Thursday, February 03, 2022

Energy Bills

Faced with the decarbonising imperative of the climate crisis, the talk had been of stranded assets, the fossil carbon industry holding coal, oil and gas that would have to stay in the ground as we moved to renewable energy sources. Big oil's days were numbered.

The industry has now pulled off a master-stroke. The increase in gas prices on the world market has been accounted for by increased demand in a post-pandemic recovery (we are not post-covid, but that's another story) with demand from China in particular being blamed.

There has been no sudden spike in the production costs of gas, or any other type of energy, so the increased prices translate directly to increased profit for the producers. In the UK 22 million households will be paying more cash to their energy providers for something that is costing no more to get out of the ground.

This may be the biggest, fastest, transfer of wealth from the many to the few, from everyone to the owners of the energy industry, ever, in all history. Even the 'oil shock' of half a century ago, which certainly had a massive long-term effect on global trade, did not impact households in such an immediate fashion.

And almost nobody has realised.


Increased energy prices are a Good Thing. The price of fossil carbon is far too low since the cost of the environmental damage done by burning it is externalised; the price we pay now does not reflect the price future generations will be charged for repairing the planet. So the increased price of our energy bills should be welcomed.

However.

That there are poor people who will be unable to pay their bills, unable to keep warm is a Bad Thing. There are myriad ways and means to abolish poverty; it is for government to deal effectively with the issue before increased bills drop through letter-boxes.

We have to stop burning fossil carbon to mitigate global heating. Rolling out more renewable energy production is necessary but not sufficient. Currently the growth in renewables is barely keeping pace with growth in energy demand let alone replacing fossil carbon. Degrowth has to be established in the energy scene.

The low-hanging fruit of energy demand destruction in the UK is insulating our homes, but, absurdly, the Government is more concerned to put #InsulateBritain protestors in prison than to actually insulate Britain. The money is available; a windfall tax on the energy companies, to recoup all of the profits from the recent price rises, would go a long way towards rolling out a meaningful programme of home insulation, addressing several problems at one stroke.

It needs to be done before another winter arrives.

2 Comments:

Blogger Unknown said...

Thank you Biff..good analysis.

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