Opinion by Kip Hansen — 30 September 2022
Joseph C. Sternberg is a member of the Wall Street Journal’s editorial board and is the Political Economics columnist. He begins a recent column in the WSJ with this statement:
He has not been fooled by the nonsense that has nearly unseated World Bank President David Malpass. Climate Policies being enacted in the UK and across Europe are the “’climate risk’ to financial stability”. That risk “has arrived, although in exactly the opposite manner to what our current crop of eco-financiers predicted.”
“The U.K. may be facing a wave of business bankruptcies exceeding anything witnessed during the post-2008 panic and recession. Some 100,000 firms could be forced into insolvency in coming months, bankruptcy consultancy Red Flag Alert warned this week. These are otherwise healthy firms with at least £1 million in annual revenue. Business failures on this scale would dwarf the roughly 65,000 firms of any size that went under from 2008-10.
The culprit is energy prices, which the consultancy believes could account directly for around one-quarter of the possible insolvencies. These prices are rising for British businesses in intervals of several hundred percent at a time and sometimes with steep deposit requirements from utilities that fear precisely a wave of bankruptcies.”
Sternberg says that “matters are probably worse in Germany, the eurozone’s largest economy” where up to 73% of small and medium-sized enterprises report that they are feeling “heavy pressure from energy prices”. Some estimate that up to 10% may be facing “existential threats” – not from Climate Change mind you, but from Climate Change Policy.
Sternberg ends his piece with this:
“Politicians are happy to blame Vladimir Putin and his Ukraine invasion for the current energy disaster. But what transformed that one-off shift in the relative price for energy into a global disaster was two decades of green-energy policy beforehand. In Europe, that includes a fixation on renewables incapable of powering industrial economies absent battery technologies that don’t exist, a refusal to tap domestic fossil-fuel reserves such as shale gas, and a deep and irrational hostility to nuclear power in many parts of the Continent. This has created an energy system of dangerous rigidity and inefficiency incapable of adapting to a blow such as Russia’s partial exit from the European gas market. It’s almost inevitable that the imminent result will be a recession in Europe. We can only hope that it won’t also trigger a global financial crisis.”
Of course, as we have seen already in California, the U.S. may headed down the same road to energy and financial disaster.
You can read Joseph Sternberg’s full column here.
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Author’s Comment:
Regardless of your personal opinions and views about climate change/global warming, there can be very little doubt that the policies being implemented and urged by governments at many levels have been destructive – higher electricity prices, higher gasoline prices, higher transportation prices that have driven up cost of food and other commodities, damaging economies.
At the worst end of the spectrum, whole states and regions are facing rolling electrical blackouts and brownouts. Other areas have asked customers to cut electrical use during certain high-demand times.
The wisdom of the ages remains true: You reap what you sow.
Thanks for reading.
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And I fear australia is going down the same drain pipe.
Its not like we the down-shouted skeptics have not been warning them for two decades
The revenge of the material economy
The future belongs to manufacturers, energy suppliers and farmers.
https://www.spiked-online.com/2022/09/23/the-revenge-of-the-material-economy/
Bill Gates: You’ll never solve climate change by asking people to consume less
https://www.cnbc.com/2022/09/29/bill-gates-youll-never-solve-climate-change-with-degrowth.html
Bill Gates Hesitant To Donate Fortune To Climate Change: ‘Innovation Is Not Just A Check-Writing Process
Gates also said he helped with climate change portions of the Inflation Reduction Act, which Congress passed in August 2022. The sweeping legislation addresses several of President Joe Biden’s legislative goals, including encouraging renewable energy purchases through tax rebates.
“I was personally involved in a lot of what got written into it, and then working with the key senators in the last month to get it to pass — that’s far greater than any individual fortune,” he added.
https://www.huffpost.com/entry/bill-gates-climate-change_n_6335f961e4b03e8038bc987b
And, since NATO sabotaged the pipeline, even a peace agreement cannot reverse this disaster. The elites are dangerously incompetent.
Also, Government response to Covid is turning out to be worse than Covid itself. There’s a pattern beginning to emerge here.
Time for reverse Exxon Knew class action lawsuits. Climate scientists and the institutions behind them knew they were promoting unsupported nonsense.
The cure is most certainly worse than the disease.
The WSJ piece is spot on. And yes, you are right, the political establishment in the English speaking countries + Germany are in the grip of a collective mania on climate and energy. From which Germany is now waking. But in the UK we had a striking example of it at the recent Labour Party conference, where the head of the party announced they would be taking UK power generation to Net Zero by 2030.
