The world’s biggest chemical company BASF, which is or was German-based, just said it’s bailing on Europe “permanently” because energy prices there are too high, the economy is too sluggish and there’s too much regulation. And guess where it’s investing? Right. Coal central. China. Meanwhile there’s a high-speed debacle unfolding in Australia where it’s clear that the incoming virtue-signaling Labour administration hadn’t even done their climate plans on the front of a napkin, let alone the back of an envelope. And that they regard the ordinary person’s desire to be able to afford their energy bills as mere small-mindedness. When the new treasurer blithely assured the National Press Club that their pledge to cut power bills by $275 had been included “in the budget” and then had to say that it wasn’t, his evasive claim to have “misheard” the question didn’t hide anything. Including that he and his colleagues ran for office on nothing more than blithe self-confidence and ignorance of practical realities.
As with reporting on climate, and much else besides, the overall impression is that the world is drastically short of adults nowadays, and far too well endowed with petulant grown children whose self-esteem was boosted at the expense of their capacities. Which is a very serious thing when trouble comes.
Energy crises are no joke. As Sky News just warned, based on government numbers, in Britain “Almost half of adults finding it difficult to afford their bills - with numbers rising”. And SJWs beware because “Renters, those living with disabilities, and lower incomes are hardest hit.” Without energy people are cold, hungry and sick and they die sooner. Real actual people.
So now we hear the news that “Australian businesses and households can expect to fork out more for power bills over the next two years as the cost-of-living crisis appears set to worsen. According to Treasury assumptions retail electricity prices are set to increase by an average of 20 per cent in late 2022, contributing to higher forecast CPI in 2022–23 and by a further 30 per cent in 2023–24.” And yes, it means what you think it means. No adults are in charge.
“The budget forecast that prices would rise a further 30 per cent next year, which would break a key election promise to lower power bills by $275 per household by 2025 – something the government said would be delivered by upgrading the electricity grid to bring in cheaper renewable energy. It also forecast gas prices would rise 40 per cent over the next two years. Treasurer Jim Chalmers has said the government is considering a ‘broader suite of regulatory interventions’ but there is ‘more work to do’ before any changes are announced.”
Translated, it means he has no idea what he even might do let alone what he should, other than release a flood of oily words.
It all looks good on paper in some professor’s study or spin doctor’s cubicle, like the Australian government plan to have 82% of energy from renewables within eight years based on even more expensive power and a laughably feeble investment in the batteries needed to help expand the grid massively. And as usual they really believe their own echo chamber including that, says their Minister for Climate Change and Energy, a perilous combination, “The cheapest form of energy is firmed renewables, even more so as global coal, oil and gas prices spike”.
Of course you get the usual advice to hammer energy producers in the hope that floggings will improve morale and robbery will increase wealth. But in the real world, only a system that produces enough energy can distribute enough of it and punishing those who create wealth is another of those desperado policies that does not work once, in Henry Hazlitt’s immortal phrase, “Today is already the tomorrow which the bad economist yesterday urged us to ignore.”
Indeed, tomorrow has arrived across the Western world. And the plan of somehow fixing the unaffordability of energy for real ordinary people, aka voters, through subsidies or grants or something from the magic money tree founders because energy crises also dampen the economic vitality on which government handouts depend.
Now you might think expensive energy and a sluggish economy are two separate problems. But only if you don’t grasp, as so many policy-makers apparently do not, just how dependant everything is on energy from your car starting when your chauffeur turns the key to your private jet whisking you to the next environmental conference to your chef being able to prepare your meals whose ingredients came in a truck and so on. As Reuters notes, “In the first nine months of 2022, natural gas costs at BASF's European sites – which include its largest complex at Ludwigshafen in southwest Germany, where it makes everything from vitamins, foam chemicals and engineering plastics to pesticides – were about 2.2 billion euros ($2.2 billion) higher than a year earlier. Spot gas prices were five to six times higher than in the United States, the company added.”
As for excessive regulation, it’s a problem across the board. But much of the worst of it is, again, climate-driven. And while politicians may think it’s OK if nobody has a job because they can just print money, it doesn’t work that way. Reuters babbled that “Efficiency drives have become the order of the day across corporate Europe, as the Ukraine crisis drives up energy costs, causing decades-high inflation.” But inflation is too many claims on wealth chasing too little actual wealth, always was and always will be. And in Australia it’s breaking loose, prompting further fatuities from the people so certain, so recently, that just electing them would solve all these silly practical problems.
It is worth mentioning here that in Ottawa the staunch progressive candidate for mayor, whom polls showed running even with her political novice challenger, ended up losing by a wide margin. It is possible that voters are more skeptical of woke politics generally than they admit to pollsters. But it is also possible that the staunch but shapeless devotion to Net Zero and world climate leadership struck people as impractical nonsense.
The idea that Canada’s capital, with its infamous winters, was really going to stop emitting CO2 in three decades wasn’t something promised by someone with a bad plan. It was promised by someone with no plan at all. Her campaign website, no longer available, did have a few jolly-sounding bullets about “Introducing good governance and accountability around climate action” and “Mobilizing Ottawa’s business community for climate action” and becoming “an internationally recognized hub for clean technology development” (on stolen aboriginal land she wasn’t going to give back, of course). But if you clicked the link “Read Catherine’s full climate plan” all you got was a single page of one, two or at best three-paragraph pledges of cosmic action like “Whether you need to walk, bike, drive, or take transit, our city will offer you choices that help our planet” or “net-zero affordable housing.” Like many climate zealots, she thought this stuff really would be easy if only you cared, and she knew she cared, so there was no need for all that mucking about with nuts and bolts.
As for Ottawa becoming a “world-class city” in anything but laughably bad light rail, incompetent maintenance of law and order, and scoffing at accountability including for $6,000-a-night hotel bookings, it’s a perennial Canadian hallucination that the world is just waiting to hear what we say and see what we do. And since she did not win you might think it’s a bit mean to dredge up this frippery. But in Australia like-minded people did win.
In the same National Press Club speech where he put his plan in his mouth over cutting energy prices whereas in fact they’re skyrocketing, The Australian reports, “the Treasurer said any steps to ease the pressure on workers’ budgets would simply make the inflation challenge worse. ‘Inflation is the dragon we need to slay,’ Dr Chalmers said. After Fitch Ratings highlighted ‘longer-run pressures’ on Australia’s AAA credit rating from climbing debt and deficits over the decade, Dr Chalmers said the ‘days of pretending that we don’t have structural pressures on the budget are over’.” And who, pray tell, was pretending such things?
Oh right. The same guy saying they could use all that free money to lower energy prices and continue to discard the stuff that works for the stuff that sounds good. Blast.