More panic is exactly what the world needs right now. Let's thank the IPCC and the EU.

The International Panel on Climate Change released its second report from the latest batch at the end of February. The report, to be followed by a third one because bad things come in threes, contained zero surprises. The sky is still falling and it’s the oil industry’s fault but what’s new is that the sky is falling faster than previously expected. That is, even faster than the last time IPCC said it was falling faster than before… It’s an ever-accelerating apocalypse loop.

Based on all the reports that are getting wide publicity these days, things are going from bad to worse to worst and worstest. Based on things like satellite data — and other data as well, such as forestation trends for the past few decades, for example — this is not true but that data is being disregarded because, I imagine, it does not contribute to the panic. We need to panic in order to act: this seems to be the message from the environmentalist lobby.

The problem with this argument is that panic does not make for sound rational decisions that yield the desired results. What it makes for is rash decisions, which tend to have a boomerang effect. In this case, the boomerang effect may turn out to be particularly strong.

Climate and emissions panic pushed the European Union and the UK to add build huge amounts of wind and solar installations. Last year, wind turbine additions in the European Union hit a record… and then the wind stopped blowing. Amusingly, the wind power industry is calling for even more wind power capacity because record or no record, this is nowhere near enough. A grim warning was, accordingly, communicated.

“To reach its 40% renewable energy target for 2030, the EU needs to build 30 GW of new wind a year,” said Giles Dickson, chief executive of WindEurope, the industry body. “But it built only 11 GW last year and is set to build only 18 GW a year over the next five years,” he went on to add. “These low volumes undermine the Green Deal. And they’re hurting Europe’s wind energy supply chain.”

I’m sure this is true. It must be the low volumes of wind power additions that are pushing up the price of virtually every basic metal that is being traded globally. It must be the subpar enthusiasm of the business world in Europe that is responsible for this shameful undershooting of Green Deal goals.

None of this, I’m sure, has anything to do with projected demand growth in the metals industry precisely because of the Green Deal goals. None of it has anything to do with falling profit margins and rising challenges in the subsidy department.

The recent sanction wave against Russia will also have a grave impact on metal markets but, I’m sure once again, the blame will be laid at Russia’s door rather than the doors of people making decisions in a state of panic because they are clearly incapable of long-term planning even when all the signs that they need to plan for the long term are right there for everyone to see.

Since I mentioned Russia, I can’t not mention the recent U-turn Germany made on energy policy. On the face of it, Germany’s 180-degree on coal and nuclear — and to a lesser extent gas — undermines the argument that decisions made in a panic are bad ones. On a deeper level, it confirms it. Germany should have been propping up its gas reserves already.

Germany should have been discussing longer lives for its coal and nuclear plants instead of shortening them even more already. Why? To reduce its dependence on foreign commodities. But no, Germany was happily floating on the waves of the energy transition until Russia invaded Ukraine and suddenly energy security became a political concern: the issue that needs to be the top of every national government’s agenda only came to the top in Germany when actual disruption of supplies became a clear and present danger. In other words, Germany’s leadership panicked.

The EU as a whole is panicking badly, perhaps because it has finally realised that the timing for higher energy costs couldn’t be worse. Economies are still recovering from the world of the pandemic fallout, rate hikes are on the way and inflation is at historic highs. Yet reputational pressures have pushed the EU to act in what would effectively be its disadvantage, with the help of Washington, and acting it is, consequences be damned.

The problem with consequences is that damned or not they don’t simply vanish when you don’t want to face them.

The authors of the IPCC reports are obviously not concerned with the implementation of any recommendations they make and any challenges this implementation might involve, such as, you know, extreme costs of energy. These costs were just this week addressed by a House of Lords committee report, which concluded that Boris Johnson’s government had failed to explain to those who will pay for the transition how exactly they would have to pay for it and, more importantly, just how much they would have to pay for it. It’s not much different with other net-zero-happy governments, either.

The head of the European wind power association is obviously not concerned with these same challenges because they are not challenges for the industry. They are challenges for the end consumer of the industry’s products. What the industry is concerned with is regulatory hurdles because they are preventing them from building more wind turbines and making more money from them, even if profit margins in wind power are on a marked decline.

The leaders of the EU, meanwhile, has stepped up the urgent renewable shift rhetoric — a panic-causing rhetoric — even though I used to think stepping this rhetoric any further up was impossible. Now, the argument for renewables boosting energy security is being trumped up after spending years in the number-two spot after emission reduction.

In a sense, this is a good sign because energy security is indeed much higher when you produce your energy locally than when you import it. In another sense, for Europe, alas, the transition would amount to nothing more than switching one dependence for another: from fossil fuels to metals and minerals. Yet this topic needs its own analysis, so I won’t go into it here.

To sum up, the so-called developed world is currently in a state of panic because we are witnessing a war between a nuclear power and a country that is being financially and materially supported by several other nuclear powers; because there is talk about more shortages of everything on top of the already existing shortages of everything; and because, honestly, we never had time to get back our bearings from the pandemic and now we have a war on our hands.

It is on top of all this that the latest bout of climate panic comes to make for panic quadrupled. No wonder the EU’s “plan” to wean itself off Russian oil and gas reads like something a grant-eater from the early 2000s in Eastern Europe might come up with as a “project” to score EU financing. The silver lining is that such a plan could never work in this form. The cloud inside the silver lining is that life is going to get a lot harder and those in decision-making position may not be able to lay all the blame for that at Putin’s door this time.