Energy Price Crisis Risks Fueling Backlash Against Climate Action

1 Oct

Energy Price Crisis Risks Fueling Backlash Against Climate Action

“It’s easy to be green,” Boris Johnson said at the United Nations General Assembly last week.

He and other European leaders equally committed to net-zero carbon emissions, however, may discover turning green is not so simple, and there may be a high electoral price to pay, analysts say.

The energy crisis buffeting the continent has placed Johnson and other European leaders in the difficult position of decrying fossil fuels while urgently prioritizing affordable access to them to avoid a political backlash by voters and businesses furious at the spiking costs of heating homes and running factories.

Energy prices have hit a seven-year high and stockpiles of gas and coal are dwindling. Russia has not increased its natural gas exports. Natural gas price jumps are largely due to a surge in Asian demand and low supplies in Europe, which has seen a 250% to 280% rise in wholesale gas prices this year. Electricity prices are also soaring because natural gas is used across the continent to generate a large percentage of electricity.

 

Spiking prices are coming at a delicate time for governments as they plan to speed a net-zero transition to post-fossil energy generation, which they say will eventually see cheaper prices. Consumers and voters, though, won’t see the benefits of cheaper post-fossil energy for some time — now they are just seeing higher costs caused by the energy squeeze compounded in some cases by carbon and green taxes.

Some advocates fear the energy-price crisis will be seen by voters as a harbinger of things to come and prompt a backlash against net-zero policies.

From Britain to Germany, Europe’s mainstream party leaders have been scrambling to respond to the surge in support for Green parties and carbon-neutral policies as their voters grow increasingly anxious about the impact of climate change. Many governments have announced ambitious carbon-reduction targets to reach net-zero carbon emissions by 2050.

 

In June 2019, Britain, which will host the 2021 United Nations Climate Change Conference, known as COP26, later this year, became the first G7 country to enshrine in law a commitment to reach net zero greenhouse gas emissions by 2050.

Delivering on radical climate action will be complicated and harder than governments are letting on, though, some analysts and politicians, both advocates for radical climate action and their opponents, warn. The energy-price crisis is due to be discussed by EU national leaders when they meet in Brussels for a summit later this month, say EU officials. Last month, Spain warned the European Commission that emission reduction measures “may not stand a sustained period of abusive electricity prices.”

Even before the energy crunch, some government ministers and think tanks had been warning that it was not clear Europeans are ready to make the sacrifices necessary for a carbon-free future and might become more reluctant as the transition from fossil fuels plays havoc with living standards and lifestyles.

Earlier this year Britain’s Tony Blair Institute for Global Change warned, “Meeting our future targets will have direct impacts on the lives and livelihoods of people across the country.” In its study Polls Apart? Mapping the Politics of Net Zero, the London-based institute founded by Britain’s former prime minister said, “While climate change has moved up the political agenda, and all the major parties are committed to delivering net zero, we are still in the early stages of understanding how the politics of climate change will evolve — and, crucially, how a political coalition can be built and maintained.”

The institute said an examination of British voter attitudes and values suggested “politicians can be confident there is a strong and sustained desire for climate action,” but also cautioned that “the development of a long-term political coalition to support the action needed for net zero is under threat.”

Similar conclusions have been reached by other think tank studies about the likely political struggles ahead to implement the European Commission’s net-zero proposal to cut pollution by at least 55% from 1990 levels by 2030.

In a paper for the London School of Economics, Patrick Bayer, a lecturer in the School of Government and Public Policy at Scotland’s University of Strathclyde, and Federica Genovese, an environmental policy expert at England’s University of Essex, warned of the need to get buy-in from the general public as the proposals “will make it more expensive to run appliances, drive cars, and heat homes.”

They questioned whether proposed EU compensation plans for the most vulnerable and the poorest “will be enough to hedge the economic resentment and social anxiety that tend to spark upheavals across the continent.”

 

The LSE paper was written before the energy price crisis started to unfold across Europe last month. Some opponents of radical climate action plans have seized on the current crisis. “If consumers come to believe that net zero exposes them to punitive cost or insecurity of supply, they will rightly reject it,” Charles Moore, former editor of The Daily Telegraph, warned last month.

Craig Mackinlay, a British Conservative lawmaker and member of a group in the House of Commons critical of net-zero plans, challenged Johnson in Parliament last month about the costs of implementing the government’s carbon-emission targets and has warned “extravagant plans for a greener country will provide cold comfort for ordinary people.”

Mackinlay has warned that British government projections on how much it will cost to turn Britain green are seriously flawed and underestimate the true costs.

The British government formally accepts the cost projections of a Climate Change Committee, which estimates the country will have to spend over $67 billion a year until 2050 to shift Britain away from fossil fuels. That is around 1% of the country’s gross domestic product. Internal government documents recently showed, however, that Britain’s own Department for Business, Energy & Industrial Strategy suspects the projection is flawed and estimates costs to be 40% higher.

Some independent experts have been even more scornful and have pointed out that New Zealand’s government, which is also thinking about adopting a 2050 net-zero benchmark, believes it could cost advanced economies as much as 16% of their GDPs to rid themselves within three decades of fossil fuels.

The costs to strip out gas boilers, switch from gas and diesel cars to electric or hydrogen-powered vehicles and to move households and businesses to renewable energy sources as industrial processes are reimagined will have to be shared among governments, homeowners, producers and consumers. That will have political and electoral repercussions, according to analysts, who point to how carbon taxes and higher fuel costs roiled France in 2018 and 2019 with the Yellow Vests protests.

Electorates seem hesitant already about embracing climate action — or at least worried about prohibitions and costs. Germany’s Green Party, the strongest in Europe, saw its share of the vote increase in last month’s federal elections but was disappointed not to get a much bigger jump.

“The election result makes one thing clear,” Volker Wissing, general secretary of the pro-business Free Democrats told broadcaster ARD Monday. “People don’t want climate protection at the expense of prosperity, and people also don’t want prosperity at the expense of nature and environment. That’s why we need to bring these things together and work out a solution as to how we can reconcile climate protection and prosperity.”

SJ

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