547. The Truth About Russian Oil, Net Zero, and North Sea Drilling

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28:25Rory Stewart:Welcome back to The Rest of Politics Question Time with me, Rory Stewart. And me, Alistair Campbell. So, Dan, following up from where you were, and I'd love you really to talk about the politics of this. So, Matt, how can we sell the long-term abstract benefits of net zero without alienating folk in terms of cost of living? And I just want to challenge you as a politician. Whatever's being done at the moment is not working. This story is not working. So what is it that needs to happen in the communication to reassure people like Matt? Well, first of all, I certainly don't neglect the worry that Matt has, but I will challenge you a little bit, Rory, because it's really not – you say – you pose the question by saying you as a politician.

29:18Well, yes, you used to be a politician yourself also, and you know very well that just because we haven't solved the problem 100 % is not the same as saying that what we're doing is not the right thing. So yes, we do pay too much for our energy in Europe. But fact of the matter is that had we not followed the route that we are on now, had we not deployed more renewables, we would pay far more. Let me give you two numbers. The IEA, International Energy Agency, they have calculated that we save approximately 33 billion euros a year in Europe on electricity bills on newly deployed renewables. So that's what comes on top of what we already have every year.

29:56and Acer, the regulatory institution that we have in the European Union on energy that looks into energy prices, they say, well, probably more or less the same amount we save on being as internet connected as we are. So are we interconnected enough? No, we need much more connections, including with the UK. But if we were just 27 individual member states in the EU, we would pay between 30 and 40 billion euros more than we do. So I don't neglect that there's a far way to go. I don't neglect that the prices are too high. But if we were to follow a different path and if we were to stop the green transition now, that would be very, very irrational because what actually brings the prices down are indeed this transition.

30:45Rory Stewart:Dan, let me try again. Matt's question is how do we sell it? So when I said you as a politician, I mean, how do you communicate this? The fact that we're having this conversation is happening partly because a lot of the European public is not convinced. So maybe let's start from the question of why you think the European public is not convinced that our policy is delivering cheap energy. So first of all, I think probably we need to acknowledge also that there's big differences between countries. And I think the situation, I'm not an expert in British politics, but I think it's probably a little bit different here than in many European countries.

31:24I think if you go to Spain, I don't think you'll have a problem selling the point that renewables are cheaper because they see that with their own eyes. They were a country very, very hard hit in 22 because they were dependent on gas. Now they've really managed to transition away and primarily renewables now, and that has lowered their bills significantly. And if you go to Italy, you'll see the opposite. They are very, very dependent on fossils and they pay very high prices. And if you go to the southeast of Europe, you'll see many member states that are actually deploying a lot of renewables, but that are not gaining or harvesting the benefits because they're not enough connected to the rest of Europe.

32:03So I don't really see that big of an opposition towards more renewables faster in Europe. What I do see is some opposition to some of the tools that we are using. because one of the reasons why this is happening is also because we are making it more expensive to use fossils. We have an ETS system, as you know, which is basically a tax. It's not a tax, but it works like a tax on fossil emissions. And some parts of industry have argued that that is making it difficult for them to compete. Now, I will counter argue to that. Well, listen, friends, there's no way around this. We're not neglecting your difficulties.

32:39but if we do not move away from fossils then you will be vulnerable every year in all of eternity for price shocks like the one we are experiencing right now and if we look at even just the short term or medium term does anybody think that we're looking into a more stable world the next five or ten years unfortunately not i wish we were but but we probably are not so using all of the economic instruments, financial, political instruments that you can to really help this transition is what we need to do. Now, in Europe, when you see, for instance, a very famous example is the Yellow Jersey demonstrations on the streets of Paris because of attacks on fossil fuel.

33:25That was an example, I don't think, of people arguing against doing something to fight climate change. This was because they didn't want their expenses to go up. Or another example, the home country of Grisha Thornburg, Sweden, in the last election, the young population voted primarily for right wing party, not because of immigration, as you might think, but because of this question of tax on fuels. so I do acknowledge that even populations who want to fight climate change if it hurts their own wallets then they will tend to to maybe care more about the wallets than the climate which is that's just the way it is so we need to take that into consideration and also use policies to alleviate that and make the incentives right that's also why earlier when I tried to explain what is it that constitutes an electricity bill or an energy bill really it's up to politicians And that could maybe where we agree, Rory, although we also disagree on issues, maybe we can agree that if politicians meant this decision makers like myself, so I'm also responsible, but if we really meant this and took it very, very, very seriously and it was the most serious thing for us to deal with, then we could do stuff tomorrow because we could lower taxes on electricity.

