You know by now what I think of Net Zero – it has been “one of the most widespread Dunning-Kruger ‘Mount stupid’ delusions ever wrought on modern societies” - and it’s good to see that Kemi Badenoch wants to do away with it – and probably deserves to win the next election on that alone.
She is right to call out its
adverse effects on living standards, and the ridiculous financial burden of Net
Zero policies on UK citizens, particularly in the energy sector. The UK’s
artificially hasty push towards renewable sources, coupled with a failure to
develop domestic fossil fuel resources, has resulted in some of the highest
energy prices globally, and it is rightly making British folk mad with
indignation. Because of politicians’ short-sighted economics and preening
attempts at virtue-signalling, UK citizens are saddled with rising household
inflation and escalating industrial production costs, leading to accelerated
deindustrialisation, and bigger consumer struggles to make ends meet. The UK
deserves better.
That the UK Chancellor Rachel Reeves refers to climate policy as the "economic opportunity of the century," merely keeps reaffirming the same mistakes and the same painful realisations that most politicians do not understand basic economics (see my Green/Environmentalism side bar for much more on this). One of the main things they don’t get is that jobs are a cost, not a benefit – in other words, labour is an input, not an output. If something requires more labour to produce, it means fewer resources are available for other productive uses. Moreover, if government mandates force businesses and households to invest in expensive, less efficient green technologies, and pay more for their goods as consumers, this diverts resources away from other sectors of the economy, which are classic misallocation and inefficiency errors in economics. A true economic opportunity reduces costs and increases productivity, and Net Zero policies do precisely the opposite.
Knowledge of price theory brings the basic understanding that prices reflect scarcity and consumer preferences. If renewable energy was as efficient and cost-effective as politicians claim, it would outcompete fossil fuels without such radical government intervention. In reality, subsidies, mandates, and regulations artificially distort prices, creating hidden costs that mostly go under the public's radar. Higher energy prices raise production costs across all industries, leading to reduced competitiveness and real income losses for consumers. And government-driven investment in green industries often crowds out private sector investment in more productive activities, leading to a lower return on capital. And, to rub salt in the wounds, the precipitous transition to Net Zero increases costs for businesses, who then pass these onto consumers, which further erodes purchasing power.
If Rachel Reeves really did want to pursue the true "economic opportunity of the century", she would pursue policies that lower costs, improve efficiency, and allow freer markets to converge upon the best solutions without so much government misallocations. Instead of Net Zero mandates, a market-driven approach - where innovations emerge based on actual consumer demand and price signals - would be far more beneficial. Instead, politicians are merely shifting costs and distorting markets.
I know some will allude to precautionary mindfulness around market failure, and state-based initiatives to jumpstart technological innovation, but these pale in comparison to the superior efficiency, adaptability, and wealth creation of market-based approaches. The counterarguments are the exception not the rule. Market failures are rare and trivial in comparison to government failures, which are frequent and more destructive. Real economic opportunity and, in fact, greener societies, come from increasing efficiency and productivity, not artificially inflating employment in sectors that only exist due to subsidies, regulations and political posturing.
