Tag: inflation

HSBC: Net Zero Australia “one of the least well placed” to Weather the Iran Oil Shock

HSBC’s chief economist for Australia, Paul Bloxham, has warned that Australia’s economy is among the least well-placed developed nations to handle the inflationary shock from the ongoing US-Iran conflict and resulting oil price surge.

From Watts Up With That?

Essay by Eric Worrall

“… the Australian economy has also been operating beyond its sustainable capacity …”

Australian economy among world’s worst placed to weather Middle East shock: HSBC

The news: HSBC chief economist Paul Bloxham has warned that Australia is in one of the worst spots globally to deal with the economic fall out of the US-Iran conflict.

…

He said this week’s first quarter inflation figures are expected to confirm that headline and trimmed mean CPI were “well above” the 2.5% target even before the full impact on the fuel price shock appeared.

“At the same time, the Australian economy has also been operating beyond its sustainable capacity and the jobs market has been tight,” he said.

“In our view, this combination makes Australia is one of the least well-placed developed economies to deal with the inflation shock that is arriving.”

…

He said the “slow road” taken by the RBA to get inflation back to target, compared to the higher and quicker rate rises overseas, means the economy is “now not very well placed to deal with the next shock”.

…Read more: https://www.capitalbrief.com/briefing/australian-economy-among-worlds-worst-placed-to-weather-middle-east-shock-hsbc-dcfceedb-12bc-4804-900e-8af282b0eac5/

Why is the Australian economy in such a precarious situation?

Lowe’s stark warning to Labor on spending, growth

Former Reserve Bank of Australia governor Philip Lowe has blasted the federal government’s cost-of-living handouts and inaction on boosting the overall size of the economy, warning it has condemned the nation to high interest rates, low wage growth and a stagnation in living standards.

Speaking in his new role as chair of the ASX’s corporate governance advisory body, Lowe said government spending was making the economic challenge worse but said the bigger issue was federal Labor’s failure to act on productivity and increase growth.

…

“There’s been endless reports, we know … we tax income and wealth generation too highly and consumption too lightly. The way we tax land is all screwed up, on education we’re going backwards, our energy system is high-cost and unreliable, we haven’t planned the growth in the housing stock for the growth in the population, and skills are going backwards in some areas.”

…Read more: https://www.afr.com/policy/economy/lowe-s-stark-warning-to-labor-on-spending-growth-20260217-p5o2zx

Federal treasurer Jim Chalmers suggested Philip Lowe’s criticism was payback for Chalmers not re-appointing him as Reserve Bank governor. But it’s not just Philip Lowe saying something is very wrong with the Australian economy.

The HSBC critique (first quoted article) suggests the Aussie economy was already overheated before the Iran War oil shock. So what was overheating the economy? From the Aussie government website;

…

In its most general sense, inflation is the rate at which prices change over a given time period. According to the RBA, the main causes of inflation fall into three broad categories: demand-pull, cost-push, and inflation expectations. Government spending that provides additional money to people and organisations can in turn mean the money is used to purchase more goods and services—that is, adding to demand and increasing prices—the ‘demand-pull’ mechanism. Economist Chris Richardson has estimated that for every $7 billion in additional government spending, the RBA would need to lift the cash rate 0.25 of a percentage point higher than otherwise.

…Read more: https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Research/Budget_Review/2024-25/GovernmentSpendingInflation

I’m not suggesting government expenditure is the only factor – our lack of preparedness for the Iran War crisis and a consequent surge in fuel prices is a significant factor. But the impact of government expenditure is not negligible.

According to economist Chris Richardson, cited on the Australian Government website page above, every $7 billion increase in government expenditure in Australia generates a 0.25% increase in interest rates. That’s quite an impact. Unfortunately the original document written by Chris Richardson has disappeared, but going by what wasn’t accidentally deleted from the Aussie federal government website, that’s quite a boost. [note this article by AFR puts the number at $7.5 billion / 0.25%].

I haven’t found the original paper by Chris Richardson, but his website is available here.

So what is the government spending our money on? The answer is plenty – but there is one set of expenditures in particular which caught my eye. From the government’s 2025-2026 budget document;

Budget 2025-2026

Economy
Building a stronger economy

…

Cleaner, cheaper energy

The Government is unlocking $8 billion of additional investment in renewable energy and low emissions technologies through a $2 billion expansion of the Clean Energy Finance Corporation. This is in addition to $36.9 million to enhance the use of existing grid infrastructure and a $10 million Accelerated Connections Fund to reduce grid bottlenecks.

Unlocking private investment in priority areas

The Government has legislated $13.7 billion in hydrogen and critical minerals production tax incentives and has allocated $1.5 billion in support for priority areas through the Future Made in Australia Innovation Fund, including:

  • $750 million for green metals
  • $500 million for clean energy technology manufacturing capabilities
  • $250 million for low carbon liquid fuels.

Support for green metals

The $2 billion Green Aluminium Production Credit will support Australian aluminium smelters to transition to renewable energy, and the $1 billion Green Iron Investment Fund will accelerate the development of this new industry.

