Monday, October 31, 2011
Solar panels swindle: It was Labour's big idea to cut global warming. But all it did was make a lucky few very rich... while pushing up bills for the rest of us
Having just installed 200 solar panels in a field on his Wiltshire estate, film director Guy Ritchie is no doubt feeling quite the eco-warrior.
For Ritchie, who retained his Ashcombe House estate as part of his divorce settlement with Madonna, is merely the latest celebrity to take advantage of the Government’s Feed-in Tariff (FIT) scheme — whereby home-owners can earn inflated payments for selling electricity generated by their solar panels and other carbon-free means, such as heat pumps or boilers.
Others who have recently jumped on the green energy bandwagon include Manchester United footballer Gary Neville, who has added solar panels, a heat pump and a wind turbine to his new eco-home on the hills above Bolton.
In London, Mick Jagger will soon be earning subsidies for the solar panels on his £10million Chelsea home, as will Jude Law on his £8million Georgian mansion in Highgate.
Nor is it just celebrities taking advantage of the popular government scheme.
More than 100,000 home-owners across the UK have already fitted solar panels to their homes — 16,000 were installed in September alone.
In Nottingham, 600 council homes are in the process of being fitted with panels, in a joint venture between Nottingham City Council and electricity company E-on. There, council tenants are effectively renting their roofs to E-on in return for subsidised payments for the electricity the panels produce.
Thankfully, this absurd subsidy bonanza is soon to come to an end.
Yesterday, Climate Change and Energy Minister Greg Barker announced that subsidies will be cut in half for all new schemes that are registered after December 12 — having effectively admitted that the Government has been overwhelmed by the scheme’s popularity.
The FIT scheme was introduced in a hurry in April 2010 without much thought as to the perverse outcome: that homeowners unable to afford the panels, or without sufficient roof-space to fit them, would end up subsidising wealthy homeowners like Guy Ritchie.
Electricity distribution companies are now obliged to buy a certain proportion — currently around 11 per cent — of their energy supplies from such producers at a huge mark-up on the price they pay for electricity generated by coal or gas plants.
The extra cost is subsequently passed on to all other electricity consumers.
The scheme was introduced by the last Labour government in order to encourage a huge switch to green energy in an attempt to hit its target of reducing Britain’s carbon emissions by 80 per cent by 2050.
These green energy levies are costing the normal homeowner dear, adding nine per cent to our energy bills this year, according to the industry regulator Ofgem. Millions of ordinary consumers, to put it bluntly, are therefore having their pockets picked to pay for the latest government eco folly.
Theoretically, any homeowner can take advantage of the FIT scheme, but in practice you have to be fairly well-off to afford the capital costs involved. To install just one solar panel typically costs £1,000, plus another £1,000 for an inverter — the device which converts the electricity into a form which can be fed into the National Grid.
And even if you have a few thousand pounds to spare, you need a large roof-space to make the panels financially worthwhile.
Thanks to high fixed costs, small scale installations make little financial sense, even in such a rigged market: a Which report last year found that a small solar panel installation costing £5,500 typically saved customers just £55 a year.
If you have got £15,000 and the space to install 15 panels, however, the subsidies start to roll in (and the unit costs are much lower because you still only need one inverter).
Homeowners who have panels installed and working before the Government’s new deadline next month have the right to sell all the electricity generated back to the National Grid at a price of 43.3 pence per kilowatt hour — or about six times the price that your electricity company will be paying to buy most of their electricity.
That means a homeowner with 15 panels in southern England can expect to earn around £1,500 a year from selling his electricity — and these payments are guaranteed for up to 25 years, rise with the Retail Prices Index and are tax-free.
Under the new rules, however, the price has been slashed to 21p and it will take homeowners roughly 18 years to break even — instead of the current ten years.
It is a similar story with other green schemes encouraged by the Government: in theory any homeowner can take advantage, but the technology is only really practical in large houses. A woodchip boiler, together with the space required to store several weeks’ supply of wood, takes up the space equivalent to half a single garage — fine for a country house with outbuildings, but impossible in a modest semi.
