The Great Backpedaling Is Upon Us
The soft left begins its retreat from the political abyss.
“I became insane, with long intervals of horrible sanity.” – Edgar Allan Poe
When it comes to opinions on climate change, the developed West is divided roughly into four camps, primarily as a function of political leanings. In one camp are those the media has labeled “hard right” or “climate deniers”—people who suspect climate change is a hoax used as cover to implement a global socialist agenda. On the other extreme sit those often labeled “hard left” or “climate alarmists”—people who believe the world is coming to an end, fossil fuels are to blame, and time is rapidly running out.
Between this polarity sits the vast majority of citizens, sorted into what we would call the “soft right” and “soft left.” Members of the soft right generally value environmental protections but put little stock into the idea that the planet is in existential danger. They also tend to be optimistic about humanity’s ability to respond to any climate challenge in light of historical adaptations and the exponential pace of today’s technology development. Those on the soft left assign more seriousness to the climate crisis, vote for candidates who promote environmental causes, and are ready to make lifestyle changes—to drive an electric vehicle, perhaps install solar panels on their roofs, and dutifully sort their trash to separate recyclables—in an eagerness to do their part.
We have long suspected that the soft left is only willing to go so far in this regard, reasonably drawing a line to shield their standard of living. This group is now aware of the Big Lie™ sold by climate alarmists — that we can radically reduce our use of fossil fuels without meaningfully impacting our lifestyles. It was fine enough to play footsie with such assumptions when energy was plentiful and interest rates hovered around zero, but as the energy crisis unfolded and inflationary pressures took hold, the initial consequences of decoupling from fossil fuels left many quietly wondering what exactly it is they signed up for.
Political cracks are beginning to appear in the left-leaning alliance, a group that has been the governing force in the West for much of the past two decades, and as the soft left shuffles to center, we expect reactionary fireworks from the alarmists. For early signs of leaks in the dam, we turn to the UK where the Conservative Party—charter members of the soft left—are leading the retreat back to reality (emphasis added throughout):
“Rishi Sunak on Wednesday ignited a business backlash and a Conservative civil war on the environment as he announced a series of U-turns on critical targets to tackle climate change. The UK prime minister pushed back a ban on the sale of new petrol and diesel cars from 2030 to 2035 in a delay that is strongly opposed by some carmakers…
Sunak also relaxed the 2035 phaseout target for the installation of new gas boilers by introducing an exemption for the most hard-pressed households so they will ‘never have to switch at all.’”
Sunak goes on to helpfully explain that “governments of all stripes have not been honest about the cost and trade-offs,” that the drive for Net Zero would impose “unacceptable costs on hard-pressed British families,” and that “we’re not going to save the planet by bankrupting the British people.” It’s almost as if he reads Doomberg. A perusal of 30 years’ worth of UK inflation data contextualizes Sunak’s newfound appreciation for physics:
The UK’s walk back from the cliff was followed swiftly by a similar retrenchment on the part of Sweden’s ruling party and comes on the heels of Canada’s reacceptance of nuclear power, the Biden administration’s active management of the oil markets with the expressed intent of lowering prices, the rightward tilt of the German electorate, and angst among the climate alarmists over the upcoming United Nations COP-28 annual gathering. Call us crazy, but we are sensing a pattern.
It was inevitable that the relentless assault against fossil fuels would manifest in economic hardship for the lower and middle classes, and as the Northern Hemisphere heads into winter, it is once again rolling the dice on energy policy. This time the signs of crisis are emerging in a vital commodity that, unlike natural gas, has no substitutes. The market for middle distillates like diesel and heating oil is showing real signs of stress, especially on a seasonally adjusted basis, leaving an opening for our geopolitical opponents to drive a polarizing wedge into our domestic politics.
Might an acute crisis in this all-important but often underappreciated corner of the commodity markets accelerate the demise of the political power held by climate alarmists? Will they go down without a fight, or—as we expect—flame out rather than fade away? Let’s take a tour of the global markets for refined fuels and find out.