The Net Zero Agenda Will Crash

Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics. Today for episode three hundred and fifty, we're talking about the net zero agenda and why the net zero agenda will crash. And joining me today is Benny Peiser. He is the director of Net Zero Watch. Now, this one is interesting because we're talking about energy markets more generally, but I don't- Definitely see some crossover here for us as Bitcoin enthusiasts and what's going on in the debate around proof of work energy usage and the broader world of so-called renewable energy. This show is brought to you by Swan Bitcoin, the easy way to buy Bitcoin and also learn about Bitcoin. Now, Swan Bitcoin has brought back Gifts. Gifts is an easy way to give the gift of Bitcoin to your loved ones, whether that's for their birthday, their wedding, or any other celebratory event. And remember Member, you're not just gifting Bitcoin to them, you're also gifting Swan's world-class education and customer support to that person. So when you sign up and you use the gift function, your loved one will receive that gift, they'll create their Swan account, and they'll convert the USD value you've gifted to Bitcoin. And so this is a great way to help start that journey for your friends and family. So go to swanbitcoin.com/gift if you're looking for Bitcoin hardware security, check out coinkite.com. Coinkite have been in the Bitcoin industry for years Years and years, and their recent focus on the Coldcard and Bitcoin hardware security has so many Bitcoiners raving about their products. The Coldcard is a small little device, it looks like a calculator, but you can use it to generate and store your Bitcoin private keys and use it to sign your Bitcoin transactions. Now, the Coldcard is a very versatile device, you can use it in single signature, multi-signature, you can use a Duress pin, you can have a BrickMe pin, and you can use it in air-gapped mode with a micro SD card. But if you're a beginner You can just directly plug it to your computer, and you can use it easily with wallets like Specter, Sparrow, Electrum, BlueWallet, and others. So go to coincard dot com and order your card with the discount code Livera. Also, they've got the MK4 available, but there's no discount on that. You can pre-order that also. Go to coincard dot com. Compass Mining is the world's first and largest online marketplace for Bitcoin mining hardware, hosting, and ASIC reselling. Bitcoin mining is only getting bigger, and so is Compass Mining. Compass is adding over two hundred and eighty megawatts worth of hosting capacity this year alone, with more to come. So if you're in the US, you can order a, an ASIC machine to your home and use the Compass at Home Mining Guides, or you can use the hosted facility function and have your miner sent to a facility and you pay a hosting fee and you select which mining pool you want. want to point your hash rate towards and receive Sats in that way. So with Compass, anyone can mine Bitcoin. Go and check out compassmining dot io. On to the show with Benny. Hi, Benny, thanks for joining me on the show today.

Hi, Stephen. Very nice to be on your show.

It's Stefan, by the way. Yeah, thank you. so Benny, I was coming across your website and your Twitter, and I just thought it was really interesting. And so I wanna get a little bit of a background on you. What, what's, Be part of the, the net zero watch.

Oh, wow. I've been, in this whole kind of battle of ideas about the environment and energy at least for the last forty-five years or so. I, I grew up in Germany. I was one of the co-founders of the Green Party in Germany, when I was a student. So I'm very familiar with the environmental movement, and my concerns were mainly about nuclear waste, nuclear energy in the kind of late seventies, early eighties. And as you grow up and you read more and you experience more and you learn more, you realize a lot of the kind of fear and fearmongering is driven by exaggerated claims, by exaggerated risk. And so over the years, I became a more skeptical environmentalist, and for the last thirty years Years, I've been living in Britain. I moved to Britain in the early nineties, got a job at the university and set up a scientific network, email network, you know, many years ago, which eventually led to me becoming the director of a new organization which looked at climate and energy policies, which the Global Warming Policy Foundation and Net Zero Watch is an offshoot of that organization. So we are the official op- position in Britain to the all party consensus on climate and energy.

Right. And so for people out there who aren't familiar, what exactly is the net zero movement?

Well, we are called Net Zero Watch, so we are observing, monitoring, and criticizing policies that don't add up, that are worse than, the problems we may face in the future, with climate change So we are extremely critical of government policies where governments think they, you know, know what the solution is. They pick winners and they tend to have a very poor track record in picking technologies that are very costly and very often, failing. So we are a think tank that looks into policies and scrutinizes these policies, scrutinizes also the costs of the- These policies. And w-we work with, you know, a number of MPs. There's also a group of MPs called the Net Zero Scrutiny Group of, of backbench MPs who are all concerned about the rising cost of these net zero policies and the cost of energy in general.

