Main Edition
US
FR
July 11, 2022 - 3:48pm
The starting point of any economy, according to financial analyst Louis Gave, is ‘energy transformed’. Without energy, producing anything becomes impossible. “The West has had 20 years of extreme good luck on this front”, he told Freddie Sayers in the UnHerd studio.
Between 2000 and 2011 China multiplied its coal production sevenfold and in 2011 the US shale revolution produced another 10 years of cheap energy. During these two decades, the American economy soared, but it did not last. The shale revolution started running on fumes, Gave tells us, and at the same time the West entered into two-front war.
On one front are sanctions against Russia responding to the invasion of Ukraine. In February, the EU cancelled long-term, favourable contracts which sent the West into an unprecedented energy crisis. Gave puts the hastiness of these decisions down to the pressures of social media activism, or what he calls the ‘something must be done’ attitude: “Confiscating the Russian oligarchs assets, that’s something. Tearing up long-term gas contracts, that’s something.”
At the same time, on the other front, the effects of the West’s war against climate change are being brought into sharp relief. In 2000, 86% of world energy needs were met by carbon. According to Gave, the West decided that climate change was such an existential threat that it “made it impossible to invest in carbon and poured money into solar and wind” instead. Much of the EU and US even forwent nuclear power, which was the reliable alternative.
Now both fronts are being fought at once, the West seems to have created the perfect conditions for its own economic crisis. For financial analysts like Gave, the real origins of the West’s economic downfall are almost entirely self-made.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
SubscribeRecently there was an article here describing how the BRIC countries were planning a new reserve currency to challenge the dollar. It seemed to me that with the west distracted by climate change and what their pronouns are, what the definition of a woman is and so on then those BRIC countries might be thinking – “Our time has come”
I really don’t know how people in countries outside of Europe and North America view climate change. My guess is that for many of them Climate Change is way down on their list of things to worry about. There seems to be an arrogance in climate change activists here that since we are the west and leaders of the free world we are obviously right and the rest of the world should follow but I think they are going to be disappointed
I agree fully with your first paragraph but must take issue with your second..
We in the temporate northern hemisphere have little to worry about as regards our own climate by comparison with many (if not most) of the (non-Western) southern hemisphere where climate change will be disastrous!
But perhaps your not entirely wrong as many of its govts are corrupt and desperate people will look to short-term solutions (and who’d blame them).
It seems to me that our main interest in climate change is help southern nations fight climate change at home or else make room for a couple of billion refugees.
I believe your hunch is correct. Outside the West people does not care as much. But even if you look at the West, you will find that poorer people cares about it less as they have more immediate issues to deal with. You don’t have time to ‘save the world’ when you are trying to save yourself.
Fantastic interview. I wish it was longer and addressed the question of a long term plan for getting out of this mess (I realize Gave made some recommendations about energy policy).
As Freddie noted at about minute 34, this interview was not about the technical details of economics in general or energy policy in particular. It was about politics; the loss and transfer of economic power from West to East.
I’ve long been disappointed that Unherd doesn’t focus more attention on economics for the very reason Freddie mentions. We’re about to see a rebalancing of global power away from the West. It’s a story much bigger than the culture wars. I hope Unherd now spends more time discussing this story and a little less time obsessing about trans issues.
The culture wars are part and parcel of the same phenomenon. Decadence.
But trans issues are part of “War on the West” by neoMarxists running our institution to divert attention of woke, mid-educated morons from falling living standards due to globalisation and mass migration.
Excellent interview! Great job UnHerd.
The topic was excellent, Louis Gave knew exactly what he was talking about, and the questions were deep and meaningful.
Thank you very much.
This kind of interview is really why UnHerd is so good.
The West created the cult of carbonphobia.
The Hebrew Old Testament had the parting of the Red sea and Jonah and the whale and Noah and the arc, etc. as its equivalent of scenarios acceptable to frighten and command loyalty.
