#GE2017 Labour Party

Labour Manifesto – environmental coverage

‘Environment’ appears as a sub-title in the ‘Leading Richer Lives’ section. While I like the acknowledgement of the contribution of the environment to ‘richer’ lives, I was initially concerned that they allocated only one page to the topic out of 123. But reading through the whole text reveals environmental issues have been woven into almost all the Chapters.

You can click on the title above to go to the page where you can see both the Manifesto. The costings that accompany this manifesto can also be found in the same link. The summary below shows quotations from the manifesto (in italics with page numbers reported) and some commentary.  The titles are mostly as they appear in the manifesto, unless statements are grouped.

Industrial Strategy

“National and local government spends £200 billion a year in the private-sector procurement. Labour will put that spending power to good use to upgrade our economy, create good local jobs and reduce inequality. We will require firms supplying national or local government to meet the high standards we should expect of all businesses: paying their taxes, recognising trade unions, respecting workers’ rights and equal opportunities, protecting the environment, providing training, and paying suppliers on time.” P. 14

Environmental Policy and Brexit

“We will drop the Conservatives’ Great Repeal Bill, replacing it with an EU Rights and Protections Bill that will ensure there is no detrimental change to workers’ rights, equality law, consumer rights or environmental protections as a result of Brexit.

Throughout the Brexit process, we will make sure that all EU-derived laws that are of benefit 􀈂 including workplace laws, consumer rights and environmental protections – are fully protected without qualifications, limitations or sunset clauses.” p.25

“A Labour approach to Brexit will ensure there can be no rolling back of key rights and protections and that the UK does not lag behind Europe in workplace protections and environmental standards in future.” p.26

Energy

“We will transform our energy systems, investing in new, state-of-the-art low-carbon gas and renewable electricity production” p.12

“…ensure that 60% of the UK’s energy comes from zero-carbon or renewable sources by 2030” p.14

“…to ensure we meet our climate change targets and transition to a low-carbon economy” p.20

“For renters, Labour will improve on existing Landlord Energy Efficiency regulations and re-establish the Landlord Energy Saving Allowance to encourage the uptake of efficiency measures.” p.21

“Labour will ban fracking because it would lock us into an energy infrastructure based on fossil fuels, long after the point in 2030 when the Committee of Climate Change says gas in the UK must sharply decline.” p.21

Climate Change – mitigation and adaptation

“Labour will insulate four million homes as an infrastructure priority to help those who suffer cold homes each winter.” p.20. This insulation design and materials should also take account of homes overheating due to increasing severity and frequency of extreme weather (like heat waves) due to climate change (see Climate Change Risk Assessment).

“We will insulate more homes to help people manage the cost of energy bills, to reduce preventable winter deaths, and to meet our climate change targets.” P.60

“We will reclaim Britain’s leading role in tackling climate change, working hard to preserve the Paris Agreement and deliver on international commitments to reduce emissions while mitigating the impacts of climate change on developing countries.” P.118

Transport

“We will retrofit thousands of diesel busses in areas with the most severe air quality problems to Euro 6 standards.” P.91

“We welcome the work done by the Airports Commission, and we will guarantee that any airport expansion adheres to our tests that require noise issues to be addressed, air quality to be protected, the UK’s climate change obligations met and growth across the country supported.” P. 92

 Water

“Replace our dysfunctional water system with a network of regional publicly-owned water companies.” p.19. Commenting on the merits of this, or supporting this proposal (or not) is not my intention, neither am I able to do this. Serious work needs to be undertaken on defining dysfunctional, assessing the feasibility of this proposal and drawing regional boundaries. If the regions were defined according to catchment (or several catchments) boundaries, then they would be in line with the ‘catchment management / partnership’ approach that has been gaining traction.

Land Use

“We will prioritise brownfield sites and protect the green belt.” p.60

Environment Sub-Section – key actions (p 93-94)

Investing in our environment is investing in our future. We will defend and extend existing environmental protections. We will champion sustainable farming, food and fishing by investing in and promoting skills, technology, market access and innovation.

