New prime minister Liz Truss has confirmed that the UK government will limit energy bill rises for all households for two years, reports BBC News. (The announcement is widely reported as a “cap” of £2,500 on energy prices, but is actually a maximum amount that a household with average energy use will pay per year.) The outlet continues: “Businesses will get help, with prices capped for six months, a shorter period of protection than many had hoped for. The help will be for everyone in England, Scotland and Wales with equivalent assistance for Northern Ireland.” The cost of the “huge support scheme” could hit £150bn, the outlet says, “but Ms Truss refused to put a figure on it, saying ‘extraordinary times call for extraordinary measures’”. Details of the costs are expected to be set out by new chancellor, Kwasi Kwarteng, in a fiscal statement in the coming weeks, notes Politico. “This is the moment to be bold,” Truss told MPs, stressing that there are “no cost free options” to lessening the impact of the energy crisis, the outlet says. Bloomberg notes that “the problem for the government is that, while the pandemic is largely finished as drain on Treasury, there’s no end in sight for the gas shortages that came with the war between Russia and Ukraine”. The government expects the package of measures to curb inflation by up to five percentage points, reports Reuters. The plans include Truss’s long-promised move for the “temporary removal” of green levies on bills, says another Reuters article. Truss also outlined plans “to make sure we have security of [energy] supply for the long-term” (see below).

The measures include a plan for the Bank of England and the Treasury to offer up to £40bn to help energy companies with a cash crunch amid fears volatile wholesale prices could cause some to collapse, says the Times. The Guardian explains that “companies who use the Bank of England’s energy markets financing scheme will have to sign up to a ‘wider set of conditions’, the Treasury said”. The paper notes that, during the coronavirus pandemic, “support schemes some companies were banned from paying dividends after receiving loans”.

Opposition leader Sir Keir Starmer criticised the government for refusing to expand a windfall tax on energy producers to fund the package of measures, reports the Press Association. In parliament, Starmer said: “Ask voters whether they think that it is fair that they pick up the bill, or those companies that make profits they didn’t expect to make, and there is only one answer to that question.“ Scottish first minister Nicola Sturgeon said she welcomed the “very belated” plan, reports the Press Association, but warned that “it does not represent a halt to the rise in energy bills”.

The Guardian speaks to business owners who say the measures “didn’t go far enough”. And the Financial Times reports that “British businesses have warned that time is running out for the government to provide details of its plans to subsidise energy supply, with questions over the scope and pricing of the support as well as the threat of a six-month cliff edge”. Figures produced for the Guardian suggests that, even at a price cap of £2,500 a year, “the poorest households will spend as much as 32% of their entire budget on gas and electricity, though the previously announced £400 discount will help relieve some of the financial pain”. The Press Association reports that consumer groups have welcomed the plan to freeze energy prices as a “huge relief”, but warned that many would still struggle with “sky high” bills this winter. And the newswire also reports that charities have warned the new energy plan contains a “big hole” as it will not protect the poorest families and disabled people who are already struggling with their bills. The Times notes that, despite the UK having “the oldest and some of the least energy-efficient houses in Europe”, the subject “was not mentioned in Truss’s statement”.

Despite the government’s guarantee to lower bills, energy regulator Ofgem has said it will continue to announce the cap on household energy prices, reports the Press Association.