The carbonphobic cult has scenarios of climate apocalypse with only 10 years to save the planet from destruction. In both cases the cause is the sinfulness of bad people, but in the Old Testament the destruction was done by God, so we could be saved by obeying God’s will.
In today’s climate apocalypse the end of humanity is not caused by an external cause but by us, so we can only be saved by disinvestment from fossil fuels as determined by ESG reporting.
The developing nations like China and India are atheists of this cult and won’t take the actions that this climate theology requires. And as the actions taken create escalating harm globally the cult will eventually have to be abandoned, via the U-Turn back to fossil fuels based on real events, not scenarios based on centuries hence.
Intrigued by your reference to ‘scenarios based on centuries hence’ – the most recent IPCC report is ‘based’ (by which I think you mean ‘scenarios setting out consequences far in the future of actions taken today’) on the near-future, this-century consequences of failure to act by 2025. The ‘cult’ is in fact the very large, very carefully monitored and peer-reviewed and very well-informed group of climate scientists, engineers, statisticians and data analysts who prepare the IPCC suite of reports. But on UnHerd, as we know, political punditry and appeals to ‘realpolitik’ trump the analytic approach. Your reference to a u-turn back to fossil fuels ‘based on real events’ sounds to me like the fellow falling off the fifty-storey office block who’s going quickly downwards past the 25th floor, still checking his emails and claiming everything’s looking just great so far. His velocity and momentum, as analytical Newton knew, are increasing as he falls, so it’s getting harder to stop the fall as every floor goes by.
I agree that the scenarios laid out in the IPCC are bad, but I think that the challenge in response is that under our current trajectory they are not apocalyptic.
But what seems to be ignored is that there is a reason that people use fossil fuels, because they are cheap and reliable. By reducing the use of those fossil fuels, there seems to be a lack of acknowledgment that there are costs now as a result. And those costs now will actually result in ‘hidden deaths’ now as a result of poverty lack of energy etc. I could be wrong, but for the developing world, the cure looks far worse than the disease (please see Sri Lanka for a live example).
For sure: short term teething problems and yes hidden deaths but deaths occur in a myriad of ways. You need to look at the longterm effects and most of all on the runaway (irreversible) risk which I believe is very real.
I don’t know why this post is unpopular! I’ve read it twice and cannot see anything but good sense in it.. what am I missing?
Because this claims of immediate disaster had been made for the last 50 years.
But even people like David Attenborough are jumped on by green mob when they mention real reason why planet might suffer: overpopulation in Asia and Africa and their use of fossil fuels.
Strangely, green blob never protest in China and India?
You may want to review this article on the plausibility of those scenarios..
https://rogerpielkejr.substack.com/p/two-things-all-esg-investors-should
Science cannot predict tomorrow’s weather accurately. I hardly think that we can predict the climate 100 or even 10 years out. We’ll see what happens in the next 10 -12 years, which is when the world should end, according to the UN’s latest report. And according to the continued building of posh high rise condo’s in these areas, apparently the very wealthy real estate investors don’t believe this tosh either. But I realize I’m arguing against a climate change religious movement, here.
No idea how old you are but all this calls to act within 10 years then it is irreversible have been made for at least 50 years.
We are still here.
All supporters of “global warming theory” completely ignore main reasons for many problems: overpopulation in Asia and Africa and unwillingness of countries there to stop use of fossil fuels.
So even if West stop using non green energy completely, it would make no difference to global warming.
Centuries hence? What? The damn apocalypse is upon us silly! Next weekend in England will prove that! Expect 40°C and then you’ll see..
Ironically, I think he has the right idea, but 180 degrees backward.
We should be friends with Russia so as to counterbalance China.
It makes far more sense culturally and geostrategically. That way China continues to remain starved of commodities and defense costs in Europe can be dramatically cut.
There was a window of opportunity to do this a few years ago. Before the rtinyhats, with their sights set on a new Khazaria, decided to screw the pooch.
Louis Gave is one the very very few Frenchmen that make proud to be one of them.