• prioritise a sustainable, long-term future for our farming, fishing and food industries, fund robust flood resilience, invest in rural and coastal communities, and guarantee the protection and advancement of environmental quality standards.
• Labour will introduce a new Clean Air Act to deal with the Conservative legacy of illegal air quality.
• We will safeguard habitats and species in the ‘blue belts’ of the seas and oceans surrounding our island.
• We will set guiding targets for plastic bottle deposit schemes, working with food manufacturers and retailers to reduce waste.
• We will protect our bees by prohibiting neonicotinoids as soon as our EU relationship allows us to do so.
• We will work with farmers and foresters to plant a million trees of native species to promote biodiversity and better flood management.
• Labour will keep them in public hands.
• Our stewardship of the environment needs to be founded on sound principles and based on scientific assessments. We will establish a science innovation fund, working with farmers and fisheries that will include support for our small scale fishing fleet.

Read Full Post »

#GE2017 Conservative Party

 

Conservative Manifesto – environmental coverage 

The environment is not mentioned in the table of contents neither in the five giant challenges. If you counted the number of times the word ‘environment’ is repeated in the text, your hopes may be raised. But the word is more often used in a different context like ‘business environment’, ‘regulatory environment’ and so on.

The previous manifesto’s pledge is repeated albeit in slightly different words: I believe the previous one referred to ‘the greenest government’.  Also previously the logo was a green tree.

“Finally, we pledge to be the first generation to leave the environment in a better state than we inherited it. That is why we shall produce a comprehensive 25 Year Environment Plan that will chart how we will improve our environment as we leave the European Union and take control of our environmental legislation again.” p.26

The 25 Year Environment Plan has been in preparation for about two years (with the initially high expectations of content recently reduced to an outline).

You can click on the title above to go to the page where you can see the Manifesto. There are no costings that accompany this manifesto. The summary below shows quotations from the manifesto (in italics with page numbers reported) and some commentary.  The titles are mostly as they appear in the manifesto, unless statements are grouped.

Industrial Strategy

“We will ensure industry and businesses have access to reliable, cheap and clean power.” p.19. It would have been good to see a reference to ensuring best practice environmental management, even if not minimising environmental impacts, mentioned in the Industrial Strategy where this quote is taken from.

“We will therefore commission an independent review into the Cost of Energy, which will be asked to make recommendations as to how we can ensure UK energy costs are as low as possible, while ensuring a reliable supply and allowing us to meet our 2050 carbon reduction objective.

And because for British companies, an energy-efficient business is a more competitive business, we will establish an industrial energy efficiency scheme to help large companies install measures to cut their energy use and their bills.

For instance, while we do not believe that more large-scale onshore wind power is right for England, we will maintain our position as a global leader in offshore wind and support the development of wind projects in the remote islands of Scotland, where they will directly benefit local communities. ” p.22

“We will therefore develop the shale industry in Britain. We will only be able to do so if we maintain public confidence in the process, if we uphold our rigorous environmental protections, and if we ensure the proceeds of the wealth generated by shale energy are shared with the communities affected.” This and more detail on how this ambition will be met can be found on page 23.

Transport

“We want almost every car and van to be zero-emission by 2050 – and will invest £600 million by 2020 to help achieve it. We will invest in more low-emission buses, as well as supporting audio-visual displays for bus passengers and community minibuses for rural areas poorly served by public transport.” p.24

Towns and Cities

“Our towns and cities should be healthy, well-designed and well-tended places. We will take action against poor air quality in urban areas. In addition to the 11 million trees we are planting across our nation, we will ensure that 1 million more are planted in our towns and cities, and place new duties on councils to consult when they wish to cut down street trees. We will encourage the very best practice in the design of buildings and public spaces, including a review of the design of government buildings, to ensure that when the state builds, it makes a positive contribution to a local area. We will do more to reduce litter, including by supporting comprehensive rubbish collection and recycling, supporting better packaging, taking new powers to force councils to remove roadside litter and prosecuting offenders. We will do more to improve the quality of road surfaces, filling potholes – especially in residential areas – and reducing road noise.” p.25

The Environment and Brexit

“We have huge ambitions for our farming industry: we are determined to grow more, sell more and export more great British food. We want to provide stability to farmers as we leave the EU and set up new frameworks for supporting food production and stewardship of the countryside. So we will continue to commit the same cash total in funds for farm support until the end of the parliament. We will work with farmers, food producers and environmental experts across Britain and with the devolved administrations to devise a new agri-environment system, to be introduced in the following parliament.

