The Davos crowd? European Commission President Ursula von der Leyen didn’t mention the climate even once in her 2026 annual address—unlike in the past.
U.S. voters? Americans rank climate change at number 28 of 30 problems, and according to the Searchlight Institute, voters in battleground states are prioritizing pocketbook issues over climate.
Canada? Prime Minister Mark Carney once championed radical climate policies but now wants to increase oil production.
The Europeans? After worrying intensely about climate change for a decade, they have other things to worry about: sky-high energy prices, low growth and the war in Ukraine. In their latest ranking, climate hit a new decade low.
How about global warming poster child Greta Thunberg? She has moved on to other causes.
Certainly, not people in poorer countries. They’re primarily concerned about the necessities of life — health, food and education. According to a recent survey of Africans, climate ranks near the bottom of their priorities, at number 31 of 34. That’s behind unemployment, the economy, health, education, poverty, roads, electricity, hunger, and corruption.
Even media outlets that once peddled climate alarm have backed off. According to a Washington Post analysis, 2025 saw the fewest media mentions of climate change in three years.
What led to this global change of mind? How could so many people
be so worried just a few years ago, and care so much less now?
First, everyone has started to realize that there are many other challenges in the world.
After the end of the Cold War, people claimed that climate change was the last big challenge to fix. That was a common idea at Davos and among many global leaders. Now, everyone recognizes that climate change is just one of many issues: wars, budget deficits, immigration pressures, declining educational achievements, artificial intelligence, and demographic changes are just a few.
Second,you can only cry wolf so many times.
How many “the end is nigh” predictions over the last 50 years?
One peer-reviewed study counted at least 78 specific claims, like when King Charles insisted that the world only had 18 months left to fix climate change. That was in 2019. So, that statement was wrong. And every statement by every well-known climate alarmist that has been resolved by 2026 turned out to be wrong. Not to mention when Al Gore told us in 2008 we only had 10 years left.
Third, climate policies are incredibly expensive and do little.
The world has spent more than 16 trillion dollars to curb climate change, and governments are lookingto spend hundreds of trillions more in the future.
A Science study of 1,500 climate policies in 41 countries across the last two decades showed that only 4% worked. In total, they cut less than a quarter of one percent of total emissions. If a private company had this kind of record, they’d be out of business.
Fourth, the alarmist claims are often blatantly misleading. When you’re told that sea level rise could force 187 million people to move, that claim unrealistically assumes nobody will do anything to address the problem for a century. But when people adapt — for example, by building levies — that number goes down 99.8%.
The Dutch solution to floods: live with water, don’t fight it. The same thing applies to climate change.
We’re constantly told more people will die from heat waves. But nobody ever reveals that the cold kills many more. Right now, warming temperatures actually save lives. And of course, when there’s cheap and reliable power, more people can afford air conditioning. As the US warmed in the 20th century, heat deaths declined significantly, exactly for that reason.
Climate economists have consistently shown that by the end of the century, climate change will cost 2-3% of global GDP. It is a real problem, but nowhere near Armageddon.
In fact, as the UN expects the average person to be 450% richer in 2100, climate change simply means it is going to feel like we’re ‘only’ 435% richer than now. That’s still a much better world — just not quite as good as it could have been.
We still need to fix climate change, but we can do so smarter. Don’t pour trillions into policies that don’t move the needle, but billions into green energy R&D. This will help develop cheap green energy alternatives that can eventually outcompete fossil fuels on price.
Ending the climate panic means our kids won’t be needlessly scared, and neither will we. Being frightened without reason doesn’t lead to smart policies.
Rather, we can start focusing more on the many other pressing problems we need to fix now. Putting the climate panic behind us makes that possible.
I’m Bjorn Lomborg, president of the Copenhagen Consensus, visiting fellow at Stanford University’s Hoover Institution, and author of False Alarm, for Prager University.
A recent interview exposes how centrist politics and climate obsession corrupt energy investments, in this case to the detriment of Canada. PM Carney is running a charade which will not bode well for Canada, according to this interview of Energy industry expert David Knight Legg by National Post’s Rob Brackenridge. Excerpts from the transcript are below with my bolds and added images. First a reminder of where PM Carney is coming from:
Greetings, folks, I’m Rob Brackenridge for National Post and NP Comment. Alberta has now officially submitted a proposal to the federal government Major Projects Office for a new pipeline to the West Coast. Presumably, that will be fast-tracked by the federal government. We’re expecting that designation of this being in the national interest from the Prime Minister by October. But is all of this enough to really get Canada to where it needs to be, to really fully embrace the opportunity that presents itself and to be that destination for investment and be a global energy superpower?
Well, someone who’s been watching all of this very closely is David Knight Legg. He is a director and an advisor to a number of energy, financial and tech firms, a former principal advisor to Alberta’s premier, former CEO at Invest Alberta Corporation. David, so great to have you with us here. Great to be here, Rob. Great to see you again. Likewise.
It’s been an interesting couple of days. Clearly, the current premier of Alberta has put a lot of work into this, and is trying to pull, I think, the federal government in a much different direction from where it’s been over the past decade. How significant is this milestone, do you think, first of all?
Well, Rob, you know, it’s always hard when you sit outside something as complicated as a negotiation between Ottawa and Alberta, which has skeptics in both their bases, as I’m sure you know. And I had a good conversation with Jason Nixon (Alberta Minister of Finance) last night about it, met the premier briefly. I think it’s really important and I think that it’s not perfect. These deals often aren’t.
But I think one of the testaments to how important it is, is how close it came to being derailed in a variety of ways, just as a little bit of the backstory. And I think that, you know, you sometimes have to take the win that you’ve got. Actually there are a lot of things I’d be critical about. I don’t think it goes far enough.
And I think we have a fundamental problem in a regulatory regime,
which means that governments have to get this involved
in getting basic infrastructure built.
In other countries, you don’t need governments announcing these things. You don’t need a most favored nation status for a project. You have very simple, clean regulations, low taxes, and you allow people to build as long as they meet basic criteria. And I think it’s the absence of that that has become more apparent to more people because of the MOU.
So I think one of the benefits of the MOU has been that it has started a conversation that’s been needed for a long time in Canada over just how hard it’s become to build anything here without official government sanction. And I think that’s a conversation that’s going to continue to persist as this project works its way forward. Yeah, even just the existence of the the major projects office, the Building Canada Act, I mean, it’s a recognition that we have all of this red tape in the way and we create this separate track to try to bypass it. But it just kind of leaves everything else still in place. Right.
So in a way, it’s an acknowledgement that we have that problem, but it doesn’t really address it at the same time. That’s a great that’s a great point. In fact, I think that’s a great way to put it. And that’s actually a conversation that really needs a national conversation that needs to happen.
If you have to create an entirely separate bureaucracy to avoid your current bureaucracy, it might be time to reform your current bureaucracy rather than set up a new set of channels and processes that ultimately are privileging things that still require the government to lean in. And it creates a greenhouse for favoritism and, you know, trying to get the attention of the government to trying to do things rather than a level playing field where anybody can come in and innovate and create. And I think as a nation, we’ve got to do better than this.
You know, it just it looks like 1970s style industrial policy rather than a fair, free, open, entrepreneur led marketplace of ideas and and opportunities. And you have to believe that there are really creative ways of thinking about things that would be initiated across Canada right now if the regulations were simple, the taxes were lower and the process was clear. We’re seeing under this prime minister a little bit of slow dismantling of a lot of the Trudeau legacy, which is maybe long overdue and perhaps needs to be expedited to some degree.
But what does it tell us about then the missed opportunity of the last decade and and all of the cost, all that was wasted as we sort of lived and endured under those policies? You know, Rob, I think one of the things that’s really interesting is Mark Carney was the heart of a lot of those policies. And, you know, half of me believes, you know, that’s what makes him the perfect guy to dismantle them because nobody else is going to be as credible with that liberal base as he would be at turning back some of the environmental overreach that’s restricted the ability to build in Canada. On the other hand, I think that there’s this temptation within this Carney government to maintain control over economic development in a way that means that they constantly have their hand on the wheel.
