Friday, April 28, 2023

Net Zero Watch - Green Britain: People need to accept they are poorer, says Bank of England


In this newsletter:

1) Green Britain: People need to accept they are poorer, says Bank of England
The Daily Telegraph, 26 April 2023
2) Scrap Bank of England’s climate mandate, Balls and Osborne say
Bloomberg, 25 April 2023

3) Poor Britain: UK car parts giant Unipart may shift investment to US
BBC News, 26 April 2023
4) Benny Peiser & Andrew Montford: Net Zero is being mugged by reality and the people are waking up
The Daily Sceptic, 26 April 2023
5) WSJ: How the green cult has disarmed Europe
The Wall Street Journal, 26 April 2023
6) Pieter Cleppe: Climate policy is green camouflage for the EU’s protectionism
National Review, 25 April 2023

7) David Whitehouse: Rapid ocean temperature rise puzzles scientists
Net Zero Watch, 26 April 2023
8) Francis Menton: South Africa and the green energy wall
Manhattan Contrarian, 25 April 2023
9) And finally: Carbon capture project in Norway temporarily halted by high costs
Reuters, 26 April 2023

Full details:

1) Green Britain: People need to accept they are poorer, says Bank of England
The Daily Telegraph, 26 April 2023

British families must "accept that they’re worse off" after a surge in inflation and stop pushing for a pay rise, a senior Bank of England official has said.

Huw Pill, the Bank's chief economist, warned that rising prices have made the whole country poorer and said that attempts to bid up wages were merely prolonging the agony.

It came just hours after another senior Threadneedle Street official insisted that the Bank would have been powerless to bring inflation under control even if it had acted faster on interest rates.

Speaking in an interview on the Beyond Unprecedented podcast by Columbia Law School in New York, Mr Pill said: “[People] need to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether [through] higher wages or passing the energy costs through onto customers.”

Demands for higher pay were only driving prices up further and “generating inflation” as a result, he said.

Inflation was five times higher than the Bank of England’s 2pc target in March at 10.1pc.

Wages were rising at one of the fastest paces seen outside the pandemic in the three months to February at 6.6pc, stoking fears that price rises would prove persistent. However, in real terms, pay was still falling rapidly.

Full story
2) Scrap Bank of England’s climate mandate, Balls and Osborne say
Bloomberg, 25 April 2023

Climate goals should be stripped from the Bank of England’s remit to remove any distractions from its focus on inflation and financial stability, according to one of the architects of UK central bank independence.

Ed Balls, an adviser to former Chancellor of the Exchequer Gordon Brown when the Labour Party made the bank independent in 1997, said it “doesn’t make any sense” to give the BOE a role for which it has no tools. In the same House of Lords committee meeting, ex-Conservative Chancellor George Osborne agreed with Balls — in effect criticizing current Tory premier Rishi Sunak.

“It concerns me, the idea that you start to throw into the mix objectives which aren’t really affected sensibly by the instrument the bank has – which is interest rates,” Balls, who opposed Osborne as Labour’s shadow chancellor from 2011 to 2015, told the Lords’ economic affairs committee on Tuesday.

Sunak, who was then chancellor, added the goal of supporting the government’s net zero ambition to the BOE’s monetary and financial policy remits in 2021. The bank has since come under attack for failing to prevent double-digit inflation, with some critics arguing it was distracted by such policy “baubles.”

Balls said there is value in doing climate stress tests on commercial banks to ensure they are resilient to financial risks posed by global warming.

“But the government has got to be clear that meeting an objective like climate change and reducing emissions is a matter for fiscal policy, regulatory policy and the government,” he said.

Osborne said that while he respected “the desire to get all arms of the British state trying to deal with the challenge of climate change, I don’t think it’s necessary to single out that objective.” He added that it was “a good exercise every few years to simplify these things.”

