From the MANHATTAN CONTRARIAN
Francis Menton
As mentioned in my last post on July 20, many data points are beginning to pile up demonstrating the lack of progress towards the so-called “green” economy. It has long been clear to those who think about it that the energy transition to “net zero” is a fantasy that will not happen. But the question remains how exactly this madness will end. Will the climate cultists’ net zero fantasies continue at full speed until they hit a wall of physical reality (e.g. power outages)? Or will these fantasies instead gradually recede as governments respond to voter pressures around cost and convenience and investors pull out when it becomes clear that projects cannot succeed financially?
A July 30 article by John Miltimore of the American Institute for Economic Research supports the second alternative. Its title is “Why the 'Green Economy' is Suddenly in Retreat – in the EU, the US and on Wall Street.” Meanwhile, New York, at least for now, remains hell-bent on a full-scale crash.
Miltimore's article gathers data from several sources – notably the recent EU elections, regulatory changes in the EU and the actions of large US investors. The main point of the article concerns the withdrawal of several of the largest US fund managers from the so-called Climate Action 100+. Climate Action 100+ describes itself as “an investor-led initiative designed to ensure that the world's largest corporate emitters of greenhouse gases take appropriate action on climate change to mitigate financial risk and maximize long-term asset value.” Yet it seems that in recent months some of the largest investors have decided to change their strategy. JP Morgan Chase and State Street have withdrawn “all funds” from their commitments to Climate Action 100+, while their even larger peer Black Rock has “reduced its holdings and scaled back its ties to the group.” Miltimore cites a February New York Times article quantifying the various withdrawals: “All told, the moves amount to a withdrawal of nearly $14 trillion from an organization that was supposed to harness Wall Street's influence to advance the climate agenda.” $14 trillion is a big number for anyone.
On the European front, Miltimore cites the results of the EU parliamentary elections in June, as well as various regulatory rollbacks before and after those elections. He describes the parliamentary election results (rightly) as a “greenlash” against various green parties, pointing in particular to the disastrous result for the German Greens: “In Germany, the heartland of the European green movement, support for the Greens fell from 20.5 percent in 2019 to 12 percent.” He then compiles a list of various climate-related regulatory initiatives that have either stalled or been rolled back in the EU, including: new restrictions on pesticide use; proposed bans on PFAS (per- and polyfluorinated alkyl substances); restrictions on new industrial emissions (which were ultimately relaxed for industry and adjusted to exclude cattle farms entirely); and a new deforestation law. Meanwhile, efforts in several countries to ban vehicles with internal combustion engines, restrict the heating of swimming pools and require electric heating of houses have led to considerable public opposition (if not to the repeal of the regulations).
My comment is that much of Europe – particularly the UK and Germany – has already passed the point where further significant emissions reductions can be achieved at reasonable cost. Further efforts to increase the share of “renewables” in electricity generation will lead to rapidly rising prices. A reckoning can only be avoided if politicians move away from existing mandates.
New York is lagging far behind Europe in actually implementing the energy transition fantasy. Our Climate Leadership and Community Protection Act, which mandates the energy transition, was enacted in 2019, with the first key deadline (70% of electricity generation from “renewables”) set at 2030. In 2019, 2030 seemed so far away. Now, in 2024, we are at a point where, to meet the deadline, most to all of the plants needed to meet the “70 by 30” goal would have to be under construction; but almost none of it is.
My July 26 post was about a report I helped author that warns New Yorkers not to switch to electric heating until politicians come up with a credible plan to provide the electricity they need. While my co-authors and I were writing that report, our Public Service Commission was putting together its own report (the “Biennial Review of the Clean Energy Standard”) (item 30 on this PSC list). Here is a summary from PBS. Key quote:
New York is expected to increase renewable energy production in the coming years, but the state is unlikely to meet a key climate goal, according to an official study released last week. The state's climate law, passed in 2019, requires New York to get 70% of its electricity from renewable sources like wind and solar by 2030, which would go a long way toward curbing the state's climate-warming emissions. But New York will likely have generated only enough renewable energy to meet about 45% of its electricity needs by the end of the decade, falling far short of its pledge, according to the study by the Department of Public Service and the state Energy Authority.
Even the 45% figure they quoted is a fantasy, and largely relates to a power plant at Niagara Falls that existed before all this energy transition talk. So far, all our politicians are in a state of denial. The only small concession to reality is talk of maybe pushing the 2030 deadline back a few years, to say 2033. The fact is that they will be no closer to the 70% target in 2033 than they were in 2030, and in fact they will never reach it because (as my report outlined) they need “controllable zero-emission resources” that do not and will not exist.
So, at least for now, New York is trying to race full speed into the wall of reality.
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