Ethan Allen Institute                                                                  July 24, 2015

 

Like the CEP of 2011, the guiding principle of the Plan’s “vision” is “to set Vermont on a path to “attain 90% of its energy from renewable sources by 2050.”

That document also advocated for

  • Moving toward “energy independence” by requiring Vermonters to reduce their consumption of imported fossil fuels that then comprised two thirds of the state’s total energy consumption.
  • Reducing greenhouse gas emissions to 25% below 1990 levels by 2012, and 50% below by 2050, to “lower the state’s contribution to global warming.” (Act 168 of 2006)
  • Strengthening and extending the various mechanisms for effecting these goals: mandates, subsidies, controls, and directives.

A more desirable and realistic plan would be, in our view, “to set Vermont on a path to assure safe, reliable and competitively priced energy that will make possible a strong, competitive and growing economic base, both for creation of new wealth and income for the people of the state, and for expanded tax revenues to enable the state to meet its fiscal obligations.”

The following comments relate mainly on the electricity section of the 2015 draft Plan.

Meredith Angwin, head of the Institute’s Energy Education Project, has posted an analysis of the electricity projections at www.yesvy.blogspot.com. It makes this key point: “The proposed Vermont Energy Plan is Basically Unworkable.”

Consider the 2011 CEP chart showing Vermont Committed Electric Resources” out to 2020.

2010 Known Electric Resources from PSD
from CEP 2011

Asa Hopkins, Director the Planning and Energy Resources Division of the PSD, offered this updated chart at a PSD meeting on June 30, projected to 2030.

 2015 Known Vermont Electric Sources from PSD

HydroQuebec, the big green part at the bottom, falls off somewhat as the old contracts expire, but its contribution remains steady.  Above it is the steady purple of Vermont and New York State hydropower, and the increased level of nuclear (medium blue) as the Seabrook contracts begin. Then there’s that huge red part, “residual mix” (aka “buying from the grid or short-term contracts”) that is supposed to diminish, and in fact disappear.

With the nuclear purchase in place, in order to meet the stated goal we can’t buy a single electron from the grid, and we can’t expand our use of natural gas. All that white space at the top right must be filled with renewables.

The last few slides in the presentation show how the PSD addresses this problem. A slide labelled “Question #1 background cont.” includes the following: “Expected identified resources ….leave 46% of the electric portfolio undetermined.” What kind of comprehensive energy plan
leaves 46% of the electricity “undetermined”?

Angwin notes that the line at the top of the 2015 chart (how much electricity Vermont is projected to require) slopes up gently to the right.  On that chart, the Vermont electricity requirement number seems to hang right around 6,000,000 MWh (6 TWh) for fifteen years.

But the Vermont projected electricity use from the PSD’s TES (Total Energy Study) included all sectors of energy use, and predicted that Vermont can lower total energy use significantly.  However, to do this, Vermonters will have to use considerably more electricity (notably electric vehicles and heat pumps). The chart below sums this up.

Future Vermont Electricity Use, from Total Energy Study and DPS presentation

In this chart, as building heat (electric heat pumps) and transportation (electric vehicles) kick in, Vermont energy use goes from around 5 TWh in 2015 to around 9 TWh in 2050.

In other words, the Known Electric Resources chart ended in 2030, with just a gentle uptick in demand, as shown by the top line of the chart. For that top line, PSD used a VELCO projection of energy use, instead of referring to their own PSD studies.  (We don’t know what study they used for the “46% of the portfolio” number.)

However, if Vermonters are required to run all sectors on renewable electricity, we are going to need much more electricity than estimated by VELCO.  Vermont electricity use practically doubles by 2050. If “46% of the portfolio…. is undetermined”, the new Plan is sucking wind.

Where will we get all that additional renewable electricity? Not from solar PV and net metering. Hydro Quebec seems the only realistic option. What became of the 2011 CEP’s insistence on more “energy independence”? Vermont will have to be much more dependent on HQ to deliver terawatts to (Canadian-owned) Green Mountain Power. In return, HQ will be in a strong position to demand favorable contract terms and perhaps expanded power corridors through Vermont.

Other material provided by PSD – not in the Plan – projects that the electric load will be essentially flat at 6,000 Gwhrs/yr from 2012 through 2025. In that latter year its “high efficiency and renewables” scenario requires that the fraction contributed by renewables will rise from the present 1,667 Gwhrs/yr (27%) to 4,606 (75%).

Fifty eight percent of this increase (1,733 Gwhrs/yr) is attributed to HydroQuebec, which until a few years ago was not “renewable” until the legislature redefined “renewable” to include what is now our leading electricity supplier. New wind turbines will contribute 230, currently proposed wind 299, FIT solar farms 108, net metered PV 21,new biomass 426,and large hydro (presumably not HQ) 123, total increase 2940.

To produce this result, the State will have to pursue some combination of ratepayer and taxpayer subsidies – tax credits, rebates, government financing, mandates, Feed In Tariffs, Renewable Portfolio Standards, and outright capital subsidies. How many acres of solar panels? How many more 450 foot wind turbines? How many gas-fired backup plants to keep grid load reasonably level? How soon will these have to come on line? Will the resulting price of that electricity keep Vermont businesses competitive and residences affordable? This information is not included in the Plan.

