Why Just Stop Oil have no sense of proportion

In an article at Conservative Women, I believe Paul Homewood vastly understates the insignificance of keeping new discoveries of UK oil & gas in the ground. We need to look at the accepted numbers.

In the 2014 UNIPCC AR5 WG3 report it was estimated that 1100 GtCO2 from 2011 was needed to reach the dreaded 2°C of warming. McGlade & Ekins 2015 (DOI: 10.1038/nature14016) estimated that known fossil fuel reserves were 3 times this. On quick search on the internet in 2017 I found that potential fossil fuel sources are a number of times these known reserves.

The oil & gas licences cover trivial amounts of global fossil fuels available. Using the BP’s measure of proven reserves, I did a quick conversion to representative CO2 emissions, then divided it into major locations. Total emissions figures were up to 20% lower than McGlade & Ekins due to (a) different reserves figures & (b) Not allowing for higher emitting fossil fuel sources like oil from Canadian tar sands or German lignite coal, reproduced in figure 1. Still, given the unequal global distribution of fossil fuel reserves

Figure 1 – Estimates of the approximate potential CO2 emissions from proven fossil reserves using data from the BP Statistical Review of World Energy 2016. These figures may understate coal.

In 2018, it was projected that the emissions to meet the 1.5°C targets were equivalent to a straight line reduction in emissions to zero between 2020 and 2050. That is producing 15 years of 2020 emissions in a 30 year period, or about less than 13 years starting January 2024. Using the BPs estimates of production & proven reserves for 2019, there are about 50 years of oil, 50 years of gas and 132 years of coal. That means leaving >70% of oil, >70% of gas and >90% of coal reserves in the ground. How significant is the UK in this. It is well out of the top 20 countries in oil, gas and coal reserves, so would not have appeared in Figure 1 with far more countries itemised. Using the 2019 estimated reserve figures the UK had 0.16% of oil, 0.094% of gas and 0.0024% of coal reserves. Overall UK fossil fuel reserves in terms of potential emissions are less than 1 part is a 1000 of the global total. The new oil & gas licences may increase the UK reserves, but it is highly unlikely to significantly increase the global share.

If the activists were in reality concerned about stopping dangerous climate change, then they would be trying to persuade Russia, China, India, Indonesia, Saudi Arabia, Iran, Venezuela etc. to all leave their considerable fossil fuel reserves on the ground. This is aside from Western countries such as USA, Canada, Australia, Germany & Poland.

Just Stop Oil have literally no sense of proportion. I have no doubt they are sincere in their beliefs. But their policy demands are in no way connected to their beliefs in some sort of impending climate apocalypse.

Kevin VS Marshall

Hansen’s 1988 Scenario C against Transient Climate Response in IPCC TAR 2001

In a recent comment at Cliscep Jit made the following request

I’ve been considering compiling some killer graphs. A picture paints a thousand words, etc, and in these days of short attention spans, that could be useful. I wanted perhaps ten graphs illustrating “denialist talking points” which, set in a package, would be to the unwary alarmist like being struck by a wet fish. Necessarily they would have to be based on unimpeachable data.

One of the most famous graphs in climate is of the three scenarios used in Congressional Testimony of Dr James Hansen June 23 1988. Copies are poor, being copies of a type-written manuscript. The following is from SeaLevel.info website.

Fig 3 of Hansen’s Congressional Test June 23 1988

The reason for choosing this version rather than the clearer version in the paper online is that the blurb contains the assumptions behind the scenarios. In particular “scenario C drastically reduces trace gas emissions between 1990 and 2000.” In the original article states

scenario C drastically reduces trace gas emissions between 1990 and 2000 such that greenhouse forcing ceases to increase after 2000.

In current parlance this is net zero. In the graph this results in temperature peaking about 2007.

In the IPCC Third Assessment Report (TAR) 2001 there is the concept of Transient Climate Response.

TAR WG1 Figure 9.1: Global mean temperature change for 1%/yr CO₂ increase with subsequent stabilisation at 2xCO₂ and 4cCO₂. The red curves are from a coupled AOGCM simulation (GFDL_R15_a) while the green curves are from a simple illustrative model with no exchange of energy with the deep ocean. The transient climate response, TCR, is the temperature change at the time of CO₂ doubling and the equilibrium climate sensitivity, T2x, is the temperature change after the system has reached a new equilibrium for doubled CO₂, i.e., after the additional warming commitment has been realised.

