Climate Change-Essay Summary From Nigel Lawson

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CCNet 27/05/14 Nigel Lawson: The Trouble With Climate Change Climate alarmism is a belief system that needs to be evaluated as such

There is something odd about the global warming debate — or the climate change debate, as we are now expected to call it, since global warming has for the time being come to a halt. I have never shied away from controversy, nor — for example, as Chancellor — worried about being unpopular if I believed that what I was saying and doing was in the public interest. But I have never in my life experienced the extremes of personal hostility, vituperation and vilification which I — along with other dissenters, of course — have received for my views on global warming and global warming policies. For example, according to the Climate Change Secretary, Ed Davey, the global warming dissenters are, without exception, "wilfully ignorant" and in the view of the Prince of Wales we are "headless chickens". Not that "dissenter" is a term they use. We are regularly referred to as "climate change deniers", a phrase deliberately designed to echo "Holocaust denier" — as if questioning present policies and forecasts of the future is equivalent to casting malign doubt about a historical fact. The heir to the throne and the minister are senior public figures, who watch their language. The abuse I received after appearing on the BBC's Today programme last February was far less restrained. Both the BBC and I received an orchestrated barrage of complaints to the effect that it was an outrage that I was allowed to discuss the issue on the programme at all. And even the Science and Technology Committee of the House of Commons shamefully joined the chorus of those who seek to suppress debate. In fact, despite having written a thoroughly documented book about global warming more than five years ago, which happily became something of a bestseller, and having founded a think tank on the subject — the Global Warming Policy Foundation — the following year, and despite frequently being invited on Today to discuss economic issues, this was the first time I had ever been asked to discuss climate change. I strongly suspect it will also be the last time. The BBC received a well-organised deluge of complaints — some of them, inevitably, from those with a vested interest in renewable energy — accusing me, among other things, of being a geriatric retired politician and not a climate scientist, and so wholly unqualified to discuss the issue. Perhaps, in passing, I should address the frequent accusation from those who violently object to any challenge to any aspect of the prevailing climate change doctrine, that the Global Warming Policy Foundation's non-disclosure of the names of our donors is proof that we are a thoroughly sinister organisation and a front for the fossil fuel industry. As I have pointed out on a number of occasions, the Foundation's Board of Trustees decided, from the outset, that it would neither solicit nor accept any money from the energy industry or from anyone with a significant interest in the energy industry. And to those who are not-regrettably-prepared to accept my word, I would point out that among our trustees are a bishop of the Church of England, a former private secretary to the Queen, and a former head of the Civil Service. Anyone who imagines that we are all engaged in a conspiracy to lie is clearly in an advanced stage of paranoia. The reason why we do not reveal the names of our donors, who are private citizens of a philanthropic disposition, is in fact pretty obvious. Were we to do so, they, too, would be likely to be subject to the vilification and abuse I mentioned earlier. And that is something which, understandably, they can do without. That said, I must admit I am strongly tempted to agree that, since I am not a climate scientist, I should from now on remain silent on the subject — on the clear understanding, of course, that everyone else plays by the same rules. No more statements by Ed Davey, or indeed any other politician, including Ed Milliband, Lord Deben and Al Gore. Nothing more from the Prince of Wales, or from Lord Stern. What bliss! But of course this is not going to happen. Nor should it; for at bottom this is not a scientific issue. That is to say, the issue is not climate change but climate change alarmism, and the hugely damaging policies that are advocated, and in some cases put in place, in its name. And alarmism is a feature not of the physical world, which is what climate scientists study, but of human behaviour; the province, in other words, of economists, historians, sociologists, psychologists and — dare I say it — politicians. And en passant, the problem for dissenting politicians, and indeed for dissenting climate scientists for that matter, who certainly exist, is that dissent can be career-threatening. The advantage of being geriatric is that my career is behind me: there is nothing left to threaten. But to return: the climate changes all the time, in different and unpredictable (certainly unpredicted) ways, and indeed often in different ways in different parts of the world. It always has done and no doubt it always will. The issue is whether that is a cause for alarm — and not just moderate alarm. According to the alarmists it is the greatest threat facing humankind today: far worse than any of the manifold evils we see around the globe which stem from what Pope called "man's inhumanity to man". Climate change alarmism is a belief system, and needs to be evaluated as such.

"When Will They Ever Learn"

"The Budget should be balanced, the Treasury should be refilled,public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome will become bankrupt. People must again learn to work instead of living on public assistance." - Cicero, 55 BC So, evidently we've learned bugger all over the past 2,069 years.

Tandou

Cotton crop transforms a dry lake bed

• SUE NEALES
• THE AUSTRALIAN
• MAY 17, 2014 12:00AM

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Aerial view of the Tandou property, showing the scale of the operation. Picture: Stuart McEvoy Source:News Corp Australia

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THE fluffy fields of white cotton stretch endlessly towards the distant red sandhills as six giant green harvesting machines march relentlessly across the flat dry bed of former Lake Tandou in far southwest NSW.

Yet few Australians are aware that one of Australia’s biggest ­irrigated cotton farms is thriving amid the outback saltbush plains 100km southeast of Broken Hill, adjacent to the Darling River and fed from the Menindee Lakes water storages.

Even fewer realise that the remote Lake Tandou farm — ­labelled the most ambitious, visionary and risky irrigation project in Australia when first dreamed up in the 1980s — is today owned and run by one of Australia’s few publicly listed specialist agricultural companies, Tandou.

