Over the last two days we have examined the rift between sceptical scientists on global warming, and the scientific establishment. The sceptics point out that observed data is more complex than the simple theory that increasing human CO2 will always produce rising temperatures would suggest. Climate models have been wrong in the past, and need further complex computing to get them to cope with the many variables affecting average temperatures – factors like water vapour, cloud cover, wind speeds and direction, ocean currents, natural CO2 , other greenhouse gases, the warming of the deep ocean and the patterns of solar energy to name a few which they try to quantify.

The scientists on the establishment side tell us  they need bigger computers and more complex models. They agree they cannot predict average temperatures for next year or for the next decade. They go so far as to suggest it might be 50 years of low or  no warming before they question their underlying thesis of a defined relationship which is quantifiable between extra human produced CO2 and average world temperatures. They agree there is still a lot they do not understand fully or cannot accurately model, which is why their forecast of warming from manmade CO2 may be wrong for a  decade or more. Cloud cover and water vapour are two such variables. They see the role of water vapour as an accelerant of global warming  by asserting that it mainly  changes in response to CO2.

So what are we to make of it? I merely conclude two things. The first is the science is not settled. The fact that most of the funding and the people are on one side does not mean the sceptics and critics from within the climate academy are necessarily wrong on all counts. The bad way they are treated makes some of  the lay public suspicious. The second is that the scientists themselves in their honest and enquiring moments agree there is  more they need to understand before they can produce a model which does predict average temperatures decade by decade or year by year.

As a specialist in economics and politics I use other arguments and take into account other matters when considering what response we should make to possible changes to the climate. I have never ruled out the possibility that average temperatures may start to rise again soon, and of course accept  there is a greenhouse effect. Indeed some of that is crucial   to life on earth as we need to avoid extreme cold. Sufficient  carbon dioxide is also central to plant life which in turn supports all of us. Mankind needs to study and watch the weather and the longer term trends which they  call climate, and adapt our way of life and our physical surroundings as necessary.

I have been an advocate of the UK putting in more fresh water capacity for some time, to deal with the rising population and any dry periods we might face. I have also been working with the government. Environment Agency and others on projects to handle excess surface water during periods of heavy rain, which are made  more necessary by increased building to accommodate a rising population. I would like to see the government start work on a plan for a second Thames barrier, further downstream, to protect the people and large investment in  eastern London.

 

This week I attended an interesting meeting on climate science in the Commons. Two distinguished Professors came to present to  MPs on behalf of the Royal Society and the US Academy of Sciences. They set out the arguments  for the global warming movement. A few MPs who were interested subjected their thesis to detailed cross examination.

Their publication  starts with the statement

“It is now more certain than ever, based on many lines of evidence, that humans are changing Earth’s climate. The atmosphere and oceans have warmed, accompanied by sea level rise, a strong decline in Arctic sea ice, and other climate related changes”

This is a thoroughly unscientific statement. MPs elicited the reply eventually after sustained cross examination that in recent years Antarctic sea ice has been growing in extent. Why do the scientists refer to just the Arctic in their headline or conclusion? Where is the sea level rising, and is that occurring owing to land based ice melting as predicted? It clearly has nothing to do with sea ice melting. In their booklet towards the end they do  seek to explain the increase in Antarctic sea ice and accept that sea levels rise for reasons other than melting ice as well. Why do they think that rising temperatures melts ice and snow in the Arctic, but claim that rising temperatures creates more ice and snow in the Antarctic, where the extra warmth allows more water retention in the atmosphere leading to heavier snowfalls?

The document improves after its first paragraph, and does include a number of honest statements about their doubts or limits to their knowledge. However, the whole 24 page booklet is written from the proposition that there is global warming, it will get worse and it is caused by man made Co2. It seeks to dismiss some of the many arguments brought by sceptics against the theory, which makes it  read like a propaganda document.

I thought I would share with you some of the better more humble statements made in it, as a contrast to the loud mouthed certainties of the crude global warmists (not our two Professors I hasten to add):

“The magnitude and timing of these changes (to temperatures) will depend on many factors and slowdowns and accelerations in warming lasting more than a decade will continue to occur”

They assert that there has been global warming from 1850 to 2010, yet supply a graph which shows global cooling from 1850 to 1920, warming from 1910 to around 1940, cooling from 1940 to around the late 1970s followed by global warming to 2000, and a plateau since.

