Sunday, December 11, 2022

Net Zero Watch: Vanguard quits climate alliance in blow to net zero project


In this newsletter:

1) The fightback has begun: Vanguard quits climate alliance in blow to net zero project
Financial Times, 7 December 2022

2) Vanguard quits Net-Zero group, marking biggest defection yet
Bloomberg, 7 December 2022

3) Texas subpoenas BlackRock for documents related to ESG push
Fox Business, 7 December 2022
4) Ron DeSantis’s war on woke puts BlackRock on the frontline
Financial Times, 7 December 2022
5) Emboldened House Republicans to bring ESG scrutiny, experts say
Roll Call, 8 December 2022
6) Green groups furious after Britain approves first new coal mine is 30 years
The Times, 8 December 2022
7) Net Zero Britain: 3 million Brits cannot afford to heat homes as UK faces Arctic snap
The Guardian, 8 December 2022
8) Allister Heath: Blackouts will trigger a people’s revolt against the new eco-tyranny
The Daily Telegraph, 8 December 2022
9) Ross Clark: Wind turbines offer huge rewards to already rich landowners – but rather less for the rest of us
The Daily Telegraph, 7 December 2022
10) WSJ: The Pentagon marches off to climate war
Editorial, The Wall Street Journal, 8 December 2022

Full details:

1) The fightback has begun: Vanguard quits climate alliance in blow to net zero project
Financial Times, 7 December 2022


Vanguard is pulling out of the main financial alliance on tackling climate change at a time when Republicans in the US have stepped up their attacks on financial institutions that they say are hostile to fossil fuels.

With $7.1tn under management and more than 30mn customers as of October 31, Vanguard is the second-largest global money manager after BlackRock. The group said on Wednesday that it was resigning from the Net Zero Asset Managers initiative, whose members have committed to achieving net zero carbon emissions by 2050.

Vanguard, which mainly manages passive funds that track market indices, said the alliance’s full-throated commitment to fighting climate change had resulted “in confusion about the views of individual investment firms”.

“We have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks — and to make clear that Vanguard speaks independently on matters of importance to our investors,” the Pennsylvania-based company said in a statement.

NZAM was founded in December 2020 and had 291 members managing $66tn in assets as of November. Last year NZAM joined an umbrella climate finance organisation, the Glasgow Financial Alliance for Net Zero (Gfanz) upon its launch last year under Mark Carney, the former Bank of England governor. Vanguard will exit both groups.

In a statement, NZAM said Vanguard’s decision was regrettable.

“It is unfortunate that political pressure is impacting this crucial economic imperative and attempting to block companies from effectively managing risks,” said Kirsten Snow Spalding of Ceres, a coalition of investors and environmental groups and also a founding partner of NZAM.

Most of the largest global asset managers belong to NZAM, including BlackRock, State Street, JPMorgan Asset Management and Legal & General. Notable holdouts include Fidelity Investments and Pimco, both based in the US.

Vanguard said the move had been in the works for several months. It will continue to offer products that use environmental, social and governance investing factors and net zero products to investors who want them. Vanguard will also still ask the companies it invests in how they plan to address climate risks.

Last month, a group of Republican attorneys-general asked the Federal Energy Regulatory Commission not to renew Vanguard’s authorisation to buy shares in US utilities. They cited its NZAM membership as evidence that it was trying to influence corporate policy rather than being a passive investor.

That move is part of a larger attack by Republicans on ESG investing. Several Republican states have pulled cash management and other investment accounts from BlackRock, which has under founder Larry Fink been outspoken about the need to take into account climate change in investing. Texas comptroller Glenn Hegar said NZAM membership was one of the factors he used to compile a list of organisations he accused of “boycotting” fossil fuels.

Republican state attorneys-general have also demanded that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo turn over information about their involvement in the banking arm of Gfanz.

Environmental groups accused Vanguard of duplicity after its announcement.

“Vanguard has never been serious about mitigating climate risk,” said Jessye Waxman, an official with the Sierra Club’s fossil-free finance campaign. For Vanguard, “joining NZAM was just an exercise in greenwashing”.

