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News From Our Favourite Lobbies

by afew Mon Dec 3rd, 2012 at 10:23:07 AM EST

Two items stand out in today's Salon. The first concerns the UN Climate Change negotiations in Doha, that are now halfway through.

IPS - Fossil Fuel Lobby in the Driver's Seat at Doha | Inter Press Service

Countries have come to Doha unprepared to make the necessary commitments to actually stay below two degrees.

"There have been a number of voices suggesting (that) keeping temperatures below two degrees C is not possible. That simply isn't true. It is perfectly feasible," said Schaeffer.

Yes, but:

countries are going in the wrong direction, spending 523 billion dollars in 2011 in public tax money to subsidise the burning of fossil fuels, said Michiel Schaeffer, a scientist with Climate Analytics that produces the Climate Action Tracker (CAT) with Dutch energy consulting organisation Ecofys and Germany's Pik Potsdam Institute.

"The 2011 subsidies for fossil fuels were a 30-percent increase over 2010, according to the IEA (International Energy Agency)," Schaeffer told IPS.

By contrast, the IEA said that solar, wind and other forms of renewable energy received only 88 billion dollars in subsidies, one-sixth of the amount given to the highly profitable fossil fuels sector.

Even though 194 states and the European Union are here at COP18 to ensure the heating of the planet stays below two degrees, they are not discussing how to eliminate subsidies for fossil fuels.

So subsidies to fossil fuels rose by a freaking 30% between 2010 and 2011. And renewables, that we incessantly hear are hopelessly expensive and subsidised, get one-sixth of the amount fossil fuels get. Are we getting round to understanding that the propaganda effort by incumbent energy industries is not only real but it is working?


The second lobby news item also concerns polluting by burning stuff.

European Commission: Big Tobacco at home in Brussels | Spiegel | Presseurop (English)

In Brussels, every meeting with a representative of the tobacco industry is a test of will - even for occasional smokers. Scarcely had we arrived when a spokesman for Philip Morris (Marlboro, L & M) slipped a packet of cigarettes into our hands. Instead of a brand name, the packaging has a picture of a man with a cancerous tumour in his throat.

"This is defamation," says the Philip Morris representative before showing us another packet featuring another cancer patient. The European Commission would like to print such images on all cigarette packaging to shock smokers, he protests, before lighting up a cigarette with evident relish.

Defamation? Is Big Tobacco still trying to pretend (as it did for decades) that smoking does not cause cancer? But more, how much influence can this lobby have?

Tobacco manufacturers have clearly managed to win influence over part of the European Commission. A series of internal documents obtained by Der Spiegel indeed reveals that several people from office of the President of the Commission oppose any strengthening of the tobacco regulations. Even the head of the European Anti-Fraud Office (OLAF) has doubts about the legislation. In that light, Jose Manuel Barroso and the agents of OLAF have therefore played a not insignificant role in the resignation of the European Commissioner for Health a month ago.

"There is no conclusive evidence" against Dalli, the head of OLAF, Giovanni Kessler, admitted before the Committee on Budgetary Control of the European Parliament. But "the circumstances" don't put him in a good light, he insisted. While the President of the European Commission is still refusing to publish the OLAF inquiry, recent documents are reinforcing suspicions that have been circulating the capital for weeks, that Dalli may have fallen victim to a conspiracy.

The former European Commissioner, who used to be a heavy smoker, undeniably wanted to strengthen EU tobacco legislation, and was proposing harsh curbs on the sale and advertising of many products containing nicotine.

Whether Dalli fell foul of a conspiracy or not, there is certainly a lobbying push against draft EU legislation on smoking and non-smoke tobacco products. Read the rest of the article for examples of Commission foot-dragging. Wonderful.

Display:
Also see the disingenuous argument about risk and the "nanny state" in the article linked to in the first (tobacco) quote above.

Social issues: The counterproductive war on smokers | Presseurop (English)

a widespread phenomenon in Western civilisation: the drift towards a nanny state and the growth of a culture that is hostile to even the slightest risk.

When smokers are suffering, later in life, from the consequences of their addiction, who do they turn to for treatment but the "nanny state"? Are they willing to pay out of pocket for medical treatment for themselves and those who suffer from second-hand smoke? (The author of the article may say, "Oh yes, I'm willing", but he's a libertarian wanker and there are not many who'd follow him).