Thus, conditional on CO2 rising at 1% a year and the eventual warming from a doubling of CO2 being around 3C, then at the point when doubling has been reached temperatures will have risen by about 2C. From the Mauna Loa data annual average CO2 levels have risen from 316 ppm in 1959 to 414 ppm in 2020. That is 31% in 60 years or less than 0.5% a year. Assuming 3C of eventual warming from a CO2 doubling then the long time period of the transient climate response

much less than 1C of warming could so far have resulted from the rise in CO2 since 1959
it could be decades after net zero is achieved that warming will cease.
the rates of natural absorption of CO2 from the atmosphere are of huge significance.
Calculation of climate sensitivity even with many decades CO2 data and temperature is near impossible unless constraining assumptions are made about the contribution of natural factors; the rate of absorption of CO2 from the atmosphere; outgassing or absorption of CO2 by the oceans; & the time period for the increase in temperatures from actual rates of CO2 increase.
That is, change in a huge number variables within a range of acceptable mainstream beliefs significantly impacts the estimates of emissions pathways to constrain warming to 1.5C or 2C.
If James Hansen in 1988 was not demonstrably wrong false about the response time of the climate system and neither is TAR on the transient climate response, then it could be not be possible to exclude within the range of both the possibility that 1.5C of warming might not be achieved this century and that 2C of warming will be surpassed even if global net zero emissions is achieved a week from now.

Kevin Marshall

by manicbeancounter on 28/05/2021 • Permalink

Posted in Climate Change, Global Warming, Uncategorized

Tagged cliscep, Hansen 1988, Mauna Loa, Transient Climate Response

Posted by manicbeancounter on 28/05/2021

https://manicbeancounter.com/2021/05/28/hansens-1988-scenario-c-against-tcr-2001/

Excess and Covid-19 death rates

Last month the Daily Mail had an article on excess deaths against Covid deaths over 12 months for 30 countries. This was based on a more detailed article in the Economist. What I found surprising that the countries making the headlines here in the UK for Covid deaths – UK, USA & Brazil – were well down the list in terms of excess deaths per 100,000 population. Since then the Economist has extended the data set to include 78 countries and the cities of Istanbul and Jakarta. The time period also varies, from around 180 to 400 days, though mostly for about a year.

Given this limitation. there are number of observations that can be made.

Overall the 78 countries account for well under half the global population. Notable absences from the Economist data set are China, India, Indonesia (except Jakarta), Pakistan, Bangladesh and Nigeria.
Total excess deaths are around 50% higher than than reported Covid deaths overall. That is 3.64 as against 2.43 million.
Excess deaths are slightly negative in a small number of countries. Most notably are Japan, South Korea, Taiwan, Malaysia and Philippines. Is this a cultural issue or a policy issue?
The worst country for excess deaths is Peru with 503 deaths per 100,000 for the period Mar 30th 2020-May 2nd 2021. Even allowing for the longer period, Peru is well above any other country. Covid deaths at 62,110 are just 38% of the excess deaths.
Next on the list with excess deaths per 100,000 and covid deaths as a percentage of excess deaths in brackets are Bulgaria (433, 53%), Mexico (354, 45%), Russia (338, 20%), Serbia (320, 24%), Lithuania (319, 43%), Ecuador (319, 34%), North Macedonia (304, 50%), Czechia (300, 81%) and Slovakia (270, 64%). Britain and USA, for comparison, are respectively 26th (180, 126%) and 25th (182, 93%).
All countries in the top 10 are either in Central / South America or Eastern Europe. Of the top 20, only South Africa (14th) and Portugal (20th) are outside these areas.
If countries are separated in excess death rankings by geography, maybe comparisons should be made between similar countries? In Western Europe the five large countries are Italy in 23rd (197, 74%) Britain in 26th (180, 126%), Spain in 28th (170, 100%), France in 37th (126, 125%) and Germany in 57th (63, 155%). Why should Germany be so much lower on excess and Covid deaths? Might it be that the Germans lead in following instructions, whilst the Italians & Spanish ignore them and the British tend more to think rules apply to people in general, but with many worthy exceptions for themselves and their immediate peers?
Peru not only has the highest excess death rate in the world, but some of the most draconian anti-covid policies. Could it be that some of the high excess deaths are the result of the policies? In Brazil, where lockdown policies are determined at state level, in some areas people are both deprived of a means to earn a living and get no assistance from the state.

There are many ways to look at the data. The Economist excess and covid deaths data gives far more insights than just crude deaths totals. Superficially it would suggest that problem areas are not, like early last year, in Western Europe, but in the Eastern Europe & South America. With the lowest death rates in the Far East, globally there are huge disparities that cannot be explained by differences in policy responses. It is more likely cultural factors play the greater role, although it is perfectly understandable why policy-makers would poo-poo what strongly suggested by the data. Moreover, with a lack of data from much of the world, and likely under reporting of Covid deaths in many countries, the true scale of the pandemic is likely vastly understated.

Kevin Marshall

by manicbeancounter on 17/05/2021 • Permalink

Posted in Uncategorized

Tagged Covid Deaths, Covid-19, Covid-19 Deaths, Economist Excess Deaths, Mexico Covid Deanths, Peru Covid Deaths, Russia Covid Deaths, USA Covid Deaths

Posted by manicbeancounter on 17/05/2021

https://manicbeancounter.com/2021/05/17/excess-and-covid-19-death-rates/

Why not a 3rd Scottish Independence Referendum post deal with rump UK?