At least two pension funds, Cbus Super and Bundespensionskasse, have left the asset owner section of Gfanz, while investment consultancy Meketa has left another section. Several Wall Street banks including JPMorgan Chase, Morgan Stanley and Bank of America threatened to pull out over the summer because they were concerned that they could be sued over increasingly stringent decarbonisation commitments.

Gfanz responded by weakening its alignment with UN climate goals that called for members to roughly halve the emissions they are responsible for by 2030.
2) Vanguard quits Net-Zero group, marking biggest defection yet
Bloomberg, 7 December 2022

Vanguard Group Inc. is walking out of the world’s largest climate-finance alliance, marking the coalition’s biggest defection to date as US Republicans step up their threats against firms deemed hostile toward the fossil-fuel industry.

Vanguard’s decision followed a “considerable period of review,” according to a company statement Wednesday. Withdrawing from the Net Zero Asset Managers initiative, which is a sub-unit of the Glasgow Financial Alliance for Net Zero, “will help provide the clarity our investors desire” about everything from the role of index funds, to financial risks in the context of climate change, the firm said.

Mark Carney, the former Bank of England governor who is the chief architect of GFANZ, said earlier this year the alliance has enjoyed considerable growth, and now represents some 550 members with roughly $150 trillion of assets in total. He also sought to dismiss reports that some members had grown uneasy with the alliance’s structure, amid concerns that they faced growing legal risks for appearing to avoid carbon-intensive sectors.

“It is unfortunate that political pressure is impacting this crucial economic imperative and attempting to block companies from effectively managing risks — a crucial part of their fiduciary duty,” said Kristen Snow Spalding, vice president of the Ceres Investor Network, a founding partner of the Net Zero Asset Managers initiative.

Vanguard indicated its decision rested in a desire to maintain the freedom not to restrict its investment options.

Initiatives such as the net-zero alliance “can advance constructive dialogue, but sometimes they can also result in confusion about the views of individual investment firms,” Vanguard said. “That has been the case in this instance, particularly regarding the applicability of net-zero approaches to the broadly diversified index funds favored by many Vanguard investors.”

The Malvern, Pennsylvania-based firm went on to say that its withdrawal from NZAM is part of a “continuous assessment of our participation in external organizations and their ongoing alignment with Vanguard’s mission and perspectives on investing.”

Full story
3) Texas subpoenas BlackRock for documents related to ESG push
Fox Business, 7 December 2022

A Texas lawmaker tells FOX Business the state will not allow financial institutions to 'continue to use Texans’ money to force a narrow political agenda'

The Texas state legislature subpoenaed BlackRock for a series of documents related to the billion-dollar financial institution's environmental, social and governance (ESG) policy push.

The subpoena, issued late last month by the Texas Senate Committee on State Affairs, represents the latest effort from the Republican-led state to slow the so-called ESG movement. Massive asset managers like BlackRock, Vanguard and State Street have increasingly pushed ESG standards upon companies in which they hold large financial stakes in an effort to push a broad green transition from traditional fossil fuel energy sources to alternatives like wind and solar.

In August, the Texas Senate Committee on State Affairs penned letters to BlackRock, Vanguard, State Street and Institutional Shareholder Services (ISS), a large financial advisory firm, for documents related to their ESG decision-making process. While Vanguard, State Street and ISS ultimately shared relevant information, BlackRock failed to hand over certain documents the committee had asked for.

"The Committee needs these documents to uncover the extent to which these firms have been playing politics using Texans’ hard-earned money. Next week we will hold a hearing where each firm will appear and give account to the people of Texas," Texas Republican state Sen. Bryan Hughes, the chairman of the Committee on State Affairs, told FOX Business in a statement. "While each firm has produced documents, some have provided more than others. BlackRock in particular has refused to provide documents it considers internal or confidential."

"Accordingly, we have issued a subpoena to BlackRock for the production of additional documents the committee needs to complete its work," Hughes continued. "We will not allow these firms to continue to use Texans’ money to force a narrow political agenda. They have a legal duty to put their investors’ interests first, and we intend to make sure they do."

Hughes announced earlier this week that his committee would host a hearing on Dec. 15 to discuss impact ESG policies from Wall Street financial institutions has on Texans. The committee has invited high-ranking officials from the companies including BlackRock to testify at the hearing.

