Net Zero: Cost, Costs, and More Costs

Getting accurate estimates of the costs of going "Net-Zero" from the governments and global institutions that adopted the policy has been a difficult task from the first. That would have been so even if they had been honest and transparent in their accounting. Moving economies from dependence on cheap reliable fossil fuels to reliance on electrification fueled by renewables (i.e. wind and sun) would require massive expenditures on almost every aspect of life.

It also has the potential to be very alarming. If voters learn that the policy will result in higher fuel prices, higher taxes, and the need for them to spend large capital sums to transform their household economies by, for instance, replacing gas-fueled heaters and petrol-driven cars with electricity-fueled ground storage heaters and EVs, they may take fright and decide that the game isn't worth the dim flourescent bulb. Managing voters' opinions has therefore become an important element in the policy. It has to be "sold."

As it happens, the United Kingdom -- which has reduced carbon emissions more substantially than any other country -- has also put together the strongest political coalition in support of the Net-Zero policy. All the political parties represented in Parliament back it. So, overwhelmingly, does the media. So do all the major cultural institutions such as the BBC. Even bodies apparently remote from politics such as the National Trust (which looks after Britain's stately homes) are keen to be seen as relevant to the cause. When the Climate Change Act setting out legally-binding targets for carbon emissions reduction was passed, only five MPs voted against it.

That legislation created a climate change committee, rooted in parliament but independent of the government, and gave it the task of holding ministers to account over whether they have met the carbon reduction targets written into law. Its sixth annual report was issued at the end of last year. And it offers a very useful glimpse into the lifestyle changes and probable costs of the Net-Zero policy which most governments and agencies have been reluctant to publish or discuss in detail.

No, ministers

That's understandable. When wind and sun still contribute only a measly 1.5 percent of global energy consumption, as Matt Ridley pointed out recently, it's hard to estimate the costs of expanding that share to the 94 percent now contributed by fossil fuels of one kind or another. But the costs won't be small. And there will be a great many of them spreading into every area of life since the mere act of living consumes energy and is sensitive to its cost.

To prevent this article becoming an encyclopaedia, I'll examine only three kinds of cost: lifestyle costs, economic costs, and political costs. I have to admit that the committee's report is relatively honest about the lifestyle consequences of net-zero, though it wraps up its admissions in honeyed phrases. Here, for instance, is its cheerful summary of how "we" will reduce demand for carbon-intensive activities:

The U.K. wastes fewer resources and reduces its reliance on high-carbon goods . . . Diets change, reducing our consumption of high-carbon meat and dairy products by 20 percent by 2030, with further reductions in later years. There are fewer car miles travelled and demand for flights grows more slowly. These changes bring striking positive benefits for health and well-being.

And here's my grouchy response to it:

But what if our diets don’t change voluntarily? Or consumers don’t actually like the new low carbon foods predicted here? Or they want to use their cars and fly on vacation more often than the planners predict? Those "striking positive benefits for health and well-being" sound alarmingly like the medical authoritarianism currently running our lives in the fight against Covid-19. Will doctors and other planners change their presciptions if we don't like the medicine? Or will they ration the foods, car trips, and vacations that the consumers (who are also voters) are determined to enjoy?

My sarcasm notwithstanding, these recommended (a.k.a. imposed) lifestyle choices imply heavy economic costs as industry and agriculture change what they now produce in response to market demand to quite different goods and activities prescribed by ministers and civil servants. The U.K.'s decision to prohibit the sale of petrol-driven automobiles from 2030 in order to require a switch to electric vehicles will force both the taxpayer to finance the electrification of the entire country and the driver to buy a much more expensive car.

When we see the scale of this economic and industrial transformation, it's plain that it's a very expensive project indeed. As I pointed out last month, even the committee chairman concedes that if it is to make us richer rather than poorer, then "[l]ow carbon investment must scale up to £50 billion each year to deliver Net-Zero." Not to worry, however, because he also assures us that "our central estimate for costs is now below 1 percent of GDP throughout the next 30 years."

But these estimates were  immediately challenged by Dr. John Constable, energy editor of the Global Warming Policy Foundation, as "entirely divorced from reality":

Some of them are out by several hundred percent, meaning that the claim that we can decarbonise painlessly doesn’t stand up to even cursory scrutiny. Offshore wind is twice as expensive to build as the CCC assumes, and two to four times more expensive to operate. The resulting electricity will be many, many times more expensive than they claim, making the use of heat pumps and Electric Vehicles utterly unaffordable.

So the estimate that net-zero costs will be less than 1 percent of GDP annually for the next thirty years is a fanciful one. Almost all other estimates are higher, some several-fold. Net-zero is a plan fueled not by fossil deposits but by optimism.

And that takes us to the third cost: political costs. These are obvious. Everyone has accepted at the back of their minds that there'll be a price to be paid by governments in power when the higher taxes and energy prices fall due. But that won't be tomorrow or, with luck, before the next election. So MPs never seem to have done the calculation of how heavy the political costs might be -- until last week when the Onward think-tank in London produced an analysis of the political impact of net-zero and discovered that it would be formidably high.

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In particular the carbon-intensive industries most reliant on fossil fuels are concentrated in the Midlands and North of England -- the very regions where Boris Johnson broke Labour's "Red Wall" and won a slew of traditionally Labour sets to swell his parliamentary majority to eighty seats. Johnson has since acknowledged that he had only "borrowed" those voters and would have to justify their trust in him by leveling up their economic prosperity to that of Britain's booming South-East.

What the Onward report suggests is that Johnson's green industrial revolution risks pushing the poorer regions further down the prosperity index rather than levelling them up. Boris Johnson's green agenda is completely at variance with its post-Brexit policy of an infrastructure build-up to as well as being economically regressive

Consider, now, the report's analysis of how this will impact the seats won in 2019 as summarized by the Telegraph:

Some of the biggest concentrations of polluting jobs are in Conservative-won seats West Bromwich West, with 59pc, as well as Hyndburn in Lancashire and Stoke-on-Trent North with 55pc each, according to the Road to Zero report.

The East Midlands has the highest share of jobs in high-emitting industries at 42pc compared to London, the lowest, with 23pc.

The research suggests that up to 10m jobs could need to be replaced, or see workers retrained, as the UK aims to achieve “net zero” carbon emissions by 2050.

What makes this report so interesting is that Onward, a progressive Tory think tank, and the GWPF, a Thatcherite one, now agree on at least one aspect of the net zero policy: It's a political suicide note.

Borrowing from the Future to Save the World

We’ve recently been examining the enormous sums that Western countries, in particular the U.S. and the U.K., are borrowing from the international capital markets to invest in the great Green project of saving the world from global warming caused by carbons emissions. Its current emanation is called Net Zero, and it’s an enormous project which our leaders justify by arguments that unfortunately contradict each other.

On the one hand they congratulate our citizens on being willing to undertake the huge sacrifices Net Zero will require; on the other hand, they are very coy about putting a figure on our sacrifices. And when forced to do so, their total financial estimates seem low in comparison to the austere lifestyles they also promise and that I documented in a recent analysis.

It’s almost as if they are owners of a restaurant advertising special meals for slimmers who nonetheless fear their customers will rebel  when presented with a huge bill for bread and water.

What do they think they’re up to? Why are we borrowing and spending on such a  scale—Joe Biden’s 2021 budget proposals are estimated to add $2 trillion to the U.S. deficit of which $700 billion will finance his green, energy, and infrastructure policies? The European Union and the U.K. are also borrowing and spending similar sums to save the world from carbon?  Can we justify such huge sums when they may avert a large general disaster but don’t fit the usual category of investment?

