Britain Waters Down Net Zero: Why This Will Keep Happening & Why It Could Be A Good Thing Long Term
It may sound crazy and it is certainly counterintuitive but we think British Prime Minister Rishi Sunak did something pretty positive this week when watered down his government's commitments to Net Zero.
Cue outrage from much of the Western media, the climate lobby and a lot of anger merchants on social media. But it will be interesting to see whether it matters either for the Conservative Party's fortunes or the climate. We think that, in classic 21st century, both risks are overblown.
Rishi Sunak is a politician and a smart one. His government and his Conservative party are in real trouble in the United Kingdom but we think that this move won't lead to the political disaster that many are predicting.
Whether it will be an environmental disaster is perhaps a higher likelihood but we have long felt that a realistic re-appraisal of the cheap talk of previous administrations and climate plans was long overdue.
We have written about that before.
Now it has finally arrived. In truth, this policy shift had been well telegraphed for weeks. The Prime Minister - Britain's 4th in 4 years - had spoken in August about the fact that Britain needs a “proportionate and pragmatic” approach to Net Zero.
On Wednesday afternoon he finally laid out some concrete steps. They involve a few individual policy changes such as:
Delaying the ban on new diesel and gas cars till 2035.
Delaying and potentially just scrapping the replacement of gas boilers.
This is....not terrible. Obviously it is bad for the climate on the margin but as this newsletter has argued for years now, most of these confident promises and ambitious targets were not worth the paper they were printed on anyway.
Another way to put this is that this means they were likely not going to happen.
Prime Minister Sunak is therefore right. We need to move away from "grand rhetoric" on climate and towards pragmatic and practical solutions that people can afford and will tolerate.
There has been precious little of this realism in any Western country that have been nearly all long on rhetoric and short on a serious analysis and policies with a chance in hell of becoming reality.
That was wrong. It was also dumb.
It was dumb because made it easy to paint climate change policies as unserious and highly elitist. It is easy to talk big and do little or, even worse, pretend as if everyone will be able to afford a new car and retrofitted windows and a heat pump. It is a little more difficult to actually force people to get on board let alone afford it in the middle of a severe cost of living crisis.
The United Kingdom discovered the gulf between government policies and political preferences when the deeply unpopular Conservatives nonetheless won a by-election in a seat in the opposition stronghold of London's suburbs over expanding a congestion charge for drivers.
The fact that that this was very unpopular was perhaps secondary to the fact that the London Mayor and the incumbent Labour Party simply said: no, this is what has to happen and dismissed their concerns.
In effect these elites argued that their view of how to combat climate change outranked the wishes of the median voter. That is a losing strategy and, unsurprisingly, it lost.
It is also worth pointing out that the United Kingdom have already slashed emissions far more than other rich and developed countries.
See here:
It is also worth pointing that the United Kingdom isn't as wealthy as many of the above peer countries. On a currency neutral GDP-per-capita basis, the citizens of the United Kingdom are poorer than the residents of every single state in the USA bar Mississippi.
Say that again.
When it comes to the congestion charge in London, yes, there was an opportunity here for the ruling and deeply unpopular Conservatives but there was also a warning for democratic governments everywhere.
The best evidence of this warning is that the opposition at the national level, the British Labour Party, have been very quiet about fully reversing all these moves. That is revealing and should make those lecturing and moralizing about Sunak's take pause. The likely next government doesn't agree either. That should prove sobering for the climate lobby.
Another piece of evidence for this general thesis is that Sweden's government has admitted it also won't reach its climate goals either. This will also force a re-think about both what is possible and how best to get there.
We can at least hope that a rethink will come up with more sensible and more equal policies though we won't be holding our breathe.
In the same way that not everyone could work at home with an iPad during the pandemic, not everyone can afford a new electric vehicle, brand new windows and a new furnace.
We haven't even gotten to the most important question of: does subsidizing these things actually help the climate?
That is the reality of a democracy. You need to bring your citizens along with you. It doesn't serve to simply either ignore the realities of their lives or talk over them. You have to bring them along and also think very, very carefully about the tradeoffs involved and whether a policy will actually accomplish meaningfully lower emissions or simply lead to higher costs for minimal climate benefit.
Our simple advice would be:
Climate doomerism doesn't actually serve the cause. It does the opposite.
Neither do threats or calling people stupid or immoral who disagree.
Action is important, not words. A commitment that actually has a chance of being properly implemented and will meaningfully correct admissions.
We may be upset about what the Sunak government has done but now rather than fantastic promises and underdelivering we can get down to thinking very carefully about what trade offs are worth it and what are just mostly signaling virtue rather than accomplishing real lower emissions.
We know we will be getting somewhere when nuclear energy and sizable investments in nuclear power become more prominent. We are clearly not there yet.
In conclusion, this "total gear shift" could end in total disaster. That is true. But we were already heading there because our previous rhetoric and targets were so deeply unserious. As we have written before, climate change has a collective action problem and a horizon problem:
We have to cooperate to achieve success but the temptation to act selfishly and benefit is very real.
Further, the goal and real benefits are far over the horizon. By lowering emissions we likely won't feel the benefit but will be our children and grandchildren who benefit.
Both of those will be very thorny to resolve but it is critical we do so without adding a third problem of running roughshod over people's democratic wishes.
That way lies both likely climate disaster and a serious populist backlash, possibly with a truly authoritarian flavor, against the modern religion of climate evangelism.
*******
Have questions? Care to find out more? Feel free to Download our App (!!) or reach out at contact@pebble.finance or join our Slack community to meet more like-minded individuals and see what we are talking about today. All are welcome.