Texas lawmakers and the state's comptroller Glenn Hegar have particularly zeroed in on how ESG standards may be harming Texas state pension plans which have relationships with the firms in question including BlackRock. They have also worried that the ESG push is simultaneously negatively affecting the state's massive oil and gas industry.

Full story
4) Ron DeSantis’s war on woke puts BlackRock on the frontline
Financial Times, 7 December 2022
Florida is the latest Republican state to target ESG investing

Woke Inc is under attack. Battle lines have been drawn in America’s latest culture war, with Ron DeSantis, Florida’s governor, its general. His most recent salvo against what he describes as “woke capitalism” was fired against BlackRock, the world’s biggest money manager. Its provocation was to invest at least some of its $8tn assets under management according to environmental, social and governance (ESG) principles and to tell companies to think about climate risk. This, according to DeSantis and Florida’s chief financial officer, flouts BlackRock’s fiduciary duty to prioritise returns above all else. Yet to try to tell a fund manager which companies it can and cannot invest in is to politicise business decisions in just the way DeSantis purports to be rallying against.

Florida pledged this month to pull as much as $2bn in long-term securities and short-term funds from BlackRock. DeSantis already led a resolution to stop the state’s pension funds from considering ESG when investing workers’ retirement savings. The move follows his attacks against other big businesses he deems too progressive, including Disney’s stance on LGBTQ issues — which cost the company, at least temporarily, its ability to run its own private government around its Orlando theme park. This playbook underscores why DeSantis is emerging as the great new hope of the Republican right, and why the odds are narrowing that he may beat Donald Trump to the party’s nomination for president. DeSantis possesses all of Trump’s prowess for tub-thumping politicking with little of his baggage.

But Florida is merely following other Republican states. About $1bn has been withdrawn from BlackRock by red states that argue ESG harms their economies and state pensions. Attorneys-general from 19 Republican states have targeted BlackRock for prioritising “activism” over fiduciary duty to their state pension funds.

The moves are pure political theatre. Regardless, for BlackRock, they have created a policy nightmare and a patchwork of liability across the US, let alone the rest of the world. There are signs that such posturing is having its desired effect. Vanguard, a rival to BlackRock, announced on Wednesday that it is leaving the financial alliance that aims to tackle climate change and which has attracted Republican ire.

Financially, the moves risk harming the ordinary working people that DeSantis and the 19 state attorneys-general claim to be fighting for. If pension funds have to sell their holdings to exit BlackRock during the current downturn in the market, that will only lock in losses for pension holders. States could face lawsuits if pension holders took a hit.

BlackRock is a natural target, not only due to its sheer size — it manages five of the top 20 US sustainable funds — but also because of the outspokenness of its founder, Larry Fink, on climate change; something that has made enemies in oil-heavy states such as Texas. Yet BlackRock’s ESG credentials have been questioned by the other end of the political spectrum for not going far enough. Some of its strategies allow for investment in fossil fuel companies as a way to further the transition to cleaner energy.

There are obvious issues with ESG, which has grown to be a $40tn industry where greenwashing and other cynical practices have emerged. But sustainable investing’s tension with money managers’ fiduciary duty is less clear cut. BlackRock argues that ignoring climate change risks investments over the long term. It is an argument that may need to be settled in court. Until then, in the manufactured war between big business and politics, it is ordinary pension holders who are caught in the crossfire.
5) Emboldened House Republicans to bring ESG scrutiny, experts say
Roll Call, 8 December 2022

Now that they’ve gained control of the House in the next Congress, Republican lawmakers will launch a slew of congressional inquiries into environmental, social and governance issues, according to legal and financial experts.

The foremost targets will be financial institutions and companies promoting ESG, as well as the Securities and Exchange Commission, which is writing climate disclosure rules for public companies.

Jonathan Su, a partner at Latham & Watkins LLP who represents companies, corporate directors and others in congressional, government and internal investigations, said the increased scrutiny is turning the tables a bit in Congress.

