Europe Energy Crisis : Europe Energy Crisis Goes Global

Insight Online News

To see climate politics turn really crazy, add fuel shortages and high prices.

Hard to believe, but politics sometimes exhibits a pull toward the rational, especially when voters find it difficult to pay their bills, heat their homes and keep their jobs.

That’s happening in Europe now thanks to home-heating and electricity prices up 300% at the wholesale level since last winter. In a quote echoed across the continent, one of British Prime Minister Boris Johnson’s parliamentary allies warned on the weekend of “catastrophic” damage to the government: “Elections are won and lost in people’s wallets.”

Europe’s mess has been framed as a story of many influences—the proverbial perfect storm. But it’s really a story of one thing, coal, plus hypocrisy.

By undiversifying its base-load power supply away from dirty coal while also dumping nuclear, Europe has invited all the consequences you read about: ill-advised reliance on Russian natural gas, frantic bidding wars with China for liquefied-gas shipments, fear of rolling blackouts whenever a French nuclear plant needs maintenance or the wind dies down or the sun goes behind a cloud.

Though firm believers in the risks of man-made climate change, analysts at the commodity research firm CPM Group cogently argue in a recent report that 2022 will be the year when energy and climate realism finally break through:

The gestures governments have been enacting, they write, are “not meaningful in the race to combat climate change.”

The electric vehicles that politicians particularly love to subsidize “will not significantly reduce carbon dioxide output, only shift its location.”

“There are real constraints”—surprise—“to moving toward clean energy industries,” starting with the unwillingness of voters and consumers to pay for it.

Most interestingly, the CPM analysts see a “bifurcation” between China and the rest of the world. Not because China has opted out of lip service to the climate cause, but because China now produces emissions for the world. Europe has conveniently adopted 1990 (when East Germany’s Sovietized heavy industry was about to be shut down) as its emissions baseline. Even so, Europe’s claimed 20% reduction in emissions since then is not merely a drop in the bucket when the world increased its total emissions 50% overall. It’s a bit of fraud since European investors simply relocated their emissions-heavy processes to places outside the European Union.

A perfect metaphor is Angela Merkel’s decision in 2011 to shut Germany’s nuclear plants, including three that closed last week. Now it can be admitted: Her motive was to forestall a momentary rush of German voters to the Green Party after Japan’s Fukushima accident, which came weeks after her party suffered a disastrous drubbing in local elections. For this passing political benefit to Ms. Merkel and her coalition, Europe will pay the price for decades.

It’s time to invoke a favorite phrase, “sophisticated state failure,” for the inability of advanced societies to reconcile means and ends, when every attempt to appease powerful and diverse interest groups and voting blocs seems to result only in a succession of boondoggles and economic crises.

An unspoken pillar of Merkelism is its touching faith in the power of markets to compensate somehow for the irrationalities of public policy. This week, European energy prices have been mercifully moderating thanks to LNG cargoes, a product of America’s fracking boom, being diverted on the high seas from Asian ports to European ones.

And yet the U.S. is not immune to the same pathologies. Texas discovered as much in last winter’s epic blackouts. After Texas chose for decades to throw money at renewables rather than freeze-proof its energy infrastructure, the out-of-state power supplies that were supposed to be its insurance policy never materialized. Ditto California, which invested in renewables rather than fireproof its grid and now is beyond out-of-state rescue. Its citizens suffer recurrent intentional blackouts to reduce fire risk. One of these winters, the Northeast will experience its own calamitous outages due to its refusal to authorize the gas pipelines and power plants needed to support a crowd-pleasing rush to renewables.

Sophisticated state failure is an unadmitted father of the Western world’s drift to populist politics. Recall how the convoluted financial-system meltdown and bailouts of 2008 gave rise to the tea party and birtherism, how the resulting rise of Trumpism spawned the countervailing Russia-collusion panic. A new culture war is blossoming over Covid policy. The worst always rise to the top in such situations: progressives who believe that with enough coercion utopia is in reach; discombobulated middle-class voters whose soured faith in government curdles into technicolor conspiracy theories.

A lot more of this may be on the way if the developed world keeps playing Russian roulette with its energy supply, a vital underpinning of a modern society and foundation of every voter’s well-being.

Courtesy : Wall Street Journal

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