They argue that “Natural causes include variations in the Sun’s output and in Earth’s orbit around the sun, volcanic eruptions, and internal fluctuations in the climate system (such as El Nino and La Nina)” and these can also cause changes to temperatures, but argue they do not account for the last 10o years. One of the features of the work is a shifting in dates for different arguments.

“The largest global scale climate variations in Earth’s recent geological past are the ice age cycles” caused by changes to the Earth’s orbit.  There has been a 4 to 5 degree warming for this reason since the last ice age ended. They also accept that 50 million years ago there was two and half times   more natural CO2 in the atmosphere, and they infer that global temperatures were 10 degrees higher than now. The pamphlet does not seek to explain these large natural variations in CO2.

They accept that you cannot predict rising temperatures from rising human CO2 output, saying that in any given decade “many natural factors are modulating this long term warming” including volcanic activity, and changes in ocean currents. They seek to explain the “slowdown” in warming in the last decade. When asked how long we could experience a slowdown or fall before they thought their models wrong, the scientists settled on 50 years as a safe figure. It is safe in the sense that most of the people in the debate will be dead or retied by the time we get there, and allows a lot of latitude with natural causes offsetting man made global warming in the meantime.

They confirm that recent temperatures are below those reached “5000 to 10000 years ago in the warmest part of our current interglacial period”. That is a doubly interesting statement, as it leaves open the likelihood of a new ice age in due course from natural causes, and reminds us that there have been past periods of substantial warming without man made CO2.

“A warmer atmosphere generally contains more water vapour. Water vapour is a potent greenhouse gas. … Another important but uncertain feedback concerns changes in clouds… the latest assessment of the science indicates that the overall net global  effect of cloud changes is likely to be to amplify warming”. There is also uncertainty about the extent and speed of the heat transferring to the deep ocean.

“Several major issues make it impossible to give precise estimates of how global or regional temperature trends will evolve decade by decade into the future”. “With current understanding of the complexities of how climate feedbacks operate, there is a range of possible outcomes, even for a particular scenario of CO2 emissions. ” “Natural variability can modulate the effects of an underlying trend in temperature”.

“There is considerable uncertainty about how hurricanes are changing because of the large natural variability and the incomplete observational record”

In summary, a pamphlet written to promote global warming theory based on man made CO2 is a mixture of polemic and some sensible and sceptical observations about the limits of current knowledge. As they accept water vapour is an important greenhouse gas, and clouds have a big impact on weather, the uncertainties about these two big variables clearly make shorter term average temperature forecasting very difficult, even for periods as long as a decade. From the graphs supplied deviations from their warming trend can last for several decades. The trend itself depends on how you draw a trend line on a very variable graph.

I found all this caution and scepticism encouraging. It implies there needs to be a lot more study before scientists can claim the science is settled, and before they have climate models which can forecast average temperatures over ten or twenty year periods.

 

Reply Those who asked about who the Profs were – they were leading Royal Society figures supporting this official publication of the Royal Society and National Academy of Sciences entitled “Climate Change  Evidence and Causes”. These are therefore all official statements of the RS.

 

 

 

 

 

This week global warming theory came back into my life. I write in praise of Professor Bengtsson, whose recent remarks as a respected climate scientist have led to more doubts about what is happening in the scientific community. He has stated

“We do not know when to expect a warming of 2 degrees Celsius…. These high values of climate sensitivity (to CO2) , however, are not supported by observations. In other words global warming has not been a serious problem so far if we rely on observations”

I support him not because he comes from my local university of Reading, though Reading is a very well regarded leading university worldwide for its work on climate and weather. I support him because he is speaking out for scientific method to be applied as sanely and sceptically to climate science as to other parts of science.

As I have explained here before, the science of  climate change is not “settled” as its leading propagandists like to tell us. No science is ever settled. Science proceeds by theory and models, followed by testing against data with continuous attempts to challenge, improve or overturn these models. Just look  at the way human understanding of the sun and planets has evolved. Galileo challenged the settled science of the heavens of his day despite the protests of the academic establishment, Newton improved on it massively, but the twentieth century went far further in altering and adding to the Newtonian consensus.