“The historical perception is that a Republican Congress has traditionally been more friendly toward the business community in terms of oversight matters,” Su said in a webinar hosted by the law firm on the subject. “The general observation is that with this upcoming Congress, that dynamic may change.”

“Whether that's because of new membership with respect to particular congressional Republicans, or a change in the political cycle, there’s very much an observation that they are very much prepared to and will conduct expansive oversight of the private sector,” said Su, who was a White House counsel in the Biden and Obama administrations.

Republicans have indicated that such congressional inquiries would focus on whether ESG considerations harm shareholders and violate fiduciary duty and whether companies may be violating antitrust laws by participating in voluntary, industrywide ESG initiatives.

They have done so as Democrats have ratcheted up pressure on companies to incorporate material risks from ESG issues, such as climate risk and human capital management. Su noted this pressure is likely continue in the Senate, where Democrats will retain their majority.

Senate Republicans will have little ability to pursue their requests as individual minority members, but they could join their counterparts in the House in a joint investigation, Su added. And companies will have to contend with various requests for information and civil investigations from various state attorneys general as well.

“For many private sector entities, it’s understandable to feel a bit of whiplash in terms of having this issue come at them not only from both political parties, but also at differing levels,” he said.

The House Financial Services Committee, of which ranking member Patrick T. McHenry, R-N.C., is expected to become chairman next year, will keep busy with oversight hearings and inquiries, with a particular focus on SEC rule-making, said Jamie McGinnis, who previously was a senior policy adviser and lead securities counsel on the committee’s GOP staff.

Speaking last month at the Cato Institute’s 2022 Summit on Financial Regulation, McGinnis said, “Patrick McHenry is very interested in practicing vigorous oversight of the SEC, given their very, very extensive rule-making agenda in a relatively short time frame for comment periods.” McGinnis is now counsel in the asset management group at Ropes & Gray LLP.

Industry observers should expect ESG-specific scrutiny from the House Oversight Committee as well. “I would anticipate hearings involving asset managers, perhaps even ESG ratings agencies, proxy adviser hearings in the coming years,” McGinnis said.
Full story
6) Green groups furious after Britain approves first new coal mine is 30 years
The Times, 8 December 2022

Michael Gove has approved the first deep coalmine in 30 years, despite calls from environmental activists and Labour to turn down the project.

The levelling-up secretary’s planning approval for the mine in Cumbria comes after two years of opposition. Critics said that it would increase emissions and 85 per cent of the coking coal would be exported to produce steel.

Lord Deben, chairman of the climate change committee, said the scheme was “absolutely indefensible”. Alok Sharma, who was president of the Cop26 climate conference in Glasgow last year, has said that the approval would damage Britain’s international reputation.

Ed Miliband, the shadow climate minister, said that the mine was a “terrible idea” from an economic and environmental perspective.

West Cumbria Mining says Woodhouse Colliery near Whitehaven will create more than 500 jobs. Cumbria county council had given approval before ministers called in the decision last year.

Gove’s approval comes after the decision was delayed three times. The most recent deadline was during the Cop27 climate conference in Egypt last month, when approval would have been internationally embarrassing while the UK was pressing for a phase-out of coal at the UN talks.

In a letter explaining his decision, Gove said he had backed the project due to the economic benefits and the creation of an indigenous supply of coking coal for the UK steel industry.

The minister argued that the mine would have a “broadly neutral effect” on global greenhouse gas emissions. He said that the mine’s operational emissions would be lower than similar ones around the world. He added that it was consistent with “government policies for meeting the challenge of climate change”.

The mine will produce 2.8 million tonnes of coal each year for steel production, rather than burning in power stations, which has almost been phased out in the UK. Nonetheless, the coal has been estimated to release 420 million tonnes of CO2 if the mine runs for 50 years, roughly on a par with total UK emissions over a year.
Full story
7) Net Zero Britain: 3 million Brits cannot afford to heat homes as UK faces Arctic snap
The Guardian, 8 December 2022

More than 3 million low-income UK households cannot afford to heat their homes, according to research, as a “dangerously cold” weather front arrives from the Arctic.

The UK Health Security Agency has issued a cold weather alert recommending vulnerable people warm their homes to at least 18C, wear extra layers and eat hot food to protect themselves from plummeting temperatures.

