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on May 21, 2013
Finally a book that does not look at any one place, i.e. the US, Germany, France, or only one segment within a country, such as the 'oil lobby' in the US or some other boogeyman. In fact it explains why having a single country (like Germany) impose renewable energy goals is counter productive if at the same time the country shifts manufacturing to carbon-intensive China. The discussion of environmental summitry is also interesting and points out obvious problems with Kyoto and European carbon trading market. The proposed solutions are worth examination and include a feedback mechanism to set prices without excess volatility. Good read.
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on November 6, 2012
This book is a valuable contribution to a small but growing movement that recognizes the failure of current energy policies and the need for an alternative that can succeed. Though not solely focused on a technology led energy policy, this new book by Dieter Helm, a respected professor of economics at Oxford University does embrace its tenets as part of a broader energy policy.

The author is committed to the urgent need to reduce CO2 but makes a damming case against the failure of current alternative energy technologies and the policies that promote them.

He favors a road-map that promotes a short term emphasis on natural gas to replace the current worldwide race for coal, along with R&D investment to develop a wide range of potentially better technologies for the future. He supports dropping all subsidies for energy deployment, both fossil and alternative energy and imposing a small but increasing carbon tax that includes border taxation to eliminate leakage. The initial tax level would be sufficient to favor natural gas over coal, and as carbon free energy alternatives become economically viable, the tax could be gradually raised to promote their acceptance.
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on May 19, 2017
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on November 27, 2012
A good critic to what has be made so far to tackling global warming. Author critics about the mainstream views about Kyoto Protocol and the role of Renewables. What I can summarize is that Renewables are not enough. Other options are needed and a big change on where the efforts are put to tackle climate change. A must-read for anyone interested in climate change and energy policy.
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on April 16, 2013
This is one of the best books I've so far read on this subject. Read it on my kindle, my mobile.. I do recommend to every one, greenpeace people included, with interest on this. Very well wriitten and full of (good) technical data.
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on December 18, 2012
I have read most work in this genre--Helm is one of the best. But where did the design of the dust jacket come from? those cooling towers emit nothing but steam--a white cloud. Some editor air-brushed in the black stuff--a serious misrepresentation. Anyone interested in background information should read Vaslav Smil or David JC MacKay.

Richard Hill--OldTown, Maine
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on December 6, 2012
Sheds new light on climate change. Deals only with CO2, nothing on methane or other gases (Okay, to I still have two chapters to go). Shows how a carbon consumption tax could be implemented in such a way as to get around the free rider problem. A glimmer of hope!
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on February 20, 2013
An up and down book with a number of "issues"

Helm grossly overstates, by implication, proven plus probable natural gas reserves. It's by implication because although has plenty of graphs and stuff elsewhere, such things are curiously missing whenever he talks gas.

He appears to deliberately get Peak Oil wrong. He again implies that King Hubbert made no allowances for offshore oil, other tech-tough oil plays, etc. Wrong. At least shallowwater offshore, and the possibility of something like "tight" onshore eventually being developed, were part of his ideas. Beyond that, he mashes up the politically driving price spikes from the two 1970s oil embargos with Peak Oil-type price climbs of the past few years. And, on the famous Paul Ehrlich-Julian Simon bet, he, like many a conservative, ignores that Ehrlich broached a follow-up bet which Simon refused.

Helm does get right the fact that the current potential of many renewables is overstated. And that carbon taxes are needed.

But, you can read about that in other climate change books.

I found this one to be pretty high on the non-credibility list because of the Peak Oil and Peak Natural Gas issues, and how Helm played with lack of jazzy graphs on both.

Up until about halfway through, I was willing to give a fourth star. After that, no. Helm simply has too much intellectual dishonesty. I can't but call it anything else; he's informed enough he could have written differently.

Until I got near the end of the book, in fact, I was ready to two-star it, and I finally did. Anybody who favorably cites Ted Nordhaus and Daniel Yergin both isn't likely to be on my good side.