Today the Scots Nats might win an overall majority in the Scottish Parliament, without the necessity of support from the greenies. It could even be an SNP majority without the support of Alex Salmond’s Alba party. If that were to occur there would be a strong mandate from the Scottish people for a second referendum on Scottish Independence, despite in 2014 it being abundantly clear that the Independence Referendum was a once in a generation decision. If the same time span between referenda on EU membership were adhered to then another would not be due until 2053.

However, those interested, like me (a) maintaining a union more than three centuries old and (b) not wanting to deliver the Scots into penury and tyranny, must concede that the SNP will continue their puerile political tantrums until they get way. Particularly if they get their overall majority the British Parliament might have to concede this or face having to annul a SNP referenda, like the Spanish with the Catalonians a few years ago.

More importantly, there are parallels with the 2016 EU Referendum, particularly around leavers being deceived and the alleged harms of a no-deal exit. As Scotland is far more closely bound to the UK than the UK was to the EU, any exit without a deal would be far more damaging than a no-deal Brexit. The major items to consider are

Continued use of pound sterling and any say by Scotland in the running of monetary policy.
Any continued subsidies by the UK of Scotland, as under the current Barnett formula or a program to wind them down.
Implicit subsidies of the UK in purchasing Scottish renewables, along with continued membership of the National Grid.
Fishing rights.
Trade deal to prevent a hard border with the rest of the UK.
A deal that includes taking on Scotland’s fair share of UK national debt.
At least advanced negotiations to join the EU, with encouraging signs from Spain (who fear Catalan & Basque separation) and Belgium, who fear a split between the Flanders & Wallonia.
The right of regions with a major “no” vote to have a separate vote to remain part of the UK. This was claimed for Scotland as part of the UK on the EU Referendum vote, so why not Southern Scotland and Shetland?
A Scottish constitution that ensures separation of the executive, legislature and judiciary. Alex Salmond’s recent tribulations suggest that the distinctions may have become blurred in a devolved Scotland.
Uncertainties leading to an exit of businesses and people from Scotland.

In fairness to the people of Scotland, given all the vast uncertainties and emotions in such a campaign, it would be best to timetable third referendum after about two years. Prior to this, the people of the rump UK should have a vote on any deal on future relationships with Scotland, particularly on borders, currency, UK national debt and subsidies to a foreign power. Thus the Scots can see whether they will be leaving with a deal or no deal, hard border or not etc. etc.

Kevin Marshall

by manicbeancounter on 06/05/2021 • Permalink

Posted in EU Referendum

Tagged Indyref2

Posted by manicbeancounter on 06/05/2021

https://manicbeancounter.com/2021/05/06/why-not-a-3rd-scottish-independence-referendum-post-deal-with-rump-uk/

Imperial self-congratulations on saving 3 million lives

Late last night there was an article at the BBC that I cannot find anymore on the BBC website. Fortunately my history still has the link.

The article linked to a pre-publication article in Nature from the team at Imperial College – Estimating the effects of non-pharmaceutical interventions on COVID-19 in Europe

On pdf page 16 of 18. Modelled estimates that by 4th May lockdowns across 11 countries saved 2.8 – 3.1 million lives.
From pdf page 6 / article page 5 there are four countries listed on the Fig 1, the last being the UK.

The graphics show for all countries that the day of the lockdowns saw a massive step reduction in daily new infections & the magic R. For the UK modelled daily infections spiked at over 400,000 on the day of the lockdown and were less than 100,000 the day after. R from around 4 at lockdown to 1 the day after. Prime Minister Boris Johnson gave a very powerful and sincere speech ordering the lockdown, but he did not realize how transformative the power of his words would be. It was the same in all the other countries surveyed. Further, all countries surveyed had a massive spike in infections in the few days leading up to lockdown being imposed. If only the wisdom of the scientists had been listened to a few days earlier – at slightly different dates in each country – then thousands of more lives could have been saved,

I believe that the key to these startling conclusions lies in the model assumptions not the data of the natural world. We have no idea of the total number of coronavirus cases in any country at the start of lockdown, just that the identified number of cases. Thus whilst the model estimates of the number of cases cannot be proved wrong, it is very unlikely. I can think of five reasons to back up my claim, with particular reference to the UK.

First, the measures taken prior to the lockdown had no impact on coronavirus cases and hardly any on R. This includes the stopping of visitors to care homes, social distancing measures, voluntary closing of public places like pubs and the start of home working.

Second, Prime Minister Boris going on TV ordering a lockdown had an immediate impact. Same for other leaders, such as President Macron in France. This is nonsense. People were locked down in households, so there would have still been infections within the households in the few days after lockdown.

Third, we know that many of the coronavirus deaths were of people infected whilst in a hospitals or care homes of people who were infected within care homes. The lockdown did not segregate people within those communities.

Fourth, the assumed pre-lockdown spike followed by a massive drop in daily new infections was not followed a few days later by any such corresponding pattern in daily deaths. It is far easier to make the case for a zero impact of lockdowns rather than this extreme impact. The truth, if perfect data were available, is likely to be nearer zero lives saved than 3 million.