Ministers also confirmed that people in more than 300 postcode areas in England and Wales would receive cold weather payments in the coming days. The £25 payments are triggered when the average temperature is 0C or less for seven days in a row.

But about 710,000 households will still struggle to pay for warm clothing, heating and food, according to analysis by the Joseph Rowntree Foundation.

A fifth of the 2.5 million low-income households were going without food and heating, it estimated. The JRF survey, of 4,251 people in the bottom 40% of incomes, which was conducted last month, also estimated that about 4.3 million households had curbed their spending on heating before the cold spell.

More than 7 million households have gone without at least one of the essentials since June, the JRF will say when its full report is released next week.

About 2.4 million households have borrowed money or used credit to cover their bills so far this year. The current cold snap means households with vulnerable people face the impossible decision over whether to take on more debt to heat their home to the level recommended by health professionals.
Full story
8) Allister Heath: Blackouts will trigger a people’s revolt against the new eco-tyranny
The Daily Telegraph, 8 December 2022

Politicians everywhere are over-reaching, having drawn an incorrect lesson from Covid, namely that we will be willing to give up on our jobs, prosperity and freedoms in the name of a climate emergency.

Winter is upon us, courtesy of the Arctic blast unleashed by the Troll from Trondheim. We will soon find out whether we can keep the lights and heating on, or whether Britain is about to be plunged into a nightmare of energy rationing, rolling blackouts, three-day weeks and untold human misery.

The proximate cause of our present crisis is Vladimir Putin’s despicable invasion of Ukraine, and the resultant reduction in global gas supplies. Yet the Government must shoulder its share of the blame: it prioritised reducing carbon emissions above all else, and neglected keeping prices low or ensuring availability and security of supplies. This winter may turn out to be a dry run for a much greater, self-inflicted disaster, a harbinger of a new normal of permanently insufficient, costly energy supplies that could jeopardise our way of life, upend our politics and trigger a popular rebellion.

We are nearing a turning point for democratic support for environmentalism. Gordon Brown’s 2008 Climate Change Act legislated to slash CO2 emissions by 80 per cent by 2050, a seismic shift pushed through with little debate but much superficial public approval. Theresa May strengthened this to 100 per cent by 2050, the “net zero” target; again, the public liked the sound of this, if not of Mrs May. China will continue to increase its emissions by more than we cut ours, but our entire ruling class has signed up to this iron-clad legal framework, with no dissent tolerated.

Thanks to technology and markets, it ought to be possible to decarbonise without ruining our society and economy, but 14 years on the revolution is proceeding just about as disastrously as anybody could have imagined. In typical British fashion, our political class has taken all the easy decisions first, and none of the tough ones. The blunders, the groupthink, the demented short-termism and the mind-boggling bureaucratic incompetence have amounted to one of the greatest national scandals of the past few decades.

It’s easy to stop extracting fossil fuels or to boast about the decline of our carbon-emitting manufacturing sector, especially when we simply switch to importing goods, oil and gas from abroad, congratulating ourselves on our brilliance. We didn’t bother to construct gas-storage facilities or stress-test supply chains for geopolitical risk. We built offshore wind farms and solar but Britain also needed its own Pierre Messmer, the Gaullist who launched France’s huge nuclear programme. Instead, we got Nick Clegg: in a humiliating video from 2010, he rejects increasing nuclear capacity because it would have taken until 2021 or 2022 to come online.

The real world consequences are catastrophic. When the wind stops blowing and the solar panels are covered in snow, when all our cars are electric and boilers replaced by heat pumps, where will energy come from? Demand for electricity will surge, but there won’t be enough supply. The grid will implode. It may one day be possible to store electricity in giant batteries, but not today. Public rage if and when it all goes wrong will make Brexit look like a walk in the park.

Rishi Sunak’s plans are laughably modest: we are now so far behind any rational transition schedule that only an extreme effort, a Manhattan Project for nuclear power, can possibly rescue us from disaster. HS2 should be halted, and its billions urgently diverted to building nuclear power plants.

