In this newsletter:
1) Brussels proposes green label for nuclear and natural gas
Financial Times, 1 January 2022
2) Boris Johnson in Red Wall crisis as 17 out of 18 seats poised to flip to Labour over energy crisis
Daily Express, 31 December 2021
3) ‘Energy costs could be the breaking point’: UK’s small businesses being pushed to brink
The Guardian, 31 December 2021
4) Charles Moore: Boris faces the same fate as John Major if he persists with the elite dogma of net zero
The Daily Telegraph, 1 January 2021
The Daily Telegraph, 1 January 2021
5) Joseph Sternberg: Many climate ambitions will end with 2021
The Wall Street Journal, 31 December 2021
The Wall Street Journal, 31 December 2021
6) And finally: Germany to close nuclear reactors despite energy crisis
Deutsche Welle, 31 December 2021
Deutsche Welle, 31 December 2021
Full details:
1) Brussels proposes green label for nuclear and natural gas
Financial Times, 1 January 2022
European Commission paves way for investments despite concerns over waste and CO2 emissions.
Financial Times, 1 January 2022
European Commission paves way for investments despite concerns over waste and CO2 emissions.
Brussels wants to recognise nuclear power and forms of natural gas as “green” activity as part of a landmark EU classification scheme to help financial markets decide what counts as sustainable investment.
In long-awaited plans, the European Commission has paved the way for investment in new nuclear power plants for at least the next two decades and natural gas for at least a decade, under a green labelling system known as the “taxonomy for sustainable finance”.
The labelling system, which will cover industries that generate about 80 per cent of all greenhouse gas emissions in the EU, is the first attempt by a major global regulator to decide what counts as truly sustainable economic activity and help stamp out so-called greenwashing in the financial sector.
A draft legal text, seen by the Financial Times, says the EU’s green label should be awarded to controversial energy sources including nuclear power and natural gas under certain circumstances.
The decision was taken after a vocal group of pro-nuclear countries, led by France, and pro-gas governments in southern and eastern Europe, demanded the taxonomy should not punish energy sources that provide a bulk of their power generation.
Nuclear power does not emit greenhouse gases but produces toxic waste that requires safe disposal and can pose radiation risks. Natural gas does produce carbon dioxide but its supporters say it is far less polluting than traditional fossil fuels and is a vital way to help pave the way for lower emissions.
Brussels was forced to delay a decision on how to classify the two energy sources earlier this year after disputes inside the college of commissioners over whether they should be awarded the green label. The battle to recognise nuclear power and natural gas as green has intensified in recent months as EU countries have faced record electricity prices this winter, driven by soaring demand for natural gas imports.
The draft taxonomy text says nuclear power should be considered a sustainable economic activity as long as EU countries that host power stations can safely dispose of toxic waste and meet a criteria to cause “no significant harm” to the environment. The construction of new nuclear plants will be recognised as green for permits granted until 2045, says the text.
Natural gas investment is also included in the green label as a “transitional” energy but must meet a more detailed set of conditions, including producing emissions less than 270g of CO2 per kilowatt and if it is replacing traditional fossil fuels such as coal generation.
The EU imports around three quarters of its natural gas needs, most of which is supplied by Russia. The bloc’s energy crisis has sparked criticism from some member states that Moscow is artificially driving up gas prices and the EU should accelerate away from gas imports to renewable energy.
The taxonomy text will need approval from a majority of EU member states and members of the European Parliament. EU diplomats said the text was likely to win widespread support from governments but the green classification for gas and nuclear was criticised by environmental groups.
France’s EU commissioner Thierry Breton has said he is in favour of labelling both technologies as green as it would help the EU meet a goal of cutting CO2 emissions to net zero by 2050, compared to 1990 levels.
“Gas is not the best to achieve our goal because you generate some CO2 but at least it’s better as a transition than coal,” Breton told reporters last month. “We need to have the right financing in the taxonomy, including nuclear energy.”
Editor's note: The European Commission's draft taxonomy text was emailed to member states last night at 5 minutes to midnight and can be found here.
see also Net Zero Watch: The EU must give green light to nuclear and gas or face disaster
In long-awaited plans, the European Commission has paved the way for investment in new nuclear power plants for at least the next two decades and natural gas for at least a decade, under a green labelling system known as the “taxonomy for sustainable finance”.
The labelling system, which will cover industries that generate about 80 per cent of all greenhouse gas emissions in the EU, is the first attempt by a major global regulator to decide what counts as truly sustainable economic activity and help stamp out so-called greenwashing in the financial sector.
A draft legal text, seen by the Financial Times, says the EU’s green label should be awarded to controversial energy sources including nuclear power and natural gas under certain circumstances.
The decision was taken after a vocal group of pro-nuclear countries, led by France, and pro-gas governments in southern and eastern Europe, demanded the taxonomy should not punish energy sources that provide a bulk of their power generation.
Nuclear power does not emit greenhouse gases but produces toxic waste that requires safe disposal and can pose radiation risks. Natural gas does produce carbon dioxide but its supporters say it is far less polluting than traditional fossil fuels and is a vital way to help pave the way for lower emissions.
Brussels was forced to delay a decision on how to classify the two energy sources earlier this year after disputes inside the college of commissioners over whether they should be awarded the green label. The battle to recognise nuclear power and natural gas as green has intensified in recent months as EU countries have faced record electricity prices this winter, driven by soaring demand for natural gas imports.
