We cannot rely on market forces to wean us off carbon-based energy

Editorial: Let’s hope the timely natural gas shortages help to focus minds at the Cop26 climate summit

Kwasi Kwarteng, the business secretary, is ‘monitoring this situation closely’ (PA)

The rise in natural gas prices is almost a parable, a real-life teachable moment for the Cop26 climate summit meeting in Glasgow in 1,000 hours’ time. What more salutary backdrop for a United Nations conference on the climate emergency than a sudden rise in the price of a fossil fuel, which makes the economics of wind, solar and even nuclear power look more attractive?

Unfortunately for the economics of renewables, the price rise is probably temporary. It would be foolish to predict what will happen, but the causes of the shortage of natural gas are mostly short term. The bounce-back of the world’s economies after the coronavirus shutdowns has been sharper than expected, and the surge in demand has surprised a market that had operated in a steady state for decades with low storage.

The gas market has been hit by the same surge in demand that has disrupted labour markets, especially that for lorry drivers, which has in turn exacerbated shortages in all parts of the economy. In Britain we have specific problems, such as, in the energy market, a fault with one of the electricity interconnectors with France, and in the labour market, Brexit, which makes it harder to recruit new workers from the EU to plug the gaps.