Thursday, June 20, 2024

BWorld 708, Degrowth vs prosperity in economic and energy policies

 Degrowth vs prosperity in economic and energy policies

There has been some not so good news in the Philippines’ fiscal and energy sectors recently. See these stories in BusinessWorld: “Philippines aims to double solar, quadruple share of wind in power output by 2030” (April 30), “Zero tariff policy now extended to two-wheeled EVs, hybrid vehicles” (May 17), “Yellow alert raised over Luzon, Visayas” (May 20), “Biofuel decision seen requiring study due to impact on poor” (May 21).

The zero tariff policy on imported EVs is another double standard in taxation. Even if the government needs additional tax revenues to reduce the budget deficit — P272.6 billion in Q1 2024, slightly up from P270.9 billion in Q1 2023 — the government gives up collecting taxes from people who are not really poor since they can afford EV motorcycles and hybrid cars.

The expansion of solar power (often via the conversion of agricultural land to solar farms) and the expansion of biofuel to feed vehicles (often made using corn and sugarcane) imply less food production for humans and livestock, which contribute to higher food inflation. 

One piece of good news recently seen in BusinessWorld is this: “DoE signs two more deals with US to enable nuclear transition” (May 21). As this column has continuously argued lately, we need more nuclear energy for power generation, plus nuclear applications in agriculture, healthcare, and other sectors.

The endless push to have more wind-solar power in the power grid and the scramble to decarbonize has already led to deindustrialization and degrowth in many countries in Europe. Clear examples are the UK and Italy — their total electricity generation has been declining for two decades (2005-2024) now, whereas high coal-using China and Vietnam, and also the Philippines, have been able to sustain growth of 4-11% over the past two decades (see Table 1).

This week, the Independent Electricity Market Operator of the Philippines (IEMOP) held a media briefing and among the data they presented were the levels of power reserves, margins, and prices in the March to May billing. The price increases in April and May over March were substantial but smaller compared to the prices in April and May 2023. Mainly because the Margin (= Supply – [Demand + Reserve requirements]) in 2024 was significantly larger than the Margin in 2023 (see Table 2).

The Australia Bureau of Meteorology’s sea surface temperature (SST) index in El Niño region 3.4 showed that as of May 19, the index was 0.35° Celsius (C), meaning it was in the neutral phase (between 0.5° C to -0.5° C). So, the El Niño phase (an SST of 0.51° C or warmer) is over and we are transitioning to La Niña (an SST of -0.51° C or cooler).

The US National Oceanic and Atmospheric Administration’s climate prediction center shows that as of its May 20 projection, we will enter the La Niña phase around early July, or less than two months from now. Then we will prepare for more clouds and rain, and more floods in this part of the Pacific.

Again, climate change is natural or nature-made, a warming-cooling cycle that has existed for the past 4.6 billion years when planet Earth was born. The El Niño-La Niña cycle, the wet-dry cycle in the tropics, the winter-spring-summer-fall cycle in the North and South Hemispheres, the water evaporation-condensation cycle, etc., are all natural. All the policies and public spending, and subsidies to “fight man-made climate change” amount to nothing and should be stopped.

We should focus on more economic growth, more prosperity to save the poor and hungry, not save the planet which does not need any savior in the first place as it just goes through endless warming-cooling cycle for decades and even centuries.


See also:

BWorld 705, PHL growth resilience amid a deteriorating global economy

BWorld 706, On economic growth, nuclear energy, and Meralco franchise

BWorld 707, PHL deficit across 7 administrations

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