They’re constantly fidgeting with what they can release. And this is problematic because you will never have government sanctioned projects move as fast as projects that are originating in the private sector and originating with people that are, you know, have to make a bottom line work. So I think, you know, the dismantling of the Trudeau erais so important for the country to move forward, but that’s not sufficient. It’s essential, but it’s not enough to actually start to get the economy rolling again. And you saw this in this really odd condo deal that that happened and a lot of these things where there’s a constant attempt to use government money. We don’t have it.
You know, they’re borrowing it to expand the bureaucracy and also to expand the government reach into things like housing, energy. You know, these are sectors that in most countries are managed without the government having to intervene. Yeah.
And it’s interesting because you mentioned the economy, and obviously that’s an impetus. I know there’s provincial federal dynamics. There’s the energy side of things, but there’s just, you know, when you look at the economic challenges Canada is facing right now and how lethargic our economy has been, the global headwinds we’re facing, the trade uncertainty with the United States. If we’ve got economic advantages, if we’ve got strength, I mean, now’s the time to exploit those advantages. Is there a dawning realization, just with everything that we’re facing now, that we have all of this in front of us? I think so.
I think it started with a paper by Stephen Miran who went on to be the chairman of the Council of Economic Advisers for the US president back in November 24, when he said the United States should embark on this. This is what the president ended up adopting as formal policy, should embark on a process of integrating its national interests in energy security, military security, and trade security. And immediately they went for Panama. They’re doing deals around the Straits of Malacca. They’re, of course, active in the Straits of Hormuz with Iran, Greenland. They immediately went to taking Venezuelan oil over. I don’t think there’s been enough coverage of that, and that’s one of the things that led to the article that I wrote, which is when the Americans took over the Venezuelan energy supply, the Chinese lost 550,000 barrels of heavy crude, which is chemically identical to what we produce. It opens up an opportunity for us to have a $15 billion a year trade with the Chinese government just on that one replacement supply chain alone. And the idea that we had Northern Gateway effectively blueprinted already, that that’s a 565,000 barrel pipeline that could easily get there.
When you look at why Northern Gateway was ultimately cancelled, it’s a series of just self-imposed rules that have nothing to do with ultimately helping the environment, even though they’re dressed up that way. When you double-click on those rules, they do nothing for the environment, and in some ways they just sort of imagine that Canada can’t do things. We look at a tanker ban and we think the whole world is moving this stuff by tank. Are we the only country incapable of operating shipping and ports in environmentally sensitive areas? We don’t back ourselves enough to figure out that we could still do it as Canadians if they can do it in 50 other countries.
So there’s a lot that I think happened during that Trudeau era that we’re going to have to answer for. And I think we’re starting at least to have the right conversations. And yesterday’s announcement was an important step towards, I think, government saying we need this pipeline. I still dislike the fact they’re putting themselves in the position of being the ones to back it and treating pipelines more like airports or something. That is maybe being realistic about what you do if you do have a kind of very statist government environment. But it would be better if we could go back to a being a nation where free market entrepreneurialism didn’t require a constant government sanction. Yeah, there’s that.
I mean, I think one of the positives here, I mean, with Trans Mountain, we faced a real backlog when it came to the capacity pipeline capacity. Right. So with this, I think there’s the investment, the spinoff that comes with increasing production to fill this pipe and to fill some of the other projects like South Bow or like the Enbridge Mainline expansion, that the expansion, the growth of production is where we could really see a lot of that investment in the economic spinoffs.
How much does that tie into this? Do you think? Look, I think it’s super important. These are supply demand cycles. And the demand side, when you look at Asia, is unprecedented. You know, and so I think that’s a really the point you’re making is critical. I think you could double or we could get to 10 million barrels. Ultimately, there would be no problem in terms of egress and demand.
Almost all the issues related to the investability of that process are tied to issues like whether or not pathways and CCUS (Carbon Capture) is really the most important thing in the world. Or is it more important than some of these commitments to actually produce and supply and ship? And I think that it’s not. You know, our lesson from a lot of the environmental and to the Prime Minister’s credit, he came out and said $200 billion in 10 years of environmental activism from Ottawa produced absolutely nothing of note. It certainly didn’t change the emissions profile of the country in any significant way. In many ways, it harmed the ability for Canada to play a role in reducing global emissions by shipping a lot more of our gas to offset the coal-fired Chinese grid. And so in so many ways, I think there’s been a decade of strategic irrelevance, but also a decade of real economic decline.
And I think this Prime Minister is faced with needing to get over what’s happened in the trade arena. And I think they’re sort of turning a light past the fact that the Americans have said we’re going to do a deal with the Mexicans and not with the Canadians. You know, we’re going to put you guys on this annual review process. Now, a lot of people are saying that’s fine. I don’t think that’s fine. I think that’s an absolute failure to effectively negotiate the past 18 months. And that is starting to put in. I think the Prime Minister is smart enough to know deep down this is a real problem for the country and for him. And when you look at Canada, the Canadian balance sheet of exports, you know that energy is the only place where you’re going to get an immediate return economically on an investment.
So I think he’s still trying to juggle that kind of absolute realism about what works economically with his desire that there still be kind of a signaling effect, at least to his base, that they’re going to take care of the environment. But I’m just not sure when you look at, you know, sitting on the board of an energy company, you look at the costs related to all of these sort of exogenous environmental commitments that Canada is kind of inventing with the hope that it signals environmental commitments. But they’re not really making that big a difference to the planet. And they’re adding extraordinary costs. And they’re often being managed by government bureaucracies that don’t move at the speed of business or commercial interests. So I think it’s an important step.
It’s raising some important conversations. But I think the answers to some of those questions, those conversations are raising are going to take us further down the path of a much more liberalized economy when it comes to energy and hopefully a smaller government, a government that can live within its means federally and provincially. Yeah, I guess that’s the takeaway here, right? I mean, you know, it’s fine to say that this is a positive achievement. This is a project that is worthwhile, but to avoid maybe patting ourselves on the back too much and recognize some of these broader challenges we face, what do you think should be the next step here? Rather than just say, see this major projects office, this approach is working to have more meaningful conversation about taxes, about regulation, about just the whole picture. Is that really where the conversation ought to be going?
Yeah, look, I think you’re doing it right now, Rob. I think that this kind of conversation that you’re initiating is really important because I think that the baseline is that we want this nation to succeed. We want Alberta to succeed. We want Canada to succeed. We know that, and I think we’ve been sort of avoiding the fact that we’ve allowed the economy to decline and we’ve become very, very dependent on the United States as a result of that.
I mean, one of the great ironies of the past decade is that by refusing to build these things that would have taken our energy to Asia and to Europe, we’ve created a much deeper dependency on the U.S. markets in every way and across every category. And that dependency is now starting to really hurt us. And I think Ontario is an especially tough, tough place when it comes to this.
But I think the first step here is to start to lay out the way forward. And one of the obvious things to do is look at other nations and say, how are they creating these things in a way that’s actually getting things done? You look at a place, I’ve been spending some time in the United Arab Emirates, which is home to both Abu Dhabi and Dubai. And they just decided in the middle of this war that the Straits of Hormuz were not secure enough.
And so they’re going to build a pipeline. They’re going to have that pipeline done in under a year. And that’s going to move 1.8 million barrels of oil. And when you hear that, you sort of think, makes sense. But then you think, imagine if Canada said, we’re going to build a pipeline, 1.8 million, we’re going to have it done in a year. And we’re going to get this stuff to China as a result of what happened in Venezuela.
Here’s the burning question for me. Why not? Why can’t we be that nation? Half the people building these infrastructure projects in the UAE are coming from Canada, because we’re the best in the world at these things. But those experts can’t build those things in Canada at that speed, because they’re beholden to a series of rules that are often rooted in what used to feel like benign green commitments.
But now we just realize these are constraints that are doing nothing for the planet. And they’re significantly slowing down our ability to actually build the kind of economic stability and security and growth we need.
And I really like the framing that you gave about this event. Yes, this step is good. But before we start celebrating, let’s consider where does this actually go next? Are we still talking about a five to 10 year build process? Is that real? Why can they build something in a year in the UAE that carries almost twice the amount of oil as what we can build? And if there’s geographic or geological reasons why, that’s fine. But I don’t think that’s the case.