The former politicians’ comments were made to a House of Lords’ inquiry into the independence of the BOE. Paul Tucker, a former BOE deputy governor, and John Vickers, a former BOE chief economist, have suggested that net zero has been a distraction.

Full story
3) Poor Britain: UK car parts giant Unipart may shift investment to US
BBC News, 26 April 2023

The boss of a major UK manufacturing firm has told the BBC he is considering moving investment to the US or Europe due to new subsidies offered there.

John Neil, who runs parts and logistics giant Unipart, said he wanted to invest in Britain but UK companies could not "compete on a level playing field".

The US is spending billions to help electric car firms, green energy and microchips via loans and tax breaks.

Europe is also planning to ease state help rules for firms in green sectors.

But the UK has yet to announce its strategy, with the chancellor telling the BBC that he would wait to see what the EU did before making any decisions.

Based in Oxford and employing more than 8,000 people, Unipart makes vehicle parts, components and manages supply chain logistics.

Mr Neill, who is also a key board member of the car industry body the SMMT, said America's Inflation Reduction Act (IRA), passed last year, was offering firms a "completely game changing set of incentives and fiscal support" that was hard to ignore.

"I've asked our team to think very carefully about our investment strategy in the US and our US operations and whether we should be pivoting more into those markets and possibly also into our European companies," he said.

Full story
4) Benny Peiser & Andrew Montford: Net Zero is being mugged by reality and the people are waking up
The Daily Sceptic, 26 April 2023


The Net Zero bandwagon was always going to grind to a halt when it bumped up against hard realities. As Abraham Lincoln observed, you can’t fool all of the people all of the time. To which the physicist Richard Feynman added the important rejoinder that you can’t fool nature either.

The eco-zealots in the think tanks, the civil service and the Green Blob have been trying to do both. Consider, for example, the oft-repeated claim that wind and solar power are cheap, which is demonstrably false, and carefully overlooks the fact that a renewables-dominated grid would require trillions of pounds of electricity storage to make it function without backup. As a result, we have seen gigawatts of wind and solar power installed, and the slow strangulation of investment in conventional energy sources. However, nature, refusing to be taken in by all the claims of ‘cheap renewables’, has responded with 20 years of relentless electricity price rises.

The silver lining to the very dark cloud of the Ukraine war and the energy cost crisis that followed is that most people now realise that a world with rising energy costs is not very pleasant at all. Others have been awakened, perhaps rather unexpectedly, by the Biden administration’s decision to launch its own Net Zero spending spree. It is rapidly becoming clear that this has the potential to turn into a disaster for the U.K.

Already unable to compete with the cheap energy and cheap labour of the Far East, many businesses are now having to face the reality that they will soon be unable to compete with the U.S. either, because of its abundance of cheap gas and its tidal wave of subsidies. Even companies that have been here for years are now thinking of upping sticks and crossing the Atlantic to take advantage of the green bonanza on offer. The U.K. and much of Europe are therefore facing an exodus of businesses, and a drying up of foreign direct investment. That could be catastrophic for the economy, and for Government finances already reeling from the pandemic.

The realities of Net Zero are also hitting home for the general public. The threat that the project represents to livelihoods and liberties is becoming more evident by the day. Recently, the mathematician Norman Fenton tweeted an excerpt from a Government-funded report that set out what Net Zero U.K. might look like: no airports, no shipping, no beef and lamb to eat, and most food imports eliminated. Sounds grim, doesn’t it? Lots of people thought so, and the tweet went viral, garnering over three million views.

The threat of being effectively locked into a 15-minute zone of a city has also concentrated minds. Anti-ULEZ protests are kicking off, and civil disobedience has followed in their wake, with cameras vandalised, bollards ripped out and barriers destroyed. Awareness of the threat of programmable digital currencies, which would allow the authorities to dictate your purchases (“No beef for you this week!”), is becoming more widespread too.