Sure. And so just to outline, obviously, I understand you're part of Net Zero Watch and you're scrutinizing, but just for the sake of people who aren't familiar- Melia, what are some of the policies that the net zero advocates are pushing forward? What kinds of things are they driving?

Oh, that's very simple. Basically, we have to reduce our CO2 emissions, in Britain to net zero, basically decarbonizing the entire economy. That means everything. That means, you know, the electricity, that means heating, that means transport, that means food, agriculture, every single- aspect of the economy has to be totally decarbonized, and we will, power, Britain by wind and solar, because wind and solar is free, as you know. You know, the sun shines, the wind blows, and so we will power Britain by wind and solar energy, and that's basically net zero, full stop. And it sounds too good to be true as usual, and it is causing- Doing all sorts of unbelievably destructive and costly damages to the economy, to consumers, to businesses, to everyone, and we're just feeling the beginning of this energy cost crisis right now where energy costs have- Doubled within twelve months. Of course, the green movement claims that's all down to the cost of gas, but of course, the green movement, is campaigning against domestic gas exploration. So, at the same-- because everything should be powered by wind and solar, the net zero movement is campaigning against the exploitation of doma- domestic, offshore and onshore gas, which in Britain is massive, massive. some of the shale basins in Britain are even bigger and deeper than in the US, so the potential is there, but the Greens are saying we can't do this, and they won't, and they have banned shale gas extraction. So it is a battle, political battle, an economic battle, an ideological battle about what are the best ways to power an industrial- Industrial society and still lead to a gradual decarbonization of the economy, and this is the bat- ongoing battle, and we are basically on the side of a cost-benefit kind of approach to this issue, so that you actually look at the pros and the cons, the costs and the benefits of each and every policy that is being promoted.

So when it comes to comparing the costs and benefits, as you say, what are some of the things that we need to consider as opposed to just merely- Saying, "Oh, wind and solar is free, so that must be the cheapest form of energy."

Yeah, if you don't understand the complexities of intermittent energy sources like wind and solar, in other words, if you don't understand just the costs and the, and the knock-on effects of how to balance a national grid that is reliant on energy that is only available at certain times of the day or certain- You know, windy days. If you, if you don't fully understand and scrutinize that kind of very unreliable energy system, then you underestimate the costs and the risks and the instability that comes with it. For the last twenty years, governments in Europe in particular have put almost all their eggs into the renewables basket. So in other words, they completely thought that you can drive and power an industrial society IT by renewables because eventually there would be batteries that could store energy for those days when there isn't enough wind or not enough solar energy generated. But what we've experienced in Europe is that the costs haven't come down for, many reasons. The costs actually are increasing because the costs of balancing out And the cost of removing reliable forms of energy are staggering. Many European countries have phased out coal, which is obviously the dirtiest form of energy production, although nowadays modern coal power plants aren't as dirty as they used to be, but still, and they are phasing out nuclear, and so there is a enormous demand for natural gas, which is driving up the prices. All of these policy are driving up The price of energy. And so you have to look at your energy system very carefully and unbiased. You have to look at really all the costs, including the transition costs, the balancing costs, the backup costs And realize that if you add all that together, it is driving up the cost, it's not bringing down the cost, and, and that's what we're experiencing in Europe. But you can only do that if you are really unbiased, and this is very difficult because most people have some kind of preference. You know, some people say, "Oh, we prefer renewables," or "We prefer nuclear," or "We prefer natural gas," or "We prefer, you know, this and that." And people who look at the energy system with this kind of tainted view, tend to underestimate the costs of, basically picking a certain form of energy. In a ideal world, you have a market where consumers pick and choose the forms of energy they want because it's the most competitive, the most reliable, but we don't have that market anymore. I- when it comes to energy, markets have been so distorted that it's almost impossible for- Anyone to build a power plant nowadays in Europe without kind of guarantees or subsidies, because, you know, policy is, is so strong that no one can guarantee you that, you build a new gas-fired power plant, well, how long is it going to last and how much will it be actually be used? You know, if you prioritize renewables, then, you know, half of the day gas-fired power plants will stand idle and so lose money. So it's, it's a really big problem. And- Because it's so complex, most people, including ministers, really don't fully understand the complexities and the problems of, of the energy situation. So on

that, now, I'm coming from a free market libertarian perspective. I believe obviously it should be less government or minimized government regulation and mostly market choice. So the question I think some people might be thinking is, well, how much of this is down to favorable government regulation or subsidies versus the actual market? Choice. Like how much of it is, let's say, people are being convinced, let's say, that in their mind they think wind and solar is better for whatever reason, even if it's only narrowly considered. What are you thinking? How much of it is regulation versus true market choice?

