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Climate Change

What does the Durban summit last weekend mean for taxpayers?

Early last Sunday morning Connie Hedegaard, the European Commissioner for Climate Action, wrote on Twitter that: “We made it.  EU’s strategy worked.”  It was the end of another climate summit in Durban where the parties had been starkly divided into two camps: the European Union and lots of smaller countries pushing for rapid decarbonisation; and major emitters like the United States, China and India who were unable and unwilling to commit to binding limitations on their own emissions.  The same divisions meant that Copenhagen collapsed in acrimony and the negotiators at Cancun limited themselves to addressing details.  Was it really the “breakthrough” that Hedegaard claimed?  Did the EU’s strategy really “work” and secure the global deal to ration greenhouse gas emissions they want?

Taken for a ride...

No.  The EU’s negotiators were willing to accept new commitments under the Kyoto Protocol, which doesn’t include the major emitters.  But in return they initially wanted all the parties to commit to agreeing a legally binding deal covering everyone by 2015.  The major emitters wouldn’t do that and so it looked like the talks were going to break down.  Instead they got creative with the language and now the major emitters are only committed to an “outcome with legal force”.

Enthusiasts in Europe can claim that is basically the same thing, but the reality is that just about anything can be described as “an outcome with legal force”.  If the major emitters don’t want a legally binding deal to limit their emissions in 2015, nothing will stop them rejecting it.  That is why they would sign a deal with the vaguer language but not when it was more specific.

So the EU has committed itself to emissions cuts in return for a Durban Platform that pledges a deal by 2015, but that Platform isn’t made of much stronger stuff than the Bali Roadmap back in 2007 which pledged a deal by 2009.  That certainly isn’t a triumph.  It would be better described as a disastrous performance if it wasn’t for the fact that the EU was planning on going ahead unilaterally anyway with the existing 2020 targets.  The result in Durban was another breakdown, not a breakthrough.

Canada added to the environmentalist gloom by dropping out of the Kyoto Protocol on Monday.  Their Environment Minister Peter Kent said that complying would mean the equivalent of taking every motor vehicle in Canada off the roads, or shutting down their entire agricultural sector and cutting the heat off in residential, industrial and commercial buildings.  The leader of the Canadian Green Party was apparently almost in tears at a press conference responding to the announcement but there is no sign ordinary Canadians care much either way.

The European Union is now the only major economic area still committed to rationing fossil fuel energy.  It has been going ahead without the largest emitters taking equivalent action since the Kyoto Protocol came into effect in 2005.  Even if a new deal is built on the Durban Platform it won’t start until 2020.  Our leaders have already pressed ahead for six years in the vain hope a global deal was just around the corner.  There is nothing to show for it.  The global increase in emissions in 2010 was, according to the US Department of Energy, the largest ever.  Can politicians here really sustain that for almost another decade?

While negotiators in Durban were committing their countries to expensive action to reduce greenhouse gas emissions, others in Brussels were trying to save the euro.  If they are going to have any chance, they will need to credibly commit to fiscal austerity.  And that will be much harder if low and middle income families are struggling to pay higher energy bills, at the same time as benefits are cut or taxes are hiked.  If Europe could ever afford a vain attempt to lead the world into cutting greenhouse gas emissions, it can’t now.

That is why many countries are making cuts in some particularly inefficient climate policies.  Britain recently cut subsidies for small solar installations under the feed-in tariff scheme roughly in half, from 43p per kWh to a still extravagant 21p per kWh.  Environmentalists and lobbyists are up in arms but the Government insist it is needed to keep feed-in tariffs affordable.

Lots of other countries from Spain to the Czech Republic have taken similar steps, but they need to go further and consider a more realistic approach to climate policy overall.  Right now too many European politicians are still trying to work out what their allotted share of the burden would be if some disinterested world Government set climate policy.  Instead they should be asking what their country can usefully do in the real world, where even when treaties can be arranged they are invariably limited and messy products of self-interested negotiation.

Britain is a good example.  Given that less than two per cent of world emissions are produced here we can make a limited contribution by cutting the amount we emit.  But we do still have significant financial and technical resources at our disposal.  Instead of investing £200 billion in our energy sector alone, as Citigroup argue we would need to in order to meet environmental targets, squandering a large part of it on exorbitantly expensive offshore wind turbines, why not put a far smaller amount of money into directly supporting research that can make low carbon energy more affordable?

Durban definitely wasn’t an example of the EU’s approach to climate policy working, quite the opposite.  The only question now is whether or not the politicians are honest enough to admit it, and flexible enough to consider other options.