34:41we could invest even more in our grids we could invest even more in the renewables we could invest even more and subsidize even more if we wanted to energy efficiency measures we got tons of questions about solar and a lot of our listeners and viewers seem to think that we're we're missing a lot of tricks here zoe fletcher could more commercial buildings like office blocks etc have solar panels on top of them felix why isn't rooftop solar being subsidized more considering it reduces grid constraint etc. Andrew surely if we put solar panels on top of buses and trains and buildings we would reduce the need for so what more could we do on solar and why aren't we doing it?

35:23So solar is really expanding fast and if we look at globally how much is being invested in solar and wind actually it's twice as much as being invested in fossil So that's also an argument in itself for why this is good business. And by the way, most of what's being invested in fossil is being invested in maintenance of existing infrastructure. So the investments are really moving towards where's the best business case, and that's solar and wind. So that helps us a lot. What can then be done politically? Well, one of the big problems right now, and to be honest, the biggest bottleneck that I see and danger that I see is that we do not expand our grids fast enough.

36:03Because it doesn't matter if we do as I want, deploy more renewables. if those renewables cannot come online. And we have some very terrible examples of what this might lead to in Europe. So again, if you'll allow me an anecdote from when I was minister in Denmark, I had to sometimes persuade Danish taxpayers that it was a good idea for us to use our money subsidizing wind turbines. And then when the wind was really blowing and we were producing too much energy, sometimes the German taxpayers' money would be spent to pay us to stop the wind turbines because their grid was not able to take it in.

36:39So that's what we call curtailment. So this is why one of the main objectives on my list of things to do in my job is to make sure that we expand our grids and connect our countries better in Europe to get out of this problem. Now, that's also a problem sometimes for solar, but solar has the advantage very often that it's also very local production, it's decentralized production. So I do think that solar is going to be one of the main components of our energy systems in the future. Countries do it differently. Use subsidies. Yes, for sure. I'm all for that. Subsidies is not a great thing to have as a longstanding measure, but to get something up in scale and down in price, it can work.

37:25Now, many countries will see now that actually solar does not need these subsidies because it's so cheap. So it's more about making sure that you have the grid expansion and very, very important point, I know you struggle with this in the UK also, permitting times. It takes way too long to get a permit to build a new solar park or to build new grids.

37:46Rory Stewart:Question from James. Why doesn't the government have a bigger focus on tidal power? It's so reliable. So it's probably not up to me to answer on behalf of the government in the UK, but I do like the question. You could be prime minister tomorrow. So, tidal and wave energy, it has a huge potential, but it's still a minute compared to our other energy sources. But I do actually think that this is one of the technologies that will grow rapidly in the years to come. We will need different types of policy instruments like the ones we used when wind technology was new. By the way, offshore wind that now competes even with coal and gas in price.

38:29Denmark built the first offshore wind park back in 1991. And then people were just shaking their heads at how naive idealists we were spending money on something as stupid as that, because surely it's way too expensive to produce energy that way. Now, it's used all over the world. It competes. You know, you have it in the UK also as a part of your strategy. And I think that I hope that using the same policy instruments, so yes, subsidies, but also smarter solutions like contract for difference models where you share the insecurity and the risk and investments between the producers and the state.

39:04That's one of the ways to make sure that these new technologies will grow. A lot of questions about data centers and AI. Nicola Laporte, why are we allowing data centers to be built? Flossie Macbeth, great name. Do you think AI and environmental policy can ever be compatible? Yes, I do think so. But I will also say it's an imperative for us. We need it. I mean, we spoke about dependencies earlier related to energy, but we also have other dependencies. Information. Big tech companies are controlling more than governments today in the world. This is a problem, I think. So we cannot only rely on American tech companies that are physically placed elsewhere in the world.

39:51We also need our own. And of course, data centers is a part of that. I will also add to that, that actually AI can be very, very helpful. And digitalization also on a more simple level can be very helpful in us being more efficient in our energy systems. Actually, we can save a lot in the expansion of grids, but just using what we have more rationally and AI can help us there. having said all of this it is a huge challenge because the energy consumption of these centers right now if i'm not mistaken it's around 2.5 percent of our energy consumption in the eu and that's set to double within the next five years right so it's not it's not a small thing so what we're working on now in the union european union is to set the standards for energy efficiency to make sure that we also incentivize that the data centers use for instance the excess heat So is it a problem that a data center uses a lot of energy?

