Sigh, another day another attempt to recast NetZeeism as a positive endeavour worthy of serious attention support from conservatives and free marketeers.
As set out elsewhere, the issue with Net Zero is not the dry as dust climatology of how you balance emissions to arrest global warming, but the ideological zealotry around how you get there. One where drippy wet eco-Tories find their views more closely aligned with those of the anti-capitalist left, than fellow liberals.
It is certainly true that there is a rich conservationist tradition in conservative movements and the UK Conservative Party. From pastoralism, to preserving heritage, national parks, garden cities, stewardship and animal care, the desire to preserve today for the benefit of tomorrow is a conservative passion. One interestingly often neither understood nor appreciated on the left.
A monomaniacal obsession with Net Zero by a fixed date and desire to impose it regardless of the costs or unintended consequences conversely is a radical stance. One that denies trade-offs, and in doing so upsets the profoundly pragmatic conservative approach to environmental challenges. One that moves with the grain of social and technological change, trusting the people to make wise choices through markets, rather than trying to impose a utopian vision on society in the manner of authoritarian socialists.
When activists say things like: “if we listen to sceptics and falter in our commitment to net zero, we will surrender this critical issue to the left.”
The only sensible response is: “what on earth are you talking about?”. That a small handful of opinion formers obsess about their carbon footprint in the manner of medieval Lords counting their sins does not entail that elections are won and lost by green purity tests. It matters that Conservatives take climate change seriously. It matters that they express that seriousness through sensible conservative solutions. It does not follow that they should seek to become an echo chamber for catastrophising teenagers and cultists in hard left campaign groups.
A good example of the problem is the Conservative Environment Network’s adoption of the ‘leave it in the ground’ ideology of groups like Friends of the Earth. It is self-evident that the UK and West are not going to be independent of oil and gas for some years to come. It is self-evident that what we do not drill we import. It is self-evident that when we import the beneficiaries are places like Russia and Saudi-Arabia not our own exchequer or British talent.
Another is their bizarre celebration of the policies of the previous Labour administration, whose renewables obligation (RO) has saddled the UK with a grid full of old wind farms whose payments are linked to a premium on the price of gas. One of the purest examples of ‘picking losers’ at the public’s expense through industrial policy rather than trusting markets.
Another is their refusal to accept intermittency is a problem until there are affordable low carbon alternatives to gas as back-up (which there are not). The true cost of renewables includes increased investments in upgrading the grid and providing alternate security of supply when the weather isn’t helpful. Right now that’s gas, and loading the grid with more stuff that isn’t working, at the same time, doesn’t change that, it just makes the whole system less efficient.
And yet the dogmatic insistence that the only path is going faster and harder on Net Zero continues. This is not a conservative position, it is conversely “economically illiterate”.
I do agree with CEN that the newer system of Contract for Difference Feed-in-Tariffs (CFD) is a better, more market-based solution to incentives than the RO. The auction mechanism encourages competitive tendering, and this should deliver more affordable renewables in future. But this is thin stuff in the wider context of a domestic energy market rendered unworkable by “socialist” price caps, capacity mechanisms, loans, rebates, subsidies, and ratchet policy incompetence.
It also doesn’t help that groups like CEN consistently underestimate the impact of the CFDs on prices. We are paying over £6bn a year in windfall profits to the bulk of renewables on the grid through the RO. The only CFD schemes to be genuinely exciting for their affordability haven’t even been built yet. And I fear future bids will be higher given the green growth paradox. Meaning that the higher energy prices impacting Europe are forcing up costs for producers of wind turbines and solar panels as well as the rest of us. Companies like Siemens and Vestas are suffering from higher prices for steel, plastics, and electronic components. Future bids are likely to be higher as a result.
We should perhaps also cast a veil over the mother of all nightmare CFDs, the Hinkley Point C contract. One that has saddled the UK with “the most expensive power station in the world”, due again to the arrogance of NetZee politicians picking technology, not market mechanisms. The replacement scheme for Sizewell C, the regulated asset base, isn’t much better. It just puts the taxpayer on the hook sooner.
If CEN genuinely want market competition, they should be targeting policies that reflect a single carbon price, technology neutrality, a removal of grid preferencing, and far fewer direct payments, if any. The plan to end our reliance on gas should be delivering better alternatives, not banning holes in the ground that upset nimby toffs as much as crusty trots.
Clearly there are positive case studies of markets delivering funky green stuff that will change the world. The Tesla, biobased and biodegradable plastics, GM crops that use less resources. This it what market-based innovation does, and it doesn’t require a central plan or vapid targets.
Clearly if CEN want to promote innovation and market-led change, all fire to them. I rather suspect however this is more likely to be that old social democratic staple of politicians taking credit for the achievements of others. Successes that would have been greater and faster had they just got out of the way rather than intervening. The UK’s domestic energy market was only cheaper, more secure and greener simultaneously, when that is precisely what happened.
It has taken two decades of nonsense from groups like CEN and the predecessors in Labour to undermine it, and they show no sign of pulling back soon. It’s not the left they fear ‘owning the narrative’ they are telling the same stories. It’s people who actually want the market to work to achieve the same ends faster, without all the ideological grandstanding.
Stop posing, start drilling, and then let’s replace the socialist mess both parties have made of energy markets with something that works for consumers rather than vested interests.