…

Delivering transport infrastructure

This Budget provides $17.1 billion over ten years for road and rail projects to improve the productivity and resilience, liveability and sustainability of our cities, regions and communities. This continues to refocus the Government’s over $120 billion 10‑year infrastructure investment pipeline on nationally significant projects.

…Read more: https://budget.gov.au/content/06-economy.htm

The true amount of green expenditure is probably significantly higher than the $24 billion the government has admitted spending on green projects. Some of the $120 billion earmarked for “critical infrastructure” is probably green infrastructure expenditure.

But let’s stick with the obvious. How much would eliminating $24 billion of obvious green boondoggles help?

Applying economist Chris Richardson’s $7 billion additional government expenditure = 0.25% interest rate rule (see above), cutting that $24 billion of useless green expenditure could result in a 1% drop in mortgage rates.

6% mortgage interest rates could become 5% mortgage interest rates.

The impact of such a reduction would be significant. According to 9News, a million Aussies are struggling to pay their mortgage. Reducing mortgage rates from 6% to 5% would be a 17% reduction in monthly mortgage interest payments for a family on the financial brink. If a family is paying $3000 / month on an interest only mortgage, reducing the mortgage rate from 6% to 5% would reduce monthly repayments to $2500. That extra $500 / month saving might mean the difference between keeping the house or being evicted by the bank.

It’s OK federal treasurer Jim Chalmers, you don’t have to thank me for finding $24 billion dollars of cost savings which could be eliminated from the federal budget. Cutting that useless green expenditure to save distressed Aussie families from financial disaster will be thanks enough.

‘Grocery Tax’ to Hike Britons’ Shopping Bills by £56 in Labour Net Zero ‘Inflation Boost’

A new “grocery tax” designed to achieve the Government’s Net Zero targets will push up household shopping bills by up to £1.4 billion a year.

Screenshot

From The Daily Sceptic

By Richard Eldred

A new “grocery tax” designed to achieve the Government’s Net Zero targets will push up household shopping bills by up to £1.4 billion a year. GB News has more.

The green tax will add as much as £56 to annual household shopping bills, according to Government calculations.

The scheme, which charges retailers and manufacturers based on their packaging materials usage, has been quietly passed into legislation as part of the U.K.’s waste reduction and Net Zero strategy. Critics warn the measure will increase food costs for families while creating additional bureaucracy for businesses.

Under the Extended Producer Responsibility (EPR) scheme, which comes into legal force on January 1st, 2025, businesses will face charges for packaging waste collection and disposal.

The system, originally devised by Michael Gove during his tenure as Environment Secretary, was previously put on hold following opposition from Conservative MPs and retailers. The first charges will be implemented in autumn 2025, shifting the cost burden from local authorities to manufacturers and retailers.

Despite the change in funding responsibility from council tax to businesses, there are no indications that councils will reduce resident taxes. According to Government forecasts, the scheme will increase household bills by £28 annually in a “low scenario”.

In the Government’s “central scenario”, costs will rise by £48 per year, while a “high scenario” could see increases of up to £56 annually. The British Retail Consortium believes Labour’s £1.4 billion cost estimate is too low, suggesting the true cost to retailers will be closer to £2 billion.

The Government expects 85% of costs will be passed on to consumers in a “central scenario”, rising to 100% in a “high scenario”. Lord McKinlay, chair of the Net Zero Scrutiny Committee, criticised the “rapidly introduced, yet little noticed grocery tax legislation”.

“It heaps more than a billion pounds of new and unnecessary costs on consumers, but as ever when Government departments estimate implementation costs, these are often hopelessly underplayed,” the Tory peer said.

He added: “It needs to be called out for what it is: yet another Net Zero tax which adds to consumer cost inflation, and further adds to the administrative burden on U.K. businesses. Another growth-destroying measure by an inept government.”

Worth reading in full.

Claim: President Trump is the Product of the Climate Doom Loop

Apparently, Trump should have told voters how climate change drives inflation.

From Watts Up With That?

Essay by Eric Worrall

Apparently, Trump should have told voters how climate change drives inflation.

A ‘doom loop’ of climate change and geopolitical instability is beginning

Published: December 9, 2024, 11.21pm AEDT
Laurie Laybourn Visiting Fellow, Global Systems Institute, University of Exeter
James Dyken Associate Professor in Earth System Science, University of Exeter

It is a common refrain to say that geopolitics gets in the way of climate action. From the war in Ukraine to trade tensions, each year seems to bring another immediate priority that diverts focus from the imperative to act on climate change. 

…

This is a vicious circle. Climate change is making geopolitics less stable, which harms climate action. This will worsen climate change, meaning more geopolitical instability, and so on. The risk is that this “doom loop” runs faster and faster and ultimately derails our ability to phase out fossil fuels fast enough to avoid the worst climate consequences.

…

Climate-flation

The recent election of Donald Trump offers a potential case study of how this doom loop could be beginning to emerge. 

…

In the years leading to the election, the US experienced its highest rates of inflation in over four decades. While inflation eventually fell, many Americans couldn’t cope with far higher prices. Trump made inflation a major focus of his campaign and it’s clear it played a role in his victory. What he didn’t mention was how climate change is increasingly a factor driving inflation.