I think a lot of it is that we’ve just grown used to and accustomed to operating in a manner that is second rate. And it doesn’t keep up with the speed of business. And it certainly doesn’t keep up with what’s happening globally in the world of energy security and energy supply.
In a significant shift in global financial priorities, the World Bank and the International Monetary Fund (IMF) appear to be scaling back their commitments to climate finance in 2026, likely influenced by pressure from the United States. This development, reported in mid-2025, has sparked concerns among environmental advocates, developing nations, and the business community about its potential to disrupt the global transition to a sustainable economy. Climate finance, which funds projects aimed at mitigating and adapting to climate change, is critical for supporting renewable energy, sustainable infrastructure, and climate resilience initiatives.[ Note: The United States is the largest shareholder of the World Bank, controlling about 16% of voting power. This allows the U.S. to single-handedly block any decision that requires a supermajority, such as extending or replacing the climate financing targets.]
Reorientation Background from US Treasury Secretary Scott Bessent
In recent years, the IMF has suffered from mission creep. Its work has too often extended into areas such as international development, climate change, gender, and social issues, which are disconnected from the institution’s core mandate. To restore its relevance and impact, the Fund must drop these extraneous items and focus on the critical economic work at hand.
As part of the ongoing Comprehensive Surveillance Review (CSR), the IMF is taking important steps to better calibrate the scope of its surveillance and reverse these concerning trends. Through the ongoing Review of Program Design and Conditionality, we expect the IMF to reemphasize a culture focused on achieving successful program outcomes rather than prioritizing inputs, such as the volume of financing provided.
In a more constrained external financing environment, the IMF should promote domestic revenue mobilization, better governance, and policies that support durable, private sector-led growth. Moreover, the IMF, together with the World Bank, must continue its efforts to improve debt data reporting, help build debt management capacity for borrowing countries, restore momentum in debt-restructuring processes, and advance progress under the Common Framework.
The World Bank must maintain focus on its core mission of reducing poverty and increasing economic growth. This means:
♦ Promoting a stronger development agenda focused on country self-reliance by directing resources to the countries most in need for foundational investments that increase productivity and growth and graduating countries from Bank support; ♦ Delivering access to all technologies which can provide abundant, reliable, and affordable energy; ♦ Promoting prudent macroeconomic management and the rule-of-law; and improving development outcomes by proactively seeking to expand competition in procurement. ♦ Striving for greater efficiency, discipline, and accountability so that every dollar delivers more impact.
The Bank must do more to advance developing country access to abundant, affordable, and reliable energy to support economic growth and poverty reduction. Energy abundance sparks economic abundance, and the World Bank should support an all-of-the-above approach to energy technologies—including fossil fuels such as gas, oil, and coal, rather than restrict borrower choice. We call on the Bank to further expand its support for affordable, reliable energy by removing constraints on its support for natural gas and increasing the number of gas projects in the pipeline. We continue to welcome the Bank’s removal of the prohibition on financing nuclear power generation last year. We further welcome the Bank’s leadership in a working group on nuclear energy development with other multilateral development banks. Financing that delivers energy abundance will provide a strong boost to growth, which will also support debt sustainability.
Focusing on the Bank’s core mission also means abandoning its distortionary 45% climate finance target,which impedes market efficiency, distorts incentives, and undermines efforts to reduce poverty and spur economic growth. We welcome the coming expiration of the Climate Change Action Plan, and upon its long-overdue expiration, expect the Bank to immediately shift its myopic focus on climate and financing volumes to one that emphasizes high-quality, durable projects rather than shaping and selecting projects to chase arbitrary financing targets that do little to lift people out of poverty. The Bank should turn its attention to whether its investments and the countries they support are resilient to a multitude of shocks, rather than to meeting nonsensical arbitrary targets.
As public institutions, the World Bank and IMF can most clearly demonstrate accountability to their shareholders by ensuring that a sharper focus on their respective core missions is also reflected by restrained budgets. In service of this goal, we are pleased that both institutions have proposed flat real administrative budget growth for the upcoming fiscal year alongside streamlining efforts that will help reverse the mission creep of recent years.
More than eight decades after their creation at Bretton Woods, we must ensure that the international financial institutions remain true to their mandates and fit for purpose. Streamlining policy priorities will allow both the World Bank and IMF to focus limited public resources on effectively fulfilling their core mandates while nimbly responding to crises. The United States will continue to work with Management and staff, as well as other shareholders, to advance these priorities.
United Nations Secretary-General António Guterres called for a massive increase in global climate spending, arguing that governments and financial institutions must devote significantly more resources to addressing climate-related challenges. In a special address at London Climate Action Week on Monday, Guterres said that governments must invest more heavily in climate-related initiatives. Guterres said.
“We must do far more to protect people and communities from the here-and-now effects of climate chaos,” Guterres said. “Because even at full speed, we cannot outrun climate change. Its impacts are already here, compounding and cascading.”
Guterres also highlighted Africa’s energy potential while arguing that the continent receives too little investment despite its abundant natural resources. Guterres continued:
“Africa is home to 60% of the world’s best solar resources, 30% of critical minerals, 1/5 of humanity,” “Yet it receives just 2% of global clean energy investment. At the same time, more than 600 million Africans still lack access to electricity. This is unjust and a lost opportunity for Africa and the world.”
The U.N. chief urged wealthy nations to honor previous climate-financing commitments and dramatically increase funding for developing countries over the next decade. Guterres said.
“Developed countries must keep their promises, including support to the Fund for Responding to Loss and Damage and the Green Climate Fund. The $300 billion pledged to developing countries must be delivered with concrete steps to mobilize the $1.3 trillion a year by 2035,” “In a world of shrinking aid, we must also unleash the catalytic role of multilateral development banks and the wider development finance system to help fund long-term infrastructure such as grids, mass transit, and water systems.”
Guterres further argued that international lenders should play a larger role in financing infrastructure and climate-related projects around the world.
“Recent reforms and policy decisions have increased the lending capacity of multilateral development banks by 600 to 800 billion U.S. dollars. They must use it aggressively to finance the infrastructure of the future and climate adaptation. They must also adapt their instruments to match the scale and time frame of the challenge, including 50-year finance where needed.”
Waste Example #5: Green Hydrogen Projects–
Absurd, Exorbitant and Pointless
The map above from IEA shows more than 2200 hydrogen fuel projects around the world, intending to replace hydrocarbon fuels to save the planet. They dream of being operational by 2030 claiming that real world obstacles will be overcome if enough taxpayer dollars are thrown at the problems.
A table from Hydrogen Newsletter provides a non-exhaustive but representative catalogue of the major green hydrogen projects that have been cancelled, postponed, or significantly scaled back between 2023 and mid-2025, illustrating the global scale of this market recalibration.
Boluwatife Remy reveals what many have overlooked, widespread disinvesting in wind power. Not so long ago, the climate feaful were badgering education and religious institutions, among others, to disinvest in hydrocarbons from Big Oil companies. Well, the worm has turned. Remy’s article at benzinga is Why Shell Is Selling Its Wind Farms—And What It’s Building Instead. Excerpts in italics with my bolds and added images.
The energy transition was supposed to be the defining corporate story of the 2020s. For Shell(NYSE:SHEL), it has become the story of what the company tried, reconsidered, and is now unwinding at a pace that leaves little room for ambiguity about where management stands.
Bloomberg reported Friday that Shell is preparing to offload a portfolio of offshore wind farms in a transaction expected to generate more than $1 billion. Rothschild and PJT Partners are handling the advisory work, with the formal sale process targeted for 2027. Shell said nothing publicly. What the company has not stayed quiet about, expressed through a long sequence of exits and disposals over the past two years, is the direction it has chosen and the conviction behind it.
This Is Not a One-Off Decision
Anyone tempted to read the Bloomberg report as an isolated portfolio adjustment has not been following what Shell has been doing since Wael Sawan took the chief executive role with an explicit mandate to tighten the company’s strategic focus and restore the return on capital that investors had been pushing for.
