Sunday, July 18, 2021

GWPF Newsletter: EU climate plan dead on arrival as Hungary announces it will veto it


European Union rocked by wall of opposition over Net Zero costs

In this newsletter:

1) EU climate plan dead on arrival as Hungary announces it will veto it
Bloomberg, 15 July 2021

2) European Union rocked by wall of opposition over Net Zero costs
Global Warming Policy Forum, 16 July 2021

3) WSJ: The climate change agenda goes out with a bang
The Wall Street Journal, 16 July 2021
4) Green homes plan to banish gas boilers goes on the back burner
The Daily Telegraph, 16 July 2021
5) Craig Mackinlay: The Government is fooling itself if it thinks it can go down the Net Zero path without electoral damage
Conservative Home, 16 July 2021 
6) US Senator Manchin raises concerns over inflation, climate agenda at Biden lunch
The Hill 14 July 2021
7) And finally: CO2 emissions set to rise with growth in coal use, says IEA
World Nuclear News, 15 July 2021

Full details:

1) EU climate plan dead on arrival as Hungary announces it will veto it
Bloomberg, 15 July 2021
Hungary has flatly rejected the EU climate plan: “This proposal is unacceptable for Hungary in its current shape, and since unanimity is required the EU can’t implement this proposal.”
The European Union rolled out an ambitious climate plan to transform every corner of its economy on Wednesday, and braced for years of tough negotiations to turn it into reality.
Every industry will be forced to accelerate its shift away from fossil fuels in order to cut pollution by at least 55% from 1990 levels by 2030. To achieve that, the bloc will bring new industries such as shipping into what’s already the world’s largest carbon market; ban new combustion-engine cars by 2035; impose new costs on dirty home heating; and force the aviation industry to emit less and pay more.
As the bloc seeks to position itself as a global leader on climate it also set out a blueprint for a levy on imports such as steel and aluminum from nations with softer environmental rules. That risks stoking trade tensions, with Russia, China and the U.S. in the EU’s sights.
There are already signs of discontent, from both EU members and industry.“

Nothing we presented today is going to be easy. It’s going to be bloody hard,” European Commission climate chief Frans Timmermans said. But he said the “existential threat which is the climate crisis” called for radical steps. He expects measures on transport, cars and home heating to cause the most complaints.
In Hungary, Prime Minister Viktor Orban’s government — already embroiled in a standoff with Brussels over an LGBTQ crackdown — flatly rejected the plan, saying it threatened to undo its signature utility price cuts.

“The European Commission’s choice of tools is untenable and unacceptable because it would lead to taxes on real estate and cars instead of making polluters pay,” Cabinet Minister Gergely Gulyas told reporters in Budapest on Thursday.

“This would also destroy the results of utility price-cuts. Therefore, this proposal is unacceptable for Hungary in its current shape, and since unanimity is required the EU can’t implement this proposal.”

Full story
2) European Union rocked by wall of opposition over Net Zero costs
Global Warming Policy Forum, 16 July 2021
The astronomical costs of Net Zero policies are beginning to cause public anger and political upheaval. Now the EU is rocked by a massive revolt over its Green Deal plans. It is becoming evident by the day that the cost and pain of Net Zero’s utopian plans won’t survive contact with the public.

EU climate plans provoke national opposition over rising emissions costs
Brussels’ historic attempt to tackle climate change faces a wall of opposition from governments in the bloc on the ground that its plans would hit their households with higher energy costs. 
EU legislators told the Financial Times that the European Commission’s attempts to expand carbon pricing to the biggest polluting sectors of the economy such as cars and buildings are at risk, as member states object that it will force its poorest to pay. 
Frans Timmermans, the commission’s executive vice-president in charge of the Green Deal, has said the measures were needed to “put a price on carbon, and a premium on decarbonisation”.
“Our current tools do not do enough. If we don’t fight the climate crisis, we will be fighting wars over water and food,” he said.