…

At the moment, the link between climate change, inflation, and politics is a “weak signal” of how the consequences of climate change can frustrate our collective ability to tackle the causes of climate change. In a recent academic paper, we called this “derailment risk”, the risk that the world ultimately cannot stick to a path that rapidly phases out fossil fuels and avoids the worst climate outcomes. 

…Read more: 

https://theconversation.com/a-doom-loop-of-climate-change-and-geopolitical-instability-is-beginning-244705

I just can’t get past the fact 10s of thousands of kids will have their understanding of the world shaped by these people.

On one hand they claim people are overlooking the impact of climate change on inflation. Then they immediately go on to say climate change is a weak signal.

Of course, people are overlooking climate driven inflation if it is a weak signal. The majority of the inflation people are currently experiencing clearly has other causes, such as skyrocketing energy prices caused by punitive climate activist political attacks against fossil fuel companies.

The obvious followup question is, will global warming become a strong signal on any timescale any of us care about?

A quick glance at Earth’s paleo history shows us how unlikely it is that climate change will ever be an issue we need to care about, on any reasonable timescale.

For starters, the Earth is currently way too cold, not too hot. We are all locked in the Late Cenzoic Ice Age, an ice age which began 34 million years ago, and shows no signs of releasing its grip. The Earth has thrived in much warmer conditions than today, and with much higher CO2 levels than today. There is substantial evidence the biomass carrying capacity of the Earth has been substantially degraded by the current ice age, compared to previous warm epochs.

Study: Ancient Fish Thrived During PETM Extreme Global Warming

In an ice age like the Late Cenzoic we are currently experiencing, ice is a far greater threat than global warming. Don’t be fooled by the current interglacial, the last glacial maximum was so severe, it may have come close to being an extinction level event.

Life on Earth was nearly doomed by too little CO2

As we approach the end of the Holocene, we shouldn’t be worried about shaving undetectably small fractions of a degree off global temperature, we should be worried about today, here and now, and what we can do to remove obstacles to prosperity and economic well being.

If we pay any attention to the long term at all, that attention should be directed to ensuring the ice never again threatens to extinguish all life on Earth – a far greater long-term problem than whether your rose garden blooms a few weeks earlier than normal.

Trump’s Victory and Climate Policy

While climate policy wasn’t the star of this recent election, the results carry significant implications for the climate agenda. Voters weren’t casting ballots explicitly for or against green energy mandates, net-zero goals, or climate “emergencies.” Yet, indirectly, they sent a strong signal: the public isn’t fully buying into the costly, disruptive climate policies that have become a pillar of certain political platforms.

From Watts Up With That?

By Charles Rotter

While climate policy wasn’t the star of this recent election, the results carry significant implications for the climate agenda. Voters weren’t casting ballots explicitly for or against green energy mandates, net-zero goals, or climate “emergencies.” Yet, indirectly, they sent a strong signal: the public isn’t fully buying into the costly, disruptive climate policies that have become a pillar of certain political platforms. As the dust settles, the reality is clear—the green agenda just lost substantial footing, and its backers will have to reckon with what that means moving forward.

Climate Policy as a Secondary Issue with Primary Ramifications

It’s true; voters in this election were concerned primarily with issues closer to home—economic stability, inflation, job security, and immediate energy costs. But even as climate policy took a back seat in the campaign discourse, its implications loomed in the background. In states where green mandates have been most aggressive, energy prices have soared, job sectors have been strained, and the promise of renewable jobs hasn’t materialized to the extent promised. These factors, while not always top-of-mind in election messaging, have clearly made an impression on the public.

What we’re seeing is a kind of indirect referendum on the climate policies that have dominated recent years. Voters may not have explicitly voted on green policies, but the growing awareness of the trade-offs involved is unmistakable. The failure of candidates most closely aligned with aggressive climate agendas shows an implicit but impactful rejection of policies that prioritize carbon cuts and renewables at the expense of reliable, affordable energy.

The Green Agenda Takes a Back Seat

For years, climate alarmism has driven policy without substantial public scrutiny. Climate mandates were passed through sweeping bills, and green energy was sold as the inevitable future. However, this election signals a turning point. The quiet but firm message from voters was that climate goals can’t overrun practical concerns, especially as they impact household budgets and energy security.

The hard truth is this: while voters might generally support the idea of a cleaner environment, they’re clearly unwilling to shoulder the disruptive and costly consequences that come with rushed climate policies. Skyrocketing energy bills, faltering grid reliability, and the disappearance of traditional energy jobs are realities that weigh heavily on ordinary Americans. People may want a healthy planet, but they also want heat in the winter, affordable gas, and the economic security that has long come from stable energy industries.

The Implications for Policymakers

For climate policymakers, this election result is a wake-up call to recalibrate. The defeat of the green agenda in the background of these results reveals the limits of popular patience for top-down mandates that affect daily life. If lawmakers are paying attention, they’ll see that policies need to be practical, affordable, and adaptable, not dictated by climate scenarios that, however dire they may sound, lack resonance with the average voter’s immediate concerns.

