The True Costs Of Net-Zero Are Becoming Impossible To Hide
Authored by Mike Shedlock via mishtalk.com,
Our net zero lesson of the day is from the U.K. but it applies universally. It’s increasingly difficult for Biden and the EU to hide the true costs of net zero mandates.
Britain Boiler Tax Scandal
In the latest green fiasco, UK Prime Minister Rishi Sunak created a quota system that would require manufacturers to sell more heat pumps to households.
Instead of meekly complying with the regulation as happens with Biden administration EPA announcements, manufacturers let consumers know they would have to pay up whether they installed the heat pumps or not.
Manufacturers correctly dubbed the scheme a “boiler tax” and consumer outrage killed the regulation.
Britain Dumps Another Net-Zero Gimmick
The Wall Street Journal reports Britain Dumps Another Net-Zero Gimmick
Most English households use natural gas to fuel the cabinet-sized boilers that provide central heating and hot water, and forcing them to adopt electric heat pumps (ultimately powered by renewable energy) is part of the government’s net-zero agenda.
An earlier proposal to ban gas-boiler sales after 2035 proved politically toxic as households balked at the cost of replacing their reliable natural-gas boilers with more expensive, untested heat pumps. So politicians resorted to subterfuge, imposing a sales quota on manufacturers. Starting in April, heat pumps would have to replace 4% of annual boiler sales or companies would pay a £3,000 fine for each “excess” natural-gas boiler they sold.
Worcester Bosch, Britain’s leading manufacturer, warned last year that the proposed quota would add up to £300 ($376) to the cost of natural-gas boilers, which retail for £1,000 and up.
A novelty is that industry fought back against the mandate. Manufacturers were transparent about passing the cost of the heat-pump fines to consumers, calling it a “boiler tax.” Mr. Sunak’s government tried to blame the companies for anticompetitive behavior. But when voters realized they’d be stuck paying for heat pumps even if they didn’t buy them, it was game over for the rule.
Biden’s Wind Tax
In the US, manufacturers have yet to stand up to idiotic Biden regulations, mostly because they have received tax incentives that hide the true costs.
But the actual costs are difficult to hide now that subsidies won’t hide the true cost. So Biden’s schemes are unraveling.
Bloomberg reports a 48% Surge in Costs Wrecks Biden’s Much-Lauded Wind-Power Plans
When President Joe Biden in 2021 laid out a target of deploying 30 gigawatts of offshore wind capacity during the next nine years, the plan was deemed bold and ambitious. Best of all, many saw it as within reach.
Two years later, the industry has another word for it: impossible.
After a cascading series of setbacks, from sobering cost revisions to billions in possible impairment charges, the US offshore wind industry’s 2030 generation goal now looks further away than ever.
Cancelled in New Jersey
Offshore wind is stumbling over costs. EnergyWire asks Can Biden Save the Industry?
The Biden administration is facing increasing pressure to take action to bolster the offshore wind industry after a major project was canceled in New Jersey on Tuesday, although options appear limited to ease financial hurdles facing developers.
Developers are taking billion-dollar losses due to the industry’s exploding costs and the dropping value of assets. Two companies in Massachusetts walked away from deals that they said did not cover costs. New York regulators rebuffed attempts to renegotiate contracts with wind companies for higher prices, casting uncertainty over the future of several wind farms off the state’s coast. Meanwhile, the supply chain of businesses to support offshore wind construction has expanded too slowly to meet the needs of proposals.
But the starkest sign of a troubled sector came Tuesday, when Ørsted, the largest offshore wind developer in the U.S. market, said it will abandon its Ocean Wind project. The two-phased wind array off the Jersey coast was one of just five major offshore wind projects approved in the U.S. — all by the Biden administration. Along with creating more uncertainty for the industry, the cancellation is raising speculation over whether other projects will follow.
Defending the administration’s record, White House spokesperson Michael Kikukawa said Biden has “used every available tool to advance the growing American offshore wind industry.”
Outright Lies Are Biden’s Biggest Tool
Without a doubt, Biden has “used every available tool to advance the growing American offshore wind industry.”
His biggest tool is a pack of lies starting with a claim that these projects are cheaper and will pay for themselves.
Downgrades and Write Offs
Fitch Ratings downgraded Eversource Energy and its NSTAR Electric utility subsidiary from stable to negative, partly on the grounds that the company may struggle to unload three offshore wind projects it had wanted to sell.
Anja-Isabel Dotzenrath, BP’s head of gas and low-carbon energy, told attendees at a London conference that the U.S. offshore wind sector was “fundamentally broken” and in need of a reset.
BP has taken a pretax impairment charge — a devaluing of an asset — of $540 million due to its New York offshore wind projects.
Norwegian oil and gas giant Equinor said last month it was taking a $300 million impairment in its U.S. offshore wind portfolio. Ørsted could take a $5 billion hit.
