Biofuels and solar energy decisions that are hard to understand

Politicians are always talking about “hard decisions”. Mr Blair and Mr Brown criticised their political opponents for what they claimed was an inability to take “hard” decisions. By “hard” decisions they usually meant “unpopular” decisions, sometimes those where innocent people in the world outside the United Kingdom would lose their lives.


Of course the hardest toughest decisions are not those which court unpopularity, as hard as those decisions are. The hardest decisions are those which admit a mistake.


There are two examples of these genuinely hard decisions which the Government have failed to make that involve green energy. At a very small level Lord Truscott, when in charge of energy decided to implement a tiny grant program for solar thermal subsidies for not for profit organisations. Although it involved less than £7 million a year it was nevertheless a massive program for the solar industry. It was implemented in a way which involved NOT informing the Solar Trade Association. As a result very few members bid for the program, which mostly went to companies that knew nothing about solar thermal.


Unsurprisingly by restricting the bidding the program now offers the taxpayer and the not for profit organisations that were supposed to benefit, unnecessarily large amounts of the subsidy going to pay companies which provide no service or goods but simply get a cut, the more old fashioned solar panels and poor take up because the restricted “framework” companies often do not have the technical or logistical structure to cope.


Altogether solar thermal which provided benign genuinely green energy for long periods gets less than £10 million from taxpayers’ money each year.


Moving from the £10 million a year end of the subsidy market the Government made a disastrous decision to subsidise biofuels. It spends £550 million of taxpayers’ money each year subsiding biofuels perhaps in the mistaken belief that they create some kind of green energy. Biofuels create energy but it is more dirty and responsible for just as many emission (in energy terms) as fossil fuel.


The problem is that biofuels directly or indirectly bring more virgin land under cultivation. Cultivating virgin land releases huge amounts of carbon into the atmosphere, so massively accelerating global warming. The carbon stays there for a hundred years and by releasing it from virgin land (usually peat or forest) you lower the availability of land to act as a carbon sink. As the Policy Exchange think tank has pointed out, it would be better by far – in simple terms “a no brainer” – to use that £550 million a year to stop the destruction of forests and peat lands.


Now this will cause the Government to break the Renewable Transport Fuel Obligation which it invented, and under which it has two years to produce 5% of UK ethanol and diesel from crops, rather than fossil fuel.


Of course this policy is responsible for emissions on a massive scale elsewhere and has certainly been responsible for pushing up food prices in the developing and undeveloped world, thereby increasing starvation. From every angle the policy is wrong, but as I said earlier the hardest decision for a government to make is one that admits that it has been wrong.


The Government’s response to what is an obvious policy error was that they would slow it down and consult. I wonder with whom they will consult. Perhaps they will ask those whose corn and rice have become so costly that they can only afford to buy half the food that they bought last year. Perhaps they will consult those who feel the effects of climate change most acutely. Somehow I doubt it.


There is another aspect to these hard decisions that Governments love to boast about. £550 million is spent each year in subsidising something that increases emissions of greenhouse gas and increases food prices. When the decision seems wrong the government “consults” and slows it down. It is difficult to figure out how so much was allotted to such foolishness when solar thermal, genuinely carbon saving, proven and established without any knock on effect ion food prices is not worth more than £10 million.


These are hard decisions indeed, but only hard in understanding how they were ever made.

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