In a way, this setback offers policymakers a chance to focus on balanced, flexible environmental strategies that don’t overburden citizens. The public’s quiet rejection of extreme climate policy can become an opportunity to develop approaches grounded in technological innovation, market-driven solutions, and gradual, economically viable transitions.

The Rise of Climate Realism

What this election suggests is that the era of unchecked climate alarmism may be shifting toward a more pragmatic, “climate realist” approach. Without overtly campaigning against green policies, voters have essentially said they’re not ready to make the kinds of sacrifices these policies demand. They’re looking for solutions that work with, not against, economic realities.

For the climate realist movement, these results represent a subtle but notable victory. The public has, in effect, rejected the notion that immediate, radical changes are the only solution to climate challenges. Instead, the message seems to be: take a measured approach, one that respects economic priorities and job security while still working toward environmental improvements.

A New Path Forward

As we look to the future, it’s evident that climate policy advocates must adjust their strategies. The message from the voting booth is unmistakable: the electorate is open to responsible environmental policy but weary of climate policies that impose financial strain without clear, tangible benefits. The public’s voice in this election suggests they’d rather see a steady, innovation-driven approach that strengthens—rather than weakens—their communities and the economy.

This election, though not explicitly about climate, may go down as a turning point for climate policy itself. Voters signaled that they won’t accept environmental goals at any cost, especially when that cost is borne by the average household. It’s a call for a shift from alarmist narratives to a practical, results-driven approach that respects both the environment and the economy.

Electric car boss quits after sales plunge 40pc

The chief executive and founder of European Tesla rival Polestar has quit after seven years at the helm.

Thomas Ingenlath leaves role at Polestar after EV maker loses $1.5bn in a year

The chief executive and founder of European Tesla rival Polestar has quit after seven years at the helm.

Polestar, which is controlled by Sweden’s Volvo and China’s Geely, confirmed on Wednesday the resignation of long-time boss and founder Thomas Ingenlath. He will be replaced from Oct 1. The Telegraph has the story.

His resignation comes after sales of the Swedish company’s upmarket electric cars slumped. Global volumes fell 40pc in the first quarter of 2024 to 7,221, down from 12,076 the previous year.

Once valued at more than $20bn (£15bn), Polestar’s valuation has plummeted to around $2bn since it went public in 2022. Its shares, listed in New York, are down 41pc this year alone.

The carmaker, headquartered in Gothenburg in Sweden, lost close to $1.5bn over the course of 2023.

Originally starting life as a prototyping division of Volvo, developing concept models and touring car racers, Polestar was launched as a standalone marque in 2017. It was billed as Europe’s answer to Tesla.

Vehicles such as the Polestar 2 electric hatchback received a positive reception from critics.

However, Matthias Schmidt, an analyst at Schmidt Automotive Research, said Polestar had struggled to turn its critical acclaim into mass sales.

In February, Volvo announced it would no longer be providing financial support to Polestar, offloading part of its 48pc stake to Geely, its Chinese parent company.

The carmaker secured a near-$1bn loan from a consortium of banks after Geely agreed to continue to support the company. In January, Polestar said it would cut around 15pc of its staff globally, equating to about 450 people.

Read the full story here.

It’s Been A Brutal Year For Offshore Wind — Despite Analysts’ Best Guesses

Some analysts predicted that the U.S. offshore wind industry would bounce back after a rough 2023, but many of the same problems that plagued the industry last year have continued to burden developers through the beginning of 2024.

From The Daily Caller

NICK POPE

CONTRIBUTOR

Some analysts predicted that the U.S. offshore wind industry would bounce back after a rough 2023, but many of the same problems that plagued the industry last year have continued to burden developers through the beginning of 2024.

Energy data analytics provider Wood Mackenzie, consultants from Deloitte, Reuters and environmental lawyers for a law firm called Locke Lord variously projected that the U.S. offshore wind sector would rebound after a distressing 2023. However, four months in to 2024, the inflation, higher borrowing costs, logistical problems and supply chain woes that battered the industry in 2023 have not relented, forcing developers to cancel or seek to renegotiate deals as they did in 2023.

“Obviously, providing affordable and reliable energy for everyone is a challenging endeavor,” Kevin Dayaratna, a senior research fellow for the Heritage Foundation, told the Daily Caller News Foundation. “Even despite all of the subsidies these alternative forms of energy – such as offshore wind – have received, they have still failed to become a significantly mainstream source of energy.” (RELATED: Blue State Doubles Down On Offshore Wind After 2023’s Massive Failure)

Since the start of 2023, approximately 60% of all contracts signed by American offshore wind developers have been cancelled, according to E&E News. Ørsted, a Danish company and one of the world’s leading offshore wind developers, backed out of two major planned projects in New Jersey in 2023, while other players like General Electric, British Petroleum (BP) and Equinor attempted to renegotiate with state governments as economic headwinds eroded projects’ profitability.

Similar developments have played out to start 2024, with developers up and down the east coast backing out of deals to sell power from their projects as the same fundamental economic problems persist despite the projections of some market experts and media outlets.

