Hopes,aspirations, signals, endless reviews and consultations- the 2008 Budget

Mr Darling’s Budget has been much as I feared; it shows a Government that is good at commissioning reviews and studies but lacking the political courage to make genuinely hard decisions.  

The Budget documents states: “Tackling climate change is the most serious and pressing global environmental challenge the world faces.” True. Unfortunately the policies announced under the heading “An Environmentally Sustainable World” will do little to tackle climate change or make the world more environmentally sustainable. Continue reading

Green Taxes, reports gathering dust, and polluters that should pay

I decided in October last year to “blog” about the environment and have posted articles almost every day since then. I called this “Ideas for the Environment” because ideas about improving life sometimes turn into real improvements and without the ideas there will be no improvements.  Continue reading

No tax relief for the environment

Governments are notoriously reluctant to change. Some months ago I was talking to a Treasury official about the best ways to incentivise microgeneration and solar thermal in particular. I explained that I thought that a simple income tax allowance of the amount spent on a thermal solar system would be a good idea.

This is what Austria has done and it has led to a massive use of thermal solar and a corresponding gain in environment benefits and in energy security.  His reply was disappointing but not unexpected. Continue reading

Gas bills – time to change the pricing structure

My gas bill came through the letterbox yesterday, and I thought I had better look at it.

My bill told me how many “units” I had used. Units are the measurement of gas at your gas meter. These are converted into kilowatt hours by first finding out how many cubic metres of gas your units represent. More modern meters already show readings in cubic metres; if you have an older meter you will have to multiply the units by 2.83. Once the volume of gas used is established from the meter reading, the utility company establishes how many kilowatt hours of energy this constitutes.

They have to do this because the energy contained in natural gas varies and to find the actual energy you have to take into account temperature, pressure and calorific value. My gas supplier multiplied the cubic metres by 1.02264, then the resultant figure by 39 (the calorific value) and the divided by 3.6 which gave the kWh I used. I was then charged for the kilowatt hours that I have used, after value added tax at 5% is added to the bill.

The value added tax rate is exactly the same for gas and electricity as it is for buying a installation of soalr panels, or PV or a wind turbine. Reducung it to 5% is one of the great triumphs of Gordon Brown’s chancellorhip – puting microgeneration on the same footing as fossil fuel energy.

There are many different gas tariffs but in my case I pay a higher rate for the first 1303 kWh used each quarter, and a lower rate thereafter. In my case the higher rate is 4.339p per kWh and the lower rate 2.39p per kWh. Some tariffs provide for a standing charge before you consume any gas at all. 

I think that tariffs that charge less per kWh as you use more gas penalise the people who pollute the least and that must be wrong. Consumption of any item is encouraged by offering a cheaper unit price for that item. If you go to your local supermarket you will see offers such as “two for the price of one”, “buy one get one free” but if you only want or need to buy one you rarely see it offered at half price.  

The idea behind this “bogof” marketing is to encourage more purchasing and in the case of a supermarket it does encourage us to buy more than we planned. Unfortunately a significant portion of the food special offers that we buy are thrown away, unconsumed, to add to the piles of land fill rubbish for supermarket’s increased profits and at the impoverishment of our environment. 

There are over 2 million pre payment gas meters in the United Kingdom. These service the poorest people.  Those who use the most gas can usually get the best deals. Those who can only afford to use a little gas get the worse deals. If you live in a mansion you can buy your gas at bargain basement rates, but if you are poor you pay the highest rates. 

We do not need to encourage the use or gas or electricity. We should not offer 2000 kWh for the price of 1000 kWh. Quite the reverse, we need to discourage the use of all fossil fuel energy. If we fail to do this we add to the climate change problems that we will invariably face at some time in the future, we add to the depletion of fossil fuels before we have found viable alternatives and we add to atmospheric pollution. 

So, it would make much more sense if all gas tariffs were at a very low rate for the first, say, 2000 kWh per quarter and a higher rate at the next 5,000 kWh and so on, charging more per unit of energy the more energy that you use. This will also encourage the take up of thermal solar systems (like those that my company Genersys sells), and if adopted for electricity tariffs as well as gas tariffs would encourage all forms of microgeneration. 

It will be difficult to change to these tariffs that penalise those who use the most energy in a competitive market, but Nicholas Stern has pointed out that climate change involves a fundamental failure of markets. It seems logical therefore that If markets fail we need to establish alternative structures that work, so it is probably about time to get rid of the utility companies as free market entities.

Climate Change – Mr Stern and the fundamental failure of markets

Nicholas Stern economist and famed author of “the Stern Review: the Economics of Climate Change” claimed yesterday that “the problem of climate change involves a fundamental failure of markets: those who damage others by emitting greenhouse gases generally do not pay. Climate change is a result of the greatest market failure the world has seen.”  Continue reading

Darling, you’re unlucky.

In January and February of this year I corresponded with Alistair Darling when he was Secretary of State for Trade about some serious failings and structural flaws in the Department of Trade and Industry’s Low Carbon Building Programme, which provided householders and not for profit organisations with some small grants to install microgeneration.  He never deigned to reply, although I did get a letter from Lord Truscott, a junior minister then, which was not a substantive reply but a boastful mini summary of what the letter writer obviously thought amounted to world beating climate change policies which involved the expenditure of £50 million of taxpayers’ money to support microgeneration. Continue reading

Gordon Brown has to choose

Bismark said, about 160 years ago that politics is the art of the possible. That Canadian economist of good Scottish stock, J K Galbraith, wrote that politics is not the art of the possible. It consists, Galbraith held, in choosing between the disastrous and the unpalatable. It is certainly about making choices, and a former Scottish economist who is today our Prime Minister, Gordon Brown, has some big choices to make. He has to steer our country’s energy policy in an environmental way, so that we produce significantly less carbon. He has to show results on this rather quickly, because he and his party have claimed the high ground of environmental and climate change leadership, not only in the country but across the world.  Continue reading