No matter what it costs.

Surprisingly perhaps, the answer is yes. You can justify an investment if it pays for some great but unprofitable social benefit that makes the borrowers proud to sacrifice both capital and income for its achievement.

A historical example of that was the Slavery Abolition Act of 1833, under which the British government spent 20 million Pounds, equal to about 23 billion Pounds today, borrowed from the world’s capital markets, to finance the freeing of slaves throughout the British empire. The slaves were freed; the taxpayers met the payments; and when the final payment on the loan was made in 2014, though attracting only modest notice, it was a source of some national pride in the U.K. Might not net carbon neutrality achieved by renewables be a similar cause?

Perhaps. But the problem is a global one. If it is to be solved, won’t the solution to it have also to be a global one? Lip-service is indeed paid to its global character since the response proceeds by international agreements under the auspices of the United Nations. But this claim is bogus on two counts. The first is that the great majority of non-Western countries, notably China and India, have not in fact made serious plans to switch from fossil fuels to renewables, and though they occasionally promise to do so—China promised President Obama that in 2014—their serious energy investment shows the promises to be fraudulent.

As Patricia Adams, the Toronto-based environmental economist, points out in The Red and the Green: China’s Useful Idiots (Global Warming Policy Foundation, London):

China is pursuing coal at a breakneck pace, with hundreds more coal-fired plants in the planning phase. In fact, says OilPrice.com, ‘China has already added 11.4 gigawatts of coal power capacity just in the first half of 2020, which accounts for more than half of the coal capacity added in the entire world in the same six months.

So the claim that non-Western countries are playing their part in reducing carbon emissions on anything like the scale of the West’s programs is not borne out by the facts. Indeed, if the country that accounts for more than 75 percent of the world’s energy growth is not on board with the Net Zero program, then the West’s own sacrifices for that cause become pointless. What purpose would there be in the Brits cutting down their meat consumption or shivering in homes kept lukewarm by storage heaters or having to switch upwards to an electric car they can hardly afford to run if the UK’s cuts in emissions are massively outweighed by China’s new power stations?

Have you hugged your planet today?

The second bogus claim is more elaborate. This holds that the non-West will join in cutting back fossil fuels and other carbon-emitting practices if the West pays it to do so as a matter of climate justice. The West became prosperous by using fossil fuels to transform its economies from agricultural to industrial ones in the two hundred years from, say, 1750 onwards. You benefited from the industrial revolution, runs the Third World’s indictment, whereas we did not. Now that we all realize economic development based on fossil fuels will ruin us all, you have an obligation to finance our post-industrial revolution by subsidizing our transition to it through green clean fuels. A transfer of $100 billion from the West to the developed world under the management of the U.N. is now demanded as part-payment of that obligation. So we have to add that sum to the massive costs of our own transitioning to Net Zero.

As often with claims of justice, however, falsehoods are doing the heavy lifting in this argument. It’s a falsehood that the developing countries didn’t benefit from the West’s industrial and scientific revolutions. Mankind as a whole gained greatly from agricultural revolutions that abolished famine, Western medicines that greatly reduced deadly epidemics of cholera and smallpox, technologies that made petroleum a valuable rather than a useless resource in the Middle East, better nutrition that extended life expectancy, Western capital and enterprise that created industries like the Malayan rubber industry, and much else.

Living standards throughout the world rose as a result of these revolutions—and they rose disproportionately in those countries that opened themselves to the free market and democracy rather than choosing the alternative route of socialist economics and kleptocratic politics.

We have no reason to feel any guilt about being the first countries--in Britain's case, the first country--to pioneer these wonderful improvements in human life. But that doesn't mean we should abstain from working with the rest of the world in tackling its threats of climate change and continuing poverty. Quite the contrary.

Unfortunately, the U.N.’s approach to these problems—namely, getting the world’s governments to plan a transformation of their economies on the largest possible scale and down to the smallest lifestyle details so as to depend on more expensive and less reliable forms of energy—is an apt imitation of the alternative tradition of political economy right down to the redistribution of resources from what remains of the West’s successful market economies to their rivals in either managed capitalist or planned socialist systems. Its only novel departure from past such experiments is that this time we are actually planning to make ourselves poorer rather than getting there by accident.

If it was good enough for the Holy Family...

There are in reality practical solutions to the problems of climate change, energy, and poverty proposed by writers such as Matt Ridley, Michael Shellenberger, Nigel Lawson, and Bjorn Lomborg and his colleagues in the Copenhagen Consensus. But little is likely to be done about them while the conventional nostrums of Net Zero and climate emergency dominate the international debate.

Maybe we should be grateful to the Chinese communists for spoiling the party.

The Way We'll Live, Then

In the last week Europe’s political leaders in and out of the European Union have been engaged in the over-production of promises to transform the continent into a Net-Zero carbon-free green utopia. A few examples:

  1. Even before the week began, the British prime minister, Boris Johnson, had pledged that the U.K would reduce its climate emissions by 68 per cent from their 1998 figure by 2030—the largest single Net Zero promise of any major economic power.
  2. Soon afterwards but still early in this week, Britain’s official Climate Change Commission produced its sixth report giving its statutory advice to the government on how to reach its Net Zero target beyond That advice was bold: “Our recommended pathway requires a 78% reduction in UK territorial emissions between 1990 and 2035. In effect, bringing forward the UK’s previous 80% target by nearly 15 years.”
  3. Not to be outdone, the heads of EU governments, meeting as the EU Council this weekend, announced that they were adopting the emissions reduction target of at least 55 per cent by the year 2030. It had originally been a 40 per cent target. But the European Parliament would prefer an even more ambitious target reduction of 60 per cent.

And in the current atmosphere of an auction on speed, who would bet against the Parliament getting its way?

For children and other living things...

Now, going carbon free will be extremely expensive both for governments (i.e., taxpayers like you) and for individuals and households. Just how expensive we’ll get to in a moment, though with some difficulty: governments have been very cagy about spelling out its costs clearly. But the financial costs may not give as accurate a picture of the scale of these promises—think how hard it is to grasp what a billion dollars is, let alone a trillion—than a look at what they would mean in visible and practical terms.

On that Climate Change Commission report is extremely illuminating because it breaks down the main effects of going Net Zero under four headings with examples of how we’ll be living under each one. Again, here are a few (with some editorializing in italics by me):

