David Henderson's letter to the FT

Oct 28, 2011
Bishop Hill in Economics

David Henderson sends me this letter. It was sent to the FT in response to an article by Max Hastings, but was not published.

Sir:

Hastings on Energy Policies

Sir Max Hastings (FT, 22 October) is right to describe wind power as 'an expensive and unreliable source of energy', and to note that 'extravagant green policies' are pushing up energy costs in Britain. But his proposed remedies for the situation are not well judged.

As to specific proposals, it is surprising that he should argue that 'turbines should remain part of Britain's energy mix'. Again, he advocates subsidies for new nuclear power stations on no better grounds than that (according to him) they are costly. Most people would think that this, if true, was a reason for not subsidising them. In viewing the future, he takes no account of the possibilities that may have been opened up by the development of shale gas. It is not to be taken for granted that 'every form of power generation becomes inexorably more expensive'.

More broadly, Sir Max harbours twin illusions that the array of past policy failures might have led a historian to recognise as such. Illusion No 1 is that wise energy policies require the timely adoption by governments of far-reaching centralised strategies for 'Britain's energy mix'. Illusion No 2 is that the future is sufficiently well charted for such strategies to be soundly based.

The main current threat, not only to costs and competitiveness but also to energy security, comes from the intertwined energy and climate change policies which successive British governments have embraced.

David Henderson

Article originally appeared on (http://www.bishop-hill.net/).