The Carbon Budget

Hats off to David Cameron. He has smacked down the “dark forces” within the Treasury by approving the fourth carbon budget, as recommended by the Committee on Climate Change. James Murray at Business Green endorses the proposed budget as:

[G]enuinely world-leading in its breadth and ambition. It will impose legally binding targets requiring the UK to cut greenhouse gas emissions 50 per cent by 2050 and 60 per cent by 2030, in the process ensuring that the country’s electricity infrastructure is all but decarbonised within 20 years.

If the plan is enacted fully, the UK will generate 40 per cent of its energy from renewables and 40 per cent from nuclear by 2030, the remaining 20 per cent coming from relatively clean fossil fuel power plants, many of which will feature carbon capture and storage technology

Moreover, by 2025, 2.6 million homes will have highly energy efficient heat pumps, and almost a third of new cars will be electric. Every component of the economy will face similar levels of revolutionary change, ensuring that the UK will almost certainly become one of the world’s premier low carbon economies, generating billions of pounds a year from exporting green technologies and expertise.

Certainly, Cameron deserves praise for his boldness in passing the budget. However, the Osborne-Cable alliance did win some important concessions. As Joss Garman points out at Left Foot Forward:

[I]t appears that whilst the government will accept the CCC’s advice on the scale of the carbon targets for the mid-late 2020s, they won’t accept the recommendation that short term cuts need to be increased.

Understandably, some will rightly point out that it’s convenient for the prime minister to agree to a 50% cut in UK emissions by 2025 – when he’s unlikely to still be in power, but to reject the advice of raising the 2020 target. Equally, it is understood that government will announce tomorrow it will rely on carbon offsets to a greater extent than is recommended by the climate committee.

This is a classic case of politics influencing policy. But no matter what some doom merchants may say in tomorrow’s papers, be in no doubt, this remains a radical piece of climate legislation. It commits to concrete action. It is to be welcomed.


Coalition drags its feet on renewables

Interesting take by Kari Lundgren on the government’s plan to boost levels of renewable energy production:

The U.K. will propose the biggest changes to energy policy in two decades tomorrow when the coalition government lays out plans to ensure aging power plants are replaced and climate targets met.

David Cameron’s government is likely to reassert state control over the market-based system introduced by his predecessor Margaret Thatcher when proposals are made to parliament. The regulator has suggested a “carbon floor” price to force up the cost of emitting greenhouse gases, encouraging investment in nuclear reactors and offshore wind farms.

Lundgren clearly thinks the plans afoot are radical. I’m not so sure. Read the article in full, here.

Catherine Mitchell is, unsurprisingly, far more sceptical:

Sadly, the proposed electricity market reforms and the green deal do not include anything that will move the UK forward in anything other than an incremental manner. At the heart of the problem is a seasonally appropriate difficulty: asking turkeys to vote for Christmas.

It is simply not in the interests of the handful of dominant energy companies and their shareholders to dramatically transform the energy system, whether on the supply or demand side. In particular, an increase in the energy efficiency of buildings will undermine a company’s future sales and profits. Only when the government confronts head-on the interests in maintaining the system largely as it is, will the energy system change.

Energy companies sell energy or services and have to comply with various rules and incentives. The rules and incentives are being tweaked so that energy companies can make more money from low-carbon energy supply and reducing energy demand. But reducing the UK’s greenhouse gas emissions by 60% by 2030 means developing a completely different energy system. Energy companies doing what they can within the current energy system is not nearly enough.

The FT also has the story.

Policy, Policy, Policy

New Labour’s former Director of Policy, Matthew Taylor, has been considering the impact of economic growth on the environment. For the first time, so it would seem. This reveals a great deal about the early New Labour project. One of its leading intellectual voices and Tony Blair’s closest political ally was so fixated on achieving positive GDP figures for the U.K., he was not even aware of other perspectives that were challenging the orthodox growth model. Indeed, it is only now that Taylor is considering what many environmentalists have been arguing for years – that unchecked economic growth might be unsustainable and cause longterm, irrevocable damage to our climate. No doubt, the growth versus sustainability debate is a complex one. Precisely the reason there should be more open debate on this issue.

Unfortunately, this is not happening. There is, however, a great deal of coverage in the FT of the faltering eurozone economy and speculation of a double-dip in Germany from various progressive bloggers. In other words, both ends of the political spectrum generally still view economic growth as paramount for achieving a ‘good’ society.

Paradoxically, this is at a time when the idea of a so-called Robin Hood tax is mustering favour amongst political commentators and journalists. Even actor Bill Nighy is in on the act. In essence, the idea is to tax all bank transactions a modest sum and divert these funds to help protect public services through the post-recession recovery. It has been strongly suggested that the tax might also help to promote green industry and climate change initiatives in the world’s poorest countries.

Whatever one thinks of the Robin Hood tax, it poses fundamental questions to our politicians, bankers and economists. If we insist with the old orthodoxy that growth is good we should surely know why it is good. What purpose does growth serve? In the past, individuals such as Matthew Taylor would surely have said that the success of our financial institutions was good for society as a whole as the wealth created helped to pay for the services we all use. But this trickle-down theory has come under heavy fire in recent years. The wealth creation of the financial sector was not harnessed as many would have liked and deregulation and the resulting credit crunch has had dire consequences for millions of people the world over.

If policy decisions continue to be made with the narrow ambition of economic growth then the implications for our climate could be catastrophic. Let’s hope, with campaigns such as the Robin Hood tax putting pressure on elected and un-elected politicians, that a more rounded approach to policy takes form.