What does the Durban summit last weekend mean for taxpayers?

Early last Sunday morning Connie Hedegaard, the European Commissioner for Climate Action, wrote on Twitter that: “We made it.  EU’s strategy worked.”  It was the end of another climate summit in Durban where the parties had been starkly divided into two camps: the European Union and lots of smaller countries pushing for rapid decarbonisation; and major emitters like the United States, China and India who were unable and unwilling to commit to binding limitations on their own emissions.  The same divisions meant that Copenhagen collapsed in acrimony and the negotiators at Cancun limited themselves to addressing details.  Was it really the “breakthrough” that Hedegaard claimed?  Did the EU’s strategy really “work” and secure the global deal to ration greenhouse gas emissions they want?

Taken for a ride...

No.  The EU’s negotiators were willing to accept new commitments under the Kyoto Protocol, which doesn’t include the major emitters.  But in return they initially wanted all the parties to commit to agreeing a legally binding deal covering everyone by 2015.  The major emitters wouldn’t do that and so it looked like the talks were going to break down.  Instead they got creative with the language and now the major emitters are only committed to an “outcome with legal force”.

Enthusiasts in Europe can claim that is basically the same thing, but the reality is that just about anything can be described as “an outcome with legal force”.  If the major emitters don’t want a legally binding deal to limit their emissions in 2015, nothing will stop them rejecting it.  That is why they would sign a deal with the vaguer language but not when it was more specific.

So the EU has committed itself to emissions cuts in return for a Durban Platform that pledges a deal by 2015, but that Platform isn’t made of much stronger stuff than the Bali Roadmap back in 2007 which pledged a deal by 2009.  That certainly isn’t a triumph.  It would be better described as a disastrous performance if it wasn’t for the fact that the EU was planning on going ahead unilaterally anyway with the existing 2020 targets.  The result in Durban was another breakdown, not a breakthrough.

Canada added to the environmentalist gloom by dropping out of the Kyoto Protocol on Monday.  Their Environment Minister Peter Kent said that complying would mean the equivalent of taking every motor vehicle in Canada off the roads, or shutting down their entire agricultural sector and cutting the heat off in residential, industrial and commercial buildings.  The leader of the Canadian Green Party was apparently almost in tears at a press conference responding to the announcement but there is no sign ordinary Canadians care much either way.

The European Union is now the only major economic area still committed to rationing fossil fuel energy.  It has been going ahead without the largest emitters taking equivalent action since the Kyoto Protocol came into effect in 2005.  Even if a new deal is built on the Durban Platform it won’t start until 2020.  Our leaders have already pressed ahead for six years in the vain hope a global deal was just around the corner.  There is nothing to show for it.  The global increase in emissions in 2010 was, according to the US Department of Energy, the largest ever.  Can politicians here really sustain that for almost another decade?

While negotiators in Durban were committing their countries to expensive action to reduce greenhouse gas emissions, others in Brussels were trying to save the euro.  If they are going to have any chance, they will need to credibly commit to fiscal austerity.  And that will be much harder if low and middle income families are struggling to pay higher energy bills, at the same time as benefits are cut or taxes are hiked.  If Europe could ever afford a vain attempt to lead the world into cutting greenhouse gas emissions, it can’t now.

That is why many countries are making cuts in some particularly inefficient climate policies.  Britain recently cut subsidies for small solar installations under the feed-in tariff scheme roughly in half, from 43p per kWh to a still extravagant 21p per kWh.  Environmentalists and lobbyists are up in arms but the Government insist it is needed to keep feed-in tariffs affordable.

Lots of other countries from Spain to the Czech Republic have taken similar steps, but they need to go further and consider a more realistic approach to climate policy overall.  Right now too many European politicians are still trying to work out what their allotted share of the burden would be if some disinterested world Government set climate policy.  Instead they should be asking what their country can usefully do in the real world, where even when treaties can be arranged they are invariably limited and messy products of self-interested negotiation.

Britain is a good example.  Given that less than two per cent of world emissions are produced here we can make a limited contribution by cutting the amount we emit.  But we do still have significant financial and technical resources at our disposal.  Instead of investing £200 billion in our energy sector alone, as Citigroup argue we would need to in order to meet environmental targets, squandering a large part of it on exorbitantly expensive offshore wind turbines, why not put a far smaller amount of money into directly supporting research that can make low carbon energy more affordable?

