Russel Norman had a bank, e-i-e-i-o
And in that bank he put our cash, e-i-e-i-o
He stuck in his thumb, and pulled out a turkey …
Apologies for the bastardised nursery rhyme, but it operates on the same sort of childish absurdity as Russel Norman’s inept idea of a “Green Investment Bank” that takes money from (profitable) miners and fossil fuel producers to gift to (unprofitable) “green energy” producers.
The idea of course is based – as all government “industry policies” do – on government picking winners who turn out to be losers.
Norman’s scheme suffers at root from the same problem as Labour’s Housing Policy: it relies for its ongoing sustainability on a programme making profits that it just can’t and doesn’t make.
That these green businesses aren’t making profits is evident from the fact that private investors with large amounts of private capital are not beating a path to the door of the green energy producers that Norman says need only sufficient start-up capital to change the world – and this in an era when (according to all the economists Russel follows) there is supposed to be a glut of idle capital being stimulated to emerge from its slumber.
That these green businesses can’t make profits, or even produce real energy, is evident from the multiple failures of –to take just three examples -- Obama’s green energy bankrupt blowouts, Spain’s “green unemployment,” and the recent admission by Germany’s Economic Minister and Vice Chancellor that its wholesale punt on green energy is a total bust.
That’s not to say that the idea of sustainable “renewable” energy might never ever work, but until there’s a disruptive technology that makes it both workable and profitable, the best working definition of renewable energy will have to remain “energy production that is only sustainable with an involuntary taxpayer subsidy.”
Until such a time, let’s admit that taxing fossil fuel producers to subsidise non-fossil fuel non-producers is only going to raise the cost of buying energy for every consumer in the country. Something for everyone to remember on those cold winter nights when you’re paying through the nose to keep your house warm.
But let’s admit that it is election year. So how might a government encourage such a disruptive “green” technology if they wanted to buy votes without sacrificing people’s energy bills? Well, if you insist, here’s one way it could be done without the need for subsidy, and even with some tax cuts.
Not that the Ginger Whinger would ever contemplate a tax cut, e-i-e-i-no.
UPDATE: To add to the numerous failures cited above, latest news on Russel’s proposition that “renewables” are a goer:
We already have a test case for [Russel’s] proposition in California, the state with the most aggressive renewables portfolio standard. A mandated 33 percent of its power must be renewable energy by 2020. According to the Energy Department, residential electricity prices have already spiked 30 percent between 2006 and 2012 (when adjusted for inflation), and studies show that the cost of electricity is likely to jump 47 percent over the next 16 years. Those are real-world costs that every Californian has to divert from health care or groceries or education or investments to pay for artificially inflated energy prices.
UPDATE 2: The Taxpayers’ Union asks What Could Possibly Go Wrong?
"The Green Party claims that their bank will be ‘for profit’ but if green technologies were so profitable, what’s stopped commercial banks getting in on the action?
"The Green Party have a history of incorrectly forecasting high returns in green technologies. In 2001 the Party trumpeted its superannuation fund investing in a wind farm company. Since then, the shares have lost 96% of their value.
“Does Russel Norman really think that bureaucrats will make profitable decisions with $120 million of taxpayer money, when the Green’s can’t even get it right with their own?
"We all support developing green energy [sic], but people should pick winners with their own money not be forced to risk nearly $70 per household taken via the tax system."