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There is no good time for energy prices to hit the roof. However, the current rise in natural gas prices is unacceptable, especially for leaders of democracies trying to reach a consensus to slow down their economies.
As most of the developed world recovers from the epidemic, natural gas production problems, geopolitical and climate change are combined with unprecedented strong demand. As a result, inflation has created a political impression on politicians. The governments of Spain and Italy are intervening to curb energy bills. France is growing benefits for low-income families. As wholesale prices rise, British politicians are trying to contain the decline by lowering the price of low-energy suppliers.
The biggest political challenge is deepening. It is to persuade voters to support power-hungry policy packages to cope with climate change as they are smarter than high-end consumer bills. Brave is a politician who tells voters that those bills should still be very expensive. Elsewhere, yellow shirts and proportionate opponents of climate change remain in the minds of policymakers.
Inflationary pressures, which are temporary or reflect structural changes in global energy production, make smart policy work more difficult.
Consumers’ current illness may make climate change more politically difficult, but not so important. The challenge for world leaders: With just weeks to go before the COP26 climate conference is to find ways to deal with energy fluctuations immediately without forgetting the long-term importance of climate change.
To do this, they must begin by recognizing the value of the value proposition. The high cost of an education since the 1970s can greatly accelerate demand-driven efforts to increase energy efficiency. As natural gas prices increase electricity, they invest in renewable investments – especially if the causes are really structural and high prices stay here.
True, higher prices can also encourage higher natural gas production. That, in any case, can be seen as a step forward in moving away from fossil fuels, such as coal. Such a change in itself is one of the reasons for the recent rise in the price of liquefied natural gas in Europe. Historically, however, oil shortages have, as a rule, shifted dependence from one source of energy to another.
Where climate change is linked to trade, commerce and politics. Browse FT coverage here.
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Over time, markets will improve. Today’s political upheaval, which is a political explosion, is sudden and measurable. Citizens need to stay on board, show that they need governments, and help those in need. That may require subsidies or regulatory interventions. But struggling consumers can afford to pay for the benefits of high incentives. Leaving market incentives on the spot can proportionate energy consumption (but not all) of family members to a flat rate or alleviate compensation problems or even bring political rewards.
Climate change has become increasingly difficult for citizens, despite the fact that citizens are worried about their family budgets. But there is no alternative to responsible leaders.