Durban definitely wasn’t an example of the EU’s approach to climate policy working, quite the opposite.  The only question now is whether or not the politicians are honest enough to admit it, and flexible enough to consider other options.

Non-job of the week

Based on the premise that you have to keep repeating yourself over and over again before people will start listening, here are some words I wrote two weeks ago regarding Lambeth Council’s search for an Energy Efficiency Manager:

I am sure many of you who have worked in offices will have seen stickers next to light switches reminding you to switch off the lights if they are not needed. These days we also have things like smart meters that tell us exactly how much energy we are consuming. If you have seen one in action you will know that as soon as you switch on a kettle, the energy consumption rises. It doesn’t stop me making a cup of tea, but I know exactly which appliances at home use the most electricity, and if I can find ways of using those appliances less I will save money.

Non-Job of the WeekCouncils can reduce energy consumption by doing the same. If you are about to go into a meeting for a couple of hours, does your computer still need to be switched on? It may have been dark when you started working this morning, but do the lights still need to be switched on? Letting council workers see how much energy they are consuming will result in a reduction of energy consumption, as happened at Windsor and Maidenhead Council.

In a report last year we highlighted how councils reacted differently to government legislation. Although all councils have to reduce the amount of CO2 emissions, there are councils who manage to do it without creating mini-departments like Lambeth do.

By adopting simple strategies that we all use at home, councils can dramatically reduce their CO2 emissions and save taxpayers’ money.

This week, Nottingham City Council is searching for a Carbon Development Officer who will be ‘tasked with improving Nottingham’s resilience to fossil fuel depletion and climate change, and identifying opportunities for securing investment to support this agenda.’ No prizes for guessing who is likely to be paying for the ‘investment to support this agenda.’

The London Borough of Redbridge is also looking for an Energy Management Officer, who needs to have the skills to forecast the quantity of Carbon Allowances required by the Council each year.

Finally, Broadland District Council needs a Climate Change Advisor who will be raising awareness and promoting sustainable sources of energy and will be required to be inspiring, but credible, and must therefore have sound knowledge of energy and sustainability issues.

My response? As it is often said in the House of Commons: I refer the honourable member to the reply I gave some moments ago!

Non-job of the week

At the end of last year, the Ministry of Defence (MoD) and the Foreign and Commonwealth Office (FCO) appointed Rear Admiral Neil Morisetti as the UK’s Climate and Energy Security Envoy.

It is important to note that this doesn’t appear to be his only duty, he seems to have a real job too.  But it clearly takes up a substantial part of his time and you may ask what climate change has to do with the MoD, and why it feels the need to appoint a Rear Admiral to such a role. During an interview to the Australian Broadcasting Corporation, this is what he had to say:

I think we – the reason we think that the implications of climate change have broadened from just environmental, socio-economic and political is that we’re beginning to recognise – and this is on a global basis – that the – not the physical changes that occur with climate change, but the second and third-order consequences, the result of rising temperatures, sea levels, increased acidity of the ocean is that we’re seeing the potential for loss of land, of loss of livelihood for people.

And that, on top of all the other stresses they’re facing, many of them related to resources, food, energy, water, etc., has the potential to increase the likelihood of conflict. So, climate change isn’t necessarily something that’s going to start a conflict on its own, but it is what I would call a threat multiplier or a catalyst of conflict.

I still can’t see what he and presumably his team are going to do. If there is conflict as the result of a water shortage, which Rear Admiral Morisetti mentions later in this interview, how is he going to prevent it? What does he do all day? Talk to governments about potential threats they already know about? Rising temperatures (and indeed falling temperatures) are not something that happen overnight. No-one predicted the earthquake in Japan earlier this year, which has contributed to energy supply problems there.

Later in the interview he talks about Afghanistan:

One of the challenges we have to look at, for example, is operating in Afghanistan, where we’re dependent on convoys to bring our fuel in from Karachi through to our operating bases and a lot of that convoy’s taken up with carrying the fuel.

So we’ve been looking at ways at which we can reduce our dependency on fuel by being more energy efficient, optimising the way we operate our equipment, perhaps changing our behaviour in circumstances whilst still being able to deliver the operational capabilities that we need.

Adapting to the new challenges facing our armed services is of course important work. No-one is going to dispute that, but surely there are already people inside the MoD who are trying to use fuel more efficiently? Is a Rear Admiral acting as a Climate and Energy Security Envoy – i.e. tasked with engaging with others outside the military – really the right person to get involved in that kind of operational planning?

