As Britain is gripped by election fever it seems the issue of climate change and CO2 reduction has taken a back seat. But rising global CO2 emissions will have a significant impact on the nation’s future health and economic prosperity, so although the c-word isn’t high on the campaign agenda it remains a key underlying issue for the next government. More importantly, assuming the objective of a modern environmental policy should be (in part at least) to reduce carbon emissions, it should be pretty easy to work out which party has got the best offering… right?
The story so far:
As far as reducing global CO2 emissions goes, UK environmental polices over the last 5 years have missed the point. Most people in the carbon reduction business agree that a lot of the money UK taxpayers have spent on renewables since 2010 has been wasted as far as carbon reduction goes. Energy policy has spent billions importing Chinese solar panels, building taxpayer subsidised solar parks (to supply taxpayer subsidised solar power) and giving generous green tax-breaks for private investors. Doing this to support your manufacturing industry (as Germany has done) has benefits for the economy, but as far as UK Solar is concerned has proven as effective at reducing global emissions as paying people to run round in circles to reduce unemployment.
So this week, I’ve surveyed the 350 team of finance, engineering and carbon reduction specialists to get their views on how to vote for lower carbon emissions. And the verdict is…
2015: Labour & The Greens
Labour doesn’t have a great track record in carbon reduction and the Greens don’t have a track record at all. But we know something about Labour’s carbon reduction credentials.
In a nutshell, Labour’s last carbon reduction policy was about as successful as Tony Blair’s efforts to stabilise the Middle East. In early 2010 Ed Milliband launched subsidised Solar at £0.30 pence per KW, $0.30 per KWh is equivalent to an electricity price of £300 per MW against our existing electricity price of circa £45 per MWh. This indirect subsidy caused the solar industry to boom and delivered great returns on solar investments through EIS tax breaks, renewable certificate (ROC, RHI) auctions and subsidised Feed-in-Tariffs (FiTs) but as far as reducing CO2 emissions went… it was ineffective.
We’ve also learned (and it’s been painfully obvious from the start) that UK Solar can’t deliver a reliable base load to the National Grid. This has necessitated back-up generation by keeping the coal fires burning. But with solar getting priority dispatch (priority in the market), some incumbent fossil fuel generators started losing revenues and found themselves forced to shut up shop, which is why we face a looming energy crisis.
The current manifesto offerings from Labour and The Greens want the UK to be Carbon Neutral by 2030. This is possible… but also nonsensical. The sheer costs of a genuine carbon neutral policy would bankrupt the UK and achieve very little in the fight against climate change. A carbon neutral UK won’t even make a dent in the predicted rise in global greenhouse emissions (the bulk of predicted higher CO2 emissions coming overwhelmingly from the developing world, not Europe). A “Carbon Neutral UK” sounds good but from a climate change perspective, it’s largely irrelevant.
Verdict: A triumph of wishful thinking over both economics and science.
SNP – Biased towards their home voters?
The SNP promise increased subsidisation of wind and tidal in Scotland (as you might expect, they are a Scottish party after all). It’s obviously biased towards the Scottish energy industry but also, somewhat pointless. Wind compared to more reliable forms of renewable energy (like Solar) is a bit like a like a star employee that only turns up half a day per week and causes all your regular staff to leave. It’s green energy, but too unpredictable to guarantee that your kettle will boil on Monday morning. As with UK Solar, UK Wind’s priority dispatch to the grid takes revenues from fossil fuel generators, causing them to close down their plants. So the SNP policy does nothing to address future energy supply issues.
350 likes tidal power, but more generational power in the Orkney islands and the Pentland Firth won’t help other locations in the UK, so it’s not the best use of limited energy funds in cash strapped austerity Britain. In reality (until we’ve got smart grids and significantly more advanced storage technology) extra wind and tidal power in Scotland will most likely go to waste.
Verdict: Jobs and power for Scotland, blackouts for the rest of us..
Conservatives and Liberal Democrats
Of all the parties, the current coalition partners propose policies that are (probably) quite sensible. Now we should stress that nobody at 350 is a fan of Nuclear but… it is low carbon and despite the obvious concerns we all share over safety and waste, the truth is there’s not much else that’s practical for the UK. Also, one thing the current administration has going for them is they support international trade of CO2 emission reductions, which could help re-inflate the trade in carbon offsets in line with EU policy. The current government has cut back on the indirect subsidies that drove the growth of UK renewables from 2010 onwards, which will slow industry expansion but may well stimulate carbon abatement activity again. Government subsidies are a cost passed on to consumers down the line and they don’t contribute effectively to the fight against climate change, so they’re bad news for everyone.
So far, the fight against climate change has been best served by international co-operation. Maybe it’s better for The United Nations to make the rules, win the support of member governments and let the private sector make the plays. Hopefully we will see a move back to global action, coordination and international trade from December 2015, through a new global deal in Paris. Arguably the Conservatives and Lib Dems have the best relationships with other world leaders to put the UK in the best position to see results from that.
Verdict: Could be worse… but could be a lot better. At least it’s getting there.
UKIP
An exit from Europe would see us leave the European Union Emissions Trading Scheme, which is the only existing sensible mechanism to fight climate change in Europe. So, bascially, their policies will almost certainly lead to increased emissions… in fact, their pledges to scrap most green policies make it sound as though they positively want the climate to change, CO2 and sea levels to rise.
Verdict: Start living underwater now to avoid the rush.
What would a sensible carbon-reduction policy look like?
A more dynamic international carbon market is the best way to fight climate change because it’s a global issue and it revolves around carbon emissions. The best results we’ve seen to reduce global CO2 emissions have come from market-based mechanisms that operate with government support but (critically) not intervention, using the existing international mechanisms (like the Kyoto Clean Development Mechanism) to reduce emissions where the growth in CO2 emissions is originating, i.e. the developing world.
From a carbon reduction perspective, it seems like none of the parties fighting for our votes in the UK have got a great handle on the issue. There’s no clear policy for smarter grids or battery tech to optimise our renewable energy mix and take advantage of the clean energy capacity we already have, either. But if you want to vote for the best climate change administration (or perhaps the least worst would be a more accurate description) your best bet is probably to vote for more of the current coalition… but even then, don’t hold your breath (unless UKIP get in, then you’ll have no choice because oxygen will be in short supply).