In this newsletter:
1) UK government’s Environment Agency delays net zero targets
Current News, February 2, 2024
2) Another Net Zero retreat? Tories ditch ‘boiler tax’
The Sunday Times, 4 February 2024
4) Europe’s Greens are on the ropes
Politico, 1 February 2024
5) Germany’s budget chaos leaves green-energy projects in limbo
Bloomberg, 2 February 2024
6) In the Land of Net Zero, The Man in the Diesel Tank is King
The Daily Sceptic, 2 February 2024
7) Matthew Lynn: The West’s humiliating electric car climbdown has begun
The Daily Telegraph, 2 February 2024
Full details:
1) UK government’s Environment Agency delays net zero targets
Current News, February 2, 2024
The Environment Agency has updated its net zero roadmap, pushing back its net zero target date from 2030 to between 2045 and 2050.
The Environment Agency, an executive non-departmental public body, sponsored by the department for environment, food and rural affairs, has announced that its ambition to become a net zero organisation by 2030 has been pushed back due to new regulations surrounding offsetting carbon emissions.
The Environment Agency’s initial roadmap from Autumn 2019 detailed a net zero organisation on the basis of a carbon emissions reduction of 45% by 2030 and offsetting the remaining 55%.
However, the Science Based Targets Initiative (SBTi), which sets climate ambition standards for the private sector, now requires a 90% reduction in emissions with no more than 10% offset by 2050.
Therefore, the plan is no longer compliant with the standards laid out by the SBTi, which is why the organisation has updated its timeline by increasing the emissions reduction target to 90% between 2045 and 2050.
Full story
2) Another Net Zero retreat? Tories ditch ‘boiler tax’
The Sunday Times, 4 February 2024
The energy secretary is planning to scrap the so-called boiler tax in a move that will be welcomed by homeowners facing the prospect of having to spend money to replace an old appliance.
Under the government’s “clean heat” strategy, targets had been drawn up to help phase out gas boilers and deliver 600,000 eco-friendly heat pump installations a year by 2028.
The target was due to come into effect in April, when boiler manufacturers would be required to match, or substitute, 4 per cent of their boiler sales with heat pumps or face a fine of £3,000 for every installation they fell short by.
Even though the target had not come into force, manufacturers were already increasing prices on their gas boilers to counter the impact of the fines, with prices set to increase by up to £120 this year.
Claire Coutinho, the energy secretary, accused manufacturers of price gouging, which is when businesses heavily inflate the price of products that are in high demand.
She is preparing to scrap the 4 per cent target and fines after concluding that any government intervention was unlikely to prevent consumers from being hit with additional costs.
A government source said: “Boiler manufacturers have saddled families with indefensible price hikes — this is not right. We’re looking again at the policy, and expect manufacturers to do the right thing and remove their price hikes immediately.”
A formal decision has not been announced, Coutinho has held discussions with officials over several weeks on scrapping the “boiler tax”.
Coutinho has instructed officials in the Department for Energy Security and Net Zero to speak to the Competition and Markets Authority about launching an investigation into the home heating market to ensure that competition is not limited and consumers are getting a fair price.
The move is likely to infuriate environmentalists, coming only months after Rishi Sunak announced a climb down on the government’s net-zero strategy by pushing back the deadline for banning new petrol and diesel cars.
However, Coutinho believes it may be the only way to get manufacturers to drop their prices again, and that consumers should be prioritised over environmental targets. Some 23 million households were still using a gas boiler last year.
Sunak’s decision to slow down the green transition has won applause from right-wing Tories but sparked criticism from moderates, including the former minister Chris Skidmore, who quit as an MP last month.
A source pointed out that in a recent letter, the Energy and Utilities Alliance (EUA), an industry association representing boiler manufacturers and other gas appliance companies, had confirmed that the companies were prepared to back down if the target were dropped.
The energy secretary is also increasingly concerned that opposition to the boiler tax could undermine confidence in heat pump technology and lead to fewer consumers buying them.
