Central bankers around the world claimed the Net Zero transition away from fossil fuels would lower inflation, but new analysis from top financial services firm Nomura has found it is in fact driving it. The Telegraph has more.
It was presented as a new utopia. Clean abundant energy, available to all. Millions of new jobs, flourishing economies and a cleaner, greener world. And all while cutting bills and freeing up money spent on light and heat to be used elsewhere.
However, as the transition to Net Zero speeds up, and wind and solar power replace oil and gas, it is becoming increasingly clear that prices are not coming down fast. Instead experts fear that going green will make the inflation crisis worse – in a fresh blow to the credibility of a string of central bankers who have predicted the opposite.
“The green transition will be expensive and, if tax collection does not keep up with increased spending, there will be an expansionary fiscal impact that could add to economic demand relative to supply, and thereby inflation,” says George Buckley, U.K. Chief Economist at Nomura.
While investment helps to drive innovation and increase productivity, which helps to lower price pressures, it also puts “an increasing strain on limited mineral supplies”, he adds.
The cost of this should not be underestimated. Wind turbines, solar panels, electric vehicles and batteries are all made with rare earth elements and critical metals.
All of this is likely to confound the central banking elite, who have called for a swift end to fossil fuels.
“The Net Zero transition is disinflationary,” Mark Carney insisted in a speech last year. The former Governor of the Bank of England doubled down on this assertion last month, admitting that while prices would probably rise for about a decade in pursuit of Net Zero, going green will ultimately help to keep inflation low and stable.
“Clean energy is cheaper. It’s cheaper today, and it will be cheaper still tomorrow, and it will be less volatile than the system that we have,” he told the Telegraph in an interview.
Christine Lagarde, President of the European Central Bank, agrees. “Extreme weather events can damage infrastructure, ravage harvests and disrupt supply chains,” she said in a speech last year.
“This can push up prices for key products and thereby fuel inflation, making it tougher for us to keep prices stable. By contrast, reinforced efforts to shift our energy supply towards more economical renewables should ultimately help to slow inflation.”
Worth reading in full.
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Right for them !! Wrong for us !!
I struggle to believe that central bankers care about inflation one way or the other. It doesn’t affect them. For people in their line of work there no longer seems to be any penalty for failure at the task they pretend to do, just for failure to toe the party line.
Why, sometimes I’ve believed as many as six impossible things before breakfast.
Since it is implausible that even a central banker would fail to see that Net Zero would be costly in the short term, we have to consider the possibility that they wanted inflation, whilst saying they wanted to reduce inflation.
Governments certainly want inflation in order to reduce the cost of their unrestrained borrowing (at our expense). But since we already know a whole new system based on CBDCs is planned, then driving the old system to destruction (a) to give an excuse for the necessity for a new one and (b) to cash in their chips from the old system as the people wheel their money round in virtual wheelbarrows, transferring their wealth to the new system and their tangible assets (ie most of the assets in the Western world) to their islands in the sun.
Central bankers know that inflation is theft, but since they and their chums are the ones with the swag, Net Zero is as much part of the plan as COVID and the the Bankers War in Moneylaunderingkraine.
https://twitter.com/pauldbowen/status/1678294430497775616?s=48&t=eyz8PPdeLnl5noHG9QrVlQ
Plod at its finest money wasting best.
You could not make it up.
I think we should start a “Heterosexual month” with two gender flags and identifying as male or female with pronouns such as Mr , Mrs ,Miss etc.
Its should be a celebration of normal sexual relations and at the same time should any of the ABC people get upset we should claim our rights as normal !!We would expect the law to be o our side ..lol
Any takers
Today’s central bankers are a mix between government stooges and economically totally incompetent ideologues.
They think men can get pregnant, money printing is not inflationary but climate change is and have no idea about supply side issues and how interest rates really impact inflation.
https://www.unz.com/proberts/the-federal-reserve-has-been-a-disaster-for-america/
Let’s hope the gold-backed currency of the BRICS lifts off and teaches and disciplines them for good.
https://www.zerohedge.com/markets/gold-standard-back-brics-intro-gold-backed-reserve-currency
Central banks are already buying gold like there was no tomorrow (whilst manip[ulating the price down, of course, to put the rest of us off).
They know the system is collapsing, and are quietly creating their own stash for when it does.
Perhaps Mark Carney et al should be sued in a class action for every penny spent on wind & solar, as it was clear to a large number of us ‘onlookers’ that these so-called renewables were never going to be cheaper, said so, but we’re ignored, even castigated as ‘deniers’.
Since when have Central Bankers been (a) Physicists (b) Engineers and (c) had the right to charge the costs of their Unicorn-thinking to ordinary people when they have no mandate whatsoever to do so?
Their so-called right has been donated to them by politicians who are more stupid
I think you should have started with (a) Economists ….
Never has the cockney rhyming slang for bankers been more appropriate
Not necessarily. Imho the Telegraph article is largely focused on irrelevancies and stirring up a traditional left-right battle based on personal prejudices.
What central bankers are interested in is flows of money and the value of that money. Since the 1970s, the world reserve currency, the US dollar, has effectively been backed by oil. Major oil producing nations, notably the US and OPEC, agreed only to sell oil in US dollars and control the supply of that oil thereby regulating the value of the US dollar and contributing to US economic dominance by obliging countries to hold and trade in US dollars. Political leaders of oil producing countries who tried to do otherwise frequently found themselves dying in suspicious circumstances of with US troops on their doorstep.
The NetZero agenda appears to be primarily about suppressing local energy production to maintain dependence on the big oil cartels and the US dollar (I would argue ‘conservative’ opposition to renewables is also part of that agenda) whilst ushering in additional controls on money flows in the name of ‘combatting climate change’ such as envisaged through the Central Bank Digital Controlled truck system (CBDC), climate lockdowns, Carbon taxes and credits, etc. Such controls would enable central banks to print as much money as they liked without undermining the source of their own power by creating inflation, thereby avoiding the consequences of decades of fraud and irresponsible lending. The price would of course be loss of personal freedoms and market competition, not to mention the fact that such extreme levels of centralized control have never worked in the past and are unlikely to do so no matter how ‘digital’ one makes them.