 

We will help Natural England to expand their provision of technical expertise to farmers to deliver environmental improvements on a landscape scale, from enriching soil fertility to planting hedgerows and building dry stone walls. We will deliver on our commitment to improve natural flood management, such as improving the quality of water courses to protect against soil erosion and damage to vulnerable habitats and communities. We will continue to ensure that public forests and woodland are kept in trust for the nation, and provide stronger protections for our ancient woodland.” p.26

“When we leave the European Union and its Common Fisheries Policy, we will be fully responsible for the access and management of the waters where we have historically exercised sovereign control. A new Conservative government will work with the fishing industry and with our world-class marine scientists, as well as the devolved administrations, to introduce a new regime for commercial fishing that will preserve and increase fish stocks and help to ensure prosperity for a new generation of fishermen. To provide complete legal certainty to our neighbours and clarity during our negotiations with the European Union, we will withdraw from the London Fisheries Convention. We will continue our work to conserve the marine environment off the coast of the United Kingdom.” p. 27

Protecting the global environment

“We will continue to lead international action against climate change, and the degradation of habitat and loss of species.” p.38

“The United Kingdom will lead the world in environmental protection. As Conservatives, we are committed to leaving the environment in better condition than we inherited it. That is why we will continue to take a lead in global action against climate change, as the government demonstrated by ratifying the Paris Agreement. We were the first country to introduce a Climate Change Act, which Conservatives helped to frame, and we are halfway towards meeting our 2050 goal of reducing emissions by eighty per cent from 1990 levels.

We will champion greater conservation co-operation within international bodies, protecting rare species, the polar regions and international waters. We will work with our Overseas Territory governments to create a Blue Belt of marine protection in their precious waters, establishing the largest marine sanctuaries anywhere in the world.” p.40

Read Full Post »

UK General Election 2017 – environmental manifestos

 

Call me a silly cow but I’m excited about this election because I don’t think it’s only about Brexit!

I think it’s about making a decision on what role we want for the public sector and policy in all areas of government. It’s about the vision for the kind of country we want to live in. A good Brexit deal will then be one which helps us the most in making that vision reality.

It is also for this reason that I’ve read the main parties’ manifestos and will be writing a series on their coverage of environmental issues and policies.

I did this back in 2005. It was the first election I could vote in, in these pastures.

In 2010, I only searched for some key words through the texts.

This year….did I say I am excited about this election?!

So, every day this week you will get a review of the environmental pledges of a political party.  I’ll add the links here as they come online.

Conservative Party manifesto 2017 – environment overview

Labour Party manifesto 2017 – environment overview

Liberal Democrat manifesto 2017 – environment overview

UKIP manifesto 2017 – environment overview

Green Party manifesto 2017 – environment overview

For a final word from me on the manifestos click here

Read Full Post »

Food for thought

Or should that be thought before food? Over the past week, the news has been full of stories surrounding the debate on eating meat. One article in particular has stirred up some interesting discussions in our paddocks – How safe is eating meat?

This article, based on academic studies, suggests that regularly eating around 85 grams of processed red meat, say 2 slices of bacon, is associated with a 20% increased mortality risk.  An increased mortality risk of 20% means a person’s risk of dying over the next year is 20% higher than if they did not eat the processed meat. Alternatively, as suggested by Prof Sir David Speigelhalter of Cambridge University, we can expect that someone who eats a bacon sandwich every day to live, on average, two years less than someone who does not (if the studies are right of course).  Pro rata, this is equivalent to losing an hour of your life for every bacon sandwich you eat. Hold on to this thought…

So let’s see what the true-er cost of a bacon sandwich would be:

A common concept used to evaluate health impacts is the ‘Value of Statistical Life Year’ (VOLY).  This measures individuals’ willingness to pay for an increase of 1 additional year of life expectancy.  VOLY, however does not provide a measure of the quality of life.