  1. Take up of low-carbon solutions. People and businesses will choose to adopt low-carbon solutions, as high carbon options are progressively phased out. By the early 2030s all new cars and vans and all boiler replacements in homes and other buildings are low-carbon – largely electric. By 2040 all new trucks are low-carbon. British industry shifts to using renewable electricity or hydrogen instead of fossil fuels, or captures its carbon emissions, storing them safely under the sea. [Choose? We’ll be choosing these changes because the government will prohibit the sale of the cars, vans, and boilers we use now. It’s what we used to call a Hobson’s Choice. And we won’t like all of it because—to take one example—the low-carbon heaters don’t keep people as warm as their current oil and gas-based ones. And what then?]
  2. Expansion of low-carbon energy supplies. U.K. electricity production is zero carbon by 2035. Offshore wind becomes the backbone of the whole U.K. energy system . . . New uses for this clean electricity are found in transport, heating and industry, pushing up electricity demand by a half over the next 15 years, and doubling or even trebling demand by 2050. Low-carbon hydrogen scales-up to be almost as large, in 2050, as electricity production is today. Hydrogen is used as a shipping and transport fuel and in industry, and potentially in some buildings, as a replacement for natural gas for heating. [Let me be sure I get this thing straight: we intend to electrify the entire country to heat people's homes, fuel their cars, provide power to industry, and do a hundred other things while at the same time making our electricity supply dependent on unreliable renewables, mainly wind (of which perhaps Boris Johnson himself will supply a large percentage.) But I’m being unfair—we’ll also rely on hydrogen (not yet available in sufficient quantities unless we make it from forbidden fossil fuels) and carbon capture (still to be developed.)]
  3. Reducing demand for carbon-intensive activities. The U.K .wastes fewer resources and reduces its reliance on high-carbon goods. Buildings lose less energy through a national programme to improve insulation across the country. Diets change, reducing our consumption of high-carbon meat and dairy products by 20 percent by 2030, with further reductions in later years. There are fewer car miles travelled and demand for flights grows more slowly. These changes bring striking positive benefits for health and well-being. [That all sounds very jolly? But what if our diets don’t change voluntarily? Or consumers don’t actually like the new low carbon foods predicted here? Or they want to use their cars and fly on vacation more often than the planners predict? Will the planners change the plan? Or ration the foods, car trips, and vacations that the consumers (who are also voters) want to enjoy?]
  4. Land and greenhouse gas removals. There is a transformation in agriculture and the use of farmland while maintaining the same levels of food per head produced today. By 2035, 460,000 hectares of new mixed woodland are planted to remove CO2 and deliver wider environmental benefits. Some 260,000 hectares of farmland shifts to producing energy crops. Woodland rises from 13 percentof U.K. land today to 15percent by 2035 and 18percent by 2050. Peatlands are widely restored and managed sustainably. [Producing energy crops? Ah, they mean like the U.S. cellulosic ethanol program that according to an article in the Scientific American  was supposed to produce energy from wood and plant wastes, reducing greenhouse gases substantially, but that by 2017, after development over three administrations, produced not the predicted 16 billion gallons but ten million gallons or, as one energy expert put it, “enough fuel to satisfy approximately forty minutes of U.S. fuel consumption last year.” You know, there are times when the damn plane just can’t take off from the drawing board.]

After looking at this list of the industrial,, economic and personal lifestyle changes needed to bring about Net Zero in Britain, it seems inevitable that together they must amount to a massive sum. But the report’s chairman sums up the costs in a single breezy paragraph:

Some of our most important work is on the costs of the transition. Low carbon investment must scale up to £50 billion each year to deliver Net Zero, supporting the UK’s economic recovery over the next decade. This investment generates substantial fuel savings, as cleaner, more-efficient technologies replace their fossil fuelled predecessors. In time, these savings cancel out the investment costs entirely – a vital new insight that means our central estimate for costs is now below 1% of GDP throughout the next 30 years.

How credible is that? Let me point out some warning signs in it. The first is that to think the argument that “in time these savings (from going from fossil fuels to cleaner technologies) cancel out the investment costs entirely” is a “vital new idea” is dotty on at least three counts: It’s the rationale for almost all investments. What’s vital about it is the qualification “in time” which for investments of this scale might be centuries. And the timescale might even be never if, as seems highly probable, the price of fossil fuels remains stubbornly lower than the price of technologies still to be invented.

And that risk is illustrated be the following comparison: the sum of 50 billion pounds cited as the annual cost of making Britain and the British virtuously Green is almost exactly the same figure as the 50 billion Euros given by the E.U. heads of government to Poland this week as compensation for killing its coal industry. The two programs are so different from each other in scale and risk that they could hardly cost anything like the same budgetary figure.

Forward into the glorious red, er, Green future, comrades.

Even if the figures added up, however, the Climate Change Commission’s program would still face the larger political problem that its proposals depend on the support or at least acquiescence of the great majority of their fellow citizens in massive potentially unwelcome changes in how they live, work, travel, eat, and enjoy themselves not for a short period but forever. When we see the growing discontent with the privations and regulations that governments have temporarily imposed for protection against a pandemic, it doesn’t seem likely that whole populations will agree to live out their dystopian fantasies.

I wondered how governments would respond to that? Then I remembered something:

“Communism is Soviet Power + Electrification of the Whole Country.” Vladimir Lenin, Report on the Work of the Council of People’s Commissars. December 22, 1920

Goodness gracious. That report was issued exactly one hundred years ago. Next week.

Is It Me That's Mad, or the World's Leaders?

Yes, I know that the headline should really read “Is it I who am mad—or the world’s leaders?” but the dubious grammatical form used above is better suited to the populist sentiments of this article. And though populism and populist are words routinely used to mean “insane,” “dangerous,” or worse “problematic,” some kinds of populism are in fact social truths that experience has shown to be accurate and valuable, i.e.,  commonsense.

That applies especially to truths about spending, saving, investment, and borrowing. Copybook maxims on that score go from Thomas Jefferson’s “Never spend your money before you have it,” to Shakespeare’s “Neither a borrower nor a lender be/For loan oft loses both itself and friend/And borrowing dulls the edge of husbandry.”

With that prudent advice ringing in our minds, let’s look at how prudently our political masters are handling our collective expenditures, revenues, borrowings, and investments. The first thing to notice (though few do) is just how massive the sums involved are.

Estimates differ but in the U.S., apparent president-elect Joe Biden is proposing a budget of $5.4 trillion equal to 24 percent of America’s GDP. He’s also proposing a smaller (but still massive) tax increase that would leave a gap of $2 trillion dollars for the U.S. Treasury to borrow. But cheer up—it’s bipartisan. President Trump’s budget estimates for 2021 weren’t much lower at 4.8 trillion equal to 21 percent of GDP and a deficit of $966 billion.

Now, expenditures to cope with the pandemic and lockdowns are emergency spending that almost everyone agrees is justified or, to be more precise, inevitable. That’s why the Trump budget rose to an annualized rate of 30 percent of GDP at the height of the pandemic this year. But a cool $700 billion is accounted for by Biden’s “Build Back Better” agenda that would increase spending on infrastructure, the environment, and the Green New Deal. That's equal to one-eighth of Biden's projected total spending for 2021 and one-third of the likely deficit.

The picture is the same in Britain where Boris Johnson’s government, as well as spending vast sums to ameliorate the pandemic and concomitant recession, is embarking on a green industrial revolution and unrelated (even contradictory) infrastructure spending. There too the Labour, Lib-Dem, and Green opposition parties attack these plans as too little, too late. In both countries the general attitude has been Spend! Spend! Spend!

Well, it is -- right?

After all, everyone knows that Tomorrow Is Another Day!

Scarlett O’Hara, Gone With The Wind’s heroine, may be out of fashion in racial politics, but financially she’s never been so enchanting to so many powerful people.

That may be because we simply can’t get our minds or even our imaginations around the figures when they rise from million to billions to trillions. To help us do that, here’s David Schwartz, the science writer and a brilliant popularizer, explaining them to NPR listeners:

The difference between a million, a billion and a trillion is like the difference between eleven and a half days, 32 years and 32,000 years.” Do the sums: a $2 trillion dollar deficit the equivalent of 64,000 years in time measurements.

And an $5.4 trillion dollar total annual budget... or a $23 trillion accumulated national debt... is equal to... but I see the audience’s eyes glazing over... No -- they’re crying.