40:42Well, it can be if it's the wrong type of energy and if it's just used once. But if it's renewable energy and it's used first to cool down the data center, and then the excess from that process is used to warm up or cool down thousands of homes, which we've seen good examples in many member states in the European Union. Then, in fact, these data centers becomes part of our energy system that's useful instead of the opposite.

41:07Rory Stewart:Dan, at the risk of irritating Alistair and listeners, I need to do a follow-up on data centers rather than just jumping to the next listeners' questions. Sure. Because this is a big issue, and its energy is at the heart of this issue. And when you talk to investors, they're driven mad by trying to get data centers built. If you look at the problems in Germany, a lot of this is to do with distribution and transmission lines. And I'm very interested in why we don't talk more about transmission and distribution in energy. I mean, very few of our listeners' questions are actually about that subject.

41:45Rory Stewart:So explain why that's such a big issue for data centers and for so much, and what the cost of these distribution transmission lines is. So first of all, I very much agree with you, Rory. I am also surprised, and I'm also a little bit embarrassed because I've worked with this all my adult life, so 20 years, and it's only the last five, maybe 10 years that I've myself begun to see, okay, this is probably the biggest challenge we have. If we actually succeed in doing what we want, which is to get more renewables and electrify more, if we don't have the grid capacity, if we don't have these connections, then it simply will not happen.

42:21And right now, we are then hit by an actual challenge. This would be a challenge even if there was not a single data center in the EU. But we're now hit by the extra challenge that these data centers are coming at a speed and at a magnitude that nobody could have foreseen. So we couldn't have foreseen that, I will say. But of course, now it's here. This is the future. What to do? Well, we are negotiating right now and hopefully at the end of this week, the European Council of Ministers will adopt a general approach that hopefully supports a proposal that we in the commission have put forward, that I put forward, which is to do a number of things.

43:00One is we need better planning. So today it's like, so 27 member states trying to be a union on energy. But in fact, it's like 27 different people making a jigsaw puzzle without looking at the picture on the box. Because there is no collective plan. There is no European-wide scenario. So I'm asking for member states to give the power to the European Commission to actually draw up a plan for Europe. What does the most rational plan look like? And where do we then need to invest? Because that will mean that we will need some of our collected funding from the EU to support, for instance, as we've done right now, an energy island in Denmark, the island of Bornholm, which will be connecting Denmark and Germany.

43:45So actually, there's some EU money in there, but actually it's Germany paying the majority, the lion's share of that investment. Imagine that We have one country paying for energy infrastructure in another country. Why? Because it doesn't really make sense to look at borders here. We need to make sure that we utilize where are the actual resources. And the resources are there in the island, the waters around Bornholm, just as they are in the North Sea. So I see many of these projects in the future hopefully connecting us all better. So that's just one example of what we need to do to answer that question, Rory, that you posed.

44:21But there are, of course, many others. final question because you've got to go sam and i think this sort of speaks to the view of quite a lot of the people that wrote in is any government actually taking the proven climate crisis seriously from yours from a deeply cynical 26 year old i suppose that goes back to point made earlier if the crisis is as you say do you really feel that we're embracing it with the urgency that needs and how much of that is down sorry to go into my trump derangement syndrome how much of that is down to the fact there's a guy over there the most powerful politician in the world who is so far from your agenda so this is one of those questions that i can i can give two speeches i can give a very gloomy speech of why it's not very likely that we will stop climate change before the self-enhancing effect sets in and then it'll be too late you know anthony giddens wrote a book where he coins a phrase, he calls it the Giddens paradox, must be great to be able to put a paradox out there and then name it after yourself.

45:25But anyway, it's pretty smart here. What he says is, when this happens, when the temperature goes to the point of no return, there will be nothing we will not be willing to do. But then it'll be too late. and if we look at what science is showing us every year it is that it's probably worse than we think and we're not going fast enough in reducing emissions and now we even have some will argue the most powerful nation on the planet going in the wrong direction so that's one speech the other speech that i i like more it's the more hopeful speech i like to say that martin luther king did not start a civil rights revolution by giving a speech called I Have a Nightmare.

