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Briefing date 10.08.2022
Booming energy giants face tougher windfall tax as bills set ‘to hit £4,400’

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UK: Booming energy giants face tougher windfall tax as bills set 'to hit £4,400'
The Sun Read Article

The Sun reports: “Booming energy giants face a tougher windfall tax within weeks with bills now forecast to hit £4,400 by next spring. The Treasury is looking to beef up significantly a 25% levy on their record-breaking profits announced in May…The plan could even be unveiled before a new PM is appointed.” It quotes a “Treasury source” saying: “If you look back at what these firms were projected to make and what they actually brought in, it was beyond their wildest expectations. We are looking at options to go further and faster on those profits.” City AM says the chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng “will hold emergency talks with energy sector chiefs today”. It adds: “There has been widespread anger at Shell, BP and British Gas owner Centrica announcing bumper financial results while households struggle to cope with soaring bills.”

Meanwhile, Press AssociationReuters and Bloomberg report on the latest energy bill forecasts showing costs could reach more than £4,200 in January and £4,400 next spring. Separately, Bloomberg reports: “UK households are already a record £1.3bn in debt to their energy suppliers ahead of winter, when bills are set to surge yet again.” The Financial Times has an article on why bills are so high: “Energy bills have started to rise sharply as gas prices shot higher in the past 12 months, driven primarily by Russia’s squeeze on supplies to Europe.”

There is widespread coverage of the candidates to become the next UK prime minister, Liz Truss and Rishi Sunak, with Press Association reporting that Truss has “refuse[d] to commit to more cost-of-living support if she becomes PM”. A second Press Association story says Truss has called the idea of holding talks on the cost of living crisis before the leadership contest “bizarre”. Separately, Press Association reports: “Sunak suggests he could offer hundreds of pounds extra in cost-of-living support.” The Times also has the story. The Financial Times reports Sunak’s comments in an article that notes: “The CBI employers group joined calls by Gordon Brown, the former Labour prime minister, for [current prime minister Boris] Johnson to start work now on a package of measures to help the vulnerable.” It adds that Johnson “has argued that he does not have the authority to draw up new policies, including any measures on the cost of living crisis, ahead of a handover of power to his successor due on 5 September”. The Financial Times reports: “Truss rejects CBI appeal to join Johnson and Sunak to tackle cost of living crisis.” Reuters says Truss “sticks to tax cut vow despite soaring UK energy bills”. The Times has another story titled: “Savings guru Martin Lewis criticises Liz Truss as £4,400 energy bills forecast.” It reports: “Liz Truss has been urged to ditch ‘outrageous’ claims that tax cuts will deal with energy price rises after she continued to hold out against immediate help with bills yesterday.” BusinessGreen says the CBI also called for the government to “fast track wind farm approvals”, cutting the length of time it takes to get offshore schemes through planning from four years to one.

Lawmakers in India pass energy conservation bill
Associated Press Read Article

On Tuesday, India’s lawmakers approved an energy conservation bill in the parliament’s lower house “that would require greater use of renewable energy and force industrial polluters to pay a price for the carbon they emit”, Associated Press reports. The bill sets out a minimum requirement for renewable energy use by companies and residential buildings, spelling out penalties for companies that do not meet these targets, the story says, while for the “first time, propos[ing] a carbon trading system”.

Meanwhile, India will ban firms from exporting carbon credits until the nation meets its own climate goals, the country’s power minister RK Singh told legislators debating the bill on Monday, Mint reports. “These credits will have to be generated by domestic companies, bought by domestic companies,“ the minister is quoted as saying. According to the story “the new law will prepare Indian companies for the looming carbon taxes in export markets”.

Environment ministry officials, meanwhile, told the Hindustan Times that “India’s updated NDC [nationally determined contribution, or climate pledge] is 1.5C compatible” while explaining that “there is no standard methodology to enumerate compatibility with the 1.5C goal because there is a vast difference in methodologies adopted by developed and developing countries”. According to the story, India is expected to submit its updated climate plan to the UN “sometime this week”.

On Monday, the Indian government also tabled amendments to its key Electricity Act, which “proposes radical changes in the power distribution area”, Economic Times reports, including promoting green energy and ensuring state-owned distribution companies “buy Centre-mandated portion of power from renewable sources”. Farmers in Punjab burned copies of the bill and power engineers protested the amendments in states including Tamil Nadu, Telangana and Rajasthan, Indian Express reports. Labour and farmer unions fear that “free power for farmers and Below Poverty Line population will go away eventually”, it says. The “controversial” bill – which seeks the “privatisation of electricity on the lines of communication” services – has been referred to a parliamentary standing committee, amid nationwide protests, Firstpost reports.