The CEP showed great enthusiasm for electrical energy conservation and efficiency, for which the ratepayers have been forced to pay $237 million over the past eleven years. It expected that Efficiency Vermont would weatherize 8,200 homes a year – 22 a day for nine years. This will hit up ratepayers for an astonishing $85 million a year by 2020.

The 2011 Plan declared a five to one return on such investments. Query: if such fabulous returns can be achieved through conserving energy, and pocketed by the favored home or business owner, why is it necessary for the rate payers to pay for it? Why don’t the home or business owners invest and pay for the energy improvements, and use their savings on their power bills to pay off their investment, without sending those bills to their neighbors?

The CEP stated that Efficiency Vermont “helped the largest commercial users in the state save 7.5% annually through a commercial energy efficiency challenge.” The Plan did not explain why the state’s ratepayers were taxed $50,000 (at least) to produce savings for Green Mountain Coffee Roasters. Why couldn’t this billion-dollar company, and others, finance their energy investments themselves, and pay themselves back with the energy savings achieved?

As for the alleged five to one return, the CEP offered no comparison with the return that might have been realized by the state’s economy had the state not taxed the $237 million away from ratepayers.

As our frequently-ignored Constitution aptly observes, “previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the Legislature to be of more service to [the] community than the money would be if not collected.” (Ch I Art 9th).

In the past decade the passion for “renewables” has produced a long list of costly incentives, notably

  • Feed In Tariffs (standard offers), which require the utilities to buy up to 50 Mw of renewable power at prices from three to five times the current market price.
  • Clean Energy Development Fund, funded until 2012 by imposing special taxes on the state’s one nuclear plant, to distribute tax credits – and later, up front cash – to subsidize renewable energy installations, notably those stimulated by one of the Fund’s original board members.
  • RESET, the Renewable Portfolio Standard legislation (2015) that mandates utilities to purchase increasing percentages of renewable electricity

There is no question but what a state can achieve the decreed “90% by 2050”– if its political leaders can persuade its taxpayers and ratepayers to provide the enormous subsidies, and submit to the ever increasing mandates, that reaching that goal will require.

Whether the taxpayers and ratepayers could do more good for the people and economy of this state by making their own decisions on how to spend their own money (see Ch I Art 9th above) is an important question, which of course the Plan, like the 2011 CEP, will assiduously avoid.

In short, the CEP’s – and certainly the new Plan’s – vision of a state with 90% of its total energy produced by renewables by 2050 can only be achieved by heroic, costly government intervention into the energy market, over the growing protests of taxpayers and ratepayers called upon to finance the ever expanding renewable industrial complex.

It is significant that the “90% renewable energy by 2050” goal is not state law. It was simply decreed by Gov. Shumlin. It does not appear in 30 VSA 8001 as one of the goals of the state’s electricity policy. The “90% by 2050” goal was mentioned in Sec. 13 of Act 170 of 2014, but the fact remains that our elected representatives have never been called to vote on it. Because of the potentially enormous costs of achieving that goal, and the flood of taxes, mandates and regulations being put in place to achieve it, we recommend that the general assembly be asked to give this decree democratic legitimacy by a record vote in each chamber.

The CEP was rightly enthusiastic about distributed generation, as preferable to large central power stations and long transmission lines. What the Plan conspicuously refused to consider is a fleet of 100-200Mw factory-built modular nuclear plants, making use of new failsafe Generation 4 technology, on a dozen sites around the state. Such plants aren’t likely to be on the market before 2020 (unless the Chinese produce an exportable package before then), but a few states will be ready for them, and Vermont ought to among them.

Recommendations: the 2011 CEP included some useful proposals, including more net metering, ride sharing, local energy committees, state building efficiency improvements, smart grid investments, the voluntary local Property Assessed Clean Energy program, and maintaining an effective energy information clearing house.

But overall the CEP resolutely headed off in the wrong direction, anticipating enormous taxpayer and ratepayer costs, ever growing bureaucracies, and ever more extensive controls over the choices of the ordinary Vermonter, all to send Vermonters galloping after a wrong-headed goal of “90% renewable energy by 2050”.

Here are our 19 specific policy recommendations for the successor Plan.