There is no market choice. For, for start, there is no market choice. I mean, companies are offering, kind of deals where they say, "You know, hundred percent of our energy is renewable energy," which of course is nonsense because the national grid Is a combination of renewables and gas and biomass and even coal and nuclear, it's a whole mix. So no one can actually offer one hundred percent renewables or one hundred percent this or that, that's impossible. And so there is no real market choice. People can only, choose, suppliers or different suppliers, but all the suppliers are essentially getting more or less the same mix of, of energy. The question is What is driving this energy mix, and that is entirely driven by policy. of course, sometimes, if let's say the gas price is high like today, the remaining coal-fired power plants in Europe, even in Britain, will be fired up because they are suddenly more competitive and, and less costly than gas, which used to be the opposite. But now coal is so much cheaper, so there's a real- Will boom in coal in Europe because gas is so expensive. And normally this is what you would expect in a market that, you know, if one source is more expensive, you would switch to another energy source. But the fact is, nuclear and coal is being phased out. So there is, in Britain, there are just two coal-fired power plants left. They will be closing down in the next two or three years, so they won't even be available. So that market is gone. Nuclear is- is being, slowed down. A lot of nuclear, old nuclear power plants will be phased out. Whether new ones, will be built in time is an open question. All of this is due to political decisions and subsidies, dictates and so on. Nothing is left to the market. That is the biggest problem. So that, I'm afraid, is the problem we face, that government intervention is such That no individual business is going to invest unless they get the subsidies and support by government. Mind you, no one would build a-- no one would build a wind turbine, let's put it this way, no one in Europe would build a wind turbine unless they get subsidies, because it's just not commercially viable to sell wind energy without subsidies.

So if you had to spell out what- What do you think are the key regulations for, regulations or subsidies that are driving this kind of outcome, at least in Britain? What are the key, you know, the top, say, three government interventions that are doing this?

Well, number one is the prioritization of renewables over all other forms of energy. So renewables are being heavily subsidized to the tune of eleven billion pounds in, in Britain per year, so consumers have to pay eleven billion Billion to the energy suppliers and, and renewable investors every year. In Germany, it's twenty five billion euros. I mean, we're, we're talking here trillions of pounds and, and euros over the last twenty years. That is taken from consumers on their energy bills and businesses, of course, pass on the cost because they have the energy costs as well, so food is more expensive than it should be and so on. That's number one. The second, of course, is, Regulation, so, coal power plants simply aren't longer allowed essentially because the government has decided to phase out coal. So it's, it's a, you know, a political decision to say we will close down all coal-fired power plants by that, by twenty twenty-four. so they've gone. Gas is very difficult, to actually in, you know, build new gas-fired power plants because again, they are very, very stringent Regulations in terms of emissions and in terms of, how much you're actually allowed to run your gas-fired power plant, because, increasingly they are used for backup for renewables. and then you have all co- sorts of targets for other forms of energy like biofuels, bioenergy, burning, you know, whole kind of forests. In power plants, all of them, all are driven by targets and regulations. There isn't a single form of energy where you could invest which wouldn't be totally dominated by government regulations and targets, not a single. So in that, in that respect, it's not surprising that no one is actually building a power project without government guarantees and subsidies.

And perhaps this part isn't as much of a government impact. That, that we are seeing this in many companies is this so-called ESG narrative or tick box exercise that some companies and potentially some investors or potentially even banks, right? So as an example, if I'm going to get credit from the bank, they might even start asking some of these typical ESG, enviro, social governance questions, and typically on the environment question, they might say something like, "Oh, what, what about, what are you doing about renewables?" and so on. So how much of that is a factor in your mind? And do you see, is that as, is that, is that more of a government influence or is that more just like the propaganda, the narrative out there is so strong and so prevailing that even private, or presumably private, or supposedly private organizations are trying to put on ESG requirements onto other actors in the market?

