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A surprisingly honest appraisal

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In recent years we have witnessed the Damascene conversion of the Tory Party from the party of big oil to the party of all things green and wonderful.  Boris Johnson now sees the proposed green energy revolution as the means of both leading the world on climate and in “levelling up” Britain’s impoverished ex-industrial, rundown seaside and small town rural regions.  With the government committed to intervening in the economy in a manner not seen since the 1970s, green energy and GDP can, apparently, go hand in hand.

But a sitting politician would say that, wouldn’t he?  Half of the art of politics is persuading the electorate that all of the bullshit printed in the manifesto can really be achieved (the other half is convincing people five years later that you succeeded even when it is patently obvious you did no such thing).  And so, in an attempt to generate post-Brexit and post-pandemic growth, Britain’s government has committed itself to a green economic revival.

It falls to retired politicians who no longer have skin in the game, but who understand how government operates behind the curtain, to point out the flaws in the proposal.  One such is David Gauke the Secretary of State for Justice and Lord Chancellor under Theresa May – not the first person who would come to mind in a discussion of renewable energy.  Nevertheless, in an article for the New Statesman, Gauke points to a flaw in the government’s reasoning which touches on the issues I regularly write about here:

“If you listen to our politicians, there is a strong consensus on climate change. It consists of four parts. First, carbon emissions are causing significant changes to our climate. Second, we need to take urgent action to reduce those emissions, including reaching net zero by 2050. Third, we have already made good progress in reducing the UK’s emissions. And fourth, the steps we need to take to reduce emissions further will also bring many positive benefits for society.

“Many will welcome this consensus but the problem is that not every part of it is entirely true…

“As for the fourth part – that the measures we need to take to reduce emissions constitute a win-win for society – this does not stand up to scrutiny and risks undermining trust in everything else that is claimed…

“It is certainly true that new industries and new jobs will be created by the measures that we take to reduce emissions. This will be good news for some businesses and for some people but, in terms of the wider economy, the new jobs created are a cost, not a benefit, and will have to be paid for by taxpayers or consumers.”

This highlights one of the real world mechanisms by which some of the surplus energy powering the wider economy is diverted into the energy sector – in this case as a result of political choices rather than for energy cost reasons.  Gauke is correct to note that in order to force the diversion either energy consumers must pay higher prices or taxes must go up.  But these aren’t the only options.  He might also add that public spending may be diverted from existing recipients or alternatively, a sovereign government can use the stealth tax of inflation by simply printing new currency to fund the new infrastructure.  Either way, politicians are storing up problems for the future by pretending that a seamless transition to renewable energy is possible.  As Gauke explains:

“If we are serious about achieving net zero by 2050, then we will have to pursue policies that will involve costs for both taxpayers and consumers. It is not surprising that politicians do not want to confront the public with the consequences of pursuing bold targets – much better to maintain support by highlighting the opportunities and downplaying the difficulties.

“It is not, however, an approach that will survive contact with reality. Either governments will avoid the hard choices, in which case we are simply not going to meet the net zero target, or an unsuspecting public will revolt when confronted with the costs. The current political consensus won’t hold if it is based on concealment.”

So long as our politicians acted as a front for the fossil fuel companies, we could delude ourselves into believing that we could swap fossil fuels for non-renewable renewable energy-harvesting technologies without skipping a beat.  All, apparently, that was needed was a change of government.  But now that governments of both left and right – at least outside the USA – have signed up to one or other variant of a green new deal, the flaws in the narrative will be exposed in short order.

Like so many politicians, Gauke, of course, fails to understand the concept of energy return on investment, and so doesn’t see that there is no way by which we get to continue living in our consumerist economy with just a fraction of the energy we currently derive from fossil fuels.  Nevertheless, carbon emissions can sometimes act as a proxy for energy costs.  And his broad point stands; as the true cost of weaning ourselves off fossil fuels becomes apparent a public revolt will be unavoidable.

As you made it to the end…

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