Now, it’s certainly true that borrowing is economically justifiable and potentially profitable if it’s likely to produce a stream of income or equivalent benefit that over time more than equals the cost of the capital borrowed. A home mortgage is a humble example.

It’s also the case that government investment can be economically worthwhile if it creates an economic environment that hikes productivity, spurs general economic growth, and thereby increases tax revenue for the Treasury. Some state investment meets those criteria, but by no means all. So we should apply certain tests to proposals such as the green industrial revolution and the Green New Deal?

The test that governments seem to like most at the moment is the question:

Can we borrow at a low interest rate?

It’s a fair question but it should be a secondary one. A low interest rate means it’s cheaper to borrow, but that’s a modest benefit at the best of times and no benefit at all if the investment produces less wealth than the cost of borrowing. And if interest rates rise as they tend to in periods of inflation produced by government over-spending, then the modest benefit becomes a horrendous cost, especially when your accumulated borrowing has reached $23 trillion. So the next—or rather, prior—question becomes:

Can we make sure the investment pays off?

To which the honest answer is, No. As the distinguished political theorist, James Burnham, author of The Managerial Revolution, used to say in his rules on life: You can’t invest in retrospect. Some of the visionary Green schemes proposed by Joe and Boris, such as electric airplanes and cheap hydrogen cars, can’t be  invented simply because we establish a state fund to invent them, any more than the flying cars and personal jetpacks of Matt Ridley’s youthful imagination exist today because we wanted them, as he noted in a column on the ten big things wrong with the green industrial revolution.

I quoted the column last week, but it can’t be quoted too often because to judge from government policy no one in Whitehall or the Beltway has read it. It should be especially worrying that many of the schemes for transitioning from fossil fuels to “renewables” all cost more than the cheap fuels they are meant to replace and need state subsidies for longer than their advocates claim in advance. Demands for extended government subsidies should be a warning. Innovations will occur, of course, because a free economy is an innovation machine. We simply don’t know what they’ll be, and if we concentrate state funding on bright ideas too early, we risk being unable to fund the good ones that survive the sorting out process.

But they lift productivity and economic growth, surely?

Again, the proof of the pudding will be in the eating, but the signs don’t look that good. What economic benefit is likely to arise from the total electrification of Britain electric cars require that would match both its cost and the cost of forcing motorists to give up petrol-driven cars from 2030 onwards? If the answer is that we will benefit from the technological innovations that British and American auto manufacturers make in the course of developing cheaper and more efficient EV’S, we could have those benefits anyway by allowing them to make the cars that the motorists want at a price they can afford and at a pace that would allow government and industry to transition in line with market demand changes. Then we might get technical innovations in both EVs and petrol-driven cars.

But, Miss Scarlett, do you really need an electric car?

We don’t do that because the real aim of policy is not technical innovation—that’s a by-product at best—but a reduction in carbon emissions, or net-zero in short. That’s why everyone concedes that electricity prices will rise for industry as well as for consumers, putting the industries in countries with green hairshirt economic policies at a serious disadvantage with their foreign competitors. How will that kind of enforced economic primitivism help us either to raise productivity or to pay back the money we’re now borrowing? It won’t.

Since this is a global problem, though, surely, our competitors like China are making the same sacrifice?

Well, no they’re not, as a matter of fact, and when they say they will, they usually ask “the West” to give them subsidies to do so. In the meantime, the Chinese Communist Party—no idealistic Greens in that Politburo—is bringing new coal-fired power stations on line with emission levels greater than the U.K.’s entire carbon output.

So why are we doing this?

That’s a bigger question to which I’ll return next week. But it certainly requires explanation because unless the laws of economics have been repealed, the policy of spending and borrowing massively in order to make our economies less productive and efficient can only have one result. It was forecast most eloquently by Rudyard Kipling in his once-familiar poem "The Gods of the Copybook Headings":

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Something to think about.

Cracks Appear in the Climate Consensus

On the face of it, international progress towards a global consensus on reducing carbon emissions to net-zero by 2050 in order to restrain the rise in world temperature to between 1.5 and 2.00 degrees above pre-industrial levels is about to be resumed after a four-year interruption. When President-Elect Biden overcomes the remaining legal hiccups to take office on January the 20, 2021—as I am assuming he will —his first acts will include returning America to its observance of the Paris climate accords. Since 195 other nations have already signed on to the Accords (and everyone has agreed to treat them as a treaty, even if a non-binding one), it’s full speed ahead to a net-zero carbon world.

Or so it would appear.

This global pact rests on strong support from the world‘s governments which in turn rest on a firm consensus of political parties, scientists, officials, “Green” activists, and the media that a net-zero carbon policy is essential in order to avert a global climate catastrophe. This consensus is so universal that anyone who dissents from it, even a distinguished scientist or a Nobel Prize winner, risks being treated as a dangerous eccentric and finds it hard to get a hearing in respectable forums. Demands are sometimes heard that such people be kept off the airwaves altogether or even prosecuted for “climate denialism.” Fortunately, there are very few such eccentrics.

As green as they come.

Not that those within the consensus deny that the net-zero policy has problems. On the contrary everyone acknowledges that it will require quite heavy sacrifices from the ordinary citizens in their countries in the form of higher taxes, higher energy prices, and lower living standards. But these sacrifices will be worth it not only because they will avert a global catastrophe but also because Boris Johnson’s “green industrial revolution” or (according to taste) Joe Biden’s “Green New Deal” will create well-paying jobs in cleaner green industries such as windfarms.  And the last obstacle to this green utopia in the form of President Trump has now been removed.

Thus ends my rather bland outline of the Authorized Version of climate change politics. If we examine it critically, it surely becomes clear very quickly that it rests on two unsteady supports: the strength of the establishment consensus and the electoral popularity of a policy of transitioning to a net-zero carbon economy. Both seem strong at present. As climate skeptics such as Allister Heath in the London Daily Telegraph have conceded, the elites on both sides of the Atlantic have committed themselves wholeheartedly to the consensus; and a poll taken before the recent U.S. election showed that America voters were greener than ever before:

Seven in 10 voters support government action to address climate change, with three-quarters wanting the U.S. to generate all of its electricity from renewable sources such as solar and wind within 15 years.

In both cases, however, there are grounds for predicting that trouble lies ahead. Take, first, the establishment consensus. That is far from being a spontaneous embrace by almost all scientists and economists (climate policy being a blend of both disciplines) of manifest truths. Nor could it be, for a variety of reasons: science itself offers only provisional truths; climate science alone covers a wide range of scientific disciplines; and even the U.N. IPCC reports offer a range of possible outcomes with varying degrees of probability attached to each.

When its tentative and uncertain conclusions disappear and re-emerge as government policy, they have become firm doctrines (e.g., outlawing the U.K. sale of petrol-driven cars after 2030) enforced by quite strong sanctions: the granting or withholding of official contracts; appointments to official boards, university posts, and the civil service; publication in scientific journals; threats to employment and promotion; and even a de facto censorship of heretics in mainstream and official media. It’s hardly surprising that few people contest the establishment consensus when there are serious risks and no practical benefits in doing so. What’s surprising is that some do.

The whole world is watching.

Who are they? Usually, the first critics of the consensus are natural heretics who look at any powerful structure of ideas maintained by force and try to find cracks in it. Others join them because they may have either economic or intellectual interests in doing so—a naturalist opposes windfarms because they kill birds, for instance.