Well, this is of course, absolutely, this is again driven by government policies because they are demanding that companies have their kind of- Climate targets, net zero targets, that they are transparent about their investments, about their interests. This is all due, and we're not talking here, you know, some green activists. We're talking highly influential institutions, government and international institutions, who are demanding that companies, listed companies and not listed companies, show what they are doing, what, you know, their contribution to net zero And of course, what it means is you have, as you said, most companies using that as a tick box exercise, but it is a risk because, again, it drives, you know, companies into a direction where it's not clear that it's actually profitable or lucrative or makes any economic sense. It's a kind of political exercise. And think about all these com- all these pension funds that have- divested from fossil fuels in recent years. they're losing millions, if not billions, this year because they no longer hold oil or gas shares, and they, as we know, they, they are making billions this year. so it's not always obvious that, going into the green direction will benefit your company or benefit your pensioners or benefit, your- Our shareholders. In fact, very often it's the opposite. We, we know, you know, we are currently facing a green bubble and the renewable, shares are low, very, you know, low this last twelve, eighteen months. So it's a risk. It's always a risk if you intervene into the market for political reasons. It has a very poor track record and it always ends in tears because we don't know, we don't know what technology will- Win out in two, three, four, five years. We don't know. If, if we think we can pick winners, as I said, very, very poor track record. We always get it wrong. There are always surprises because that's what technology does, and that's what the markets do. They come up with new solutions we don't even know that they exist today. And if you go down the route that you think is the future, it's almost certain to be a coup de sec.

I see. And so- So when it comes to the impacts of some of these government policies, this whole ESG narrative, one impact that I'm potentially seeing, and I'm curious if you could elaborate or spell out some of your thoughts, is it that we are seeing potential energy producers or companies less willing or less able to go and make investments, long, long-term investments into coal, gas, even potentially nuclear, because of this environment, because of this climate, whether that's government regulation or ESG? The narrative.

That's right. And that's what we're seeing in Europe. We're seeing that hardly anyone is investing, which is interestingly the reason why the EU, I don't know whether you're aware of this, but the EU, is proposing to classify natural gas and nuclear as green energy now, right? So in terms of ESG, as you said, gas and nuclear are now kosher, they are now green because the EU is proposing to simply wash them green. And say, "Look, these are clean energies. Why are they doing that, knowing how the Greens hate nuclear and, and natural gas? They're doing that because without it, no one is going to build a nuclear power plant or a natural gas plant." Fire power plant in Europe. No one is going to build a power plant without the EU guaranteeing that their investment will pay off, because they have to, you know, a power plant has to run at least thirty years to actually be profitable, twenty, thirty years. Nuclear has to run, perhaps, you know, a little bit longer, and gas a little less, but basically, unless you have these kind of long term guarantees, no one is going to spend, two billion Euros or, or never mind, ten billion euros for a power plant. So the, the Europe is in a big pickle, and this is why-- this is how they try to get out of it by declaring suddenly that if you build a nuclear power plant or a gas power plant, you are green and it's ESG, compliant.

Isn't it interesting then that they are on one hand trying to virtue signal about being green and look how renewable and everything we are? But then at the same time, they're having to be at least a little bit pragmatic here, because they realize that they can't actually run the grid entirely on wind and solar, so they're having to try to actually bring the gas and nuclear into the ESG fold, as it were.

Yeah, absolutely. But this is out of desperation, because they've done twenty years of saying the future of Europe is renewable energy. They've put all the eggs into that basket, and suddenly they realize it's not working, it's too expensive And we are suddenly completely dependent on Russia, and no one is building any power plants anymore in Europe. So they've realized they, they are in, in trouble, and that explains the desperation and the irony of the EU suddenly declaring nuclear and natural gas as green energy. That's, that's the explanation. And by the way, this is what's going to happen all over the world. This whole net zero agenda is going to crash on contact with voters, and most governments will switch back to more reasonable and more rational energy policies. I have no doubt about it. It's just a question of time. The current net zero agenda is simply unaffordable economically, politically, socially, geopolitically, completely Self defeating.

As people like Alex Epstein point out, and I've, I've interviewed Alex on my show also, that he points out that just fundamentally for hundreds of millions or potentially even billions of people to even get energy, we're going to need to use a lot of fossil fuel just because that's what's cheap, reliable, and scalable, as he spells out in his book and the way he talks about it. and from what I've seen, again, I'm not an expert, but from what I see, it seems like energy costs are rising dramatically in Europe Open. In, in the UK, we're seeing discussions about families who are having to literally make the choice between heating or eating, and it's just incredible that, like, I mean, it's incredibly sad that we're seeing the discussion and the outcome has gone this far. So why is it that people aren't able to understand this aspect that the costs are rising for energy and that we need it to be cheaper?