Claire Coutinho has accused manufacturers of unreasonable price rises and is said to believe that consumers should be prioritised over environmental targets
Green policies have also plagued Germany’s government. Olaf Scholz’s coalition government tried to in effect ban all new gas and oil boiler installations as part of its drive to reach carbon neutrality by 2045, but the political and public opposition resulted in the plans being dramatically altered.
The UK government has been chastened by Germany’s experience, with sources revealing that Sunak had already contemplated scrapping the boiler tax back in September, when he announced his big climbdown on net zero.
Full story
see also: Rishi Sunak faces ‘boiler tax’ rebellion.Tory backbenchers mobilise against plans to penalise boiler makers that do not meet heat pump installation targets
3) Labour is making its "slowest U-Turn" on £28bn Net Zero spending
Politics Home, 3 February 2024
Labour insiders say the party has made a rod for its own back over the £28bn green spending pledge as a long internal debate over whether Keir Starmer should jettison the headline figure rumbles on.
On Thursday, hundreds of business representatives gathered in London's Oval cricket ground for an audience with Starmer and Shadow Chancellor Rachel Reeves. It was the latest in a series of events where Labour's leading duo have met with some of the country's most influential financial big-wigs. For Starmer and Reeves – widely expected to become the next prime minister and chancellor – it was another opportunity to hammer home their message that Labour plans to be a pro-business government.
But the conference was overshadowed by growing uncertainty over one of Labour's integral economic policies. Was the plan to spend £28bn a year on green investment, first announced by Reeves at the 2021 Labour Party conference, still the plan? Or had relentless Tory attacks on the pledge, which had already been watered down to extend across a parliament, driven the safety-first Labour leadership to scrap the headline figure?
In an interview with Sky News on Thursday, Reeves did little to quell the growing speculation, dodging ten direct questions by Beth Rigby about whether the £28bn figure had been binned. Instead, the shadow chancellor repeatedly stressed the importance of Labour's fiscal rules when it comes to generating policy.
PoliticsHome understands that the Labour leadership has decided to ditch attaching the £28bn figure to their green investment pledge as it's become an easy target for Conservative strategists devising attack lines ahead of the next general election, which must be called this year.
"It’s pretty obvious it was a mistake to put a number on the policy," said a senior Labour insider.
Full story
see also: “Countries around Europe are beginning to water down and abandon Net Zero policies. I expect the cost of energy and costs of Net Zero to be one of the key election issues. I wouldn't be surprised if that Labour's Net Zero U-turn isn't the last U-turn....”
4) Europe’s Greens are on the ropes
Politico, 1 February 2024
BRUSSELS — The green wave is over.
The parties that roared to their best-ever results in 2019’s EU election on the back of mass climate protests led by Greta Thunberg are now facing a farmer-fueled backlash that is endangering their prized Green Deal.
Europe is rocking with farmers demanding exemptions from environmental rules. Nationalist parties are fanning the flames. And far-right parties in places like Germany and France are surging.
The Greens now face a stark choice as they strategize for their next big electoral test in the June EU election: compromise to save the best of the Green Deal or stick to their ideals and risk their calls for a greener agenda being sidelined.
"I'm ready to compromise — but then knowing that you need to compromise to get something," said Bas Eickhout, a Dutch European Parliament member expected to be chosen as a co-leader of the Greens’ EU election campaign during a party congress in Lyon this weekend.
The prospects of pulling off another green wave look slim, if not impossible.
In the upcoming EU election, the Greens — who vaulted to become the Parliament’s fourth-largest group in the 2019 election — are poised to lose about a third of their 72 seats, according to POLITICO’s Poll of Polls. Some of their most experienced legislators who shaped the faction’s European policies in recent years are also departing.
It gets worse.
EU environment chief Virginijus Sinkevičius — the only commissioner nominated by a green party — will not have a second stint in the role. Meanwhile, his erstwhile boss — and long-term EU climate czar — Frans Timmermans has long since returned to Dutch politics. Talks to coax Italy’s 5Star Movement to join — which could add to the Greens’ numerical strength in the next Parliament — have also hit a dead end.