Seeing such policies alongside the restrictions on movement and lifestyle, and the ongoing censorship of criticism and opposition, many will conclude that climate catastrophism is simply the latest manifestation of mankind’s habitual tendency to totalitarianism. They are right to do so: green fanatics aspire to dictate every aspect of life, for you and everyone else in the world, just as the National Socialists and the Communist commissars tried to do.

So, as more and more of the impacts of Net Zero hit home, word of the economic and societal threat is spreading. Another surge in energy prices next winter or the winter after could prove the final straw for hundreds of thousands of businesses and the public alike. A small ray of hope is that in some parts of the world, the green cult is having to make compromises. The EU was recently forced by Germany to abandon its planned ban of combustion-engined cars. At the recent G7 meeting, ministers refused to set a date for the elimination of coal from the bloc’s energy systems, rolling back a pledge made at the Glasgow climate summit.

Yet most Western governments, including Mr. Sunak and his cabinet, remain almost entirely in thrall to green dogma. The reality is that far too many of them are Net Zero ideologues themselves, and far too many of the rest are cowed by the antics of the eco-zealots and the fulminations of their supporters in the mainstream media. We should expect no real change of direction under the current generation of ministers and MPs.

This inability to tackle the Net Zero cost crisis is almost certain to clear the way for Labour to sweep into power and to do… precisely nothing about the energy crisis. The damage being done to our economy and society will continue, and perhaps even accelerate.

But eventually a turning point will be reached, and the public, mugged by reality, will realise where the Establishment is taking them. They will look at the cold, dark, miserable Net Zero world that Norman Fenton described and will refuse to go any further. They will instead return to the path they have chosen in the past, the path to liberty and prosperity. The established political parties cannot see the inevitability of this reversal, but eventually they will have to accept it, and follow on behind, or face becoming irrelevant.

Benny Peiser and Andrew Montford are Director and Deputy Director of Net Zero Watch.
5) How the green cult has disarmed Europe
The Wall Street Journal, 26 April 2023

The EU’s development bank has a policy against providing financing for “ammunition and weapons, including explosives and sporting weapons, as well as equipment or infrastructure dedicated to military/police use.”


The war in Ukraine has exposed decades of under-investment on defense in Europe, and most countries are scrambling to catch up. But they won’t succeed unless they jettison the environmental, social, and governance (ESG) mentality among European institutions and private investors.

Most NATO members have long failed to meet the alliance’s defense-spending benchmark of 2% of GDP. Europe’s defense industry relies on private investment to help fund research and development, training and recruitment of a skilled workforce, and more. Yet in recent years defense investment has become taboo.

Much of the pressure not to spend comes from the political left that lobbies investors and legislatures through nonprofits. “We have a problem because we think that deliveries and weapons exports” are “fueling conflicts and are at the end responsible for deaths and a big number of refugees,” says Thomas Küchenmeister, managing director of the nonprofit Facing Finance.

The Swedish Consumers’ Association says it wants to restrict investment in defense companies that make controversial weapons like mines or cluster munitions or sell to governments that are corrupt, unstable, have a poor track record on human rights, or “spend a disproportionate part of their budget on purchases of arms.” But war is an inherently ugly business, and good luck finding a defense company that can meet these standards.

The ESG mindset has also spread to European Union institutions. The European Investment Bank, the EU’s development bank, has a policy against providing financing for “ammunition and weapons, including explosives and sporting weapons, as well as equipment or infrastructure dedicated to military/police use.”

The Ecolabel is a voluntary EU certification program that directs consumers to sustainable products and businesses, and an effort is underway to include financial products. But the most recent draft proposal suggests a restriction against investment in companies that derive “more than 5% turnover from the production or trade of conventional weapons and/or military products used for combat.” Have they told the Russians?

The EU is also working to develop a unified definition for what qualifies as an ESG investment. In July 2021 the EU published a draft proposal for a “social taxonomy” that lists weapons alongside gambling and tobacco as “harmful sectors or activities” that “cannot qualify as socially sustainable despite e.g. good worker-related performance.”

