woke capitalism, and the net zero delusion

If truth is the first casualty of war, then the collapse of political illusions must be the second. War and its outcomes are never certain. Hence, from Thucydides to Clausewitz, connoisseurs of the phenomenon have counselled against recourse to it unless informed by clear and achievable goals. Violence clarifies. In the case of Vladimir Putin, it has exposed the illusion of Eurasianism, the failings of Russian hard power, and its loss of markets for its arms industry, while it also threatens the integrity of the Russian Federation, ultimately reducing it to a servile satrapy of Greater China.

In the case of Europe, war has clarified not only its relationship with post-Soviet Russia, but also the delusions informing its net zero energy policy and its future economic security. Significantly, this is not the case with the US (or for that matter Canada or Australia), which despite their commitment to various international environmental protocols remain secure in their fossil fuel and uranium energy resources.

Europe is not. As a result of three decades of punitive environmental governance, it faces a very difficult winter and an uncertain political and economic future. All European wars since the eighteenth century have been resource wars (whether over population, coal, iron, or later oil and gas). This is a basic fact of modern European history, and one which its elites and the history’s fools that advised them ignored at their, and their electorates’, cost. The Russia–Ukraine War, and the misconceived sanction regime immediately exposed Western Europe’s dependency on Russian gas and oil. Consequently, despite recent Russian reverses on the battlefield, Europe remains ambivalent in its support for Ukraine, democracy, and freedom.

As such, the energy issue is a case study in how a political elite, infused with abstract norms and transnational idealism at the ‘end of history’ created the perfect conditions for the revenge of political realism. Whilst Europe eschewed the hard truths of geopolitics, geopolitics happened on its doorstep. At first, of course, Western European diplomats continued to argue about whether Putin represented a threat to peace and stability at all, despite the repeated warnings of those in closer proximity to Russia’s border. As European Commission President Ursula von der Leyen confessed in her State of the Union speech in September: ‘We should have listened to those who know Putin […] voices inside our Union—in Poland, in the Baltics, and across Central and Eastern Europe.’ 1European Commission, ‘2022 State of the Union Address by President von der Leyen’, 14 September

European delusion has quickly assumed the form of an entirely avoidable energy crisis. For the EU it represents a regional political humiliation, whilst in the UK it is a very British one, a direct result of a generation of cross-party policy failure. Together, Western Europe’s political elites conspired to deliver a perfect storm. In Germany, it reflects the influence of a red/green lobby that inspired the ostensibly conservative Merkel administration to close all its nuclear facilities, which were providing 13 per cent of its energy by 2022. Three nuclear power stations closed in 2021.

Germany is of course central to the European economy. As Russia weaponized energy exports, Germany faces a staggering 65 per cent collapse in industrial output if Putin turns off the taps completely, potentially plunging the country into a deep recession. The Scholz government’s seizure of three Russian-owned oil refineries on German soil in late September, in order to secure their oil holdings, indicated the extent of political panic. Asset appropriation is usually the preserve of rogue states such as North Korea, Iran, Venezuela, and indeed Russia, both before and after the fall of the Soviet Union. It is not usual in a Western democracy.

Elsewhere, in Italy, business and domestic users currently face huge hikes in energy prices whilst its deluded former minister for Ecological Transition, Roberto Cingolani, anticipated that the movement away from gas would represent only ‘small sacrifices for large rewards’. Not surprisingly, the economy, Ukraine, and EU energy regulations played a decisive role in the Italian elections that saw a populist coalition led by Giorgia Melloni achieving a comprehensive victory. Matteo Salvini’s League which forms part of the populist coalition that came to power in Italy, already sees energy sanctions as contributing to ‘il suicidio Italiano’. 2La Republica (7 September 2022).

Meanwhile the UK, which left the EU in 2020, remains committed to the net zero carbon agenda to the detriment of its energy security. Grave errors by past energy ministers range from: opposition to nuclear power in 2001; refusal to back new clean coal plants in 2009; supporting wood pellet plants over new gas ones in 2012; the end of carbon capture funding in 2015; the closure of the Rough gas storage site for reserves in 2017; and the gas fracking ban in 2019.

At the same time, to meet EU rules, between 2000 and 2017, over a third of the UK’s base-load electricity generating capacity was closed without any comparable net replacements. Instead, ministers approved weather-dependent renewables and more interconnectors to import power from the Continent, thus offshoring British energy jobs, resilience, and security. New nuclear is already twenty years late.