Some people working to advance the policy discover flaws or scandals in its operations and resign to oppose it from outside. Then there are journalists, natural heretics often, but looking for a good story always. Finally, there are critics who are simply very clever people who notice things and realize they don’t add up. And when all these “types” start examining climate policy and how it’s going, they find all kinds of risks being taken and mistakes being made.

Of course, there have been sharp-eyed critics of  “climate change” alarmism—and of the policies intended to ameliorate it—from the first: former U.K. finance minister Nigel Lawson who founded the Global Warming Policy Foundation, Danish academic Bjorn Lomborg who founded the Copenhagen Consensus Centre, and the late Nobel Laureate Freeman Dyson, who thought for Princeton.

But their numbers have been growing in the last year. The American environmentalist, Michael Shellenberger, announced his de facto resignation as a leading environmentalist by writing his book,  Apocalypse Never. Its theme, echoing Lomborg's, is that climate change is a serious problem but not a looming catastrophe requiring drastic emergency measures.

Dieter Helm, the Oxford professor who was commissioned by the U.K. government to report on British energy supply chains and climate change, has now written a new book, Net Zero: How We Stop Causing Climate Change that challenges the central orthodoxies of the Western establishment’s climate policy. In a review on the U.K .Reaction website, Jack Dickens writes:

Two fatal flaws in the current global approach are emphasized in Helm’s book – the focus on reaching Net Zero carbon emissions while maintaining high levels of carbon consumption, mostly through off-shoring carbon-intensive activities, and the faith in a symbolic but ineffectual top-down approach to solving the climate conundrum, as exemplified by grand United Nations summits in Paris and Tokyo. The result, he argues, has been the creation of an illusion that something is being done while individuals and governments are consistently failing to take decisive measures.

And the U.K.’s main conservative papers in the Telegraph group—papers read by Tory activists and thus important to Tory politicians—have started to take a more skeptical view of Boris Johnson’s boasted “green industrial revolution” in op-eds by three of its star columnists—former editor Charles Moore, Sunday Telegraph editor Allister Heath, and columnist Matt Ridley. It doesn’t amount to a complete conversion; the Telegraph’s formidable financial columnist, Ambrose Evans-Pritchard, remains on Boris’s side. Still, all three have written strong criticisms of the government's net-zero policy recently, and Ridley offered an especially scathing critique of ten reasons why it’s a mistake.

Ridley, who moonlights as a member of the House of Lords, is the author of several well-regarded books on science of which the latest, How Innovation Works, is highly relevant to the climate debate. He takes aim at Boris’s ideas on  innovation in climate policy with a double-barreled shotgun. The first barrel demolishes the Prime Minister’s own proposed innovations:

Innovation will create marvelous, unexpected things in the next 10 years. But if you could summon up innovations to order in any sector you want, such as electric planes and cheap ways of making hydrogen, just by spending money, then the promises of my childhood would have come true: routine space travel, personal jetpacks and flying cars. Instead, we flew in 747s for more than 50 years.

The second barrel aims at Whitehall’s neglect of more realistic innovations that get no money or attention in the green industrial revolution:

My fear is that we will carry out Boris’s promised 10-point plan, cripple our economy, ruin our seascapes and landscapes, and then half way through the 2030s along will come cheap, small, safe fusion reactors.

It’s a bracing attack from a government supporter, friendly fire in fact, and taken together with the other skeptics, it’s a sign that the establishment consensus is showing some cracks. In part, these criticisms are a reaction to the fact that policies like net-zero carbon are ceasing to be distant possibilities and becoming real prospects. No sale of petrol-driven cars is only nine years away. And as Dr. Johnson wrote two centuries ago, when a man knows he will be hanged in the morning, it concentrates the mind wonderfully.

Mind, concentrated.

But surely these policies are popular with the voters? Wasn’t that the story of the U.S. opinion poll quoted above? How can a popular policy be reasonably compared to being hanged in the morning?

The answer to that objection is a rule that I’m thinking of calling O’Sullivan’s Second Law. It goes as follows: The popularity of a policy is less important than the popularity of its consequences.

How popular are the consequences of a policy of net-zero carbon by 2050 likely to be? It is hard to estimate that because governments constantly evade answering the prior question of what will be the costs of going net-zero in terms of higher taxes, higher energy prices, and a lower standard of living. They concede in a vague and slightly noble way that people will simply have to make heavy sacrifices, but they don’t want to put a figure on it.

That’s not surprising. When the New Zealand government did just that, it discovered, according to Lomborg, that getting to carbon neutrality would “cost more than NZ$85 billion annually, or 16% of projected GDP, by 2050. That is more than last year’s entire national budget for social security, welfare, health, education, police, courts, defense, environment, and every other part of government combined.”

Sixteen percent of projected GDP annually. That’s what you call political suicide. No policy that requires it will remain popular. It runs up against Stein’s Law formulated by the late Herb Stein, a distinguished American economist: ““If something cannot go on forever, it will stop.”

It can’t go on. Long before 2050, the net-zero policy will have to be abandoned. And the longer that political establishments cling to its defense, the worse the resulting crash will be.

A Test Drive for Net-Zero

Proposals for going green and hiking taxes—they seem to go together—rain down as gently upon us as leaves in Autumn. In Britain, as I mentioned last week, the Finance Minister, Rishi Sunak, is looking at new ideas to charge motorists for—wait for it—driving on the roads.

There will soon be s a $50 billion tax hole in his budget as a result of the government-mandated switch from gas-powered cars to electric ones by 2030. That date was moved forward from 2035 in a speech this week from Prime Minister Boris Johnson on his “green industrial revolution,” i.e., the U.K. equivalent of America’s Green New Deal that Joe Biden has been promising.

Boris’s speech unveiled a whole armory of exciting new green measures—summarized coolly in the London Sunday Telegraph by "lukewarmer" Matt Ridley as “all Britons driving electric cars powered by North Sea wind turbines and giving up their gas boilers to heat their homes with ground-source heat pumps. [Plus] He will invent zero-emission planes and ships.”

Are having fun yet?

Viscount Ridley suspects that not all the prime minister's hoped-for innovations will come to pass. As a strong believer in the importance of innovation himself -- his latest book is on that topic -- he thinks that we'll be happily surprised by some innovations by 2030, and we shouldn't take rash and expensive decisions that will foreclose those possibilities now. Equally, however, we shouldn't bet the bank on innovations that may never pan out despite our best efforts.

That's one cautionary truth. Another is that we can be pretty certain that these exciting new green measures Boris announced will likely bring forth a lot of exciting new green problems. Among them is that drivers won’t be paying the fuel taxes they pay now if they’re driving electric vehicles. That's why, to fill that budgetary hole, the finance minister is thinking to tax road use.

There must have been a hostile reaction to this leak because the next day the Times published a nervous follow-up:

Drivers would support a national road-charging system providing that it was not simply used as a “cash cow” by the Treasury, ministers have been told.

Of course, any new tax would be used by the Treasury as a “cash cow” if only because the U.K. is going to have to finance the economic effects of the lockdown one way or another. That’s a given. Also, governments like green taxes because they attract almost automatic support from green parties, pressure groups, and public opinion.