“Vessel owners and operators are actively contracting with original equipment manufacturers and project developers to reserve vessels for project construction in 2024 and beyond,” Locke Lord attorneys M. Benjamin Cowan and Emily Huggins Jones wrote on January 3. “Thus, despite significant headwinds in 2023, with improving economics, more flexible procurement procedures, continued federal support, and increasing legislative support, the U.S. offshore market appears to have weathered the worst of the storm and is poised for growth in the coming year.”

On the same day that the two attorneys published their market analysis, Equinor and BP backed out of a contract with New York state to provide power generated by their planned Empire Wind 2 offshore wind farm due to inflationary pressures. Subsequently, three other New York offshore wind projects were cancelled on April 19.

“The offshore wind sector, which faced setbacks in 2023, is expected to rebound in 2024 with tangible opportunities and a record number of tenders,” Wood Mackenzie wrote on January 25. “In summary, 2024 holds the promise of a global wind energy resurgence, with key areas of focus including market recovery, reliability, profitability for [original equipment manufacturers] and the offshore wind sector’s evolving dynamics.”

The day after Wood Mackenzie published those words, Ørsted announced that it had backed out of Maryland’s orders approving its Skipjack 1 and 2 projects off the state’s coast. The company said at the time that inflation, high refinancing costs and supply chain issues combined to render the state’s subsidies economically unviable, but that it would not give up on the projects altogether. (RELATED: Environmental Laws That Impeded Pipelines For Years Could Trip Up Biden’s Sprint Toward Offshore Wind)

Several senior employees of Deloitte, one of the country’s top consulting firms, also projected confidence that the offshore wind industry would be able to turn things around in 2024.

“Offshore wind investments dropped in 2023 amid challenges with costs and permitting, but the tide is expected to turn in 2024 as construction and operations get underway at several key projects,” reads a February 9 piece by Deloitte consultants Marlene Motyka, Jim Thomson, Kate Hardin and Carolyn Amon published in The Wall Street Journal’s “sustainable business” section. “Transmission is a factor in many constraints on renewable deployments, although [Infrastructure Investment and Jobs Act] and [Inflation Reduction Act] programs and grants could start tackling transmission issues in 2024.”

Reuters, a global news outlet, echoed some of this optimism in its own projection that the American offshore wind industry would rally after 2023’s turbulence.

“The U.S. offshore wind industry is eying a brighter 2024, with work expected to start on several projects following a year marked by stalled developments and billions of dollars in write-offs,” reads a Reuters piece published in December 2023 under the headline “U.S. offshore wind poised for success next year after turbulent 2023.”

The industry’s problems are also complicating President Joe Biden’s climate agenda. The Biden administration has set a goal of having offshore wind providing enough electricity to power 10 million American homes by 2030, but Reuters reported in November 2023 that the target is almost certainly out of reach due to the industry’s struggles.

The industry has struggled despite the availability of robust federal subsidies, including tax credits contained in the Inflation Reduction Act, Biden’s signature climate bill. Despite the industry’s missteps, the administration is pushing ahead with its offshore wind agenda, releasing a robust five-year leasing schedule for the industry on Wednesday that could see up to a dozen lease sales through 2028.

“Biden’s offshore wind fetish ignores the realities affecting the industry here and abroad, but that is the hallmark of all his energy and climate schemes,” Dan Kish, a senior research fellow at the Institute for Energy Research, told the DCNF. “Warren Buffett once said the only reason to build wind turbines is the tax credits, and he was talking about onshore wind. Offshore wind is three times as expensive, and it only makes sense with sweetheart electric rates for the builders gifted to them by politicians looking for golden parachute jobs with wind companies after consumers boot them out of office when they start getting their bills.”

Wood Mackenzie, Reuters, Deloitte, Locke Lord and the White House did not respond to requests for comment.

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Rise And Fall Of The German Economy… Energy Debacle Leading To Economic Meltdown

The number of Germany’s corporate insolvencies in March reached the highest level on record, new data reveal. It’s the Great Green Energies economic debacle

Stressed business man covering face with hands in office. Working over time or too much. Problem with failing business or confusion with crisis. Entrepreneur in bankruptcy.

From NoTricksZone

By P Gosselin

Corporate insolvencies at an all-time high in March – Why Germany’s economy needs more than just hope

The number of Germany’s corporate insolvencies in March reached the highest level on record, new data reveal. It’s the Great Green Energies economic debacle

Blackout News here calls the trend “alarming” and that it is “a clear sign of the worsening economic crisis. The news are based on data released by the Halle Institute for Economic Research (IWH).

“There has been nothing comparable since 2016, the year the data was first collected,” reports Blackout News. “This development not only points to internal company problems, it also highlights the extensive economic challenges the country is facing.”

Insolvencies are even worse than during the Corona pandemic lockdown years.

“Exorbitantly high energy costs”

Analysts say the main driver behind the dire trend are Germany’s exorbitantly high energy costs, mostly due to the country’s mismanaged foray into green energies – like wind and solar – and the transition away from affordable and stable conventional energy sources like natural gas, coal and nuclear power.