The VOLY in Europe as suggested by the Commission is ~£40,000*. So, the cost of losing an hour of your life per bacon sandwich can be calculated by dividing this value by the total number of hours in a year (8,760 hours) which is ~£4.56. Add this to the average cost of a bacon sandwich along Mortimer Street (£2.52) and the true-er cost of a bacon sandwich is closer to £7.08.

£7.08** for a bacon sandwich!!!

 

*€50,000; using a simple exchange rate of €1 = £0.80 this equals £39,983.

**This is a simple calculation that ignores many factors that would be included in a ‘serious’ valuation. We just wanted to play around with some numbers that might just get you thinking before gobbling up your next bacon sandwich!

Read Full Post »

The Business of Natural Capital

The Economics of Ecosystems and Biodiversity (TEEB) for Business Coalition recently rebranded itself to the Natural Capital Coalition. This is one example of how the term ‘Natural Capital’ is increasing in popularity…but what is it? Essentially, it is the goods and services that nature provides us. An informative and accessible blog post on the ICAEW* website highlights that, other than sustaining life on Earth, nature provides us with goods and services that people value and should really recognise. There is a business workshop being held on 3April – organised by UKNEE** and University College London – that will be discussing the latest research in how businesses can incorporate natural capital into their accounting structures so that its value can be recognised.

For example, as the UK’s current flooding demonstrates, woodlands and other habitats are good at regulating water and slowing the uptake into rivers.

 

We invest in human capital and physical capital because they are productive; so by conserving their condition, they will continue to generate goods and services for us. Just as by training your employees and purchasing new machinery you are likely to generate more revenue as a business, if we agree that Natural Capital exists, why should we not also invest in improving it? For example, by investing more in the management of woodlands and upstream habitats mentioned previously, one is able to reduce the risk of flooding further downstream. A post in The Guardian by George Monbiot sheds light on this factor in more detail with regards to the recent UK floods.

Often, as the example above illustrates, the benefits of improving natural capital are public, but there are occasions where businesses can identify natural resources that generate a revenue for them at a private level (or reduce revenue if they were to be removed­­). Therefore, instead of having almost a zero value in private decision-making, nature can be recognised as an input in the production process, just like human and physical capital are.

*ICAEW (Institute of Chartered Accountants in England and Wales)

** UK Network of Environmental Economists

Read Full Post »

The costs of going through the reef are going through the roof

A shipping lane is being proposed which would go through the Great Barrier Reef so as to improve access to a mining complex.

We must ask some questions that help decide whether the proposed lane should go through the reef or not. Who will benefit or lose out in each scenario, when, and for how long, and by how much?

In economic analysis, as £1 now is worth more than £1 in the future, future costs and benefits are discounted to create a Present Value for each impact, which you can then weigh against each other.  For a project to be recommended on economic analysis grounds only, its benefits over time need to outweigh its costs. In economic terminology Net Present Value (benefits minus costs) > 0 or Benefit Cost Ratio > 1. There are of course many other considerations in making a decision about a project that economic analysis can capture. But let’s see how we can think about this project if we were attempting to do an economic analysis (cost benefit analysis in this case).

Let’s briefly look at the case where the shipping lane does go through the reef. This will not cost the company anything extra than they had already planned. It may, however, have an economic cost to society (a negative externality); reef damage, caused by the ships, will reduce tourism in the area- a huge source of local GDP and employment in Queensland.

We can also look at the case where the shipping lane is diverted to avoid the reef. The tourist numbers and revenues don’t change, but the diversion would cost extra money to the mining and shipping companies in the form of fuel and time.

The comparison of cost of diversion and avoided damage (benefit of diversion) to the reef can conclude:

(a)    if the cost of diverting ships is less than the lost money from tourism and other marketable impacts, the shipping lane should be diverted.