Heat pumps — which are essentially air conditioning systems in reverse, and which keep a house warm by extracting heat from outside earth or water — are likewise only really practical on a large scale.
A heat pump for a four-bedroom house requires around half an acre of garden under which to lay the pipes. Alternatively, the pipes can be laid under a lake — if, unlike most homeowners, you are lucky enough to have one.
One satisfied customer is Simon Howard, who two years ago replaced the oil boilers at his ancestral home, Castle Howard in North Yorkshire, with a water-source heat pump from his lake.
He claims to have reduced his heating bill from £51,000 to £11,000 a year as a result. If that is the result without subsidies, why the need for taxpayers to be paying handouts to mansion-owners who install similar systems?
The subsidies for green energy schemes represent a huge mis-allocation of resources.
If we need state handouts for the green energy business, surely they should be going towards the development of new technology, not subsidising the running of present technology which in a few years time will look like an Austin Seven compared with the latest BMW.
A Norwegian company called EnSol, for example, has patented a film which could one day be cheaply applied to the windows of our homes and do the same job as one of today’s expensive solar or photovoltaic panels.
The market for that technology, however, will be compromised by the subsidies we will still be paying — in 25 years — to run tens of thousands of by then technologically-obsolete panels.
To take the automotive analogy further, imagine if Mrs Thatcher’s government had launched a scheme to subsidise the running of cars powered by lead-free petrol when they came on to the market 25 years ago, offering 40p a mile subsidy for everyone who drove the cars.
Our roads would still be full of battered Mini Metros and Ford Sierras which their owners were driving around purely to pick up the subsidies.
The scheme wouldn’t have done the environment any good whatsoever, given that the most economical cars available in the 1980s were far more polluting than the cars on the market today. Green energy isn’t always environmentally-beneficial in any case.
Wiltshire’s county ecologist, Louisa Kilgallen, recently criticised Ritchie’s proposed solar panels for the negative effect they may have on flora and fauna, saying they could spoil the chalk grassland environment.
But as with wind turbines, the environmental negatives of solar energy are being overlooked in the mad rush to encourage anything which can be classified as ‘green’.
Of course, it would be mad if we didn’t try to extract clean energy from the sun, the wind and the ground. But the Government’s subsidy schemes are not ultimately going to help us to achieve that aim.
All they are doing is to create a rigged market which helps the rich foster a green and caring image for which the rest of us are paying dearly.
Hundreds of revolutionaries fought each other at a hospital in Tripoli early on Monday, in the biggest armed clash between allies since the fall of Muammar Gaddafi.
The Argentine government has imposed new restrictions on the purchase of US dollars, in an attempt to reduce capital flight and tax evasion.
People wanting to exchange Argentine pesos for dollars must now explain where they got the money, and show they have paid their taxes.
Currency trading in Buenos Aires on Monday was much reduced as a result.
Many Argentines buy dollars to protect their wealth from inflation - thought to be higher than officially stated.
People buying dollars now have to give their national identity and tax number, which must then be approved by the national tax agency (AFIP) before the transaction can go ahead.
Reports from Buenos Aires said the process was taking as much as an hour, with many people having their requests turned down.
Some exchange houses remained closed.'Hysteria'
The new rules came into force on Monday after being announced by finance minister Amado Boudou last Friday.
"This is an important measure to combat tax evasion and money laundering," he said.
"Those who have their accounts in order should remain calm, while those who engage in shady manoeuvres should be very nervous".
Mr Boudou also warned against "intentional efforts" to stir up "collective hysteria" around the move.
The new currency controls were introduced a week after President Cristina Fernandez de Kirchner was reelected by a huge margin.
Under her leadership Argentina has enjoyed sustained economic growth.
But inflation has also risen - the government says the annual rate is around 10% but some independent experts put it as high as 25%.
