Europe Has Always Been at War With Diesel

Fuel

Europe is at war with the diesel engine. Paris, Madrid, and Athens will ban diesels starting in 2025. Even Stuttgart (home of Daimler and Porsche) and Munich (home of BMW) are following suitFrance and Britain have pledged to eliminate internal combustion engine cars by 2040.   The cars–diesel in particular–are too polluting, you see. And so the Euros are intent on replacing them with electric vehicles.

Europe has always been at war with diesel!

Um, not really. Like Oceania and East Asia, Europe and diesel were once fast allies. In its early days of the fight against climate change, Europe figured that since diesel engines burn fuel more efficiently than gasoline ones, they could reduce carbon emissions by forcing or inducing people to switch to diesel. They gave tax breaks and incentives that led to 1/3 of the European car fleet being diesel.

Then reality crept in. Diesels create more particulates, which create nasty pollution, particularly in urban areas. The Euros thought they could address this by strict emissions standards. So strict, that auto companies couldn’t meet them economically. So they lied and cheated. Brace yourself: even morally superior German companies lied and cheated! So Europe bribed people to pollute their cities. Well played!

Further, even by its own objectives the policy was a failure. Even though diesel has lower CO2 emissions, it has higher soot emissions–and soot contributes to warming. Whoops! Further, the CO2 advantage of diesel has been narrowing over the years, due to improvements in gasoline engine technology. So at best the impact of diesel on warming has been a push, and maybe a net bad.

But never fear! The same geniuses who forced diesel down Europe’s throat have a solution to the evils of diesel: they will force electric cars down people’s throats.

What could possibly go wrong?

Well, off the top of my head.

First, in the near term, a good portion of electric cars will be powered by electricity generated by coal. This is especially true if China goes Europe’s way.

Second, the green wet dream is for renewables to replace coal. Don’t even get me started. Renewables are diffuse and intermittent–they don’t scale well. They have caused problems in the power grid wherever (e.g., Europe, California) they have accounted for over 10 percent or so of generation. They consume vast amounts of land: air pollution (if you believe CO2 is a pollutant) is replaced by sight pollution and the destruction of natural habitat and foodstuff producing land. Renewables are a static technology (e.g., the amount of wind generation is limited by physical laws), whereas internal combustion technology has been improving continuously since its introduction in the 19th century. Really economic renewables generation will require a revolution in large-scale storage technology–a revolution that people have been waiting for for decades, but which hasn’t appeared.

Third, disposal of batteries is an environmental nightmare.

Fourth, mining the materials to produce batteries is an environmental nightmare–and is likely to benefit many kleptocrats around the world. Are greens really all that excited about massive mines for rare earths (notoriously polluting) and copper springing up to provide the materials for their dream machines? Will they pass laws against, say, blood cobalt? (And when they do, will they acknowledge–even to themselves–their culpability? Put me down as a “no.”)

Fifth, depending on the fuel mix, carbon emissions over an EV’s lifetime are not that much lower than those of an internal combustion car using existing technology–and that technology (as noted above) will improve.

Like I say, top of my head. But there’s an even bigger reason:

Sixth, unintended consequences, or more prosaically, shit happens. Just like the diesel box of chocolates was full of things the Euro better thans didn’t expect, and didn’t like upon consuming, the EV craze will also present unintended and unexpected effects, and in this type of circumstance, these effects are usually negative.

But they know better! How do we know? Because they keep telling us so! And because they keep telling us what to do!  Despite the fact that their actual record of performance is a litany of failures. (I cleaned that up. My initial draft had a word starting with “cluster.”)

Given such a track record, people with any decency would exercise some restraint and have some humility before embarking on another attempt to dictate technology. But no, that’s not the elite’s way. That’s not the bureaucrats’ way. They have learned nothing and forgotten nothing and will continue to prove that until someone stops them. Sadly, short of revolution it’s hard to see how that can happen.

Almost all attempts by states to dictate technology are utter fiascos. The knowledge problem is bigger here than anywhere, and the feedbacks are devilishly complex and hard to predict. Look at something seemingly as prosaic and well-understood as the production of oil and gas. Ten or twelve years ago, only a few visionaries glimpsed the potential of fracking, and I doubt that even they would admit that they foresaw the transformation that has occurred. Trying to dictate a technology that is dependent on myriad other technologies, and which may be rendered obsolete by technologies not yet developed, is something that only fools do.

But alas, there are many fools in high places.

The Orwellian switch from Europe and Diesel Have Always Been Allies to Europe Has Always Been at War With Diesel is particularly revealing because rather than recognize that the experience of Europe’s pro-diesel policy makes a mockery of policymakers pretenses of foresight, the failure of that policy is spurring them to embark on an even more speculative binge of coercion!

If you think CO2 is an issue, tax CO2 and let the market figure out the optimal way of reducing emissions: there are many margins on which to adjust, including technical innovation, fuel substitution, changes in lifestyle. Yet these madmen (and women) and fools insist on dictating technology right after their past dictates have proved failures. Worse than that: they are issuing new ukases because their old ones were crashing failures.

We are in the best of hands.

About Craig Pirrong 227 Articles

Affiliation: University of Houston

Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University, and a faculty member at the University of Michigan, the University of Chicago, and Washington University.

Professor Pirrong's research focuses on the organization of financial exchanges, derivatives clearing, competition between exchanges, commodity markets, derivatives market manipulation, the relation between market fundamentals and commodity price dynamics, and the implications of this relation for the pricing of commodity derivatives. He has published 30 articles in professional publications, is the author of three books, and has consulted widely, primarily on commodity and market manipulation-related issues.

He holds a Ph.D. in business economics from the University of Chicago.

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