Or (again) are the tobacco lobbyists (like the fossil fuel lobbyists, finally) trying to pretend there are no really serious consequences from indulgence in their profit-making goods?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 10:35:31 AM EST
a culture that is hostile to even the slightest risk.

When someone else takes a risk that he may damage (and will certainly annoy) me, of course.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Dec 3rd, 2012 at 11:50:43 AM EST
[ Parent ]
By contrast, the IEA said that solar, wind and other forms of renewable energy received only 88 billion dollars in subsidies, one-sixth of the amount given to the highly profitable fossil fuels sector.

It makes no sense to compare absolute numbers. Compute $/Gwh and the numbers look differently.

by oliver on Mon Dec 3rd, 2012 at 11:24:17 AM EST
30% increase in subsidies to fossil fuesl in one year looks like what?
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 11:39:37 AM EST
[ Parent ]
And subtract the merit order effect and you're back again.

Most of the "subsidies" listed for renewables are fixed-price purchase agreement, for which one must of course not only count the periods where the fixed price is above the market price, but also how much the market price is lower than it would have been under a BAU (i.e. natural gas baseload) scenario. If the fixed price is lower than the weighted average price under BAU, it's not a subsidy after all.

By contrast, most of the fossil fuel subsidies take the form of direct production subsidies, lump-sum transfers, regulatory forbearance and general regulatory laxness, pollution tax waivers, free pollution credits, etc., all of which actually are subsidies.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 3rd, 2012 at 11:41:24 AM EST
[ Parent ]
I had understood that the phenomenal increase in fossil fuel subsidies in the past few years was mostly a matter of direct subsidies to consumers, i.e. artificially low fuel prices.

And they can be quite hard to cut, because you tend to end up with your head on the end of a pike.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Dec 3rd, 2012 at 12:06:45 PM EST
[ Parent ]
A general subsidy to consumer prices affects all types of energy, not just fossil fuels. So did all producers get a 30% rise from 2010 to 2011? (Don't know the answer).
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 12:15:18 PM EST
[ Parent ]
Not if the subsidies are for home heating or transportation, which take up a much larger fraction of the fossil fuel use than of the electricity use.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 3rd, 2012 at 12:24:50 PM EST
[ Parent ]
consumers get fuel at low prices, but governments need ot buy the supplies at market prices. If market prices increase, the implicit subsidy increases.

It can be argued that natgas subsidies like in Russia are relatively fair (equal distribution across most of the population of a good providing vital services like electricity, heating and cooking), but low prices for oil in many countries mostly benefit the small slice of middle class that is already rich enough to own a motor vehicle and create massive waste of resources.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Mon Dec 3rd, 2012 at 05:05:06 PM EST
[ Parent ]
Speaking of fossil fuel subsidies, I wonder whether they count the cost (both strategic and pecuniary) of keeping military bases and propping up friendlycompliant client governments in every godforsaken hell-hole that happens to have hydrocarbons...

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 3rd, 2012 at 05:19:29 PM EST
[ Parent ]
That kind of externality is definitely not counted as a subsidy...
by afew (afew(a in a circle)eurotrib_dot_com) on Tue Dec 4th, 2012 at 02:14:45 AM EST
[ Parent ]
Jerome a Paris:
mostly benefit the small slice of middle class that is already rich enough

See below for the IEA assessment that only 8% of fossil fuel subsidies in 2010 benefited the poorest 20% of the population.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Dec 4th, 2012 at 02:39:46 AM EST
[ Parent ]
The Washington Bruxelles Let Them Eat Cake Consensus is helping here. Fuel subsidies is one of those things that always get slashed when the economic hit men move in.

Of course, the reason you get the Vlad Dracul treatment when you cut fuel subsidies is that people like being able to cook their food. And even if they could have afforded unsubsidized fuel before your country got Troika'ed (not a certainty, even in much of Europe), the IMF/ECBuBa/whomever will make sure you can't after they're done.

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 3rd, 2012 at 12:15:37 PM EST
[ Parent ]
Pointing towards the real problem of the state having to subsidise fuel because other infrastructure is lacking and the people is to poor to survive without it. So needed is: building infrastructure for electricty, building renewable power and employing people with decent wages.

My guess would be that a large part of that 30% increase is automatic, as in it is not the rules that are changed but the reality it applies to.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Mon Dec 3rd, 2012 at 02:15:18 PM EST
[ Parent ]
If so, not particularly efficient in "helping" the poor.