  1. Abandon the “vision” of this Plan that state government must use its coercive powers to see that Vermont gets 90% of its energy from renewable sources by 2050 or any other date – at least until the General Assembly votes on the record to make themselves accountable to the voters who will bear the burdens.
  2. Replace that vision with this: “to set Vermont on a path to assure safe, reliable and competitively priced energy that will make possible a strong, competitive and growing economic base, both for creation of new wealth and income for the people of the state, and for expanded tax revenues to enable the state to meet its fiscal obligations.”
  3. Repeal the requirement that Vermonters be forced to reduce their greenhouse gas emissions to 50% below the 1990 baseline by 2028, or any other year. (Act 168 of 2006).
  4. Repeal the state’s “climate action plan”, inasmuch as nothing the people of Vermont can do, even at crippling economic cost, will ever have any detectable effect on any metric of “climate change” (formerly “global warming”).
  5. Repeal the RESET mandate that utilities meet a fraction of their demand with high priced renewables.
  6. Repeal the Feed In Tariff (Standard Offer) mandate that requires ratepayers to pay far above market prices to the producers of government-favored renewable electricity.
  7. Repeal the small business solar tax credit.
  8. Stop looking for inventive new ways to suck money into the Clean Energy Development Fund, such as a “compliance fee” levied on non-renewable energy (heating oil, truck and auto fuel, propane, natural gas etc.). When its current subsidy commitments are exhausted, abolish the Fund.
  9. Abandon the idea of authorizing issuance of Qualified Energy Conservation Bonds unless the entire risk of default rests with the enterprise favored by the financing (in which case the issue probably can’t be sold.).
  10. Repeal the ratepayer-financed PSB energy efficiency program, and let businesses and homes that wisely invest in energy conservation recover their costs from their own savings, instead of sending the tab to other ratepayers.
  11. Abandon the idea of instituting a carbon tax – a “climate pollution tax” to its backers. Such a tax, levied on gasoline, diesel, natural gas, home heating oil and propane, would, its backers say, include a rebate of 90% of the proceeds to people and businesses burdened by the tax; the remaining 10% would finance more renewable adventures like the CEDF. Opening an (eventual) $700 million a year revenue source would be an irresistible temptation to legislators to solve their chronic budget problems, not their constituents’ energy cost burdens.
  12. Abandon any temptation to subsidize any form of passenger rail in Vermont, especially after Gov. Dean’s $28 million Champlain Flyer boondoggle.
  13. Abandon any notion of requiring buildings to be “net zero” (100% energy self-sufficient) by 2030.
  14. Abandon any notion of restricting or taxing single occupancy vehicles (SOVs) driven by Vermonters.
  15. Abandon any notion of using land use controls to force Vermonters into downtown centers or other government-favored locations in the name of energy efficiency.
  16. Assess electric vehicle owners, who pay no fuel tax, a charge for using the state’s highways, instead of making gasoline and diesel fueled vehicles absorb all the costs. Require that publicly installed EV charging stations charge EV owners enough to at least cover the energy they are drawing.
  17. Continue to require utilities to purchase electricity offered through net metering connections, up to the point that grid stability becomes a problem; but set the rate of kwhr credit for net metering vendors so that they do their part in covering the fixed cost of maintaining power grid service.
  18. Consistently remind yourself that markets work, and that ordinary people usually turn out to make better use of their resources than what is prescribed for them by the experts who prepare “comprehensive energy plans.”
  19. Read Ch. I Art. 9th of our Constitution again, and post it in plain view at PSD headquarters. (Send copies over to the State House and the Governor’s office.)

Thank you for this opportunity to comment on the draft Energy Plan.

For the Ethan Allen Institute,
John McClaughry*, Vice President

*Member, Senate Natural Resources and Energy Committee and Joint Committee on Energy, 1989-92. A.B. (physics), Miami U.; M.S. (nuclear engineering) Columbia U.

 

 

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By Rob RoperRob Roper

We need to lower the cost of health care in Vermont, and the state, dealing with a structural budget deficit, doesn’t have the capacity to raise more taxes. So, what can we do? One simple, cost-free solution is to repeal Vermont’s Certificate of Need (CON) laws.

What are CON laws? Basically, a way for the government to guarantee a monopoly (and artificially high profits) to a politically favored provider by denying potential competitors permission to provide services. In Vermont, for example, when Vermont Open MRI, wanted to provide imaging technology for one half to one third the price of UVM Medical Center, they had to first convince the Green Mountain Care Board there was a ‘need’ for cheaper, faster, more convenient MRIs. (Duh!)

Why should anybody have to ask such permission, let alone be forced to waste considerable time and money getting it? Why not just let folks hang out a shingle? If there is a need, the customers will come. If there is not a need, the imaging center, or the clinic, or whatever will go out of business. Not good for the investors, but no harm to the taxpayer or the patients.

Other stories of cheaper, more convenient healthcare alternatives breaking into the market include ClearChoiceMD. When this group wanted to open a number of low-cost, convenient urgent care centers around the state, their competition insisted that they get a CON. When it became clear these clinics were not subject to CON laws, legislators, rather than encourage entrepreneurial, creative problem solving, enacted a number of regulations making it more difficult for ClearChoiceMD to operate.

Most recently, Dr. Peter Gunther wrote a piece that appeared in a number of venues about some doctors needing a CON to open a Green Mountain Surgery Center, citing National data that shows “the costs of procedures at such community-based centers are 45-60 percent less than in a hospital setting.” Please! Go for it! Why would anyone object, and why would we keep laws on the books to obstruct such ventures?

Currently, thirty-six states and D.C. have CON laws, regulating, on average, fourteen healthcare services, devices and procedures, but as few as just one (Arizona and Ohio), and as many as thirty – you guessed it – Vermont! Yes, we are the worst.

The ostensible reason for CON laws is that giving a government enforced monopoly to a favored provider allows that provider to over-charge some patients (who would otherwise go elsewhere) so that the unnaturally high profits can be used to subsidize indigent care services. This is bad policy on so many levels.

