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Poor Europe: Energy Costs To Constrain Quality Of Life

Be careful what you wish for.

The green lobby has been calling for consumption of fossil fuels to be cut back. Governments have paid lip service to the green agenda, but when the time has come to make difficult decisions, they’ve baulked.

All the best intentions in the world don’t have a hope in hell next to short-term political self-interest. And political self-interest tends to be a function of popular well-being. And popular well-being is generally contingent on how well people are doing economically.

The European Commission forecasts that electricity prices will rise in real terms for at least 20 years. Which should be good news for green-leaning politicians like the U.K.’s Prime Minister David Cameron. Except it’s not.

Because although the recent rise in energy bills will prove to be a major constraint on global demand and production, and therefore should help to keep a lid on greenhouse gas production, people are likely to take out their unhappiness about the worsening state of their household finances—in other words having to use a bigger proportion of their incomes on energy—on sitting politicians.

Non-fossil fuel forms of energy production are either too expensive, too unreliable or, like nuclear, politically suspect.

What the world’s waiting for is the holy grail of nuclear fusion, a process that doesn’t leave much radioactive detritus; that from a small amount of inputs (hydrogen) produces vast amounts of energy (and helium).

But the promise of nuclear fusion is 10 to 20 years away. As it has been for the past half century.

Until then, the shape of the future is almost certainly lower standards of living in energy-dependent countries. And possibly fewer greenhouse gasses.

The Wall Street Journal, 17 October 2011