The stats quoted in the IPS article are surely from the IEA's 2012 World Energy Outlook, just out, price €150, I'll pass.

But from the 2011 edition:

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 02:18:02 PM EST
[ Parent ]
I also wonder about the price effect of fuel subsidies: if oil companies use subsidies to boost both wholesale and retail prices higher, nothing may be won at the customer end.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Dec 3rd, 2012 at 02:23:22 PM EST
[ Parent ]
perhaps I'm naive about the mainstream European sensibilities, but I find it almost incredible that these two lobbies have any substantial influence there. I'm used to their attitude and to their influence in the U.S., but I figured that was due to their frog-boiling technique. They 'grew up' with us over these many years.

Where is that storied European skepticism concerning all things 'American'? I admit to perennial optimism when it comes to turning the USA to responsible citizenship, but I've looked to y'all for inspiration.

So - what is to be done?

paul spencer

by paul spencer (spencerinthegorge AT yahoo DOT com) on Mon Dec 3rd, 2012 at 11:31:57 AM EST
Brussels is a lobbying hotspot. Of course, the lobbyists adapt their style to Europe rather than appear American.

As for whether these two lobbies are in fact American (alone), Big Tobacco and its methods are American and British, (see Imperial Tobacco and British American Tobacco). Fossil fuel incumbents are as European as they are American.

What is to be done? Short of a total end to capitalism, we need a change of political personnel, honesty in public dealings, regulation. A long road ahead...

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 12:01:03 PM EST
[ Parent ]
on both counts.

paul spencer
by paul spencer (spencerinthegorge AT yahoo DOT com) on Mon Dec 3rd, 2012 at 01:46:29 PM EST
[ Parent ]
I don't know how credible Spiegel and Presseurop are when they criticise the European Commission. In fact, Brussels is plastered with posters for the EU's anti-smoking campaign Ex-smokers are unstoppable.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Dec 3rd, 2012 at 11:36:02 AM EST
Spiegel, not Presseurop. It's also Presseurop that translates the anti-legislation article I linked to.

I don't see any reason to doubt what the Spiegel author says about journalists being lobbied by a Philip Morris man. Nor about delaying tactics:

European Commission: Big Tobacco at home in Brussels | Presseurop (English)

Ireland's Catherine Day, Secretary General of the European Commission and as such the most powerful woman in Brussels, repeatedly saw to it personally that brakes were put on the procedure.

On July 25, Day, who had been Barroso's closest ally for the last seven years, sent Paola Testori Coggi, the head of SANCO (Directorate General for Health and Consumers) a two-page letter that could easily have been sent by a tobacco industry representative.

In it she expressed "serious doubts" about the directive. She criticised the "general prohibition of smokeless tobacco products," questioned "the treatment of products containing nicotine" and expressed reservations about "the provisions for the sale of cigarettes."

On September 23, Day sent a second letter to Paola Testori Coggi. She demanded that the directive not be presented before the Summit of Heads of State and European Governments scheduled for mid-October. Certain details, she wrote, could still be modified, and no controversy should be stirred up before the summit.

The Director General of SANCO could not understand why, as the details of the Dalli proposal had been public for some time - and had sown panic in the tobacco industry. The goal was to move onto the next stage as quickly as possible to get the proposal adopted by the Commission before the end of the year.

Today, one thing is sure: John Dalli's resignation has set back the draft directive, and the reality is that it is highly unlikely to be adopted before the end of the mandate of the current Commission in 2014.

Apparently Dalli is an Ex-Smoker who may well have turned out to be stoppable.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Dec 3rd, 2012 at 11:47:30 AM EST
[ Parent ]
Every time I see/hear the word "lobby" my brain inserts the word "bribery" and it all makes sense. What to do about it? What can be done? Probably nothing. Just saw a short segment on Dem Now! concerning Egypt (an aside). The public is likely to codify its own enslavement and their military is still calling all the important shots. The way the system works.

The good news ... it's only a life sentence. You eventually leave this planet of idiots.
by THE Twank (yatta blah blah @ blah.com) on Mon Dec 3rd, 2012 at 04:38:55 PM EST
The point has already been raised above - fuel subsidies are predominantly in effect in developing nations. There's not one EU nation in the top 25 of nations which have fuel subsidies in place.