Fifth, in Italy the lockdown was not imposed nationally on the same day. The North of Italy was locked down first, followed by the rest of the country some days later. Like with the imposition of less draconian measures pre-lockdown in the UK, this should have seen a less immediate effect than suggested by Figure 1.

Are the authors and peer-reviewers at Nature likely to be aware of the problems with the headline BBC claims and the underlying paper? Compare the caption to “Extended Data Table 1” (pdf page 16)

Forecasted deaths since the beginning of the epidemic up to 4th May in our model vs. a counterfactual model assuming no interventions had taken place.

to the report from the BBC;

Lockdowns have saved more than three million lives from coronavirus in Europe, a study estimates. …….

They estimated 3.2 million people would have died by 4 May if not for measures such as closing businesses and telling people to stay at home.
That meant lockdown saved around 3.1 million lives, including 470,000 in the UK, 690,000 in France and 630,000 in Italy, the report in the journal Nature shows.

from the Evening Standard;

Around three million deaths may have been prevented by coronavirus lockdowns across Europe, research suggests.

from yahoo! News;

By comparing the number of deaths against those predicted by their model in the absence of interventions, the researchers believe that 3.1 million deaths have been averted due to non-pharmaceutical measures.

and from eCAM Biomed – GLOBAL IMPACT FUND

This study found that nonpharmaceutical interventions, including national “lockdowns,” could have averted approximately 3.1 million COVID-19 deaths across 11 European countries.

These press reports is not disimilar to the title of the Imperial College press release

Lockdown and school closures in Europe may have prevented 3.1m deaths

I would suggest that they are different from the caption to Extended Table 1. The difference is between comparison of actual data to modelled data based on some unlikely assumptions and actual lives saved in the real world. The difference is between the lockdowns having saved 3 million lives and having saved many times less. It is between the desisions of governments sacrificing economic prosperity to save hundreds of thousands of lives, and ruining the lives of millions based on pseudo-science for near zero benefits. The authors should be aware of this and so should the reviewers of the world’s leading science journal.
Are we going to see a quiet withdrawal, like of the BBC report?

Kevin Marshall

by manicbeancounter on 09/06/2020 • Permalink

Posted in Uncategorized

Posted by manicbeancounter on 09/06/2020

https://manicbeancounter.com/2020/06/09/imperial-self-congratulations-on-saving-3-million-lives/

Dumb hard left proclamation replaces pluralistic thirst for knowledge and understanding

Last week Guido Fawkes had a little piece that, in my opinion, illustrates how nasty the world is becoming. I quote in full.

IMPERIAL COLLEGE DROPS “IMPERIAL” MOTTO
**“ROOTED IN POWER & OPPRESSION”**

In response to representations from students inspired by the Black Lives Matter movement Imperial College’s President, Professor Alice Gast, has announced they are dropping their “imperialist” Latin motto.

“I have heard from many of you with concerns about the university motto and its appearance on our crest. The Latin motto appears on a ribbon below the crest and is commonly translated to ‘Scientific knowledge, the crowning glory and the safeguard of the empire’. We have removed this ribbon and the motto in a revised crest you can see below in this briefing. This modified crest is already in use by my office and the Advancement team and will be integrated into all of our materials over the coming year. We will commission a group to examine Imperial’s history and legacy. We have a long way to go, but we will get better. We will build upon our community’s spirit, commitment and drive. We will draw strength from your commitment and support.”

The College’s motto, coined in 1908, was ‘Scientia imperii decus et tutamen’ which translates as ‘Scientific knowledge, the crowning glory and the safeguard of the empire’. As Titania McGrath might say this motto “is a reminder of a historical legacy that is rooted in colonial power and oppression”. That’s an actual quote from the college’s President, in the interests of diversity she is erasing the past. As someone once wrote “Who controls the past controls the future. Who controls the present controls the past.”

UPDATE:This old article from 1995 describes the arms and motto of Imperial College, paying particular attention to the deliberate ambiguity of the Latin:

Thus DECUS ET TUTAMEN translates as ‘an honour and a protection’. The rest of the motto is deliberately ambiguous. SCIENTIA means ‘knowledge’ but is also intended as a pun on the English word ‘science’. IMPERII could mean ‘power’, ‘dominion over’, ‘universal’, ‘of the empire’, ‘of the state’, or ‘superior’; and again is intended as a pun on the English word ‘imperial’.
Because of this ambiguity the full motto can be translated in many different ways. One translation could be: ‘Dominion over science is an honour and a protection’. A more politically correct translation might be: ‘Universal knowledge is beautiful and necessary’.