The wind exits have been coming in steady succession. Shell walked away from the Atlantic Shores offshore wind project in the United States, absorbing a $1 billion writedown after concluding the numbers no longer worked. It sold its half of the MarramWind floating offshore wind development off Scotland to joint venture partner ScottishPower Renewables and abandoned the CampionWind project it had been developing independently.
Positions in other offshore wind assets across multiple markets have been quietly sold down as each successive review of the business case reached the same conclusion. The explanation attached to each departure has been consistent: the project either fails to meet the company’s return thresholds orno longer fits what Shell believes it does well.
One exit looks like a portfolio decision. A dozen exits
over twenty-four months looks like a verdict.
What Shell Is Building in Place of Wind
The company Sawan is assembling has a narrower and more deliberate focus than the Shell that spent the early 2020s presenting sweeping energy transition commitments to investors and government audiences. Liquefied natural gas trading and upstream oil and gas production are where the strategy now concentrates, businesses where Shell carries genuine competitive advantages built over decades that no amount of capital could quickly replicate elsewhere.
That repositioning is not unique to Shell. The same reassessment has been running simultaneously across the major integrated oil companies. BP has been selling renewable assets and reorienting capital toward upstream production. Equinor reduced its renewable energy workforce by around 20% while boosting spending on oil and gas. TotalEnergies negotiated an exit from nearly $1 billion in U.S. offshore wind leases and committed the equivalent amount to domestic fossil fuel development instead.
The companies that arrived at the 2021 and 2022 investor days withambitious clean energy targets have each, at their own pace and with varying degrees of public candor, concluded that those targets were built on assumptions that did not hold.
How Offshore Wind Lost Its Financial Logic
The deterioration in offshore wind economics between 2021 and 2024 was sharper than almost anyone inside the industry publicly acknowledged while it was happening. Construction costsclimbed as specialist installation vessels became scarce and supply chains struggled to keep pace with the volume of projects that had been approved simultaneously across European and American markets.
Interest rates moved from near zero to levels that fundamentally changed the math on capital-intensive long-duration infrastructure. Turbine manufacturers, squeezed between fixed-price contracts and rising input costs, ran into serious financial difficulty.
The gap between what projects were expected to cost when developers submitted bids and what actually arrived on the invoice became a recurring crisis.
Contracts got cancelled. Projects got written down.
Governments that had structured power purchase agreements around cost assumptions from a different era found themselves in renegotiations that pleased nobody. The companies carrying the heaviest exposure to offshore wind at the peak of the enthusiasm cycle spent years managing the fallout from decisions that looked reasonable in 2020 and looked considerably less so by 2023.
What This Means for Shell Shareholders
Selling wind farms that are not generating acceptable returns and redirecting the proceeds into businesses that are creates a cleaner financial picture for investors who have been watching Shell carry underperforming assets longer than they would have preferred.
Shell has been among the more aggressive capital returners among the major oil companies, and management has been consistent about treating buyback capacity and dividend sustainability as priorities that outrank maintaining positions in low-return businesses.
The assets being brought to market will find buyers. Infrastructure funds and specialist renewable developers have been steady acquirers of divested offshore wind portfolios throughout this cycle, often able to hold the assets more cheaply than integrated oil companies whose capital costs and return expectations create a structural disadvantage in low-margin infrastructure. Shell selling is not the same as the assets disappearing. It is the assets moving to owners better suited to hold them.
What stays with Shell is the part of the energy business it has decided it is actually good at. For investors, that clarity is worth more than a diversified portfolio of businesses generating mixed returns and requiring constant explanation.
BREAKING: U.S. Unleashes $10 Billion Nuclear Shockwave To Revive Belgium’s Energy!
Mackenzie Web reports on an announcement in Belgian news site La Libre “The United States wants to help Belgium restart its nuclear power plants, Donald Trump is fully behind the project” (translation) Excerpts in italics with my bolds and added images.
In a bold revelation, U.S. Ambassador to Belgium Bill White announced a game-changing investment plan that shifts the energy landscape of Europe. America is prepared to finance up to 50 percent of new nuclear reactor construction in Belgium, potentially injecting $10 billion into this initiative. His remarks, delivered to the Belgian newspaper La Libre, signal a renewed focus on nuclear energy as a reliable power source. White, clearly aligned with Trump’s energy strategy, stated,
“Washington is all-in on helping Belgium reverse decades of suicidal green phase-out madness.”
Several MEPs (mainly Greens) hold up anti-nuclear posters at EU debate.
This renewed commitment comes at a pivotal time for Belgium as it seeks to reclaim its energy independence. The country’s new right-leaning government, led by Prime Minister Bart De Wever, is actively nationalizing its nuclear fleet and abandoning plans to decommission existing reactors. No longer willing to rely on inconsistent renewable energy sources, Belgium is stepping back into its nuclear past, which had been shunned during years of leftist climate policies prioritizing wind and solar over proven energy sources. As White puts it, the reality of energy security is finally sinking in.
American companies Westinghouse and GE Vernova are set to lead the charge in this nuclear renaissance. Westinghouse’s AP1000 reactor, equipped with advanced passive safety features, promises a safer, more efficient alternative to outdated technologies previously favored in Europe. With an impressive capability for 72 hours of blackout protection, this reactor is already in operation in the U.S. and China, demonstrating its reliability. Similarly, GE Vernova’s BWRX-300 small modular reactor boasts rapid deployment capabilities, making it a perfect fit for Belgium’s urgent energy needs.
BWRX-300 Small Modular Reactor | GE Vernova Hitachi
The significance of this investment stretches beyond economics; it also reinforces America’s longstanding alliance with Belgium. White highlighted that this initiative harkens back to an 80-year partnership where the Belgian Congo’s uranium was pivotal in America’s atomic endeavors during World War II. The contribution of Belgian resources in winning past conflicts illustrates the strategic bonds between the two nations, and today’s nuclear cooperation continues that legacy. As White emphasizes, this is not merely a financial deal—it is a calculated move toward mutual security, ensuring that European nations can break away from fluctuating foreign energy supplies.
Moreover, this initiative marks a decisive pivot from recent energy decisions that left European nations vulnerable. The reliance on Russian and Middle Eastern sources has proven costly and unstable, especially amid geopolitical tensions. White asserts that under this new agreement, Belgium can expect “no more blackouts” and “no more skyrocketing bills,” fundamentally changing the energy conversation in Europe. With the U.S. stepping up to fill this critical void, the interests of American energy innovation directly align with the needs of a nation seeking stability.
In summation, this announcement is a shot across the bow to proponents of renewable energy who have long championed policies ignoring the realities of energy demand and practicality. The message is clear: America is not just offering financial assistance; it is providing a framework for a robust nuclear future. While globalists may resist this trend, the power of American engineering and technology is poised to reshape Belgium’s energy landscape, ensuring real leadership is showcased on the world stage. The green dream is receding, while the nuclear renaissance emerges, casting doubt on the feasibility of relying solely on renewables.
Zeldin explains how EPA grants cycled through multiple groups,
each taking a cut, before funding more activist groups.
Environmental Protection Agency (EPA) Administrator Lee Zeldin revealed how federal dollars spent on “environmental justice” often perpetuate a wasteful yet lucrative cycle of environmental activism. [some emphasis, links added]
“It’s the principle that there needs to be a zero tolerance policy for any waste and abuse,” Zeldin told host Alex Marlow. “It’s also the principle of being able to do more with less, and we proved over the course of our first 15 months here that we can achieve extraordinary savings here at the agency.”
EPA’s annual operating budget at the time of Zeldin’s arrival was “about $10 billion,” yet he said, “Over the first year that I was in this position, we saved $30 billion.”
“In 2024, this agency obligated and spent over $60 billion, and we were able to cancel grants and contracts. We did real estate consolidation [and] staff efficiencies with an agency-wide reorganization,” he explained. “We closed an EPA museum that nobody knew about or almost no one even visited.”
Zeldin pointed to an exchange with Senator Sheldon Whitehouse (D-RI) in a congressional hearing regarding wasteful solar grants that the self-proclaimed climate change champion supported.