First, it is a hidden, unjust “tax” on some medical patients. The government has the power to tax, but not a hospital. If the government wants a hospital to provide care for patients who cannot otherwise afford it, the government should pay for it, not the unlucky guy who happens to be in the next bed. This is not fair, nor does it make sense except for the fact that it allows politicians to escape accountability for what is a massive transfer of wealth.

Second, this creates a baffling lack of transparency. It’s a joke to ask how much anything at a hospital costs today. An Advil? An appendectomy? Nobody can tell you because one person is being double or triple charged while another is skipping out on the bill. It is an impossible scenario for regulators to effectively monitor and keep players accountable. Which gets us to the last point….

It doesn’t work. A recent study by the Mercatus Center concluded, “We do not find evidence associating CON programs with an increase of indigent care. The effect of CON programs on indigent care shows no clear pattern using either direct or indirect measures of indigent care.”

What they found CON laws did to is decrease the availability of services for patients, everything from hospital beds, to MRIs to CT scans… whatever service requires a CON, there is less of it in the marketplace. That means longer waiting periods and higher costs for patients.

If you want to lower the cost of anything, the goal should be to increase supply. CON laws are in place for only one reason – to restrict supply. They should be repealed by the legislature, a serious healthcare reform move that would cost taxpayers nothing to implement, and could lower the cost of health care over the long term.

- Rob Roper is president of the Ethan Allen Institute.

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by Meredith Angwin

2010 Known Electric Resources from PSD
Blog post about this at ANS Nuclear Cafe

The Vermont Public Service Department (PSD)  is revising the Vermont Comprehensive Energy Plan which they issued in 2011.  They want public input by July 24. Yes, the plan has been under serious discussion for about a month.  First PSD had invitation meetings (late June), now they are having public meetings (July).  Then they will issue a draft 2015 plan and request further comments later in the year. You can see local timeline here.  The 2011 plan is one of the base documents.

The Charts and the Questions

On the morning of June 30, the subject of the invitation meeting was Energy Supply Resources. Asa Hopkins is Director the Planning and Energy Resources Division of the PSD. Here is a link to his presentation. (You can see all the meeting agendas and presentations at this link.)

From Hopkin’s presentation, this is the current version of the 2010 chart:

 2015 Known Vermont Electric Sources from PSD

Yes, it looks familiar.

We’ve got the big green part at the bottom: HydroQuebec.  HydroQuebec falls off somewhat as the old contracts finish, but it is still steady.  Above it is the steady purple of Vermont and New York State hydropower, and the increased level of nuclear (medium blue) as the Seabrook contracts begin. Then there’s that huge red part, “residual mix” (aka “buying from the grid or short-term contracts”) that is supposed to diminish.  As a matter of fact, it’s supposed to go away entirely.

After all, the Vermont plan is for 90% renewables, and the chart shows that we already have a big section of nuclear (relatively new long-term contracts). Nuclear is clean-air, but the Vermont plan isn’t about clean air and low carbon, it’s about renewables and only renewables.  In other words, with the nuclear purchase in place, in order to meet the Vermont plan, we really can’t afford to buy a single electron from the grid.  We also can’t afford to expand our use of natural gas.

All that white space at the top right must be filled with renewables.

The last few slides in the presentation show the PSD grappling with this problem. A slide labelled “Question #1 background cont.” includes the following:
“Expected identified resources ….leave 46% of the electric portfolio undetermined.”

Here come the cars and heat pumps

If you look at the 2015 chart above, you will notice that the line at the top (how much electricity Vermont is projected to require) slopes up gently to the right.  On that chart, the Vermont electricity requirement number seems to hang right around 6,000,000 MWh (6 TWh) for fifteen years.

But if you look at another chart in the same viewgraph presentation, you get quite a different picture.  This is Vermont projected electricity use from the TES (Total Energy Study)  done for the PSD.  The TES study included all sectors of energy use, and predicted that Vermont can lower total energy use significantly.  However, to do this, Vermont will use considerably more electricity (electric vehicles and heat pumps). The chart below sums this up.

Future Vermont Electricity Use, from Total Energy Study and PSD presentation

In this chart, as building heat (heat pumps) and transportation (electric vehicles) kick in, the Vermont energy use goes from around 5 TWh in 2015, to around 9 TWh in 2050.

In other words, the Known Electric Resources chart ended in 2030, with just a gentle uptick in demand, as shown by the top line of the chart. For that top line, PSD  used a VELCO projection of energy use, instead of referring to their own PSD studies.  I don’t know what study they used for the “46% of the portfolio” number.

However,  if Vermont really runs all sectors on renewables and therefore electricity, we are going to need much more electricity than estimated by VELCO.  Vermont electricity use practically doubles by 2050. It looks to me as if “46% of the portfolio…. is undetermined” could be a serious underestimate of the problem.

Where will we get so many renewables?  I think that buying from Hydro Quebec seems the only realistic option. And of course, HQ will love the sight of Vermont needing to buy their power!  Talk about Vermont having no bargaining position whatsoever.