It cannot be done. At least, it can only be done by cutting electricity consumption to a third or less of present levels.
The striking thing in the piece is a link on the same page to this:
https://archive.ph/o/ryXaO/https://www.wsj.com/articles/gavin-newsoms-dirty-climate-secret-california-rolling-blackouts-green-energy-grid-11662583198?mod=popular_AMP
In which we see, what has been reported by a number of sources, that the result of trying to move to intermittent generation for electricity is to increase the use gas and dependency on it. The link is about California, but I have previously cited an article showing the same is true for New England. And of course it is also the case in the UK and Germany.
There’s a simple choice: you don’t correct for intermittency, and then you have an unusable supply and will be stuck with reductions of use and blackouts. Massive and unpredictable reductions as the wind varies. Or you do correct, in which case the only backup you can use at the required scale is rapid start gas, and then you are at the mercy of the gas market. And are not actually reducing carbon emissions.
Its like the late great Nora Ephron said: any recipe with capers is better without them.
Well, any proposal with wind and solar is better without them. Either use the gas backup by itself if you are trying to maintain supply. Or if you are going to do it by cutting supply, just cut it and don’t bother erecting the turbines. Either way they are a total waste of time.
Climate policy is the matador’s cape behind which the “elite” are hiding, waiting to slaughter the economic bull. They will feast while we starve. That is the real policy.
“At the worst end of the spectrum, whole states and regions are facing rolling electrical blackouts and brownouts. ”
I’d say that’s at the best end of the spectrum, as some places are already experiencing them. We are looking at people unable to heat their homes and afford enough food this winter.
In Massachusetts the power company just announced a 64% rate increase. Of course this happened two days before the pipelines blew up, almost as if they were warned something might happen
It is the implementation of the Morgenthau Plan, which was developed for use in Germany after WWII but never implemented. Now it is being applied to all of Western Developed Civilization by the green progressive movement.
The article makes a major point that cannot be over emphasized: Climate poses a serious risk to global governance. The risk is NOT Climate Change, it’s climate POLICY.
“The U.K. may be facing a wave of…”
Globalist attacks.
Since Truss announced the fossil fuel expansion there has been a tension. Although reported as a uniquely UK phenomenon with the crash of the pound in these last few days, it wasn’t. Japan suffered similarly and I see no direct comparison for that. A massive intervention to prop up the Yen. But in BBC land it… never happened.
Then just to make sure markets and investors were spooked that little bit more the IMF decided to chime in with its expert advice…. don’t do that…
“IMF criticizes huge UK tax cuts and urges a rethink” – CNN
What business is it of theirs?
Mr. Hansen,
Thanks for posting the Sternberg piece.
He has elegantly stated that which we at WUWT know.
Sternberg’s piece should be required reading for everybody on the planet (but, especially, U.S. voters).
The greatest risk is that Human Extinction will be a self-fulfilling prophesy.
The Wizard Of Baca Grande
I leave the Baca with Strong, retracing our route of a week earlier. We pass the Lazy U Ranch and turn south on Highway 17. The desert slides by. Strong tells me he has often wished he could write. He has a novel he’d like to do. It’s something he has been thinking about for a decade. It would be a cautionary tale about the future.
Each year, he explains as a background to the telling of the novel’s plot, the World Economic Forum convenes in Davos, Switzerland. Over a thousand CEOs, prime ministers, finance ministers, and leadings academics gather in February to attend meetings and set economic agendas for the year ahead. With this as a setting, he then says: “What if a small group of these world leaders were to conclude that the principal risk to the earth comes from the actions of the rich counties? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it?” And Strong, driving as I take notes, looks at me. Then his eyes go back to the Highway 17. The man who founded the United Nations Environment Program and who wrote parts of the Burndtland Report and who in 1992 will try to get the world’s leaders, meeting in Brazil, to sign just such an agreement, savors the questions hanging in the air. Will they do it? Will the rich countries agree to reduce their impact on the environment? Will they agree to save the earth?
Strong resumes his story. “The group’s conclusion is ‘no’. The rich countries won’t do it. They won’t change. So, in order to save the planet, the group decides: isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?”
“This group of world leaders,” he continues, “form a secret society to bring about an economic collapse. It’s February. They’re all at Davos. These aren’t terrorists. They’re world leaders. They have positioned themselves in the world’s commodity and stock markets. They’ve engineered, using their access to stock exchanges and computers and gold supplies, a panic. Then, they prevent the world’s stock markets from closing. They jam the gears. They hire mercenaries who hold the rest of the world leaders at Davos as hostages. The markets can’t close. The rich countries…” And Strong makes a light motion with his fingers as if he were flicking a cigarette butt out the window.