(b)   if the cost of diverting ships outweighs the lost money from tourism and other marketable impacts; the direct lane should go ahead on efficiency grounds.

But hang on a minute, it’s not that simple!

We have to think about the characteristics of the reef that generate values other than the market price and revenues. It’s these social values that are not paid for in a market that are often most important to people and are what make the Great Barrier Reef, well, GREAT.

It’s not that different to what people care about when their house burns down. Do people care about the games console or the expensive pair of new jeans? No, it’s the family photos, the postcards from friends, and the paintings your son made when he was 4 years old that hang in the kitchen.

The same goes for the reef; it’s the bio-diversity, cultural heritage, national pride, the wonder and mystery, and the sheer size of it that are the most ‘valuable’.

These characteristics lead to types of value that cannot be bought, such as: Option value (I may be willing to pay to have the option to see the Reef in the future, even though I have no intention going now); Existence value (I may be willing to pay for the knowledge that the Reef exists without any intention to ever see); and Bequest value (I may be willing to pay so that my descendants can see the Reef).

By including these values, we can build a better understanding of the Total Economic Value of the Reef. ‘But how do you measure them if we can’t buy or sell them?’ I hear you cry. This is where environmental economists earn their money; they realise that these values may be hidden within the price of another good/service that is bought and sold and thus can extract it. Another method is to survey people’s preferences of different scenarios regarding the environmental asset and their associated income in each scenario.

By eliciting these values, we can monetise damage done to the reef that isn’t seen through the market and incorporate it into the decision process.

Accounting for some leeway either side, if the true cost of having a lane directly through the reef i.e. losing all values associated with reef damage, is more than the cost to companies of circumventing the reef, then there is a compelling argument that the direct lane should be shelved.

So what if, even after including these non-marketed values, the damage to the reef is less costly than the cost to the companies of bypassing it?

In reality, we can’t monetise everything and we are never 100% certain what the consequences of reef damage is in the long term; perhaps, with data only available in the future, the costs are found to be so much more than previously thought. In that case, instead of attempting to put a market value on certain attributes, we could just say that, ‘some things are critical for nature and for the people, both now and in the future, and should be protected’.

Yes, economic development may bring us monetary wealth, but perhaps we lose immaterial wealth in the process in terms of wellbeing, morals and principles. Some things are irreplaceable, and should remain that way.

Here is a link to the online petition against the lane.

Read Full Post »

Vintage Mint In Box

I was watching an old Big Bang Theory episode the other day; it was the one where Penny buys Sheldon and Leonard (Star Trek enthusiasts) a Spock Transporter each from the comic book store.

Penny wants to open them up and play with them, which stuns the boys; Leonard says, ‘Once you open the box, it loses its value.’ (Watch the 2 minute clip here)

Here, Sheldon and Leonard realise that things don’t always have a ‘use’ value in the traditional sense of consuming them. They recognise that the toys have an embedded value in leaving them in the box untouched i.e. mint in box. Neither of them may even consider selling them in the future, despite the toys being ‘worth’ more.

Instead, they enjoy looking at them in their pristine condition (a non-consumptive direct use value) and, also, may want to pass them on to their children – if Sheldon knows how to make a child – or donate them to a museum so that others can see them in their original state (a bequest value).

Perhaps, then, we can learn something from comic book enthusiasts and apply their ‘mint in box’ mentality to the environment. Policy-makers now take into account these direct and indirect use and non-use values into project appraisal by considering a project’s total economic value.

People wouldn’t pay as much to visit Yosemite National Park if it wasn’t kept looking beautiful, as they would not derive as much value. Therefore, it makes sense to keep it looking beautiful (see picture below).

Another non-consumptive direct use value that can be compared to the Big Bang Theory example would be improving bathing water standards. People don’t go to beaches to drink the sea water, which would be a consumptive use value. Instead, they derive value from playing in the water. If the water is not safe, then people cannot play in it; therefore there is a benefit (amongst many others) from improving it that doesn’t have a market price.

Later on in the episode, Spock comes to Sheldon in a dream and asks him what the purpose of a toy is. Sheldon replies by saying, ‘to be played with’ and thus comes to the conclusion to open it and play with it. Therefore, we need to think about what the purpose of the environment is before making decisions to change it.