“We had examples where the grant was going through up to four different pass-throughs, where each pass-through entity was getting at least 15% to administer their part of the pass-through,” Zeldin said. “I mean, a lot of this is just inexcusable.”
“The money that gets appropriated in the name of environmental justice to remediate an environmental issue, but then the dollar goes to an activist group to train other activist groups to come to D.C. and advocate for the next dollar to go to them to go out and be activists, like, wait, I thought we were spending this dollar to remediate an environmental issue,” he explained further.
“So yeah, it’s about doing more with less, and we have found extraordinary ways to save the taxpayers tens of billions of dollars.”
Tilak Doshi explains how formerly empirical economists have been captured by climatist ideology, betraying their profession and public trust. His Clintel article is UK economist says high energy prices are ‘good for the climate’. Excerpts in italics with my bolds and added images.
[Note: “In the old Soviet Union, the Communists allegedly used the term “useful idiot” to describe Westerners whose naïve political views furthered the Soviet agenda, even though these Westerners didn’t realize that they were being exploited in such fashion. It is in this context that I confidently declare that American economists have been useful idiots for the green socialists pushing extreme climate change policies.” Robert Murphy]
A UK economist recently said the quiet part out loud: high energy prices are ‘good for the climate’. This is not an aberration, says Tilak Doshi, but symptomatic of modern economists. “The barbarians did not storm the gates. The Western elites invited them in, gave them chairs, and asked them to redesign the curriculum.”
When petrol prices rocket because of supply shocks—such as the closure of the Strait of Hormuz and the rerouting of oil tankers—one might have expected a discussion of geopolitics, market signals and the obvious supply-side remedies. Of which there has been plenty, some competent and even masterly, some not so competent by “instant expert” talking heads in social and mass media. But a recent article by an economist in The Conversationoffered a solution so perversely tone-deaf it could have been lifted from a Babylon Bee satirical script.
Citing research that a 10 per cent rise in UK petrol prices can cut demand by up to 5 per cent, the piece solemnly declared that “high prices are a way of adjusting consumption to cope with the lower supply.” The subtext was unmistakable: with refined products suddenly scarcer, the proper response is not to produce more fuel if the country were blessed with domestic fossil fuel resources (like the UK) or to import more from sources outside the Strait of Hormuz or both. Instead, the advice from Christoph Siemroth, Senior Lecturer in Economics, University of Essex, is to make what little remains even costlier—so that the hoi polloi drive less, take the bus and hasten the glorious transition to net zero.
Clueless and Insidious
One is reminded of Marie Antoinette’s famous cake remark, betraying aristocratic cluelessness. But The Conversation article is something far more insidious: the capture of economics itself by the green ideology that now rules our institutions from the BBC to the Treasury, from Oxbridge common rooms to the UK Met Office service. The discipline that once stood as the last redoubt against the Frankfurt School’s long march through the social sciences has fallen. Frank Knight, Gary Becker, George Stigler, Milton Friedman et al held the gates against postmodern gibberish for a generation. No longer. The barbarians are inside the citadel, wearing lanyards from the oxymoronically named Department for Energy Security and Net Zero, chanting “sustainability” like a secular rosary.
Consider the elementary logic that every first-year economics student once absorbed before the PPE types at Oxford and Cambridge began their higher education in Gaia worship. When the price of a good rises because of scarcity—whether from a blockade in the Persian Gulf or an OPEC production cut—the signal is unambiguous: produce more, explore more, innovate more. Britain sits atop some of the richest hydrocarbon resources in Europe. North Sea oil and gas reserves are not physically exhausted; they are made economic infeasible in the face of Miliband’s punitive tax rates.
Onshore shale, barely scratched after a decade of regulatory vandalism,
could transform our energy security if the
“precautionary principle” were not treated as holy writ.
Higher prices should, in any sane world, trigger precisely that response: more drilling, more fracking, more investment in refining capacity, more imports of oil and gas from diversified suppliers. Instead, our green economists prescribe the economic equivalent of putting a feverish patient into a sauna. Demand must fall. Prices must stay punishingly high. The suffering is the point.
Taxes
The Conversation piece is exemplary in its genre. Price caps are correctly dismissed as distortionary, leading to physical shortages and queues as a means of rationing. One needs to only remember the long lines at gas stations in the US under Jimmy Carter’s price controls after the 1979 oil price shock.
Roughly 50–55% of the UK retail price for both petrol and diesel currently go to the government as taxes.But fuel duty cuts are rejected because they are untargeted and cost the Exchequer revenue—fuel duty, after all, is nearly 2 per cent of government income, a nice little earner for the net-zero industrial complex.
The preferred remedy? One-off cash transfers to low-income car owners, modelled on Germany’s 2022 gas rebate which provided a temporary fuel tax cut in 2022 to ease soaring petrol and diesel prices during the energy crisis triggered by Russia’s invasion of Ukraine.
The beauty of this, we are told, is that it preserves the “price signal” while letting households “profit” by leaving the car at home. Translation: we will bribe you to stay poor and immobile, all in the name of the planet. Meanwhile, the authors of such wisdom never feel the pinch. They lecture the white van plumber, carpenter or electrician going about his work and the hard-pressed mother doing the school run that their higher fuel bills are a feature, not a bug.
Luxury Beliefs and Intellectual Corruption
These are luxury belief-inspired energy policies which “confer status on the upper class at very little cost, while often inflicting costs on the lower classes”. As Victor Davis Hanson has so often pointed out, leftist policy elites in Democrat-run states suffer little from the consequences of their own policies. The metropolitan elite’s enthusiasm for open borders stops abruptly at the high walls of their own villas (Nancy Pelosi anyone?)
The same applies to energy. Inhabitants of the liberal metropolitan bubble can afford the £12-an-hour parking in Covent Garden, the retrofitted Victorian terrace with an air-source heat pump the size of a small car, and the Tesla whose real environmental cost is buried in Chinese lithium lakes and in artisanal cobalt mines using Congolese child workers. For them, “sustainability” is a lifestyle brand. For the rest of the country—pensioners choosing between heating and eating, hauliers facing bankruptcy, farmers unable to run their tractors—it is economic sadism dressed up as virtue.
Buddhist economist
The historical parallel is instructive. E.F. Schumacher — the “Buddhist economist” — told us, “small is beautiful” and that giant power stations were somehow spiritually corrosive. One wonders what he would make of the fact that a modern combined-cycle gas plant needs to be at least 200 MW to be remotely efficient, or that industrial civilisation runs on economies of scale, not backyard steel furnaces.
Yet today’s green establishment is repeating the Maoist folly in Western drag: decentralised “community energy”, intermittent wind and solar that require massive subsidies and backup gas plants, and an ideological insistence that the optimal size of an economy is whatever fits the carbon budget decreed by “climate modellers” in Exeter or East Anglia. The Soviet Union tried to create the New Soviet Man—selfless, collective-minded, liberated from base material desires. The project failed spectacularly. Its successor is the New Green Man, who measures his carbon footprint, cycles to the vegan restaurant, and cheers when Ed Miliband shuts down another North Sea field. The totalitarian impulse remains; only the Orwellian vocabulary has changed from “proletarian internationalism” to “just transition” and “climate justice”.
The intellectual corruption runs deep. Paul Krugman, a Nobel laureate in trade theory, now produces columns that read like press releases from the Church of Climate. Marginal costs of natural gas? Not so relevant when policy costs—carbon taxes, renewable obligations, network charges, capacity market payments—make up some 60% of your bill. As Kathryn Porter,David Turver and others have documented with forensic clarity, the “energy price crisis” is largely a net-zero policy-induced crisis. The wholesale cost of electricity is only part of the story; the rest is the deliberate layering of green levies and taxes that no classical economist would recognise as market-based. Yet we are told, with straight faces, that the “97 per cent consensus” demands we accept this as settled science. The same consensus, one notes, that once assured us the pause in global temperature increase was impossible, that polar bears were doomed, and that Himalayan glaciers would vanish by 2035.