The Black Lives Matter translation of the motto – ‘Scientific knowledge, the crowning glory and the safeguard of the empire’ – might be valid, but so are many other formulations. Indeed, although Britain at the start of the last century was the most powerful nation and ruled the most extensive empire in history, along with competing with the United States & Germany as the leaders in the pursuit of scientific knowledge, the motto has proved untrue. Imperialists who backed the foundation of Imperial College who thought that scientific knowledge would safeguard empire were mistaken. What is left is an Imperial College ranked about tenth in world rankings of universities so it is a glorious product of imperialist thinking. Given that it is still thriving it is more glorious that the majestic ruins of earlier empires, such as the Colesium in Rome or the Parthenon in Athens.

Deeper than this is that the motto is deliberately a pun. It is superfically meaningful in different ways to those from a diverse range of backgrounds and belief systems. But to those with deeper understanding – achieved through high level study and reflection – know that more than one valid perspective is possible. That also leads into the realisation that our own knowledge, or the collective that of any groups that we might identifying as belonging to, is not the totality of all knowledge possible, and might be even turn out to be false some time in the future. This humility gives a basis for furthering understanding of both the natural world and the place of people within it. Rather than shutting out alternative perspectives, we should develop understanding of our own world view, and aiming to understand others. This is analogous to the onus in English Common Law for the prosecution to prove a clearly defined case beyond reasonable doubt based on the evidence. It is also applies to the key aim of the scientific method. Conjectures about the natural world are ultimately validated by experiments based in the natural world.

Consider the alternative “ideal” that we are heading towards at an alarming rate of knots. What counts as knowledge is the collective opinion of those on the self-proclaimed moral high ground. In this perspective those who do not accept the wisdom of the intellectual consensus are guilty of dishonesty and should not be heard. All language and observations of the natural world are interpreted through this ideological position. Any conflict of is resolved by the consensus. Is it far fetched? A quote from Merchants of Doubt – Oreskes Conway 2010.

by manicbeancounter on 07/06/2020 • Permalink

Posted in Uncategorized

Posted by manicbeancounter on 07/06/2020

https://manicbeancounter.com/2020/06/07/dumb-hard-left-proclamation-replaces-pluralistic-thirst-for-knowledge-and-understanding/

Sunday Times exaggerates price gauging on Amazon

It has been many months since last posting on this blog due to being engaged in setting up a small business after many years working as a management accountant, mostly in manufacturing. For the first time this year I purchased the Sunday Times. What caught my attention was an article “Amazon sellers rolling in dough from flour crisis“. As my speciality was product costing I noticed a few inaccuracies and exaggerations.

Sunday Times article from page 6 of print edition 03/05/20

The first issue was on the fees.

Amazon sells many products directly to consumers but more than half of its sales are from third-party sellers on its “Marketplace”. They pay fees to the online giant of up to 15% of the sale price.

The fees at least 15% of the sale price. This is if the seller despatches for themselves, incurring the cost of postage and packing.

Let us take an example of the price rises.

A packet of 45 rolls of Andrex lavatory roll rose from under £24 to more than £95.

For somebody purchasing from Amazon with prime, they will get free postage on purchases over £20. So they can get 45 rolls delivered for about the standard price in a supermarket of 5 x 9 roll packs at £4.50 each. Using an third party app (which might not be accurate) for the Classic Clean Andrex, I find that third party sellers were selling at £23.45 up to March 8 when stocks ran out. Further Amazon were selling for about 3 days at £18.28 until Sunday March 8, when they also ran out. Apart from on Fri Mar 13 Amazon did not have supplies until late April. It was during this period that 3rd party sellers were selling at between £50 & £99.99. Any items offered for sale sold very quickly.

Now suppose an enterprising individual managed to grab some Andrex from a wholesaler (est. £15 inc. VAT) and list them for sale on Amazon. How much would they make? If they already had an account (cost about £30 per month) they could despatch themselves. They would need a large box (at least 45 x 45 x 35 cm) which they might be able to buy for under £30 for a pack of 15. They would have to pay postage. It is £20.45 at the Post Office. If anyone can find a carrier (for 6.5kg) cheaper than £12, including insurance and pick up, please let me know in the comments. If the selling at £50, the costs would be at least £7.50 + £15 + £2 + £12 = £36.50. To make a quick buck it is a lot of work.

This is, however, a bad example. Let us try a much lower weight product. The classic Uno Card Game, that the Sunday Times claims was listed at £5.60 on March 1st and £5.60-£17.99 on April 30th. This compares with £7.00 at Argos & Sainsbury’s and £6.97 at Asda. The inaccuracy here is with the range of prices, as there were multiple sellers on both dates, with £5.60 being the price sold by Amazon themselves. Actual selling prices fluctuate during March and this evening the prices are between £5.49 and £17.99. It is usually the case with popular products that there are multiple sellers. During March and April Amazon were out of stock, with actual selling prices between £4.99 and £19.00. Most often it was in the range of £9.00-£11.50.