I sit there spellbound. This is not any storyteller talking. This is Maurice Strong. He knows these world leaders. He is, in fact, co-chairman of the council of the World Economic Forum. He sits at the fulcrum of power. He is in a position to do it.
“I probably shouldn’t be saying things like this,” he says.
http://nwodb.com/?e=03620
Quote:”….the culprit is energy prices…..”
Yes and no.
In exactly the same way Governments (and the voters of course) want cheap food.
Hence why food has escaped, by and large, the hideous taxes and duties applied to almost everything else folks need and use
Energy escaped not entirely unscathed but at least here in the UK, sales tax (VAT) is applied at only 5% instead of the general rate of 20%
Governments do that because taxing an absolute essential such as Food is a ‘a bit rough’
In the UK and in Europe, Cheap Food was engineered via the subsidies given to farmers. It did not work to make food inexpensive, it worked so as to give Government total control over farmers – what they produced and how much. Hence dictating prices.
Why Government did that was to release money so that folks could spend on ‘other stuff’ – stuff that was not ‘essential’ and could thus be taxed at a much higher rate.
Over the course of time, other stuff came to include everything except food and energy
Thus the tax take skyrocketed and Governments ‘got used to it’
They instantly spent every penny that came and in the UK, whenever a new tax was mooted, it’s blindingly obvious that the intended revenue was already spent before the revenue stream even started.
Further depressing the prices of food and fuel.
See where we’re going?
It’s not **really** the increasing cost of fuel that’s to blame, its the immense amount of tax that folks pay – that every spare penny they had to spend of stuff (other than Food or Fuel) was taken off them in tax.
Even then, look at UK petrol where 66 pence out of a current price of 165pence is tax.
Now do we see where Liz Truss is headed with her tax cutting?
If folks paid less tax, they would not only have the money but also the inclination to spend more on fuel.
She has exactly the right idea and is going for it.
Now then, Who is kicking up the biggest fuss about La Truss’ tax cutting if not the Big Boys of The City.
i.e. The most greedy and grotesque bunch of money grubbing cronies that ever drew breath.
Because every penny of tax revenue that comes in crosses over their desks and when it does they take a cut.
Then when the money is spent (by Gov), it passes under their noses once more and they take another cut.
Not least because vast numbers of Seats On The Boards of those Big City Firms are occupied by ex-government ministers.
That is after all why they became Members of Parliament in the first place.
The System is rotten to the core – see and understand now who especially is blaming Mr Putin for the trouble we’re now in? And why.
The actual and wannabe Cronies
Mr Putin is not the problem
High fuel prices are not the problem
High taxes are – or especially the grotesque parasites that feed, very nicely thank yo very much, off that huge revenue stream.
We know it’s not true lefties BUT….it could be because it fits-
Donald Trump Jr shares meme accusing Greta Thunberg of Nord Stream pipeline sabotage (msn.com)
It’s straight out of your hymn book and you just need to contextualize these things. LOL.
Isn’t this arrival through unexpected means how real risks always appear? Right now, worldwide, the risk of fascism is advancing exactly through political parties and people who have been screaming that everyone else is a fascist risk for decades.
The climate zealots, hysterics actually, see nothing bad within themselves and the general public have so many cognitive infirmities that they are likely to accept the zealots claim that wind turbines would have saved the world had we only started sooner. I’m not too sure the coming apocalypse will provide any learning opportunity.
Witchcraft poses an even bigger risk to financial institutions.
Small and medium sized companies going under right and left.
Large companies, with sizable government contracts to keep them going, survive and absorb their defunct former competitors.
Sounds like an excellent plan for consolidating economic power in the hands of the elite.
That’s been the plan all along aided by complicit media and politician useful idiots.
The “climate crisis” is a manufactured crisis designed to distract the masses from the dismal failure that Progressivism has been over the last half-century. By the 21st century, liberated markets in the developing world had reduced global abject poverty to its lowest level in all of history. Most of even the poorest in America today live better than the poorest did 50 years ago.
But to Progressives, the only solution to the consequences of bad Progressive policy is more bad Progressive policy. The phony war on carbon was the perfect excuse.
“You reap what you sow.”
I think a better way to put this quote is….We reap what they sow!