Brussels on Wednesday presented 13 legislative measures designed to help cut average greenhouse gas emissions by 55 per cent by 2030 and to reach net zero emissions by 2050, when compared with 1990 levels.
At the heart of the strategy is a bid to expand the EU’s carbon pricing mechanism, known as the Emissions Trading System, where companies have to pay for the cost of polluting.
Governments of some of the largest states lined up to question the merits of the expansion of the system to cover emissions from road transport and the heating of buildings, arguing it will have a “regressive” effect on those residents who cannot readily afford greener alternatives.
Since its creation in 2005, the system of allowances has been limited to the big power generators and polluting industries that buy the credits to cover the cost of their emissions.
The EU carbon price has hovered for the past month around €55 a tonne, or more than double its pre-pandemic level, as traders bet that the availability of carbon allowances will need to tighten if the EU is to meet its emission targets.
But France, Spain, Italy, Hungary, Latvia, Ireland and Bulgaria all raised concerns about the impact on citizens at a meeting of EU ambassadors on Wednesday when they were briefed following the release of the plans, diplomats told the FT.
Commission president Ursula von der Leyen also faced down a revolt among at least seven of her 26 commissioners before presenting the plans. The reforms will need the support of a qualified majority of EU governments and the European parliament to come into force. 
Full story (£)
3) WSJ: The climate change agenda goes out with a bang
The Wall Street Journal, 16 July 2021
Ambitious plans conceal growing voter skepticism. Politicians will catch on sooner or later, and hard.

Joseph C. Sternberg

We’re supposed to view this week as a banner occasion in the annals of climate change. The European Union unveiled a mammoth new plan to control carbon emissions, while Beijing rolled out an emissions-trading scheme and the U.K. released a plan to green up transportation.
Except this is all happening as climate politics seem to be undergoing a rapid and significant shift in many places, and not in the direction environmental activists hoped. To wit: Voters have started noticing how much they’re each going to have to spend to reduce carbon emissions, and they don’t like it.

It’s a startlingly broad phenomenon. The Swiss last month rejected a referendum to impose a fuel tax and a tax on airline tickets. The British cabinet, which on Wednesday proposed major new carbon restrictions for transport industries, also is split over previously announced plans to ban gas-fired home heating and require landlords to boost energy efficiency in rental units.

The EU hadn’t even unveiled its marquee new climate package this week before furious lobbying erupted in opposition from almost everyone. French officials sound particularly alert to the danger, and no wonder. President Emmanuel Macron has seen his agenda knocked off course for the better part of three years by grassroots protests against a diesel tax hike that started in 2018.

Meanwhile in Japan, climate-minded shareholders have just wrapped up a disastrous (for them) season of annual shareholder meetings. Resolutions codifying aggressive corporate carbon targets were defeated at all three companies where activists proposed them— Mitsubishi UFJ, Sumitomo and Kansai Electric Power.

This followed the announcement in April that Japan’s Government Pension Investment Fund, the world’s largest with around $1.6 trillion under management, is abandoning trendy ESG investing. (It stands for “environmental, social and governance.”) The strategy was a financial loser, and “we can’t sacrifice returns for the sake of buying environmental names or ESG names,” Kenji Shiomura, senior director of the fund’s investment strategy department, said in an interview with Bloomberg. Given Japan’s impending glut of retirees and shortage of workers, Bloomberg’s reporters had to concede that “pensions are a more sensitive subject than climate change.”

Two years ago the green crowd was basking in Greta Thunberg’s glow and activists thought the public had reached a tipping point in favor of climate action. What happened?

Primarily climate activists are victims of their own success. For a variety of reasons — some market-based and benign, and others regulatory and expensive — carbon intensity in developed economies has declined markedly in recent decades. By one count, the U.S. now emits 0.28 kilogram of carbon dioxide for every dollar of gross domestic product, down from more than 0.8 kilogram in the 1970s (using constant 2010 dollars). Britain’s emissions per dollar of GDP have declined to around 0.13 kilogram from above 0.6 kilogram in the same span, and Japan’s to 0.18 from 0.36.
This suggests that further reductions in emissions in these economies are likely to be much harder and costlier to eke out. Note how, despite fantastical promises about the economic benefits of electric cars or green jobs, it always seems to require uncountable trillions of dollars for taxpayer-financed Green New Deals and an extra couple of hundred bucks on your household heating bill to get from here to there.
This only encourages Western voters to notice all the other parts of the world where carbon intensity has not yet declined to the same degree, such as China, India and Russia, whose carbon emissions per dollar of GDP stand between nine and 10 times as high as the lowest-emitting market economies.
Those countries need only import already-existing carbon-reducing technologies. Beijing’s new emissions-trading system almost certainly is an attempt to force recalcitrant companies to do this, as much for the sake of general economic efficiency as for any other reason. Such a transition still will be costly, to be financed either via higher consumer prices on Chinese exports or direct government subsidies. But it’s almost certainly cheaper than developed countries’ current plans to blow another few trillion dollars trying to invent an entirely new economy to achieve only marginal emissions reductions.