Landmark US climate bill will do more harm than good, groups say
The Guardian Read Article

The “landmark” climate bill just passed by the US senate “will lead to more harm than good, according to frontline community groups who are calling on Joe Biden to declare a climate emergency”. This is because, the paper says, the bill “makes a slew of concessions to the fossil fuel industry”. The piece adds: “[S]cientists estimate [the bill] will lead to net [greenhouse gas emissions] reductions of 40% by 2030, compared with 2005 levels.” The Financial Times “energy source” newsletter reports: “New tax credits will transform America’s clean energy landscape…A boom in clean energy projects should follow.” Reuters reports that the bill “exempts most oil industry from methane fees”. The New York Times “climate forward” newsletter says of the bill: “policies to slow global warming can also shield consumers from rising prices”.

In a related comment, the New Republic’s Kate Aronoff writes for the Guardian: “Congress is about to pass a historic climate bill. So why are oil companies pleased?” She says: “The bill is a devil’s bargain between the Democrats, the fossil fuel industry and recalcitrant senator Joe Manchin. Yet it’s better than nothing.”

Separately, Reuters reports that six US coal plants “have announced delays or potential delays to their planned closures, citing concerns about energy shortages”.

Vietnam needs $8bn-$14bn power investment a year through 2030 – minister
Reuters Read Article

Vietnam needs significant investment of up to $14bn a year until 2030 to fund its power plans, Reuters reports, citing its deputy industry minister. The newswire says the country plans to give priority to renewable sources, citing the minister. It adds that Vietnam “pledged last year to become carbon-neutral by 2050” and aims to increase offshore wind capacity to 7 gigawatts (GW) by 2030 and 65GW by 2045. It quotes the minister saying: “Vietnam will not add new coal-fired power plants to its master power development plan, and will only continue coal projects that are under construction until 2030.” The piece adds: “The ministry last month asked the government to remove future coal projects with a combined capacity of 14GW from the master power development plan that is being drafted.”

Europe’s rivers are running dry, disrupting $80bn in trade routes
Bloomberg Read Article

Amid heat records across Europe, the “continent’s rivers are evaporating”, reports a Bloomberg article. It adds that “the Rhine – a pillar of the German, Dutch and Swiss economies for centuries – has dried up to the point of becoming all but impassable at a key bottleneck, stymieing vast flows of diesel and coal”. German chancellor Olaf Scholz’s administration “is concerned shipping snarls could undermine plans to revive some mothballed facilities”, says the piece, noting: “Germany’s rail network faces chronic congestion while shifting to the road isn’t straightforward either.” It adds that the continent’s rivers and canals contribute around $80bn to the EU’s economy just as a mode of transport, according to calculations based on Eurostat figures. German publication Bild carries an editorial where Germany’s Rhine is called a “sad trickle”. It says that “the Rhine loses up to one centimetre of water level every two days on average”. It also adds that Germany’s second largest reservoir is only 21.5% full. “You can see impressively how climate change is making itself felt in our area”, Bundestag member Rainer Keller from the ruling Social Democrats is quoted saying. Deutsche Welle adds that the average depth in the river is around two metres at this time of the year, but it has fallen below a metre in several places. Euronews also has a story.

Elsewhere, Die Welt quotes Scholz saying: “If we don’t manage to stop climate change, then we will no longer have a future worth living in”. Meanwhile, Reuters reports that Germany’s network regulator Bundesnetzagentur, which would be in charge of gas rationing in the event of a supply emergency, has received scores of exemption requests from industry, “reflecting fears of potential production cuts and subsequent losses”. Finally, Der Tagesspiegel reports: “Despite the import ban on Russian hard coal that came into effect on Thursday, German coal importers are not expecting any delivery bottlenecks.” Alexander Bethe from the association of coal importers told the German Press Agency that “coal is available on the world market”.