After Russian tanks rolled into Ukraine, a proposal scaled back the social-taxonomy language to designate as “harmful” only controversial weapons like mines, cluster munitions and chemical or biological weapons.

But Jan Pie, secretary general of the Aerospace, Security and Defence Industries Association of Europe, says “European banks and investors have picked up the signal that Europe would be about to say defense is not a sustainable activity.” Mr. Pie says some investors are limiting exposure to the defense industry, some banks have denied loans and guarantees, and some insurers are raising premiums.

Alessandra Genco, chief financial officer at the Italian aerospace and defense company Leonardo, said the industry may face higher capital costs if fewer banks and institutions are unwilling to invest. Dutch Defense Minister Kajsa Ollongren said last month that it’s “a problem” that “our pension funds here in the Netherlands prefer not to invest in the defense industry.”

Examples abound of financial institutions that have adopted policies to restrict defense investment. Allianz Global Investors says its sustainable-labeled funds don’t invest in companies that derive more than 10% of revenue from weapons, military equipment and services.

The German GLS Bank condemns “the Russian invasion of Ukraine as a war of aggression and against international law,” says spokeswoman Nora Schareika. But the bank doesn’t invest in “weapons and armaments,” a policy “based on its conviction” that they “can never be sustainable, since they destroy lives.”

Bad actors like Russia and China share no such ethical qualms. They respect only military power. A West that is reluctant to arm itself won’t deter aggressors, and the result will be a more dangerous, violent world.
6) Pieter Cleppe: Climate policy is green camouflage for the EU’s protectionism
National Review, 25 April 2023

Over the years, the European Union (EU) has been rolling out all kinds of measures meant to deal with climate change. This push has been accelerating lately, and it is becoming ever more evident how often it just amounts to raising more barriers to trade in a bid to keep foreign competition out of the EU.

The starting point for this is the EU’s de facto “climate tax.” Since 2005, the European Union’s “cap and trade” scheme has involved imposing a levy on CO2 emissions with its Emissions Trading System (EU ETS), whereby entities could then trade away their right to emit CO2. The idea is that by enabling companies to buy and sell such a right, emissions are saved where it is most efficient to do so.

One small objection here is that — as the prominent Danish economist Bjørn Lomborg has pointed out — complying with stringent CO2-reduction targets laid out in the international Paris Climate Agreement would necessitate a financial cost of $1–2 trillion every year from 2030 onwards, but only reduce temperature increases by a mere 0.027 °C. Lomborg believes a better use of financial resources would be to help victims of natural disasters. He also believes that the EU and its member states would see more return on investment by no longer constraining nuclear power, an energy source that notably combines reliability — something which “renewable” energy sources like wind and solar power lack — with minimal CO2 emissions. The EU is divided on this approach, however, even if, in the case of nuclear power, all of its members are legally bound to promote this energy source as a result of the Euratom treaty.

Instead, European governments are now broadening the range of industries that will be charged for their CO2 emissions. The European Parliament just voted to extend the “cap and trade” scheme to the building and transport sectors, which were previously exempt. Importantly, this will apply to gasoline, diesel, and heating fuels such as natural gas, which means it will directly affect everyday households.

True to form, the new policy also includes measures to compensate consumers for this cost created by the EU itself. An 87 billion euro “Social Climate Fund (SCF)” will be set up, which the same EU consumers will need to finance as taxpayers.
It remains to be seen whether inflation and continuously elevated European energy prices will lead to opposition from voters. One French left-wing politician dubbed the newly agreed measure to extend the EU carbon market as another attack “on the most precarious . . . households.” However, in Western Europe the political power of the green movement is still very strong.

In Belgium and Germany, for instance, governing greens are fighting to delay the extension of perfectly functioning nuclear-power plants, with varying degrees of success.