Speaks perfect English, and right to the point.
No bull, just facts and no mass media would have the corrones to have him on a show.
It is really hard to dispute his arguments.
But like so many French people, including your leaders, gives Russia free pass.
I am surprised that Mr Gave was not pressed on what other response to Russian aggression was possible?
Would Russia had agreed to keep contract prices instead of going to spot?
Saying that West energy policy was mad for 20 years is correct, but you could not reverse it immediately.
So not fighting war on 2 fronts means abandoning Ukraine to genocidal Russian Imperialism.
Do you honestly believe that would stop future aggression by Russia?
Appeasement was tried in Munich by France and Britain.
Did it work?
I had the impression he was saying we should/will go back to coal, and thereby be able to continue to oppose Russia. His point being that we can’t fight a war on two fronts.
I have some sympathy with Liam’s view, but if I were Liam I wouldn’t base my argument on climate science, because the science is contested, but just as importantly, what to do about it is too contested – Freddie’s guest makes the point that for all the investment in renewables over the last 20 years we have barely made a difference to carbon output.
I think a persuasive argument can be made that we have to steadily reduce carbon output, but on the basis that it is pollution – as Freddie’s guest said, people in China are really concerned that they can’t see across the street and their children are sick from the pollution. Same in India. It will probably take a mix of everything – fossil, nuclear, renewables, energy efficiency, maybe ‘green hydrogen’ …
Excellent discussion once again, although I can’t believe that the people at the top table are not aware of the balancing act they must perform.
Also, what were the West supposed to do with Putin’s aggression – let it continue a la Czechoslovakia before WW2?
They haven’t exactly stopped it, have they? As for Czech who says NATO won’t do the same thing again.
The UK has not shifted its oil purchases from Russia and Germany has only reduced theirs by 8%. In the EU we have watched energy prices climbing since March 2021. We need to stop blaming Russia and understand the mechanics of borrowing.
And printing!
Meanwhile, Germany’s Green Party are switching on previously mothballed coal-fired power power stations, while at the same time shutting off a fleet of stations that provide reliable low-carbon power.
Green Parties were good for raising awareness about the dangers of climate change. Now that we are fully aware, it is time for the adults to manage the transition to a low-carbon economy.
Or maybe the “adults” who believe they can “manage the economy” should go back to school to learn how government managed economies tend to lead to dystopia, not utopia.
Green parties raised the potential issue of anthropological climate change (the climate is constantly changing), the corporate capitalists (Schwab et al) have now told their political establishment to treat it as gospel, to facilitate a command and control style of global governance.
However, as Steve Koonan demonstrates in his book, this matter is, in reality, ‘Unsettled’
I think you’ll find it IS settled save for a few nutters who pepper their garbage with an odd truth to give it credibility so the credulous fall for it. The rest of us are feeling the sunburn and watching the trickle of migration soon to be a flood to escape a largely uninhabitable world.
The climate has always been changing. Expecting it to remain static is wishful thinking. Unfortunately, it has become very difficult to have any informed debate on this matter even within scientific circles:
https://www.discoursemagazine.com/ideas/2022/05/02/the-fake-scientific-consensus-on-climate-change/
Almost every adverse weather event is now ascribed to man-made climate change. It’s become a convenient tool with which to browbeat the masses into accepting energy price hikes and reduced standards of living.
As we witnessed during COVID lockdowns we are living in a time where science has become politicized and research is considered useful only insofar as it furthers governmental and corporate agendas.
I wish I could give you two thumbs up.
You can only convince people it is settled if you suppress different scientific opinions. Another couple of scientists about to get themselves branded as “fringe” nutters are William Happer, Professor of Physics, Emeritus, Princeton University and Richard Lindzen, Professor of Earth, Atmospheric, and Planetary Sciences, Emeritus, Massachusetts Institute of Technology. A one page summary here of their considered, scientific opinion. It is NOT settled.
https://co2coalition.org/publications/16417/
If by “adults” you mean govts such as the current one in the UK then I think you may have a distorted idea on what an adult actually is.
