In his 2017 book The Strange Death of Europe, Douglas Murray accused Western European nations of Geschichtsmüde, being weary of history. President Trump might translate this by recycling a sobriquet he used against Jeb Bush—being low-energy.
This is now literally the case in both the United Kingdom and Germany, who have the most expensive energy costs in the developed world. The consequences have been catastrophic, in economic, political, environmental, and even geostrategic terms.
The true tragedy is that so much of the pain is self-inflicted, the result of bad, rushed policy designed to make people feel warm and fuzzy inside, rather than actually keeping people warm.
Net Zero
The commitment in Britain to “net zero emissions by 2050” was signed into law in the dying days of Theresa May’s premiership, as an attempt to give her a “legacy” after three painful years as Prime Minister. That legacy is likely to be lost, like the works of Ozymandias, as the world comes crashing back to economic reality.
The debate over the introduction of net zero was conducted during the Conservative Party’s leadership contest to succeed May, and therefore all attention was away from what would prove to be the most impactful economic decision of the year. The debate lasted all of 90 minutes.
The results have been completely devastating for Britain’s economy in all sorts of corrosive ways. For one, 169 years after Henry Bessemer worked out how to mass-produce steel in Sheffield, Yorkshire, Britain almost lost its ability to make the stuff here in Britain. Global factors like Chinese dumping play a part, but the extent of environmental regulation on British industry is making it impossible to sustain any kind of heavy industry. And now, British Steel has been nationalized once more, lumping the taxpayer with the losses and liabilities, but without doing anything to address the root causes.
But the government meddling does not stop there. In agriculture, a cruel, ideological attack on farmers (over whether farms can be charged inheritance tax) is going to spur more prime farmland to be turned into solar panel fields in a country where the sun often doesn’t shine.
There are now many statutory requirements to push environmental policies in all sorts of areas, to the complete detriment of other requirements, namely economic prosperity, that would otherwise be carefully balanced. So new homes in Britain have to have small windows, to increase insulation efficiency.
HS2, a much delayed and hideously over-budget high speed rail line between London and Birmingham, is building a one-kilometer-long tunnel to prevent bats being harmed by high-speed trains. The tunnel will cost over £100 million to build. Not only is there no evidence that the trains would interfere with bats, but there is also some evidence that the bat tunnel may actually be a bat-killing tunnel.
Hinkley Point C, the only nuclear power station being constructed at the moment in Britain, is having to construct a “fish disco” at huge costs to push fish away from being sucked into the cooling system.
This kind of environmental “everythingism” is not just holding back progress, not just costing huge amounts; it is corrosive of every attempt by people who just want to get on with building and growing—even “green” enterprises. Orsted, an offshore wind company, had to fill in forms five times longer than Tolstoy’s War and Peace, and had to wait nearly three years for a decision to build one farm.
Current Energy Sources
Perhaps these farcical examples could be forgiven if our energy system was secure, and provided generally cheap and abundant energy, as it does in the United States. But it does not. Britain’s energy mix reveals further the damage and hypocrisy at the heart of the net zero scandal. We are vulnerable, poor, and unproductive, and it’s largely our own fault.
France can rely on the world’s second-largest nuclear power station fleet, generating nearly two thirds of all its energy. Britain only generates 14% through this reliable, low-carbon, baseload generating source. And Germany? Nothing. Pressure from the Green party forced Germany to close all nuclear power plants “in the name of the environment.”
The result is that they are having to open coal power plants to fill the gap. And evidence has even emerged that the Greens used taxpayer cash to campaign against nuclear with bogus academic reports. Ideological hatred of nuclear has wrecked the German economy.
Whilst the USA has benefited enormously from the shale gas boom, both economically and in its increasing independence from Middle Eastern oil, a total ban on fracking remains in place in the UK. The result for households is that electricity is over 100% more expensive in the UK than the US. As the technologies of the future look to be increasingly electricity-hungry, this obviously puts the US at an enormous advantage, and creates a structural bottleneck for UK companies looking to innovate and lead in the AI space.
Then there are the taxpayer subsidies, with billions of pounds used to prop up renewables. Wind subsidies alone cost £5 billion every year, causing prices to soar as markets are warped by government fiat. Despite being a reasonably windy island, there is still a reliability gap: wind power’s capacity factor averaged 30% in 2022. This leaves Britain reliant on costly gas imports during lulls. Perversely, in 2023, bill payers ALSO spent almost £1 billion paying wind farms “constraint payments” to switch off because there was nowhere for the power to go when the wind WAS blowing!
And all this economic damage will have a negligible impact on global emissions. The UK’s share of CO2 output is about 1% of the worldwide total. So whilst India and China are openly celebrating opening new coal power plants, Britain debates the level of subsidy to give to vulnerable old people to stop them from freezing to death in the winter.
Free Market Alternative
Given the shale gas revolution in the US, the French literal nuclear powerhouse, and the potential of technological fixes coming down the track, Britain and Germany do not need to be impoverishing themselves with such gay abandon. There are free market alternatives. Indeed, deregulation efforts in the 1980s by Margaret Thatcher, including electricity privatization, cut prices by 30% in a decade.
Streamlining permitting approvals for new nuclear power stations would be a start. According to a lobby group, Britain Remade, South Korea is able to build nuclear power stations for six times less than the UK’s latest station, Hinkley Point C, per megawatt. Getting down to these costs, and employing new, small modular reactors, would help bring costs down and reliability up. So too would ending the absurd ban on fracking.
Ending subsidies and letting solar, wind, biomass, and all other forms compete properly will finally force these options to become competitive, and allow consumers to choose not to freeze in their beds in the meantime. Some call for a revenue-neutral carbon tax that could internalize costs instead of the exorbitant green levies.
And if Britain really wanted to help global emissions, it could leverage its world-class university and research institutions to come up with the exciting technologies of the future, and spur another Industrial Revolution. At the moment, R&D is even more captured by woke distractions and environmental concerns than the US system has been.
Lessons for the USA
Speaking of America, this should all signal yet another cautionary tale for the US. Whilst the new administration in the White House has seen through the utter folly of these damaging environmental policies, the swinging pendulum of popular opinion could always bring them back with a vengeance.
The ironically named Inflation Reduction Act allocated $369 billion in green subsidies. That’s almost a quarter of Britain’s TOTAL government spending in a year. The level of economic damage that will have been caused from misaligned incentives from this will have ripple effects across the global system, which looks to American trends before deciding where to invest. And California’s 2035 gas car ban, when combined with the cost hikes from whatever tariff changes eventually settle, will hit consumers with enormous bills.
As a Brit, it pains me to suggest looking across the English Channel for inspiration in anything that doesn’t involve grapes or garlic, but America would benefit from looking at France’s permitting around nuclear and housing. This would continue to let competition drive decarbonization, whilst keeping America hypercompetitive.
Britain’s net zero rush has literally priced out prosperity. Germany has it even worse. There has never been a successful, thriving nation without access to abundant energy. There is hope in Britain: the Conservative’s new leader has picked abandoning “net zero” as her first major policy intervention, making a welcome break from her predecessors. Even socialist Prime Minister Keir Starmer is trying to wriggle out of various mad commitments.
Britain had net zero chance of actually eliminating her emissions without collapsing her entire economy. Hopefully the realization doesn’t come too late for her to miss out on the opportunities of the future. And America should never take for granted the energy abundance she enjoys.
