| Alan Moran 1 June 2022 |
A review and commentary on topical matters concerning the science, economics, and governance associated with climate change developments.
Developments in the economics of climate change policies
European forward contracts for electricity are now 5-10 times as high as in the past. This means that next year electricity bills will more than double. Politicians are blaming the Ukraine War. Below is the data for Germany.
| President Biden welcomed high petrol prices as part of “an incredible transition” of the US economy away from fossil fuels. The Administration has also cancelled oil exploration leases in the Gulf of Mexico. The Biden administration’s impeding of fracking and efforts of states like California, New York and Texas to replace coal and nuclear with high cost renewables has seen US electricity prices rise. But the momentum of the Trump deregulation measures has mitigated this by causing a surge in new supplies of oil and gas. US prices at the end of May remained less than half those in Europe (and Australia). |
| Thunder Said Energy shows Europe could easily cover its gas needs if governments allowed fracking. The following shows reserves in billion cubic metres. |
| In Australia, wholesale gas prices are trading at eightfold the price prevalent four years ago, while electricity prices for the past two months have been 5-10 times historical levels. An examination of 20 US case studies finds the costs of connecting a utility scale wind or solar project into the power grid ranges from 10-100% of the project itself. The alternative of carbon capture and storage fitted on power plants is, with extremely optimistic assumptions, 15% for natural gas, 20% for diesel, 30% for coal and 70% for wood-fired power generation. |
| Developments in government policies on climate change Having set anti-coal and renewable energy policies that increase electricity prices, the UK government is contemplating a windfall tax on electricity including on renewables. It has already put a 25 per cent super tax on gas and oil profits which is to generate £5 billion over the next year, about one-third of the cost of households’ direct payments. US and EU countries are also contemplating such action. Forces supporting ‘climate change action’ won stunning success in the Australian election, The Green’s share of votes increased to 14 per cent, compared to anti-renewable subsidies ’Freedom’ parties on 12 per cent, and with both major parties also standing on green climate platforms. A new grouping, the “teals”, named after their blue-green clothing choice, targeted affluent traditional Liberal Party seats and went from one to seven members in a Lower House of 151 MPs. Unlike the Greens, the teals have been described as “the climate change party you can vote for without supporting suburban heroin injecting rooms, death taxes or defunding the Australian Defence Force.” Australia’s new government has a policy of closing down coal plant and inhibiting new gas developments. The Greens, with which the new government will need to work, seek to expedite this “transition” process, and have a goal of “no new coal or gas projects”. Such policies also find favour among many other federal and state politicians, bureaucrats and state planning judiciaries; the National Party, the junior member of the former Coalition government, has changed its leadership in a move away from supporting domestic coal generation to pursue the “sensible centre’’. In the wake of the Australian election the national carbon credit price increased 20 per cent in the expectation of new policies which include requiring more shedding of carbon emissions by major firms. The Government of NSW has approved 11 areas for new coal exploration but rejected this in two areas, which the Wilderness Society said are now “safe from coal’s long shadow”. Key global policy makers, including US Treasury Secretary Yellin, are hoping to design packages that will wean South Africa, Vietnam and Indonesia off coal. And UN Secretary General Guterres urges graduates not to work for coal and other “climate wreckers”. But being virtuous isn’t cheap! The University of Stellenbosch estimates “It will take at least $250 billion to transition to a low-carbon, more equitable energy system in South Africa”; that’s about the Republic’s GDP; US and Europe looking to chip in $8.5 billion. Net zero policies’ costs are amplified by gas and coal shortages revealed by the Ukraine War. India, which is rapidly increasing coal production, is actually easing its environmental rules on coal developments to boost supply. Vietnam plans to raise its annual coal imports to 46.5 million tonnes by 2025 and to 123.7 million tonnes by 2045 from 36 million tonnes last year. Indonesia is also increasing coal developments and has got funding from major banks including Citigroup, BNP Paribas. Many other countries are, at least temporarily, returning to coal, including UK, Germany and Italy. Even so, in 2022, 61% of mayors of German cities with populations of more than 50,000 people rate climate as the most important current field of action for municipalities. Germany continues to double-down on promoting renewables and with regulations to reduce energy use. And, though seeking alternative gas supplies this is billed as a short-term measure. There has been no recent statement by the German government on impending nuclear power station closures. The US generally is facing climate-policy induced energy shortages caused by renewables subsidies forcing the closure of base power plant. But Richard Glick, Federal Energy Regulatory Commission Chairman, brushed aside concerns claiming, “that’s not going to happen. “We’re moving forward” with the green energy transition. California, having found environmental reasons to prevent new dams since 1979, is now also finding that global warming, critter dangers and other pseudo pestilences rule out new desalinisation plants. These are said to be needed to combat climate change-induced droughts. Governor Newsom is changing course by offering subsidies to keep open the state’s last remaining nuclear plant at Diablo Canyon. But independent candidate for governor, Michael Shellenberger, has accused Newsom of creating a water and energy crisis in the state by prioritizing environmental concerns over the reliability of essential systems. |
Developments in policies on climate change by leading businesses
Companies, including Nike, Disney and Coca Cola have incurred backlashes following their “Environment Social and Governance” (ESG) stances, which are nowadays code for anti-fossil fuel policies. Heartland also details the many US state governments that are withdrawing business from funds supporting ESG.