The ramifications are potentially damning: The Greens could be pushed to the sidelines of climate policy decision-making in the next Parliament, have little sway over Europe’s legislative agenda in the next European Commission and be forced to watch as a more right-leaning EU assembly slows down or even repeals large parts of the Green Deal.
"The risk is real," said `Belgian MEP Philippe Lamberts, who is a co-leader of the Greens’ faction in the Parliament.
“Everyone is green as long as it’s free of charge. Once it starts costing someone a penny then they all scatter,” he lamented.
Full story
5) Germany’s budget chaos leaves green-energy projects in limbo
Bloomberg, 2 February 2024
Germany’s climate and transformation fund faces a shortfall of as much as €10 billion ($10.8 billion) next year, according to people familiar with the matter, casting doubt on the nation’s goal for curbing greenhouse gas emissions.
The gap in the off-budget fund threatens key solar and hydrogen projects, the people said, asking not to be identified as the information is private.
“It is currently not possible to provide conclusive information on this, as it depends on various parameters and estimates that need to be updated,” according to Germany’s finance ministry, commenting on the size of the funding gap.
Chancellor Olaf Scholz’s coalition was forced to overhaul its finances after a top court last year ruled that it was unconstitutional to transfer more than €60 billion earmarked to tackle the Covid-19 pandemic into the climate fund. While the 2024 budget has finally passed, that only came after the government readopted a debt brake, raising concerns about the funding available to achieve Germany’s target of slashing carbon emissions by 65% by 2030.
“The core problem remains that Germany should actually be investing massively this decade to accelerate the climate transformation, secure cheaper energy and transform our industry from a world based on cheap Russian gas,” said Jens Burchardt, a Berlin-based partner with Boston Consulting Group and the founder of the firm’s Center for Climate and Sustainability. “However, there currently seems to be a lack of political consensus in favor of this.”
Full story
6) In the Land of Net Zero, The Man in the Diesel Tank is King
The Daily Sceptic, 2 February 2024
By Guy de la Bédoyère
Gwythian Prins is quite right to express his concerns about the impact of Net Zero on the U.K.’s national security in a piece published the other day on this site, ‘Net Zero Threatens National Security‘.
I’ve been racking my brains to think of a time in human history when a kingdom or state consciously chose to retro-equip its army with inferior technology or compromise its capability by seeking to introduce unreliable equipment. And I can’t think of one – what can I think of is all those who lost because they didn’t keep up.
Back in the middle of the 16th century BC, northern ancient Egypt was controlled by a group called the ‘shepherd kings’ or Hyksos. They’d invaded from what is now Syria and pushed back native rulers, establishing their own regime. They’d achieved this with one very simple tactic: they had chariots.
Now, the Hyksos chariots were a bit cumbersome and seem to have had four warriors in them. But when the Egyptians didn’t have chariots, the Hyksos behemoths were cutting edge.
When an Egyptian leader called Ahmose materialised on a cometh-the-moment, cometh-the-man basis, he didn’t try to push the Hyksos out with slower and more cumbersome chariots. Indeed, the Egyptians didn’t have any chariots.
So they started making chariots. And what’s more, they made their chariots smaller, lighter and faster so that they could fight a Bronze Age Blitzkrieg war. Ahmose led these vehicles into battle and, just like Heinz Guderian’s Blitzkrieg war of 1940, he pulverised the Hyksos whose chariots had become obsolete in an instant.
The blistering Ahmose established the 18th Dynasty, reunified Egypt and ushered in its greatest line of kings who presided over an unprecedented era of wealth, power, and – most important of all – national security.
One of the last of the kings of that dynasty was Tutankhamun in the late 14th century BC, whose tomb was famously found almost intact in 1922. On his body was an iron dagger, made of iron from a meteorite. At this time this spectacularly hard metal, which cut through bronze like a wire through cheese, was beyond the wit of man to smelt. Only a king could own one.
Within a few centuries the secret of the high temperatures needed had been discovered and humanity, for good or ill, entered the Iron Age. No-one went to war with a Bronze Age sword after that unless he wanted to lose or be conquered. The Roman Empire was an Iron Age state.