The herd has done some head-scratching over this topic, and we would appreciate your input- do you agree or disagree, can you think of other analogies?

Read Full Post »

Letter to the Media – the draft Habitat and Biodiversity Bill in Turkey is a catastrophe

Sir,

As the streets of Turkish cities host horrific scenes of police brutality against unarmed civilians, in the wake of peaceful protests against destruction of one of the last green areas in central Istanbul, the Turkish Parliament is preparing to rush through a vote on a policy that will allow much more widespread destruction of nature.

The Habitats and Biodiversity Bill is based on the European Union Habitats and Wild Birds Directives, but with two vital differences.

In EU member states the criterion of ‘over-riding public interest’ for allowing developments in conservation areas is applied through long-established systems of Environmental Impact Assessment (EIA), stakeholder engagement and public consultation.  But the definition of ‘overriding public interest’ is vague in the Turkish bill, there is no system of consultation in the country, and EIAs, if they are carried out at all, are often conducted long after a development project starts.

Secondly, for protected land, the EU also requires that there be ‘No Alternatives’ for siting the development.  The draft bill in the Turkish Parliament, by contrast, will simply abolish the National Parks law. The draft bill has been opposed to by 113 NGOs, and the European Commission itself described the draft bill as “worrying” (Turkey Progress Report, 9 November 2010), but the criticisms have been ignored.

This highly controversial legislation is being rushed through the Turkish Parliament, under cover of civil unrest, and represents a catastrophe for nature conservation in Turkey.  As natural and social scientists leading European research in biodiversity conservation and the human benefits derived from natural systems, we support our Turkish academic and NGO colleagues in deploring this myopic legislation and calling on the Turkish government to redraft this legislation taking account of their legitimate concerns.

Signed: coordinators and researchers at the following European Commission funded biodiversity related research projects.

Ms Ece Ozdemiroglu, Managing Director, economics for the environment consultancy,http://www.eftec.co.uk, United Kingdom

Dr Robert Tinch, Brussels Representative, eftec and OPERAs project, Belgium

Prof Dr Wouter de Groot, BIOMOT project, the Netherlands

Dr Rob Bugter, BESAFE Project, the Netherlands

Prof Dr Josef Settele, SCALES, Germany

Dr Sybille van den Hove, SPRIAL project, Spain

Dr Rupert Read, University of East Anglia, United Kingdom

Read Full Post »

…still listening George?

In our last post we talked about the possible reasoning behind George Osborne failing to commit to stringent climate change targets and how this is affecting firms who want to invest in low-carbon technologies, and how this in turn will affect the UK economy.  In this post we talk about the long-term impacts of this failure to commit – the increasing costs of climate change.

George Osborne’s perspective is surely a case of short term political thinking trumping the strategic planning required when considering the impacts of long term environmental change. Without investment in low carbon technologies, their costs will remain high and Osborne can continue to claim that lower carbon targets will be a burden on business. Only by investing in research and development will the costs of low carbon technologies be reduced as we learn more about them and discover new and cheaper ways to implement them.

The time taken for cost reductions in low carbon technologies due to higher research spending on their development is unclear, but as the Stern review[1] (a 2006 review of the economic costs of climate change) illustrates, we are on a path to increasing costs of climate change given a business as usual situation. Therefore, although the Chancellor may not be imposing any additional costs on businesses in the short term, the longer the government fails to promote the low carbon renewable technology cause, the higher the costs of climate change become in the future as its impacts increase.

A likely retort from climate change sceptics is that the academic literature is unclear on the best timing and extent of investment in climate change mitigation and some such as Nordhaus[2] recommend waiting before committing the kind of large scale investments Stern’s review advocates. However, this essentially means waiting until the costs of climate change become large enough to justify the investments in low carbon technologies. The question then becomes are we willing to take that risk given the potentially irreversible consequences of inaction?