The draft taxonomy text says nuclear power should be considered a sustainable economic activity as long as EU countries that host power stations can safely dispose of toxic waste and meet a criteria to cause “no significant harm” to the environment. The construction of new nuclear plants will be recognised as green for permits granted until 2045, says the text.
Natural gas investment is also included in the green label as a “transitional” energy but must meet a more detailed set of conditions, including producing emissions less than 270g of CO2 per kilowatt and if it is replacing traditional fossil fuels such as coal generation.
The EU imports around three quarters of its natural gas needs, most of which is supplied by Russia. The bloc’s energy crisis has sparked criticism from some member states that Moscow is artificially driving up gas prices and the EU should accelerate away from gas imports to renewable energy.
The taxonomy text will need approval from a majority of EU member states and members of the European Parliament. EU diplomats said the text was likely to win widespread support from governments but the green classification for gas and nuclear was criticised by environmental groups.
France’s EU commissioner Thierry Breton has said he is in favour of labelling both technologies as green as it would help the EU meet a goal of cutting CO2 emissions to net zero by 2050, compared to 1990 levels.
“Gas is not the best to achieve our goal because you generate some CO2 but at least it’s better as a transition than coal,” Breton told reporters last month. “We need to have the right financing in the taxonomy, including nuclear energy.”
Editor's note: The European Commission's draft taxonomy text was emailed to member states last night at 5 minutes to midnight and can be found here.
see also Net Zero Watch: The EU must give green light to nuclear and gas or face disaster
2) Boris Johnson in Red Wall crisis as 17 out of 18 seats poised to flip to Labour over energy crisis
Daily Express, 31 December 2021
PRIME MINISTER Boris Johnson is facing a political crisis of confidence over the energy crisis as polling shows that 17 out of 18 Red Wall seats are poised to flip back to Labour.
Daily Express, 31 December 2021
PRIME MINISTER Boris Johnson is facing a political crisis of confidence over the energy crisis as polling shows that 17 out of 18 Red Wall seats are poised to flip back to Labour.
Mr Johnson may soon face some political setbacks due to the ongoing energy crisis as UK residents face rising energy bills. It comes following a global shortage of natural gas earlier this year as economies unlocked from the pandemic.
Earlier this week, energy firms warned that bills were likely to remain high until at least 2023, as they called on ministers to provide consumers with relief from higher costs.
According to the Financial Times, analysts have warned that the UK’s energy price cap looks likely to rise by more than £700 in April.
In a poll conducted by the not-for-profit trade body Energy and Utilities Alliance (EUA), it was found that the cost-of-living crisis is hitting Red Wall voters hard, with an astonishing 79 percent saying the Government does not understand the financial pressures on working families.
EUA and YouGov polled 1,600 voters in 18 Red Wall constituencies across the north of England, covering seats won by the Conservatives for the first time in 2019 on a range of energy issues.
The figures will put pressure on the Government to relieve the pressure of escalating energy bills.
The joint poll also found that 80 percent of Conservative voters in 2019 now believe the issue of energy bills to be important to them, with nearly 60 percent stating that rising energy bills are having a big impact upon their personal finances.
Commenting on the findings, EUA’s Chief Executive Mike Foster said: “These numbers confirm just how deeply the cost-of-living crisis is hitting working families.
“Sky-high energy bills are not the fault of consumers, but they are paying a heavy price. It is also very clear that politicians will pay a price for not tackling sky-high bills.”
“In October, the average Price Cap bill rose by £140, another £700 is simply not affordable.
“Voters will expect action before April’s figures kick in. There is plenty the Government can do but in the short term, their options are limited."
Full story
3) ‘Energy costs could be the breaking point’: UK’s small businesses being pushed to brink
The Guardian, 31 December 2021
Thousands of small business owners across the UK will bear the brunt of the national energy crisis that risks driving the UK to a cost of living catastrophe within the next year.
“The future is far from certain,” says Julian Pariera, the owner of Beauchamp Laundry Services in Birmingham. “I’m extremely concerned at how things are panning out.”
Pariera is one of thousands of small business owners across the UK who will bear the brunt of the national energy crisis that risks driving the UK to a cost of living catastrophe within the next year. Before next winter, he will need to renegotiate an energy deal to run the washers and clothes dryers that his customers rely on after a record surge in energy market prices.
“We fix our energy tariffs for up to five years, and every time we renew a deal it seems to double. This time I won’t be surprised if our energy costs quadruple. It’s madness,” he says. “These costs can’t be reflected in our charges because if we put up our prices by this much our customers wouldn’t be able to afford it. So the question I have to ask myself is how we can manage while still protecting our customers?”
“The government talks about getting business back on track after Covid – and I’m not saying they’re doing a bad job – but with these cost pressures it’s just ridiculous. We’ll carry on somehow because this business has been in place for the last 30 years – we’re established – but if we were just starting out we wouldn’t manage,” Pariera says.
For now, it is still more affordable for many of Beauchamp Laundry’s customers to bring in damp clothes and linen to be tumble dried during the winter than to run their own dryers at home, Pariera says. But at some point in the next year he may need to adjust his dryers to offer fewer minutes for each pound spent.
These concerns are shared by small business owners across the country, which employ almost 13 million staff and make £1.6tn in turnover every year. The Federation of Small Businesses has warned that energy costs are the top concern of its members and could prove to be “an existential threat”, particularly for the fragile end of the small business sectors that were hardest hit by Covid-19 restrictions.