Or that it grows 8700ha of cotton crop annually, boasts one of the most sophisticated and modern channel irrigation systems in Australia, is as large in its 14,500ha of irrigated country as the much better known Ord River scheme in Western Australia’s Kimberley, runs its own cotton-processing gin and employs 50 permanent staff plus 30 contractors.

Tandou chief executive Guy Kingwill admits one of the most frustrating aspects of his job is trying to explain to potential investors, financiers and analysts exactly why the Lake Tandou farming operation that lies at the heart of the company’s business model is so special.

“The scale, the complexity, the strategy that underpins it all; it’s impossible to envisage or understand really until you come here,” he says.

“I try and start by saying that it’s not really a farm but a factory, an agricultural business on an industrial scale, where timing is everything but when, if we get it right, we do really well. But most people — until they see it for themselves — can’t get past the point of wondering how you can ever have a highly productive or profitable operation in such a remote part of the outback.”

From the air, it is easy to see why.

Outside the kidney-shaped ring of the Lake Tandou bed are caked hard clay pans, dry billabongs, the meandering, peripatetic anabranch of the Darling River with its pelican-filled lakes and creeks, and a few mobs of hardy sheep wandering the spartan, but currently grassy, pastoral plains.

Inside the ring of irrigation channels fed from nearby Lake Cawndilla, the most southern of the Menindee lakes filled by the Darling River, is the highest yielding cotton and wheat farm in Australia, which produces more clean cotton from every drop of its current 70,000-90,000 megalitres of annual irrigation water than any other Australian property, despite having an annual rainfall of less than 200mm.

But another source of Kingwill’s good-natured frustration is that Tandou is also much more than just a big cotton farm.

When Tandou first listed on the Australian Stock Exchange in 1987, after being converted in the late 1970s and early 80s by high-stakes agricultural pioneer Bob Smith from an outback pastoral lease to an irrigated horticultural and cropping farm, cotton growing was only in its infancy in ­Australia.

The public listing converted the operation into a serious, but very small, agribusiness player, with its irrigation areas able to be further developed and expanded, a cotton gin built and larger irrigated cotton and wheat crops grown on the 20,000 megalitres (or 20 billion litres) of water ­licence entitlements then owned by the company.

In the process of dealing with such large amounts of irrigation water to grow its crops, Kingwill says his company fortuitously became one of the early experts in juggling the economics of water availability and current water prices in the southern Murray-Darling Basin system against the economics of growing a big cotton crop at the Lake Tandou farm.

“We know if the cotton price gets north of $450 a bale (227kg), this is a cotton farm,” says Kingwill, happy in the knowledge that cotton prices for next year are already close to $500 a bale.

“But for four years between 2007 and 2010 when the drought was at its worst and water was scarce and expensive we grew zero crop on the whole of Tandou. Our logic was why grow cotton and get $150 profit for every megalitre of water used to produce it — plus put it all the effort of farming — when we could sell the same water allocation we owned to other farmers who needed it more for $500 per megalitre profit without having to do anything?”

It is a canny understanding of the economics of water use versus farming, plus a trading skill, that Tandou has now turned into its new business model.

Instead of remaining just a food and fibre producer, Kingwill — who has been managing director of the company since 2005 — has converted Tandou into an emerging but significant water owning and trading business, as much as a cotton company.

Tandou now owns more than 84,000 megalitres of permanent water rights across the southern half of the Murray Darling basin, making it one of the largest water holders, along with Singapore-owned Murray River almond-growing company Olam.

The water rights are sourced from various parts of the river system — including the Upper Murray, Murrumbidgee, Goulburn, lower Murray and Lower Darling.

Because water is now tradeable across the river systems, the water portfolio gives Tandou the flexibility to either choose to water its own crops, “move” the water across basins towards its Tandou farm, or sell the water when it is more profitable to do so to other farmers and water buyers.

The new focus on water has completely transformed the asset base of Tandou. Despite its current market capitalisation of $92.5 million — after a $25m capital raising completed last week to pay down debt linked to its Hay acquisitions — the company internally values its 84.5 ­gigalitres of water at $75m.

Kingwill says water assets now make up 60 per cent of Tandou’s asset base, while its land, crops and machinery at both Hay and Tandou are valued at about $50m. Company debt, before the most recent share issue, sat at $64m in March.

But the Tandou chief executive says most investors have not yet realised that Tandou now has the biggest, most actively managed water portfolio in Australia.

It trades water daily and in large amounts, with the daily trading — buying and selling of permanent water rights — as well as trading in available actual irrigation water to farmers, now generating profits for the company as great as the returns on its farming assets.

“A lot of people are scared of water trading because there are a thousand different rates and rules regulating it across different basins, but it’s an area we specialise in and understand,” says Kingwill.

“Our fundamental belief is that water is a highly undervalued asset that will only appreciate in value over time, especially if an El Nino is coming And we always have the choice to either utilise the water on our own farms or sell it depending on price; it complements our farming and is a very good business for us.”

Foreign investors appear to have caught on to Tandou’s pivotal water position ahead of locals. Its latest major shareholders, after the $25m capital raising offer, show the New York based Water Asset Management fund holding 10 per cent of Tandou.

Specialist NZ based agricultural investor, Selwyn Cushing, holds 21 per cent, while a Cushing associate and Tandou director Roger Findlay has amassed a further 13.6 per cent.

Other major investors include Australian private equity player Martin Foreman and his PF Agriculture vehicle with 8 per cent.