Net Zero Scepticism

When I used to travel to the USA regularly, I was often accused of cynicism by academic colleagues.  In response, I usually said that I was merely being sceptical, pointing out that this was an Enlightenment virtue much needed if academics were to be effective.  I often added that I thought that I was paid to be sceptical.  Well, no one is paying me now, but scepticism remains a life virtue when the alternative is credulity which the world is in no danger of running out of. [ * ]

I'm not a climate change sceptic, but I now realise that I am becoming  a net zero sceptic.  That's to say, I am unconvinced that the present (and next) UK government policies and plans around cutting greenhouse gas emissions will be effective or cost-effective.  I also suspect that they are ill-focused on the problem.  I also consider that they carry considerable risk to the proper relationship between parliament and people which relies on mutual respect.

I am still working out the parameters of this scepticism, with a number of recent posts being significant pointers along this road.  It's also fair to say, however, that concerns about forcing people to spend money that they can ill afford (or simply do not have) on unnecessary changes to their lives for an arbitrarily-timed, ill-defined goal is a key component.  I'm going to write about these issues over the next few weeks to try to sort out what I think.  What follows here is a start.

It is hard to avoid in any discussion of climate change a convincing case that it comes with costs, and that these costs will rise as planetary systems are affected.  Such costs are economic, social and environmental, as well as financial.  Indeed much policy now being implemented is based on the need to reduce these costs over time.

It is rarer to find explicit acknowledgement that climate change policy also comes with costs, although we all know, unless we're asleep, that it does.  Two examples will suffice for now: all UK electricity users have been paying a 'transition to renewables tax' for some years as part of their bills.  It is, of course, not called a tax, nor is it clearly labelled.  The government is trying (and seemingly failing) to find a way of shifting this tax to gas users as a means of incentivising a shift to domestic electricity use (despite the electricity grid being unable to cope if they are successful).  In 2024 this tax is likely to be around £150 per account.  All electricity consumers also pay another tax (around £40 in 2023 and again not labelled as such) to compensate wind farm owners when they have to switch off their turbines because the power cannot be sent from where it is generated to where it is needed because, thanks to lack of effective planning, there are insufficient inter-connector cables in place.  There are also new taxes to come for all sorts of things such as the decommissioning of the gas grid.

My scepticism includes the worry that a lot of money will be spent to no great effect, with the opportunity costs incurred therein being heavy.

Putting scepticism together with environmentalism, points to Bjorn Lomborg – the original "skeptical environmentalist” – who is now President of the Copenhagen Consensus, a thinktank he established.

In a recent article for the Telegraph, Lomborg notes that the research of climate change economist William Nordhaus argues that very ambitious carbon reductions will bring high costs and low benefits.  Lomborg says that this research is routinely ignored leading to unrealistic promises of net-zero carbon emissions by 2050.  Last year a special issue of Climate Change Economics made such an analysis.

Lomborg writes:

"Three different modelled approaches all show far higher costs than benefits for every single year throughout the 21st century and far into the next. By 2050, the annual costs of the policy range between $10 and $43 trillion. That’s 4-18 per cent of global GDP. Consider that the total tax intake of all governments across the world today is about 15 per cent of global GDP – and politicians would potentially have us spend more than that.  Across the century, the benefit is 1.4 per cent of global GDP while the cost averages out at 8.6 per cent of global GDP.

Every dollar in cost delivers perhaps 16 cents of climate benefits. Clearly, this is an atrocious use of money."

Lomborg's recommendation is that, instead of making carbon cut promises, rich countries should dramatically increase green energy R&D as this "would help innovate the price of low-carbon energy below that of fossil fuels so every country in the world will want to make the switch" because green technologies are genuinely cheaper.  You can listen to Lomborg arguing these points in a recent Spectator podcast with Marshall Matters.  It explores issues raised in his book False Alarm. [ ** ]

I guess that very few people know about Lomborg, and that's probably the same number who know about the Climate Change Committee despite the effect it has on their lives.  It's purpose is "to advise the UK and devolved governments on emissions targets and to report to Parliament on progress made in reducing greenhouse gas emissions and preparing for and adapting to the impacts of climate change."

Cynics say that it's real purpose is to tell parliament what to do and thereby relieve governments of the blame for disastrous plans.  But that rather cynical view is for another day.

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[*] The day after I drafted this, James Marriott wrote in support of doubt and scepticism in The Times.

[**] I remain, of course, duly and properly sceptical of Lomborg's thesis ...