The World Economic Forum in Davos, however, declared ESG scores are the foundation for “stakeholder capitalism,” which the delegates, comprising top business people, bureaucrats and politicians, assumes will replace “shareholder capitalism” in the near future.
| Shell and BP are committed to net zero by 2050 and are spending shareholders’ money to meet this but still face demonstrations as does Total. Activist group Market Forces has successfully pressured Deutsche Bank from refinancing Whitehaven Australian coal mines and is turning up the heat on Australian banks to follow suit. Market Forces has also slammed $5 trillion fund manager Vanguard’s rationale for investing in Australian coal mines as “farcical”. Michael Bloomberg, with a net worth of $70 billion, is throwing $242 million at ending coal production in developing countries. Bloomberg proclaimed, “We’ve already helped close more than two-thirds of US coal plants, and more than half of Europe’s, while also reaping economic benefits.” Some push-back is also evident. In 2017, a senior executive at BlackRock, one of the largest investors in mining, declared that “coal is dead,” giving it a 10 year life. Though providing mixed messages, BlackRock will now oppose resolutions requiring firms to stop providing finance to traditional energy companies, or requiring alignment of bank business models to a specific climate scenario. Not so HSBC, which suspended a senior executive who, with prior approval, gave a speech that suggested the climate risk to firms is overstated. |
| This program shows the different roles played by enthusiasts, governments, businesses, and banks in using climate alarmism to attack cheap, reliable power that is the new orthodoxy. Many of these forces have gained considerable wealth at the expense of energy users in general. |
Developments in the science of climate change
Climate alarmists maintain the pressure. According to a team of 11 different forecast centers within the World Meteorological Organization, there’s a “93% chance that the five years from 2022 to 2026 will be the hottest on record” due to human-induced climate change. NASA climate modeler Gavin Schmidt, while not supporting these figures said, “Regardless of what is predicted here, we are very likely to exceed 1.5 degrees C in the next decade or so, but it doesn’t necessarily mean that we are committed to this in the long term — or that working to reduce further change is not worthwhile.”
Well-funded activist group Oil Change International estimates that staying within a 1.5 °C carbon budget implies leaving almost 40% of ‘developed reserves’ of fossil fuels unextracted. It calls on “governments and companies not only to cease licensing and development of new fields and mines, but also to prematurely decommission a significant portion of those already developed”. However as Australian conservative Senator Renwick shows, 1000 tonnes of dirt has to be mined to get one tonne of lithium, (the key component of batteries, that are said to be the solution in “firming up” variable supplies of wind/solar). This undermines the myth that wind/solar are emission free.
There is much hype from IPCC affiliates about “super hurricanes” increasing. Here is the actual data from Roger Pielke.
| Largely unreported is a 12 year downward trend in global warming. |
| What climate emergency? Paul Homewood examines UK weather and finds that temperatures rose between the 1980s and early 2000s but have remained stable since then. Heatwaves in 1975 and 1976 were much more intense than anything that has followed. In contrast, extreme coldwaves have become much less common. |
Whimsey
The UN Environmental Program (UNEP) presented Sir David Attenborough a ‘Champion of the Earth’ award for his devotion to frightening children and adults about the fake catastrophes of climate change.
The Guardian asks, “Can cross-breeding protect endangered species from the climate emergency?” It concludes, “We need to act at the source of the problem, which is climate change.” But that, “if we cannot save them as they are, should we try saving them as something else?”
Bristol’s Labour mayor, Marvin Rees, Britain’s first city mayor to declare a ‘climate emergency’, flew nine hours to Vancouver to give a 14 minute speech to tell other leaders how to cut emissions.
Nutty Professor Lambert warns: “Global warming has extended [tick] seasons and precipitated the spread of ticks which are being found to host an increasing number of pathogens.”
| May articles related to climate change This is worse than we thoughtThe Spectator, 24 May 2022 The Seinfeld election: a show about nothing The Spectator, 17 May 2022 The politics of an energy dystopia The Spectator, 10 May 2022 Build more dams Letter to the editor, 12 May 2022 |