Ibrahim Dogus, the owner of three restaurants near the London Eye, says a “vicious circle” of rising costs and falling revenue endemic across the hospitality industry means even longstanding eateries in prime locations are struggling to secure affordable energy deals. Many suppliers refuse to offer contracts to restaurants without a hefty security deposit, or charge eye-watering rates to guard against the risk they might go under, he says.
“Before the recent price hike I’d pay between £2,500 and £3,000 a month for energy at one restaurant. But my latest bill for November was £5,600. At the same time, turnover has fallen to between 10% and 15% of what it used to be. Before the pandemic we might serve 600 people; these days it’s closer to 60. But our costs are still climbing. We’re quite worried,” he says.
Dogus has already cut his staff from 60 to 25, made use of the government’s support schemes, and negotiated payment plans to manage the debt he owes to his landlords and pay business rates. But energy companies are the exception, he says, and this could prove the difference between whether his chain survives or not.
“Energy companies are not interested in helping at all. If you don’t pay in full for a couple of months someone comes to turn off your lights. Never mind that you can’t pay them if you can’t serve customers. It would be over,” he says.
“It’s a very difficult moment for small businesses. There’s been Brexit, there’s been Covid. But on top of everything else, energy costs could be the breaking point,” he says.
It’s New Year’s resolution season, and don’t be surprised if politicians world-wide settle into the same informal pledge: Talk as little as possible about climate change in 2022. They’ve gotten a head start on that resolution, working hard at it even before Friday night’s socially distanced parties begin.
The biggest, most entertaining and also most telling climb-downs are happening in the U.K. Prime Minister Boris Johnson in October unveiled an ambitious policy program to get Britain to net-zero carbon-dioxide emissions by 2050. It was Mr. Johnson’s public-relations coup ahead of the COP26 global climate conference he hosted in Glasgow. It also was unusual in its honesty about what such environmental ambitions will cost individual households and businesses—a point politicians usually avoid for all the obvious reasons.
Sure enough, the backtracks and U-turns began before that document was written. The most controversial component of Mr. Johnson’s net-zero boondoggle concerns an attempt to steer households away from the gas boilers on which 86% of them rely for hot water and central heating.
Mr. Johnson said in October he hopes that by 2035 the government will be able to phase out installation of new natural-gas heating units. That represents a step back from earlier plans to require carbon-efficient heat pumps in new homes as early as 2025, and the extended deadline still faces stiff opposition stemming from the high cost of heat pumps.
And “boiler-gate” is only the beginning of the reversals great and small. Among the great, count the delay to next year (at least) of a formal public-comment process for a beefed-up emissions-trading system. One reason for the holdup, the Telegraph reports, is that Mr. Johnson’s colleagues can’t agree on which corners of the economy should become newly subject to the rules—although apparently they now agree that car and home fuels should be excluded.
Among the smaller reversals, the Transport Department in November backtracked from a plan to require small businesses with parking lots on their premises to install electric-vehicle charging points. The proposed rules governing other structures such as new housing, residential conversions, and new mixed-use developments are so porous as to resemble a well-aerated Swiss cheese, with cost limitation emerging as the primary concern. This difficulty installing charging stations augurs the collapse, sooner or later, of Mr. Johnson’s announced plan to ban new internal-combustion cars by 2030.
Nor is this only a British phenomenon. Set aside the brouhaha surrounding green provisions in Democrats’ Build Back Better spending extravaganza in America. Some of the most surprising climate realism is now emerging in Europe.
French President Emmanuel Macron faces a campaign for re-election in 2022, and he learned the hard way in 2018 how higher fuel prices can trigger debilitating popular protests. His solution is to double down on traditional French industrial policy, especially concerning support for nuclear power. At Mr. Macron’s behest, the European Commission in Brussels may be on the verge of including both nuclear and natural gas on a list of environmentally friendly energy sources eligible for “green investment” from governments and private investors. Swedish teen activist Greta Thunberg is dismayed, but she also doesn’t need to persuade anyone to vote for her.
Even in Germany politicians are starting to change course. Households and businesses there pay some of the highest electricity prices in Europe in service of former Chancellor Angela Merkel’s aggressive shift toward renewable power. German voters believe in these goals more than most other electorates, and they elected the environmentalist Green Party into the new governing coalition in September.
But even in Germany there appears to be a limit. The deal cementing the coalition between the Greens, the larger Social Democrats and the smaller Free Democrats hedges its climate commitments. A coal phase-out will happen ideally by 2030—with the newly inserted word “ideally” blunting Green ambitions by marking the whole project as tentative. Carbon neutrality will wait for 2045, if it ever comes, and more-aggressive limits on aviation and automotive emissions are missing.
The net-zero gimmick will be with us for a long while yet, alas. The green true believers (or are they bitter clingers?) are busy devising rear-guard actions by which to insulate environmentalism from real-world political pressures, not least by enlisting gullible or cynical titans of finance to do via pension-fund investment allocations what can’t be done honestly via legislation. The political class remains rhetorically wedded to its earlier foolhardy promises, and the media is too enamored of reality-detached activists such as Ms. Thunberg.
All the smarter then for politicians to resolve to discuss the matter as little as possible in the year ahead. As starving the atmosphere of carbon dioxide becomes a political liability, starving the issue of political oxygen will become the electoral tactic of choice.