Ah well. We can always write to the PSD, and encourage them to read their own reports. 2011 Comprehensive Energy Plan.

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by John McClaughryJohn McClaughry

Sen. Bernie Sanders is out on the Presidential campaign trail, and he says he’s “talking about what I believe is the most important issue facing the American people: the grotesque level of income and wealth inequality. The Koch brothers [Bernie’s proxies for Satan] and a few others are attempting to buy the United States government, and that should be of concern to everybody.”

When asked (by Mother Jones magazine) why we should be concerned, the Vermont socialist replied with a rare allusion to religion. “I think this goes back to the Bible. There is something immoral when so few have so much and so many have so little.”

I don’t pretend to be a Biblical scholar, but I grant Bernie (who is Jewish) that the Torah expresses a deep concern that excessive economic inequality can lead to a loss of God-given freedom. But what passes for socialist morality in practice today is not so much concerned with the wisdom of the Torah, as with seizing political power.

In the relevant chapter of the New Testament (Mark 10:21), Jesus replied to the rich man who had faithfully obeyed the Ten Commandments “Sell what you have, and give to the poor, and you will have treasure in heaven.” After hearing this proposition, the man “went away sorrowful, for he had great possessions.”

Note the contrast: The Christian morality says that the rich man who distributes his riches will enter the Kingdom of God. The socialist morality promises him no reward in heaven, or on earth. The obligation of socialist morality is to unite the masses, seize control of the government, wield its instruments of coercion to confiscate the riches of the unworthy owners, and distribute those riches to everybody not “rich”. That is, after the redistributors are well compensated for their morality enforcement.

Another key difference is that under socialist morality the rich are not given the choice to divest themselves of their possessions, in return for which they may enter the socialist equivalent of the Kingdom Of God (whatever that may be). Instead, the all-powerful government plunders their possessions, after which the formerly rich find themselves not in the Kingdom of God, but in a reeducation camp, or on a steam grate with a tin cup.

According to the Congressional Budget Office (2014), the despised (by socialists) “top 1%” of income earners (threshold income: $1.453 million) collect 14.6% of all income. They paid (in 2013) 33% of the total of Federal individual income, payroll, corporate and excise taxes, while receiving very little in government transfer benefits.

The Gini Index, that measures inequality on a scale of zero (everyone has the same income) to one (the top recipient gets all the income) has risen from 0.37 in 1980 to 0.44 today – not too alarming.

What’s fair? A Sanderista might say that the top 1% ought to be made to pay 50% of all taxes, instead of 33%. Another might say that the top 1% should pay 90% of all taxes, until they aren’t the top 1% any more. There is no rational way to determine “what’s fair”.

Gallup’s April survey asked if respondents thought income and wealth should be more widely distributed. The result: 63% yes, 31% no. (The poll question didn’t hint at how the redistribution should be effected.)  Gallup added: “This year’s increase to 63% [from 59% in 2013] is close to the average of 62% agreement across the 13 times Gallup has asked the question since 1984.”

The CBS News/New York Times Poll in May asked a national sample of 1,027 adults “What do you think is the most important problem facing this country today?” Only four percent of respondents mentioned “income gap/disparity”.

But the perennial inability of the inequality issue to catch fire politically (at least since Huey Long during the Depression) won’t deter determined socialists like Bernie Sanders from beating the envy drum, and calling on the Bible for help.

-  John McClaughry is vice president of the Ethan Allen Institute (www.ethanallen.org).

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by John J. Metzler

NEW YORK—A rhetorical tsunami followed the signing of the landmark nuclear limitation deal between Iran and six world powers in Vienna. On the one hand President Barack Obama and his tireless Secretary of State John Kerry presented a technically well-crafted plan which would supposedly keep the Iranian nuclear genie in the bottle but not dismantle the actual atomic program. On the other, deep bi-partisan skepticism in Washington greeted the deal with the nervous concern that it will not really stop Tehran’s long-term nuclear capabilities. Now the accord faces a showdown in the U.S. Congress.

Israeli Prime Minister Benjamin Netanyahu bluntly called the deal a “stunning historical mistake.”

Announcing the historic accord between the USA and the Islamic Republic of Iran, President Obama used the word “deal” 29 times!   The word deal has a far different nuance and connotation than accord or agreement. Deals are often associated with used cars while accords are better linked with diplomacy. I’m surprised given the linguistic optics, that the State Department would not have opted to use a less edgy term.

But a deal is what we have with Iran’s clerical regime. The suffocating economic and military sanctions slapped on Iran by both the United Nations Security Council and the United States will soon be lifted allowing for a massive jump-start for the moribund Iranian economy. Ending an Iranian asset freeze moreover will release over $140 billion into Tehran’s coffers. This will help both the average Iranian as well as embolden and enrich the rulers.

Iran’s Foreign Minister Mohammad Zarif played a weak hand well, getting a surprisingly good deal for the clerical regime.

Obama stated carefully that the deal was “not built on trust but verification.” Agreed. Yet such verifications are based on outside inspections. Here’s a glaring problem: international inspections of sites inside Iran are not spontaneous but must be scheduled two weeks ahead.

