One of the most fascinating features of right-wing political and economic thinking is how utterly inconsistent and illogical it is. Big claims are made about how important freedom is and the need to sweep away pesky legislation. Yet a right-wing government is busy trying to remove the freedom to noisily protest and spending a great deal of time putting in place new laws to restrict your rights.
Equally large claims are made about what a gigantic mistake it is for governments to interfere with markets. Until it becomes evident that interfering with a market will be to the advantage of those who finance the shadowy opinion influencers who dominate much of cyberspace.
Misinformation about rising energy costs
Spreading deliberate misinformation is exactly what’s happening right now with oil and gas prices. For decades, environmentalists have been asking for governments to get serious about reducing the use of fossil fuels. Action has been so slow and reluctant that the UK is still building new homes without solar panels, heat exchange units, battery storage, or electric vehicle charging points.
Now that the price of fuel has risen alarmingly, any reasonable person might expect groups like Insulate Britain to be given large amounts of airtime to explain why their policies would have avoided this problem and why reduced use remains the most reliable solution. Instead, far-right theorists are busy telling us that the real problem is that environmental levies are driving up prices. Pressure is mounting not to get ourselves free of dependence on fossil fuels, but to subsidise their use and to bring back fracking.
It beggars belief that any responsible person would call for the subsidy of fossil fuels through the public purse. The British government would effectively be subsidising air pollution, climate chaos, and the Russian and Saudi Arabian governments. Not exactly the most searingly brilliant use of public money.
Cost of living crisis
There is, of course, no disputing the fact that paying a lot more for heating and for transport at a time when other bills are rising fast is a very real hardship and household budgets need support. But there should also be no disputing the fact that it is a really bad idea to subsidise consumption of harmful products.
The way to help people who are suffering cost of living rises is to try to lower their costs on other essential items, to cut their tax bill, or to raise their income. Any support that can be afforded needs to be targeted intelligently, not wasted on attempts to control prices of commodities that are subject to global economic forces.
Subsidies have a nasty way of gobbling up large amounts of money without dealing with the problem they seek to address. The British government is incapable of changing the price of oil and gas on international markets. Any subsidy it puts in place to deal with a temporary rise in fuel prices might quickly be overwhelmed by further price rises.
The world economy seems to be moving to a new phase of rapidly rising energy costs. The prime driver for this is increases in consumption, as huge increases have taken place to the standard of living of billions of people without being accompanied by a rapid drive towards sustainable lifestyles.
Supply and demand challenges
The move to a global economy initially transferred many factory jobs to places where labour costs were a lot lower, such as the coast of China or to India. When that first began to happen in the last decades of the 20th century, all those cost reductions had the consequence of diving down global prices of many goods and services globally. The result was a long period of low inflation.
Now things are rather different. Billions of people have seen their living standards rise and the new middle classes in formerly third-world countries are starting to buy cars, take foreign holidays and accumulate property and possessions. All that extra consumption is pushing up demand. By contrast, the supply of raw materials and of fossils is relatively fixed and relatively slow to change.
If billions more people consume plastics made from oil, drive petrol cars and regulate the temperature of their homes using gas, then it is most unlikely that the price of oil and gas is going down anytime soon. Rather the reverse.
Unless governments across the world act quickly to subsidise reduced power consumption, to even out the times of the day when power is consumed and to increase storage capacity, there is going to be massive competition to buy supplies of fossil fuels and serious problems of rising prices. Relative to most countries in South East Asia, South America and Africa, the British economy is growing at a snail’s pace. That means other countries are going to have much more financial capacity to buy up supplies and withstand price rises.
It’s time to invest in green technologies for the future
The alternative to this expensive future is to get serious about investing in technologies that don’t require the burning of fossils and don’t come with the risk of steadily increasing climate chaos and plastic mountains.
Instead of sending money to unpleasant regimes like Putin’s Russia whilst subsidising unsustainable lifestyles, the British government needs to be putting all its effort into getting us free from the need to consume oil and gas.
Money is going to be incredibly tight in the post-pandemic, post-Brexit British economy, whoever is in charge of our national finances. Squandering any of that money on subsidising fossilised technologies is just about the single most short-sighted policy it is possible for us to adopt.
Environmentalists have been demanding for decades that serious and urgent effort is put into cutting fuel bills whilst reducing CO2 emissions, via improving home insulation and fitting offices, factories, shops and schools with power generating technology such as solar, wind or heat exchange. With rising fuel costs, those demands just became a lot more urgent and the technologies a lot more cost effective.
Why would anyone want to use government money to subsidise continued use of outdated technology that is known to harm the environment?