Earlier this week, energy firms warned that bills were likely to remain high until at least 2023, as they called on ministers to provide consumers with relief from higher costs.
According to the Financial Times, analysts have warned that the UK’s energy price cap looks likely to rise by more than £700 in April.
In a poll conducted by the not-for-profit trade body Energy and Utilities Alliance (EUA), it was found that the cost-of-living crisis is hitting Red Wall voters hard, with an astonishing 79 percent saying the Government does not understand the financial pressures on working families.
EUA and YouGov polled 1,600 voters in 18 Red Wall constituencies across the north of England, covering seats won by the Conservatives for the first time in 2019 on a range of energy issues.
The figures will put pressure on the Government to relieve the pressure of escalating energy bills.
The joint poll also found that 80 percent of Conservative voters in 2019 now believe the issue of energy bills to be important to them, with nearly 60 percent stating that rising energy bills are having a big impact upon their personal finances.
Commenting on the findings, EUA’s Chief Executive Mike Foster said: “These numbers confirm just how deeply the cost-of-living crisis is hitting working families.
“Sky-high energy bills are not the fault of consumers, but they are paying a heavy price. It is also very clear that politicians will pay a price for not tackling sky-high bills.”
“In October, the average Price Cap bill rose by £140, another £700 is simply not affordable.
“Voters will expect action before April’s figures kick in. There is plenty the Government can do but in the short term, their options are limited."
Full story
3) ‘Energy costs could be the breaking point’: UK’s small businesses being pushed to brink
The Guardian, 31 December 2021
Thousands of small business owners across the UK will bear the brunt of the national energy crisis that risks driving the UK to a cost of living catastrophe within the next year.
“The future is far from certain,” says Julian Pariera, the owner of Beauchamp Laundry Services in Birmingham. “I’m extremely concerned at how things are panning out.”
Pariera is one of thousands of small business owners across the UK who will bear the brunt of the national energy crisis that risks driving the UK to a cost of living catastrophe within the next year. Before next winter, he will need to renegotiate an energy deal to run the washers and clothes dryers that his customers rely on after a record surge in energy market prices.
“We fix our energy tariffs for up to five years, and every time we renew a deal it seems to double. This time I won’t be surprised if our energy costs quadruple. It’s madness,” he says. “These costs can’t be reflected in our charges because if we put up our prices by this much our customers wouldn’t be able to afford it. So the question I have to ask myself is how we can manage while still protecting our customers?”
“The government talks about getting business back on track after Covid – and I’m not saying they’re doing a bad job – but with these cost pressures it’s just ridiculous. We’ll carry on somehow because this business has been in place for the last 30 years – we’re established – but if we were just starting out we wouldn’t manage,” Pariera says.
For now, it is still more affordable for many of Beauchamp Laundry’s customers to bring in damp clothes and linen to be tumble dried during the winter than to run their own dryers at home, Pariera says. But at some point in the next year he may need to adjust his dryers to offer fewer minutes for each pound spent.
These concerns are shared by small business owners across the country, which employ almost 13 million staff and make £1.6tn in turnover every year. The Federation of Small Businesses has warned that energy costs are the top concern of its members and could prove to be “an existential threat”, particularly for the fragile end of the small business sectors that were hardest hit by Covid-19 restrictions.
Ibrahim Dogus, the owner of three restaurants near the London Eye, says a “vicious circle” of rising costs and falling revenue endemic across the hospitality industry means even longstanding eateries in prime locations are struggling to secure affordable energy deals. Many suppliers refuse to offer contracts to restaurants without a hefty security deposit, or charge eye-watering rates to guard against the risk they might go under, he says.
“Before the recent price hike I’d pay between £2,500 and £3,000 a month for energy at one restaurant. But my latest bill for November was £5,600. At the same time, turnover has fallen to between 10% and 15% of what it used to be. Before the pandemic we might serve 600 people; these days it’s closer to 60. But our costs are still climbing. We’re quite worried,” he says.
Dogus has already cut his staff from 60 to 25, made use of the government’s support schemes, and negotiated payment plans to manage the debt he owes to his landlords and pay business rates. But energy companies are the exception, he says, and this could prove the difference between whether his chain survives or not.
“Energy companies are not interested in helping at all. If you don’t pay in full for a couple of months someone comes to turn off your lights. Never mind that you can’t pay them if you can’t serve customers. It would be over,” he says.
“It’s a very difficult moment for small businesses. There’s been Brexit, there’s been Covid. But on top of everything else, energy costs could be the breaking point,” he says.
4) Charles Moore: Boris faces the same fate as John Major if he persists with the elite dogma of net zero
The Daily Telegraph, 1 January 2021
When we crashed out the ERM, it demolished the orthodoxy of the time. Johnson’s climate agenda has to reckon with reality sooner or later
The Daily Telegraph, 1 January 2021
When we crashed out the ERM, it demolished the orthodoxy of the time. Johnson’s climate agenda has to reckon with reality sooner or later
As this New Year dawns, I am struck by a parallel from 30 years ago. At the beginning of 1992, the pound was in the Exchange Rate Mechanism (the ERM) of the European Monetary System.
According to the then prime minister, John Major, membership was essential to stabilising sterling and controlling inflation. In fact, however, the ERM’s insistence that the pound must be worth at least 2.7780 Deutschmarks kept interest rates fearsomely high, hitting businesses and mortgages and inducing recession.