There are already pressing problems around the world for a man with his experience to deal with. Pirates off the coast of Somalia are regularly hijacking vessels. Wouldn’t his time be better spent concentrating on immediate problems like these, rather than talking to politicians and think tanks about the importance of climate change?

Article about the Solyndra scandal and “green growth” in City AM

I’ve written an article for City AM about the Solyndra scandal, mentioned before on this website, and the implications for draconian climate regulations. It looks at the price we’re paying for these policies; the financial challenges they are facing; and the fact they don’t deliver jobs.

I conclude the article arguing that:

“The particularly sad and venal story of that loan guarantee is just one example of how attempts to secure green growth so often end in disaster. The pattern is clear. Huge amounts of consumers’ and taxpayers’ money wasted; the promised boon to employment not living up to its billing; and a nasty aftertaste of cronyism.”

In other news, reports from Australia suggest we might see yet another vindication of the Second Law of Climate Change Politics soon, which I coined in Let them eat carbon: Climate change regulation will tend to proceed by the least democratic route.  This video explains what has happened pretty simply:

Talking to the One Show about energy prices

Yesterday evening I appeared as part of a panel for the One Show responding to consumers’ questions about high energy prices.  With electricity and gas bills putting so much pressure on their finances, it is important that people are aware of just how much government climate regulations are already costing them, and set to add to their bills this decade.  We need to get rid of failing climate change policies but that won’t happen if the public aren’t aware of the price they’re paying.  Here is the clip, and there is a lot more detail in the book.

One thing that came up in that clip, which it is worth saying a bit more about, is Chris Huhne’s suggestion that we won’t get higher bills because of the measures they are taking to improve the energy efficiency of our homes.  When you think about it, that argument is somewhat absurd.  He can’t conjure £200 billion of investment in the energy sector out of nowhere.  Who does he think will pay for that massive investment?

When Citigroup looked at this issue they found that even with major efficiency improvements prices will still rise by well over a third in real terms, and then we have got to pay for all the insulation and double glazing too.

He was also misleading when he said that this investment was needed to keep the lights on.  Replacement and renewal to maintain supply is only a small share of projected investment.  It is attempts to cut greenhouse gas emissions that are driving the huge costs expected here.  Particularly building, connecting and backing up massive amounts of offshore wind.

Buyer beware with environmental policy, or you might accidentally ban water

As the US magician-comedians Penn and Teller make clear in this classic clip, you need to be careful with environmental policy.  It’s quite legitimate to be concerned about chemicals affecting what you eat and drink, but if you don’t find out more it’s easy to be lead astray and wind up signing a petition to ban water.

There is a similar problem with climate change policy.  Many people see a threat of sea levels rising; more frequent and damaging storms; or even fewer polar bears, and want to do something about climate change.  They still need to look very carefully at what politicians are doing to curb greenhouse gas emissions.  The debate over the science isn’t nearly as critical as it is made out to be, and the most important reasons to be sceptical have nothing to do with the effect you think carbon dioxide has on the climate.

In Let them eat carbon I’ve set out how climate change policy is going very wrong.  The taxes, subsidies, regulations and targets are costing a fortune, putting people out of work and failing to deliver.  They are sustained by activists with generous grants at our expense; special interests making hefty windfall profits; and leaders who don’t want to admit that the current agenda has failed.  It isn’t banning water, but politicians have signed us up to some very bad ideas.

David Cameron intervenes in Australia to make the case for policies that are hurting manufacturing industry here

At ConservativeHome I’ve written an article following on from reports over the weekend that David Cameron is intervening in Australia to support proposals for a new carbon tax.  Just last week the Government admitted that bills for large energy intensive companies are set to rise by over fifty per cent, and industry expects those rises could be even sharper.  That will mean lost jobs and emissions exported to other countries instead of cut.  We need to reform policy here not encourage other countries to make the same mistakes.  You can read the article here with more detail on the issue and why you can’t rely on Government energy price projections.

Claims from civil servants they need a ‘safe space’ to think freely are undermined by today’s FT front page

I’m currently appealing to the Information Tribunal against the Department of Energy and Climate Change’s refusal to answer a Freedom of Information (FOI) request I submitted about the economic and financial cost of the higher emissions target they want. TPA research suggests that could be extremely expensive. But the Government are refusing to let us know the cost estimate they have been basing their position on.

