Britain And Germany Are The Patsies of Net Zero: Paul Marshall (Transcript)

Read the full transcript of Sir Paul Marshall’s talk titled “Britain And Germany Are The Patsies of Net Zero” at The Alliance for Responsible Citizenship (ARC) 2025.

Listen to the audio version here:

TRANSCRIPT:

SIR PAUL MARSHALL: So, we’re having some quite rapid shifts of mood this afternoon. And I just wanted to say how much I enjoyed the free trade debate, which showed actually a split, almost by the end of the debate at least, down the middle in terms of people in the room.

And it’s an area where there is legitimate, genuine debate across our nations. What I’m going to talk about now is something where there is actually an emergent split between continents and between our nations.

And that is the problem of net zero.

The UK’s Net Zero Efforts

So ladies and gentlemen, welcome to the capital of net zero. Britain is very big on windmills. We are, in Boris Johnson’s words, the Saudi Arabia of wind. In some ways, this is something to be proud of.

Since 1990, the UK has cut its carbon emissions by over 50%. On this, we lead the G20.

But in our quest for renewable energy, we lost something. We lost sight of the trade-offs involved in energy policy. We may be leading the G20 in emissions reductions, but we are also leading the way in sacrificing our energy security. We are leading the way in destroying our ancient rural landscapes. We are leading the way in wrecking our industrial base.

And we are leading the way in impoverishing our people. This is not a party political point. Net zero is indeed being pushed to its extreme limits by an ideological Labour government.

But it was passed into law by a Conservative government. Nor is this a speech about climate change.

You don’t need to be a climate change denier to be very fearful about where British energy policy is leading.

A Global Problem

And finally, this is not just a speech about Britain. What I am describing is a European problem. And a Canadian problem. And an Australian problem. These countries have been infected by an ideological zeal which is leading us to sacrifice our economic prosperity and our people’s livelihoods, all for the sake of making some fractional changes in the levels of carbon dioxide in the atmosphere. Late stage capitalism is prone to fall for luxury beliefs.

We take for granted our prosperity. We take for granted the foundations of liberal democracy and free markets which underpin that prosperity. And we fall for fashions that we can’t afford. And so these countries, which I fear are in a very late stage of capitalism, have contracted a severe case of climate derangement syndrome. Most European countries are committed to net zero by 2050, likewise Australia and Canada.

The Scandinavian targets are a little earlier.

The Collective Action Problem

But climate change policy is a classic collective action problem. This is the mother of all collective action problems. If only some countries make sacrifices and others don’t, then all they do is wipe out their own prosperity. Out of a misplaced sense of guilt, we have allowed Asian countries to set much later dates.

China is committed officially to 2060, Saudi Arabia to 2060, India to 2070. And if your net zero deadline is 35 or 45 years away, you can pretty much ignore it for the time being. And that is exactly what is happening. Every year Chinese coal consumption is expected to fall. Every year it goes up.

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China has 1161 coal-fired power plants. In 2023 they’ve built two plants per week. India has a mere 285, but they too have now got the coal bug. They’re currently opening two plants a month and their construction plans are accelerating. China and India are about as committed to net zero as Britain is to investigating the grooming gangs.

The USA’s Strategy

But it is the USA who played the smartest game. It was the United States, through Al Gore, who launched climate anxiety on the world. In 2009, Al Gore warned that the North Pole would be ice-free by the summer of 2014.

But the US never stopped drilling. And now, just at the point where many Western countries have swallowed the net zero ideology hook, line and sinker, you guys, and I’m looking at the thousand Americans in the room, are moving on, to leave the rest of us like a half-dead fish flopping on the riverbank.

Now I’m not suggesting that this is a conspiracy. I know that in America you have Republicans and Democrats, and the idea of you conspiring together is a bit like Keir Starmer eloping with Elon Musk.

But just like with Wokery and DEI, America launched a set of luxury beliefs on the world. Watch as those beliefs gain traction, only to discard them in their own land just before they reach the point of fatal destruction. Unlike Europe in particular, the US still has the DNA to resist ideas that are bad for your wealth. You understand the foundations of wealth creation, and you don’t take them for granted.

Sadly, we have a much weaker immune system.

Europe’s Self-Destruction

So we are powering ahead in full self-destruction mode.

So how is Europe planning to reach net zero? Well, we have a twin-track strategy. On the one hand, we are prematurely closing some of our most reliable sources of energy, like coal and nuclear, and ceasing our exploration for offshore oil and gas.

And on the other, we are taxing carbon emissions, driving up our energy and electricity costs across the board, and piling costs on the industry and the consumer. I have some bad news for our net zero zealots. Europe may or may not reach our net zero targets, but one thing we will most certainly do is wipe out what remains of our industrial base. Electricity costs for industrial users in Britain are five times the US, seven times China.

Germany is not far behind. These are acts of national economic suicide.

Germany’s Energy Dilemma

Now I want to talk briefly about the two standout zealots, Britain and Germany. Germany used to rely primarily on a mix of fossil fuels and nuclear, but Angela Merkel decided to phase out the nuclear industry, and that left them increasingly dependent on Russian gas and German wind. We all know what happened to Russian gas, so now Germany relies on a mixture of imported US and Qatari gas and German wind.