Billions of dollars worth of capital have been flowing out of the country as wealthy Argentines seek to protect their money from inflation and a possible devaluation of the peso.
The government has been selling its dollar reserves on the currency market to stem the peso's losses, while also seeking to limit capital flight.
Argentina's recent history of severe economic crisis has caused many people to view the US dollar as a safe haven, and to keep part of their wealth outside the country.
In the 1980s the country suffered periods of hyperinflation.
A financial crisis in 2001-02 caused a collapse in the value of its currency and led the government to freeze people's bank accounts. It also defaulted on its foreign debts.
US authorities say they have broken up a massive drug-smuggling network run by a Mexican cartel in Arizona.
A total of 76 suspects have been arrested and huge quantities of drugs and arms seized in a series of raids.
The ring used backpackers and vehicles to smuggle marijuana, cocaine and heroin across Arizona's western desert.
The network was linked to Mexico's Sinaloa cartel and generated an estimated $2 billion in profit over the last five years, officials said.
"Today we have dealt a significant blow to a Mexican criminal enterprise that has been responsible for poisoning our communities," said Arizona Attorney General Tom Horne.
"I find it completely unacceptable that Arizona neighbourhoods are treated as a trading floor for narcotics", he added.
The bust - known as "Operation Pipeline Express" - followed a 17-month investigation by multiple US law enforcement agencies.'Monopoly'
A mix of US and Mexican nationals were arrested in three sweeps last week, earlier this month and in September, officials announced.
More than 30 tons of marijuana, 90kg (200lbs) of cocaine and 72kg (160lbs) of heroin were seized, as well as more than 100 firearms.
Operating from the Arizona towns of Chandler, Stanfield and Maricopa, the network ferried drugs across the Mexican border on foot and by vehicle to safe houses in the Phoenix area, officials said.
The drugs were then sold to criminal gangs who distributed them in other states across the US.
Officials believe the network made huge profits by securing a monopoly on smuggling routes along an 80 mile (128km) stretch of the remote desert border from Yuma to to the community of Sells in the Tohono O'odham Indian reservation.
Intelligence suggested the ring was linked to the Sinaloa cartel, led by Mexico's most-wanted fugitive drugs lord, Joaquin "El Chapo" Guzman.
"We in Arizona continue to stand and fight the Mexican drug cartels, who think they own the place," Pinal County Sheriff Paul Babeu said.
"This is America and we shall bring a crushing hand of enforcement against those who threaten our families and our national security".
Assemblywoman Mary Hayashi has been charged with felony grand theft after allegedly being caught by security officers stealing nearly $2,500 in clothing from a San Francisco Neiman Marcus store.
The 45-year-old Castro Valley Democrat, wife of a Bay Area judge, pleaded not guilty Thursday in San Francisco Superior Court and is free on $15,000 bail pending further proceedings Nov. 15.
Sam Singer, spokesman for Hayashi, said the arrest occurred after she left the store while using her cellular phone.
"The incident in San Francisco was a mistake and a misunderstanding," Singer said. "The assemblywoman strongly believes in the justice system and is hopeful that this matter will be cleared up soon."
Hayashi, who is scheduled to be termed out of office next year, chairs the Assembly Business, Professions and Consumer Protection Committee.
The veteran lawmaker was placed under citizen's arrest by security officers outside Neiman Marcus after leaving the store without paying for clothing items, said Officer Carlos Manfredi of the San Francisco Police Department.
Hayashi had passed several cash registers without stopping and the incident was captured on videotape, said Manfredi, adding that the clothing was recovered and has been booked into evidence.
Leather pants, a black skirt and a white blouse were the merchandise involved, Singer confirmed. He did not know their brand names or value.
Hayashi, after being stopped by Neiman Marcus security officers about 12:15 p.m. Sunday, was taken into custody by San Francisco police and released on bail about seven hours later – at 7:28 p.m., reports said.
Maximum sentence is three years in prison for grand theft, but first-time offenders typically do not receive such stiff sentences, said Assistant District Attorney Omid Talai, spokesman for the San Francisco DA's office.