Bleak winter of UK power cuts feared in worst-case scenario for energy supplies
Financial Times Read Article

The Financial Times reports that ministers have been drawing up “worst-case” plans “for a bleak winter that could involve gas shortages and power blackouts”. The paper explains: “[B]usiness secretary Kwasi Kwarteng has drawn up contingency plans – including the possibility of four days of emergency measures in January to conserve gas – in response to risks posed by extreme energy market disruption as Russia squeezes supplies to mainland Europe. While Kwarteng’s central case is that Britain’s gas and electricity supplies will be sufficient to meet demand this winter, he has modelled for ‘extreme’ outcomes, such as severe weather taking out Norwegian and French energy imports.” Bloomberg was the first to report on the contingency planning, quoting the business department saying the scenario is “not something we expect to happen”. Reuters also has the story.

A related comment for the Financial Times by Nordic and Baltic bureau chief Richard Milne says: “Unusually dry weather has reduced hydropower production [in Norway], leading to pressure to cut electricity exports.” He writes: “That could be a headache for countries from Germany and the Netherlands to the UK that have imported significant amounts of electricity over the years from Norway through cables, even before Russia sparked panic about what could happen this winter.”

China exports 49,000 NEVs in July, with Tesla China shipping 19,756: Association
The Global Times Read Article

The Global Times reports that China’s NEV (new energy vehicle) exports reached “49,000” in July, with “Tesla China exporting 19,756 NEVs”, according to the data released by China Passenger Car Association (CPCA) on Tuesday. The state-run newspaper writes that Tesla’s “gigafactory” in Shanghai was the “first fully foreign-owned auto manufacturer in China”, which has become one of Tesla’s “global centers for exports”, with “more than 160,000 overseas deliveries in 2021”. Xinhua reports that in July, the retail sales of NEVs in China “soared 117% year-on-year to about 486,000 units”, according to the data from CPCA. In the first seven months, the sales of NEVs totaled 2.7m units, skyrocketing by 122% year-on-year, the state news agency notes, citing the data.

Meanwhile, a Bloomberg article, titled “The US-China rift moves climate politics into an era of competition”, says: “With the US playing catchup to China’s enormous spending on clean energy, maybe climate rivalry can be a good thing”. Li Shuo, ​​a climate analyst at Greenpeace East Asia, is quoted saying “the soil in climate governance is multilateralism”, adding: “I don’t think without that soil we will be able to solve climate change”. The story adds that, according to Taiya Smith, a senior associate focused on US-China relations and geopolitical risk at the environmental think tank E3G, the US-China conversations “initiated at COP26 in Glasgow haven’t produced much tangible results”. It quotes Smith saying: “Having the US and China feel like they’re competing to do more on climate change in order to write the new global order is the strongest position the world could be in.”

Separately, the South China Morning Post carries an article on why “the world’s energy use can be fully renewable by 2050 if China goes above and beyond its promise”. Finally, a Xinhua interview writes that according to Li Jing, partner of climate change and sustainability services at Ernst & Young (EY) Greater China, China’s green finance market is in “full swing, thanks to the rapid expansion of green industries and low-carbon transformation of traditional sectors”.

UK issues new 'extreme heat' warning for England and Wales
Reuters Read Article

The UK’s Met Office has issued an amber “extreme heat” warning for parts of the country, Reuters reports, adding that there is “no respite in sight from hot dry conditions that have sparked fires, broken temperatures records and strained the nations’s infrastructure”. The newswire continues: “The warning follows the driest July for England since 1935, when temperatures rose above 40C for the first time, turning a renewed spotlight to the impacts of climate change.” The Financial Times says: “London faces hosepipe ban in weeks as England braces for new heatwave.” The Times and the New York Times also have the story. Sky News reports: “Climate change is making droughts worse as our atmosphere heats up, scientists say.”

In the Conversation, several scientists write under the headline: “Britain’s notoriously wet and cold climate is changing – you won’t like what replaces it.” The piece explains: “So what does that new climate look like? The latest set of simulations project hotter and drier summers plus warmer and wetter winters, with larger changes in summer compared to winter rainfall.”


Europe can withstand a winter recession
Chris Giles, Financial Times Read Article

Financial Times economics editor Chris Giles has a comment article on how Europe can “overcome the effects of a Russian gas embargo” this winter. He points to energy substitution of Russian gas with liquified natural gas (LNG) imports, a “temporar[y] reprieve” for coal power and an expected 15% increase in European renewable energy capacity this year. Also on his list is cross-border energy sharing (“solidarity”): “IMF modelling showed that more cross-border sharing of gas could reduce losses in the worst affected countries significantly, almost halving the hits to the economies of central and eastern Europe at low cost to those allowing gas to flow.” Finally, he calls for energy conservation: “Publicity drives have worked in Japan and Alaska to limit energy consumption in the face of shortages. This would be helped by large increases in the cost of energy to give a significant price signal, offset by lump-sum payments for poorer families. Industry alone should not bear the brunt of Putin’s energy warfare.”