Echoes of Iraq in the 1990’s when UN arms inspectors played a cat-and -mouse game with Saddam?   Covering that endless exercise in the UN, I recall the maze that world powers faced   being blindsided by Baghdad despite having the support of seven Security Council resolutions.

While experts will muse over the accord’s technical parameters, the geopolitical reverberations will be felt throughout the region. Islamic Iran, a key player in funding terrorism and fueling a number of conventional conflicts such as Iraq and Yemen as well as supporting the Assad regime in Syria will now have more resources to aid its allies, mostly Shiite Moslems who are opposing the majority Sunnis.   We may see a spike in inter-Islamic tensions in the Middle East, as Iran is reinvigorated politically and ideologically.

There’s a deeper concern too. In a belated quest to battle Islamic State of Iraq and the Levant (ISIL), a Sunni Muslim terror movement, the Obama administration has quietly looked to cooperating with Iran’s Shiites as a counterforce. This empowers Iran regionally and threatens trust with Washington’s Arab allies, not to mention Israel.

Sunni Arab state reaction ironically mirrors Israel’s. Shock and deep concern over the long range implications. Arab monarchies such as the Saudis and the Gulf states, not to mention secular Egypt, are decidedly nervous. Turkey has been marginalized.

Importantly the deal was not a bilateral negotiation between the U.S. and Islamic Iran but what was called the P-5 plus Germany meaning the permanent members of the UN Security Council: China, France, Russia, United Kingdom the United States and Germany.

While those countries want to defuse Tehran’s nuclear weapons capacity, at the same time they wish to revive once cosy commercial links with Iran.

Russia and China want to reopen lucrative trade, and eventual weapons sales with Iran as do the Europeans.   French Foreign Minister Laurent Fabuis, who to his credit was particularly tough in negotiations, now is set to visit Iran in the near future. French economic ties with Iran were traditionally strong until sanctions slashed $4.4 billion in trade in 2004 down to $650 million in 2013. French commercial delegations will soon head to Tehran to talk business as will the Germans and British!

Nonetheless, the Islamic Republic of Iran remains one of the world’s most intolerant regimes fostering political and religious repression of its own people.

Will the U.S. Congress support this deeply flawed deal? No matter how Congress votes, many observers view this accord as securing Obama’s “political legacy.” It just might, but not in the way the president wishes. The Iranian mullahs may have the last laugh.

**************

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues. He is the author of Divided Dynamism The Diplomacy of Separated Nations: Germany, Korea, China (2014)

 

 

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Posted by Rob Roper

Most if not all renewable energy activists in Vermont will admit that nothing Vermont does, given our tiny population an pin-prick sized geography on the planet, will have any effect on global climate trends. However, they justify plans to industrialize hundreds of miles our ridgelines and thousands of acres of pasture lands with wind and solar electricity generating factories because Vermont can serve as an example for the world to follow. And, if they do follow, that will make a difference.

So, how we doin”?

According to a handful of recent articles, not so well either at home or abroad. The Wall Street Journal ran a story on July 10, States Are Unplugging Their Renewable-Energy Mandates. It highlights moves by several states to kill mandates far less onerous than Vermont’s. The authors report that in May Kansas repealed its mandate for 20% renewable energy by 2020. North Carolina is on track to freeze its renewable mandate where it is at 6%, killing a scheduled rise to 12.5% by 2021. Last year, Ohio froze its renewable mandate at 2.5%.

On the other side of the world, Australia “has ordered the taxpayer-funded $10 billion Clean Energy Finance Corporation (CEFC) to immediately cease any new investments in wind power projects.” (Abbot Cancels All Government Wind Farm Subsidies, July 12, 2015) As the Prime Minister stated, “Up close, they’re ugly, they’re noisy and they may have all sorts of other impacts. It’s right and proper that we’re having an inquiry into the health impacts of these things.”

Across the pond, the Telegraph reported in a July 19th article, Britain’s Green Energy Subsidies Face The Axe, that, “Subsidies for new wind farms and solar power plants are set to be cut as ministers move to protect millions of families from rising energy bills.”

The rest of the country and the world is waking up to the fact that wind and solar are not the solution to global climate change, and, in fact, bring with them a host of environmental problems all their own.

As Bill Gates pointed out, “The thing is, none of the renewables technologies that we’re currently subsidizing, rolling out, actually work.” Gates is investing $2 billion into research for new technologies that are both renewable and, critically, cost effective.

James Delingpole puts it most bluntly in an article, Study: Wind Farms Even More Expensive and Pointless Than You Thought:

Among the factors wind advocates fail to acknowledge, the report [The True Cost of Wind] shows, is the “opportunity cost” of the massive subsidies which taxpayers are forced to provide in order to persuade producers to indulge in this otherwise grotesquely inefficient and largely pointless form of power generation….

Instead it has been squandered on bribing rent-seeking crony-capitalists to carpet the landscape with bat-chomping, bird-slicing eco-crucifixes to produce energy so intermittent that it is often unavailable when needed most (on very hot or very cold days when demand for air-conditioning or heating is high)….

