by HIV will be deported without exception
• Torture of suspects
• Political suspects held incommunicado at undisclosed locations
• Capital punishment (150 lashes) for becoming pregnant outside of marriage
• Ban on conferences examining women’s rights
• No citizen rights for the children of local women with foreign husbands
• Centre for trafficking of Men, Women and Children for sexual exploitation
• Passports routinely confiscated from migrant workers (who make up 90% of the workforce)
• Harassment of Human Rights Defenders
• Government has barred 12 prominent UAE commentators and academics from disseminating their views
• Trade unions are Illegal
• Sentence of death by stoning issued by courts

It’s going to be a busy embassy…

The European Environment Agency yesterday published a report which ranked Ireland 2^nd among the EU25 for transport emissions growth. Not a league table you want to top, but at least we have the excuse of our economic growth. What’s Luxembourg’s excuse? They topped the table. Well, if you have ever crossed the border into Luxembourg by road you may know the answer. Petrol and diesel in Luxembourg is significantly cheaper than any of its neighbours and so when truckers pass through they ensure they arrive on an empty tank and leave full, thus distorting their emissions, as the EEA measures the amount of fuel sold, not where it is consumed.

The more important conclusion from the report however, is that Transport (excluding  Air and Sea) makes up 21% of our total greenhouse emissions, and without addressing this in a significant manor it is near impossible to reach any of our emissions targets.

93% of the transport emissions are generated by the burning of fossil fuels on the road, by cars, buses, trucks and vans. These vehicles can make small improvements, but to make significant changes we need to move both people and goods on to public mass transit systems.

Ireland needs to address its electricity supply, regardless of environmental concerns our supply is currently at capacity and we need to decide on a direction to meet our future demands. If we are serious about climate change then all future power generation should be renewable. We have the capacity, to fulfil our demand many times over with the use of offshore wind and tidal turbines. If it is adopted as government policy then we can achieve, an effective generation system which produces beyond our current and projected needs. When clean electricity in plentiful supply we can then convert many of our fossil fuel burning systems to electricity.

Public transport systems are perfectly suited to run on electricity, we have the Luas and Dart running on electricity, but unfortunately they are the only two. Our public transport currently is reliant on fossil fuels. If we invest heavily in renewable electricity then we should be ready to enjoy its benefits. We need to start evaluating the electrification of our intercity train network. Electric trains can accelerate faster, reach higher speeds and most important are better for the environment than diesel (even with our current fossil fuel based electricity.) What is the point in investing in diesel engines today when diesel is set to continue to rise in price, and the emissions cannot be improved? Sure, the capital investment will be large but we will future proof our train system. An improved train system will remove large number of cars from the road but also trucks. Iarnrod Eireann needs to start carrying freight again.

Trams are a great solution where large numbers of people are going in the same direction, and Dublin along with the other Irish cities need more Tram systems, but buses will always play a significant role in public transport. The Labour party estimate that Dublin Bus require an additional 500 buses (a 50% increase in fleet size) in order to provide a effective service. Before we run out to order these 500 diesel buses we need to consider our options.

Trolleybuses are making a come back, they run on electricity, and can be installed quickly and at a reasonable cost. They are a cross between a tram and a bus. They use overhead power lines, but do not run on tracks. They can manoeuvre in traffic just like a regular bus, and new models can even leave the overhead lines and rejoin them at later stage if need be.

Installing Trolley Buses on all our cities, converting our trains to electricity and massively increasing the capacity of both while at the same time investing heavily in renewable electricity would future proof both our electricity supply and public transport, while significantly reducing our emissions. 

AMD, the second largest processor manufacturer last week released a report which estimated the power consumption of US datacenters to be 45 Billion KWh. The US makes up approximately 20 percent of global internet usage and with the total power consumption of Ireland at 35 Billion KWh annually, turning off the internet would be the environmental equivalent of turning off 6 and a half countries the size of Ireland.

Of course we need not fear, because 5 days after AMD published this report they came to the rescue with the launch of their new range of energy efficient chips.