Having read a book on the CIA coup against Mossadegh in 1953, I realize just how much in the tank Dan Yergin is for Western Big Oil interests, and that's part of why I moved this down from a possible third star. There are good points here, but there are liberal books that cover them. Or even centrists, like Vaclav Smil, who, surrisingly, was NOT referenced here.
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HALL OF FAMEon August 8, 2013
Author Helm states his reason for writing this book is because in almost a quarter of a century, virtually nothing of substance has been achieved in addressing climate change.' Meanwhile, it is hard to find any mainstream climate change expert who now believes this phenomena can be limited to 3.5 F. degrees (2 degrees Celsius). From the pre-Industrial Revolution concentration of around 275 ppm of CO2 in the atmosphere, we reached 400 ppm in May of 2013, while adding nearly 3 ppm/year - up from 2 ppm/year in 1990. Despite European commitments of 20% renewables by 2020, Germany has also closed eight nuclear reactors in 2011 following the Fukushima incident and fast-forwarded two massive new lignite coal power stations - power generation that is about as dirty as you can get. Further, Europe's emphasis on carbon production is misleading - despite carbon production falling eg. 15% from 1990-2005 in Britain, its consumption (counting production shifted to Asia) increased 19%. Another problem - advocates of current renewables often claim these sources will become cheaper than fossil fuels since prices of oil and gas will go up because we are running out of them - lately, however, fracking has added vast new gas reserves, changing politics and lowering prices to the point where that is not likely in the near future.

The world is not on track to limit average global temperature increase to 2 degrees C. Any agreement to limit global temperature increases will not emerge before 2015 and new legal obligations will not begin before 2020. The long-term average temperature increase is more likely to be between 3.6 and 5.3 degrees C (about 8 degrees F). Global CO2 emissions increased 1.4% in 2012, reaching a historic high. Non-OECD countries now account for 60% of emissions, up from 45% in 2000. China made the largest contribution to the 2012 increase, but is growth was one of the lowest it has seen in a decade, thanks to its increased deployment of renewables and improvement in energy intensity. A switch from coal to gas in power generation helped reduce U.S. emissions by 200 million metric tons, back to the level of the mid-1990s. Meanwhile, climate change has fallen down the list of voter priorities - despite advances in scientific research on the topic.

Supporters are partly responsible - many began with an all-out assault on nuclear power, an important potential solution. Some lukewarm climate change supporters (eg. Lawson and Lomborg) have found it hard to get their views out; another problem - 'Climategate' emails, though little of substance was actually there. Exceptional cold weather is met with deafening media silence, and claims about melting Himalayan glaciers turned out to have been exaggerated. Similarly, the potential real contribution (taking ecological impacts, economics and space requirements into account) of renewables are often overstated by their supporters. Meanwhile, utility bills continue to rise.

Another problem - the topic is inherently complex, far more so than doing a laboratory experiment. Increased water vapor brings a cooling effect, reduction of sea ice allows the sea to absorb and retain more heat, possibly even releasing methane hydrates - both positive feedback effects, the latter being possibly very large and disastrous. And climate has changed a lot on its own, prior to the Industrial Revolution. Computerized climate change models create substantially different outcomes for differing assumptions.

National politics present both another problem and opportunity. Northern areas like Russia may benefit from global warming (longer growing season, easier shipping and access to raw materials), while politically-connected coal producers and gas retailers, along with recent access to vast new natural gas supplies in the U.S. complicate its response - especially through the dissemination of deliberately slanted or false information.

On the other hand, Chinese citizens have become alarmed over its emissions - an estimated 25% of demonstrations are about the environment, with a heavy middle-class component (harder to put down, easier to spread). Yet, it ranks about #4 overall in polls of public concerns. More people live at sea level in China than in any other country, and its leadership knows it needs to come up with improved behavior. China now produces nearly double America's CO2; it is also the world's largest investor in green energy, spending $275 billion over five years cleaning up its air - double its defense budget. China also already has a shortage of water, and that is threatened by pollution and climate-caused glacial-melting and reduced snowfall (vs. rain). Its deserts are spreading, and crop yields plateauing - again, possibly worsened by climate change. Meanwhile, the efficiency of its coal-fired power plants rose from 31% in 2000 to 37% in 2010, vs. 33% in the U.S.