UK: Energy price rises are a looming calamity
Editorial, The Daily Telegraph Read Article

An editorial in the Daily Telegraph says the expected rise in household energy bills this winter “will be hard to absorb” for “most people” and adds: “For many they will be impossible. A serious issue is looming.” It says, with “No 10 afflicted by stasis”, the candidates to be the next prime minister “must have an effective policy response to this looming calamity that is ready to go on day one”. An editorial in the Times says: “Without help for the poorest households, which even now [one of the candidates, foreign secretary Liz] Truss refuses to commit herself to providing, many really will face desperate choices this winter.” The Daily Mirror says in an editorial: “It is unforgivable that zombie Conservatives – in office but not in power – are failing to act while families people are crippled by soaring energy bills.” It continues: “Truss and [rival candidate former chancellor] Rishi [Sunak] demonstrate no sign of understanding the pain inflicted [if bills rise as expected this winter].” The paper adds: “The Tories are not to blame for global prices rocketing after Putin’s invasion of Ukraine but they are responsible for a woeful reaction when a Covid-style rescue package is required.” An editorial in the Sun says: “Ministers must look at drastic options if energy fatcats do not lower prices.” For the Guardian, Labour MP Zarah Sultana writes under the headline: “Britain isn’t just facing a cost of living crisis: it’s facing a bonanza of corporate greed.” She says: “Multinational corporations such as BP and Shell have announced eye-watering profits (nearly £50bn for the oil giants at the last count).” An editorial in the Daily Express says more “energy is needed now”. (It does not explain how or from where.) An editorial in the Daily Mail criticises the “brass neck” of former prime minister Gordon Brown for suggesting further help for families struggling with their bills, adding: “New Labour’s aversion to commissioning new nuclear power stations on his watch is also a root cause of the looming energy gap we have in Britain now.” (This is at best a partial explanation for the decisions of successive governments on nuclear power.) An editorial in the Scotsman on the cost of living crisis is titled: “Liberal Democrats deserve praise for coming up with what sounds like a plan.”

In other commentary on energy bills, the Times chief business commentator Alistair Osborne writes that the government should “axe the price cap” in favour of tighter regulation and “some sort of social tariff for the poor”. Osborne adds: “Of course, securing cheaper energy supply is a long-term game that the government’s failed to play for decades. But what about something else that could have a quick impact: energy efficiency? Not a squeak about this from Truss or Sunak, despite examples across the EU. What of cutting motorway speed limits by 10km (six miles) per hour, as the International Energy Agency proposed in March: a move that’d save 430,000 barrels of oil a day across its 31 member countries? Or running a public information campaign on energy-saving measures? Or making it a national priority to insulate the draughtiest homes of the poor or elderly? Or providing real incentives to install solar panels? All those would save money, fuel and the planet. Not that you can expect our future great leader to have worked that out.”

In the Daily Telegraph, associate editor Ben Wright says: “There is little that can be done to increase the UK’s energy supply or storage by this winter. The next prime minister’s first priority will therefore have to be preparing an emergency programme to reduce demand. They will also need to draw up a support package for households that are unable to afford energy bills that are poised to rise from stratospheric to astronomical when the price cap is lifted again in October.” Also in the Daily Telegraph, world economy editor Ambrose Evans-Pritchard argues for “a fair, tapered mechanism” offering “direct support” to those most in need. He adds: “At times of extreme stress you need socialist redistribution to save democratic capitalism.” For the Guardian, columnist George Monbiot writes under the headline: “Britain faces crisis upon crisis, and our leaders are absent. This is how a country falls apart.” He says: “Inflation, energy bills and stagnant wages could mean destitution for millions. But Conservative ideology forbids offering answers.” Referencing Carbon Brief analysis from January, Monbiot notes how previous government decisions to “cut the green crap” saw the number of lofts being insulated plummet. In contrast, he points to examples of expanded support for building renovation in other European countries, adding: “We face a choice not only between fossil fuel profits or a habitable planet, but also between fossil fuel profits and habitable homes. Johnson, Truss and Rishi Sunak have chosen their side.” For the Daily Mail, columnist Alex Brummer says “I believe there are reasons for a sliver of optimism” on energy bills. He says prices “could peak in March 2023”.