Don’t bank on such realities intruding on the COP26 confab in Scotland later this year. This week’s raft of huge new green initiatives suggests the climate agenda will go out with a bang rather than a whimper.
But as the costs climb toward the stratosphere, one can speculate anew on how long it will be until gravity reasserts itself. At which point, expect the climate-change-industrial complex to concoct some pretext by which it can claim victory on the basis of progress already achieved—before any other hapless politician need ask voters to spend money they simply don’t want to give up anymore.
4) Green homes plan to banish gas boilers goes on the back burner
The Daily Telegraph, 16 July 2021
The Government has delayed its flagship policy on rolling out green alternatives to gas boilers amid concerns of a backlash over the costs.


It comes amid concerns over how the country will reach its goal of net zero emissions by 2050 without hitting consumers' bills.
The heat and buildings plan, set to include a target date for the end to new gas boilers from 2035, had been readied for release last week.

But it will now not be released until the autumn, as the Government tries to come up with new ideas to cushion the cost of switching to greener alternatives to gas boilers.
Among the proposals in the strategy is a commitment to review the difference between electricity and gas costs, which currently mean greener heat pumps are on average £400 more expensive to run annually than gas boilers.
That could see gas prices rise to make them more expensive compared to electricity.
A carbon price on gas for heating is also under consideration, echoing a similar move in the European Union.
Meanwhile, heat pumps themselves can cost up to £10,000, and often require costly insulation and retrofits to work effectively.
One idea under consideration is a payout to lower and middle-income families who would be hit by higher gas prices, but would be unable to pay the upfront costs to switch to green heating.
But there is disagreement within Government about whether such a policy would be affordable, with the Treasury said to be hesitant to commit funding, amid concern about backlash from its own MPs over public spending.
"Number 10 is trying to bounce the Treasury into something a bit more populist," an industry source said.
Observers say the Government’s decision to cut the aid budget from 0.7 to 0.5 per cent of GDP suggests there is little appetite to extend public spending.
It comes after the Government released its plan for transport to go green, which suggested it would need to recoup lost costs from fuel duty and vehicle excise duty with new taxes, potentially in a road pricing scheme.
It also suggested electric cars could be eligible to pay vehicle excise duty, which they currently avoid, from 2025.
Meanwhile, the release of the Treasury’s own review of where the costs of net zero will fall has also been repeatedly delayed, after concern within other Government departments that it was too negative.
Backbench Tory MP Steve Baker, who has been critical of the planned gas boiler phase-out, said the delay was indicative of the dilemma facing the Government.
"This is just the beginning of the practical problems the Government faces, and they’re going to need to come clean with the public if they don’t want a political disaster later," he said.
"The Government must tell the public openly, transparently and fully the cost of net zero and just how substantially our lives will be changed."
Full story
5) Craig Mackinlay: The Government is fooling itself if it thinks it can go down the Net Zero path without electoral damage
Conservative Home, 16 July 2021
Craig Mackinlay MP is the MP for South Thanet.