Eventually, the markets disbelieved the government’s increasingly shrill promises to do “whatever it takes” to keep the pound in. On September 16 1992 (“Black Wednesday”), they tested Major’s commitment. For a few mad hours, interest rates rose to 15 per cent. Then the government admitted defeat. Britain fell out of the ERM that evening and for ever.
This humiliated Major and demolished the orthodoxy of the time, but reality returned. The pound found its natural level, the British economy recovered. The chances of Britain ever entering the European single currency receded.
Thirty years on, the parallel is with net zero. As with the ERM, which sterling entered with fanfare in October 1990, the Government is proud of its policy. In late June 2019, the dying days of Theresa May’s premiership, Britain became, in its words, “the first major economy in the world to end its contribution to global warming by 2050”. Under the new law, greenhouse gas emissions would have to reduce to net zero by 2050, compared with the previous target of at least an 80 per cent reduction from 1990 levels. Boris Johnson, who succeeded Mrs May, has boasted, notably at Cop26, of this legislation and is acting on it, seeking applause from elites otherwise hostile because of Brexit.
In the course of 2021, however, the measures required to fulfil this edict have grown unpopular. Policies such as banning pure new internal combustion engines by 2030, the imposition of low emission zones in big cities or talk of new mortgages only for energy-efficient homes have caused alarm. Energy costs seem the worst – the impracticality and expense of green technology like heat pumps to replace gas boilers, and the dizzying rise in gas prices.
There is also resentment that our Government is not protecting us from global bad faith. Although net zero pledges have risen in two years from covering 16 per cent of the global economy to 68 per cent, these look highly dubious. Countries such as China, India and Russia are most unlikely to comply with the 2050 timetable. This saddles Western countries with policies that cannot achieve the sole purpose of net zero – a universal reduction of carbon emission levels. So they will hit our consumers and businesses even worse. We are the victims of the attitude satirised in the Beyond the Fringe Battle of Britain sketch: “We need a futile gesture at this stage!”
During 2022, these problems can only increase. Probably the Government can avoid one spectacular day of disaster like Black Wednesday 1992 – although even that might not be true if, for example, there are suddenly drastic power cuts.
Under present policies, detestably high price rises are unavoidable. A recent poll for Net Zero Watch recorded three out of five saying they would not be willing to pay higher taxes on their energy bills to meet net zero targets. As with the ERM/European issues 30 years ago, Tory rebels are picking up on discontents which ministers – and all the Opposition parties in Parliament – ignore.
In April, the energy price cap is expected to rise to £2,000, doubling what it was a year ago. And price caps – which drive smaller firms out of business – are no solution to price hikes, only delaying their impact.
Some price rises are attributable to temporary market problems, but we are trapped in high prices because government has deliberately eschewed alternatives. In the United States, natural gas prices are ten times lower than in this country. Britain’s shale basin is far thicker, and therefore potentially more productive than America’s, but the government’s shale fracking moratorium has left it untapped 10 years after its possibilities became available.
For similar reasons, we are not fully exploiting our offshore drilling capacities, or digging out coal needed for steel production. Yet the absolute need for fossil fuels, because of the intermittency of wind and solar power, remains. Environmental dogma simply raises the prices to distress levels, thus rewarding less green countries.
The economic costs to us ought to be obvious – the loss of competitiveness, of energy-intensive manufacturing and of key advantages which Britain gained from the Industrial Revolution; the vulnerability to foreign politics; the retrograde inconvenience of many green technologies.
So should the psychological damage. The idea that your long-term investment in equipment to keep your house warm is being undermined by vain attempts to meet arbitrary targets (there is nothing scientifically special about the date 2050) is frightening, especially for the old, as is the fear that you could not afford to heat your home or run your car.
At the Greta Thunberg end of the environmentalist spectrum lies a belief that the Western way of life should be destroyed. It is disturbing that a Conservative government seems to toy with such ideas.
Surely it is time to ditch the dogma and coercion and find friendlier ways of controlling emissions. There are signs of this happening in the EU, where the European Commission is changing its “taxonomy” so that natural gas and nuclear power can be treated as sustainable forms of low-carbon energy rather than the work of the Devil.
Why is it that a Government skilled, as we learnt at the general election of 2019, at appealing to public opinion, is so out of touch on these issues?
Again, the ERM comparison is instructive. It is a great feature of the modern world that bureaucracies want to build institutions that increase their power by transcending national borders. It is a founding principle of the European Union that it should be forged not through referendums or elections, but through systems above democracy. The ERM was part of this. Although usually presented in Britain as a technical question of monetary management, it was always intended as the transitional method of creating a single currency and a European central bank, thus stripping each nation state of the right to its own currency.
As the ERM developed in the 1980s, a parallel process (though not a specifically European one) was developing over global warming. The United Nations Intergovernmental Panel on Climate Change (IPCC), and the Conferences of the Parties (Cop), sought to build a new global order. This has involved great deference to “experts”, not unlike that paid to Sage over Covid, and misrepresentations of what the conferences have actually agreed. The tax-paying, energy-using public have been ill-informed about how it will affect them.
As with the ERM, so with net zero, a weird unanimity took over the process, backed by a largely compliant media. John Major repeatedly lamented after Black Wednesday that “everyone” had supported ERM. It was not so, unless by “everyone” he meant most people holding senior official positions. Such people are most likely to be wrong when they are nearest to unanimity. They need watching. As a journalist, Boris Johnson was a genius at detecting when the official orthodoxy ignored the facts of most people’s lives. He will need to recover that skill in 2022 if he wishes to avoid the eventual electoral fate of John Major.
