The headlines:
EU climate plan is shelved following farmer protests across EuropeFox News, 25 March 2024
Climate fatigue: EU hits roadblocks in reaching green milestone as elections loom
Financial Times, 28 March 2024
Ross Clark: The EU’s Net Zero retreat is gathering steam
The Daily Telegraph, 27 March 2024
Neil Winton: EU may water down harsh 2035 EV mandate and reprieve hybrids
Forbes, 27 March 2024
Net Zero Britain: Isle of Wight families struggle with soaring heating costs in ‘eco-friendly’ homes
On the Wight, 27 March 2024
How China got its claws into the West’s net zero transition
The Daily Telegraph, 27 March 2024
Joel Kotkin: Joe Biden’s climate plan is a threat to democracy
UnHerd, 25 March 2024
Matthew Lynn: The smart meters scandal is about to explode in our faces
The Daily Telegraph, 27 March 2024
Why ESG Investing Might Never Recover
The Wall Street Journal, 24 March 2024
Tilak Doshi: ESG by any other name would smell just as bad
Forbes, 27 March 2024
And finally: China is missing key climate targets
Institute for Energy Research, 19 March 2024
The detail:
Fox News, 25 March 2024
A major European Union plan to fight climate change and better protect nature in the 27-nation bloc has been indefinitely postponed Monday, underscoring how farmers' protests sweeping the continent influence politics ahead of the June EU parliamentary elections.
The member states were supposed to give final approval to the bill on Monday following months of proceedings through the EU’s institutional maze. But what was supposed to be a mere rubber stamp has now been possibly shelved forever.
‘(The plan) is in a very difficult position at the moment and with the upcoming European elections, it won’t be easy to get out of this position,’ said Dutch Climate Minister Rob Jetten. The Nature Restoration plan is a key part of the EU’s European Green Deal that seeks to establish the world’s most ambitious climate and biodiversity targets and make the bloc the global point of reference on all climate issues.
The bill aims for Europe to become the first climate-neutral continent by 2050, demanding short-term changes and sacrifices from all parts of society to reap the benefits in a generation.
‘If you want to reach climate neutrality, you also have to look in the broader perspective of protecting biodiversity, strengthening the nature in Europe,’ Jetten said, stressing that such initiatives were necessary.
Even if the plan had a rough ride through the EU’s complicated approval process, the watered-down version was supposed to sail through the final vote
Under the complicated voting rules, whereby a qualified majority representing 15 of the 27 member states and 65 % of the population was needed, it was long thought that threshold was safe, until Monday.
‘It seems that we don't have a qualified majority anymore because ... Hungary has changed its vote. We have to understand why they do that,’ said Alain Maron, a Belgian regional climate minister, who chaired the meeting of the EU environment ministers.
The change of heart follows weeks of relentless protests from farmers across the bloc who have argued that reams of environmental laws governing the way they work are driving them toward bankruptcy at a time when food security and self-sufficiency are becoming essential again as the Russian war on Ukraine war rages on.
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Climate fatigue: EU hits roadblocks in reaching green milestone as elections loom
Financial Times, 28 March 2024
Progress in the fastest-warming continent is thwarted by a constituency fatigued by inaction and trade tensions
The EU has the most advanced green legislation in the world. But the bloc is not on track to meet its climate targets, even as it approaches deadlines for delivering detailed road maps on how it will achieve them.
EU climate commissioner Wopke Hoekstra said this week that EU countries would cut emissions by 51 per cent by 2030 compared with 1990 levels — falling short of a 55 per cent goal. This follows more than three decades of hard-won progress in decreasing greenhouse gas emissions from their 1990 peak.
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Ross Clark: The EU’s Net Zero retreat is gathering steam
The Daily Telegraph, 27 March 2024
Across Europe, 72 gigawatts-worth of gas plants are being built, as nations realise you cannot power a national grid on solar and wind alone
Building new gas power plants will, of course, ‘only make the transition to renewables-based power unnecessarily costly’. How do I know? Because I heard it from a bunch of climate activists calling themselves Beyond Fossil Fuels. What’s more, building new gas plants runs contrary to the ‘emerging consensus’ that Europe must phase out all fossil fuel-generation of power by 2035.
