Well, I can't quite believe that I'm the only person to have noted this (being alone in such things usually means that I'm wrong, but I don't think I am this time) but the correct answer is "nothing".

This change should, if our politicians are honest with us (which is, I think you'll agree, one heck of an escape hatch I've left myself) make no difference at all to the average cost of a plane ticket in or out of Britain. It'll hurt various Johnny Foreigners flying from and to places outside Britain, but not us.

Starting from the beginning: we assume here that the IPCC is correct, that climate change is happening and that we're causing it. What we thus need to do is reduce carbon emissions. We can do this in one of two ways (sensible ways, that is, there are myriad non-sensible ways), cap and trade (where we issue permits which polluters have to have in proportion to their pollution) or a]]> 2008-07-09T14:27:20+01:00 http://www.spectator.co.uk/business/trading-floor/825621/picking-winners.thtml Glory Be! Our Prime Minister has done it again!

Yes, he's such a giant brain that he knows exactly which technology we ought to use to move around.

By 2020, the Prime Minister wants all new cars sold in Britain to be electric or hybrid vehicles producing less than 100 grams of carbon dioxide per kilometre.

Amazing, isn't it, that he knows so much? He's able to know what changes there will be in technology over the next 12 years? That fuel cells will not become economic, that diesel engines will not become even more efficient, that battery technology will advance enough to make this anything less than crippling in its expense.

Amazing really, I hadn't realised that he was so bright.

After all, the last time he made a technological choice for us proles it was to insist that we should all use biofuels wasn't it, and that turned out to be such a good idea.

Just one little point though:

Why does every representative of a fishing region believe he must defend his constituents' right to ensure that their children have nothing to inherit?

Quite true: the solution though is for the right to the fish being the property of the fishermen and thus being something which they can hand on to their children, as farmers can their land and as we know, that does indeed aid in combatting the basic problem, the Tragedy of the Commons.

One more little point: the number of fish in a fishery (and yes, you do have to have restricted access for this to be true) being run for optimal profit is in fact higher than the minimum sustainable population. Yes, if fishermen were allowed to own the asset for the long term, there would be more fish in the sea.

Perhaps]]> 2008-07-08T13:36:05+01:00 http://www.spectator.co.uk/business/trading-floor/823366/number-crunching-with-polly.thtml Today's great idea from the political journalist of the year, Polly Toynbee:

Sharing the suffering will be essential, daring to tax the top 1% of earners and use those funds to lift the lowest-paid out of tax to compensate for the steep price rises. Close every loophole and refuse to accept as a law of nature that the very rich escape tax. Fairness matters more in hard times.

We don't in fact take it as a law of nature that the very rich escape tax: we rather note that if we try to tax them too much then they'll bugger off and we'll get nothing. The Laffer Curve is indeed true at certain points along the range of possible tax rates.

But still, let's try to do some number crunching here. My assumptions are pretty rough and ready and I'll no doubt be putting things into Polly's mouth that she wouldn't explicitly endorse once the implications are laid out, but they are things she's suggested before such implications are laid out.

So, at what level of income should you start to pay income tax and NI? I think a very reasonable starting point would be the minimum income needed]]> 2008-07-08T13:23:31+01:00 http://www.spectator.co.uk/business/trading-floor/823311/what-an-excellent-idea.thtml One of my little pastimes (sad, sad geek that I am) is keeping an eye on the latest ideas of one Richard Murphy. He's a retired accountant who writes all sorts of well meaning pamphlets about tax, investment and how we can all make the world a better place. I have to admit that his latest idea really is something of a corker. He notes this line from the Observer:

Stock-market historian David Schwartz says : 'It is one of the biggest myths that shares offer generous returns provided your time horizon is a long one.If you look at average annual returns from 1900, stocks come in at about 1 per cent; it is only if you re-invest dividend income that the figure rises to 4 or 5 per cent.'

He then goes off and designs a much better system for pension savings. We should have a form of government guaranteed bond to invest in infrastructure projects (schools, hospitals and the like). A hypothecated gilt in effect: the money rather than going into general funds goes to a specific project but we've still got that government guarantee so that it's as safe as the promises of future Chancellors. 2008-07-08T12:57:27+01:00 http://www.spectator.co.uk/business/trading-floor/822246/82-percent-of-voters-think-the-economy-will-get-worse.thtml The new Populus poll for The Times finds a dramatic increase in economic pessimism. 14 months ago, 25 percent of voters thought the economy would get worse. Now, 82 percent do and the number thinking it will improve has dropped from 19 percent to 3 percent.

Icahn notes in the letter that "several of our conversations have lasted as long as an hour" (still showing off). Here is an abridged version of what passed between them:

Steve made it abundantly clear that, due to his experiences with Yahoo! during the past several months, he cannot negotiate any transaction with the current board...However, Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company….Our company is now moving toward a precipice. It is currently losing market share in its "Search" function...IT IS TIME FOR A CHANGE. (Icahn's own capitals)

Polly Toynbee was this week named political journalist of the year in the Public Affairs News awards.

Thank the Lord it wasn't for services to economics. In fact, I'd point to this one sentence in the article above that announcement as an example of exactly what is wrong with the political system of the country.

Society can't do without cleaners, carers, caterers and classroom assistants.

That our leading political journalist is so deeply ignorant of matters economic: or if you prefer, that her peers are so deeply ignorant that they'll give an award to someone who trots out such silliness.

For of course society can do without those people: reaching back deep into my own memory I'm pretty certain that only a few decades ago we didn't in fact have classroom assistants. We had teachers, yes, but they're now off doing the paperwork while the assistants keep the ankle-biters quiet.

Similarly, caterers are a newish invention: the restaurant, let alone the works canteen, didn't really come into British society until post WWII: the existence of the Cornish pasty is evidence of another way to feed the working man.

What she's missing is]]> 2008-07-07T12:54:36+01:00 http://www.spectator.co.uk/business/trading-floor/820831/the-food-we-throw-away.thtml Yes, you've seen it, all over the papers this morning, the way in which we throw away perfectly good food and thus waste money, waste resources and annoy Gaia. Here's the actual report.

One point that's worth picking up on:

Around 18% of UK GHG emissions are related to food production and consumption.

I will guarantee you that this is picked up on by various Greenie writers and used as evidence that we must indeed eat locally, stop transporting food and heavens to Betsy, we'd certainly better stop buying anything from Johnny Foreigner. The bit they won't go on to tell us is the next sentence.

Nearly half of these emissions come from farms, mostly in the form of methane and nitrous oxide that fall outside current UK domestic targets for carbon dioxide (CO2), and are beyond the scope of the EU Emissions Trading Scheme and other carbon pricing mechanisms

The reason they won't is that there's also been research from the US in recent weeks which breaks down which parts of the food production system cause the most emissions. Some 4% of the emissions (note, this is food production, not production and consumption combined) come from]]> 2008-07-07T12:35:31+01:00 http://www.spectator.co.uk/business/trading-floor/815226/issue-3-of-the-spectator-business.thtml We've just uploaded the content from the latest issue of the Spectator Business - you can access it here.

In particular, I'd recommend you read Michael Millar's piece on the resurgance in trade union militancy - "Are we heading for an autumn of discontent?" 

It'd be great to hear your views on this, or on any other articles in the magazine.  Just register them in the relevant comment sections.