Between 2000 and 2010 global demand for coal grew over 70%, with China and India accounting for more than 90% of the growth; India and China add up to three large coal-fired new power stations/week and the two have 30 nuclear plants under construction (24 in China). There are probably several centuries of reserves left. Methane is also released as the coal seams are opened up. It also creates acid rain when burned. Aviation fuel is more damaging (2 - 4X) by being released into the atmosphere at great height; aviation passenger miles are expected to grow 4 - 6%/year, mostly in China and India.

World population is expected to grow from its current level of 7 billion to 9 - 10 billion from 1990 to 2050; it was 1.7 billion in 1900.
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on October 30, 2012

I had high expectations for this book after reading most of the book. But as I got to the end, I decided I needed to scale back my expectations. Helm never really got out of the "Introduction to the Carbon Crunch" mode, though his "Introduction" is thoughtful.


Helm is refreshingly critical of the cap-and-trade movement, though he never calls it that. He refers to the two ways of reducing CO2 pollution as: 1) carbon-consumption taxing (i.e., levying taxes on each product consumed based on how much carbon is consumed in the production of that product) and 2) CO2-production permitting (i.e., cap and trade). He maintains that the last twenty years of Europe's attempt at regulation of CO2 production (cap and trade) has been a dismal failure since it has simply led to exporting the carbon consumption to cheaper manufacturing countries like China. On p. 234 he says:
"Europe's carbon consumption continues to increase.... Lots of money has already been spent; much more spending has been committed to the cause; and all with no apparent impact on global emissions. ... In the hall of political mistakes, this must stand out as a pretty unique failure."

The reason for the failure is that while Europe has reduced CO2 pollution at home by reducing coal consumption in favor of natural gas, the pollution due to their consumption of artificially cheap global goods, especially from China where coal consumption has exploded, has more than offset any domestic savings.

Discussing these issues on p. 70, Helm packs quite a bit into a couple of paragraphs, so pay attention:

"Between 1990 and 2005, whilst [direct] carbon production fell by 15% [in Britain], carbon consumption went up by over 19% [in other countries that manufactured goods for Britain]. In other words, the British were causing an increase in global emissions, masked by the amount produced in Britain. It is this carbon consumption that matters in terms of global agreements and national burdens.

"Europe and the US made matters even worse from a climate change perspective by encouraging excessive consumption (and hence import demand) through the loose monetary policy after the stock market crashes in 2000. This led to rapid growth in debt-financed consumption in developed countries, notably the US and Britain, which spilled into global trade. This in turn boosted exports from China, which in turn boosted demand for oil, gas, coal, and minerals, sparking a commodities boom. The commodity boom led to a greater exploration and production in a host of resource-rich countries, including Australia, Indonesia, and Canada. These countries emissions rose as a consequence. ... The Great Recession that followed when the debt-fueled bubble burst after 2006, had its carbon impact when the US and Europe reduced demand for China's carbon-intensive exports. But its effects were short term, and within a very short period emissions growth returned. This was due to a combination of stimuli applied by many governments, the now more self-driven growth of a number of Asian and other rapidly developing countries, and domestic demand in China."

He briefly leveled his guns at the Federal Reserve Bank, the Bank of England, and both governments. He could have said much more about these four entities' stimulation of global pollution and could probably have written a whole book on that topic alone. See my "Digression on the Role of Money" at the end of this review.


--The War Economy

Having made the correct assessment that cap and trade doesn't work and raising the price of carbon via consumption taxes does, Helm then makes a tactical error. On p. 240 he says, "Less consumption means lower standards of living. ... decarbonization cannot be done with zero pain. ... Tackling climate change does mean lowering our standard of living from its current unsustainable levels."