According to the then prime minister, John Major, membership was essential to stabilising sterling and controlling inflation. In fact, however, the ERM’s insistence that the pound must be worth at least 2.7780 Deutschmarks kept interest rates fearsomely high, hitting businesses and mortgages and inducing recession.
Eventually, the markets disbelieved the government’s increasingly shrill promises to do “whatever it takes” to keep the pound in. On September 16 1992 (“Black Wednesday”), they tested Major’s commitment. For a few mad hours, interest rates rose to 15 per cent. Then the government admitted defeat. Britain fell out of the ERM that evening and for ever.
This humiliated Major and demolished the orthodoxy of the time, but reality returned. The pound found its natural level, the British economy recovered. The chances of Britain ever entering the European single currency receded.
Thirty years on, the parallel is with net zero. As with the ERM, which sterling entered with fanfare in October 1990, the Government is proud of its policy. In late June 2019, the dying days of Theresa May’s premiership, Britain became, in its words, “the first major economy in the world to end its contribution to global warming by 2050”. Under the new law, greenhouse gas emissions would have to reduce to net zero by 2050, compared with the previous target of at least an 80 per cent reduction from 1990 levels. Boris Johnson, who succeeded Mrs May, has boasted, notably at Cop26, of this legislation and is acting on it, seeking applause from elites otherwise hostile because of Brexit.
In the course of 2021, however, the measures required to fulfil this edict have grown unpopular. Policies such as banning pure new internal combustion engines by 2030, the imposition of low emission zones in big cities or talk of new mortgages only for energy-efficient homes have caused alarm. Energy costs seem the worst – the impracticality and expense of green technology like heat pumps to replace gas boilers, and the dizzying rise in gas prices.
There is also resentment that our Government is not protecting us from global bad faith. Although net zero pledges have risen in two years from covering 16 per cent of the global economy to 68 per cent, these look highly dubious. Countries such as China, India and Russia are most unlikely to comply with the 2050 timetable. This saddles Western countries with policies that cannot achieve the sole purpose of net zero – a universal reduction of carbon emission levels. So they will hit our consumers and businesses even worse. We are the victims of the attitude satirised in the Beyond the Fringe Battle of Britain sketch: “We need a futile gesture at this stage!”
During 2022, these problems can only increase. Probably the Government can avoid one spectacular day of disaster like Black Wednesday 1992 – although even that might not be true if, for example, there are suddenly drastic power cuts.
Under present policies, detestably high price rises are unavoidable. A recent poll for Net Zero Watch recorded three out of five saying they would not be willing to pay higher taxes on their energy bills to meet net zero targets. As with the ERM/European issues 30 years ago, Tory rebels are picking up on discontents which ministers – and all the Opposition parties in Parliament – ignore.
In April, the energy price cap is expected to rise to £2,000, doubling what it was a year ago. And price caps – which drive smaller firms out of business – are no solution to price hikes, only delaying their impact.
Some price rises are attributable to temporary market problems, but we are trapped in high prices because government has deliberately eschewed alternatives. In the United States, natural gas prices are ten times lower than in this country. Britain’s shale basin is far thicker, and therefore potentially more productive than America’s, but the government’s shale fracking moratorium has left it untapped 10 years after its possibilities became available.
For similar reasons, we are not fully exploiting our offshore drilling capacities, or digging out coal needed for steel production. Yet the absolute need for fossil fuels, because of the intermittency of wind and solar power, remains. Environmental dogma simply raises the prices to distress levels, thus rewarding less green countries.
The economic costs to us ought to be obvious – the loss of competitiveness, of energy-intensive manufacturing and of key advantages which Britain gained from the Industrial Revolution; the vulnerability to foreign politics; the retrograde inconvenience of many green technologies.
So should the psychological damage. The idea that your long-term investment in equipment to keep your house warm is being undermined by vain attempts to meet arbitrary targets (there is nothing scientifically special about the date 2050) is frightening, especially for the old, as is the fear that you could not afford to heat your home or run your car.
At the Greta Thunberg end of the environmentalist spectrum lies a belief that the Western way of life should be destroyed. It is disturbing that a Conservative government seems to toy with such ideas.
Surely it is time to ditch the dogma and coercion and find friendlier ways of controlling emissions. There are signs of this happening in the EU, where the European Commission is changing its “taxonomy” so that natural gas and nuclear power can be treated as sustainable forms of low-carbon energy rather than the work of the Devil.
Why is it that a Government skilled, as we learnt at the general election of 2019, at appealing to public opinion, is so out of touch on these issues?
Again, the ERM comparison is instructive. It is a great feature of the modern world that bureaucracies want to build institutions that increase their power by transcending national borders. It is a founding principle of the European Union that it should be forged not through referendums or elections, but through systems above democracy. The ERM was part of this. Although usually presented in Britain as a technical question of monetary management, it was always intended as the transitional method of creating a single currency and a European central bank, thus stripping each nation state of the right to its own currency.
As the ERM developed in the 1980s, a parallel process (though not a specifically European one) was developing over global warming. The United Nations Intergovernmental Panel on Climate Change (IPCC), and the Conferences of the Parties (Cop), sought to build a new global order. This has involved great deference to “experts”, not unlike that paid to Sage over Covid, and misrepresentations of what the conferences have actually agreed. The tax-paying, energy-using public have been ill-informed about how it will affect them.