Well, for a start, the Greens have always claimed that going for renewables will bring down the cost of energy. And- And of course, this hasn't ever really happened. Energy prices have always gone up and depending, of course, on oil and gas prices. But the real breakthrough in energy cost actually happened about ten years ago with the shale revolution, and, that brought down the price of gas, not just in the US, but internationally tremendously. Look, the whole green agenda has a religious, you know, a religious- It's, it's a, it's a belief system. It's not a rational kind of cost benefit policy driven agenda. It is a very kind of doomsday, end of the world driven philosophy. People think that only wind farms and solar panels can save us from doomsday. It's this kind of blinkered, fearful assessment, and it's difficult to even discuss the- These issues rationally with believers, it's very difficult even to have a rational debate about this. And as I said, i-in Europe, the, the, all party more or less are saying the same thing, so there is no proper debate or proper, you know, discussion about the pros and the cons. And this is only beginning to change because- Of the pain and the economic hurt and the security situation. So it's only beginning to change now, but there hasn't never been a proper discussion about the pros and the cons. And anyone who dared to say the things I'm saying or my colleagues are saying, they were then decried and, pushed to the fringes as, you know, climate deniers and, being in the pocket of the fossil fuel industry. History and all these kind of attempts to shut down any proper debate, and that has led to this kind of almost all party consensus all over Europe, where everyone is saying the same thing and no one is saying, "Hold on, you know, where, where are the emperor's clothes? You know, where is this actually working?" That is part of the problem, the lack of a proper debating culture. I mean, this is obviously affecting now all institutions in Europe and in the Western world, this kind of cancel culture mentality. But, that causes often these political problems if there is no proper debate, no proper scrutiny, and everyone go-- is going just like a herd into one direction.

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Well, first of all, you have to look at the situation and compare the current situation with the predictions they've made in the past. As I said, costs have come down over the last twenty years, but they're not coming down very much more, particularly not for wind, and the kind of inherent cost of growing wind is underestimated. What happens if, if a system, a national system, is overwhelmed with, renewable energy is that the whole system becomes unstable, destabilized, because once wind is the predominant energy form, all other forms of energy will be pushed aside and will no longer run, economically. So you will have to, you know, the, the, the- As I said, the gas-fired power plants or the go-- the coal-fired power plants will have to be subsidized just to keep running, because they will not no longer be profitable on their own. They will only be used when they are needed, when there's not enough wind. That is extremely costly. These costs are never taken into con- consideration when looking at wind or solar. if you add those costs to wind, then the Costs aren't low, then they are very high because the, these backup, systems that are required. Batteries are another s-story, because of course, if you had batteries, then you wouldn't need the backup, then you could store the energy for the, you know, windless days or, or the night. But these batteries are nowhere near, nowhere near, and where they exist, they are not only very expensive, but they, you know, they, they store so little energy, you know, for a few- Hours, and that's it. so I don't see any real prospect of, you know, large enough and economically sustainable forms of batteries anytime soon. That is still pie in the sky. That's, that's a big problem for renewables And for the whole energy system, as I said, because the more renewables you have on your system, you are essentially making everything else Un-economic, un-profitable. That's the problem of the renewable. You know, if you have ten percent, twenty percent renewables, you can just get away with it, but if you have fifty percent renewables, all the other forms of electricity generation become un-profitable because, you know, on a windy day, you have to shut down your gas power plant, you have to shut down your coal-fired power plant, you have to shut down everything else because everything is

driven by wind. I see. And that's just because, because of the way the energy grid works. You need to bring one down while you bring the other up, and as you're saying, having to turn off and on, off and on the coal and the gas pla-plants makes them uneconomical when, if we were to use those more as the more predominant forms of energy, then they could be run economically and thus bring the overall cost of energy down. Is that how you would summarize it? Not

only that, not only that, we actually published a paper showing that if Britain had continued its move towards shifting from coal to gas And shifting and building more nuclear, a combined nuclear gas power system would be cheaper and would reduce CO2 more than the current form, because the other thing that people don't understand is if you use gas fired power plants on and off, right, as backup, it-- they actually emit more CO2 than if you run them efficiently twenty four seven. So the current system of running gas fired power plants actually emits more than if you would run Run them twenty four seven without the on and off and on and off. So there is actually, even, even, even if, you know, even you think it's important to have an energy system which reduces CO2 emissions, a gas to nuclear energy system is more efficient and less carbon intensive than the current one, which is a kind of mix of renewables, coal and, and, and gas.

And there's also an everyday cost even on the goods and services, and let's say there's The manufacturing industry in the country. If energy cost is going up because of all the renewable craze, then it might price out a lot of the manufacturers who might have otherwise been able to profitably be manufacturers in that country, so driving that, that business somewhere else.