Talai declined to comment on Hayashi's likely punishment if convicted.
Hayashi is embarrassed, distraught and she apologizes for any misunderstanding, but she has no intention of resigning from office, Singer said.
"Absolutely not," he said. "She is one of the most respected members of the Assembly – a fine, upstanding citizen and a role model. This is a mistake and nothing more."
Hayashi had entered Neiman Marcus with two shopping bags. One contained items purchased from another store; the other had merchandise that she intended to return to Neiman Marcus, Singer said.
While inside Neiman Marcus, she picked up some additional items to purchase. Distracted while using a cellular phone, she stepped outside briefly "without really thinking about it," Singer said.
She immediately realized her mistake, but before she could rectify it, she was stopped by store security officers, Singer said.
"She was probably trying to do too much at the same time and was distracted," Singer said. "She made a mistake, but she did not intend to do what she's been accused of doing."
The arrest does not disqualify Hayashi from serving in the Legislature.
Political repercussions could hurt her political career, however, even if she is not forced from office, political analyst Bob Stern said.
"For most public officials, the publicity is far worse than the penalty," Stern said.
Spokesman John Vigna released a written statement that said Assembly Speaker John A. Pérez will await findings of the criminal justice system.
"The Speaker believes that Ms. Hayashi has the same right to due process as every person in California," Vigna said. "This is a serious matter and must be resolved through the appropriate setting of the courts."
Hayashi represents an Alameda County Assembly district that includes all or parts of Castro Valley, Hayward, Oakland, Pleasanton, San Leandro and San Lorenzo.
The lawmaker is married to Alameda Superior Court Judge Dennis Hayashi, a former public-interest attorney, her Assembly website said.
Hayashi, who lived in Korea as a child, has documented her experiences as an immigrant in a book "Far From Home: Shattering the Myth of the Model Minority."
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Read more: http://www.wyff4.com/news/29638219/detail.html#ixzz1cPhV7xzF
By PAUL SPERRY, FOR INVESTOR'S BUSINESS DAILY
President Obama says the Occupy Wall Street protests show a "broad-based frustration" among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis.
"You're seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place," he complained earlier this month.
But what if government encouraged, even invented, those "abusive practices"?
Rewind to 1994. That year, the federal government declared war on an enemy — the racist lender — who officials claimed was to blame for differences in homeownership rates — and launched what would prove the costliest social crusade in U.S. history.
At President Clinton's direction, no fewer than 10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. They also were threatened with denial of access to the all-important secondary mortgage market and stiff fines, along with other penalties.
The threat was codified in a 20-page "Policy Statement on Discrimination in Lending" and entered into the Federal Register on April 15, 1994, by the Interagency Task Force on Fair Lending. Clinton set up the little-known body to coordinate an unprecedented crackdown on alleged bank redlining.
The edict — completely overlooked by the Financial Crisis Inquiry Commission and the mainstream media — was signed by then-HUD Secretary Henry Cisneros, Attorney General Janet Reno, Comptroller of the Currency Eugene Ludwig and Federal Reserve Chairman Alan Greenspan, along with the heads of six other financial regulatory agencies.
"The agencies will not tolerate lending discrimination in any form," the document warned financial institutions.
Ludwig at the time stated the ruling would be used by the agencies as a fair-lending enforcement "tool," and would apply to "all lenders" — including banks and thrifts, credit unions, mortgage brokers and finance companies.
The unusual full-court press was predicated on a Boston Fed study showing mortgage lenders rejecting blacks and Hispanics in greater proportion than whites. The author of the 1992 study, hired by the Clinton White House, claimed it was racial "discrimination." But it was simply good underwriting.
It took private analysts, as well as at least one FDIC economist, little time to determine the Boston Fed study was terminally flawed. In addition to finding embarrassing mistakes in the data, they concluded that more relevant measures of a borrower's credit history — such as past delinquencies and whether the borrower met lenders' credit standards — explained the gap in lending between whites and blacks, who on average had poorer credit and higher defaults.
