Yesterday I warned you about the cost of Britain going carbon neutral by 2050. And how imposing those costs on consumers causes social unrest and other backlashes. At least it has in many places around the world.
Over in Germany and Ireland, farmers took to the streets this week to protest coming EU environmental regulations. They shut down the capitals with tractors and their diesel fumes.
On cue, the UK government released its own plans for agriculture to meet the emissions targets. And you ain’t gonna like ‘em.
At 12% of UK emissions, agriculture is a big… target. And the coming changes mean “Farmers will need to adopt new practices touching almost everything they do” Bloomberg claims.
Sounds expensive, doesn’t it?
Should the ruling Prime Minister Boris Johnson’s Conservative government take on all the advice, the measures would cost about 1.4 billion pounds ($1.8 billion) a year. The net social benefit could be as much as 4 billion pounds a year, the committee said. As a comparison, the U.K. currently pays in 3.3 billion pounds a year into the European Union’s Common Agricultural Policy in 2018.
I hope that’s a net figure, guys…
But it sounds like a good deal, right? £1.4 billion spent for £4 billion in gains.
Well, it depends who is going to pay for it and who gets the gains. Somehow I don’t think that’ll be so social.
Will it be the farmers who pay? Will we see tractors rolling past our office here in London?
Or perhaps the food consumers amongst us will have to fork up?
Perhaps we’ll end up with an agricultural policy worse than the EU’s thanks to climate change red tape. Wouldn’t that be ironic?
Strangely enough, the UK will be following the US’s lead by making tree planting a major part of the campaign to offset emissions. If I had any faith in the government’s ability to pull this off, I’d be happy about that particular solution.
Hopefully Britain’s emissions goal is far off enough to avoid any real action anytime soon. So that our costs and political system remain stable. Perhaps the right technology to solve the problem of pollution will come along in the meantime. If it hasn’t already.
Does anyone know of any power source that’s reliable, safe and green? You know, the one you’re not allowed to mention in politics any more.
Meanwhile, over in China and India, things are heating up. The two countries claim to have almost eliminated their hydrofluorocarbon HFC-23 emissions. And yet, tests suggests someone is still pumping the gas used in fridges, inhalers and air conditioners into the atmosphere.
Instead of falling as assumed, the HFC-23 emissions are growing at a record rate. I wonder if climate scientists have updated their models for this, or whether they’re still using China and India’s published figures.
I wonder what other data nations might be misleading us on…
China has definitely been transparent about its coal, as Boaz Shoshan’s Twitter feed pointed out. 72% of coal plants around the world are funded by Chinese banks. While the West pays China money to go green, it builds coal plants around the world…
Over in Australia, “coal and gas plants are breaking down every three days” on average reports the Renew Economy website. Coal still provides 60% of Australia’s energy needs. Steve Smith the rest. He’s out at about the same rate too – once every three days.
The average age of Aussie power plants is also Steve Smith’s age – 30. But the key issue is of course reliability. You can turn coal power on when you need it. Wind, solar and David Warner have a mind of their own.
And so Australia faces a dilemma. To build new coal power, like Germany recently decided to. Or turn to political no-nos like nuclear. Renewable energy just won’t deliver power reliably enough when Australians need it.
Let’s get to today’s point. The world seems to think that climate change is the key risk. I’m getting worried about the consequences of combatting climate change. Perhaps they’re just as dangerous.
It’s a bit like Prohibition, the war on drugs and invading Iraq. The problem may seem obvious at the time. But is the government’s solution really better?
By making decisions on climate change independent of what those decisions imply, political leaders around the world have painted themselves into corners. They now face having to choose the lesser evil of various options.
Yesterday we looked into the countries that chose to impose environmental costs on to the people. All hell broke loose as a result.
In Germany, the PR team handled things much better. The Energiewende is idolised by people around the world while a new coal plant gets built on the side. And the return to coal is being blamed for an increase in deaths thanks to pollution. Whoops.
In China, they just lie about the stats, take Western money and build coal elsewhere.
In Australia they pay incredibly high electricity prices.
The point is, there’s no longer an easy option once you accept binding commitments about emissions. That’s sort of the idea of a commitment, but I’m not sure it’ll actually reduce emissions. It could just lead to political chaos, higher prices and unintended consequences.
This won’t end well. Not for investors or consumers.
But life isn’t just about the Green Bubble and climate change, right?
What else is going on?
Only the most important tech development in the history of communication. Soon, everything will be able to talk to you. From your fridge to your night light.
If that sounds like a lot of required hardware, you’re on to something.
And that’s it from me, for two weeks. I’ll be discovering just how misleading the term “paternity leave” is.
My colleague and e-believer Kit Winder will be in charge (of Exponential Investor). Good luck to you both.
Until next time,
Editor, Southbank Investment Research