Political parties have been lulled into a false sense of complacency: the public want to be greener, but not at the cost of suffering extreme material regression. Voters are worried about climate change and wish to decarbonise, but only a tiny minority are fully paid-up to the most extreme, fanatical, anti-human, anti-capitalist version of the environmentalist doctrine. Human nature hasn’t suddenly changed: we still want to enjoy economic growth, to live better, longer, richer lives. We want to own goods and travel freely. Few of us want to be poor and cold and miserable. We don’t aspire to return to a feudal lifestyle, with our overlords dictating how we can live our lives.

Until now, green virtue has come easily and cheaply. Everybody hates littering and waste. It’s not hard to recycle, or to shift to reusable bags. It’s a different matter when people begin to be truly inconvenienced (idiots sitting down on motorways) or forced to buy expensive new cars: the anger is immediate. Wait until voters are told they can’t fly to Spain, that meat will be taxed, or that power cuts will be the new normal to comply with net zero: there will be a populist explosion.

Politicians everywhere are over-reaching, having drawn an incorrect lesson from Covid, namely that we will be willing to give up on our jobs, prosperity and freedoms in the name of a climate emergency. Germany faces crippling deindustrialisation, to great angst. The Dutch are nationalising and shutting “polluting” farms, triggering widespread fury. Switzerland’s winter contingency plans are modelled on lockdowns. Electric cars would be banned from non-essential journeys, shop hours cut and streaming services downgraded; sports matches, concerts and theatres could be cancelled.

The public might wear this once because of Ukraine, but it won’t tolerate intermittent energy becoming the norm. In typically condescending fashion, France’s plans are described as délestage – load shedding, getting rid of ballast, of “non-essential” energy users – as if bankrupting businesses were obviously necessary for the common good. We are halfway along F A Hayek’s Road to Serfdom.

So why this new snobbery? One answer can be gleaned from another visionary dystopian classic, Michael Young’s The Rise of the Meritocracy. A side effect of individualistic meritocracy, which I otherwise support, is that those who rise to the top become entitled and look down upon everybody else. As Young put it, “by imperceptible degrees an aristocracy of birth has turned into an aristocracy of talent”. The result is the return of anti-capitalist, neo-feudal attitudes: the elites nudge and compel the masses to do what is good for them, safe in the knowledge that the powerful will retain their privileges, their exclusive “Zil” traffic lanes, their private jets.

It won’t wash. The politicians have a choice: make greenery consumer-friendly, harnessing technology to preserve the public’s quality of life, or face a calamitous democratic uprising.
9) Ross Clark: Wind turbines offer huge rewards to already rich landowners – but rather less for the rest of us
The Daily Telegraph, 7 December 2022
Sunak's Government has miscalculated in giving in to Tory eco rebels. Green energy is popular in theory, but not in practice

Is Rishi Sunak already a prisoner in Number 10? Twenty four hours after giving in to backbench rebels and abolishing house-building targets he has now given into the Tory wind farm lobby, too — lifting the moratorium on onshore wind farms imposed by David Cameron in 2015.

According to the rebels, led by former levelling-up secretary Simon Clarke, onshore wind is very popular with voters. A YouGov poll published at the weekend claimed that 64 per cent of Tory voters would support the construction of a wind farm ‘near’ their home, with only 30 percent against. The crucial word there is ‘near’. What does it mean? A hundred yards away, half a mile away, 10 miles away?

A lot of Tory voters live in urban areas where they know they are not going to get a wind farm at the end of their road. Perhaps they wouldn’t mind a wind farm built on farmland several miles away. But the real test will come once the planning applications start to roll in for real — and many voters realise they will be in the shadow of turbines which have roughly doubled in height since the moratorium has been in place. The tallest onshore turbine in Scotland — where there never was a moratorium — is 600 feet, roughly as high as the North Downs.

We are rapidly going to discover just how few potential wind farm sites there are in the South East which are more than half a mile from the nearest residential property. There are more sparsely-populated areas in the North, but many of those are within national parks.

Those familiar with rural politics know that there is virtually no development you can undertake in the English countryside without inciting a protest group — around my way there was even a protest against the creation of a nature reserve on the grounds it might create more traffic. Wind farms are not going to be an exception — once they start being built many of the rebel MPs will discover that what the public tell opinion pollsters does not necessarily coincide with what they think when they find developers on their doorstep.

