There is something in the air: a pushback against the charge to net zero, come hell or highwater.
Yesterday, Shell said it would ‘stabilise’ its production; Exxon Mobil, separately, said they didn’t think society would bear up to the sacrifices necessary to hit net zero by 2050. Others in government have expressed scepticism about the cost of that process, not least when under-developed nations are unlikely to be in any great hurry to close up the cheap energy production which is a) making them rich and b) powering a vast increase in living standards.
We have written many times in City A.M. that the cost of going green is more significant than people realise, even in an environmental sense. Indeed, in many ways – as Ed Conway, whose book Material World comes out today, has made clear – hitting net zero targets will require a sizable plundering of the raw materials that many believe should stay firmly in the ground. The amount of copper required in today’s generation of wind turbines is no joke. On the financial side, the hit to household budgets and living standards could well be dramatic.
Net zero by 2050 is, of course, the product of political grandstanding. It’s a noble and worthy aim but it’s fundamentally arbitrary. Far better would be for governments, diplomats and campaigners to mirror the pragmatism we are starting to see from the big energy majors, who have dumped the hairshirt and are now being honest about the fact that – despite their desires to go green – society wants cheap reliable energy and it wants it now.
In the UK, the road to a greener future goes through the energy companies and the City of London. The capital is already a European hub for green finance and will remain in pole position for some time. Governments would be better to set aside the net zero cheerleading and instead look realistically at what the energy mix might be in a few years’ time.