As part of the announcement on energy bills yesterday, UK prime minister Liz Truss removed a ban on drilling for shale gas as part of “vital” efforts to “increase our domestic energy supply”, reports Bloomberg. Speaking in parliament, Truss said: “We will end the moratorium on extracting our huge reserves of shale that could get gas flowing in as soon as six months where there is local support for it,“ the newswire reports. Even with the renewed government support, the shale gas industry “still faces an uncertain road, with significant opposition from local communities and challenges related to the country’s geology”, the newswire adds. It explains: “Earlier this year, the UK’s meagre fracking industry faced its last rites. Cuadrilla Resources Ltd, the company behind the country’s first major shale gas discovery in 2011, was poised to plug and permanently abandon two exploration wells in Lancashire. But Russia’s invasion of Ukraine handed the firm a reprieve as the regulator withdrew the order to close the wells and the government of former prime minister Boris Johnson considered whether to allow a restart of drilling.” The Guardian says that “fracking will not ease the UK’s energy crisis or bring down heating bills, but will imperil climate targets”. Prof Jim Watson, professor of energy policy at University College London, tells the paper: “There is huge uncertainty about the economic viability of fracking, and it may take a long time to produce relatively small amounts of gas.” The Big Issue has a piece on “why fracking won’t make your energy bills cheaper anytime soon”. It adds: “It’s also hugely unpopular and has been dismissed by everyone from environmentalists to the government’s own climate advisers and even former energy minister and now-chancellor Kwasi Kwarteng.” The Guardian speaks to anti-fracking campaigners in Lancashire who vowed to “pull out all the stops” to stop fracking going ahead. Separately, the Herald reports that Scotland’s first minister Nicola Sturgeon has “said there will be no fracking in Scotland, despite Liz Truss’s decision to end the ban in England”.

For more, see Carbon Brief’s just-published factcheck, titled: “Why fracking is not the answer to the UK’s energy crisis.”

Meanwhile, as widely expected, Truss said that the government will also “make more than 100 new licences for oil and gas extraction in the North Sea available” from next week, reports the Daily Telegraph. It continues: “The changes, which could take years to bear fruit, will make no difference to supplies this winter. But they are aimed at helping Britain to become a net energy exporter by 2040, combined with plans already announced by Boris Johnson to build 24 gigawatts worth of nuclear power capacity by 2050, new offshore wind farms and solar farms. Ms Truss said the radical shake-up was necessary after ‘decades of short term thinking’, which had left the country exposed to surging energy prices following Russia’s invasion of Ukraine.” Reuters notes that “it typically takes five to 10 years from exploration until oil and gas is produced from a new field, requiring a significant commitment from companies involved”. And a Reuters analysis piece says that “Britain’s move to green-light dozens of new oil and gas fields will leave investors and banks with a tough PR job as Britain struggles to shore up its energy security whilst sticking to its climate commitments”.

As part of the newly announced measures, BBC News reports that the government will also “ask renewable and nuclear generators to take up new 10 or 15-year contracts at fixed prices well below the current rates”. Truss told MPs: “Renewable and nuclear generators will move on to contracts for difference, to end the situation where electricity prices are set by the marginal price of gas.” She added that the move “will mean that generators are receiving a fair price reflecting their cost of production, further bringing down the cost of this intervention”, the outlet reports. Trade association RenewableUK confirmed its members have had a “series of discussions” with the government on the issue and says it is waiting for the government to “take a position”, the outlet says. It continues: “So, why might they accept this huge potential hit to profits? RenewableUK says it is because the companies recognise it isn’t fair for consumers to face such high prices at a time of national crisis. Those close to the discussions say they are probably also being offered a generous long-term price to reflect the short-term loss of profits.” Shadow climate change secretary Ed Miliband told BBC Radio 4’s Today programme yesterday that such long-term fixed-price contracts would have the effect of ensuring huge profits for electricity companies for years to come. He said: “This is a proposal from (energy industry trade association) Energy UK, and let’s be clear about this proposal: This would lock in massive windfall profits for these electricity generators.” The Times says that “industry experts warned that the government was in a weak negotiating position, with generators likely to seek very attractive terms to compensate them for forgoing high prices now, especially as Truss has ruled out the alternative of a windfall tax”. Bloomberg also has the story.

Truss also announced her intention to launch a fresh review to explore how the UK can achieve its 2050 net-zero target “in a way that is pro-business and pro-growth”, reports BusinessGreen. It adds: “The government said the net-zero review would aim ‘to ensure we are meeting our net zero 2050 target in an economically-efficient way, given the altered landscape’ and that ‘delivering the target is not placing undue burdens on businesses or consumers’. The review is set to be chaired by Tory MP Chris Skidmore, a staunch supporter of the UK’s net-zero goal, who is tasked with reporting back to the government before the end of the year.” He has tweeted that he “will be saying more very shortly about the terms of reference and how people can get involved”.