I’m used to activists making sweeping assertions and talking in generalities rather than addressing the boring old details like how we keep the lights on when there is little in the way of wind and solar energy on offer, but this really does take the biscuit. Only a ‘consensus’ of climate activists with their heads in the clouds – plus Ed Miliband – thinks we could save consumers money by closing down all our gas power plants in the near future. Judge European governments by their actions rather than their words and the clear consensus is that we are very much going to need gas power in the future. As Beyond Fossil Fuels itself reveals, Britain is not the only country that is building new gas plants. Across Europe, 72 gigawatts-worth of them are being planned. This may well be contrary to the targets governments have set themselves to decarbonise their power sectors, but when forced to make a choice between virtue-signalling and keeping the lights on they are invariably choosing the latter.
It ought to be obvious that you cannot construct a national grid on solar and wind power alone. Renewables are great on a sunny, windy day like today when wind and solar farms between them are generating 21 gigawatts of power. It is rather less good on calm winter evenings when they can struggle to generate 1 gigawatt. What makes it possible to incorporate so much wind and solar power in our energy mix is gas power plants, which can be turned up or down at short notice to balance variable and unpredictable renewable power.
Take gas away and you have a serious problem. We could store energy in lithium batteries or pumped storage reservoirs – but at a very high cost. We could theoretically use surplus power to generate hydrogen via electrolysis of water, store the hydrogen in underground caverns and burn it to generate power on windless and sunless days – except that the technology doesn’t yet exist on a commercial scale and when it does it is likely to be as expensive, if not more so, than lithium batteries. It certainly won’t be saving consumers money.
Rather than seeing gas a great evil, green lobbyists should see it for what it is: part of a system which has allowed us hugely to reduce carbon emissions from power generation over the past three decades. It has enabled us to all-but banish coal power plants – a form of energy which, gigawatt for gigawatt, produces around twice as many carbon emissions. And it has enabled the rollout of wind and solar by providing reliable back-up. Moreover, it may be possible in future to fit gas plants with carbon capture technology – although that won’t be cheap, either.
Green lobbyists are making themselves an irrelevance by turning against all fossil fuels in all circumstances. Governments may have nodded along with their demands up until now, by setting net zero targets. But clearly, when ideology collides with reality, governments are not going to sacrifice the well-being of their citizens. The move to build new gas plants is yet one more sign of Europe’s retreat from unrealistic net zero targets.
Neil Winton: EU may water down harsh 2035 EV mandate and reprieve hybrids
Forbes, 27 March 2024
The European Union and Britain plan to ban the sale of new combustion vehicles in favor of electric ones, but the move is stumbling and some experts believe the only sensible solution is to water down the edict by giving free rein to hybrids.
If European governments don’t do this, the auto industry, currently losing money building the wrong kind of electric cars, will be swamped by Chinese-made ones. Any attempt by the EU to put a damper on Chinese EV sales with tariffs though is likely to trigger German opposition. The likes of VW, Mercedes and BMW make big profits in China.
Europeans have banned the sale of new ICE vehicles by 2035 using an ever-tightening insistence that its citizens buy electric cars. The trouble is available EVs are not ready for prime time yet, both in terms of technology and price. But mandated sales of EVs are projected to rise almost fivefold from this year’s around 2 million by 2030. In Britain, automakers’ EV sales must account for 22% of overall sales this year, rising to 25% in 2025, 33% in 2026, 38% in 2027, 52% in 2028, 66% in 2029, 80% in 2030 and 100% in 2035. In the EU a roughly similar grind down for ICE vehicles is defined by fleet carbon dioxide emissions. Big penalties await manufacturers who fail to meet targets.
