A Closer Look at the UK’s Energy Predicament

Tilak Doshi’s article, “The Folly Of Climate Leadership,” provides an incisive critique of the United Kingdom’s ambitious journey towards net zero emissions, offering a stark examination of the policies and their implications on both the economy and the populace. Doshi draws attention to the significant financial burden placed on UK citizens due to the pursuit of net zero emissions, stating,

Citing an International Energy Agency report, The Daily Telegraph reported on Wednesday that UK electricity prices have risen faster than almost any other developed country since 2019. The price of electricity in the UK rose by 19 percent in 2023 alone, compared to the US where electricity prices have risen by 5 percent annually since 2019. Referencing a separate report from the House of Commons library, the same article finds that the price increases have been driven by taxes and levies linked to the country’s commitment to the “net zero” emissions target which made up almost a fifth of household electricity prices.

Rupert Darwall’s 76-page penetrating analysis of Britain’s energy policy, “The folly of climate leadership: Net Zero and Britain’s disastrous energy policies” with a foreword written by Andy Puzder was published last month by the RealClear Foundation. It provides the context necessary to understand how UK’s political elites practically sleep-walked the country into its binding net zero legislation. The follies of quixotic climate leadership are not Britain’s alone, as the Biden Administration took office three years ago as America’s first “environmental administration”. Mr. Darwall’s analysis provides an excellent assessment of the lessons of Britain’s failing energy policies for those of the Biden administration. Under Democrat leadership, the US government unleashed a tsunami of green subsidies under its misnamed Inflation Reduction Act to achieve its net zero targets.

https://www.forbes.com/sites/tilakdoshi/2024/01/29/the-folly-of-climate-leadership/?sh=744e33e566f2

The UK’s commitment to wind power as a cornerstone of its renewable energy strategy is met with skepticism. Doshi references the government’s legal commitment under Prime Minister Gordon Brown to reduce carbon emissions by 80 percent by 2050, a target that was later expanded upon with even more ambitious goals. The reliance on wind energy, particularly offshore wind, was bolstered by claims of rapid cost reductions and mass deployment efficiencies. Yet, as Doshi points out, these assertions often overlooked the complex realities of energy production, including the financial and technological challenges inherent in scaling up wind power.

Doshi leverages Rupert Darwall’s analysis to challenge the prevailing narrative surrounding green energy policies. Darwall’s report, as cited by Doshi, delves into the UK’s energy policy failures, illustrating how political narratives have often overshadowed factual accuracy and economic prudence. The article highlights how these policies, while aimed at establishing climate leadership, have led to increased energy costs, questioning the sustainability and efficacy of such an approach.

Mr. Darwall tracks down Boris Johnson’s “9 times cheaper” claim to a July 2022 post by Carbon Brief, a climate website funded by the European Climate Foundation which is in turn funded by green billionaire foundations such as the Bloomberg Family Foundation, Climate Works Foundation, and the William and Flora Hewlett Foundation. In this and a myriad other ways, Mr. Darwall shows with forensic precision how Britain’s energy policy is captured by vested interests and climate NGOs in the climate industrial complex where the welfare of working Britons matters little if at all.

As Siemens, the world’s largest wind turbine company grappled with a share price collapse late last year amidst cost escalation, component failure, disappointing productivity and “ramping-up” challenges, its chairman Joe Kaeser warned last week that energy bills will have to keep rising to pay for the green transition as he attacked “fairytale” thinking about net zero. He suggested higher energy bills were inevitable as turbine makers grapple with huge losses, forcing them to pass on costs to their customers. In September, not a single bid was received at a key government auction for offshore wind acreage, dealing a blow to the UK’s renewable power strategy and even higher government subsidies to rescue a faltering industry.

The Role of Government and Economic Realities

The critique extends to the governmental agencies responsible for overseeing the economic viability of climate policies. Doshi notes,

The Treasury and the Office for Budget Responsibility (OBR) are the two key government agencies that act as watchdogs for policy coherence and cost-benefit analysis of key policy proposals. Mr. Darwall, who is not one to mince words, states baldly that “they share responsibility for propagating fantasy economics on the likely costs and consequences of net zero.” Darwall describes in detail how U.K. politicians and their expert advisors in the Treasury and the OBR effectively sold “green snake oil” to their voters. In a “travesty of policy analysis”, these agencies were effectively “selling voters a fairy tale of green growth”.

The OBR, indulging in climate group think and virtue-signaling luxury beliefs, “fabricated a scenario of spiraling public debt reaching 289 percent of GDP in 2100 out of unevidenced climate catastrophes caused by tipping points such as a complete melting of the Greenland ice sheet, which the UN’s Intergovernmental Panel on Climate Change reckons might happen over several millennia.”

The Treasury’s published its Net Zero Review in October 2021. While claiming that its report is “not a cost-benefit analysis”, it nonetheless asserts that “a successful and orderly transition for the economy could realize more benefits—improved resource efficiency for businesses, lower household costs, and wider health co-benefits—than an economy based on fossil fuel consumption.” The Treasury claims that “The costs of global inaction significantly outweigh the costs of action.” Yet it does not consider the most likely scenario that the developing countries, constituting 80 percent of the global population, will continue to use fossil fuels in their imperative for economic growth and improving the well-being of their citizens.

https://www.forbes.com/sites/tilakdoshi/2024/01/29/the-folly-of-climate-leadership/?sh=744e33e566f2

This observation underscores a broader issue within the discourse on climate policy: the tension between aspirational goals and the pragmatic considerations of economic impact and technological feasibility.

A Call for a Reassessment

Doshi’s article serves as a critical reminder of the need for a balanced approach to energy policy—one that carefully weighs the environmental benefits against the economic and social costs. The UK’s experience with its net zero ambitions and renewable energy strategies, particularly wind power, offers valuable lessons on the complexities of attempting to transition the energy system.

Even at the cost of impoverishing its citizens, Britain’s political elite has striven in its hubris to make the country a global “climate leader” in the United Nations-led drive to reduce greenhouse gas emissions. Britain’s economic performance deteriorated markedly since the global financial crisis and remains far below its pre-2008 trend. Mr. Darwall cites the work of the late economic historian Nicholas Crafts who showed that 2007–19 saw Britain achieve the lowest peacetime growth rate since 1780.

As Europe’s farmers in France, Germany, Netherlands, Poland, Lithuania, Romania and Belgium engage in mass uprisings against government climate policies across the continent and as Paris is being blockaded by tractors, the publication of Rupert Darwall’s study could have not been more appropriate.

https://www.forbes.com/sites/tilakdoshi/2024/01/29/the-folly-of-climate-leadership/?sh=744e33e566f2

Doshi’s full article is worth a read.