New research warns that global warming to date has driven the world to the brink of multiple “tipping points”, reports the Guardian. The review of more than 200 studies shows that five tipping points may already have been passed due to the 1.1C of warming, the paper says, including the collapse of the Greenland ice sheet, the shutdown of “a key current in the north Atlantic” and the abrupt thaw of carbon-rich permafrost. It adds: “At 1.5C of heating, the minimum rise now expected, four of the five tipping points move from being possible to likely, the analysis said. Also at 1.5C, an additional five tipping points become possible, including changes to vast northern forests and the loss of almost all mountain glaciers.” BBC News explains the concept of tipping points, noting that “once a critical point is crossed – or ‘tipped over’ – the breakdown of the system is self-sustaining, so will continue even if there is no further warming”. The new study builds on a 2008 paper that outlined nine potential tipping points, says New Scientist. It adds: “The number of tipping points has also expanded to 16. Some new ones have been added – including changes in the Labrador Sea, part of the North Atlantic, which could cool Europe – while others have been dropped, such as loss of Arctic sea ice, as it is no longer seen as having a tipping point dynamic.” Lead author Dr David Armstrong McKay tells the New York Times that the study “really provides strong scientific support for rapid emission cuts in line with the Paris Agreement”. He notes that limiting warming to 1.5C “doesn’t guarantee we don’t see tipping points…but it reduces the likelihood”. Reuters and the Independent also have the story, while Carbon Brief has all the details of the study.

In the New York Times, a guest essay by journalist and author Elizabeth Rush looks at “what Antarctica’s disintegration asks of us”.

Brussels is facing pressure from at least 10 EU countries to implement a cap on gas prices for all suppliers, reports the Financial Times, “with some governments warning that singling out Russia could push Vladimir Putin to cut supplies to Europe completely”. The paper continues: “Member states that oppose commission president Ursula von der Leyen’s proposal to apply a cap solely on Russian gas imports include Italy, Poland and Greece, according to officials. The lack of consensus on a gas price cap means that the proposal is likely to be discussed only briefly at an emergency meeting of energy ministers [today] designed to agree on measures to help consumers and companies through the energy crisis, they said.” Hungarian foreign minister Peter Szijjarto said that “if price restrictions were to be imposed exclusively on Russian gas, that would evidently lead to an immediate cut-off in Russian gas supplies. It does not take a Nobel prize to recognise that”, reports Reuters. The Economist says that the “threat may be moot”, adding: “Europe already has plans to embargo Russian oil from 5 December…and gas deliveries have shrunk by two-thirds from pre-war levels.” Reuters reports that “a windfall levy on non-gas power plants, a bloc-wide cut in electricity demand, and emergency credit lines for power firms facing soaring collateral requirements” are among the other proposals that will be discussed today. Diplomats “remain deeply split over what exactly should be done and how”, says Bloomberg, which adds that “as they try to stick together, governments also need to make sure their emergency intervention doesn’t accidentally cause chaos in the energy markets and make things even worse”. Politico summarises where countries stand on the different proposals, while the Financial Times Energy Express newsletter looks at “why energy ministers cannot agree on gas price caps”.

In an interview with the Financial Times, EU competition commissioner Margrethe Vestager says that she plans an imminent consultation with member states on temporarily prolonging the bloc’s “crisis framework” for state aid. This could “help EU states funnel public sector money to struggling utilities as it seeks to respond rapidly to the cash crunch in the sector”, the paper says. The Financial Times also reports that “European power producers are facing margin calls that could total €1tn but will be in a strong position to repay state-backed loans if governments help them through the liquidity squeeze”. It adds: “The soaring price of power this year has pushed up the margin requirements on electricity generators that hedge their sales in the futures market to unprecedented levels, leading to widespread calls for government intervention to prevent the European market from collapsing.”