When the Romans went to war against the Carthaginians in the First Punic War (264-241 BC) they were not a naval power, even though the Carthaginians were. The Romans used a wrecked Carthaginian ship as a template and built their own, adding improvements in the form of the corvus boarding ramp. Yes, it was trial and error, but they won their first engagement with the Carthaginians in the Battle of Mylae in 260 BC because their ships were better.
It was a long and hard struggle with catastrophes along the way, but Rome won that war, and the next two wars against Carthage and ended up as the most powerful naval force in the Mediterranean.
There are so many other stories like this that I could go on for hours. The principle is always the same and the dynamic is the process of technological development, which at its fastest is and always has been driven by warfare. The unavoidable fact that it is impossible to stand still or diminish the effectiveness of a nation’s armed forces without making that nation a sitting duck for a more ambitious nation’s greed.
Yes, of course arms reduction treaties can and do exist, and they’ve been a mechanism for trying to inhibit the recklessness of unrestrained militarisation by encouraging mutual compliance in stepping back. They can and do work – up to a point. But there has never been a situation where everyone is prepared to play ball at the same time.
In the world of realpolitik there is simply no conceivable possibility of any serious nation unilaterally trying to cripple its capacity either to manufacture the raw materials or the hardware with which to defend itself, and expecting to survive. Extraordinarily though, that is quite literally what seems to be happening in Britain today.
There is no future for Net Zero in warfare, the armed forces or manufacturing. We cannot defend ourselves with electric tanks made of papier-maché steel, to use them as a metaphor for any other aspect of military technology.
We can’t have a situation in which during a war our factories are at the mercy of windpower generated by turbines in the middle of a sea beyond us to defend in a meaningful way or can’t function at full bore simply because it’s a cloudy day. Nor can we depend on an energy source that isn’t up to the job, however much of it we have, just as in the same way the Bronze Age fizzled out in the face of iron.
It might be better for all of us if we were all susceptible to such limiting factors, but the world doesn’t work like that. The ‘enemy’, whomever that turns out to be and whenever that is, will kit itself out with whatever will make it most likely that it wins and seizes what it wants, whether that is territory or resources or just power. And if that means the enemy goes to war with faster, more reliable and more powerful equipment then that’s exactly what its troops will have to hand.
Look at how the Germans spent years preparing themselves for 1939. That they ended up losing isn’t the point. In 1939-40 they were streets ahead of other European countries, which is why their advance was terrifyingly fast. They lost in 1945 because by then the Allies (which means the U.S.) had poured unlimited resources into record-breaking technological development and manufacturing capability on an unprecedented scale. The Germans probably had some of the best equipment, but they couldn’t produce it in sufficient quantities, despite resorting to synthetic oil. And that’s just as important as the equipment itself. The Tiger tank might have been as good as ten Shermans, but the Allies had eleven Shermans.
It may be an unpalatable aspect of human society, but if there’s anything that history tells you, it is what people are like. And in a world of nation states, you must be in a position to defend yourself. I hope beyond anything else there isn’t going to be a war, but one of the best ways of making sure there is one is to make yourself look like a pushover.
Cyber assaults are all too likely in the future. That’s a whole other story too, but it won’t change the fact that if we ever need to pull ourselves together and fight back then we’ll have to kiss Net Zero goodbye on the spot. The only question now is whether it’s already too late.
Here’s hoping we don’t have to find out the hard way.
7) Matthew Lynn: The West’s humiliating electric car climbdown has begun
The Daily Telegraph, 2 February 2024
Ambitious plans for an electrification-led industrial revolution are in full-scale retreat
France’s President Macron had a plan to make millions of electric vehicles a year. Chancellor Scholz planned to put 15 million on Germany’s roads by 2030. President Biden trumped the lot with a $174bn (£138bn) plan to make the US the world leader. Even Boris Johnson – remember him – had a £1bn plan to beef up our charging network.
Rewind only a couple of years, and almost every president or prime minister was making electric vehicles the cornerstone of an industrial strategy. And yet, this week we have learned that Renault is abandoning plans to separately list its electric vehicle (EV) and software business, while Volvo is winding down its Polestar electric sports car subsidiary.