If windfarm-supporting Tories are hoping that onshore turbines will help solve the energy crisis they will be disappointed in that, too. The idea that onshore wind is the cheapest form of energy only holds if you ignore the cost of coping with the intermittency of wind power. Britain already has enough wind and solar power — theoretically — to meet the average 38 GW UK demand for power. Yet on a calm night last week the contribution of wind and solar fell to less than two per cent. We have a tiny capacity for energy storage — equivalent to less than an hour’s national consumption.

The only reason we can cope with lulls in the wind is by firing-up gas stations at short notice. One of the reasons gas power seems so expensive at the moment is that the market has to pay through the nose to keep gas power stations on standby for use at short notice. If we used gas power to generate a steady baseload as we used to do it would be a lot cheaper per kWh.

The lifting of the moratorium on inshore wind will delight the Tory landowning interest, who stand to make fat sums from licenses to have turbines built on their land — David Cameron’s father-in-law, Sir Reginald Sheffield, was being paid £350,000 a year from turbines on his land. There is rather less in it for ordinary Tory voters.
10) WSJ: The Pentagon marches off to climate war
Editorial, The Wall Street Journal, 8 December 2022


Biden’s new mandate on contractors adds green politics and costs to weapons.

The war in Ukraine is draining U.S. arms stockpiles while geopolitical risks grow. Yet the Biden Administration is worried about — you can’t make this up — the climate impact of U.S. weapons and wants to impose costly green mandates on federal contractors.

A little-noticed rule-making proposed by the Department of Defense, NASA and the General Services Administration last month would require federal contractors to disclose and reduce their CO2 emissions as well as climate financial risks. The rule would cover 5,766 contractors that have received at least $7.5 million from the feds in the prior year.

Smaller contractors would have to publicly report their so-called Scope 1 and 2 emissions—i.e., those they generate at their facilities and from the electricity and heating they use. Firms with larger contracts would also have to tabulate their upstream and downstream Scope 3 emissions, including those from customers, suppliers and products used in the field.

For example, weapons manufacturers would have to quantify and disclose the amount of CO2 generated from their own facilities; manufacturers that produce steel, computer chips and motors used in their weapons; propellants and fuel; and even munition storage areas. It’s unclear if CO2 emissions will influence procurement decisions.

Large contractors would also have to publish an annual climate disclosure and develop “science-based targets” to reduce greenhouse gas emissions in alignment with the goals of the 2015 Paris agreement. That means contractors will have to aim to zero out emissions and possibly require their contractors to do so.

Will Lockheed Martin and Raytheon Technologies have to redesign weapons systems and aircraft to be powered by lithium-ion batteries? China mines and processes the critical minerals used in batteries and other green technologies that will be required to meet these “science-based targets.”

The proposed rule would also apply to non-defense contractors, including pharmaceutical, shipping and tech companies, though it curiously exempts universities, nonprofit research institutions and state and local governments. These exemptions are a concession that the rule imposes costly burdens.

But the very point of the rule is to force CO2 emissions reductions across the private economy by leveraging $650 billion in annual federal contracts. By covering Scope 3 emissions, the rule would sweep in tens of thousands of non-federal contractors, including many small businesses.

“Public procurement can shift markets, drive innovation, and be a catalyst for adoption of new norms and global standards,” the rule-making says. The climate conditions on contractors “will give visibility to major annual sources of GHG emissions and climate risks throughout the Federal supply chain and could, in turn, provide insights into the entire U.S. economy.”

In other words, this is a back door for the Administration to force businesses across the economy to report and reduce their CO2 emissions. It goes even further than the Securities and Exchange Commission’s proposed rule requiring publicly traded companies to report Scope 1 and Scope 2 emissions.

The rule-making claims that federal contractors will benefit from climate mandates by “increasing senior management attention and funding for investing in GHG reduction projects.” Great. As the U.S. military faces strained budgets and growing threats, climate will be a costly new priority in national defense. The People’s Liberation Army must be dumbfounded by its good luck.

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

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