The study did not take into account a host of other relevant data factoring into denials, including applicants' net worth, debt burden and employment record. Other variables, such as the size of down payments and the amount of the loans sought to the value of the property being bought, also were left out of the analysis. It also failed to consider whether the borrower submitted information that could not be verified, the presence of a cosigner and even the loan amount.
When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.
Still, the study was used to support a wholesale abandonment of traditional underwriting standards — the root cause of the mortgage crisis.
For the first time, Washington's army of bank regulators put racial lending at the top of their checklist. Banks that failed to throw open their lending windows to credit-poor minorities were denied expansion plans by the Fed in an era of frenzied financial mergers and acquisitions. HUD threatened to deny them access to Fannie Mae and Freddie Mac, which it controlled. And the Justice Department sued them for lending discrimination and branded them as racists in the press.
"HUD is authorized to direct Fannie Mae and Freddie Mac to undertake various remedial actions, including suspension, probation, reprimand or settlement, against lenders found to have engaged in discriminatory lending practices," the official policy statement warned.
The regulatory missive, which had the effect of law, advised lenders to bend "customary" underwriting standards for minority homebuyers with poor credit.
"Applying different lending standards to applicants who are members of a protected class is permissible," it said. "In addition, providing different treatment to applicants to address past discrimination would be permissible."
To that end, lenders were directed to "make changes in marketing strategy or loan products to better serve minority segments of the market." They were also advised to "change commission structures" to encourage brokers and loan officers to "lend in minority and low-income neighborhoods" — a practice Countrywide Financial, the poster boy of the subprime scandal, perfected. The government now condemns the practice it once encouraged as "predatory."
FDIC warned banks that even unintentional discrimination was against the law, and that they should be proactive in making "multicultural" loans. "An ounce of prevention is worth a pound of cure," the agency said in a separate advisory.
Confronted with the combined force of 10 federal regulators, lenders naturally toed the line, and were soon aggressively marketing subprime mortgages in urban areas. The marching orders threw such a scare into the industry that the American Bankers Association issued a "fair-lending tool kit" to every member. The Mortgage Bankers Association of America signed a "fair-lending" contract with HUD. So did Countrywide.
HUD also pushed Fannie and Freddie, which in effect set industry underwriting standards, to buy subprime mortgages, freeing lenders to originate even more high-risk loans.
"Lenders should ensure that their loan processors and underwriters are aware of the provisions of the secondary market guidelines that provide various alternative and flexible means by which applicants may demonstrate their ability and willingness to repay their loans," the policy statement decreed.
"Fannie Mae and Freddie Mac not infrequently purchase mortgages exceeding the suggested ratios" of monthly housing expense to income (28%) and total obligations to income (36%).
It warned lenders who rejected minority applicants with high debt ratios and low credit scores to "be prepared" to prove to federal regulators and prosecutors they weren't racist. "The Department of Justice is authorized to use the full range of its enforcement authority."
It took a little more than a decade for the negative effects of the assault on prudent lending to be felt. By 2006, the shaky subprime mortgages began to default. In 2008, the bubble exploded.
Clinton's task force survived the Bush administration, during which it produced fair-lending brochures in Spanish for immigrant home-loan applicants.
And it's still alive today. Obama is building on the fair-lending infrastructure Clinton put in place.
As IBD first reported in July, Attorney General Eric Holder has launched a witch hunt vs. "racist" banks.
"It's a more aggressive fair-lending enforcement approach now," said Washington lawyer Andrew Sandler of Buckley Sandler LLP in a recent interview. "It is well beyond anything we saw during the Clinton administration."
Tom Perez, assistant attorney general for civil rights, recently testified that his division "continues to participate in the federal Interagency Fair Lending Task Force." And he and the task force are working with the newly created Consumer Financial Protection Bureau to "enhance fair-lending enforcement."