A final example from the Sunday Times is for Carex Handwash Sensitive 250ml. As an antibacterial product, as soon as the Government recommended frequent hand washing the product sold out in supermarkets. As such it was ripe for making super-profits dueing the period of panic buying. This product used to be frequently available at £1 or slightly more. The Sunday Times lists the Amazon price at £1.99 on March 1st and at £5.98-£11.50 on April 30th. My App shows a single seller at £7.99, with the March 1st price of £3.25. The Sunday Times have probably picked up a different listing that is no longer available. The best value Carex antibacterial at the time of writing appears to be this listing for 2 x 250ml, where the price ranges from £9.49 to £13.16 including delivery. Selling at around £3.64 prior to March, the selling price peaked at around £32.99 in mid-March.

Whilst the Sunday Times article may not have the best examples, it does highlight that some people have made extraordinary profits by either being in the right place at the right time, or by quickly reacting to changing market information and anticipating the irrational panic buying of many shoppers. Here the problem is not with entrepreneurs meeting demand, but with consumers listening to the fearmongers in the media and social media believing that a pandemic “shutdown” would stop the movement of goods, along with a cultural ignorance of the ability of markets to rapidly respond to new information. In the supermarkets shelves many needlessly emptied shelves. Much of the fresh food bought in panic was binned. Further, many households will not be purchasing any more rice, tinned tomatoes and toilet rolls for many months. Since then there has been an extraordinary response by suppliers and supermarkets in filling the shortages. The slowest responses to shortages have been where the state is the dominant purchaser or the monopoly supplier and purchaser. The former is in the area of PPE, and the latter in the area of coronovirus testing.

Finally, there is a puzzle as to why there is such a range of prices available for an item on Amazon. A reason is that many of the the high-priced sellers were competitive, but the price has fallen dramtically. Another is that the higher-priced sellers are either hoping people make a mistake, or have “shops” on Amazon, that lure people in with low price products and hope they occassionally buy other, over-priced products. Like the old-fashinoned supermarket loss-leaders, but on steroids. Alternatively they may have the products listed elsewhere (e.g. actual shops or on Ebay) and/or a range of products with the extraordinary profits of the few offsetting the long-term write-offs of the many. There is the possibility that these hopefuls will be the future failures, as will be the majority of entrepreneurial ventures in any field.

Kevin Marshall

by manicbeancounter on 04/05/2020 • Permalink

Posted in Uncategorized

Posted by manicbeancounter on 04/05/2020

https://manicbeancounter.com/2020/05/04/sunday-times-exaggerates-price-gauging-on-amazon/

How misleading economic assumptions can show Brexit making people worse off

Last week the BBC News headlined Brexit deal means ‘£70bn hit to UK by 2029′. ITV news had a similar report. The source, NIESR, summarizes their findings as follows:-

Fig 1 : NIESR headline findings

£70bn appears to be a lot of money, but this is a 10 year forecast on an economy that currently has a GDP of £2,000bn. The difference is about one third of one percent a year. The “no deal” scenario is just £40bn worse than the current deal on offer, hardly an apocalyptic scenario that should not be countenanced. Put another way, if underlying economic growth is 2%, from the NIESR in ten years the economy will be between 16% and 22% larger. In economic forecasting, the longer the time frame, the more significant the underlying assumptions. The reports are based on an NIESR open-access paper Prospects for the UK Economy – Arno Hantzsche, Garry Young, first published 29 Oct 2019. The key basis is contained in Figures 1 & 2, reproduced below.

Fig 2 : Figures 1 & 2 from the NIESR paper “Prospects for the UK Economy“

The two key figures purport to show that Brexit has made a difference. Business investment growth has apparently ground to a halt since mid-2016 and economic growth slowed. What it does not show is a decline in business investment, nor a halting of economic growth.

After these figures the report states:-

The reason that investment has been affected so much by the Brexit vote is that businesses fear that trade with the EU will be sufficiently costly in the future – especially with a no-deal Brexit – that new investment will not pay off. Greater clarity about the future relationship, especially removing the no-deal threat, might encourage some of that postponed investment to take place. But that would depend on the type of deal that is ultimately negotiated. A deal that preserved the current close trading relationship between the UK and EU could result in an upsurge in investment. In contrast, a deal that would make it certain that there would be more trade barriers between the UK and EU in the future would similarly remove the risk of no deal but at the same time eliminate the possibility of closer economic ties, offsetting any boost to economic activity.

This statement asserts, without evidence, that the cause of the change in investment trend is singular. That is due to business fears over Brexit. There is no corroborating evidence to back this assumption, such as surveys of business confidence, or decline in the stock markets. Nor is there a comparison with countries other than the UK, to show that any apparent shifts are due to other causes, such as the normal business cycle. Yet it is this singular assumed cause of the apparent divergence from trend that is used as the basis of forecasting for different policy scenarios a decade into the future.

The rest of this article will concentrate of the alternative evidence, to show that any alleged change in economic trends are either taken out of context or did not occur as a result of Brexit. For this I use World Bank data over a twenty year period, comparing to the Euro area. If voting to leave the EU has had a significant impact in economic trends

Net Foreign Direct Investment

There is no data for the narrow business investment at the World Bank. The alternative is net foreign direct investment.

Fig 3 : Data for net foreign direct investment from 1999 to 2018 for the Euro area and the UK.

