STU TURLEY

• The UK’s Net Zero efforts have coincided with a decline in electricity availability and a rise in energy prices, impacting both businesses and consumers.
• Analysis suggests that while the UK has reduced its own emissions significantly, this accounts for less than one percent of the global total.
• There are concerns that the UK’s current Net Zero policies have resulted in weak economic growth and stagnant productivity, alongside high energy costs.

How many times have we heard the argument that there is no trade-off between pursuing Net Zero and economic growth? The argument lies at the heat of the country’s economic, climate and environmental policy debate.

The energy secretary, Ed Miliband, repeats the mantra at every opportunity – “clean energy and Net Zero equals good jobs and economic growth” – and he is echoed in this article of faith by an entire industry (in the public and private spheres) that have thrown their lot in with the clean energy drive, whether through opportunism or conviction.

But what if they’re all wrong?

The debate has animated politicians for years and has spilled over into the culture wars, with scepticism of the environmental consensus becoming a cornerstone of populist and insurgent parties. Cool heads are needed now more than ever, not least because decisions taken today (indeed, decisions taken five and ten years ago) will determine our future prosperity.

Fortunately, Kallum Pickering, chief economist at Peel Hunt investment bank, has undertaken a forensic analysis of the Net Zero policy landscape, and his findings deserve widespread attention.

Pickering traces the roots of the UK’s productivity problem to 2006, when electricity availability began to decline. It has fallen by 21 per cent since then. This fall is attributed to the decommissioning of coal, oil and nuclear production facilities. Coincidentally, this is also when the UK started to become a net-importer of oil and gas. Crucially, demand for electricity continued to grow and, given a deliberate squeeze on supply, the price went up – particularly for businesses, but also for consumers.

Pickering notes that the UK now has “the highest domestic electricity prices in the advanced world.” Translating this issue to the real world, Pickering notes that the US managed to keep its energy consumption stable while growing its living standards (GDP per capita) whereas the UK’s living standards have basically flatlined as energy consumption reduced. This is food for thought.

But have we at least contributed meaningfully to a reduction in global CO2 emissions? Not really, says Pickering, noting that while our own emissions have halved this accounts for less than 1 per cent of the global total.

He concludes that “the UK’s decarbonisation efforts, so far, have resulted in weak economic growth, high energy prices, stagnant productivity and no significant impact on global emissions.”

Politics is about choices, of course, but it should also be about evidence and recognising when and where policies need to change in reflection of reality.

Source: Oilprice.com

They know green power doesn’t work, but still they squander our money on it

IAN GRIBBIN

IN THE swanky setting of an exclusive Tokyo restaurant, I savoured a few mouthfuls of burgundy before getting up to introduce a guest speaker to global investors. The gentleman was a retired German inorganic chemist who had spent his entire career working for the conglomerate BASF. For the next 45 minutes he explained why lithium-ion batteries for automobiles would lead to a dead end. I’ll spare you the dry detail but suffice to say that inorganic chemistry is a rigid area in which the laws of the universe dictate its limitations.

In short, it isn’t possible to build a battery which can compete with petrol-powered vehicles for longevity and economic efficiency.

After the dinner ended, I chatted to some of the biggest names in finance.

‘Very interesting, Ian,’ they said. ‘But the governments are throwing so much money and incentives at green initiatives that we have to play the game.’

All but two participants held a different opinion. These were our invited representatives from Toyota and Honda. Former Japanese engineers at their respective companies, they came up to meet our German chemist and agreed wholeheartedly with his presentation, exchanging their ‘meishi’ (business cards) and promising to engage in future dialogue.

This all took place a decade ago. By 2023 we found ourselves with EV sales shrinking, and inventories at dealers at astronomical levels so much so that fields are being rented to store the excess. You see, the depreciation of EVs is some five times higher than petrol vehicles owing to the inability to get battery costs much lower, as predicted by our German friend.

However, this is all just a backdrop to the real story. In the intervening decade Europe, including the UK, has squandered an average of some €764billion each year ‘to reduce GHG emissions’ versus a relatively paltry $280billion by the US and very little by the rest of the world.

These investments have not performed well in recent years. Look at Orsted, the Danish wind farm ‘pioneer’ which has fallen some 76 per cent since its peak in 2021. Or Albemarle group – a lithium producer – down over 80 per cent in the same time span. How about Hertz, which replaced its entire fleet with EVs and is now facing Chapter 11 bankruptcy? Down 90 per cent. I haven’t even bothered to add in the opportunity costs of the lobbies on Shell and BP to divest oil and gas assets. Shell was practically forced to sell now far more valuable proven finds in the Permian Basin to ConocoPhillips for a song just under three years ago.

All of this is YOUR money being channelled into dead-end investments and will certainly have an impact via lower pension payouts in years to come, creating future economic headwinds.

Yet our government and their attendant bodies – the Pension Regulator – are still urging our pension funds to throw good money after bad. Indeed, non-compliance with green policies will even result in significant penalties. As you know from my previous article, I’m studying for FCA exams and the whole course is littered with references to green investments. As far as I can see almost one in three jobs in finance these days is related to ESG.

Not only are we directly subsidising renewables and EVs, driving up transport and energy costs, but we are also losing our prosperity in terrible investments.

Going back to the start of this piece, the shrewd Japanese have barely thrown a Yen at developing EVs while the other global automakers are making layoffs and cutting investment amid languishing share prices and falling profits.

Yet again, the stupidity of our overlords is contributing hugely to our decline in national prosperity. I only hope that some light is seen before the next economic collapse is upon us.

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This article (They know green power doesn’t work, but still they squander our money on it) was created and published by Conservative Woman and is republished here under “Fair Use” with attribution to the author Ian Gribbin

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