If all of that isn’t bad enough, the whole thing is now degrading into protectionism. With its new climate tariff on imports — dubbed the EU “Carbon Border Adjustment Mechanism” or CBAM — coming into effect in 2026, the EU aims to compensate European industry for the competitiveness it has lost thanks to the climate levy. Despite protests by the EU’s trading partners that this violates World Trade Organization (WTO) rules, the EU is simply going ahead with it.
Such policies stem from the same economic-policy illiteracy which lies at the root of Europe’s experimental energy policies. These involve phasing out domestic fossil-fuel production without establishing a reliable and cost-effective substitute. Together, the results are currently contributing to what has been described as an ongoing process of “deindustrialization” in Europe that is hurting importers and end-consumers.
And these are not the only policies doing damage. Indeed, there are plenty of examples of EU climate policies being used for protectionist purposes. The EU’s newly proposed Net Zero Industry Act, for instance, aims to ensure a 40 percent local share for key green technologies by 2030. The policy is in part a response to the Biden administration’s Inflation Reduction Act — which, with certain exceptions, reserves fiscal support for “green” investment to North American miners and manufacturers — but that doesn’t make it any less unreasonable.
According to Francisco Beirão, head of EU government affairs at a company that develops and manages solar projects, this proposal is “very protectionist” and is driven by fear of competition from the U.S. and China. Former Swedish prime minister Carl Bildt has also warned that the EU’s response risks ending up as “crude protectionism and dirigisme.” And even Bruegel, an EU policy think tank with close ties to the European Commission, has condemned the EU’s proposal as “unabashedly protectionist” given that “the aim is import substitution of specific manufacturing products, on a rather massive scale.”

Full post
7) Rapid ocean temperature rise puzzles scientists
Net Zero Watch, 26 April 2023

Dr David Whitehouse, Science editor

Scientists are puzzled by a rapid increase in the temperature of the world’s oceans. The daily surface temperature between 60°N and 60°S reached a record high on March 31st – the highest temperature in the NOAA record that started in 1981.

It occurs as we are moving from persistent La Nina into El Nino conditions which could later this year increase global ocean temperatures by more than half a degree Celsius.
Many factors have been postulated to be contribution to this temperature spurt. Sunspots are set to reach a high maximum sooner than expected this solar cycle. In 2022 the Tonga submarine volcano eruption added a huge amount of water vapour into the atmosphere. Also in 2022 the International Maritime Organisation issued a ban on pollution from ships reducing their sulphur emissions. This reduced the blanket of reflective aerosol particles reflecting sunlight back into space before it reached the oceans, thereby potentially heating it.
The temperature of the North Atlantic has been at a record high for some time surpassing 20°0C at the end of March.

This is curious because at this time of the year North Atlantic sea surface temperature are usually at their annual low. Sea surface temperatures are also high in the Pacific presaging a coming El Nino.
Because of its speed scientists are not yet linking this to the steady movements of climate change seen so far in the oceans. It might be natural variability, but whatever its explanation it is not replicated in most climate models.
Since this event comes in anticipation of a strong El Nino that if it occurs will make 2024 the warmest year on record it has been suggested that the world warmed in steps whereby an El Nino signifies the transition to a higher temperature than before. Among the first to suggest this as an effect was the GWPF and we also repeat that this is not well represented in climate models whose projections play such an important role in the climate debate.
8) Francis Menton: South Africa and the green energy wall
Manhattan Contrarian, 25 April 2023