Well, you see, this is the other irony. The Europeans are proud to say how well they have decarbonized the economy, but what they have done essentially is to shift a lot of the heavy industry and manufacturing to low-wage, low-cost countries like Asian countries, China in particular. So a lot of what we use is actually produced abroad, and we don't- Don't include the emissions that we import. We've only shifted the manufacturing to another destination, but the CO2 emissions are still the same, perhaps even higher, because perhaps, you know, some of the environmental regulations, in China are less than they are in Europe. But then we import the products, but we also import the CO2 emissions. Without obviously acknowledging that. So if you buy a television or you buy any product from, you know, b-built in China, in all likelihood, the energy that went into building that product was mainly coal, and the emissions in building a product were emitted in China. For the atmosphere, it doesn't make any s-- makes no difference whether the emissions are, you know, emitted in Britain or in China. It all goes in the atmosphere. But we then claim how green we are Because we're not emitting the CO2, but we, you know, ignore that the stuff we actually buy and consume and import is being produced in high emission countries. So it, it doesn't, as you said, it doesn't actually make sense, to sh-just, outsource our manufacturing for these green, reasons because the emissions are going- Growing up in any case.

Yeah, and that's almost like the everyday person's version of what the rich celebrities do when they fly to Davos in their private, you know, they fly to the World Economic Forum or Davos or something in their private jet and say, "Oh, well, see, I purchased this offset, because, you know, so that makes it okay." But it's kind of like a similar version when everyday consumers are just buying products that were made in China and then the emissions of that are just being done in China instead of locally in their country or whatever country. And so I It's almost like the culture that we're living in now that it's almost, it's so difficult to just openly reject that thesis and just openly say, "No, we're doing something that's good for humanity." It's almost like so many companies, entrepreneurs, people, they sense this need to virtue signal about it, and even countries, like, so for example, like China and others, when they're talking about this, what are the countries going to do? They almost make these overtures about, "Oh, look, yeah," like even though in reality they're still doing a lot Because they have to, and as they should be, but they still make this kind of overture about, "Oh, see, we're going renewable, guys. We're, we're trying to be good too."

Yeah. It's, I mean, this is, as I said, very strong belief system and, and, you know, a-- that you have to adhere to if you don't want to be attacked by the mob or the, the, the blob or by campaigners. And so a lot of countries and a lot of businesses do this greenwashing. And some- Doing it more successful than others, but my guess is that the mood is shifting, the mood is shifting. People are becoming more worried about the cost of these virtual signaling and because it, as you said, the costs are going through the roof and people are struggling to heat their homes. And once that happens, I mean, we've had, two or three generations of welfare state that is beginning to look very, very fragile now that- That inflation is going up, costs are going up.

Now, now also related to the, some of it is greenwashing, as you were saying, but I think it comes back to countries are going to have to be, some of them will have to be more pragmatic, and maybe the richer ones can afford to play that game for a little bit longer, can't they? But there will be countries that just want to bring people out of poverty, and I think that's part of what will, as you said, will cause the net zero agenda to crash. And I think this is also important, I think I think it might be good to also bring up the Bitcoin aspect of this also, because in the Bitcoin world, there's a lot of discussion around should Bitcoin's proof of work system, how should we consider the economic impact of that? And so there's discussion saying, "Oh, look, see, the Bitcoin miners are boiling the oceans." And so there's like almost this narrative within some of the Bitcoin circles of people who are saying, "Look, it's encouraging renewables and that we should try to pander to the ESG narrative." And on the other hand, you've got those who are saying, Openly saying we want to use more energy and that's a good thing for humanity and that's part of what keeps Bitcoin secure and that's the important part. So I wonder your thoughts as well on where we're going with the so-called ESG narrative that, you know, as the net zero agenda crashes, let's say the real cost starts to become apparent for people, will the world shift back to saying, "Actually, yeah, coal, natural gas, nuclear, maybe hydro, these are the forms of energy that the- Market will be choosing, and we should be okay with the market choosing that.