As with the ERM, so with net zero, a weird unanimity took over the process, backed by a largely compliant media. John Major repeatedly lamented after Black Wednesday that “everyone” had supported ERM. It was not so, unless by “everyone” he meant most people holding senior official positions. Such people are most likely to be wrong when they are nearest to unanimity. They need watching. As a journalist, Boris Johnson was a genius at detecting when the official orthodoxy ignored the facts of most people’s lives. He will need to recover that skill in 2022 if he wishes to avoid the eventual electoral fate of John Major.
5) Joseph Sternberg: Many climate ambitions will end with 2021
The Wall Street Journal, 31 December 2021
In the U.K., Germany and France, leaders walk back as their plans’ exorbitant price tag becomes clear.
The Wall Street Journal, 31 December 2021
In the U.K., Germany and France, leaders walk back as their plans’ exorbitant price tag becomes clear.
It’s New Year’s resolution season, and don’t be surprised if politicians world-wide settle into the same informal pledge: Talk as little as possible about climate change in 2022. They’ve gotten a head start on that resolution, working hard at it even before Friday night’s socially distanced parties begin.
The biggest, most entertaining and also most telling climb-downs are happening in the U.K. Prime Minister Boris Johnson in October unveiled an ambitious policy program to get Britain to net-zero carbon-dioxide emissions by 2050. It was Mr. Johnson’s public-relations coup ahead of the COP26 global climate conference he hosted in Glasgow. It also was unusual in its honesty about what such environmental ambitions will cost individual households and businesses—a point politicians usually avoid for all the obvious reasons.
Sure enough, the backtracks and U-turns began before that document was written. The most controversial component of Mr. Johnson’s net-zero boondoggle concerns an attempt to steer households away from the gas boilers on which 86% of them rely for hot water and central heating.
Mr. Johnson said in October he hopes that by 2035 the government will be able to phase out installation of new natural-gas heating units. That represents a step back from earlier plans to require carbon-efficient heat pumps in new homes as early as 2025, and the extended deadline still faces stiff opposition stemming from the high cost of heat pumps.
And “boiler-gate” is only the beginning of the reversals great and small. Among the great, count the delay to next year (at least) of a formal public-comment process for a beefed-up emissions-trading system. One reason for the holdup, the Telegraph reports, is that Mr. Johnson’s colleagues can’t agree on which corners of the economy should become newly subject to the rules—although apparently they now agree that car and home fuels should be excluded.
Among the smaller reversals, the Transport Department in November backtracked from a plan to require small businesses with parking lots on their premises to install electric-vehicle charging points. The proposed rules governing other structures such as new housing, residential conversions, and new mixed-use developments are so porous as to resemble a well-aerated Swiss cheese, with cost limitation emerging as the primary concern. This difficulty installing charging stations augurs the collapse, sooner or later, of Mr. Johnson’s announced plan to ban new internal-combustion cars by 2030.
Nor is this only a British phenomenon. Set aside the brouhaha surrounding green provisions in Democrats’ Build Back Better spending extravaganza in America. Some of the most surprising climate realism is now emerging in Europe.
French President Emmanuel Macron faces a campaign for re-election in 2022, and he learned the hard way in 2018 how higher fuel prices can trigger debilitating popular protests. His solution is to double down on traditional French industrial policy, especially concerning support for nuclear power. At Mr. Macron’s behest, the European Commission in Brussels may be on the verge of including both nuclear and natural gas on a list of environmentally friendly energy sources eligible for “green investment” from governments and private investors. Swedish teen activist Greta Thunberg is dismayed, but she also doesn’t need to persuade anyone to vote for her.
Even in Germany politicians are starting to change course. Households and businesses there pay some of the highest electricity prices in Europe in service of former Chancellor Angela Merkel’s aggressive shift toward renewable power. German voters believe in these goals more than most other electorates, and they elected the environmentalist Green Party into the new governing coalition in September.
But even in Germany there appears to be a limit. The deal cementing the coalition between the Greens, the larger Social Democrats and the smaller Free Democrats hedges its climate commitments. A coal phase-out will happen ideally by 2030—with the newly inserted word “ideally” blunting Green ambitions by marking the whole project as tentative. Carbon neutrality will wait for 2045, if it ever comes, and more-aggressive limits on aviation and automotive emissions are missing.
The net-zero gimmick will be with us for a long while yet, alas. The green true believers (or are they bitter clingers?) are busy devising rear-guard actions by which to insulate environmentalism from real-world political pressures, not least by enlisting gullible or cynical titans of finance to do via pension-fund investment allocations what can’t be done honestly via legislation. The political class remains rhetorically wedded to its earlier foolhardy promises, and the media is too enamored of reality-detached activists such as Ms. Thunberg.
All the smarter then for politicians to resolve to discuss the matter as little as possible in the year ahead. As starving the atmosphere of carbon dioxide becomes a political liability, starving the issue of political oxygen will become the electoral tactic of choice.
6) And finally: Germany to close nuclear reactors despite energy crisis
Deutsche Welle, 31 December 2021
Berlin (AFP) – Germany will shut down three nuclear power plants on Friday even as Europe faces one of its worst ever energy crises, following Angela Merkel's timetable for phasing out atomic energy.