The Government has launched its “greenprint” Transport Decarbonisation plan and adds to what has been trailed before with an extension of the ICE ban to new heavy goods vehicles by 2040, the decarbonisation of public transport and the goal of net zero aviation by 2050.
The ambition to ban the sale of traditional petrol and diesel cars by 2030 remains but there’s no detail as to how the small matter of the £34 billion currently levied on ICE vehicle users will be filled. This is the biggest and most costly undertaking of the British state in history and a strange throwback to the command and control regimes of old – when producing a definitive figure for the annual number of tractors to be built and so many tonnes of grain was all the rage.
We’re yet to hear more as to how the banning of domestic gas boilers will be achieved. Make no mistake, this requires a radical transformation of every part of the economy and our freedoms. Yet no one questions the enormity or cost of the project, and there are no answers to the obvious question – who pays?
Surely we cannot simply be obliged to pay any cost, however high and however painful? Other ambitions in the document, particularly regarding heavy goods vehicles have already been derided by The Road Haulage Association– “So this is blue-sky aspiration ahead of real-life reality”. Quite.
While there is no draft legislation on the table to enforce these bans, just warm words, ambitions and glossy documents, there’ll doubtless be more to come as the Government plays a game of Top Trumps with international partners at COP26 this October.
The only estimates available for the cost of Net Zero come from the Committee on Climate Change (CCC), which is supposed to provide rigorous, independent advice to parliament – and yet its output always recommends further and faster.
The CCC is a significant player in the political debate around Net Zero, often explicitly directing Government policy, while being totally unelected and unaccountable. Mainstream media regurgitates its words sagely with little space offered to those who question its assumptions.
More recently, it has come up with a new estimate for the cost of Net Zero that details £1.4 trillion of capital spending that will be required to meet it. The committee was keen not to publicise this mind-boggling number (over half of UK annual GDP or 35 times the annual defence budget for context), and so discounted it with a range of speculative benefits that may or may not materialise.
The £1.4 trillion figure has finally been brought to public attention after the Office for Budget Responsibility (OBR) recycled the CCC figures for its fiscal risks report. The revelation that households are each facing a £50,000 bill over the next 30 years has caused, rightly, an awakening in the press. I am worried that the true cost could be much higher still.
The shift to retro-fitted air source heat pumps, additional insulation and larger radiators to make up for their poor heat output brings with it huge cost and significant risks. An independent report put the cost of decarbonising the UK’s social housing sector alone at £103 billion, or £20,000 per household. If such costs are replicated across the entire housing stock, we are looking north of £500 billion just for residential decarbonisation.

There’s no obvious technology to elegantly replace the gas boiler and I’m yet to find a constituent who assented to pay out £20,000 just to be both colder and poorer.
The pain doesn’t stop there. The use of electric cars, which are much more expensive than their ICE equivalents and have obvious limitations of range and charging, are made more expensive if electricity prices rise to accommodate huge demand requirements and upscaling of additional offshore wind, or expanded reliance on interconnectors from the continent supplying coal produced electricity. The taxation black hole will doubtless be filled by new taxes or hairbrained road charging schemes.

The batteries are largely unrecyclable without huge energy input and use of toxic solvents to break down the near impenetrable resins. The safety of these batteries, that can burn uncontrollably releasing a variety of noxious substances, has not been fully investigated and yet the prospect is for many square miles of grid level batteries to smooth notoriously unreliable renewable electricity supply. ...
The Government is fooling itself if it thinks we can go down the Net Zero path without electoral damage. We will look, quite rightly, like the privileged few taking the poor back to the lifestyles of the early 20th century. The optics of jetting from one international climate conference to the next to tell other people they should not be flying, driving and eating meat, is not one that will be sustainable when these policies really start to bite.
The growth economies of China, India and Indonesia alone have more coal powered plants planned over the next ten years than the entire output of the current US electrical grid. The current UK output of global CO2, no more than a rounding error in the scheme of things at a mere one per cent, will be reduced to ½ per cent as coal powered growth proliferates globally.
I was never Theresa May’s greatest fan politically, but I’ll conclude with a statement she made on January 11 2018: “In our election manifesto last year we made an important pledge: to make ours the first generation to leave the natural environment in a better state than we found it.”
I agree wholeheartedly with that statement. There is much to be done in protecting habitats and our oceans and weaning the planet off of the scourge of plastic waste. These ambitions are achievable and rooted in common sense while this path to Net Zero is muddled, costly and impractical.
We should pause for breath, inject some rational thinking and consider the alternatives before it’s too late. I am actively discussing these issues with colleagues as we simply cannot watch a financial, societal and political disaster unfold before us.
6) US Senator Manchin raises concerns over inflation, climate agenda at Biden lunch
The Hill 14 July 2021

