Net Zero Target is Facing Lack of Technology, Nations Not Ready and The Inflation It Will Cause.

“If I had to put my money on a single factor that was going to push up costs in the years to come, I would say it was the environmental emphasis and in particular the drive towards net zero,” said Roger Bootle, founder of Capital Economics Ltd. and author of the 1996 book `The Death of Inflation.’ “I think this is going to lead to a whole series of costs and price increases across the economy.”

“Massive spending on new plants, technologies and processes could all feed through to prices. Manufacturing low carbon glass adds about 20% to the cost, according to Nippon Sheet Glass Co., which supplied the glazed exterior of The Shard, London’s tallest building. That’s a squeeze companies have to either swallow or pass on to customers.”

“Households are also going to have to spend. In the U.K., the government is drawing up plans to replace conventional gas boilers with more environmentally friendly — and more expensive — heating systems.”

“In addition to investment costs, the transition is fueling a huge demand for key raw materials. Copper for example, vital for power grids and wiring for wind turbines, is up more than 60% in price in the past year”.

“Steel is another case in point. The metal, used in everything from ball-bearings to bridges, is very carbon intensive to produce, normally relying on coal-fired blast furnaces. Greener production routes that use hydrogen or biomass exist but are currently far more expensive.” 

“That situation could worsen, with the IEA warning last month of a “looming mismatch” between “climate ambitions and the availability of critical minerals” such as copper, nickel, lithium and cobalt.”

“If our solution is entirely just to get a green world, we’re going to have much higher inflation, because we do not have the technology to do all this, yet” BlackRock Chief Executive Officer Larry Fink said this month. “That’s going to be a big policy issue going forward.”     (BlackRock is using its financial clout in an attempt to force everyone in to going for Net Zero.)

“And there’s another piece to the puzzle. As green-minded investors tell oil companies to scale back drilling, the resulting supply squeeze is seen pushing up oil prices before economies are anywhere near phasing out fossil fuels.”

In summary the Bloomberg posting says: we are not ready yet; we don’t have the technology; and there will be inflation.

Add to the above, that China, India and most all the currently undeveloped nations are not going to include themselves in this rush to curb fossil fuel use, but rather are going full out building facilities using coal.   Their objective is to bring their citizens up to the living standards of the developed nations.

The result of the China, India and the other undeveloped nations increasing CO2 emissions will negate the developed countries efforts to decrease their CO2 emissions.  China makes promises about reducing fossil fuel use but then dismisses the promise when the time comes.

cbdakota