This rigid scenario in favor of EVs is being questioned. In a report published Tuesday, HSBC Global Research said EV adoption is slowing and the ICE ban by 2035 is likely to be reviewed.
‘Some experts felt that the targets for 2025 won’t be at risk, but the ICE ban in 2035 in the EU could be a casualty of the upcoming review in 2026,’ HSBC Research said in a report on its conference on the future of transport.
Europe’s carmakers are also lobbying for change, led by BMW, Volkswagen and Renault. They are worried about the EU’s 25% CO2 emissions tightening next year compared with 2021. The EU has promised a review of the whole timetable for 2035 next year.
And a recent report from Boston Consulting Group said most automakers lose about $6,000 on each EV they sell for $50,000 and even though it referred to the U.S. market, it is likely to be of major concern in Europe too.
After surging from the early 2020’s, EV sales growth has suddenly slowed, with the likes of GM and Ford in the U.S. and Mercedes and Volkswagen in Europe pulling back over-ambitious plans. Early sales were driven by wealthy early adopters and business purchasers.
The next round of sales needs increased momentum. Unfortunately, the price of EVs is much too high for a mass market to develop.
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Net Zero Britain: Isle of Wight families struggle with soaring heating costs in ‘eco-friendly’ homes
On the Wight, 27 March 2024
‘Angry and frustrated’ parents say their young children are going cold as heating costs on an Isle of Wight housing estate skyrocket to ‘unaffordable’ rates.
Residents of Bluebell Meadows and St George’s Gate claim they have been ‘lied to’ and feel ‘let down’, having been promised cheap bills and houses which were economical to run.
Despite the estate using a unique biomass heating system — a centralised system which burns wood chippings to provide heat and hot water to homes — those living there say they have faced soaring costs in recent months.
Those responsible for the estate — Barratt David Wilson Homes, the Isle of Wight Council and Sovereign Network Group, which together form the Pan Management Company — say the surge in prices ‘reflect the handover of the biomass centre’ to the estate management company.
In a joint statement, they said they were looking at the fuel supply arrangements to try to help reduce costs.
Residents claim there has been a lack of ‘proper answers’ and a meeting for residents arranged earlier this year was cancelled.
Mum-of-one, Amy, 28, is among those who have been calling for accountability.
In December, she said she was ‘mortified’ to see her bills more than double, from £38 to £100 a month.
‘There is only so much wrapping up in clothes and blankets you can do’
Amy said residents were ‘trapped’ and could not switch energy providers.
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How China got its claws into the West’s net zero transition
The Daily Telegraph, 27 March 2024
Beijing is tightening its grip on a crucial component of the green economy
Within financial markets, ‘Doctor Copper’ refers to the idea that the price of the metal can be used as a barometer for the health of the world economy.
So ingrained is the substance in our everyday lives – used in everything from construction and electronics to power transmission and more – that its price is a good bellwether for how well things are going.
To look at copper over recent months, you’d think the world is on the up. The price of the metal has risen by nearly a tenth over the last six months.
But what this rally may in fact be pointing to is something quite different: China tightening its grip on supplies.
Inventories usually grow around Lunar New Year at the end of January as Chinese smelters keep working through the holiday period but many factories reduce their operations.
However, the seasonal build-up has been the most pronounced since 2020. Stockpiles jumped from 30,905 metric tons at the end of December to 285,090 tons by the end of February.
Imports also rose over the same period despite the large build ups in warehouses.
The trend has caught the eye of market observers because of the importance of copper to the green economy.
Electric vehicles, wires that carry electricity and solar panels all require copper and lots of it. In many instances, there is no substitute.
Copper supplies are already tight after a string of mines reduced their production forecasts late last year. Many mines around the world are nearing the end of their lifespan and the quality of the ore is in decline, meaning more is needed to achieve the same standard.
The closure of a copper mine in Panama and a lack of new projects in the pipeline suggest supplies are set to shrink, according to Ewa Manthey from Dutch bank ING. Goldman Sachs expects demand to outstrip supply this year.