UK net foreign direct investment was strongly negative in 2014 to 2016, becoming around zero in 2017 and 2018. The Euro area shows an opposite trend. Politically, in 2014 UKIP won the UK elections to the European Parliament, followed in 2015 by a promise of a referendum on the EU. Maybe the expectation of Britain voting to leave the EU could have had impact? More likely this net outflow is connected to the decline in the value of the pound. From xe.com

Fig 4 : 10 year GBP to USD exchange rates. Source xe.com

The three years of net negative FDI were years of steep declines in the value of the pound. In the years before and after, when exchange rates were more stable, net FDI was near zero.

GDP growth rates %

The NIESR choose to show the value of quarterly output to show a purported decline in the rate of economic growth post EU Referendum. More visible are the GDP growth rates.

Fig 5 : Annual GDP growth rates for the Euro area and the UK from 1999 to 2018.

The Euro area and the UK suffered a economic crash of similar magnitude in 2008 and 2009. From 2010 to 2018 the UK has enjoyed unbroken economic growth, peaking in 2014. Growth rates were declining well before the EU referendum. The Euro area was again in recession in 2012 and 2013, which more than offsets the stronger growth than the UK from 2016 to 2018. In the years 2010 to 2018 Euro area GDP growth averaged 1.4%, compared with 1.5% for the years 1999 to 2009. In the UK it was 1.9% in both periods. The NIESR is essentially claiming that leaving the EU without a deal will reduce UK growth to levels comparable with most of the EU.

Unemployment – total and youth

Another matrix is unemployment rates. If voting to leave has impacted business investment and economic growth, one would expect a lagged impact on unemployment.

Fig 6 : Unemployment rates (total and youth) for the Euro area and the UK from 1999 to 2019. The current year is to September.

Unemployment in the Euro area has always been consistently higher than in the UK. The second recession in 2012 and 2013 in the Euro area resulted in unemployment peaking at least two years later than the UK. But in both places there has been over five years of falling unemployment. Brexit seems to have zero impact on the trend in the UK, where unemployment is now the lowest since the early 1970s.

The average rates of total unemployment for the period 1999-2018 are 8.2% in the Euro area and 6.0% in the UK. For youth unemployment they are 20.9% and 14.6% respectively.

The reason for higher rates of unemployment in EU countries for decades is largely down to greater regulatory rigidities than the UK.

Concluding comments

NIESR’s assumptions that the slowdowns in business investment and economic growth are soley due to the uncertainties created by Brexit are not supported by the wider evidence. Without support for that claim, the ten year forecasts of slower economic growth due to Brexit fail entirely. Instead Britain should be moving away from EU stagnation with high youth unemployment, charting a better course that our European neighbours will want to follow.

Kevin Marshall

by manicbeancounter on 04/11/2019 • Permalink

Posted in EU Referendum, General Election 2019, NIESR

Tagged EU Referendum, General Election 2019, NIESR

Posted by manicbeancounter on 04/11/2019

https://manicbeancounter.com/2019/11/04/misleading-economic-assumptions-by-the-niesr-on-brexit/

In the interests of the EU should the EU council grant an extension to the UK?

Brexit looks to be currently at stalemate in the UK. As at the morning of Monday 21 October 2019, I have tried to lay out the perspective of the EU Council if it aims to follow, in spirit, Article 50 of the Treaty of the European Union. That is, aiming at leaving aside any political biases that the EU or myself may have on the issue.

After the Government pulled a meaningful vote on the revised political declaration on Saturday they will try again for a meaningful vote today. Following the inability to get the deal passed, on Saturday evening Prime Minister Boris Johnson sent the letter requesting an extention of the Article 50, as required by the the Benn Act. It was a photocopy and unsigned. This can be found on the government website page Letters from the UK to the EU Council: 19 October 2019. Boris Johnson also sent a signed letter to Donald Tusk to be found on the government website page Prime Minister’s letter to President Donald Tusk: 19 October 2019.

The Formal Letter is as follows

Dear Mr President,

The UK Parliament has passed the European Union (Withdrawal) (No. 2) Act 2019. Its provisions now require Her Majesty’s Government to seek an extension of the period provided under Article 50(3) of the Treaty on European Union, including as applied by Article 106a of the Euratom Treaty, currently due to expire at 11.00pm GMT on 31 October 2019, until 11.00pm GMT on 31 January 2020.

I am writing therefore to inform the European Council that the United Kingdom is seeking a further extension to the period provided under Article 50(3) of the Treaty on European Union, including as applied by Article 106a of the Euratom Treaty. The United Kingdom proposes that this period should end at 11.00pm GMT on 31 January 2020. If the parties are able to ratify before this date, the Government proposes that the period should be terminated early.