Most will recall violent protests in Nigeria early this year when the national government tried to raise its petrol prices and lower its subsidies. That attempt hardly flew. Whether the subsidies are efficiently spend on the poorest, it's a moot argument, as subsidies remain too often an effective tool for political stability. That will undoubtedly change in time with increasing population and increasing oil prices.

It does beg the question how much influence the fossil fuel lobbyists have on national politics, particularly when ruling governments have a direct interest in using subsidies.

So let's have a hard, honest look at Europe. It's hard enough to get the point across how futile subsidising Spanish coal mining is. Or while I'm at it, German lignite mining.

Combining the EU, lobbying fossil fuel industries and all the world's fuel subsidies in comparison with all subsidies on renewables, doesn't strike me as a fair or even an useful assessment.

A more interesting question should be: how many fuel subsidies did EU nations receive in comparison to renewables subsidies in EU nations?

But in all honesty, I don't think even that will tell us much about the traction of lobbyists in Brussels - because their real power lies in obstruction (see the tobacco example).

by Nomad on Mon Dec 3rd, 2012 at 05:51:56 PM EST
I think you're mixing up two lobbying stories. On fossil fuel subsidies, the article comes from Doha during global climate change negotiations, so concerns global matters. The IPS journalist argues that the fossil fuel lobby (or powers-that-be might be more accurate) dominates the discussion.

The second concerns lobbying in Brussels on specifically EU tobacco legislation.

I had no intention of "Combining the EU, lobbying fossil fuel industries and all the world's fuel subsidies in comparison with all subsidies on renewables", only to pick out two different lobbying stories from the day's news. The only link between them is of a general order, the (infuriating) power of commercial interests to perpetuate damaging behaviours.

"how many fuel subsidies did EU nations receive in comparison to renewables subsidies in EU nations?" is definitely an interesting question. Diary?

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Dec 4th, 2012 at 02:29:03 AM EST
[ Parent ]
My comment was not meant as a criticism directed towards the content of your diary, sorry if I did not make that clear enough. Reading back, I think I picked up on the thought after reading paul spencer's comment.

Nonetheless, it does serve as a general caution and to underline that, to have a hard, honest look at Europe, relying on the total number of fossil fuel subsidies does not give an apples to apples comparison.

The only time I have today is to launch the start of a diary with a request for BYO relevant data, not to fill it.

by Nomad on Tue Dec 4th, 2012 at 03:31:54 AM EST
[ Parent ]
Or while I'm at it, German lignite mining.

For the record, the sector of coal mining receiving direct subsidies until 2018 is hard coal (Steinkohle), not light coal/lignite (Braunkohle).

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Dec 4th, 2012 at 11:56:15 AM EST
[ Parent ]
Democracy Now!: Study: Wealthy Nations' Fossil Fuel Subsidies 5 Times Greater Than Climate Aid to Countries in Need (DECEMBER 4, 2012)
A new report by Oil Change International has found wealthy nations are spending five times more money on fossil fuel subsidies than climate aid. In 2011, rich nations spent $58 billion on subsidies and just $11 billion for climate adaptation and mitigation in developing countries. According to the study, the United States spent $13 billion on fossil fuel subsidies in 2011 and just $2.5 billion in climate aid. We're joined by David Turnbull, campaigns director of Oil Change International. [includes rush transcript]


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Tue Dec 4th, 2012 at 05:14:15 PM EST
[ Parent ]
Study: Wealthy Nations' Fossil Fuel Subsidies 5 Times Greater Than Climate Aid to Countries in Need

DAVID TURNBULL: Well, so, you know, in the halls here in Doha, where the negotiators are talking about how they can help to support developing countries adapt and act on climate change--and what we found is that that support is really lacking. Developing countries are in need of at least $100 billion per year in 2020. And what we're seeing is that fossil fuel subsidies from the rich countries that could help support that need for adaptation and mitigation efforts, the developed countries are supporting fossil fuel subsidies at five times the rate of the climate finance.

AMY GOODMAN: Where does the Export-Import Bank fit into this?

DAVID TURNBULL: The Export-Import Bank today--this last week, we have a report out that shows that they're supporting fossil fuel industry at a rate of $11 billion a year, and that's far more than what they need to. In the context of President Obama talking about the need to end fossil fuel subsidies, it's just simply inconsistent.

AMY GOODMAN: So, what is the U.S. role in the Export-Import Bank?

