Farewell net zero, we hardly knew you …

Saturday, 5 August 2023 — South Melbourne

[6 min read]

Dear Reader,

A few months ago, I joined an editorial ideas meeting in Melbourne and net zero unexpectedly popped up at the top of the agenda. What struck me was how far behind Australia is. Not in achieving net zero, but in discovering its thorny implications.

My work in Europe with Nigel Farage and keeping up with daily German news had highlighted just how controversial saving the planet had already become over there. Australia just hadn’t gone through the same reckoning…yet.

Since then, net zero’s ‘challenges’ have become part of Australia’s news cycle too. The public has discovered what Europe’s power bill payers learned about a year earlier.

The cost of achieving net zero has been underestimated by an order of magnitude that’d make a government public transport feasibility study look conservative.

The feasibility of a net zero energy system has been overestimated by an amount that’d get Elon Musk arrested for false advertising.

There simply aren’t enough mineable resources needed to build a net-zero energy system anyway.

Living standards under net zero would be worse than the Second World War rationing.

Green energy is not cheaper once you factor in energy storage and transmission costs.

The cost of updating the power grid alone is prohibitive.

And so on and so forth…the revelations have been flowing.

Today, I want to update you on your future once more. Because, once again, Europe is leading the way on net zero. Or should I say out of net zero?

In the UK, which The Telegraph declared, ‘is a world leader in net zero fantasies and delusions,’ the worm has already turned. ‘This could be the beginning of the end of net zero,’ it says. Why? ‘Every net zero policy has been a flop — and you are paying the price,’ reads another headline.

Even the politicians have woken up, in the only way they know how. The UK Government recently faced a series of by-elections. It lost two seats but managed to hold onto one where a peculiar local issue dominated the debate.

The London Mayor wants to expand the Ultra-Low Emissions Zone into that electorate, which would’ve cost local drivers a lot of money. The Government opposed the change, and so it held onto the seat.

This seems to have caused some sort of political awakening for the Government in the UK. It has realised that neutering net zero is its only hope of getting re-elected. The slogan, ‘Don’t elect Labour, they’ll only do more of what we’ve been up to’ isn’t going to fly.

The biggest question in UK politics now is just how far the Government will go in undermining its own net zero policy. And the answer appears to be quite far, with hundreds of new oil and gas licenses to be issued in the North Sea for a start. Most of those would be worse than worthless under net zero commitments…

It’s not just those in government who have woken up. Former Brexit negotiator Lord Frost dared to point out that global warming would benefit the UK. Former Labour Prime Minister Tony Blair reckons, ‘Public must be spared [the] huge burden of net zero’ and ‘[The] UK can play its part in climate change fight but its efforts risk being dwarfed by [the] impact of countries such as China.’ A former Chancellor (Treasurer) claims, ‘there's a ‘cross-party disease of politicians not being straight with voters about [the] significant true cost of [the net zero] project”.

And, of course, it’s not just the UK that is experiencing the change. ‘Giant doubt about [economy minister] Habeck’s electricity plan,’ reports German newspaper Bild about the outlook for renewables to 2030.

It’s also a case of ‘do as I say, not as I do’. The Germans didn’t turn to wind and solar when their energy system was blown apart after playing too much Russian Roulette. They turned to coal and gas, recently adding vast long-term US LNG import deals.

The Germans are internationally renowned for their energy transition, which currently has them using more coal than renewables put together…

In Sweden, they eliminated electric vehicle (EV) subsidies, causing a 20% drop in car registration. In Norway, they’ve discovered that EV subsidies go to the rich, leaving the poor in fossil fuel cars that could soon be phased out. Now the Norwegians are considering ceasing EV subsidies…

South Africa’s energy minister says the country’s blackouts are being caused by ‘the West paying us to cut coal’ after South Africa ‘agreed to be a “guinea pig” and close coal-fired power stations.’

Even the IPCC’s new chair, James ‘Jim’ Skea, has come into his position saying he wants to avoid causing ‘a sense of panic and despair’ over climate change. The fellow who proposed the term ‘global boiling’ was roundly ridiculed.

Most awkward of all is the revelation that global warming will save lives…

Things are so far advanced in Europe that anti-anti-fossil fuel protestors are popping up. They aim to disrupt anti-fossil fuel protestors with their own inconvenient tactics.

It reminds me of when I lived in London and angry commuters pulled climate change protestors off the roof of a train they were disrupting.