China is already the world’s largest producer and consumer of the metal. Its strategic stockpiles help it to influence prices on global markets and protect against shortages for its domestic industry.
However, the country’s tightened grip on copper poses a potential threat to the West’s energy transition.
‘China holds most of the cards for the copper needed for the green transition,’ says Kieran Tompkins, a commodities economist at Capital Economics.
The backdrop is heightening tensions between Beijing and the West, with the UK and US this week accusing China of a coordinated hacking campaign meant to undermine democracy.
A row is currently raging in Westminster over how tough Britain’s response should be. Those who argue for cautious, targeted sanctions are fearful of the potential economic fallout of angering Beijing.
In this context, the scale of China’s stockpiles – and its motivations – are significant.
Full story
Joel Kotkin: Joe Biden’s climate plan is a threat to democracy
UnHerd, 25 March 2024
In the future, people could find themselves in violation of the law if, for example, their cars report too much mileage, while their energy use will be both closely monitored and rationed. Such policies would require a permanent mobilisation of executive power, making democracy necessary roadkill on the road to an imagined green utopia.
For a policy that requires sacrifice, at least for the masses, the climate agenda lacks one critical element: public support. Even in ultra-green Europe, there is a growing resistance among politicians and the public towards extreme climate policies. In America, too, climate scepticism is growing. Given that Joe Biden rolled out new pollution standards for non-electric cars last week, this public shift should provide discomfort among the Democratic establishment.
While most Americans concede that climate change is real, it’s not much of a priority: only 2% rate it as their major concern, according to Gallup, well below the figures for immigration, inflation, government competence and reducing poverty. These sentiments are even more pronounced among working-class voters: even as the Biden administration expends hundreds of billions in taxpayer funds to ‘green projects’, the average American doesn’t want to spend more than $2.50 a week to combat climate change.
Now, instead of mobilising the masses, the climate lobby increasingly rejects the idea of popular consent. In the EU, the US and individual states such as California, vague legislative goals are left to ‘experts’ for implementation. Aware they are unlikely to get public backing for such things as electric car mandates, consistently higher energy prices or the removal of gas stoves, the climate lobby seeks to employ the bureaucracy — in concert with academics and nonprofits — to impose policies which lack public support.
Some climate activists see the Covid-19 lockdowns as a ‘dry run’ for future action. Officials at the United Nations endorse this concept, embracing the pandemic as a ‘fire drill’ for what must happen to meet climate goals.
But perhaps the more relevant model may be that of the ‘corporate state’, most associated with the fascist regime of Benito Mussolini. Some might see Donald Trump as the poor man’s Il Duce, but the powerful alliance of the executive branch with a handful of ultra-rich, ultra-powerful companies is more reminiscent of the corporate state.
In 2020, Biden raised record sums from the corporate elite, notably the tech oligarchs and their Wall Street allies. This year will likely bring unprecedented financial support from these same players to the President’s campaign. This interplay between big corporate interests and activist bureaucracies now constitutes what Bjørn Lomborg has labelled the ‘climate-industrial complex’.
Once re-elected, Biden (or his advisers) may try to push this agenda without much concern for public opinion. He could implement what Eric Heymann, a senior executive at Deutsche Bank, calls ‘a certain degree of eco-dictatorship’. This reflects a change in elite opinion towards what two German observers describe as a ‘political ideology that questions the foundations of pluralism and democracy’, and which instead favours a post-national ‘politics of identity and minority entitlements’ and a global green regime.
To achieve their goal, climate activists can employ technological weapons not available to Mussolini in his failed efforts to get Italians in line with his appetite for war. Already some websites censor or discredit even the most credentialed and moderate climate sceptics, who question the climate change narrative much as they did during the pandemic. Climate activists, funded by billionaires, are even pressuring television stations to censor ads criticising Biden’s electric car mandate.
In the future, people could find themselves in violation of the law if, for example, their cars report too much mileage, while their energy use will be both closely monitored and rationed. Such policies would require a permanent mobilisation of executive power, making democracy necessary roadkill on the road to an imagined green utopia.