“The wave of corporate insolvencies cannot be explained by poor business decisions alone. Rather, it is the high cost of energy, which is driving up operating costs in times of global uncertainty, and a tax policy that leaves little room for investment,” Blackout News adds.

Both, left and center-right, are to blame

The push to green energies, and away from conventional sources, began in earnest under the government led by Angela Merkel and her CDU center right party. The latest Socialist-Green coalition government, led by Olaf Scholz and Robert Habeck, have since pushed draconian policies that have only exacerbated Germany’s economic and energy woes.

Most experts argue that the government hasn’t been fixing problems, rather it has been making them far worse. It simply refuses to acknowledge the reality.

Industrial exodus…country needs more than just hope

“The current crisis demands far more from political decision-makers than just hoping for a calming of the market,” adds Blackout News.  “Comprehensive measures are needed…the measures include a reduction in energy costs.”

Blackout News recently reported on the “industrial exodus” as “Germany’s economic crisis forces traditional companies to flee.”

Right, Epoch Times, Climate Change Isn’t Causing Inflation or Higher Food Prices

The German edition of the April 12 Epoch Times ran a story, titled “Food prices remain high – companies blame climate change.” The Epoch Times, an international newspaper which publishes in 33 countries and 21 languages, rightly expressed skepticism of this claim. Climate change can’t cause inflation, which is always and only a result of government monetary and fiscal policy, and data is clear that modest warming and higher carbon dioxide levels are boosting food production.

From ClimateRealism

By H. Sterling Burnett

The German edition of the April 12 Epoch Times ran a story, titled “Food prices remain high – companies blame climate change.” The Epoch Times, an international newspaper which publishes in 33 countries and 21 languages, rightly expressed skepticism of this claim.

Climate change can’t cause inflation, which is always and only a result of government monetary and fiscal policy, and data is clear that modest warming and higher carbon dioxide levels are boosting food production.

After noting that the recent decline in inflation has still left food prices at “crisis levels,” the Epoch Times points to two recent reports blaming climate change for continued food price inflation.

“In a detailed article, the “Handelsblatt” refers to a variety of negative effects that phenomena such as heat, drought, extreme rainfall, increased pest infestation or plant diseases had on crops,” writes the Epoch Times. “A study by the ECB and the Potsdam Institute for Climate Impact Research also assumes possible food inflation of up to 3.2 percent in Europe by 2035 – due to climate change.”

The claim that climate change is causing food inflation is easily disposed of. As discussed at Climate Realism across hundreds of articles, none of the climate related weather phenomena mentioned in the story as causing food production problems is worsening; not drought, not extreme heat, not heavy rainfall, not crop pests.

And, indeed, regardless of the weather, Climate Realism has published more than 200 articles showing that crop production and yields have increased dramatically as the Earth has modestly warmed. The articles examine trends for dozens of crops from countries all across the globe covering almost every type of regional climate where crops are produced.

Those interviewed by the Epoch Times complained in particular about the decline in specific crops in specific countries during particular years. Everyone knows weather impacts crops seasonally, yearly, and sometimes over multiple years, so a single year or couple of years’ production of a specific crop in one country or another says nothing about whether long-term climate change is causing a problem. To make such a connection one must look at long-term trends.

Climate realism has previously refuted claims that climate change caused a decline in cocoa beans, coffee beans, grapes, olives (see, for example, the Figure 1, below), sugar. Those posts cite data from the U.N. Food and Agriculture Organization to show that both production and yields for these crops have increased dramatically as the Earth has warmed slightly over the past 30 and 50 years, regularly setting records.

Figure 1: U.N. FAO, olive production and yields since 1990.

What’s true of those crops is true of spinach and tomatoes, also mentioned in the Epoch Times article, as well. Both crops have experienced a substantial increase in production and yield amidst recent climate change. (See Figure 2 from the FAO below)

The same is also true of sour cherries, which experienced a more than 83 percent increase in production since 1990, on an increase in yield in excess of 60 percent. Blaming the sustained increase in prices for orange juice, chocolate, or organic grapes on a decline in production from one specific country in a single year is the cherry picking of the data by orange juice producers, vintners, and chocolatiers to divert blame from themselves, and the governments which regulate and control their fates, onto the boogeyman of climate change.

In fact, sustained high food prices are not the result of a changing climate but of changing government policies, policies which increase demand in times of limited supply and policies instituted to fight climate change. As Climate Change Weekly discussed recently government climate policies, both domestic and international, have increased the costs of all of the inputs into food, from seeds, to fuel, to pesticides and fertilizers, to electricity for non-perishable storage. These policies have lingered long after the COVID 19 lockdowns, even as governments have expanded the money supply and increased the debt through deficit spending.

Food demand is fairly inelastic. People have to eat to survive, no matter the costs. Demand for food hasn’t increased dramatically. But government policies have made food production harder while disincentivizing financing and investments in food production through public spending. These two factors have resulted in sustained higher food prices

The Epoch Times rightly acknowledges the problematic nature of the claim that climate change is causing food inflation, quoting the Climate Change Weekly article on the topic. Climate change doesn’t print money, nor does it create new programs or increase government spending, injecting money into the economy when productivity is not increasing.