But there’s a problem with German wind. It does not blow all the time. German wind is about as reliable as British trains. The wind problem, of course, is not unique to Germany, but Germany has the best word for it, Dunkelflaute. During those periods when the wind don’t blow, which may last as long as two weeks, the system has to rely on other sources of energy, such as gas, to keep things going.

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That is why some people think a better word for renewables is unreliables. Unreliables are essentially a parasitic form of energy. Their marginal cost can be theoretically below, but because of their intermittency, they can only function today as part of an energy system balanced by other providers. There are high hopes that this problem will be solved through the development of cheap storage, but that solution has not arrived yet.

Wind was once considered to be the best solution, now the great hope is batteries.

But the most long-life batteries in the world today only have storage capacity for six to eight hours. Dunkelflaute may last as long as two weeks.

So we need a huge leap forward in technology if traditional batteries are to be the solution. Meanwhile, German electricity costs have risen to be amongst the highest in the world, just behind Britain. This is a disaster for Germany, as its historic strength is in industries highly dependent on energy – cars, chemicals, steel, capital goods. German business knows this.

Collectively, in 2023, the top 30 companies in Germany invested just 15 billion euros in Germany. They invested 115 billion euros in the United States.

Britain’s Energy Crisis

Britain is Germany’s leading competitor in the catastrophe stakes. In the 1990s, nuclear accounted for over a quarter of our electricity, but now Britain only has five remaining plants. Four of these are slated for closure in the next five years. There is much talk of small modular reactors, but for the wait for the approval of these is interminable, held up by bureaucrats.

In the meantime, we are prematurely running down our oil and gas capacity. According to some calculations, Britain has enough gas reserves in the North Sea to cover 35 years of consumption. Yet since 2019, the UK has refused to grant any new oil and gas licences.

And we’ve even levied a specially designed windfall tax on the existing producers.

But Ed Miliband has a cunning plan. He wants to build lots and lots of windmills. And don’t forget solar. He plans to build more than a billion solar panels across the UK.

And so the English countryside, immortalised by Constable and Turner, will soon be enhanced with large acreages of photovoltaic plates.

Now I’m not an expert, but it is not clear to me that Britain has a comparative advantage in sunshine. In fact, according to the World Bank, there is only one country with less sunshine than Britain, and that is Ireland. Nor do we have a comparative advantage in building solar panels, they are all made in China with coal. We do have an advantage in wind, of course, but Britain’s wind is surprisingly similar to German wind.

We also suffer from Dunkelflaute. Both Germany and Britain are hoping and praying for a solution to the storage problem, but this is the biggest policy gamble in history. Ed Miliband is definitely a gambler, but he’s not gambling with his own money. He is gambling with the British economy and with British livelihoods.

The Consequences for Industry

We can already see the consequences. The last British steel blast furnaces will close this year. Britain has lost one third of its chemical industry in the last four years. Jim Ratcliffe, the owner of the largest independent chemical company in Britain, has warned that our chemical industry faces extinction.

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He is moving his company, INEOS, to America.

But it is the car industry where Europe wins the biggest prize for self-immolation. The EU has set itself the target of shutting down all sales of internal combusted engine cars by 2035.

But Brexit Britain will not be outdone. Britain may not be a world leader in car manufacturing, but we may just be the world leader in destroying car manufacturing. We have brought forward our target for electric-only cars to 2030, five years ahead of the EU. The EU car industry still employs nearly 14 million people. The UK car industry, 813,000.

The only question is how many of these will still have a job by the time Ed Miliband loses his. In his recent Baku speech, Zakir Sharma reassured the British people that despite his extremely aggressive targets for emissions, people won’t have to change anything about their lifestyles. This is nonsense. Europe’s governing elites have a bad case of what you would call trade-off denial.

The Hidden Costs of Net Zero

We talk as though the huge subsidies to the renewable industries or to global climate aid have no budgetary consequences. We choose willful blindness to the catastrophic job losses in energy-dependent industries and we ignore the impact of energy costs on people’s standard of living. Net zero is immiserating and its main victims are the poor. There is a saying in poker that if you’ve been playing for half an hour and you don’t know who the patsy is, then the patsy is you.

Britain and Germany are the patsies of net zero. Creating abundant clean power is a great thing as long as it works and as long as it is commercially viable.

But Britain and the EU especially have combined it with policies deliberately designed to make energy use prohibitively expensive.

So expensive that it is driving companies out of business or overseas. We think we’re setting an example but other countries have not followed us. All we are doing is outsourcing our energy provision to the US and the Gulf and outsourcing our manufacturing to the US and China. We have exported our jobs to more polluting countries and we are re-importing the emissions by buying their goods and we are doing all this on the backs of the poor.

Conclusion

Cheap and abundant energy is the foundation that underpinned our prosperity. Industry knows this, America knows this, nations in the Gulf know this and China knows this. The question for Europe, Australia and Canada is simple.

Will we choose to relay the foundations of our prosperity? If we do not, we will simply continue down the path to unilateral economic disarmament.