Why the UK and EU Keep Doubling Down on Net Zero Dogma

On Monday, GB News ran a story on UK Energy Secretary Ed Miliband’s vow to “double down” on the government’s environmental agenda, whilst accusing opponents of the move to net zero of “making up nonsense and lies”. In a “strongly worded statement”, Miliband warned that abandoning the net zero agenda would not only risk “climate breakdown” but would also “forfeit the clean energy jobs of the future”.

The hangman’s noose concentrates the human mind wonderfully, Dr Samuel Johnson once observed. But this evidently does not apply to the government bureaucracies ensconced in Westminster or Brussels. The oil price shock triggered by the closure of the Strait of Hormuz — “the world’s worst energy crisis in history exceeding the combined shocks of both the 1970s oil prices shocks and the Ukraine war” according to the IEA chief Fatih Birol -- has led the environmental justice warriors among the ruling elite to yet more muddled thinking.

Econ 101 Anyone?

Instead of applying basic economic principles — comparative advantage in international trade, portfolio diversification to manage risks, and marginal costs in commodity pricing — Europe’s elites have doubled down on their net-zero dogma. The theme is now familiar: the two great energy shocks of the past 5 years -- from the 2022 Ukraine war to today’s Hormuz crisis -- prompts not a return to economic rationality but a frenzied acceleration of the very policies that created the vulnerability in the first place. Economic illiteracy, it seems, is an incurable condition; those afflicted are immune to intervention by reality or logic.

Start with the fundamentals. International trade operates on David Ricardo’s principle of comparative advantage: nations specialise in what they produce relatively efficiently and trade for the rest of their import needs. In the case of international trade in fossil fuels (as in other natural resources), nations produce what natural endowments they are blessed with. It is an absolute advantage as it were, they exist or they don’t exist: gold and diamonds, copper and other valuable minerals and fossil fuels like coal, oil and natural gas.