For three of the world’s most famous billionaires, space is indeed the final frontier – for their egos. Jeff Bezos, the planet’s richest man, launched into the great beyond last week via his Blue Origin venture, days after Sir Richard Branson did the same on a Virgin Galactic craft. Elon Musk, the sometime world’s richest man, has yet to join his rivals in the heavens with his SpaceX business, but has bought a ticket to ride with Branson at some point.
Space travel is the stuff of legend and these lauded entrepreneurs are clearly caught up in the mythology. Humanity and space have connotations of bravery, and technological and intellectual brilliance, that run through the ages, from Galileo to Gagarin and the moon landings.
The human fascination with space, for all the hubris that it brings with it, has made the effort worthwhile in terms of technical feats alone. So there is a straight lineage from that fascinating distant and recent history to a beaming Bezos striding around the desert in a cowboy hat like a dotcom Chuck Yeager.
But neither he nor Branson is advancing the cause of humanity with their efforts to establish a commercial spaceflight industry. It is difficult to place their achievements in the pantheon when you look at what their rockets leave behind on Earth: carbon emissions. According to calculations by Eloise Marais, an associate professor of physical geography at University College London, on every space flight up to 300 tonnes of carbon dioxide are split between four or so passengers, compared with up to three tonnes of CO2 per passenger on a long-haul commercial airline flight. As she says: “It [commercial space travel] doesn’t need to grow that much more to compete with other sources.”
Bezos ultimately wants to move all heavy industry into space and save the planet by launching its heaviest pollutants beyond the stratosphere. This smacks more of flat-Earthism than a constructive solution for the climate crisis. As one campaigner pointed out last week, surely it is easier to convert the world to clean energy than to put Exxon on an asteroid? Musk aspires to make humanity multiplanetary and be a “spacefaring civilisation” – another example of focusing the eyes on heaven as the planet sizzles.
It is, of course, on the Earth’s surface where Bezos needs to concentrate his efforts. His company Amazon’s carbon emissions rose 19% last year – in sharp contrast to the global total, which fell 7% in comparison with 2019. The e-commerce giant has pledged to be carbon neutral by 2040 and its “carbon intensity” – which measures emissions per dollar of sales – did indeed fall last year, but its profit-maker is its carbon-intensive cloud computing business and there is much more work to be done.
Branson, too, can do better. His best-known business is Virgin Atlantic, a long-haul airline that – along with the rest of the aviation industry – will struggle to atone for its contribution to the climate crisis by any other means than carbon offsetting for years to come.
Of the trio, Musk is the one who gets closest to a free pass to heaven. The eccentric billionaire has at least done his bit for the environment by turning Tesla into the world’s premium electric transport brand. He could consolidate that achievement by focusing his efforts on one planet, not many.
The hubris of Bezos, Branson and Musk gives greater credence to recent words from Mark Carney, the former governor the Bank of England, who is now a UN envoy on climate change and Boris Johnson’s finance adviser on the climate.
He said this month that without robust intervention from governments, markets would fail to address the environmental emergency: “When people have made it clear they have that objective [of tackling the climate crisis], and if there is public policy that translates those wishes into real action – a price on carbon, regulation of internal combustion engines, for example – then financial markets, capitalism, will come up with the solutions to give people what they want.”
Bezos, Branson and Musk should lower their sights and focus on more worldly matters: the planet needs it.
NatWest sale makes no sense, but Sunak needs the money
The Treasury wants to offload the 55% stake it holds in NatWest bank by 2025 at the latest. Officials said last week they would begin drip-feeding shares into the London market for private buyers to snap up at the current price, which on Friday was 200p.
This is the fourth time the Treasury has sold shares after buying an 84% stake in the bank – formerly known as Royal Bank of Scotland – at the height of the financial crisis for GBP45bn.
In 2009 it paid 502p a share. The word in the City is that the much diminished, less risky bank of today will never regain that price, let alone the GBP60 a share reached in the crazy, casino-like world of financial services in 2007.
For the British taxpayer, this amounts to a colossal loss and raises the question: why sell at all? Why not keep a state-owned bank on the Treasury’s books, one that always looks over its shoulder when debating its lending strategy or toying with plans to fleece customers, as RBS’s global restructuring group (GRG) was accused of doing in the wake of the banking crash.
However, the GRG scandal, which involved a division that lent money to small businesses using “bullying and intimidation” to extract fees and charges from customers, happened while the bank was state-owned. Without the government taking full control and appointing senior executives or placing civil servants in positions of power, there is little likelihood of a wholesale change in lending policies. And the fear is that even worse lending decisions would result, landing the taxpayer in even hotter water.
Rishi Sunak could still leave himself the option of retaining a golden share to influence the bank in times of stress. The chancellor, though, blocked by manifesto commitments from raising personal taxes, is strapped for cash. It means that this opportunity will be lost and, like a street hawker, he will sell the lot for whatever the market will pay.
Ofgem was given the run-around by energy firms
When the energy regulator made its first intervention in the pricing of gas and electricity tariffs since the privatisation of the industry in the late 1980s, there was plenty of reason for optimism.
The energy price cap was implemented in 2019 after growing criticism of the UK’s “big six” energy suppliers and accusations that their “fat-cat energy bosses” were profiteering at the expense of hardworking families.
Since then the regime put in place by the regulator, Ofgem, has gone on to save about 15 million households an estimated GBP1.5bn a year.
But the broad, populist appeal of a reduced energy bill is no remedy for the ingrained tendency among energy companies to charge as much as they can get away with – and for the regulator to let them get away with it.
In the still early days of Covid-19, Ofgem announced plans to increase the energy price cap and include a GBP23-a-year provision to help gas and electricity companies cover the cost incurred from customers who were left unable to pay their bills because of the financial fallout from the pandemic.
This could be worth a total of GBP90m to the industry since the new energy cap was brought in from April this year – but there is scant evidence that it was ever justified.
The decision is said to have come about amid some heavy-handed lobbying of the regulator by major energy companies, including British Gas, the UK’s largest supplier. Its profits have more than doubled compared with last year and it reported no problem with unpaid debts during the pandemic thanks to the government’s job retention schemes.
Following news on Friday that the energy price cap will be extended beyond its 2023 deadline, it’s worth remembering that its success is only as strong as the regulation that governs it. The energy regulator should take care not to be suckered again.