Matthew Lynn: The smart meters scandal is about to explode in our faces
The Daily Telegraph, 27 March 2024
It would not be much of a surprise if Ed Miliband, as energy minister, introduces some form of energy rationing
The technology doesn’t work as planned. The numbers don’t add up. And ordinary people may have their lives ruined by a system that barely even recognises they exist. If ITV is looking for a follow-up to it’s hit drama about the Post Office scandal its producers and script writers do not have to look very far. It is playing out in real-time right now. In reality, the smart meter fiasco risks turning into the next Horizon scandal.
Like so many government-backed technologies, it was sold as a way of making the system more efficient, with the added benefit of helping us hit our net zero targets. Smart meters installed in our homes would give us more accurate readings of how much electricity we were using, while the little monitors in the corner might gently nudge us towards consuming a little less (which would be helpful, given that the Government has woefully failed to make sure we have enough power to keep the lights switched on).
What’s not to like about that?
Well, quite a lot as it turns out. According to the latest figures from the Department for Energy, Security and Net Zero, of the 30 million meters installed in British homes, almost four million are not working properly. The estimate was 2.7 million in June last year, but has now been revised dramatically upwards.
The results of that can often be painful. Households may well have been overcharged for the energy use, and at a time when many are already struggling to pay their energy bills. Some households might now have to go back to manual readings if they want to question their bill, but the technology can make that difficult, too.
There is a depressingly familiar pattern starting to emerge. The computer system doesn’t work as it should. There is plenty of buck passing, with people initially denying there is anything to worry about, then blaming someone else for the problems, and finally denying that anything can ever be done to fix the problem. It seems that no one has learned anything from the Post Office scandal. Instead, ministers will grimly press ahead with a technology that clearly doesn’t work, and if people are forced to pay an inflated sum, then it will simply be brushed under the carpet.
Even more terrifyingly, the meters may eventually be used for ‘time-of-day’ charging. It would not be much of a surprise if Ed Miliband, as energy minister in a government led by Sir Keir Starmer, introduces some form of energy rationing. After all, there seems to be little hope of ever hitting our net zero targets without it. Your smart meter might then decide when you can and can’t boil the kettle, regardless of whether it works properly – and if it doesn’t work well enough, that’s tough.
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Why ESG Investing Might Never Recover
The Wall Street Journal, 24 March 2024
The ESG brand probably has its best days behind it.
Following a three-year craze for investment products focused on environmental, social and corporate-governance concerns, the percentage of newly created funds in the U.S. and Europe with ESG in their name has fallen from a peak of 8.3% to just 3.3%, according to an analysis of quarterly data by
Morningstar Direct.
Likewise, online searches for ‘ESG investing’ have plummeted back to mid-2019 levels, according to Google Trends. Mentions of the term in company analyst calls have dropped 59% from their quarterly peak in 2022, FactSet data suggest.
One explanation is the collapse of the clean-energy stocks most readily associated with the ESG movement. Flagging growth in electric-vehicle sales has hit sector behemoth Tesla. The S&P Global Clean Energy index, which lists solar-panel maker First Solar and Danish wind-turbine giant Vestas among its top constituents, has lost 31% since the start of 2023 as renewable-energy projects have been shelved. That compares with returns of 27% for global stocks.
The rise of ESG investing between 2019 and 2022 coincided with a surge in clean-tech valuations, and now the reverse is happening. Investors have pulled $2.2 billion from funds dedicated to decarbonization since the start of the year, according to EPFR, and the outflows are getting larger every week.
There is a risk that ESG was an investment fad rather than a financial revolution extending across all industries.
The term was the product of an uneasy three-way alliance. On one side were ethically driven investors, who are particularly widespread in Scandinavia and include pension funds, universities and religious organizations united in wanting to shun contentious firms. On another were institutions such as the United Nations that aimed to channel money to industries that benefit society. Finally, there were investors who wanted to profit from the green revolution.