In related news, Reuters reports that Portugal yesterday approved “an energy-saving plan through the end of 2023 that should allow it to meet the target for reducing gas usage set by Brussels and even surpass it at some point next year”. Reuters also reports that “oil producers in Guyana are boosting exports to European buyers seeking alternatives to Russian crude”.

In comment, an editorial in the Economist looks at “how to deal with Europe’s energy crisis”, noting that “the most popular tactic – retail energy-price freezes, like those in France and on Ms Truss’s agenda – are superficially tempting”, but “they have huge drawbacks, too”. The outlet says: “Instead of fixing prices there is a better approach. Governments should offer households relief through lump-sum cash rebates on bills, possibly disbursed via utilities firms. This would protect living standards while leaving markets to set the incentive to curb energy use. For the poorest, for whom energy bills eat up as much as a sixth of total spending, rebates will need to be supplemented with other benefit payments.”

Germany is going to subside small- and medium-sized companies as part of a package of measures designed to avoid a wave of insolvencies due to rising energy prices, reports the Guardian. According to the article, Robert Habeck, the German economy minister, said he “anticipated that the subsidies would be in place for a limited time, until efforts on the national and European level to bring down high electricity and gas prices took effect”. Without financial help from the government, the story says, some companies “are expected to temporarily stop production”. German backers in Lower Saxony protested against “skyrocketing energy prices” on Thursday by switching off the light in shops with the motto saying: “Today the light, tomorrow the oven”, reports Norddeutscher Rundfunk. The federal government also wants to protect companies in other ways: because of the threat of corporate bankruptcies due to high energy prices, it will temporarily weaken insolvency law, reports Manager Magazin. It also says Habeck sharply rejected the harsh attacks on his energy decisions by the block CDU/CSU on Thursday in the Bundestag: “The Union ruled this country for 16 years”, said the minister, “the current government, on the other hand, will clear [those energy issues] up in a few months”. However, the CDU leadership around party leader Friedrich Merz is increasing the pressure on the traffic light government with their own proposals to relieve the population and companies of the high energy prices, reports Der Spiegel. The outlet has received a draft of the energy proposal for the upcoming federal party conference, which “provides for a price cap for private households for basic electricity and gas requirements”. It quotes the draft, which states that “the basic gas requirement should be 75% of the previous year’s consumption and a price of 12 cents per kilowatt hour should be guaranteed for this”.

Meanwhile, Germany plans to subsidise a basic level of electricity usage for households, according to measures set out in a German economy ministry paper seen by Reuters on Thursday. Electricity distributors would be required to grant households a certain electricity quota at a discounted price per kilowatt hour, notes the outlet. The stated goal, it explains, is to decouple the price of electricity from the price of gas, which “has rocketed” since the Ukraine war and “subsequent plunge” in Russian deliveries to Germany. However, Germany is failing in seeking allies within the European Union to secure its future gas supplies, reports Bloomberg. Germany’s neighbours Belgium, Luxembourg, the Netherlands and Poland refuse to engage in “constructive negotiations” about such bilateral deals, Habeck said in a report to lawmakers seen by Bloomberg.

Finally, the Daily Mail reports that Germany’s energy department has started an advertising campaign to motivate “the whole of society” to save energy.

Data from the Copernicus Climate Change Service (C3S) shows that this summer was the hottest on record in Europe by “a substantial margin”, reports BBC News. The summer was 0.4C warmer than the previous record, only set last year, while August also set a record – “a whopping 0.8C warmer than the same month in 2018”, the outlet says. It quotes Dr Freja Vamborg, a senior scientist with C3S, who said: “An intense series of heatwaves across Europe paired with unusually dry conditions, have led to a summer of extremes with records in terms of temperature, drought and fire activity in many parts of Europe, affecting society and nature in various ways.” C3S data shows that, globally, “temperatures in August tied for the third hottest on record”, reports the Washington Post. And Bloomberg says “North America also had one of its warmest summers on record”. Politico and the MailOnline also have the story.