Well, it's difficult, to, you know, predict, but in all likelihood, countries will begin to prioritize energy costs and energy security over the net zero targets. China is doing that anyhow. India is doing that. Most, most developing country, they have no option than to focus on cheap, reliable- Affordable energy, if they want to raise, you know, hundreds of millions, billions out of poverty, that's what they need, and that's at the core of the international conflict between the West and the developing world, always has been, that the developing world has never agreed to any binding targets, and they always said, "Look, you've, you know, to the West, you've, you've, become developed, wealthy on the back of cheap energy, and now you want to prevent us from using cheap energy." Energy, and we're not doing that. So that's no question, this will continue. And whether some of the Western nations will be able to actually come back to a rational form of energy policy, which would require a cost-benefit analysis, we'll have to wait and see. Everyone is battling and, and, and parties are- Deeply divided over this, particularly conservative parties are beginning to fracture over this green agenda. But there are alternatives that can do both, can be cleaner, greener, low carbon forms of energy generation that are a real alternative to the kind of obsession with renewables. As I said, if the world were to go for more nuclear and more natural gas rather than coal, for instance. Particularly in, more developed countries, that would be more efficient than going to for the renewables, which come with all sorts of unintended complexity issues, cost issues. So I certainly think there are alternatives. Other countries might have to re-- still rely on coal because they are sitting on huge amounts of coal, and also the energy security issue. I mean, China, for instance, isn't blessed with a lot of resources, but they do have coal. they don't want to become entirely dependent on Russia for their energy security or the Middle East, for that matter. So China will continue using coal, as will India, I, I'm pretty sure, for, both economic and energy security, reasons. The good news is, and we haven't even mentioned that yet, is it would appear that the predictions of climate disaster and acceleration Exaggerated global warming, have been exaggerated, and that the, the reality is that the climate, the warming is at the low end of the IPCC scenario. So the, the warming trend over the last thirty, forty years is much lower than most models had predicted. So the warming is at the low end of the, of the predictions, which I think is good because it gives us more time and governments Also more scope to readjust and, and reassess and to revise policies accordingly. But that realization hasn't yet turned into a kind of consensus among the officials. But the reality is, if you look at the climate trend, so the warming trend over the last thirty, forty years, it's much, much lower and much slower than most models predicted. So that's the good news, which al-- will allow governments To slow down some of the policies they've adopted and aren't able to sustain politically or economically. Right.

And speaking of government responses and policies, another thing that I've seen also, I believe Net Zero Watch has commented on this also is, so what we've seen recently is these very high energy costs in the, in the UK, in Britain particularly, I believe, and some gas producers have been potentially about to go bust, and then basically it looks like Boris Johnson There's been talk about trying to bail these companies out, and you, you and NetZeroWatch have commented that this is more like a short-term band-aid than really a long-term fix. Could you just elaborate a little bit? What's, what's the story with that?

Well, this is about energy suppliers, not the kind of oil and gas producers. It's not about the BPS or the Shells of this world, it's about suppliers, so companies that supply your network with gas, or electricity. And Because there is a price cap, which is not a crazy idea, co-- you know, which distorts the complete market, but there's this price cap, so they-- these suppliers have to buy the gas on the market, you know, for the market price, but they aren't allowed to pass this on to consumers because there's a cap of what they can charge consumers. Now, that's, has driven, I don't know, forty, fifty companies to bankruptcy, so they've all gone out Under, and those who are still surviving obviously would go under if they weren't bailed out, and in, in effect, the government is bailing them out by handing over billions of doll-- of pounds and saying, okay, we are giving you that money, but you're not allowed to charge that right away, and we're giving this as a loan, you have to pay it back. It's unlikely to happen because the companies will say, well, you know, in a year's time or in five years' time If we have to pay this back, we'll have to raise energy prices, which would be very unpopular. So, but anyway, they've given them basically this kind of handout called a loan, and the idea is that the companies will not charge consumers that amount of money that they will get loaned by the government, which comes to about two hundred pounds per household on average, average home, which they will not charge because they get the money from the government But they will then try to claw back in the next five years. So instead of paying it this year, consumers will then have to pay it over the next five years. That's the idea, but it's all complete nonsense because it doesn't actually address the underlying problem of the energy crisis. Part of the problem is that the re-- the subsidies for renewables, for instance, the eleven, billion that I mentioned before, are being-- part of them will be- Have to be paid by consumers through their energy bill. So you could theoretically reduce the energy bill cost or the burden by simply, eliminating the green subsidies. You could say, you know, the government could, okay, so there's a legal obligation, obviously, so the government could theoretically buy them off or, take them into taxation and eventually eliminating them, but you would reduce the burden, the cost tremendously by simply saying we're no longer paying Any subsidies for energy, full stop. And you, you have to, you know, stand on your own feet like any other company. You have to run, and you either swim or you sink. that would r-- tremendous. This is normally how free markets work, because then you have competition and innovation, people trying to outcompete each other and bring down the cost and make your product more competitive and more attractive. None of this is working in the- Energy market. so the government is propping up these remaining suppliers, handing out billions, in the hope that in a year's time, this will somehow go away, which is completely naive, because they will come back. This just for one year, so next year we'll have the same situation, and the, the companies will say, "Well, look, unless you give us another six billion or whatever, we'll have to raise price again." So it's, it's a, it's a Vicious circle, and the government is incapable of addressing the underlying problems.