So, in conclusion, if the rest of the world is even aware of what Vermont is doing regarding renewable energy, either they don’t care or are learning not from our success but from our enormous policy mistake. Either way, they’re not following us, but running in the opposite direction. And, either way, our policy is a failure.

- Rob Roper is president of the Ethan Allen Institute.

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by John J. Metzler

Paris—China’s Premier Li Keqiang descended upon Paris for a shopping spree; signing contracts and making deals which will energize the still anemic French economy. The French put on the Ritz as even Francois Hollande’s Socialist government can do so well; the impressive ceremony at the Elysee Presidential Palace and the glittering Parisian protocol. But the business bottom line was clearly the key element stressed during the three-day visit where Beijing’s Premier signed $20 billion in contracts and investments with France.

“Airbus Strengthens its Stake in China,” touted the headline in the business paper Les Echos.

The Chinese put in orders for 75 Airbus A330 airliners valued at $18 billion. In a meeting between PRC Premier Li and French Prime Minister Manuel Valls, the Chinese side agreed to a

host of aviation deals.   Already the European consortium-built Airbus has over 1,150 of its aircraft flying with Chinese carriers.

Later when the Chinese delegation visited the Airbus assembly site in southern France at Toulouse, an agreement was made to further expand the current Tianjin Airbus assembly factory in Mainland China. The new A 330 Completion and Delivery Center is slated for Tianjin which is near the current assembly line for the smaller A 320 aircraft.

Airbus projects that the Chinese market is ripe for its aircraft and projects sales at over 5,000 planes between 2014-2033.

Though Airbus is enchanted with Chinese market possibilities, the question of industrial espionage at the Tianjin mega facilities as well as the very real possibility that Chinese-produced Airbus jets will eventually replace workers at the firm’s European facilities in France and Germany remains a nervous concern.

A series of Franco/Chinese agreements were reached between the countries on Climate policy, the internationalization of the Chinese Yuan currency, and for civilian nuclear power.   A letter of intent between the French firm Areva, EDF, and China General Nuclear was aimed at “establishing a long term partnership in the field of medium and high power reactors.”   Currently China’s two Taishan reactors near Hong Kong are based on the French Areva’s design and are currently being constructed in China. The $10 billion contract saw construction start on the first Taishan 1 reactor in 2009 which is expected to start up next year. The Taishan 2 facility is expected to come online in 2017.

France has long been an exponent of nuclear power for electricity production and remains one of the world’s most nuclear powered countries. China on the other hand has long been dependent on highly polluting fossil fuels and is trying to make a transition to alternative power sources for its massive electricity demand.

Another agreement was signed whereby France and China would work together on infrastructure and energy projects in Africa. Such a plan would allow for China to find overseas markets in Africa while at the same time going through France as a respected go between on much of the continent. Though China remains Africa’s largest trading partner, there’s an clear undercurrent of resentment between many of the African countries and Beijing. In such cases, France would presumably be a third party facilitator in this form of economic diplomacy.

Franco/Chinese relations are still basking in the afterglow of the 50th anniversary celebrations in both Paris and Beijing recalling France being among the first major West European countries to open diplomatic ties with Mao’s then-isolated People’s Republic back in 1964. This diplomatic move put France in a special relationship with China.

Yet modern China is less about sentiment than about the business bottom line.

For Francois Hollande’s Socialists, France’s traditional commitment to the rights of man and freedoms in general are easily shelved in this lucrative commercial entente with People’s China.

*****************

John J. Metzler is a United Nations correspondent covering diplomatic and defense issues. He is the author of Divided Dynamism The Diplomacy of Divided Nations: Germany, Korea, China (2014).

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by Rob Roper

A recent article in the Times Argus by Dr. Peter Gunther (7/14/15) tells the story of a group of local physicians who have applied for a Certificate of Need that would allow them to open an independent, outpatient surgery center in Colchester. According to the article, such facilities charge, on average, 45-60 percent less than hospitals.

So what is a Certificate of Need, and what does it do? If a group of licensed doctors wants to set up a surgery center, or a clinic, or whatever, why can’t they just hang out a shingle? If there’s a need, patients will come. (And, gee, do you think there’s a need in Vermont for significantly lower cost healthcare options?). If there’s not, the facility will go out of business. Bad news for the investors, but no cost to the taxpayers and no harm to the patients.

Basically, a Certificate of Need (CoN) is a bureaucratically controlled “permission slip” used to protect politically connected monopolies, foster cronyism, and drive up costs. They do not benefit the public.

Currently, 36 states have CoN laws in place and Vermont’s are the most onerous, regulating thirty services, devices, and procedures (yes, once again, we’re number one!), more that double the national average of fourteen. (Certificate of Needs Laws: Implications for Virginia, Mercatus Center, Feb. 2015)

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This is a big reason why our healthcare costs in Vermont are unaffordable. If you want to lower the cost of anything, the goal should be to increase supply. CoN laws are in place for only one reason – to restrict supply. They should be repealed by the legislature, a serious healthcare reform move that would cost taxpayers NOTHING to implement, and would certainly save money over the long term.

- Rob Roper is president of the Ethan Allen Institute.