Tyranny
Rupert Darwall’s Green Tyranny provides an insightful exploration into the origins of the climate industrial complex. The green movement’s roots lie not in empirical ecology but in a Malthusian revulsion against industrial modernity and a quasi-religious yearning for control. What to eat (less meat), how far to travel (fewer flights), what temperature your thermostat may reach (no more than 19°C if Whitehall has its way)—these are not technical questions but moral ones, policed by the new priesthood of economists who have traded the parsimony of Occam’s Razor for the abusive use of the precautionary principle (“better safe than sorry”). Uncertainty is weaponised asymmetrically so that minor or hypothetical risks (e.g., induced seismicity from fracking) trigger regulatory paralysis, while the far larger risks of alternatives are downplayed. The precautionary principle becomes a de-facto veto tool for ideological opposition to hydrocarbons, not genuine risk management.
Homo economicus, the rational maximiser embedded in cultural norms that Adam Smith understood in both The Wealth of Nations and The Theory of Moral Sentiments, has been replaced by Homo Climaticus: a creature whose every decision must be subordinated to the carbon ledger.
The consequences are not abstract. Britain’s energy prices are among the highest in the developed world precisely because we have chosen ideology over geology. While China adds coal-fired capacity equivalent to the entire UK grid every few years and India builds out its fossil infrastructure without apology, the West hectors the Global South about net zero and wonder why BRICS+ nations hedge their “policy commitments” to UN forums such as the COP30 conference in Brazil last year. The multipolar realignment is not just geopolitical; it is energetic. The Rest have noticed that the West’s net-zero experiment is self-inflicted economic suicide. They intend no such folly.
Glimmers of Hope or Barbarians At The Gates?
Yet there are glimmers of hope. The tide is turning, as Matt Ridley explains in his recent Clintel lecture “The Climate Parrot is almost dead.” Mr. Ridley argues that public and political momentum behind the “climate emergency” narrative is weakening. Indeed, public tolerance for green virtue-signalling has limits when the bills arrive. The on-going protests in Ireland over the cost of fuel by farmers, contractors and others have been massive, leading the government to place the army on “standby” as nationwide fuel protests continue to cause significant disruption and threaten critical supplies across the country. The military’s potential involvement comes as blockades outside major fuel depots intensify, prompting a dangerous government shift towards an “enforcement” phase in response to the escalating crisis. There are indications that these protests are spreading to Norway and France, as farmers and truckers there block arterial roads with tractors and trucks.
Populist movements across Europe and the United States are demanding energy realism: all-of-the-above policies that include nuclear, gas, and yes, even beautiful, black coal, where geology and economics dictate. The Chicago School may have been breached, but it is not yet razed. Rigorous economists—those still willing to follow the data rather than the grants—continue to point out that adaptation and technological progress have always outpaced apocalyptic forecasts. The “climate emergency” that justifies Soviet-style rationing by price is, on closer inspection, a political choice, not a scientific imperative.
Barbarians
Economics was once the most parsimonious of the social sciences, cutting through trite views with marginal analysis and revealed preference. When it abandons that discipline for the higher calling of Gaia worship, it ceases to be economics and becomes propaganda. The article in The Conversation is not an aberration; it is a symptom of a discipline that has exchanged truth for tenure and rigour for righteousness. The barbarians did not storm the gates. The Western elites invited them in, gave them chairs, and asked them to redesign the curriculum.
The corrective will not come from more white papers or behavioural nudges. It will come when voters—those whose lived experience of green policy is higher bills, colder homes, and slower journeys—demand an end to the experiment. Ireland is in tumult as we speak. Energy abundance is not a luxury; it is the foundation of modern civilisation. To pretend otherwise is not sophistication. It is civilisational self-harm. And the bill, as always, lands on the people least able to afford the eco-crucifix.
The above video includes a conversation between Bjorn Lomborg and Scott Bessent at the annual IIF gathering (Institute of International Finance). The introduction by IIF CEO Tim Adams starts about 11 minutes in. For those who prefer reading, below is a lightly edited transcript of comments back and forth, along with some added images. TA refers to Adams, BL to Lomborg and SB to Bessent.
TA: Today we’re going to deepen the discussion with a conversation between Bjorn Lomborg who runs the Copenhagen Consensus and the author how to spend 75 billion to make the world a better place. I’ve had this book on my desk since it was published in 2014. It’s a great publication. If you haven’t read it, you should. I’m sure Bjorn will give you some copies. It really is how do we do development and a cost benefit assessment? How do we get the most bang for our buck? And that conversation is often missed in this town and other capitals. And of course, we’re delighted and honored to have the Treasury Secretary Scott Bessent back today to join us at our spring meetings. So, ladies and gentlemen, please invite to the stage Bjorn and Secretary Scott Bessent.
BJ: Thank you very much. Tim, you kind of took away all our talking points. So, Mr. Secretary, it’s great to have a conversation here today about the World Bank and the IMF here at their spring meeting. The goals of these institutions, of course, is to accelerate global development, drive economic growth, and lift billions of people out of poverty. And these goals remain vitally important. Unfortunately, many development institutions now prioritize Western elite issues like gender, social topics, and climate change over what the world’s poorest people need and want: better education, healthcare, and reliable energy.
Nowhere is this disconnect more clear than in their climate fixation. In the latest year, 48% of the World Bank’s financing went to so-called climate finance, up from 44% the year before, exceeding their own uh 45% target. I suspect the reason why elites are so climate focused is because they correctly see the poor as more vulnerable to climate impacts. But remember, poor people are more vulnerable to every impact. They’re more vulnerable to disease, to hunger, to bad education, to corruption.
The World Bank and the IMF need to get back to making rational priorities. For instance, using cost benefit analysis. As Tim also just mentioned, these organizations used to lead the world in cost benefit analysis. As I’ve argued for a long time, and the reason I think we’re having this conversation now is that we need to scrap these climate targets and get the World Bank and IMF back to their core missions.
In your speech here last year at the IIF, you made this exact point and you called on the World Bank and the IMF to refocus on their core missions. In your view, how has the bank and the fund responded and what more do they need to do?
SB: Well, Bjorn, thank you and good good to be back here a year later to talk a little about a report card for the multilateral banks and to also say that the US leads the G20 this year and I can tell you that our agenda is growth. We believe in the US that the biggest risk to financial stability is a lack of growth.
When I look at the choices that Europe has made unable to follow the Draghy report from Mario Draghy on how to increase growth. The the EU was originally the European Economic Union and it was meant to facilitate trade among the members, make it more seamless, create more prosperity. And it turns out that it’s probably been a hint of the IMF and World Bank. I’m informed by Grace Hopper who was the first female Admiral in the US who was a big fan of it. She has some great sayings. Two of them, one is: The most dangerous words in the English language are “because we’ve always done it that way”. And the second is: “The way to get things done is to get things done.”
And I think we need to step back and look at the IMF and World Bank, their core missions. The IMF I believe the is global financial stability and stabilizing the countries that are in bad equilibriums and getting them back to a sustainable path an economically sustainable path. World Bank is to pull people out of poverty and we cannot have these kinds of elite beliefs get in the way. And I think a lot about this Nature magazine article that came out in April of 2024 that became the guiding principle for so much of the climate beliefs: that GDP was going to be 60% % lower by the turn of the century. So then it was the gospel for 18 months and then it was refuted.
So every everything was based on that. So you know I I don’t think that we can have this kind of short- termism. I think we have to stick with core principles and I do think we we are starting to see at at the World Bank. They are starting to take a tack more for energy abundance and all of the above. They have now gotten on board with nuclear energy. I’m not sure why it ever went away.
And then the IMF, I think, needs to lead by example, probably get rid of their golf course out in Maryland, which I said last year, and focus on global imbalances. Because I can tell you this slow motion buildup of global imbalances after a lack of sustainable growth, it is the the the biggest risk.
The the world cannot take a China with a trillion dollar trade surplus.
BL: And I think you’re absolutely right and one of those points that we we believe somehow that climate is so important that we need to do everything because the nature study that you mentioned that suggests that we could lose 60% of global GDP if we didn’t fix climate change. Which later turned out to be wrong, but of course the point is if that was really true, it should have been rich countries spending rich country money on dealing with climate change. But that’s not what’s happening. It’s mostly rich countries deciding to spend poor people’s money through the World Bank and the IMF badly. And this is not what the the world’s poor are telling us that they want.