How the net-zero sceptics' medieval arguments are being overwhelmed by a very modern reality
James Murray, BusinessGreen Read Article

A comment from BusinessGreen editor James Murray says: “Critics of the net-zero transition are trying to blame it for the UK’s economic woes, but their arguments are looking increasingly detached from the modern world.” He continues: “The arguments against the net-zero transition continue to be toppled, overwhelmed by economic, geopolitical, technological, and atmospheric reality, and undermined by their own rickety internal contradictions. And yet, so complete is their disconnect from the real world that these zombie arguments continue to stumble across the political landscape desperately looking for an issue, any issue, to attack. Soaring energy bills? Blame net-zero. Boris Johnson’s downfall? Net-zero’s fault. A decade of flat-lining productivity and anaemic wage growth? You guessed it, net-zero’s the cause. Not one of the politicians and media commentators seeking to equate net-zero with all the world’s ills ever explains precisely how it has caused these bad things to happen.”

Also in BusinessGreen, the Tony Blair Institute for Global Change’s Daniel Newport writes under the headline: “Net-zero is under threat from division and defeatism – climate progressives must take heed.”

Meanwhile, for the Daily Telegraph, climate-sceptic columnist Allison Pearson writes under the headline: “The Tories must abandon this vanity contest and act now on energy prices.” She writes: “The net zero agenda, the pet project of a pious panjandrum class, has led to a grotesque failure of energy security…A conscious decision was taken to rapidly reduce the supply of fossil fuels before green renewables – ‘unreliables’ as they should be known – had enough time to be proved viable.” (The UK has a legislated target to “maximise economic recovery” of its fossil fuel resources; renewables generated 36% of the country’s electricity over the past year, only fractionally lower than the 38% from gas.) Also in the Daily Telegraph, failed MP-hopeful Nigel Farage incorrectly writes: “Any serious state action plan would immediately remove the extortionate 25% surcharge on electricity bills for social and green commitments and move to cut five per cent from VAT, whilst slimming down the state to pay for it.” (Green levies make up less than 5% of energy bills and less than 10% of electricity bills.) He also rails against the “the self-inflicted wounds of net-zero fanaticism underpinning the [energy] crisis”. (Soaring gas prices due to Russia’s invasion of Ukraine are behind 95% of the increase in UK household energy bills. Farage has previously said he “admires” Russian president Vladimir Putin.)

In the Guardian, executive director of the Institute for Public Policy Research Carys Roberts says: “While Biden is tackling inflation and shaping a green economy for the US, Britain is being left behind.” She writes: “Truss, widely seen as the frontrunner, has fallen back on outdated tropes of financial support as handouts and has virtually nothing to say on how she would achieve net-zero, both for its own sake and as a response to the cost-of-living crisis.” Roberts concludes: “Biden and the activists and researchers around him are ambitiously forging a new kind of economic policymaking that seeks to rapidly decarbonise, reduce pressures on family purses through collective provision, and tax wealth and profits to fund this and quell inflationary pressures. The UK government – whoever it is headed by – should take note of the new economics rather than be left behind.”


Amazon fires in the 21st century: The year of 2020 in evidence
Global Ecology and Biogeography Read Article

Most “anomalously high fire occurrences” in the Amazon over 2003-20 were primarily driven by agricultural fires and deforestation – not by drought – new research finds. The authors used satellite data to assess the number of fires and yearly burned area in the Amazon over 2003-20. They find that Brazil and Bolivia saw 70% and 15% of annual active fire detections in the Amazon, respectively. The study finds that roughly one third of annual burned area in the Amazon consisted of agricultural lands. “In 2020, the total burned area in the Amazon was the greatest since 2010, and the ratio of burned area per active fire was the second greatest of the time series, despite a much lower extent of areas with anomalously high water deficit in comparison to the 2015–2016 megadrought,” the authors add.

Rapid 20th century warming reverses 900-year cooling in the Gulf of Maine
Communications Earth & Environment Read Article

New research finds that over the last century, warming in the Gulf of Maine – located in the western North Atlantic – has been “more rapid than almost any other 100-year period in the last 1000 years in the region”. The authors combine proxy data from shells with climate models to assess temperature trends over the Gulf of Maine over the past 1000 years. They find that the region “underwent a long-term cooling over most of the last 1000 years, driven primarily by volcanic forcing and North Atlantic ocean dynamics”. The region then began warming in the late 1800s due to greenhouse gas emissions and changes in western North Atlantic circulation, they add.

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