The fair-lending task force's original policy paper undercuts the notion the financial crisis was all about banker "greed," though it certainly played a role after the fact. Rather, it offers compelling evidence that the crisis evolved chiefly from government mandates and threats to increase lending to applicants who could not afford them.
For years, scientists dismissed Carl Gustafson's claims that a pierced mastodon bone found in Sequim in 1977 was evidence that humans were hunting large mammals in North America 13,800 years ago. New tests now show he was right.
Oh dear. I really didn't want my first blog post in a week to be yet another one about global bloody warming. Problem is, if those lying, cheating climate scientists will insist on going on lying and cheating what else can I do other than expose their lying and cheating?
The story so far: ten days ago a self-proclaimed "sceptical" climate scientist named Professor Richard Muller of Berkeley University, California, managed to grab himself some space in the Wall Street Journal (of all places) claiming that the case for global warming scepticism was over. Thanks to research from his Berkeley Earth Surface Temperatures (BEST) project, Professor Muller stated confidently, we now know that the planet has warmed by almost one degree centigrade since 1950. What's more, he told the BBC's Todayprogramme, there is no sign that this global warming has slowed down.
Cue mass jubilation from a number of media outlets which, perhaps, ought to have known better – among them, the Independent, the Guardian, The Economist and Forbes magazine. To give you an idea of their self-righteous indignation at the supposed ignorance of climate change deniers, here is the Washington Post's Eugene Robinson in full spate:
We know that the rise in temperatures over the past five decades is abrupt and very large. We know it is consistent with models developed by other climate researchers that posit greenhouse gas emissions — the burning of fossil fuels by humans — as the cause. And now we know, thanks to Muller, that those other scientists have been both careful and honorable in their work.
Nobody’s fudging the numbers. Nobody’s manipulating data to win research grants, as Perry claims, or making an undue fuss over a “naturally occurring” warm-up, as Bachmann alleges. Contrary to what Cain says, the science is real.
Problem is, Eugene, almost every word of those two paragraphs is plain wrong, and your smugness embarrassingly misplaced.
As you know, I had my doubts about Muller's findings from the start. I thought it was at best disingenuous of him to pose as a "sceptic" when there is little evidence of him ever having been one. As for his argument that the BEST project confounds sceptics by proving global warming exists – this was never more than a straw man.
Now, though, it seems that BEST is even worse than I thought. Here is what Muller claimed on the BBC Radio 4 Today programme:
In our data, which is only on the land we see no evidence of [global warming] having slowed down.
But this simply isn't true. Heaven forfend that a distinguished professor from Berkeley University should actually have been caught out telling a lie direct. No, clearly what has happened here is that Professor Muller has made the kind of mistake any self-respecting climate scientist could make: gone to press with some extravagant claims without having a smidgen of evidence to support them.
Here, to help the good professor out, is a chart produced by the Global Warming Policy Foundation's David Whitehouse. It was plotted from BEST's own figures.
Note how the 10 year trend from 2001 to 2010 – in flat contradiction of Muller's claims – shows no warming whatsoever.
What's odd that BEST appears to have gone to great trouble – shades of "hide the decline", anyone? – to disguise this inconvenient truth. Here is a graph released by BEST:
The GWPF's David Whitehouse is not impressed:
Indeed Best seems to have worked hard to obscure it. They present data covering more almost 200 years is presented with a short x-axis and a stretched y-axis to accentuate the increase. The data is then smoothed using a ten year average which is ideally suited to removing the past five years of the past decade and mix the earlier standstill years with years when there was an increase. This is an ideal formula for suppressing the past decade’s data.
Muller's colleague Professor Judith Curry – who besides being a BEST co-author chairs the Department of Earth and Atmospheric Sciences at America’s prestigious Georgia Institute of Technology – is even less impressed.
There is no scientific basis for saying that warming hasn’t stopped,’ she said. ‘To say that there is detracts from the credibility of the data, which is very unfortunate.’
Remember all these people survive on grant money.