Government policies created inflation in general, and food inflation in particular. And government can end both by halting unjustified, rapidly increasing spending, especially spending on climate policies and by reversing regulations and executive actions which make it more expensive and harder to produce affordable food.

Dems, Media Push New Study Linking Climate Change To Inflation, But Economists Aren’t Buying It

Liberals are touting a new study linking climate change and inflation, but economists say that the real causes are more likely to be massive government interventions in the economy purporting to save the climate.

From The Daily Caller

NICK POPE

CONTRIBUTOR

Liberals are touting a new study linking climate change and inflation, but economists say that the real causes are more likely to be massive government interventions in the economy purporting to save the climate.

The study, authored by four European researchers and published in the scientific journal Communications: Earth and Environment on March 21, argues that “temperature increases cause nonlinear, persistent increases in food and headline inflation,” according to its text. While corporate media outlets, climate activists and Democrats have boosted the study’s findings, the forces related to climate change that are likely to drive persistent inflation are massive government taxation, spending and regulation pushed by policymakers to fight climate change, according to economists who spoke with the Daily Caller News Foundation.

Climate activists, including Climate Power — which is spending $80 million to support President Joe Biden in 2024 — have touted the study’s findings, while outlets including The Associated Press, ABC News, Axios, The Los Angeles Times and The Hill have also pushed the study since its release. Democrats on the Senate Budget Committee also promoted the study on X, formerly Twitter, stating thats its findings demonstrate another way “that climate change is raising costs for families and threatening our entire economy.” (RELATED: Inflation Reduction Act ‘Has Nothing To Do With Inflation,’ Biden Says)

“Energy inflation permeates the rest of the economy. So many people want to say, ‘Look at core CPI and we’ve removed energy.’ No, you haven’t, because energy goes into every good and service that’s in the consumption bundle, and so you’re raising the cost of everything,” Michael Faulkender, the America First Policy Institute’s chief economist and a former assistant secretary of the treasury, told the DCNF. “It was Putin’s price hike, it was pandemic supply chain issues, it’s ‘greedflation,’ it’s ‘shrinkflation,’ and now it’s climateflation. It’s anything but their policies being responsible for it.”

Democrats and other defenders of the Biden administration have variously blamed Vladimir Putin, the pandemic as well as corporate greed or price-gouging for inflation.

“We find a rich response of inflation in different price aggregates to fluctuations in a variety of weather conditions. The strongest and most consistent signal arises from fluctuations in average monthly temperatures,” the study states. “Although larger in food prices, these impacts also translate into considerable effects on headline inflation. We find limited evidence for impacts on other price sub-components asides from weak evidence in the electricity sector.”

The study projects that food inflation could jump by as much as 3% annually over the next 10 years due to the impacts of climate change, especially increasing temperatures and heat waves. The study states that the food inflation Europe endured in the summer of 2022 would be amplified by between 30% and 50% by 2035 given the warming the study projects will occur by then.

“Inflation is a monetary issue. It has to do with the money supply. The Earth’s average temperature does not affect the amount of currency in circulation,” Ryan Young, a senior economist for the Competitive Enterprise Institute, told the DCNF. “Climate change policies, rather than climate change itself, do tend to increase inflation. They do this by increasing deficit spending, which central banks are more or less obligated to finance … Typical climate change policies have an additional, smaller effect on inflation by reducing productivity. Green products are often less durable and less efficient, and they take up investment dollars that could have gone to other uses.”

The U.S. money supply, or the total amount of money circulating in an economy, as of January 2024 reflected an increase of nearly $5 trillion relative to January 2020, just before the pandemic occurred, according to data from the Federal Reserve Bank of St. Louis. Inflation has been a persistent problem for the Biden administration and the American economy since 2021, with the consumer price index (CPI) increasing by 18.5% since President Joe Biden took office. (RELATED: ‘Economic Disaster’: Biden’s Budget Dreams Would Add Even More Fuel To Sky-High Inflation, Experts Say)

The Biden administration has pursued “the most ambitious climate agenda in history,” proposing to reshape America’s power grid, cracking down on oil and gas leasing and seeking to force electric vehicles to eventually dominate the American auto market. The Inflation Reduction Act (IRA), Biden’s signature climate bill, contained $369 billion for green initiatives, but Goldman Sachs projects that the actual price tag for those programs could ultimately reach about $1.2 trillion.

Europe has also seen massive inflation since 2021, and the European Union intends to spend hundreds of billions more euros on climate policy and initiatives through 2027, according to the European Commission.

Three of the study’s four authors — Christiane Nickel, Eliza Lis and Friderike Kuik— are affiliated with the European Central Bank, an institution that significantly underestimated inflation in 2021 and 2022 amid an energy crisis and massive fiscal stimulus in response to the pandemic. While the European Central Bank and several of its affiliated researchers were involved with the study, the paper does not reflect the official positions of the institution or the “Eurosystem,” the study notes.