Professor Bengtsson joined the Advisory Board of the Global Warming Policy Foundation. You would have thought most climate scientists would welcome the addition of a respect member of their profession to the Board of a body which likes to challenge and question the academic consensus. He could have made sure the work of the Foundation took proper note of the academic work its is reviewing and challenging. Instead he had to write a letter of resignation shortly after joining the Board complaining  of the McCarthyite pressures exerted on him by the academic world for daring to join such a body at all!

This is not science as it should be conducted. If the scientists are truly confident of their models they should be able to deal with any intellectual challenge from a Policy Foundation without resorting to threats or tantrums. One of the  main reasons so many people do not believe the scientists is they keep putting back the date when their model predictions of rising temperatures will come true. Tomorrow I will look at their 50 year weather forecast, and ask why they cannot also do a 10 year one that works.

 

 

I have long expected Scotland to vote to stay in the UK. I was interested to see a more positive approach this week by the better  together campaign, something I welcome. I also understand why the UK government has not made contingency plans for the possible loss of the referendum. To do so would be misconstrued as evidence of worries that the vote would be lost and would be a boost to Mr Salmond.

This does not prevent others from speculating about what should happen in the unlikely event of a Scottish Yes vote to independence. I have suggested before that in such a circumstance the UK Parliament should pass an Act rapidly extending the tenure of existing MPs for Scotland until the chosen date of separation, and at the same time preventing them from voting on English or rest of the UK issues. The present Scottish MPs should play no part at Westminster in the negotiations the rest of the UK has to conduct with Mr Salmond over the terms of the split.

A more interesting question is how Westminster should respond to a No vote in Scotland. There has been some discussion of additional powers for the devolved Parliament if they vote to stay in. It seems to me it should be a priority on hearing of their wish to keep the union together, to tackle the outstanding  issue of England’s government. We have unfair asymmetric devolution. I want the new English Parliament to be at Westminster, on days when the Union Parliament is not meeting. Every English MP elected to Westminster should be both a Union MP and an English MP. We should get on with establishing a proper government for England in the devolved areas.

 

As one of the few opponents of Mr Brown’s purchase of most of the shares in RBS I would like to look five years on at the way RBS has progressed since the crisis.

I advocated the UK authorities giving limited support through loans and guarantees to the UK clearing bank parts of RBS that needed support to prevent a wider collapse. I had in mind the kind of controlled administration or living will approach which the authorities now say they will adopt if there is a future similar crisis. I thought it was quite wrong to put so much taxpayers money at risk, wrong for taxpayers to finance a bank which was undertaking large amounts of investment banking business and paying huge salaries and bonuses to its staff. I wanted RBS to be forced to sell off its insurance and overseas banking arms, and slim or sell its investment bank, as part of its response to the crisis.

Instead Labour took over the conglomerate, appointed a new Chief Executive, and told him to run it as an integrated group. Taxpayers enjoyed quarter after quarter of heavy losses. The Group was reduced in size drastically, as they closed down business activities and wrote off large quantities of loans that had gone wrong. No wonder the UK economy did not make much progress 2010-12, as its largest bank was cutting its balance  sheet by more than  £600 billion.

Now the  management seems to agree with much of the approach I have advocated, splitting up what was never a natural integrated business. They are in the process of selling Citizens, the US bank. They have sold the insurance interests. They have slimmed down the Investment bank and wish to concentrate on the main UK clearing bank business. The last quarter saw some profit at last for the ill served taxpayer shareholders. There is talk of a dividend later this year.

The Bank of England should never have left the wholesale markets so short of cash as they did during the crisis. It exposed weaknesses in this large bank too drastically, and increased the likelihood of major losses. Once the bank was brought down by the lack of funds in the market, the government should not have leapt in to buy the shares. It has been a long battle to get more to understand that in such a crisis the government and Bank should act as a lender of last resort and a guarantor of the crucial parts of the financial system, but should not take on a whole rambling conglomerate with a failed business model and put taxpayers money into shares.

 

This week listening to Labour I thought I had woken up again in the 1970s. Labour wants “solemn and binding” guarantees from Pfizer that it will never sack a British worker if it takes over Astra Zeneca, and will invest large sums in research facilities at Cambridge.

There is something absurd about politicians demanding assurances that a company’s promise will be held to whatever happens next. Anyone who has experience of government knows that events can force a rethink of the genuine promise honestly made. They also should know that an individual can make a promise, but changes to personnel in the government or company subsequently may change the policy in ways the person making the promise can no longer influence.