Road pricing has both green and attractive economic features as an alternative to other forms of taxation. As Dr. John Walker argues in his RAC Foundation study, On the Acceptability of Road Pricing:  It’s “technically successful; meets objectives ranging from managing congestion to raising revenue to fund road improvement; need not be prohibitively costly; and once in place, tends to gain public acceptance”

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As that guarded last comment suggests, however, it’s got some difficult features too. Switching from fuel taxes to road pricing is a problem in itself. Fuel taxes are simple to pay and to collect. Road pricing means that both government and the motorist have to install equipment to record the costs of journeys and to charge for them. It’s a more visible cost than when it’s paid as part of a price for petrol at the pump.

If the road pricing system is variable, moreover, imposing higher costs on cars sitting in traffic and lower ones on cars going along empty roads at off-peak periods, it will be more efficient, but it will also be more unpopular with the general public. Differential pricing of that kind makes economic sense because it discourages congestion and makes for more pleasant driving and less wasted time. But the public sees it as unfair because it penalizes those drivers who have to work regular hours and travel at peak hours, and they are often the poorer members of society.

And it’s being proposed at the wrong time. Motorists already feel under threat as many of the costs of Boris’s green industrial revolution end up being paid by them. If gas-fueled cars won’t be available from 2030 onwards, those owning such cars will find spare parts more expensive, gas stations fewer in number (and more distant), and gas prices higher. In the end they’ll have to purchase an electric vehicle if they want to continue driving.

Many of them—I’ve seen estimates as high as one-third of U.K. current drivers—will find buying an EV requires a serious financial sacrifice. Those who are unable to get a decent price for the resale of their petrol-driven cars will be in even worse financial straits. On top of these shock demands on their wallets, they will see the addition of road pricing as an intolerable extra.

It’s bound to provoke resentment among those financially hard-pressed drivers who find themselves paying heavy bills to use the roads that their taxes have already built in order to keep the economy moving today. That’s not entirely speculation. As the Times recalled late in the story: “The Labour government ditched similar plans for road charges 13 years ago after a petition attracted 1.8 million signatures.” Bringing in road pricing in such circumstances would risk a British version of the gilet jaunes suburban and provincial riots that have now lasted almost two years in France.

Coming soon to a country like yours.

Road pricing is not the villain in this mystery, however, though it may be the victim (murdered by numerous Acts of Government.)  The main super-villain, lurking in the background, is the decision taken with all-party support in Britain, echoed in similar decisions taken in Brussels and (shortly) in Washington, to aim for a net-zero carbon economy by 2050 which is both unachievable and certain to reduce living standards brutally. The lesser villain which is Son of the First is the decision taken by fiat of the present British government to switch to all-electric cars from 2030 onwards.

It is frivolity on stilts and bound to have terrible results: a hugely expensive electrification of Britain, power supplies nonetheless inadequate to cope with additional demand from EVs nationwide, electricity blackouts on a regular basis, increases in both taxes and electricity prices to pay for this transition, the spread of job losses in the industries that use power, etc., etc., in addition to the problems for motorists and taxpayers described above.

There is only one silver lining to this thunderstorm of clouds: when the policy of forced sales of EVs crashes into reality, it might compel the  Johnson government to reconsider not only that policy but also the larger futility of dragging down the U.K. economy and standard of living by depriving it of the cheap energy that most of the world will still be using.

Switching to EVs is a kind of test drive for the new kind of economic policy: not the betterment of the people but the moral preening of the elites. We'll see if the net-zero carbon economy has survived its first run round the track by, say, January the 1st 2031.

Utopian Ambitions, Hideous Costs

One of the features of the modern world is that as the ambitions of governments expand, their performance deteriorates, and to cope with the hostile reactions that generates, they grow increasingly tyrannical.

Initially, they divert resources from the everyday tasks of government—building roads, stopping crime, defending the country—to pursuing grand projects such as “building Europe” or “saving the world.” Over time their rhetoric catches up with their performance and they claim credit in elections for what they promise to achieve while ignoring or covering up or distracting from their failure to perform government’s essential duties, let alone their lofty ambitions, at all well.

The final stage of this rake’s progress is that they try to suppress information and even debate about the costs and failures of their most cherished policies and condemn their critics for “social” crimes like “ignoring” science or “spreading hate.” Here are a few examples, from several countries, to make the general point:

Take, first, crime. Crime figures always need some interpretation; for instance, this year U.K. statistics have been distorted by the coronavirus pandemic. In Britain there have been fewer home burglaries since the residents have been living at home most of the time. Until this year, however, there have been sharp rises in crimes of violence, including rape, and moderate rises in thefts and burglaries.

The real enemy is the citizenry.

These patterns do not seem to be reflected in increased police concern: residents increasingly complain that the police respond slowly or not at all to notifications of theft and burglary on the grounds that they are “swamped.” On the other hand the police have expanded their interventions in cases of bias expressed on the internet even when they are not crimes (in which cases they have still recorded them as bias “incidents"), and they run campaigns inviting complaints about “hate.”

In addition, legal reforms proposed—in Scotland by the Scottish government, in England by the official Law Commission—will, if enacted into law, criminalize expressions of racial and other prejudice spoken at home around the kitchen table. Earlier generations of Britons would have seen this an unacceptable intrusion of tyranny into the home in pursuit of the mirage of a multi-cultural society without tensions.

In the United States, state and city authorities in those jurisdictions with left-wing Democrat majorities have instructed their police forces not to intervene to protect people and property against attacks by left-wing mobs of social justice warriors. In Britain the police have shown a similar bias in taking the knee during “Black Lives Matter” protests and dancing in the streets with Extinction Rebellion protesters while cracking down on demonstrations against government-imposed coronavirus lockdowns.

All these things show a trashing of the impartiality of law and hint that the police and legal authorities now see their role as regulating the behavior of respectable citizens and their opinions rather than apprehending and punishing criminals.

It’s as if the real threats to freedom and democracy come from ordinary citizens using free speech and the vote to promote their opinions and interests rather than people who believe their ideas are so right and necessary that they can impose them on the rest of us—and that institutions controlled by the latter are maneuvering to find ways of skirting the law to do so.

A related idea in the sphere of economics is the Great Reset advanced by the World Economic Forum, aka Davos Man, which proposes to exploit the Coronavirus Pandemic to usher in a new age of . . .  well, of what exactly? Its proposals (or some of them) were outlined in a video  that predicts our lives will be better in almost every way except that we’ll “own nothing” but also hints heavily that we won’t be choosing this future democratically but will have to adapt to what the World Economic Forum thinks is necessary.

I remember that it asked whether or not the Davos people in the WEF would own anything like the rest of us. And if the reply came that of course they wouldn’t own anything, as I suspected, I would then ask if they would enjoy the traditional perquisites of ownership such as being able to use the property as they wished.

That kind of thing makes a difference to the abolition of private property. Communist apparatchiks and their apparatchiks did not own their dachas, etc., in the early days of social justice, which is why you discover from books such as Milovan Djilas’s New Class that they ensured their children would inherit their jobs in order to get the privileges that went with them.

And about those privileges: as a result of the Great Reset we’re told we won’t be eating much meat, or traveling very far, or keeping “billions” of migrants out of our nations or cities—the prohibition on traveling  apparently doesn’t apply to them—and that we’ll nonetheless be as happy as clams in a plastic-free sea.

Everything clear now?

So much for the future that Davos offers you. Let’s now look at how that kind of utopianism works in practice. Earlier this week the London Times had a bold headlined story announcing that Ministers in the Tory government, notably Chancellor Rishi Sunak, were considering making people pay for using the roads. It was strong stuff:

Rishi Sunak is considering plans to charge motorists for using Britain’s roads amid concerns over a £40 billion tax shortfall created by the switch to electric cars.

