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G8 Pumps Out Misplaced Concern About Oil Price

Jake van der Kamp – Updated on Jul 10, 2008 – SCMP

G8 nations … said yesterday they would work towards a target of at least halving global greenhouse gas emissions by 2050 …

In another statement released on the second day of the summit, the leaders expressed strong concern about … oil prices.

Post, July 9

And blah-blah-blah-ba-ba-ba-blah-blah-blah-blaaaaaah-blaaaaah-blah-blah-blaaah-blah-blah-blaaaaaaaaaah …

I could carry this on right to the end of the column to acquaint you fully with the sum total of the real achievements of the Group of Eight summit but the boss would say I was a lazy cheater and dock my paycheque for it.

It’s blah-blah because there is only one thing that can cut greenhouse gas emissions by 50 per cent. This one thing is guaranteed to do the job and it is also beginning to make itself felt at last.

Our greenhouse gas emissions cutter will hugely stimulate the use of alternative energy sources. It will turn wind power, geothermal power and solar power into world’s biggest growth industries with enormous research budgets.

It will also induce consumers everywhere to adopt strict energy conservation measures. It will force them to turn off their lights every time they leave a room, make them turn up the standard room temperature in every air conditioned interior space they use and put sports utility vehicles into museums along with Tyrannosaurus Rex.

Below you can see a chart of how this miracle worker solution to pollution has exerted itself so far against a scale of emissions reduction in which the blue line represents the 50 per cent reduction mark.

Our miracle worker has not done much to help emissions reduction over most of the last 20 years but recently it has begun to assert itself quite strongly. It is now almost halfway to that 50 per cent goal established by the G8 and is likely to hit it many years before 2050.

This miracle worker, in case you hadn’t already recognised it, is a restatement of the price of oil in which the 50 per cent mark on the chart represents a price of US$300 a barrel.

Now, I could be wrong about that US$300 a barrel. It could be a lower price that gets us a 50 per cent reduction in emissions and it could be higher but it is probably somewhere around that level.

At US$300 a barrel for oil you will not be driving or riding in an SUV, you won’t turn your air conditioner down to 20 degrees, you will be using only fluorescent lights and you probably will have solar panels installed on the roof.

You will be doing all these things without any directive or any word at all from any leader of the G8. In fact, if it were left to G8 leaders to hit the target then that target would be as unblemished as an archery bulls-eye in an old folks home.

In the absence of a high oil price, I would like to see the day that an American president risks his re-election chances by telling the voters that they may no longer drive gas guzzlers.

I would like to see a Canadian prime minister pass a law that residents of Montreal may heat only two rooms per home in winter and must wear sweaters in the office. It would be an even better show if it were tried through tax targeting. That would result in a more spectacular fight than boxing any day.

Yet these are exactly the choices that the same voters will make with oil at US$300 a barrel. In fact, the only way they can be induced to make these choices is through a high oil price, with prices of other fossil fuels rising in tandem, as they are certain to do.

There is no other way. No elected political leader will ever do it through tax or other measures inflicted on people who have a vote in whether that leader remains a leader. And if the G8 countries won’t do it, then there is not the slightest chance that China and India, the world’s fastest growing energy consumers, will do it.

But will these G8 leaders recognise that a high oil price will do everything they want done without them having to blow out another puff of hot air over the microphones?

No, they will not. In their second day communique they expressed strong concern about oil prices.

They will now go home and grant oil exploration credits, wilderness oil drilling concessions, fuel cost relief measures and extra-budgetary military payments to maintain armed forces in the Middle East. In other words, they will do everything that they can do to suppress the miracle working emissions cutter.

And that’s why I say that G8 emissions reduction talk is just blah-blah-blah-ba-ba-ba-blah-blah-blah-blaaaaaah-blaaaaah-blah-blah-blaaah-blah-blah-blaaaaaaaaaah …

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