Yours sincerely,

Prime Minister of the United Kingdom of Great Britain and Northern Ireland

This letter provides no reason for extending the Article 50(3) period. The Prime Minister’s letter provides context for at least withholding the decision on the extension. With a deal between the EU and the UK not actually put to a vote by the UK parliament, there is clearly no reason for granting of an extension. Indeed, granting an extension before that deal is decided would likely ensure that the deal is voted down. Refusal to grant an extension would see the EU effectively ejecting a member state with no deal, something that neither the EU, nor a majority in the UK parliament desire.

The EU council are bound by Article 50. I covered legal analysis of Article 50 by the High Court of Justice in Northern Ireland last month. Like the judicial ruling I quoted Article 50 in full. The legal analysis was

Certain aspects of Article 50 did not fall to be construed in either Miller or Wightman. Bearing in mind that the exercise is one of construing a measure of EU law, I consider that those aspects of Article 50 not addressed in either Miller or Wightman yield the following construction:

(i) First, there is no concept, meaning or definition of “negotiate” supporting the view that the clause beginning “… the Union shall negotiate … ” denotes a duty and exercise unilateral in nature. It takes two to tango. The concept of negotiation must surely be, depending on its context, something bilateral or multilateral in nature. This discrete element of Article 50(2) would be emptied of meaning and rendered nugatory if it is not to be construed thus.
(ii) There is no legal context known to this court which dictates that negotiations must culminate in a legally binding agreement between the negotiating parties. There is nothing in the text of Article 50 which displaces this proposition. Nor is there any identifiable basis or rationale for implying any different or contrary
construction.
(iii) Article 50(2) clearly establishes an imperative, namely a negotiated and concluded withdrawal agreement, without purporting to mandate that this occur.
(iv) Article 50(3) expressly contemplates the possibility that the negotiations required by Article 50(2) will not culminate in a withdrawal agreement.
(v) The plain aim of the two year period specified in Article 50(3) is the promotion of stability and certainty in the EU.
(vi) The provision made in Article 50(3) for consensual extension of the basic two year period is plainly designed to further the overarching imperative of a negotiated and concluded withdrawal agreement.

Note that this analysis was upon matters raised by those wanting the judicial review, so may not be comprehensive for the current purposes.

Point (i) clearly states that two parties must negotiate. In the current circumstances who negotiates with the EU Council? The Benn Act coerces the Prime Minister to act against his clearly stated will. So you have parliament saying one thing and the recognised Prime Minister saying another. By “recognised” I mean by, parliament, the Queen as Head of State, and the EU Council, in its negotiations with the UK last week. Parliament has had opportunities to constitutionally remove the Boris Johnson as Prime Minister. They twice failed to vote for a general election at the start of September. Also the leader of the opposition has had numerous opportunities to table a vote of no confidence and then try to form a coalition government. In my view, Article 51 of the Vienna Convention on the Law of Treaties (1969) may have some relevance.

Clearly the Prime Minister is not concluding a Treaty under the letter he was coerced into sending, just requesting an extension or a negotiating perios . However, it would be highly embarrassing for the EU Council to assent to an extension in the full knowledge that it against the will of the person who they have recognised as the UK’s representative.

Point (ii) states that reaching a withdrawal agreement might not be possible, whilst point (iii) states that it is a clear imperative. It is this context that the EU Council ought to withhold any decision on extension until it is clear that the agreed deal will not pass. Doing so would undermine their own efforts to reach a deal.

Point (iv) refers to Article 50(3) as having an imperative, namely a negotiated withdrawal agreement. Point (vi) makes clear this is the overarching imperative of any extension. If it is clear that any deal will not pass then there is no justification for extending the Article 50 period beyond the 31 October Point (v) is the plain aim of two year period for leaving – and by implication any extensions – is for the promotion of stability and certainty in the EU . Clearly the current situation is causing considerable instabilities and uncertainties is both the UK and the EU as a whole. Perhaps another incentive not to extend is the term office of Presidents Juncker and Tusk end on 31 October. Personally they will not want to leave the issue of Brexit still unresolved.

If parliament rejects the current deal, why should the EU Council extend? The possible position of the EU is to express clear exasperation with the UK, and make clear an extension will be contingent on the UK being in a position to make clear decisions by a stipulated date. That would imply the UK holding a general election at the earliest opportunity that will result in a clear position on Brexit. That is to leave, with or without a deal, or to revoke Article 50. It would mean that the EU has to agree with Nigel Farage, and it could see the resignation of Boris Johnson who whose main aim is to see Britain leave at the end of the month “do or die”. Whether he resigns or not, the Conservatives would likely drop in the opinion polls, which might see another hung parliament. The Labour Party would need to campaign on a clear position, as if they win on current policies, they would not comply. The alternative of a second referendum with only two options of “leave with the current deal” and “revoke Article 50” would not carry legitimacy unless there was some clause to allow for people who want neither option. For instance it could be that the result would only recognised if it by a clear majority of the ballot papers counted.

If parliament remains in its current state, it is clearly in the interests of the EU not to extend, to ensure that there is minimum continued disruption to the EU from Brexit. It is also clear that in preventing any possible disruption from a no-deal Brexit it will have the fullest cooperation from the current UK Executive.