He repeatedly compares decarbonization to a wartime economy and its pain. But wartime efforts are short and very inefficient. What we need is a shift in our consumption paradigm from global, cheap, and disposable to local, quality, and smart. That's a long-term, efficient economy-- just the opposite of wartime. Fighting a war is what government is good at since efficiency is less important and propaganda is critical. But efficiently satisfying the consumer needs of large and diverse populations is what free enterprise has shown itself to excel at. It is easy to imagine the kinds of actions and sacrifices we need to make to bring common sense and energy efficiency back to both our political and consumption decisions. The good news is that our western life style in both the US and Europe is so wasteful of energy and so rich in non-essential consumption that it would be easy for us to substantially slash our consumption with minimal pain. By the same token, our political election processes are so user friendly that it is easy for us to re-direct our governments--once we realize that no beneficial change can ever come from mainstream candidates.

We consume too much stuff because stuff is too cheap. That is an obvious economic truth along with its corollary truth--stuff is too cheap because of government subsidies. Just name a resource, and it is likely that the United States Government and/or many other governments contribute heavily to the resource's production via direct contributions of money, land, and legal rights; plus free or subsidized military protection, subsidized agriculture and drugs, market promotion, employee health care and education, R&D, transportation, environmental cleanup, assassinations, coups, loans, tax breaks, central bank manipulations, and so on. The maintenance of cheap prices of labor and mineral resources in third world countries has been the successful principle focus of American foreign policy for well over a century. For example, several economic studies have found that the real cost of oil in the US considering all subsidies at all levels of government and society is anywhere from three to six times the sticker price.

--Using the Free Market

Helm insists that taxation of the consumed carbon is the only way to bring carbon price closer to parity with carbon costs. I maintain that we should first remove as many of the government-granted subsidies as possible to see how much that achieves before we assess taxes. In addition, if we made the taxes revenue-neutral to government and cost-neutral to the consumer, the pain could be reduced even more. This can be done by offsetting some other tax in the aggregate by exactly the amount of the carbon tax revenue. Thus those consumers who reduce consumption the most will achieve more consumption savings and get just as much alternate tax relief as those who continue consumption as before. Presumably wealthy people would continue more of the old consumption habits, while lower-income consumers would opt for the savings. The free market really can be used to manage economic pain rather than simply defaulting to government coercion.

--Conservation and Standard of Living

The taxes on gasoline in Europe are about ten to twenty times what they are in the US. This has not led to a collapse of the European economy as the critics of raising gas taxes in the US have asserted would happen here. I wish Helm had covered this gas tax issue in "The Carbon Crunch" as an example of minimal pain government action. Another example of dramatic energy conservation was the California brown-outs of the early 2000s. During a three month period in 2002, Californians voluntarily reduced their electricity consumption by 20%. All I noticed were some car lots not blazing so brightly all night and many stores and homes a little warmer and dimmer than usual. I sure didn't see any pain. After the brown-out danger subsided, we quickly reverted to our cheap-energy consumption habits.

One final note on conservation and pain. I see little pain and standard-of-living decline in the following:
-Buying three pair of shoes instead of six pair each year.
-Walking the half mile to the market instead of driving.
-Not buying the stuffed toy that your grandchild will discard the next day.
-Playing tennis and softball during daylight instead of under the lights.
-Turning off the front-yard accent lights.
-Buying vegetables and meat from local or regional producers instead of from Argentina and Australia.
-Not having a perfect lawn, and sweeping dirt instead of blowing it into everyone's lungs.


--European Gasoline Tax

I wish Helm had discussed the European gasoline tax, how it is so different from that of the US, what effect it has had on gasoline consumption in Europe, and what lessons one can learn about a carbon-consumption tax. There is no international replacement for local transportation, so a gasoline tax has a strong impact on local transportation habits. But if a carbon-taxed price of a domestic shirt gets too high, a shirt imported from a country with a less-strict adherence to a carbon tax will be substituted. This does exactly what Helm criticized Europe for doing in their failed attempt at CO2-production permitting. It shifted consumption toward global goods. Helm calls this carbon leakage.