George  Osborne’s reluctance to commit to low carbon targets seemingly stems from his desire to keep business on board and his view that there’s a choice between ‘environment’ and the ‘economy’ played out in policy terms through either ‘going green’ or ‘gaining growth’. Therefore perhaps the most convincing argument for the government to implement the CCC’s policy recommendation is the demand from UK businesses for greater government commitment on carbon. In a letter co-ordinated by the Aldersgate Group, over 50 businesses including ASDA, Sky and Anglian Water[3], call for the inclusion of such a decarbonisation target in the Energy Bill. Furthermore, John Cridland Director General of the CBI, has also recently voiced his support for greater government commitment to the green economy recognising the benefits that can be had to business and the economy in the long term[4].

Business leaders, politicians (including Mr Davey, the Lib Dem Energy Secretary) and the public seem to be increasingly excited about the potential for ‘green growth’ and prepared for the short term cost of a transition to a low carbon economy. Given what we know about the need to act swiftly in response to climate change, wouldn’t it be a shame if we were unable to reach our greenhouse gas emissions targets because of a failure on the part of the government, not the market, to recognise the long term benefits of early action on climate change.

---

[1] Stern, N (2006) The Economics of Climate Change.

[2] Nordhaus, W. (2007) A Review of the Stern Review on the Economics of Climate Change

[3] Harvey, F. (2012) Firms call on Tories to back 2030 carbon target for power sector. The Guardian. Accessed: October 8 2012. 

[4] Cridland, J. (2012) Business needs to look at decarbonising their products and services

Read Full Post »

Are you listening George Osborne?

The UK economy stands to lose hundreds of millions of pounds of investment in gas-powered plants and offshore wind farms unless the government can provide guarantees about its future carbon policy plans, a leading article in The Times warned on Monday[1]. Seven ’global electricity and nuclear technology’ firms have written collectively to the Energy Secretary Ed Davey and to the Chancellor George Osborne, voicing their concerns over a lack of commitment to the delivery of climate change targets and a watering down of energy policy targets’.  The letter was one of two letters from ‘UK plc’ yesterday asking George Osborne to commit to these targets, the other coming from the Aldersgate Group – a coalition of companies committed to moving towards a green economy[2].

Their concerns come as yet further disagreements within the coalition emerge, this time over whether to pursue the policy recommendations of the Committee on Climate Change (CCC). The CCC recommends that 50g of CO₂ should be generated per kilowatt of electricity compared to the current 400GCO₂/kW (a 87.5% reduction), something that the Chancellor views as undesirable because of the higher energy cost burdens it imposes on UK businesses. The Chancellor’s argument runs that the higher costs of low carbon technologies would be passed on by energy firms to ‘UK plc’ thereby stifling economic growth as the potential for expansion in employment and productivity in these firms would be reduced.

The reason the CCC was set up was to try and avoid the 5 year political cycle, yet if the government ignores its advice then surely they become a toothless body subject to the whim of politics and their function becomes less of a comfort to those who worry about these sorts of things.

Unfortunately, as a result of George Osborne’s’ lack of commitment to a low carbon economy, energy firms remain reluctant to commit capital investment in such technologies, being unsure of the comparative advantage that it will deliver in the future. In a future where we are committed to lower carbon energy generation, it is likely that there would be higher taxes on carbon intensive energy generation, so investment in low carbon technologies now is a good idea. However without this commitment to lower CO₂ targets, energy firms have no incentive to invest in such technologies and will continue to invest in cheaper higher carbon technologies, lest they risk losing out to their competitors.

So in order for a low carbon renewable technology economy to really take off, the government must commit in the long term to stringent targets for CO₂ set out by the CCC. Only then will we see the required investment in low carbon technologies and significant advances in employment levels and productivity in the emerging low carbon or ‘green’ economy. And only then will we begin to have any chance of meeting our climate change targets and avoid the large costs associated with a failure to act (see next post).

---

[1] The Times. Go green or we quit Britain, energy firms tell Osborne. Sam Coates. October 8 2012.

[2] The Guardian.Firms call on Tories to back 2030 carbon target for power sector. Fiona Harvey. October 8 2012. 

Read Full Post »