Most notably of all, it seems the argument that the West’s emissions reductions won’t have an impact on climate in the face of the developing world’s expected emission increases is gaining political traction.

Voters seem to be saying that they won’t sacrifice their prosperity to cut emissions if it won’t make a difference because developing nations aren’t following suit.

And believe it or not, developing countries want a standard of living that fossil fuels have delivered to us in the West. Denying them the prosperity we achieved is going to be a tough sell.

This has created a new Nash Equilibrium of all-around pollution.

And it begs the question I’m really supposed to be focusing on, given overseas politics is not the actual mandate…

Is the greatest investment trend of the century already over?

Not so long ago, the energy transition was supposed to pull the rug out from under fossil fuel companies, dragging down the portfolio performance of anyone dumb enough to own such ‘stranded assets’.

Renewable energy technology was the corresponding opportunity with truly vast amounts of renewables needed to fill the void due to their intermittency.

The most profitable investment opportunity of the next few decades was going to be the resources shortages we face from trying to go green. You see, green energy is incredibly metals intensive. You need frightening amounts of copper, nickel and cobalt, for example.

If the world were to make a pitch for net zero, as governments have promised, then it’d take a mining boom of unprecedented proportions. And that, in turn, requires a commodity price spike in order to make it profitable.

But investors seemed to forget that net zero was never anything more than a political promise — hardly the basis of a good investment.

Renewables projects seem to be the stranded assets nobody wants and the companies that delayed selling their fossil fuel projects are performing well.

The good news is that the climate change fad is no doubt destined for a comeback, like the hydrogen fad, EV fad and artificial intelligence fad, which make periodic comebacks surprisingly often.

Perhaps we’ll recognise them as fads from the outset though, yeah?

Regards,

Nickolai Hubble,
Editor, The Daily Reckoning Australia Weekend

Dear Reader,

Let’s begin an overview of the climate alarmist position by considering a few of their claims in the light of real science:

Surging sea levels will inundate the coasts. This is false. Sea levels have risen at the same pace for 100 years, unaffected by climate change or human activity. The rate of increase is about seven inches per 100 years. That’s barely enough to get your feet wet in 2121 if it persists, which it may not.

Hurricanes are becoming more powerful and more frequent. This is false. The 2014 US National Climate Assessment said, ‘There has been no significant trend in the global number of tropical cyclones nor has there been any trend identified in the number of US land-falling hurricanes.’ There is evidence that property damage from hurricanes is increasing. Does this mean hurricanes are getting stronger? Not at all. It just means that rich owners with subsidised insurance are building mansions on sandbars where they don’t belong. That’s not climate change. It’s stupidity.

Tornadoes are more powerful and more frequent. This is false. National Oceanic and Atmospheric Administration (NOAA) records from 1954–2014 show the number of tornadoes in the US of EF1 or greater (EF is the Enhanced Fujita Scale of tornado strength) is fairly consistent at about 400, with occasional spikes in 1973, 1982, 2008, and 2011. The number of tornadoes in the US of EF3 or greater has been steady at around 40, with spikes in 1957, 1965, 1973, and 2011. No correlation has been shown between tornado strength and CO2 emissions.

Snowstorms are becoming more frequent with greater accumulation of snow. This is false. Snowstorms are highly localised so, of course, measurements vary, with some locations getting more snow, some less. A chart of annual snowfall in Washington, DC, from 1889–2018 shows the annual snowfall in inches has been trending downward for the entire 130-year period. If climate change has any impact at all, it is causing less snow. And there is no correlation between climate change and an increase in CO2 emissions.

Wildfires are destroying larger areas more frequently than ever before.This is false. Satellite data from NASA reveals that the global area burned annually by fires from 1998–2015 has declined by about 25%.

Similar data exists for ice sheets, droughts, floods, and other weather-related outcomes. In short, none of the extreme outcomes that the climate alarmists shout about are true. And there is no conclusive evidence that any extreme weather, when it does occur, is caused by human activity or CO2 emissions.

It is true that CO2 emissions are increasing. It’s also true that scientists have detected a slight trend toward global warming.

There is no clear evidence that human-caused CO2 emissions are the principal source of global warming. Although, emissions could be a contributing factor along with sunspot cycles, ocean currents, and other natural causes that are difficult to measure.

What is clear is that global warming, if any, is proceeding slowly. There is no looming catastrophe. Some evidence even suggests that a new cooling period has begun.

Regards,

Jim Rickards,
Strategist, The Daily Reckoning Australia