46:11We do need to create hope. And good news is, it's not naive, actually, because looking at the numbers, it can be done. We are globally investing twice as much in renewables as we are in fossiles. We are on track of reaching our reduction of emission targets in the EU's targets that were considered extremely ambitious when we adopted them. The economics of many of the underlying transitions that we need are really good and the business cases are are there but bottom line to the question are we taking it serious enough um i don't think so to be honest i think it should be and i'm to blame also because i also speak more about prices and security and all these things because it's so important and because it's it's right now and because it's the present crisis that we're in but actually we will get past those crisis there will i really firmly believe there will be a peace in Ukraine.

47:04I really firmly believe that we will get the prices down and therefore be able to compete better in Europe. But climate change, this is about fighting something that will not disappear and trying to stay below that number, that increase in temperature where the self-enhancing effect sets in as a point of no return. By the way, we don't know when that is. We might even have surpassed it now. So yeah, okay, that's me trying to be positive and then I became negative anyway. I don't know. I apologize about that. Well, thank you, Dan, very much. Thank you. It was an honor. Normally, you know, I only listen to podcasts about birds.

47:39But you are actually one of the few exceptions I like to listen to. About birds? Okay. What's the best? Well, tell us. What's the equivalent? What is the rest is birds? What's the best? You should make one called The Rest is Birds. Do you know, actually, that I read somewhere recently that it's becoming trendy for young people also to watch birds? I love birds. Yeah, me as well. But I'm not an expert. Are you an expert? but I wouldn't say that, but I'm, I'm, I do spend a lot of my spare time watching birds. You're a twitcher.

48:06Rory Stewart:No, I wouldn't go that far. Well, listen, it's lovely to see you. Yeah, lovely to see you. It's an honor to be in this program. Thank you. Thank you. Thank you, Dan. Bye bye. So Rory, more or less convinced by, well, you're convinced by the climate crisis, aren't you? I don't think there's any doubt about that. What you're not convinced about is the answer. I think it was wonderful. to, I mean, it's very generous for him to come. And for listeners, Alistair and he got to the gold hanger office at seven o 'clock in the morning on a pretty packed visit for the EU commissioner. So I think it's a brilliant way of understanding how the European Union thinks and the commissioner thinks.

48:46Rory Stewart:I'm afraid that if you were a European business person listening to that, let's say you were working in German industry, you would be tearing your hair out. And I think if you were somebody who was really focused on the big issues around climate, you would remind people that Britain is only 1 % of direct emissions and the EU is only 7 % of direct emissions. So the question is, what is the exam question that he's trying to answer? Is this the most efficient way to stop global climate change? Is this the best way of supporting European industry with cheap energy? Is this the best way of dealing with energy security?

49:26Rory Stewart:And if show in the short term or the long term. And I guess I'm still not sure that he's got the answer to those things. And I think where I slightly differ with you is you assume that the reason these arguments are struggling is because of a conspiracy by Trump and the far right. I think the reason that these arguments are struggling is that ordinary businesses, ordinary householders sense that a lot of this doesn't quite add up as neatly as people like Dan are suggesting. hmm no i think i think i think that's a very harsh judgment i mean and also just on the somebody who's actually at the reason he's in london is because of climate week um and somebody who's at it sent me a thing this morning actually on a survey of european business which doesn't suggest that actually they're they're they're displeased with the the the attempt to keep the focus on renewables and also they do see the business opportunities in it this is the thing we'll put in the newsletter called the business breakthrough barometer 92 percent of business leaders seeing competitive advantage in the sort of approach that he's talking i thought more interesting and and also it's not that i think there's a conspiracy theory i think that just that you know politics and economics and energy they they they they're not separate things so if you go back to when al gore was vice president of the united states and kind of leading the global charge on climate change and renewables and the link between the two, then that argument was being won.

50:59The reason why I think that he, Dan, would accept, I think, that he maybe faces a more hostile environment when he's talking about this in public, is not just because of the cost of living, although that is a massive factor, it's also because the politics have shifted. And the reason why I'm so keen to make sure that the politics don't shift in the direction that they're going by accepting some of the arguments that are made against the renewables agenda by people like Richard Tice and the reform people. It's this right v left polarization of a debate. And where I thought was most interesting in all of those exchanges actually was when he tried to take it back to the very core of this thing, which is the climate crisis itself.

51:42And you could see he was struggling not to terrify us because that deep down is I think where he thinks this debate is. So I think we've got a real, we've got a clash here of our understanding of how this debate should be conducted. So I thought it was interesting, but I think he accepts that we actually need to, I think we need to get back onto the high ground again and not just be talking about, you know, the price market mechanisms, all that stuff.

