• Net zero has turned from gospel into punching bag
  • But what happens if we fail to achieve it?
  • The power that wins, either way

News stories about net zero failures are coming thick and fast now. I have run out of space on my internet browser to keep them all to hand. It’s a bit embarrassing, really.

Back in March of 2023, I predicted that our attempts to reach net zero would fail. But because we’d run out of the resources needed to make it happen. There just isn’t enough metal to achieve what politicians around the world are pitching us, I told The Fleet Street Letter readers.

But we seem to have faceplanted somewhere near the first hurdle, not the third one I warned about. You can hardly describe it as a real attempt to save the planet anymore.

The number of offshore wind energy jobs in Scotland is a tenth of what was forecast by the government, and green job offers there are declining fast.

German electric vehicle (EV) car sales are so bad that the country is having to openly admit it will fail to reach its energy transition targets. Not that the country would have electricity to power more EVs. The German version of the Office for Budget Responsibility released a report that it considers the country’s electricity supply to be “not secured” in the medium term. The German economics minister supposedly had a fit of anger about it while in Washington. But his wasn’t the only country growing worried about power supplies.

The company that rescued Britishvolt from going bust may be going bust itself.

The first generations of old wind farms will soon begin to need replacing. This either means wind energy companies are going to get a surge in new orders just to revive existing projects, or the amount of wind turbines will struggle to grow as dismantled ones undermine newbuilds.

You get the idea. Net zero continues to implode. The list of how is getting ever longer.

It’s no surprise, then, that the resources you might expect to soar in price on the back of any green energy rollout have plunged instead. Especially in Australia, the green energy transition’s metals have destroyed mining fortunes instead of creating them. “Rich List fortunes gouged by green metals slump,” is the Australian Financial Review’s headline.

Nickel, lithium, iron ore and the crucial metal copper have all performed miserably as net zero implodes on my computer screen. My prediction that net zero would eventually fail was proven right… well before I was ready for it.

But let’s try to stay a few steps ahead of the news on this trend.

What is going to happen if we fail to save the planet from carbon dioxide?

As the prolific energy bloggers Doomberg like to say on podcasts, “We are going to run the carbon experiment.” Given the shortcomings of our actual attempts to reach net zero by producing more green energy, we’ll find out the hard way whether the climate change models are as accurate as the pandemic models…

Whether the government’s climate science is as correct as the government’s pandemic science…

Whether the government’s climate policies are as effective as the pandemic policies…

Sure, we can’t agree on the answers to those questions regarding the pandemic, even in hindsight. But I’d love to see a government give another lockdown a go to find out what the consensus is.

Anyway, the failure to cut carbon emissions either means we get fried, swamped and starved, or…

Well, what if the climate scientists have it all wrong? What if, in a few years’ time, we have an inquiry which discovers that climate policies were not based on science after all? They “sort of just appeared,” like social distancing policy during the pandemic.

What if we discover that the economic harms of climate policies were never considered, a bit like for Covid lockdowns?

What if we discover the climate models were just models, like the pandemic models?

What if there wasn’t sufficient scientific evidence backing climate policy, as there wasn’t for mask policy, which UK health officials subsequently admitted?

Nah, that would never happen…

But if it did, what would it mean?

It takes a dangerously long time to change course on energy policy

If the world woke up tomorrow and decided that poverty alleviation is more important than carbon emissions, it would still take decades to dig our way out of the hole we’re in.

It takes time to find new sources of energy, develop them, increase refining capacity and build the energy infrastructure to use that capacity. I believe we’re facing severe energy shortages for some time, regardless of what we do next. It’s really a question of how long they last. The earlier we wake up, the earlier energy supplies recover. More on that tomorrow.

Just hypothetically speaking, of course, if the UK government were to realise all of this, what would it do? Which form of energy is the fastest to bring online given the global energy market’s situation as context?

Yes, new gas power plants. The infrastructure, technology, capacity and more all already exist to ramp up that source of controllable power. And so, any government which wakes up to the short-run risks of an energy crisis due to the failure of the energy transition would build a bunch of new gas power plants, in clear violation of its legislated net zero goals.

If only Rishi Sunak’s government would do so…

Which energy wins?

The good news is that, as an investor, you don’t need to choose between the two scenarios I’ve laid out. Whether you believe we are going to continue to try to mitigate climate change, or give up, the same source of power stands tall: nuclear power.

More on that soon too.

Until next time,

Nick Hubble
Editor, Fortune & Freedom