Asset managers jumped at the chance to cater to all three simultaneously. ESG allowed them to differentiate their products, revitalize the case for active management and, at a time of declining fees, charge more for stock screens that often lead to only small changes in allocations. Among U.S. equity funds, ESG strategies have an asset-weighted average fee of 0.52%, compared with 0.33% overall, Morningstar Direct data shows.
But the confusion of motivations made for contradictions and a lot of doublespeak. Neither ethical objectives nor bets on decarbonization square logically with fund managers’ claims that ESG is a broad path to higher, safer returns.
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Tilak Doshi: ESG by any other name would smell just as bad
Forbes, 27 March 2024
The New York Post led an article last week with the headline ‘Texas yanks $8.5B from Larry Fink’s BlackRockBLK +0.5% in ‘massive blow against the scam of ESG’’. On the same day, Executive Director of Consumers Research Will Hild tweeted that BlackRock ‘was simultaneously trying to destroy the domestic oil and gas industry while managing funds that depended on royalties derived from that very same industry. A more flagrant violation of fiduciary duty is difficult to imagine.’
Mr. Fink is CEO of BlackRock, the world’s largest asset manager with over $10 trillion under management. He is the man most responsible for making ‘environmental, social and governance’ criteria the ruling ideology astride the investment world. A ‘flagrant violation of fiduciary duty’ is a serious charge on any financial advisor. That is why Mr. Fink said last June that he didn’t want to use the politicized term ‘ESG’ anymore. A recent Bloomberg article notes that the term is fast becoming a ‘loathed monicker.’
For Larry Fink, who forecast in late 2018 at a New York TimesNYT +0.4% conference that ‘the demand for ESG is going to transform all investing…’, it is not ESG these days, it is ‘transition investing‘. Avoiding the loathed monicker, BlackRock is all about investing in ‘infrastructure’ that ‘will help speed the transition from fossil fuels.’
ESG investments have grown rapidly over the past decade, and the amount of professionally managed portfolios that have integrated key elements of ESG or ‘sustainable’ criteria exceeded $17.5 trillion globally in 2020 by some estimates. According to leading accounting firm PWCPWC +0.6%, global assets under management in 2021 totaled $127.5 trillion, of which $18.4 trillion or just under 15% were described as ESG funds. By 2026, the upbeat assessment by PWC expects ESG funds to constitute 21.5% of global assets under management. In 2021, Bloomberg came out with even more bullish forecasts, suggesting that global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management. Commitments from large institutional investors and regulatory pressures were expected to drive this strong growth in ‘sustainable’ investing
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And finally: China is missing key climate targets
Institute for Energy Research, 19 March 2024
China is falling short on key emissions targets as it prioritizes national security over U.N. climate commitments. It is well behind on its goal to cut energy intensity by 13.5 percent and carbon intensity by 18 percent between 2021 and 2025.
The intensity rates – measuring how much energy is consumed and how much carbon dioxide emitted per unit of economic growth – are a key part of the country’s pledge to bring emissions to a peak before 2030 and to net zero by 2060. While the planning commission set targets for 2024 mandating a 2.5 percent reduction for energy intensity, it did not set a new target for carbon intensity and did not move to reduce coal consumption.
In fact, it is building new coal plants at home and around the world that can operate 4 or 5 decades or more—well past 2060—the date of its net zero pledge. China is the largest emitter of carbon dioxide emissions – emitting over twice the U.S. level — and if it keeps emitting at today’s levels or higher, what the rest of the world does will be insignificant.
As such, President Biden would do well to learn from China’s behavior because Biden’s regulations and forced electrification are crippling the U.S. energy grid with intermittent wind and solar power and electricity demands that could double or even quintuple from today’s levels. His climate policies are also benefitting China’s manufacturing sector as its leads in the manufacture or processing of most areas of the energy transition—EV batteries, critical minerals and their processing, solar panels, polysilicon, etc.
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