“Climate change won’t drive inflation. It is so gradual that prices have time to adjust,” Diana Furchtgott-Roth, the director of the Heritage Foundation’s Center for Energy, Climate and Environment, told the DCNF. “The effects of warming are swamped by the far greater demand of upwardly-mobile people asking for air conditioning and other energy-intensive goods.”

“It is the solutions to climate change that drive up prices,” she continued. “Intermittent electricity, with wind and solar powering on and off with the wind blowing and the sun shining, and then backed up with gas that kicks in when wind and sun stop generating energy, is more expensive than continuous energy. That’s why electricity bills are rising.”

The authors of the study did not respond immediately to requests for comment.

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The Conversation Leans on Flawed Polling Study to Claim That Climate Change Influences Elections

Matt Burgess, assistant professor of environmental studies at the University of Colorado Boulder, wrote the Conversation piece, and is also one of the authors on the study being referred to. Right away, he admits that American voters’ top priorities are economics, inflation, crime, health care, education, and immigration.

From ClimateRealism

By Linnea Lueken

In a recent post by The Conversation, “Climate change matters to more and more people – and could be a deciding factor in the 2024 election,” one of the authors of a recent study looking at polling and Americans’ attitudes towards climate change claims that despite being low on most people’s list of concerns, it actually plays a potentially deciding role in elections. This is unsubstantiated, and not only can the results can be manipulated based on what polling you select, but the researchers appear to have -at best- some major blind spots when it comes to interpreting their data.

Matt Burgess, assistant professor of environmental studies at the University of Colorado Boulder, wrote the Conversation piece, and is also one of the authors on the study being referred to. Right away, he admits that American voters’ top priorities are economics, inflation, crime, health care, education, and immigration. This is consistently shown to be true, as Climate Realism has pointed out numerous times. Not only do Americans rank other issues higher than climate change, but it is actually ranked last or tied for last for the majority of people when compared to other issues, even other environmental issues.

Still, Burgess insists that actually climate change has influenced presidential elections, writing “[d]espite this, research that I conducted with my colleages suggests that concern about climate change has had a significant effect on voters’ choices in the past two presidential elections.”

The authors used 2016 and 2020 survey data from “Voter Study Group,” a subsidiary of “Democracy Fund” which is described as nonpartisan, although they seem to lean decidedly left. The study analyzed “relationships between thousands of voters’ presidential picks in the past two elections with their demographics and their opinions on 22 different issues, including climate change.”

The survey data they used was one where they asked voters to rate climate change as “unimportant,” “not very important,” “somewhat important” or “very important.” Unsurprisingly, they found that 67% of those polled rated climate change as “somewhat” or “very” important, which was an increase from previous polling from 2016. They also report that 77% of those rating climate change as important expressed support for Biden in 2020, and 69% of them supported Hillary Clinton in 2016. Burgess says this suggests “that climate change opinion has been providing the Democrats with a growing electoral advantage,” but this is obviously ignoring another fundamental criterion, which is candidate likeability.

Even among Democrats, Clinton was unpopular. Remembering, for example, that many Bernie Sanders supporters were miffed when Clinton was given the nomination, polling data from the time showed that 12% of Sanders supporters ended up voting for Trump in the general election.

This is a pretty egregious oversight on the part of Burgess, and in the Conversation article, he admits that “[o]ur analysis could not answer” the question of how climate change opinion may have “tipped” the 2020 presidential election, but he offers “educated guesses.”

First, that because recent elections have been very close, “climate change opinion would not need to have a very large effect on voting to change election outcomes.” Number two was that “candidates who deny that climate change is real or a problem might turn off some moderate swing voters,” and third was that “some voters may be starting to see the connections between climate change and the kitchen-table issues that they consider to be higher priorities than climate change.”

None of this is evidenced by the data, and outside research calls it into question. The Pew Research Center tried the same thing in 2020, as covered by Climate Realism at the time, claiming that “a majority of registered voters in the United States say climate change will be a very (42 percent) or somewhat (26 percent) important issue in making their decision about whom to vote for in the presidential election[.]” However, once again, the same poll found that out of 12 policy issues, it was at the bottom of the ranking. The question “How important, if at all, are each of the following issues in making your decision about who to vote for in the 2020 presidential election?” was asked of surveyed voters, and even in that line of questioning, the economy, health care, supreme court appointments, corona virus, economic inequality, foreign policy, gun policy, immigration, racial and ethnic inequality, and violent crime all ranked higher.

Burgess admits towards the end of the article that Democrats “risk losing voters when their policies impose economic costs, or when they are framed as anti-capitalist, racial, or overly pessimistic.” This is a death blow to the idea that climate change gives Democrats a significant benefit in elections, because climate policy is consistently economically costly, especially when discussing banning fossil fuels, and polls show that voters are unwilling to spend very much money at all on climate issues. Additionally, the climate narrative is completely pessimistic with constant alarmist claims of impending doom.

In the end, the article about Burgess’ study reads more like wishful thinking than science. It is transparently an effort to use polling in order to influence people into believing that the climate issue is more important in their peers’ minds, so that social pressure will make it a priority for them too. If past polling and the reporting on it are anything to go by, this attempt will likely not succeed either, especially as energy costs rise amid the application of climate policy.