I see. And so one other aspect I'm curious as well, that why aren't we, essentially, why aren't we seeing more of the fossil fuel companies actually push back on this, as opposed to try and do this whole British Petroleum becoming, you know, be-beyond petroleum and so on, and you know, this kind of marketing. Is it, is it just that kind of, is it the climate, is it the culture, like, why, why aren't- Aren't they just sort of giving a more of a, a strong pushback here?

Because they are under enormous pressure from the government, essentially. Forget about the campaigners, they can live with, you know, green campaigners that's basically part of the, you know, business environment that you have to confront campaigners. But no, it is the government and institutions and pension funds and so on who are demanding these kind of, changes. It's, it's essentially driving- Driving these companies into private hands essentially, because eventually only the big, oil majors, of, you know, China, Russia, and, and Iran and, and the Middle East will survive. Western oil companies will have to basically sell off their, their, they, they can't survive that kind of political government pressure. It's all the government driving this, and they are threatening them with, you know- You know, all sorts of measures if they don't take these actions. So it's, it's again something that is entirely driven by policies, and of course, many companies also have boards that have become much more activist. A lot of, you know, well-off investors think either because their kids are driving them or they think they look good if they become activists. So there's also this kind of, new phenomenon of, of activists investors and activists, shareholders who think they look good if they do, you know, push these kind of popular or populist or green agendas. And, you know, these companies have boards, and the boards, the-- on the boards, you have people from the banks, you have people from pension funds, from universities, whatever, and they are, you know, all kind of, you know, this green agenda is a, is a almost like a cult, you know? It's very, very difficult to stand up and say, "Hold on, this is crazy from an economic perspective." And they say, "What are you saying? We need to save the planet. It's more important than, you know, your profit."

Okay, Benny, so let's just summarize a few of the points that we've spoken about. So there's this net zero movement out there, they're trying to, quote unquote, decarbonize the economy, but when you really zoom out and look at the overall costs of this, it's actually a bad thing for the average person and for Well-being if they're having to make these decisions between heating their home and eating. And we've spoken a little bit about some of the influences, so things like government regulation, government subsidies, this ESG box-ticking exercise, ESG culture, if you will. But you've also pointed out that there's a reason, there's a hope for optimism here, that the cost is potentially going to force people to really reconsider at some point, and so that this net-zero agenda will eventually crash. So if you had to just for- For a final closing comment for listeners, if you had to leave them with a message, if they, if they wanna help or if they want to get involved in some way, how could they get informed or get involved in some way?

Well, Stephan, thanks for having me on your program. Basically, these are highly complex issues, very, very complex, very difficult, both, the climate issue as well as energy policy. People need-- people who are interested need to be properly- Be informed, and that does require, unfortunately, that they read up on these issues because they are difficult to understand. You need some time to read up, to understand the pros and the cons, because that's required to come to a rational decision or rational debate. You really have to fully appreciate that whatever you choose, whatever path you choose in- Economics and in your life, there are pros and cons, and you have to weigh them up, and you have to weigh up all the benefits and all the costs, and only when you are able to do that, you can come to a more reasonable approach. Not, it doesn't mean that it's always the right one, but it's more reasonable because you've at least weigh, weighed up, you know, the arguments in favor and against. That, I think, is missing because it's become- Too almost religious this issue, too dogmatic, and that's what we are trying to achieve, at least for those people who are interested in a proper debate and a proper discussion, a proper scrutiny of these issues. We want to provide our readers with all relevant information so that they can make up their mind on the basis of the most relevant facts. That's what we're trying to achieve at Net Zero Watch, and as I said, we're working with, a few dozen MPs who are beginning to realize they have a problem on their hand and they need to look more into it. there isn't no clear, kind of path, and it would be foolish to claim that there is a clear path. But as I said, there are alternative options that are potentially more- cost-effective and can achieve better outcomes, we have to look at them. We have to see, for instance, how we can bring down the cost of nuclear, which is still far too expensive, but which is certainly the future of the global energy market. It's just a question of time whether it's the next fifty years or the next seventy years, nuclear will play a, a increasingly important role, but it has to be cheaper than it currently is. It's also, again, comes down to Regulation and regulatory costs, but anyone interested in these matters, whether it's climate, whether it's energy and energy policy, they can happily come to our website or subscribe to our newsletter and get the information that they normally don't get in their newspaper or on the BBC.

Fantastic. So listeners, check out netzeroatwatch dot com. And Benny, thanks for joining me.

Thanks, Stefan, for having me.

I hope you enjoyed that conversation, and I wanna know what you think. Let me know. If you see some crossover there between the Bitcoiners who are interested in proof of work mining and those people interested in having a more rational conversation about the energy markets of the world, get the show notes at stephanilivera dot com slash three five zero, and I will see you in the citadels.