With energy prices already on the rise and tensions higher than ever between Europe and key gas supplier Russia, the closure of the plants in Brokdorf, Grohnde and Gundremmingen could well tighten the squeeze.
The move will halve remaining nuclear capacity in Germany and reduce energy output by around four gigawatts -- equivalent to the power produced by 1,000 wind turbines.
Protests over the Fukushima nuclear disaster in 2011 prompted former chancellor Merkel to set the wheels in motion for abandoning nuclear power just over 10 years ago.
Germany is planning to completely wind down atomic energy by the end of 2022, when it will shut its final three plants in Neckarwestheim, Essenbach and Emsland.
But with energy prices soaring across Europe, the timing of the plans coming to fruition could hardly be worse.
Europe's reference gas price, Dutch TTF, hit 187.78 euros per megawatt hour in December -- 10 times higher than at the start of the year -- and electricity prices are also soaring.
The spike has been fuelled by geopolitical tensions with Russia, which supplies one third of Europe's gas.
Western countries accuse Russia of limiting gas deliveries to put pressure on Europe amid tensions over the Ukraine conflict.
Moscow also wants to push through the controversial Nord Stream 2 pipeline, set to ship still more Russian gas to Germany.
Price hikes
The end of nuclear power in Germany will likely push prices up even further, according to Sebastian Herold, a professor of energy policy at the Darmstadt University of Applied Sciences.
"In the long term, the hope is that an increase in renewable energy will balance things out, but this will not be the case in the short term," he told AFP.
Until Germany can really ramp up renewables, it will remain dependent on fossil fuels to plug the gap left by the nuclear exit.
"This will make Germany more dependent on natural gas overall, at least in the short term, and thus also a little more dependent on Russia," Herold said.
The transition may also take longer than Germany would like, with progress on renewables slowed in recent years by opposition to energy infrastructure projects.
The proportion of energy generated by renewables is expected to fall in 2021 for the first time since 1997 -- to 42 percent, compared with 45.3 percent in 2020.
As well as driving up prices, the nuclear plant closures will also remove a key source of low-carbon energy in a country that is already struggling to meet ambitious climate goals.
The new coalition government under Social Democrat Olaf Scholz has pledged to bring forward Germany's planned coal exit to 2030 and wants Germany to generate 80 percent of its electricity from renewables by the same year.
But Robert Habeck, the co-leader of the Green party and head of a newly created super-ministry for the economy and climate, admitted this week that Germany is already on course to miss its climate targets for 2022 and probably also 2023.
Full story
Deutsche Welle, 31 December 2021
Berlin (AFP) – Germany will shut down three nuclear power plants on Friday even as Europe faces one of its worst ever energy crises, following Angela Merkel's timetable for phasing out atomic energy.
With energy prices already on the rise and tensions higher than ever between Europe and key gas supplier Russia, the closure of the plants in Brokdorf, Grohnde and Gundremmingen could well tighten the squeeze.
The move will halve remaining nuclear capacity in Germany and reduce energy output by around four gigawatts -- equivalent to the power produced by 1,000 wind turbines.
Protests over the Fukushima nuclear disaster in 2011 prompted former chancellor Merkel to set the wheels in motion for abandoning nuclear power just over 10 years ago.
Germany is planning to completely wind down atomic energy by the end of 2022, when it will shut its final three plants in Neckarwestheim, Essenbach and Emsland.
But with energy prices soaring across Europe, the timing of the plans coming to fruition could hardly be worse.
Europe's reference gas price, Dutch TTF, hit 187.78 euros per megawatt hour in December -- 10 times higher than at the start of the year -- and electricity prices are also soaring.
The spike has been fuelled by geopolitical tensions with Russia, which supplies one third of Europe's gas.
Western countries accuse Russia of limiting gas deliveries to put pressure on Europe amid tensions over the Ukraine conflict.
Moscow also wants to push through the controversial Nord Stream 2 pipeline, set to ship still more Russian gas to Germany.
Price hikes
The end of nuclear power in Germany will likely push prices up even further, according to Sebastian Herold, a professor of energy policy at the Darmstadt University of Applied Sciences.
"In the long term, the hope is that an increase in renewable energy will balance things out, but this will not be the case in the short term," he told AFP.
Until Germany can really ramp up renewables, it will remain dependent on fossil fuels to plug the gap left by the nuclear exit.
"This will make Germany more dependent on natural gas overall, at least in the short term, and thus also a little more dependent on Russia," Herold said.
The transition may also take longer than Germany would like, with progress on renewables slowed in recent years by opposition to energy infrastructure projects.
The proportion of energy generated by renewables is expected to fall in 2021 for the first time since 1997 -- to 42 percent, compared with 45.3 percent in 2020.
As well as driving up prices, the nuclear plant closures will also remove a key source of low-carbon energy in a country that is already struggling to meet ambitious climate goals.
The new coalition government under Social Democrat Olaf Scholz has pledged to bring forward Germany's planned coal exit to 2030 and wants Germany to generate 80 percent of its electricity from renewables by the same year.
But Robert Habeck, the co-leader of the Green party and head of a newly created super-ministry for the economy and climate, admitted this week that Germany is already on course to miss its climate targets for 2022 and probably also 2023.
Full story
The London-based Net Zero Watch is a campaign group set up to highlight and discuss the serious implications of expensive and poorly considered climate change policies. The Net Zero Watch newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.netzerowatch.com.
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