Episode Twenty-Four: No Time To Die

In a previous post we talked about the British state’s long-term tendency to under-invest in modern hardware and software, transferring money away from capital budgets towards day-to-day spending. The context for that post was the NHS of today, but the under-investment issue has been a constant theme throughout the years of austerity, and seems to be getting worse over time. As notable as the investments the British state withdraws from, however, are those it blocks.

In the last 10 years, for instance, Britain has managed to effectively ban virtually all forms of onshore power generation. Everyone knows about the regulatory problems surrounding new nuclear power plants, and most people know about the ban on fracking. Less well-known is that the governments that constantly trumpeted their green credentials and commitment to Net Zero have also blocked nearly all new onshore wind farms. Some new large-scale solar farms are still built on agricultural land, but many more are blocked by the planning system, while rates of rooftop solar installation plummeted after the government suddenly scrapped a critical but quite expensive subsidy scheme. After soaring increases from 2011-2017, total solar capacity has been fairly stagnant since then, even as prices of solar continue to tumble far beyond anyone’s forecasts.

Offshore, matters are only a little better. Norway continues to find giant new oil & gas fields in the North Sea, but regulatory uncertainty and the constant pressure to cut or entirely ban new drilling licenses put hard limits on the appetite of firms to invest in North Sea exploration in UK waters. While offshore wind has been a notable success story, with 10GW capacity installed to date, the scale-up challenge still required to get offshore wind capacity anywhere near the 40GW target the government has set for 2030 is enormous.

We are not experts in energy or climate policy, and do not have firm views on the optimal energy mix over the next ten or twenty years. It seems almost certain, though, that blocking such a large variety of projects, across both renewables and non-renewables, is a long-term recipe for high prices and general immiseration. This sort of regulatory short-termism is perhaps a little less obvious than the antiquated MRI scanner at your local hospital, but probably much more costly. Pressure from NIMBYs has led to central and local government almost entirely giving up on solar and onshore wind, while eco-activists have proved effective lobbyists against new nuclear and gas exploration. Besieged on all sides by hostile pressure groups lacking any kind of long-term vision, and too intellectually weak to generate a coherent long-term energy policy itself, the result is regulatory chaos that is neither eco-friendly nor able to put any downward pressure on prices.

We believe that population ageing underpins this chronic and worsening affliction of sclerotic short-termism. The power of the local Boomer vote has been the key factor in limiting the growth of onshore wind & solar, while eco-activism seems to be another core hobby for the retired grey vote. While political scientists have modelled the increasingly short-term incentives of ageing politicians, the age of politicians is surely a trivial factor relative to the age of voters. While the UK’s median age is a little over 41, the median age of voters is around 53, due to huge differences by age in turnout and eligibility. A small but growing political science literature supports the model of ageing electorates as increasingly short-termist, scared of inflation, and averse to investments in human capital (education spending) and physical capital (housing, infrastructure). Even at the most local level of politics, a quick scan of community Facebook groups will reveal an increasingly bitter culture war between old and young over inner-city parking and Low Traffic Neighbourhoods, as suburb-dwelling Boomers unaccustomed to e-commerce fight for their right to drive to local urban amenities and park conveniently.

Gerontocracy is, of course, a venerable form of political organization: ancient monarchies and oligarchies were often relatively gerontocratic, and many traditional pre-agricultural tribal societies displayed almost absolute forms of oligarchic gerontocracy. Yet we wonder if the gerontocrats of bygone eras were more like Prince Charles or Jeremy Clarkson, rightly beloved examples of Boomers Who Build, than the elderly voters of today. The Prince of Wales won all the status and money he could ever dream of at birth, while Clarkson has earned himself a vast fortune and the undying adoration of the people. Neither feel any real need to protect what they already have, and so both display a remarkable propensity to leave something better for future generations, whether that’s beautiful new towns like Poundbury and Nanlesdan, or a revitalized British farming industry. When power and wealth are assured, gerontocrats are free to harness the wisdom of the old to the long-term benefits of the young. When power is dispersed, however, elderly voters who feel themselves in an economically precarious position vote to protect what they have at the expense of investments in projects that they will not live to see the benefits of.

There are, of course, some solutions to the problem, of varying degrees of radicalism. Votes for 16-year-olds and compulsory voting are both reasonable mitigations, with precedent in other nations. More daringly, parents could be allowed to vote on behalf of their children, or the votes of younger people could be weighted higher than those of the old. Mass immigration of the young is another short-term fix, an enormous pro-natalist incentive program (about 2-3% of GDP) a solution over the long term. All of these, however - especially immigration and pro-natalism - confront the same short-termist coalition of the aged that has put such a dent in energy supplies. Getting any useful change through that coalition is doable, but will require enormous political capital and not a little ingenuity.

In the longer-term, however, as young people become an increasingly scarce global resource the problem may naturally self-correct. With fertility rates dropping rapidly below replacement even in relatively poor middle-income nations, inter-state competition for young people is likely to intensify. The era of brain drain may be replaced by a time of age drain. For those lucky enough to work in globally mobile jobs, the world might be your oyster.