Even with massive subsidies, these projects are not economical. All they do is replace one form of energy with another at increasing costs that must be born by someone.
Let’s accurately label this fiasco for what it really is: A mandate to use wind, then a wind tax to support it.
Biden Backs Off Gas Stove Crackdown
Fox News reports Biden Backs Off Gas Stove Crackdown After Widespread Pushback
On Feb. 1, 2023, the DOE issued its original proposal which was set to take effect in 2027 and impact a staggering 50% of current gas stove models. The DOE argued it is required to put forth such regulations under the Energy Policy and Conservation Act which mandates energy efficiency rules while not harming consumer choice.
In response, Republicans and consumer advocacy organizations blasted the Biden administration for curbing consumer choice and pushing a regulatory regime that would lead to higher prices. They also criticized the DOE for attempting to force Americans to electrify their homes in an effort to reduce emissions and fight global warming.
“President Biden is committed to using all the tools at the Administration’s disposal to lower costs for American families and deliver healthier communities — including energy efficiency measures like the one announced today,” Energy Secretary Jennifer Granholm said in a statement [after the administration backed off the proposal].
Gas Stove Tax
Let’s label the Biden administration proposal for what it really is, a tax on gas stoves.
Biden then had the audacity to brag about lowering costs when he backed off the proposal.
Tax This, Tax That, Tax Everything
Up and down the line, we need to label the green regulations and mandates from this administration for what they really are: Across the board tax hikes.
And since these these taxes apply to everyone, not just the wealthy, they are very regressive in nature.
We have wind taxes, heat pump taxes, gasoline taxes, stove taxes, air conditioner taxes, internal combustion engine taxes, etc., all of which are mislabeled in ways to sound like they are positive things.
Cap-and-trade is nothing but a giant tax scheme in which manufacturers have to pass on the costs.
Industry is fighting back in the UK and farmers are fighting back in the EU. Republicans need to carry the regressive tax hike message into the upcoming US election.
Inflation Pressures Everywhere
Please note that all of these mandates purposely increase costs. They are all inflationary.
Nearly everything this administration does is inflationary. The same applies to every regulation in California.
Minimum Wage Hikes
On February 4, I noted Cost of Running a McDonalds Jumps $250,000 in CA Due to Minimum Wage Hikes
Impact on Joe’s Grill and Susie’s Diner
Don’t think for one second that these wage hike only hit wealthy franchise owners. For starters, many franchise owners are deep in debt to buy that franchise.
In addition, how are Joe and Susie going to get help at $16 when McDonalds is paying $20?
The answer is they won’t. Effectively, $20 is the new minimum wage in California, and not just restaurants.
Big Explosion of Government and Social Assistance Jobs
President Biden is bragging about job growth in 2023. But he doesn’t say where those jobs are.
Data from the BLS, chart and calculations by Mish.
On February 5, I noted a Big Explosion of Government and Social Assistance Jobs in 2023 to Help Migrants
A surge in immigration led to a surge in need for government and social assistance jobs at taxpayer expense. City and local governments are under financial strain.
Under Bidenomics policy, we have created hundreds of thousands of jobs that are of net negative benefit to US taxpayers. That’s what Biden is really bragging about.
Fed Chairman Tells 60 Minutes US Fiscal Path is Unsustainable
Fed Chair Jerome Powell tells 60 Minutes that it’s “urgent” the US address its “Unsustainable Fiscal Path”
Please consider Fed Chairman Tells 60 Minutes US Fiscal Path is Unsustainable
The Fed normally does not comment on fiscal policy, but Powell did. “Debt is growing faster than the economy. So, it is unsustainable. … You could say that it was urgent,” said Powell.
I list 15 key takeaways from the interview. Click on the above link for discussion.
It’s not just Democrats causing this problem. Republicans are in on the fiscal madness. For example, please see 169 Republicans Vote to Expand Welfare, Bill Heads to Senate
Inflationary Tariffs
Also consider Help for the Heartland? Trump Tariffs Failed the Mission
Since tariffs are a tax on consumers, Trump is proposing a huge tax hike. Biden is on fully on board.
China will retaliate and so will Europe. Costs will soar across the board. More inflation is on deck. Irony abounds. How can tariffs help both candidates?
Is Inflation Transitory?
Biden is bragging inflation is coming down. Economists have fully embraced the softest of softy landing. And Powell told 60 Minutes he thinks inflation is transitory.
I keep asking: Is inflation transitory or is this recent decline in the rate of inflation what’s transitory?
To help decide, please check out some of the links above.
Then factor in Biden’s regulations, the end of just in time manufacturing, a surge in immigration, and trade wars with China no matter who wins the election.
Here’s my concern: How Much Inflation Is Baked in the Cake?