Tony Blair, Gordon Brown, David Cameron, Theresa May, and Boris Johnson collectively oversaw the running down of British energy security, diversity, and resilience, representing the biggest national policy failing in the post-war era. In July, the National Grid had to panic-buy staggeringly expensive Belgian electricity to avoid power cuts, illustrating Britain’s perilous energy supply. As power demand surged during the heat waves, the National Grid paid £9,724 per megawatt hour, more than 5,000 per cent the typical price, to prevent London suffering blackouts.

Meanwhile, a compliant media and the Euro blob are told to keep citing Russia and Ukraine as the reason for this very avoidable energy crunch. The real story is much more damning, delusional, and home-grown. The writing was on the wall years ago as governments across Europe slavishly followed EU diktat and closed coal, nuclear, and oil-fired power stations without clear policies to build cleaner equivalent replacements. Weather-dependent windmills and solar panels could never fill the gap. The EU’s various power station directives, first supported by the Blair government in 2001, forced the UK to start shutting down key plants from 2012.

The crisis has, moreover, exposed Europe’s excessive overdependence on imported power. This has huge implications for energy security, resilience, future bills, and climate change. Why has reliable home-grown generation across the EU, and particularly in the UK, been put at such a discount?

The EU, the UK, French and German governments, their advisers, their media and academe all insist it is a result of COVID disruption and the Russia–Ukraine War that has been a temporary hiccup on the road to net zero by the end of the decade. Actually, it is the net zero agenda, the policy of carbon offsetting, and what the former US bond trader, Stephen Soukup, describes as the dictatorship of woke capitalism that has generated the current malaise.

The demonization of the gas, oil, and coal bridge to a non-carbon future has inflicted notable self-harm on the potential of UK and EU energy self-reliance. The forced deployment of thermodynamically inefficient and environmentally damaging ‘renewables’ when correctly understood in whole life energy calculation (Energy Return on Energy Invested—EROEI) has produced high consumer costs, great fragility of supply, and the proliferation of junk assets via environmental governance criteria undermining the energy foundations of the Euro economy. Nor, ironically, has it contributed to ameliorating environmental harm in any useful way. ESG (Environment, Social, Governance) criteria were written into the 2017 UN Principles for Responsible Investing. Pension funds and investment trusts sign up to these woke principles with economic and geopolitical costs. By the middle of 2017, the ESG movement went mainstream, as some ‘1600 asset owners representing $62 trillion signed the UN PRI’. 3Stephen Soukup, The Dictatorship of Woke Capital (Encounter Book s, 2020), 88.

Net zero explains why the UK failed to develop gas fracking or grant licenses for further exploration of the North Sea, preferring Green virtue signalling by offsetting its carbon emissions and importing LNG from the Middle East. Like celebrities offsetting their private jet flights by planting trees in the Amazon, or travellers being asked to offset their carbon footprint every time they step on a plane, this mechanism only facilitates a multibillion financial services industry and increasingly questionable ESG investment vehicles. It is the twenty-first-century equivalent of the papal indulgences sold on a mass scale in the sixteenth century to offset the cost of building the Vatican in Rome. The economic consequence of that was the Reformation and a century of religious warfare culminating in a seventeenth-century global crisis.

The energy crisis has thus exposed the dangerous and failed doctrine of draconian out-of-date targets and poor policymaking over a generation. A failed energy policy inflicts huge pain on households, industry, and the wider economy. It diverts investment and stops job creation. Europe needs to learn and understand how and why political leaders failed in this most critical area of policy in the national interest.

The tragedy is that it has taken an energy price shock of the scale currently sweeping Europe to rouse its political elite. Yet while von der Leyen’s recent mea culpa might have been expected to galvanize the EU, it has instead further exposed the divisions between states in the east, who generally advocate a tougher stance including further sanctions and more military and humanitarian aid, and those in the west, including Germany, who fixate on the political and economic fallout of a prolonged conflict.

  • 1
    European Commission, ‘2022 State of the Union Address by President von der Leyen’, 14 September
  • 2
    La Republica (7 September 2022).
  • 3
    Stephen Soukup, The Dictatorship of Woke Capital (Encounter Book s, 2020), 88.

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