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by John McClaughry

Remember the Veterans Health administration scandal, and how President Obama vowed to hold everyone accountable?

A year ago Bernie Sanders, then chairman of the Senate Veterans Affairs committee, forcefully defended the VA at a Massachusetts forum, stating the VA provides “very high quality healthcare” and programs such as Medicare and Social Security are “enormously popular.” But then, this: “Right now, as we speak, there’s a concerted effort to undermine the VA,” he said. “What are the problems?  You have folks out there now, Koch Brothers and others, who want to radically change the nature of society, and either make major cuts in all of these institutions, or maybe do away with them entirely.”

Oooh, those awful Koch Brothers again!

In February, VA secretary Robert McDonald asserted that the department had fired 60 people involved in manipulating wait times to make it appear that veterans were receiving care faster than they were. In fact, the department quickly clarified after that interview, only 14 people had been removed from their jobs, while about 60 others had received lesser punishments.

Now, new internal documents show that the real number of people removed from their jobs is at most, three. One was fired, one retired in lieu of termination, one’s termination is pending.

I think veterans would be a lot better off if the Koch brothers, instead of Sanders and Obama, had been put in charge of making the VA work.

- John McClaughry is the founder and vice president of the Ethan Allen Institute

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by John McClaughryJohn McClaughry

Fifteen years ago Wal-Mart and Home Depot rolled into the Rutland-sized town of Midland, Ontario. A 20-year-old man who had built the website for his parents’ paint store decided to help locally owned businesses compete with the big-box giants.

The result was ShopMidland. It’s a professionally produced website with photos and descriptions of local business vendors and their services. Today, the 1,500 participating (and fee-paying) businesses can modify their content online and offer gift certificates and weekly deals. Colin Pape, the originator, has now franchised the idea to other local entrepreneurs, who have created 25 similar sites across Canada and 15 in California.

In Washington, D.C., a firm called Main Street Genome is analyzing the purchasing patterns of 300 independent restaurants. Its technology-intense program reveals how the restaurants can shave as much as 15 percent off their costs by smarter purchasing and better cash management. MSG is going nationwide this year.

In Bellingham, Washington, a group called Sustainable Connections has achieved spectacular success with its Local First business marketing program. A San Francisco credit union has generated new revenue for local businesses with its BernalBucks neighborhood business debit card.

In Ann Arbor, Michigan, a successful deli named Zingerman’s has created a family of independently owned but coordinated enterprises – creamery, bakery, coffee roaster, candy making, produce farm, roadhouse restaurant, online sales – collectively named the Zingerman’s Community of Business. ZCoB operates an entrepreneurship training program for employees who have visions for new businesses of their own.

These are only five of 28 grassroots efforts to stimulate local economic activity described in Michael Shuman’s latest book, “The Local Economy Solution: How innovative self-financing ‘pollinator’ enterprises can grow jobs and prosperity,” just published by Chelsea Green in White River Junction.

The first thing to understand, Shuman says, is that the traditional “economic development” model of chasing after large companies with huge taxpayer subsidy deals is absolutely the wrong way to revitalize a crippled or stagnant local economy. Indeed, he says, “economic development today is creating almost no new jobs whatsoever.” In support of that conclusion he methodically dissects and refutes the “eight myths of [conventional] economic development.”

There is another far more promising path. “A growing number of small, private businesses are … facilitating local planning and placemaking, nurturing local entrepreneurs, helping local consumers buy local and local investors finance local business. And most remarkably, by charging clients reasonable fees for their services, they are able to cover their costs.”

These functions are performed by what Shuman calls “pollinators.” These come in five varieties: planning, purchasing, people, partnership and purse. For each, Shuman offers insightful descriptions of their workings, drawn from site visits throughout the U.S., Canada and even Australia. The common ingredient is that all of the pollinators are locally grounded, and succeed by building local support in pursuit of the shared goal of revitalizing the local economy.

Shuman is convincing in his belief that “if we replicated the two dozen models described in this book, economic development ultimately could be done by the private sector at virtually zero cost to the public.”

Spearheading the growing national movement toward local business generation is the Business Alliance for Local Living Economies (BALLE, which held its annual meeting in Burlington in 2006), the American Independent Business Alliance, and the Schumacher Center for a New Economy (where Shuman is heading its Localpedia project).

How can these innovative local businesses be financed? Shuman addressed that question in his 2012 book “Local Dollars, Local Sense” (also published by Chelsea Green). The techniques often require state government to relax long-outdated regulations that “protect” people from investing in local enterprises.

Last year the Legislature directed Financial Regulation Commissioner Susan Donegan to prepare a report on “crowdfunding,” that is, expanding the market for financial support of local enterprises. Her report appeared in January, and a new securities rule entitled “Exemption for Small Business” is working its way through the promulgation process.

For anyone still in thrall to showering subsidies on outside corporations in the name of “economic development,” “The Local Economy Solution” will be a game changer. Anyone eager to generate new economic life in their community or region will find this book to be a treasure chest of innovative ideas, invaluable experiences, and high motivation.

- John McClaughry is the founder and vice president of the Ethan Allen Institute.

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