In reality, amid an onslaught of Chinese competition, and falling sales, the West’s electric vehicle dream is quickly unravelling – and we need to relearn all the lessons in why grand, state-led industrial strategies never work.
It was not so long ago that countries were competing furiously to launch battery-powered visions of the future. With Tesla riding the wave of green demand to become the world’s largest car manufacturer, measured by market value if not volume, and with ambitious net zero targets to meet, they all wanted to make sure they could compete in electric vehicles.
We would reduce carbon emissions, create many jobs, and shore up our industrial base. Sure, governments would have to commit a few billions – or tens of billions – to make it happen. But it would pay for itself many times over.
And yet, right now, plans for an EV-led industrial revolution are in full-scale retreat.
Renault, despite the programme of state support, has this week scrapped the separate listing of its EV unit Ampere, which has been scheduled for the first half of the year. It was a “pragmatic decision” according to the company’s chief executive Luca de Meo, arguing that falling sales for EVs across Europe meant the market was more challenging than forecast.
Likewise, Volvo announced that it would stop funding its EV unit, Polestar, and might even offload its 48pc stake on other shareholders, including China’s Geely. Last September, Volkswagen said it was cutting production of two of its flagship EV models, while in November, Ford said it was scaling back its battery plant in Michigan.
It looks like all those “well-paid green jobs” are going to take a little longer to arrive than anyone anticipated. As for the payback on huge sums various governments have “invested” in the industry, it looks like the returns on that money will take a while to come through as well.
There is nothing wrong with EVs themselves. They are often great as run-arounds for dense urban environments, and as long as the raw materials are sourced correctly, and the chargers are not powered by coal-burning generators, they are probably a little better for the environment than the petrol version.
If people want them, then that’s great. The trouble with the industry right now is that demand is falling because the vehicles cost far more than anyone expected, and what market there is will be captured by Chinese manufacturers such as BYD that can make vehicles far more cheaply than anyone in the West can. The result? A lot of government money will be wasted.
There is a lesson in the humiliating climbdown. State-led industrial strategies never work. Indeed, the failure of the drive into EV is a textbook example of everything that goes wrong.
First, it backs the wrong industries. No one really has any idea what products people might want in five or ten years time, which is why it is best to leave it to private companies and their investors to make their own bets, reap the rewards when they get it right, and bear the losses when they don’t.
Politicians and bureaucrats are no better at making those decisions, as usually a lot worse. Don’t believe me? Just ask consumers. Hertz in the US is disposing of the 20,000 EVs it bought with great fanfare in recent years, and is replacing them with petrol models, due to lack of demand. Over the past year, figures from the Society for Motor Manufacturers and Traders revealed a steep fall in EV interest from private buyers.
Next, the state over-invests. Even if there is a small market for EVs, there certainly wasn’t space for huge new industries in France, Germany, the US, or in a dozen smaller countries. The car industry was awash with over-capacity already, and that was before the Government started throwing billions at electric vehicle plants. All that happens is that prices collapse, and no one makes any money.
Finally, it distorts the market with subsidies. Governments start out spending a few billion on new EV factories, then they have to start subsidising the EVs so that people actually buy them, then they have to impose tariffs and quotas to stop imports from countries where other government have invested too much.
Finally, they have to pay out even more to keep alive the factories making a product that no one wants. It’s a vicious cycle, and once it starts it is very hard to stop.
The one relief for the UK is that our political and administrative class was too inept to pour even more money in, despite the best efforts of the former PM’s Theresa May and Boris Johnson to splurge a few tens of billions into the “race for EVs” and the endless warnings that we risked “getting left behind’”. We will be spared the worst of the pain ahead.
In reality, the volte-face on the electrification of the auto industry is underway. Major manufacturers have started to pull back, but all the grand projects for battery factories, for shiny new EV plants, and for charging infrastructure, will inevitably be scrapped very soon.
Billions of taxpayer’s money will have been wasted. We should draw the lesson from that, as bitter as it might prove. The Government never knows what the industries of the future will be – and should leave it to entrepreneurs and customers to work that out.
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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