Meanwhile, the Independent reports that drought has been officially declared across the whole of Wales despite recent rainfall. The outlet adds: “It is the first country-wide drought for 16 years, and comes after the nation only experienced 56% of its average rainfall between March and August. The six-month period has been the third driest since records began in 1865.”

Chinese factories were “shuttered again” in late August, a “frequent occurrence” in a country that has “imposed intermittent lockdowns to fight the coronavirus”, the New York Times writes. It adds that a “record-setting drought crippled economic activity across southwestern China”, “freezing” international supply chains for “automobiles, electronics and other goods that have been routinely disrupted over the past three years”.

Meanwhile, Bloomberg says that China is “set to add more new coal-fired power plants than previously expected”, in a “bid to ease an energy crunch that’s hurting its economy”. It adds that the world’s “biggest energy user” plans to add 270GW (gigawatts) of thermal capacity in the five years through 2025, citing China Energy Engineering, the country’s leading energy engineering conglomerate. (See recent analysis on China’s energy trends published by Carbon Brief.) Separately, an analysis published by the Diplomat, titled “How China is responding to its water woes”, says that China’s approach to water management has “traditionally been engineering-focused”, adding that the Chinese government has also “implemented various other policy responses to its national water challenges”. It continues: “Citizen science is another way China addresses water challenges, enabling residents to play a greater role in environmental monitoring and protection.”

Elsewhere, according to the National Energy Administration (NEA), China’s top energy regulator, the country should “further promote the completion” of China’s “gigantic” wind and solar bases, and “accelerate” the construction of supporting energy storage and peaking regulation facilities, reports the China Energy News, a state-run industry newspaper. Finally, Reuters has published an article by columnist Clyde Russell, saying that China’s August coal and copper imports may not be “as strong as they look”.

The heatwave that has been gripping California and other western states for 10 days and counting is the most severe ever recorded in September, reports the Washington Post. It says: “The data supporting the assertion is overwhelming. Records began falling on 30 August when Seattle and Portland set calendar day records of 90F [32C] and 100F [38C]. And it’s not yet over – while the region’s heatwave peaked on Tuesday, among California’s hottest days ever observed, it’s expected to continue until Saturday, ending after a total of 12 days.” The paper adds that, “in just the past week, nearly 1,000 heat records have been broken, including more than 270 monthly records. Some places, like Salt Lake City, Sacramento and Reno, Nevada, have broken their September records multiple times and by large margins”. As of yesterday, 71 large wildfires were burning across the western states, covering nearly 500,000 acres total, reports the Independent.

Meanwhile, New Scientist reports that “by 2050, days with extreme wildfires in California could become 57% more frequent even in a warming scenario with low greenhouse gas emissions”.

In an editorial on Liz Truss’s newly announced plan to deal with the energy crisis, the Financial Times says the measures amount to “a blunt instrument to tackle a multi-faceted crisis”. It continues: “The UK will be paying the cost for decades. As it subsidises costs regardless of income level, it provides a big giveaway to the better-off, while some of the most vulnerable will still struggle with prices at this level. The cap also lessens incentives to reduce consumption, though the price will still be significantly higher than prewar levels.” Attempting to boost energy security and reform pricing “are reasonable goals”, the paper says, but “they must not detract from vital efforts to reduce long-term reliance on oil and gas and accelerate the transition to renewable and nuclear energy”. It adds: “In the near-term, gas supplies may become even more scarce, while the price cap might not restrain demand. That makes it vital for the government to push ahead with an information campaign for households and businesses to save energy and raise efficiency.” Also in the Financial Times, new chancellor Kwasi Kwarteng writes that “our radical supply side reforms to boost energy security – which are central to this package – will also reduce the cost of wholesale energy over the next two years”. He adds that “we will maximise all sources of domestic energy, including North Sea oil and gas production and speeding up the deployment of clean, affordable, homegrown energy technologies such as offshore wind and new nuclear”.