It is of course sensible to ask enough questions to make sure the promise is honestly made. We do not want a Pfizer promise like the Lib Dem one to rule out tuition fees for university students, only to see them newly  in power craft a policy and recommend it which did the opposite of what they promised.

It is difficult to go much beyond that. Sometimes people in power make promises which may have been honestly made, but later are forced to choose between two different promises, as it is not always possible to carry out both when circumstances change. Labour promised an ethical foreign policy, yet under the influence of allies and wanting to uphold the US special relationship ended up fighting a war in Iraq which was heavily criticised at the time on ethical grounds.  Labour also promised no Income Tax rises, yet ended their period in office with Income Tax and National Insurance tax rises owing to the collapse of the economy and Great recession on their watch. Sometimes parties promise things they know they cannot possibly carry out, like UKIP promising to take us out of the EU if we vote for them in the European elections. A few days before elections I do not have the luxury of pointing out any Conservative examples, without danger of misrepresentation, but I am sure my readers will be keen to supply some they think occurred.

Sometimes things deteriorate far more than expected. In the case of a company if trade turns down and revenue falls, they may well have to cut costs in ways they had not expected. Companies do not have the luxury of governments with their own currencies, of being able to print more money or borrow cheaply. If a company cannot pay all the bills it has to make cuts.

In the case of Pfizer, what happens if the CEO changes from the one making the promsie? What if the shareholders of the enlarged group if they succeed with a bid have a different view from that of the bidding management of Pfizer?

As I have pointed out before, both Pfizer and Astra Zeneca have been cutting their workforces. Astra is currently closing its research facilities in the north. We will never know for sure which route is the best for British jobs and research, because only one side will win and  have the chance to show us what they can do.

From July 2010 the Capital Gains Tax rate rose from a sensible 18% under the Labour government to an uncompetitive 28%. Presumably the idea was to collect more revenue from it. Even the Treasury, however, expected a dip in the first full year after its implementation (2012-13, as CGT is paid the year after the gains on which it is calculated). They then expected revenues to pick up.

In the 2013 Budget the Treasury gave new forecasts, where they accepted that CGT revenues would be lower in 2012-13 at £3.9bn but would bounce up to £5.1bn the following year. By the time of Budget 2014 they had to revise the figures again. This time they forecast revenues lower in both 2012-13 and 2013-14 at £3.9bn in each year, £400 m down on the £4.3bn collected in 2011-12. A massive £1.2 bn of forecast revenue had gone missing, despite the economy growing faster than they expected. Clearly the taxpayer has lost out so far from the increase in the rate of CGT. If it had stayed at 18% 2011-12 might have come in a bit lower, as there would have been no need for some to pre-empt the higher rate in the week or two of rumours that preceded the imposition in June 2010. The following two years would doubtless have seen considerably more revenue than the Treasury will receive at the higher rate.

CGT is the most easily avoidable tax. Many individuals and companies simply refuse to sell assets which are sitting on large gains, even though they would rather switch them into something more useful for their current needs. Rich individuals who have power to switch the domicile of themselves or their assets find it more worthwhile to do so if they are thinking of selling something at a good profit. Individuals with losses as well as gains make sure they take offsetting losses when rejigging their investments. High rates of CGT are probably stopping people selling second homes in London, even though they may not need them any more, helping to fuel the boom.

I remember making the case against a higher rate of CGT at the time of the 2010 budget. The Lib Dems wanted a 40% rate, I wanted to keep Labour’s rate, and we ended up with a compromise. It’s more proof that the Treasury do not have a good model of tax receipts. Just as they under estimate rising revenues when rates are cut, so in this case they have grossly overestimated the gains so far from a higher CGT rate.

 

One of the worst features of the EU is the way it wants to suppress people’s natural senses of identity. England is the country they do not allow on a map. It is a curious paradox that the EU wants to prevent the UK government having a new relationship that works for us, yet wishes to bolster the other member states who face separatist problems. Having encouraged senses of regional identity, the EU now backs national governments by telling Catalonia it has to stay with Spain, and  the Veneto to stay in Italy  even though a strong message has been sent in a recent informal referendum. Above all, the EU wants to keep the Ukraine together when the government of the Ukraine visibly cannot govern large parts of the country  because consent has broken down.

