Net Zero and Statism Deliver Stagnation: How Interventionism Undermined Growth in Canada and the UK

Governments are terrible at picking winners and even worse at choosing losers. Net zero and interventionist “Keynesian” policies in Canada and the UK have proven that government intervention has created a worse outcome than anyone would have expected. The result is higher costs, distorted incentives, and weakened productivity growth, with increased dependency on fossil fuels to attend to peak demand, exactly what Austrian economists predicted.

The war in Iran and the near-closure of the Strait of Hormuz have accelerated a change that had been slowly building for more than a decade.

The United States has become the world’s emergency oil supplier. Before the conflict, American production was already at record highs, but the shock to Middle Eastern exports has proved more relevant for markets and geopolitical strategists. The United States is no longer just the biggest producer. Now, it has become the preferred and most reliable supplier whenever a significant disruption removes millions of barrels from the market.

Iran Already Lost: Hormuz Matters Less Every Day

Hormuz matters less every day. For decades, the Iranian regime regarded the Strait of Hormuz as the ultimate choke point of the economy. That story still dominates headlines, but in practice the blackmail power Iran draws from Hormuz is eroding. Trade flows, energy technology, and risk management are changing faster than the inherited narrative.

In reality, almost 80% of the volumes that passed through the Strait have been re-routed or offset by US exports. The United States is the world’s energy superpower as the largest oil and gas producer, posting record oil and natural gas net exports as well as jet fuel and fertilizer international sales. Meanwhile, the Iranian economy depends almost exclusively on the Strait remaining open. 80% of all its exports, 60% of government revenues and 25% of its GDP depend on Strait flows.

Europe’s average gas price has climbed to $7.15 per gallon, more than 70% above the average U.S. The retail gasoline price is well above China’s national level of $5.5 per gallon, according to official figures. Meanwhile, European benchmark natural gas prices are up by 38% compared with one year ago, while U.S. natural gas prices are down significantly, almost 26%, according to the latest Bloomberg figures.

However, the problem is not just expensive energy; it is a structural burden on households and businesses in two regions where average salaries are also significantly lower than in the United States. These elevated energy taxes come on top of much higher wage, corporate, indirect, and environmental taxes. And no, it is not compensated with radically better public services.