Also commenting on the plan, Alistair Osborne – chief business commentator at the Times – writes: “The ‘no handouts’, free-marketeer Liz Truss has intervened in the energy market to deliver one of the biggest handouts Britain has ever seen: a two-year, uncosted, absurdly sketchy, blank cheque of a policy that’ll hold gas and ’leccy bills at £2,500 a year for the typical household.” Osborne says that “this is a vast punt on the public finances for a poorly targeted plan that, for now at least, brings no incentives to cut energy use”. He adds: “Everything hinges, too, on how Truss uses the time she’s bought so expensively to overhaul the wholesale energy market and decouple the price of electricity from the marginal price of gas. All her flim-flam over new fossil fuel projects, spanning everything from new oil and gas licences to fracking, will take years to come on stream, while doing nothing for net-zero.” Also in the Times, columnist Emma Duncan writes that the fracking ban was “daft”, arguing that fracking would “would make us more secure” and drawing parallels with the “huge fracking industry” in the US. (Duncan overlooks the fact that any gas from fracking the UK would be sold on the international market and that the UK’s geology means it would only produce small amounts of gas – see Carbon Brief’s new factcheck.) The Daily Telegraph‘s business columnist Kate Andrews criticises Ed Miliband – shadow secretary of state for climate change and net-zero – for “calling for bigger windfall taxes on the oil and gas companies”. She writes that “Labour party has come up with some awful energy policies in recent years”, including the “idea of an energy price cap”. (The cap was actually brought in by Theresa May’s Conservative government in 2018.) An editorial in the climate-sceptic opinion pages of the Wall Street Journal says that energy prices and subsidies “are both soaring” in Europe because of net-zero (somehow forgetting the small matter of Russia’s invasion of Ukraine).

In the Guardian, financial editor Nils Pratley writes that Truss’s energy plan is “notable for what it lacks”. He picks out “six areas of the canvas are virtually blank”, including energy efficiency: “[E]ven though cries for a mass-insulation programme for public buildings and council houses have been heard for months. A public information campaign is better than nothing, but other European countries have been on the job for ages.” Also in the Guardian, Sandy Hager – senior lecturer in international political economy at City, University of London – writes: “Truss’s plan effectively means that the government will guarantee the income of the energy suppliers. The concern here is that the companies that dominate the sector don’t need this support, nor do they deserve it.” The Guardian also assembles a panel – including Green MP Caroline Lucas – to give their verdicts on the plan.

Finally, an Independent editorial says “when it comes to the climate, let Liz Truss be judged by her deeds – not her words”. The outlet’s chief political commentator John Rentoul writes that Truss’s “empty statement” did “nothing to defeat Labour’s case for higher windfall taxes”. And Dale Vince, founder of the renewable energy firm Ecotricity, writes in the Daily Express that “this is a fossil fuel crisis. We can’t solve it with more fossil fuels. Energy independence can only come from using sustainable sources.”

When it comes to renewable energy, both Democrats and Republicans in the US are best persuaded by arguments that frame the issue in terms of cost savings, according to a new study. Researchers compare the short- and long-term support for renewables using three different ways of framing renewable energy among nearly 3,000 participants. They find that cost savings is “the most effective frame”, outstripping both an economic boost and mitigating warming, “both in terms of immediate effect size on beliefs and in the longevity of those effects”. They also find “negligible differences” between supporters of the two major political parties in how effective each type of messaging is.

A new review paper finds that agriculture is responsible for at least 90% – and up to 99% – of deforestation in the tropics from 2011-5. Researchers analyse existing datasets and previous estimates of deforestation to determine to what extent tropical deforestation co-occurred with agricultural land use. They find that between 6.4-8.8m hectares of deforestation per year in the tropics is driven by deforestation, but only about half of this deforested area is converted into productive agricultural land. They conclude that “ending deforestation likely requires combining measures to create deforestation-free supply chains with landscape governance interventions”.