Perhaps you mean scientists? Sadly most are now mere prostitutes selling not their bodies but their minds to the highest bidder, ie the 0.1% who are probably in favour of mass human extinction. I say let’s keep the Greens..
“Confiscating the Russian oligarchs assets, that’s something.”
yes, theft is what it is. I hope you don’t think the Russians will forget this, and please don’t give me any more of your nonsense about NATO. It’s been exposed as useless.
Thanks for the interview. Gave is evidently an optimist.
..and perhaps a tiny bit of a climate denier? His glib dismissal of renewables gave it away I fear…
‘climate denier’
Do we need that infantile phrase in an adult discussion forum?
Very interesring geopolitical points and the rmb contagion a key point
Very interesring geopolitical points and the rmb contagion a key point
William Happer, Professor of Physics, Emeritus, Princeton University. Richard Lindzen, Professor of Earth, Atmospheric, and Planetary Sciences, Emeritus, Massachusetts Institute of Technology.
“We are career physicists who have specialized in radiation physics and dynamic heat transfer for decades. In our opinion, science demonstrates that there is no climate related risk caused by fossil fuels and CO2 and no climate emergency.”
Another couple of scientists about to get themselves branded as “fringe” nutters going against the consensus. Worth a read – very short and very to the point!
https://co2coalition.org/publications/16417/
William Happer, Professor of Physics, Emeritus, Princeton University. Richard Lindzen, Professor of Earth, Atmospheric, and Planetary Sciences, Emeritus, Massachusetts Institute of Technology.
“We are career physicists who have specialized in radiation physics and dynamic heat transfer for decades. In our opinion, science demonstrates that there is no climate related risk caused by fossil fuels and CO2 and no climate emergency.”
Another couple of scientists about to get themselves branded as “fringe” nutters going against the consensus. Worth a read – very short and very to the point!
https://co2coalition.org/publications/16417/
Everything about this discussion suggests that Trump was right.
Everything about this discussion suggests that Trump was right.
Surely Gave’s take on renewables was too glib. Small scale, local but widespread generation is surely important and could be introduced in very short order as well as insulation, if govts had the will. After all we seem to be able to jump from ICE cars to electric almost overnight now the will is finally there. Solar, wind and even hydro are all doable.
Also the consumption of vast amounts of energy can surely be questioned: do we need all of the stuff and nonsense we produce and consume?
A universal income will solve the jobs problem overnight (as proved by so many not returning to work post Covid). Far more effort into puchase avoidance and repairability renewal will help too. Small scale nuclear must also be doable and surely the technology must be far smarter than of old. My own view is that every one of the green solutions must be introduced but at small scale but widespread..
What planet are you on?
Yes, small nuclear is being tested now including in UK (by RR).
Jumping into electric cars is more difficult than you think. Lack of charging infrastructure for a start (not just charging point but whole grid).
Electric cars are just virtue signalling toy for rich woke.
Universal income is nonsense.
It was tried in Finland and failed.
Anyway, it is not possible to have a universal income with mass immigration of people who never contributed anything into the system.
Main problem is though: why don’t you try to persuade India and China to stop use of fossil fuels.
Go protest in China.
We might even send you food parcel when you get 20 years in a gulag.
Wow. Solve the jobs problem overnight by printing money and making more debt to pay people to do nothing. ‘Cos it is working great post-lockdown…we never need to work again haha! Wow. You definitely need to listen again and understand how the “free money” Magic Money Tree / MMT sausage is made.
It is not even possible to have UBI when everyone DOES contribute – we are paying in “a bit” and getting back “alot” – that is why we are spending more than we earn as a country! Basic maths. If that worked we would not be massively in crippling, weakening, debt all over the West. It is just like a massive UK credit card where we can only pay the interest…and then the rate starts going up.
Did you not even hear that all renewables generation in 21 years of investment has gone from 14% to 16% of global energy?