A Treasury paper on a new national road pricing scheme has been presented to the chancellor. The government will announce this week that a ban on the sale of new petrol and diesel cars, which forms part of the prime minister’s ten-point plan on climate change, will be brought forward to 2030.

Downing Street wants to seize the initiative after days of damaging briefings between allies of Boris Johnson’s former adviser Dominic Cummings and his fiancée, Carrie Symonds.

Let me first indulge in a little interpretation of how an ambitious editorial writer on The Sun—a job for which Ms. Symonds once applied—might write up this story in a column. How about:

PM’s sweetie tells Boris: Pay! Pay! Pay! “Make Motorists Pay for New Electric Cars, Pay Higher Electricity Prices, And Pay to Drive.”

Unfair? To Ms. Symonds, undoubtedly unfair. She is a devout environmentalist, apparently an eloquent advocate, and the future Mrs. Johnson. Of course, she has some influence on Boris. But she couldn’t prevail against the Treasury, the Cabinet, all the opposition parties, the BBC, the rest of the media, and the pipes and drums of “Not an Energy Company—BP.”

Then again, she wouldn’t have to do so. They’re on her side. All of those powerful bodies have committed themselves strongly to the policy of making the British economy a net-zero carbon emissions economy by 2050 and thus also to the major step towards it (to be announced, as the Times predicted, this week) of making it illegal to purchase a car driven by the internal combustion engine after 2030.

Well, I’ll leave it there except to point out that this is merely the latest example of what happens when governments declare utopian ambitions and only consider the costs of them as they start coming in. And they have only just started coming in--see my earlier column on the costs of electrifying the whole of Britain to make it hospitable to electric cars.

Electrifying? It will make your hair stand on end.

The False Promise of Energiewende

Here is Michael Schellenberger writing about Germany's "ambitious" (as it is always called) green energy transition known as die Energiewende (energy transition, or turning point) For some background, Energiewende is a series of policies first passed in 2010 with the object of completely transitioning the country away from conventional, carbon emitting energy sources including coal, oil, and natural gas, and towards ones classified as low-to-zero carbon like nuclear, solar, wind, and biomass.

After the Fukushima disaster in 2011, it was decided that Germany would move away from nuclear energy as well, with the aspiration of having the country run exclusively on so-called renewable energy by 2022.

As Schellenberger notes, since its passage Energiewende has been a constant source of hope for leftists the world over, because it gives them something to aim for. Their contention is that it will show the world that cheap green energy is possible, and that it can easily be reproduced anywhere in the world.

Of course their panegyrics have been light on specifics. In fact, the actual results of Energiewende have been mixed so far:

[L]ast year, Germany was forced to acknowledge that it had to delay its phase-out of coal, and would not meet its 2020 greenhouse gas reduction commitments. It announced plans to bulldoze an ancient church and forest in order to get at the coal underneath it.

That's right -- as the fracking revolution has contributed to America's leading the world in carbon emissions decline, green Germany is bulldozing forests for the purposes of mining coal.

The problem is twofold. First, green energy sources produce much less energy than traditional ones. This was once treated as a feature, not a bug, by environmentalists, who believe that modern society requires too much energy, and the best way to fix that is, to borrow a phrase, "starving the beast."

But as this Luddite attitude is a hard sell to most people, modern environmentalists have adjusted by promising exciting new technologies which are always just over the horizon.. "Governments and private investors poured $2 trillion into solar and wind and related infrastructure" since 2000, according to Schellenberger, though with not a great deal of substantive advancement to show for it.

This touches on the second problem -- the expense. Schellenberger points out that average Germans are increasingly frustrated with the cost (€32 billion annually) of the project, an amount which is only projected to increase -- "Der Spiegel cites a recent estimate that it would cost Germany “€3.4 trillion ($3.8 trillion),” or seven times more than it spent from 2000 to 2025, to increase solar and wind three to five-fold by 2050." Public opposition will put heat on the move to renew the twenty year wind and solar energy subsidies which expire this year, the loss of which would be devastating.

What's more, the obsession with "net-zero" has led to the type of environmental despoliation which oil and gas companies are often accused of -- "Solar farms take 450 times more land than nuclear plants, and wind farms take 700 times more land than natural gas wells, to produce the same amount of energy." As bad as bulldozing churches and forests is for coal sounds in modern Germany, it will apparently be much worse if they ever do go completely renewable.

Clarity in the House of Lords

In this election week, dedicated as it is to democracy and the noble practice of voting, I am devoting this space to praising a debate on climate change in the unelected U.K. House of Lords that took place on the 26th of June 2019. It’s a debate that I’ve cited before in a column that concentrated on the failure of all Western governments (except New Zealand) to put realistic price tags on their net -zero carbon emissions policies. But it had other lessons for climate and energy policy too.

Admittedly, others have been debating energy and climate change in this election campaign, especially in states like Pennsylvania and Oklahoma. The two candidates have clashed on fracking and whether fossil fuels should be phased out now (Biden), later (Biden), or maybe never (Trump) .These things were then covered, sort of, by a press that wanted to avoid controversies that might threaten Joe Biden’s opinion poll lead or his memory of the issues.

But the three hours of the Lords debate stuck in my mind as being livelier, better informed, covering more of the key issues, and  less packed with mere slogans than the three months of discussions in the American election campaign. Above all, the Lords debate brought to light issues that the wider climate change debate everywhere often ignores: in particular, who will pay the bills for the zero-carbon policies?

Baron Donoughue (Photo by Chris McAndrew)

In this context a speech by the Labour Peer, Baron Donoughue, was an important and necessary contribution. Bernard Donoghue is a representative of a important but disappearing force in British public life: the postwar grammar school generation that was educated in good state schools, went onto college as the first family members to do so, rose by meritocratic routes (Michael Young’s book, The Rise of the Meritocracy, that first spotted and classified the new breed, was published in 1958) to senior positions in business, cultural, and public life, and staffed the top of British governments from 1964, when Harold Wilson became Labour Prime Minister, through Margaret Thatcher and Thatcherism until Tony Blair and a new generation took over in 1997.

As that description suggests, the grammar school generation rose in both major parties, but until Thatcher its deepest influence was on the Labour party where it usually gravitated to the party’s “right-wing” or “Labourist” faction as distinguished from its socialist Left. The broad political tendency of grammar school Labourists was to support policies of generous universal welfare, moderate redistributive taxation, and a “soft” cultural blend of meritocracy and egalitarianism.

Donoughue himself was from a poor background, and after Oxford he rose via the Economist magazine and the London School of Economics to become the head of the Policy Unit in the Downing Street of Labour PMs Wilson and James Callaghan. Donoghue told an interviewer in 2015 (according to his Wikipedia entry) that he had gone into politics to be "associated with Labour governments which defended the interests of working people and underprivileged people." That was the kind of Labour party that has gradually lost support among blue-collar workers and provincial England as it has moved both in a culturally leftist ideological direction and into the public-sector middle class.

Maggie and grammar-school colleague.

Direct comparisons with American life are treacherous, but Donoughue’s nearest equivalents in American public life would be people like Joe Manchin, the senator from West Virginia, who defends the interests of its coal miners, or the writer Mickey Kaus, author of The End of Equality, who favors policies that would strengthen the economic prospects of the working class by tightening labor markets.