So I I had the fortune to work together with Nobel laurate Tom Shelling and he often asked the very simple question, how do you best help poor people? Through development policy or through climate policy? Remember climate policy costs hundreds of trillions of dollars and it shaves off a tiny fraction of a degree in a century’s time. Development policy like avoiding death costs just billions or maybe even just millions of dollars and saves lives right now. And of course that is why development policy often is much much better if you actually want to help poor people.
And of course it also builds much more resilience. Look, a hurricane that hits poor Haiti kills hundreds of people. The same hurricane hitting rich Florida kills virtually no one because prosperity protects people. And so we need to get this conversation back and I think this is exactly where the IMF and the World Bank need to get back to their core missions.
SB: I think it has to be resiliency supply chains. Again, I think you know both the IMF and the World Bank have an important role in understanding this debt loop and downward spiral that many countries are in. Several countries, one in particular, have done the equivalent of a loan to own program. With a lot of these countries there’s a lot of undisclosed debt. There are a lot of tolling arrangements that are unfortunate and I think only the these multilateral banks can effectuate that.
But you know again I do want to congratulate them. The IMF was willing to say this time is different with Argentina and Argentina’s been a fantastic success. They’re accumulating reserves every day as we speak. Tens of millions of people there are being brought out of poverty. The government of Javier Milei, I’m very interested to see it was the poorest elements of Argentine society who voted for him this time around and the young people. So there there’s optimism there. And then you know that the IMF is working on bringing Venezuela back into making it look more like a normal economy, and I think will play a very important role there. And I think the World Bank leadership is back on a good trajectory in terms of energy and unlocking resources for the the very poorest countries.
BL: Yeah. If you don’t mind, I’ll pick you up on that energy point because last October you withdrew the United States from the Green Climate Fund. Because in your words, their goals run contrary to the fact that affordable, reliable energy is fundamental to economic growth and poverty reduction. I think that shows the general point we often forget, how energy really powers modern life. It warms us in the winter, it cools us in the summer, it transports us. I mean, look around this room and I think pretty much everyone is from somewhere else. And this is what energy does. Energy allows us to live better than kings of the past.
Energy really is prosperity. Yet, the climate fixation that we’ve been talking about means that both the World Bank and the IMF pushed for a rapid shift away from fossil fuels and towards renewables and for total ban fossil fuel investment. And I think they need a reality check. There is no transition that taking place globally. We use more renewables, yes, but we also use much more fossil fuels. The world still gets more than 80% of its total energy from fossil fuels. And the decline is so slow that on current trends, we will only get to 0% in 4 to 10 centuries.
Germany has spent famously 700 billion euros on its energy shift since 2002. Electricity prices more than doubled and yet Germany’s energy is still 79% fossil fuels. China produces most of the world’s solar panels, wind turbines and electric cars, but much of this of is produced with coal. China’s energy is still 87% fossil fuel. I would say a Chinese EV is a coal powered vehicle. Much of it is in China and of course especially in some places, for instance India, which are driven enormously on coal, they simply they emit more. But the real point is that poor countries want to get rich like China did. They want to use more energy and much of this will be fossil fuels. They don’t want to copy Germany and they don’t have 700 billion euros to blow on climate policies. So it is just simply hypocritical forcing poor nations into renewables that even rich Germany or China aren’t achieving.
In your IIF speech last year, you call on the World Bank to focus its efforts on expanding developing country access to reliable and affordable energy and you criticized its climate targets. You noted that the IMF devotes disproportionate time and resources on climate even though it’s not part of the fund’s mission. So, what have you seen from the bank and the fund in these areas since your speech? And what more do you expect from them?
SB: Again, as as I said earlier, I think the World Bank is has made a good pivot. They they are now pushing or they are a proponent of nuclear energy. I’m not sure how that wasn’t considered a renewable for for so many years. I mean, if if you look now, France is powering the European energy grid and their their reactors are running the full blast and it’s one of the cleanest. But when you think the Europeans got into this terrible recursive loop because they they decided to turn turn off their nuclear energy. The Germans became more dependent on Russian crude and then the Russians were selling them the crude to finance the war against them.
But you know I do think the World Bank is moving to an all of the above energy process and program and again is getting back to the core mission of lifting people out of poverty. And you know I would just say it’s very good to follow not only what people say but what they do. Bill Gates, who for a long time had pushed this climate agenda, has also changed tack. If you read his recent speeches he believes we’re going to innovate our way out of this. And the Gates Foundation has something like 13 billion of investment in energy innovation. Look no one’s expecting deos machina, one day and everything will be fixed. But in in the US we were going to run out of everything, going to run out of the crude and crude derivatives. And then fracking was invented and now that the the US larger reserves than Saudi and Venezuela.
On the other side, I think the IMF getting back to this message of stability, of monitoring global imbalances and stepping in early. You know I didn’t always agree with Ben Bernanke’s monetary policy, but I always admired Federal Reserve Chairman Bernanke because he had a framework. And if you ask him a question, you could almost see him run it through his framework and everything was always consistent. And I think with the IMF and the World Bank the framework needs to always be consistent.
BL: On the Bill Gates point I think really two things stand out. First of all, the innovation point that you just made. I mean this is what has always solved the problem. Tim mentioned the green revolution that we had in the 1970s when we worried about running out of food. Remember, we didn’t fix the problem of the world not having enough food by telling everyone, “I’m sorry. Do you mind not eating as much?” And then we’ll send it down to whoever it is that we worry about. The point was that we innovated a way to generate much more food.
And of course, we’ll do the same thing with climate. We are going to solve big problems through innovation. That’s how we’ve always done it. But I think Bill Gates made another point which is incredibly powerful and useful when you talk about climate change. He said: “For so long we’ve been talking about climate as if the point is to cut carbon emissions or to reach a certain temperature limit. No, the point is to make the world better for humans. And there the question is do we make the world better for humans by cutting carbon emissions by whatever tons? Or do we make it better by for instance making it so small children don’t die or that in school there’s so many other ways we can also do this or that. This of course refers back on the IMF and especially the World Bank on what can be done and there are just so many incredible things that we can do first.
SB: Yeah, again, you know, I think keeping focus on the main thing and not getting distracted by what feels good, it’s convenient, it’s part of the the Davos consensus while much of the Davos consensus seems to have been shattered.
WEF’s Global Risks Perception Survey
BL: Yes. So I want to just take us to our third and and and last point and talk about tradeoffs. Because all international financial institutions need to get back to the core point of tradeoffs. Look,the money that the World Bank spent on a solar panels can’t be invested in healthcare or education. And the world’s poor tell us very clearly not to focus on climate first. When Africans are asked what worries them the most, climate change came almost at the bottom. A vast survey of more than 50,000 Africans across 39 countries found that climate change ranked 31 of 34. The top concerns are not surprising there. It’s unemployment, the economy, health, education, poverty, roads, electricity, hunger, and corruption. And then it goes on for a long time until you get to 31, which is climate change.
When your child might die tonight from a preventable disease, no family cares about shaving a fraction of a degree off global temperatures in a century from now. Elected leaders of poor countries tell us the same thing. In a large survey of low and low middle- income countries, they show climate ranks 12 of 16 issues. Even the World Bank’s own client surveys show climate ranks low. So international financial institutions should compact to focus on their strengths. As you’ve said, the World Bank should focus on poverty reduction and the IMF on macroeconomic stability, but the world’s poor are very clearly saying don’t focus on climate first.
So from your perspective as treasury secretary, how do you view the international financial institutions and their effectiveness in general and the bank and the fund specifically?
SB: You know I would also highlight that it’s not a unique survey item among the world’s poorest. Germany instituted very very strict remodeling and rebuild requirements for German households. So you had to spend I can’t remember it was 30 40 50,000 euros to upgrade to a a more green house and they’re all getting voted out. So like probation is not a good motivator. I do think,as I said last year, that we are determined with the multilateral financial institutions the US wants to be in it to win it. We want to be good partners. America first does not mean America alone. And we we want to go back to basics.