One of the grounds for that refusal relies on an exception in FOI law for internal communications which is intended to avoid, in the words of the Information Tribunal, the “threat of lurid headlines depicting that which has merely been broached as agreed policy”. The idea is to ensure that people can still freely discuss ideas within a ‘safe space’ in government. My request doesn’t do anything to seriously threaten that safe space, but a civil service leak today completely undermined it. Another example of how something can be a matter of principle and ensuring good government for officials when it suits them, and discarded just as quickly when it doesn’t.

Climate change targets are a big deal. The Government put the cost of the Climate Change Act 2008, which enshrines a target for an 80 per cent cut by 2050 in law, at £324 to £404 billion. It is vital that we are able to scrutinise the likely costs of new targets before the Government signs up to them at an international conference. I requested what they thought the cost would be after the conference in Copenhagen where the pledge was made. The only reason we didn’t sign up to such a target is that the Chinese and Indian negotiators understandably wouldn’t accept binding limits on their own emissions. The policy therefore clearly hadn’t merely been broached and there is no reason they shouldn’t release an estimate of the likely cost of a target they are still pushing for at an EU level.  It is vital we know the expected cost of these policies so that there can be proper democratic scrutiny of the Government’s estimates and decisions.

That makes it particularly annoying to see the front page of the Financial Times today with a very lurid headline: “Abolish jobcentres, scrap maternity leave, suspect consumer rights – Cameron’s strategy chief peddles a radical agenda”. The journalists have done their job and the story does explain that these were just ideas from Steve Hilton, David Cameron’s Strategy Director, but this is exactly the kind of thing that the safe space exception is supposed to protect. And who has breached it?

Over the past few months, government officials have told the Financial Times of some of Mr Hilton’s quirkiest ideas, which failed to make the government’s red tape review, being announced today.

Steve Hilton’s ideas may be good, bad or just impractical. He is certainly right that maternity pay clearly does make it harder for small firms in particular to recruit young women. The solution might be paying for it in another way so that it is less of a burden on a specific employer. But all that is neither here nor there for the time being. Clearly the civil servants are finding looking into these ideas a hassle, or just haven’t taken to Steve Hilton as a colleague. So they have taken ideas which the Government isn’t intending to pursue and leaked them to journalists.

When officials want to avoid scrutiny over the costs of climate targets, the safe space is sacred, but when someone actually uses that space for its intended purpose, they will happily violate it themselves. Apparently some in Whitehall are still attached to Sir Humphrey’s old tricks.

Let them eat carbon event with The Freedom Association

In a couple of weeks time – 11 August 2011 – Let them eat carbon is going to be released. The next Monday – 15 August 2011, at 6.45pm for 7pm – I’ll be speaking to the The Freedom Association as part of their Free Spirits series about the book.  There are more details, and you can register to attend, here or you can register on Facebook here.

Chasing Rainbows: How the Green Agenda Defeats its Aims by Tim Worstall

Tim Worstall has been very busy recently.  As well as maintaining his long running and superb blog, he has written a paper for the Institute of Economic Affairs about some of the myths at the heart of the UKUncut campaign’s attempt to convince people spending cuts aren’t necessary.  And that follows shortly on the heels of the book I’ve just finished reading, Chasing Rainbows: How the Green Agenda Defeats its Aims.

The book is well worth reading.  It isn’t about the science of climate change but instead sets out why, in a number of ways, the ideological preoccupations of the environmentalist movement cause them to adopt self-defeating policies.  Some examples are very relevant to TaxPayers’ Alliance research.

He looks at how attempts to encourage recycling aren’t informed by a proper understanding of the time that people have to spend sorting their waste.  Neither the British Government nor the European Union even know how much time it is taking to meet their requirements.   That means they don’t properly appreciate the cost in terms of reduced leisure time, making millions lives slightly more pressured and stressful.  It is a good explanation of why that sorting process has become so complicated as we showed in our report on the number of bins households across the country are given to sort their waste into.  That additional sorting in the home might seem like its saves money if you ignore the value of the time people spend doing the sorting.

He also looks at green taxes and makes the point we have in a number of studies: green taxes can be too high if they exceed the social cost of the emissions produced by activities like motoring and flying.  I think he is a bit too kind on the taxes.  He acknowledges but doesn’t quite describe the seriousness of the problems in setting the ideal carbon tax that many economists would like to see.  And the social cost estimate he uses from Stern was never really intended as a tool for policymaking.  When DEFRA translated the Stern Review’s findings into a tool for policy appraisal they came to a substantially lower number (the “Shadow Price”).  There is more detail on all that in our most recent report on green taxes and regulations.

Well worth reading.

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