Sen. Joe Manchin (D-W.Va.) said he raised concerns over inflation and the Biden administration's climate agenda during a lunch meeting with the president on Wednesday where lawmakers discussed their infrastructure plans.
Manchin told reporters after the event that he voiced his worries about rising prices and moving away from carbon-emitting fuel such as coal, an important part of West Virginia's economy.
“I said I’m concerned about inflation and I said I want to see more of the details of what’s going on,” he said. “I’m concerned also about maintaining the energy independence the United States of America has and with that you cannot be moving toward eliminating the fossil [fuel].”

His remarks come a day after the Bureau of Labor Statistics reported that consumer prices were up 5.4 percent in June compared to a year ago. Last month's 0.9 percent increase from May was almost double what economists were expecting.

Manchin said his constituents in West Virginia are getting hit by inflation.

“I’m concerned. In West Virginia — I spoke about that just now — that people are paying much higher gas prices, they’re paying food prices. ... Every type of product and goods has gone up considerably,” he told reporters.
Manchin also indicated that he pushed back on the president's proposals to move the economy away from fossil fuels.
“I told him that I was concerned about some of the language I’d seen to move us away from fossil. I said if you move our country away from fossil and there won’t be another country that will step to the plate to do the research and development that will fix the emissions that are coming,” he said.

Full story
7) And finally: CO2 emissions set to rise with growth in coal use, says IEA
World Nuclear News, 15 July 2021
After falling by about 1% in 2020 due to the impacts of the COVID-19 pandemic, global electricity demand will increase by 5% in 2021 and 4% in 2022, according to the International Energy Agency (IEA). However, almost half of this increase will be from fossil fuels - notably coal - threatening to push CO2 emissions from the power sector to record levels in 2022.


Nuclear power generation is forecast to grow by around 1% in 2021 and by 2% in 2022.
Most of the increase in electricity demand is expected to come from the Asia Pacific region, according to the latest edition of the IEA's semi-annual Electricity Market Report released today. More than half of global growth in 2022 will occur in the China, the world's largest electricity consumer. India, the third-largest consumer, will account for 9% of global growth.
Renewable electricity generation, which grew 7% in 2020, continues to rise strongly - but cannot keep up with increasing demand, the IEA says. Based on current policy settings and economic trends, electricity generation from renewables - including hydropower, wind and solar PV - will increase by 8% in 2021 and by more than 6% in 2022. However, renewables are expected to be able to serve only around half of the projected growth in global demand in 2021 and 2022.

Fossil fuel-based electricity generation is set to cover 45% of additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest. As a result, carbon emissions from the electricity sector - which fell in both 2019 and 2020 - are forecast to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high.

Coal-fired electricity generation is set to increase by almost 5% this year and by a further 3% in 2022, potentially reaching an all-time high. Meanwhile, gas-fired generation, which declined 2% in 2020, is expected to increase by 1% in 2021 and by nearly 2% in 2022.

Increase in emissions
"Our analyses show that the short-term trend in global electricity markets is not consistent with a zero emissions pathway," the IEA said.
In the pathway set out in IEA's recent Roadmap to Net Zero by 2050, nearly three-quarters of global emissions reductions between 2020 and 2025 take place in the electricity sector. To achieve this decline, the pathway calls for coal-fired electricity generation to fall by more than 6% a year.

After falling by 1% in 2019 and by 3.5% in 2020, CO2 emissions from the electricity sector are forecast to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high. The IEA sees the decline in the emissions intensity of global electricity generation slowing from more than 3% in 2020 to around 1% in 2021 and 2022.

Modest growth in nuclear
Nuclear generation has declined recently, with production almost 3% lower in 2020 than 10 years earlier, partly because of low demand levels forcing plants to produce below maximum capacity, especially in Europe. Nuclear generation declined by 4% in 2020, the IEA says.
Full story

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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