Climate Change Policy – the Curate’s Egg

The UK Treasury does not attach enough importance to climate change issues. Joan Walley, a labour MP has argued that by the Chancellor making statements that emissions will not be cut at the expense of British business the Treasury is undermining investor confidence in low carbon industries. Greg Barker talks about the need to review the system to ensure that we are not simply shipping emissions abroad and Mr Cameron wanted this government to be the greenest ever. These statements show the current muddle of British climate change policy.

It seems that the government’s huge ambitions to rapidly cut emissions are not matched with policy that results in emissions actually being cut. We have a dash for PV, funded by energy payers, which will make little difference to emissions savings and likewise another dash to install wind turbines which will, like PV, in practice produce less energy than you would reasonably expect from the subsidy granted.

From the extreme of granting too generous an incentive for some renewables we have a situation where there are no incentives of any significance for low carbon heat production. The government in conjunction with the previous government design a Renewable Heat Incentive which rewards the creation of emissions from biomass, and indeed the whole of the RHI is based on providing more energy security, rather than reducing emissions. It is noteworthy that they call it the renewable heat incentive, rather than the emission reduction heat incentive.

With this background it is hardly surprising that there are few investors who want to get involved in renewable energy; uncertainty kills businesses and uncertainty in the energy sector is created by governments, rather than any external factors. It is noteworthy that there is no uncertainty in the fossil fuelled energy sector.

In the meantime the government’s policy on climate change (as oppose to their targets) is very much like the curate’s egg – parts of it are quite excellent, really, honestly, we say in all timidity.

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