The EU’s  dislike of England and our approach to supranational government is fuelling a wish  for England to leave the EU, and will be sorted out when the UK or the rest of the UK minus Scotland  finally has our EU referendum. In many areas the EU backs defensive national governments who think they can ignore separatist movements. In the case of England the EU antagonises  the Conservative part of the Coalition government by its often unhelpful response to UK wishes for less interference and more freedom.

The western powers are right to say that yesterday’s referendum in Donetsk and Lugansk was neither legal nor properly conducted. Those wanting out may have voted more than once in some cases, and those who wished to stay in the Ukraine may have taken the advice of the Ukrainian government to stay away from the polls. However, no-one can doubt that a large number of people in Eastern Ukraine do not accept the legitimacy of the current Kiev government, and do fear its intentions towards them.

At the very least the Ukrainian government should talk to the rebels. Sending in the army and trying to remove them by force is not the right answer, and will intensify the civil war in the making. It will increase  the bitterness on both sides. The Ukrainian regime needs to discuss whether a much greater degree of autonomy within the Ukraine would satisfy enough easterners. Are there guarantees that the Ukrainian government can offer on  Russian language and customs that would be credible?

If it is not possible to find a way of jointly governing in the Ukrainian state, then the Ukrainian government needs to offer a legal and properly organised referendum with sensible propositions on the ballot paper that could attract consent.

The UK has offered Scotland a referendum despite the absence of SNP MPs in large numbers at Westminster, and in good time whilst the UK can  govern Scotland with consent. The people of Scotland will now decide whether they wish to renew their consent to Union government or whether they wish to be self governing. If they decide Yes to the Union they will  understand that has to be for a considerable time, as unions should not  be made and broken too often.  That could be a model for any  part of a European state that is unhappy about its current status. It is not just the EU that needs to amend its ways of tackling these issues, but it is the EU that has played an important part in fomenting regional identities which may  now affect not just the individual member states but also EU policy  itself.

 

Today I read that I can get a train ticket to Birmingham for £6, to Stoke for £8 and to Leeds for £14.60 from London. Doesn’t sound like a crowded railway at the moment.

 

The legal position over this bid is very clear. Labour legislated in 2002 to stop Ministers interfering in future bids and deals outside defence and the media. In 2004 they signed up to the European Mergers Regulation, which means that larger company bids involving businesses with activities in more than one member state of the EU are under the sole legal control of the EU Competition authorities. As I put to Dr Cable, and as he agreed, the Astra Zeneca potential bid falls to be determined by the EU and by the EU alone.

However, the actual position has become more ambiguous than the legal position, thanks to the behaviour of Pfizer and Dr Cable. Dr Cable has taken legal advice and constantly stresses that he is “neutral” about the bid. He has to be. However, he has also made clear that he is looking for a role in the debate over the future of Astra Zeneca, and has been aided in this by the actions of Pfizer. The bidding company has decided that it will co-operate with the UK government regardless of the legal realities.

Their decision to do this reflects the realities of power. Whilst Dr Cable cannot block their bid, Pfizer will need the co-operation of parts of the UK government if they are to increase their presence in the UK successully. The NHS is their  largest customer. They may need planning permissions for new facilities. They may want government help with training and apprenticeships. The various ways in which a very large state apparatus impinges on a pharmaceutical company argues for a good relationship from the outset. If Dr Cable wants to discuss the future, then he will be able to. If Parliament wants to examine the issues, then Pfizer will have to put up executives to come and talk.

Pfizer may offer indications or promises on future jobs, the extent of their research commitment, and their future UK presence. These may be well meant, but it is difficult  for them to be binding. Astra Zeneca may offer something similar. As the past shows, they like Pfizer have been reducing their workforce in the face of falling turnover.

The truth is which ever management gets the prize to manage these assets in the future, they will have to adjust their plans depending on their sales and profits. We will never know whether Astra or Pfizer will keep more jobs or generate better results, because only one will win and have the chance to show us what they can do.

It is bizarre that so many UK politicians have learnt so little that they think they can second guess this deal and reach the answer which will guarantee all those jobs and facilities for the foreseeable future. The buying habits of drug consumers, and  changes made in other countries affecting their relative competitiveness, will determine whether we keep these jobs or not. The large pharmaceutical companies are having to cut costs one way or another, so redundancies cannot be ruled out whoever wins.