These banks were invented around Breton Woods which was post World War II Europe and Asia, and was a unique time in America and it led to incredible prosperity the across the world. So, you know, why can’t we do that again? And why can’t we focus on growth? Like what are the tools? What what what is hindering growth of these economies? Is it the unsustainable debt which is is the IMF concern?
Is it the poor infrastructure, health and hygiene, which is the World Bank role?
Because you know for a time we kind of skipped the foundational elements and tried to jump to something else, kind of luxury beliefs, instead of issues when a government was not able to fund itself or if people were not able to feed themselves. We’ve just got to get back to that. I I think Ajay and Kristalina have have gotten the message and are moving forward in a very very constructive way and I want to congratulate them.
BL: When you have to decide what to do obviously I’m I’m an advocate for cost benefit analysis so I’m going to be saying they should be looking at it. Really, if you think about it, the World Bank and IMF used to be world leaders in cost benefit analysis. And it makes sense if you only have limited money. If you have to think about trade-offs all the time, you have to ask yourself where can we spend scarce resources and do the most good in the world. And this is exactly what cost benefit analysis does for you. It allows you to pick out the really good policies and make it just much more likely that we can actually achieve all these goals that we’re talking about.
A part of Battle of Ideas Festival 2025 was the above presentation explaining plainly why UK energy has become so expensive. For those who prefer reading, below is a transcript with my added bolds and images.
Why are our electricity bills so high? We’re told as Craig referenced that it’s all the fault of gas. Now this argument is going to come to somewhat crashing reality in the next year. I was just checking the prices now and from yesterday’s close we’re now87 percent down from the highs in 2022. Now has anybody seen an 87 percent reduction in their bills, hands up, anybody? Oh that’s a huge shock. Next year gas analysts expect that the gas price will return to its long-term average pre-2021.
So the gas crisis actually began in the autumn of 2021, about six months before the invasion of Ukraine and it was to do with the recovery from COVID. Basically during COVID demand for gas fell because industrial activity dropped, a lot of upstream production was shut in and it takes time to bring that back, you can’t just turn on the tap in most cases, it requires quite a bit more work than that. So there was a delay in bringing that production back online and when you have more demand than you’ve got supply then prices go up and then Putin took advantage of this in the following February and well we all know what happened then.
Since then in the upstream sector they’ve been busy bringing new LNG, liquefied natural gas projects, on stream. By the end of this year there’ll be enough new LNG to fully replace all of Russian gas and sometime next year we’re expecting the global gas market to go back into length. So there’ll be more supply globally than there is demand and prices are expected to fall. In fact the only reason why Miliband could possibly deliver the 300 pound reduction in bills would be because of gas prices falling.
Unfortunately I think he’s going to more than offset that with higher subsidy costs. So the first thing is that gas is not expensive and really for 25 years we had very low and very stable gas prices. Gas was cheap, in fact the cheapness of gas was what enabled the energy transition to even begin. I wrote a report earlier in the year about the cost of renewables, if you do a chart that shows the wholesale price of gas, the wholesale price of electricity and then the domestic price of electricity what you find is that the wholesale gas price was low and stable until 2021.
The wholesale electricity price was basically the wholesale gas price plus a little bit which is what you’d expect and then the domestic price was the wholesale price of electricity plus a little bit. And again you’d expect that you buy a wholesale, you pay for it to be delivered to your house, you’ve got to pay the supplier some money for you know doing the admin for that, they want to take a bit of profit, there’s some taxes, that’s what you’d expect.
Figure 4 – International Domestic Electricity Prices (p per kWh). UK has the highest domestic electricity prices in the IEA.
But from 2006 this relationship started to break down and what we saw was a steep increase in what households were paying despite a flat trajectory for wholesale prices. Why was this? It was because we were adding on policy costs. We’re subsidizing renewables, we started using suppliers to do all sorts of other social programs, wealth redistribution, literally the warm homes discount is suppliers. They phone up the department for work and pensions and they find out which of their customers are eligible and then they calculate how much that discount is going to cost and then they add on an admin fee and then they spread that cost out across all our other customers.
They take money from one group of customers to give to another. This is wealth redistribution, it’s not the job of private companies. The energy company obligation, we’ve heard about that in the news this week where I think the National Audit Office has written a report saying how inefficient it is, how low quality the work is. Well guess what, energy companies are not experts in construction. They are being expected to engage in sub contracts to companies that will come in and install insulation and similar things in your home. They don’t know anything about this, this isn’t part of their core business.
Typically as wind and solar power share of supply increases, distribution and transmission costs rise sharply.
It’s a hugely inefficient thing to expect suppliers to do and the cost of all that is added to bills. The smart meter rollout, we’re the only country in the world that expects suppliers, retailers, to install network equipment in people’s homes. Everyone else got the network companies to do it, you know, duh. And what’s even worse is that the supply business was created within the Utility Act 2000. It was the final part of unbundling the energy system and almost immediately both the governments and the regulators started telling everyone that suppliers were greedy profiteers that couldn’t be trusted.
And then they expressed shock that nobody wants these greedy profiteers who can’t be trusted to install devices in their home that would give the greedy suppliers that can’t be trusted lots of information about how they’re using electricity and gas and potentially enable them to change your prices remotely, put you onto prepayment tariffs remotely and do all sorts of other stuff remotely, potentially without your permission. And they were just kind of shocked that people didn’t want to do that. So the whole market is completely dysfunctional.
Now, when we come to the real costs and the real reasons that our bills are so high has to do with renewables. When we build renewable generation, we have to provide a big subsidy. Now, a lot of people think, well, the wind and the sun are free. And this is true. Wind energy and solar energy is free. But the equipment needed to turn that energy into electricity is not free. That’s actually pretty expensive.
Now, imagine that we only had renewables on our grid. And when you’re setting prices, normally, the price at which you sell your goods is linked to your short run marginal operating cost, which for wind and solar is close to zero. Essentially, you’d be giving it away. How are you going to recover your capital costs for that expensive equipment if you have to give away your products? You’re never going to be able to do it. So basic economic theory will tell you that renewables will never be built without subsidies. They are always going to require subsidies because you will never be able to recover the capital costs to selling the electricity at the short run marginal operating cost of that electricity.
So we give subsidies to renewables. And that subsidy is higher than the cost of generating electricity with gas. So the argument about gas pushing your bills up is nonsense. These subsidies are higher than the cost of generating electricity with gas. And the way the new subsidies work is that the generators are guaranteed a fixed price, and they receive that by selling that electricity in the market. And then if that’s lower than this fixed price, they get a top up.
And it’s a one for one relationship. If you lower the wholesale price of electricity by one pound, you increase the subsidy cost by one pound. And the subsidies are added to our bills. They come straight out of our pockets. So when people say, oh, we’ve got to get off gas, we’ve got to stop marginal pricing. People talk about marginal pricing as if we’re some weird outlier in the world markets doing this strange marginal pricing thing, taking the most expensive form of generation to set the price.
Every deregulated power market in the world sets the electricity price through marginal pricing. In fact, most commodity markets do the same thing. This isn’t weird. It’s completely normal.
And if you decided to change price formation to lower the wholesale price, your bill will stay the same. You’re just moving money in different buckets around the bill. Now the bit that says wholesale price will go down, and the bit that says policy costs will go up. But the amount you pay will stay the same. And so this is the whole misinformation that we have.
The other issues with renewables are you’ve got to pay for backup. They have low energy density, so you need a lot more wires to connect them. A good sized gas power station, 800 megawatts. If you wanted an equivalent size wind farm, you need 60 turbines. So that’s 60 times more wires. But to get the same amount of electricity over the year, because your wind is only working about a third of the time compared with about 86% of the time for gas, you need something like 150 times the wires. You need 150 turbines.
All that gets added onto your bills. The cost of backup to make sure you’ve got generation available when it’s not windy and sunny, that goes straight onto the bill. And the real-time balancing cost, where you’re having to even out the impact of clouds and gusts of wind, all goes on the bill. And so this is why our bills are so high.
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