Standing clearly on the political ground of defending working class interests, Donoughue raises the question of who would pay the huge direct financial costs of at least a trillion pounds by 2050 of going net-zero, let alone the staggering infrastructure costs of transforming the U.K. economy into a net-zero-compliant one. He suspects he knows the answer to that:

Will it be, as is the case with the £15 billion in current climate costs, that the working people of this country carry the main burden, relative to their incomes, through paying significantly higher energy costs and green taxes to subside renewables?

If so, and it is so, there's a political problem with that:

The climate change revolution is predominantly a professional-class religion . . .. Polls have long shown that working people do not massively support this project, and they have not yet heard of these proposed new burdens  . . . it is irresponsible of the Government to push through this massive and not fully-considered project in a statutory instrument without serious assessment of the practicality of its proposed details or costs, and where those costs will fall . . .

Maybe the Brits will proud of making this sacrifice if it saves the world as its advocates claim. But they'll want to know what the world is getting for their sacrifice. Donoughue has naught for their comfort:

Our share of global emissions is just over 1%. If we alone decarbonise tomorrow, that is the amount by which global carbon emissions will diminish, yet in the next few years China and India alone—the great carbon emitters—will increase their carbon emissions by more than double that share . . .​ Pursuing zero carbon in Britain alone while the big emitters continue to pollute the atmosphere on a massive scale is a futile gesture of moral imperialism. (My emphasis.)

Donoughue is asking the important questions even if today and for some time to come, he can expect to be vilified rather than answered.

Strange bedfellows?

On this score also it’s hard to find his exact equivalent on climate policy among American public figures. It’s certainly not President Obama who happily accepted what Donoughue calls “false paper promises based on ill-supported forecasts” from the Chinese communists  (who promptly broke them) in order to keep the Rio-Kyoto-Copenhagen-Paris traveling roadshow on the road even if only rhetorically.

Might it not be Donald Trump who has refused to sign such promises while presiding over a large reduction in carbon emissions because his encouragement of the fracking revolution, in addition to powering America’s economic recovery and a rise in blue-collar living standards, also replaced oil and coal with much cleaner natural gas? An all-round win.

My suspicion is that Donoughue would not be entirely happy with that comparison--Trump grates on many British nerves--but he should be. Trump during his campaign has taken the same stand as Donoughue in defending working-class economic interests and in demanding that international climate treaties should be rooted in economic reality and a fair sharing of sacrifices between nations. And if Trump ultimately wins the still-disputed election, Donoghue may not want to disavow the comparison either.

What Price 'ESG'?

In March 2019, Norway’s Government Pension Fund Global (GPFG) announced that it would sell off around $7.4 billion ( £5.7 billion) worth of stocks held in oil and gas exploration and production companies that according to the government had thus far failed to invest in renewable energy. In the days following, the combined market capitalization of Tullow Oil, Premier Oil, Soco International, Ophir Energy and Nostrum Oil & Gas fell 3 percent, or about $168.8 million (£130 million).

Then this past February, as supply was overtaking demand in the global oil markets, Goldman Sachs and JP Morgan both announced green investment strategies. That’s right, the fast-living, meat-eating, boat-owning, McMansion-dwelling investment bankers found God, or least least Gaia.

Goldman will place restrictions on coal mining and coal fired power plant investments while JP Morgan would stop funding E&P exploration in the Arctic and would target $200 billion in green financing in 2020. It was a curious business decision since a slew of their private banking clients attained their wealth through O&G royalties and since both banks were underwriters in the Aramco IPO that yielded investment bank fees totaling around $90 million.

While the specifics of any one of these examples are not significant by themselves, they are illustrative of a trend within certain quarters of investment banking and on executive boards to pander to a set of criteria that at best are squishy and at worst represent Wall Street wokeness.

‘ESG’ is an acronym for 'environmental, social and governance'. It describes a set of often broadly- interpreted, rather fluid investment criteria (data and factors) applied by reflexive investment bank boards and activist investors to companies’ operations.

Choose one or the other.

While almost all are in agreement of the importance of good governance, the other elements of this criteria are frankly little more than ‘feel-good’ foolishness, open to any and all interpretation and activist pressure. Think symbolism over substance. Consider the following:

In May 2020 a Google spokesperson confirmed that the company will stop building custom AI/ML algorithms to facilitate upstream extraction in the oil and gas industry. After all, goes the narrative, working with O&G companies impedes stated climate goals and accelerates the climate crisis. There was no mention by the Google representative about whether they would also be removing the light fixtures, carpet, paint, tile, toilets, chairs and desks from their offices since petroleum products are part of the manufacturing process for those products.

The Google representative further clarified that Google Cloud only generated approximately $65 million in revenue from oil and gas company contracts in 2019, accounting for less than 1% of total Google Cloud revenue… as if the small percentage diminished the grievous nature of their environmental breach by working with the O&G industry.

Using AI in O&G after all would create business efficiencies that would make fossil fuel extraction faster, more safe, more accurate and less expensive. Imagine the societal damage brought by such a reality. Job stability, and increased tax revenue for the communities in which oil and gas plays are located would underpin this dystopic future that would emerge were Google to continue to develop AI technology with the O&G industry. What courage it must have taken for Google to reach such an important decision.

Greenpeace, an evangelizer from the religious-right of the church of EGS was there to celebrate Google’s decision. After all they had helped apply the thumb screws to Google. The narrative was predictable -- the EGS crowd won a moral victory against an immoral industry.

However, the same EGS advocates, the ones with more holy insight into what ‘E’ and ‘S’ should represent in the EGS pact had no comment or moral opinion about Google’s collaboration with the Communist Chinese regime only months earlier. They had nothing to say about Google’s efforts to develop a Chinese version of Google’s already creepy search engine. Known as “Project Dragonfly”, Google worked quietly developing the search engine that would censor searches by Chinese citizens of terms that the dictatorial Chinese Communist regime determined were acceptable. It wasn’t until The Intercept broke the story in July, 2019 that Google reluctantly abandoned the effort.

Don’t fret though, Google still has offices in China. They are now focused on developing AI technology and manufacturing for Chinese government-controlled companies. That’s right, the thing they abandoned with U.S. oil and gas because of its immorality they are now doing on behalf of the tyrannical Communist Chinese government. What letter should be used to describe that kind of moral and intellectual flexibility?

And no backing up!

The regime, known to forcibly sterilize and imprison its minority Muslim population known as Uighurs began disappearing and re-educating these innocents. It is now believed there are around 380 detention facilities to which anyone who pushes back on the tyrannical regime is sent. Instead of supporting the job-creating, liberty-centric O&G industry, these gentle-hearted EGS-minded investors and investment banks are content with this genocide of the Uighurs. What’s the letter for that?

Then just yesterday a former Facebook employee revealed that the censorship giant employs an Orwellian team in Seattle known as ‘Hate Speech Engineers.” Imagine the pride of ESG-minded investors when they found out that six members of this elite team of censors are Chinese expats in the U.S. on H-1B visas. Who better to be censoring all sorts of legitimate news stories than those who are expert at exploiting false narratives back in their motherland and on behalf of their motherland?

To the executives in the O&G industry, standing silent in the face of what is clearly politically correct wokeness, your silence will lend to the destruction of the one industry in North America that has single-handedly changed the geo-political landscape of the world and delivered the U.S. energy independence. To those in the investment banking world who favor the ESG standards and their random application to good versus bad industries, perhaps a new letter should be added to the criteria. How about “F” for fraud?