Helm also failed to discuss how the price of bunker fuel for ships and jet fuel for planes factors into the price of global commodities, and thus the over-consumption of global commodities. International common-carrier usage is probably about as sensitive to fuel price as is automobile usage. The UN says that there are 100,000 cargo boats using international waters and that their CO2 output is greater than that of the country of Germany. If we increase the price of domestic goods via a carbon-consumption tax without increasing the price of international transportation, then we will be shifting even more consumption to the global market.

In a perfect world, we could solve the whole problem by imposing some tax on the fuel at the point where it is extracted from the ground. That seems impossible since most fossil fuel is ultimately consumed in a different country from its source.

--The Helm Solution

The international taxing of anything is difficult to impossible. Thus the carbon-consumption tax would be difficult to levy on a product to product basis. It would require that we determine the CO2 content of each item in our economy, for example, a domestically made shoe versus a Chinese-made shoe. Helm admits that this is undoable, so his solution is this on p. 191:

"It turns out that a very small number of industries are responsible for the bulk of carbon imports--steel, chemicals, aluminum, cement, and fertilizers, for example. If we could find a rough and ready way of taxing these, then the problem of carbon leakage [substituting a global, high-pollution shoe for a domestic, low-pollution shoe] would be much reduced.
"The obvious way to do this is to set up some broad categories and make some assumptions."
Helm then talks in wishes and generalities until he arrives at: "Once other countries introduce a carbon price, more would probably join, since the border tax [tax imposed by the country trying to reduce carbon consumption on the basic commodities and their derivatives from other countries] undermines incentives to free-ride. Gradually an international approach could emerge. The crucial difference is not only that the carbon border tax does not need an international agreement, but also that the Europeans and others can get on with tackling climate change--for which their responsibility is far greater than the 11% of global emissions that their leaders are so keen to quote--without waiting for a possible Kyoto framework agreement that might apply from 2020."

Although this leaves me wondering whether I, like Jack, have just bought the magic bean, Helm has written some worthwhile ideas that need to be expressed and considered before we can actually take a step toward solving CO2 pollution. It is necessary to speak of wishes and generalizations before one gets serious about a solution. But I still think the book title should have been "An Introduction to the Carbon Crunch."

--The Missing Analysis

Helm needs to do some hard analysis to see just how practical his ideas are. What I have found in my career of experimental physics is that it is easy to talk yourself into how good your idea is, but when you put pencil to paper and start doing rigorous analysis with real numbers, you find the holes in your ideas. This encourages a revision of the good idea. After several such iterations, one may in fact, have a really good idea. Or one may have to go back to square one. I don't think Helm ever got to the point where his ideas could actually be claimed as good.


Excess US dollars, which fueled the consumption excess, existed because of two things: the Federal Reserve Bank and fractional reserve banking. Both of these were brought to us by the United States Government--the Fed by an act of Congress (Federal Reserve Act of 1913) and fractional reserve banking as a tradition of the Bank of England and mandated in the Federal Reserve Act. The bottom line is that the Fed, created as a creature of Government, has subsidized economic growth and corporate profits with cheap and abundant credit for a long time. In addition, federal and state governments have been the biggest long-term growth sector in the US economy, and the Fed has provided abundant funds for that also. The abundance of cheap credit reached an absurd level before the 2007 financial crisis and has even risen since then.

One corrective action that would at least shed some daylight on the presently secret acts of the Fed is an act in the US House of Representatives that simply requires that a full audit of the Fed be performed--the Federal Reserve Transparency Act (H.R. 459). A similar bill died in committee last Congress, and this new bill likely will do the same this year since mainstream Republicans and Democrats do not want to threaten the source of cheap money for their benefactors.
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