52:09Rory Stewart:Yeah, well, I think that's important. And I think that's probably the most important thing, which is that getting stuck in green energy as cheap energy is probably a trap. Because sometimes green energy isn't cheap energy. It'd be very convenient if it always was, but sometimes it isn't. And we can get into the details of why it isn't. But a lot of that is distribution and transmission, and also what you do when the wind isn't blowing or it's blowing too hard. So then the big question is global. It's not about Europe. It's not about Britain. it's about what mechanisms we put in place globally, not to deal with the 1 % we emit or the 7 % Europe emits, but the other 93%.

52:49Rory Stewart:And that's where I think we should be looking much more at taxing embedded carbon, making sure that when we're buying t-shirts from China, we are paying the correct price for the embedded carbon and setting up a global system for that. Now that's very ambitious. It may sound pie in the sky, but it's the only way of tackling climate change. There is literally no point Britain and Europe being good and doing what they can to reduce emissions if China and the US and India continue to emit in the way that they are, continue to build more and more emissions. So if we're really idealistic, let's not get caught up in what's happening in Europe and Britain the real idealism has to be reaching out to global agreements right but but then sorry to go back to Donald Trump a global agreement if you go right back to the Kyoto process and then forward to to Paris and literally one of the first things he does is come and say I'm not having international agreements so that's why I think some of us do have to stay idealistic do have to say that even though we're only one percent that we still have a leadership role to play and even if there is a price to pay as long as dan and others can persuade people that in the long term that is the way that is the route to cheap energy so i i think you're a bit sort of uh i was going to say nihilistic i don't mean nihilistic but you're i think you're pessimistic and i think that feeds into the one of the reasons why this debate is is is not in the place that it needs to be and then is exploited by these deeply awful fossil fuel industry the oil and gas the cock brothers you know steve bannon richard tyson etc etc i'm not putting you in their camp uh but this is why i was quite angry with tony blair and his thing recently i mean dan before we record it started recording dan said that one of the best things about climate that he's read in recent years was a was a set of papers put together by the tony blair institute which he said was completely on his side of the of the argument and then tony comes out with his message to the labor party say you know drill not quite drill baby drill but sort of you know not far off it there's another way of looking at if we're not a massive oil producer so on the one hand we say if we're not the big emitter we shouldn't sort of worry too much unless the rest of the world does we might say the same about you know if we're never going to be a big oil producer why should we worry about what limited oil and gas resources we've got left in the North Sea.

55:22It's just a sort of crazy argument.

55:24Rory Stewart:I think my final thing is, but maybe I'm wrong about this, is to win the political debate, people have to concede that there are problems. What worries me about the way in which some people, not so much Dan, but sometimes he falls into this trap of communicating, is they're basically denying that there are issues around price or that there are trade-offs. And I think the public is suspicious of the idea that you get the best of all and the best of all possible worlds, that in our normal lives, we know there are trade-offs. And I would like a bit more acknowledgement of, yes, of course, our energy prices are really high.

56:06Rory Stewart:And this is why. And this is how we're going to get out of it. And this is why we're in a bind. And these are some very difficult choices. And sometimes we are being idealistic and spending more um so i i don't know maybe i'm wrong maybe it's better to just keep insisting that there are no trade-offs and that we can decarbonize and have energy security and have affordability and have vibrant industries and there's no trade-offs but i i think the truth is there are massive trade-offs between those four no there are i i don't think he was saying there are no trade-offs i think he was setting out in the context of you know we said right at the top these two massive shocks that we've had that have changed the way people have thought about this look i i think i think he's i i think he's a good voice on this i think sometimes there are people who probably are not uh don't necessarily want to get down into the detail of how the market works we didn't really get into that i remember when we met him in helsinki he was explaining how the market actually works and it's so complicated and almost it sounds at times so random it is like these sort of you know the price of one part of the sector is going up and down and the one that's the lowest or the highest will set the price for the next half hour.

57:14And it sort of feels chaotic. We didn't get into that. But what I feel he is, is a really strong voice. And I think we need more people who keep us focused on the fact that this climate crisis is real. Because you have an awful lot of people, very powerful people, for their own political and business reasons, who are pushing in a very opposite direction. so that's why i was very pleased that we gave him the platform we did and thank you to all our listeners for all your great questions thank you all very very much indeed and i think this is

57:45Rory Stewart:something we will come back to a great deal thank you see you soon see you soon bye