It’s obvious to any person with the faculty of critical thinking that intermittent renewable “green” energy will never work to power a modern economy. So as various U.S. states and foreign countries press forward on their crash programs to go fully “green” with their electricity generation, the next obvious question immediately arises: who will be first to hit the green energy “wall”?
That is, which state or country will be the first to find that without enough reliable generation its electricity system no longer works? And how will that impact the population?
In previous posts I have examined the progress toward energy disaster of various wealthy jurisdictions that have embarked on this supposed transition to renewable electricity. For example, here is a December 17, 2021 post titled “Which Country Or U.S. State Will Be The First To Hit The Renewable Energy Wall?” That post focused on California and Germany. My March 15, 2023 post, “Countdown To New York’s Rendezvous With Energy Impossibility,” considered New York as another candidate for the first to hit the wall.
But let’s now look at South Africa. South Africa is one of the wealthiest countries in Sub-Saharan Africa, which is not saying much. The World Bank gives its per capita GDP as about $7000 for 2021. (For comparison, the U.S. per capita GDP is around $70,000. while wealthier European countries like Germany, the UK and France have per capita GDP in the range of about $40,000 - $50,000.).
Unlike wealthy Western countries, South Africa is far from completely developed, and has never achieved a fully-built-out electrical grid. The country has a legacy electricity infrastructure, almost entirely based on coal generation, dating from prior to the accession to power of the ANC in 1994. But South Africa needs a big increase in its electricity supply to become a fully-developed economy. Its population has grown rapidly (from about 43 million in 1994 to 60 million today). Meanwhile its electric utility, Eskom, is heavily indebted with little further ability to raise private capital. Thus the country substantially relies on Western aid to support and expand its supply of electricity. As an example of what is occurring in the realm of Western aid for electricity infrastructure, the World Bank stopped financing coal power plants in 2013 and stopped financing oil and gas extraction projects in 2017.
And thus South Africa has become a mostly-willing guinea pig for the green dreams of Western elites. According to Climate Home News from September 19, 2020, the South African government put out a so-called Integrated Resources Plan in 2019 “outlin[ing] a transition from polluting coal generation to renewable sources like solar and wind.” In September 2020, according to the same CHN piece, “the South African cabinet . . . approved a goal to reduce greenhouse gas emissions to net zero by 2050.” South African President Cyril Ramaphosa is on record on multiple occasions over the past several years as supporting a Net Zero transition for his country.
On the ground in electricity generation in South Africa, here’s what I can learn. The New York Times reports on March 14, 2023 that over the past decade plus, since the wind/solar fad took hold, the country’s coal power plants have been allowed to become “dilapidated” due to poor maintenance and disinvestment. Meanwhile, the focus going back as far as the turn of the century has moved to developing wind and solar resources to provide electricity. A December 2021 piece from the Alexandria Engineering Journal provides a comprehensive overview of the growth in renewables in South Africa. [...]
According to CNN, any individual home or business is getting hit with about 12 hours a day without power, generally coming in increments of about 4 hours at a time, and often without notice. It’s disgusting to watch what the self-important international functionaries are doing to this poor country. But at least we’re learning what the green energy “wall” looks like in practice.
Full post & comments

9) And finally: Carbon capture project in Norway temporarily halted by high costs
Reuters, 26 April 2023

OSLO, April 26 (Reuters) - A project to capture carbon emissions from a waste plant in the Norwegian capital Oslo has been paused for a year amid projections of large cost overruns, potentially dealing a blow to wider Norwegian plans to foster the fledgling technology.

"New cost calculations show that we cannot implement the original plans for the carbon capture project within the existing budget," Knut Inderhaug, head of project operator Hafslund Oslo Celsio, said in a statement.

The reasons were higher costs from suppliers due to inflation, the geopolitical instability that has lifted energy prices, and a weakened Norwegian crown, Celsio said without providing specific overrun figures.

Investment costs for the Klemetsrud waste plant, which are being subsidised by both the Oslo city council and the Norwegian government, were initially set at 5.5 billion Norwegian crowns ($518.88 million).

To date, Celsio has spent around 450 million crowns, a spokesperson told Reuters.

The company will now take a 12-month hiatus to find ways to reduce costs, which would delay the project from its initial 2026 commissioning date, it said.

Full story
see also:  Gordon Hughes: The Bottomless Pit. The Economics of Carbon Capture and Storage (pdf)

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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