DAVID TURNBULL: Well, the U.S. is--this is how they help to finance projects of energy and different fossil fuel infrastructure projects around the world in developing countries. They help to give new financing. They help to give different ways of supporting fossil fuel infrastructure. And instead of supporting renewable energies, they're supporting fossil fuels.

(...) here in the United States, you know, the fossil fuel industry is spending millions upon millions of dollars trying to influence the Congress to support these fossil fuel subsidies. Just right now, there's a $2 million ad campaign being placed by the American Petroleum Institute that's trying to support and ensure that those subsidies stay in place in the context of the budget negotiations

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Dec 5th, 2012 at 01:48:31 AM EST
[ Parent ]
This is indeed from within the EU:

Osborne to back shale gas 'fracking', Crosby on rack over HBOS near-collapse The Week UK

Chancellor George Osborne is expected to announce tax breaks to encourage the construction of up to 30 gas-fired power stations along with his Autumn Statement tomorrow, according to the Financial Times. The power stations will be built across the country in order to guarantee power supplies by 2030. A new government body, the Office for Unconventional Gas, will also be established to encourage development of controversial shale gas by `fracking'

Tax breaks... When already market forces would favour building gas stations.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Dec 4th, 2012 at 05:19:25 AM EST
I entirely expect such idiocy from Osborne, but he has a record of putting up schemes that don't quote work out. What makes me even more worried about British energy policy now is new energy minister John Hayes, and the LibDems' losing battle in the coalition on this front too.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Dec 4th, 2012 at 12:17:09 PM EST
[ Parent ]
More news from another incumbent that makes out it's cheap while renewables are too costly:

EDF raises French EPR reactor cost to over $11 billion | Reuters

(Reuters) - French utility EDF has raised the cost of the construction of its next-generation nuclear reactor by more than 2 billion euros on Monday, the latest in a series of overruns for the first EPR reactor built in France.

Stricter regulation in the wake of the Fukushima nuclear disaster contributed to bringing the total cost of the 1,600-MW Flamanville European pressurized reactor to 8.5 billion euros ($11.11 billion), the group said.

In 2005, the state-owned utility estimated the reactor's cost at 3.3 billion euros.

Subsidies?

Dash for gas sees 30 new gas power plants by 2030 - Telegraph

Adding to fears over costs of nuclear, EDF said on Monday that the price of its much-delayed Flamanville reactor in France had risen by a further €2bn, to €8bn.

EDF plans to build the same reactor design at Hinkley Point in Somerset.

EDF said that its cost estimate for Hinkley Point - which it has provided to the Government for subsidy negotiations but has not publicly disclosed - "already include the lessons learned from Flamanville".

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Dec 4th, 2012 at 05:32:16 AM EST
On Friday, I quoted Al Gore saying:

"It will play a role, but probably a limited role. I think the waste issue can probably be solved, and Fukushima notwithstanding, the safety of operation issue can probably be solved. But the cost is absurdly high and still rising," he wrote during a question and answer session on Reddit to promote his 24-hour Climate Reality webcast on the links between fossil fuels and extreme weather.

What he forgot to not(ic)e is that that price increase is a direct consequence of those solutions of the waste issue and (currently known) safety of operation issues.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Dec 4th, 2012 at 12:04:17 PM EST
[ Parent ]
EDF said that its cost estimate for Hinkley Point [...] "already include the lessons learned from Flamanville".

Yeeeeeah, and the cost estimates for Flamanville already included the lessons learnt from Olkiluoto 3...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Dec 4th, 2012 at 12:07:52 PM EST
[ Parent ]
I for one completely believe that they incorporated the important lessons from Olkiluoto and Flamanville in their Hinkley Point estimates.

It's just that the important lesson from Olkiluoto and Flamanville is "we can get away with lowballing the cost in the proposal."

- Jake

Austerity can only be implemented in the shadow of a concentration camp.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Dec 5th, 2012 at 09:18:48 AM EST
[ Parent ]
weeel, yeah if they think they can get away with renegotiating the price support mechanism with the government of the day, ten years down the road.

Which is a pretty safe bet, when you think about it. The analogy which I am familiar with is a major mission-critical software development. You can count on lowballing the cost to win the tender, then doubling it (or so) a couple of years later when it's too late to cancel the project.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Wed Dec 5th, 2012 at 09:33:14 AM EST
[ Parent ]


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