It is widely accepted that the world must reduce carbon
emissions. The Energy Bill, which received its third reading, last week,
facilitates the UK’s efforts in this regard and I was pleased to support it. However, it is clear that since we produce
only 2% of global emissions there is not much point acting unilaterally. We must do our bit and try to provide
leadership to others but increasingly, others seem not to wish to be led. I
accept that on a per capita basis China and India may be “entitled” to
accelerate emissions as they alleviate poverty and catch up with living
standards in the rest of the world. And accelerating they are: China increases
its emissions each year by roughly the same as the UK’s total emissions. But
for me the really disturbing developments are in the EU, once regarded as the
world’s conscience in climate matters.
Take Germany, for example. The green lobby often refers to
them as best in class. But the green lobby is wrong. Germany produces around
20% more carbon per head than the UK and about 25% more per unit of GDP. The
issue is not lack of renewables – they have plenty. The problem is that they,
in common with most EU states, burn much more coal than we do. Germany is not unique. Broadly the same trend
applies to Holland, Italy, Spain, Belgium and Ireland. Indeed, the only
significant country that performs better then the UK on emissions is France,
but their huge nuclear base ensures that they will always be top of the class.
In March, the European Environment Agency confirmed that not only were UK
emissions significantly below the EU average, but also they were falling at
about double the rate of the rest.
Now this might be acceptable if high carbon countries had a
clear plan to burn less coal in future. But not only does no such plan exist;
incredibly, more coal stations are
being built. Not only in the catch-up economies of Eastern Europe but at a very
rapid rate in Germany. A cynic might say that the German industrial
establishment has taken a look at the way the “wind is blowing”, and told their
Government enough is enough (after all, coal-produced electricity is about 30%
of the price of wind and solar). If they are to compete in the global race, they
need low energy prices. Clearly, in the UK the industrial establishment has
less weight in the corridors of power. We will have turned off all our coal
stations within three years.
An EU master plan was supposed to have prevented this by
assigning a carbon price to emissions, but last month the European Parliament
voted to maintain an EU carbon price of around €4 a tonne. In the UK, we have
implemented a price of €20 a tonne on top of that and we plan to increase this
further. The impact on our process manufacturing industry will be devastating
and, at the margin, will ensure that electricity is produced on the continent
and transported to the UK via the interconnector cables. Nobody disputes this
will cost jobs, at least on this side of the channel. So what has gone wrong? It was not meant to be like this.
The Commission has
made one simple mistake. It has set targets, not based on reducing carbon
emissions, but on increasing renewables, as if these were the same thing. This was
a triumph for the powerful renewables lobby, led predominantly by German and Scandinavian
suppliers, but it is not helping the climate as much as carbon reduction targets
would. An interesting by-product of all this is that while we have
the lowest emissions in Europe, and they are falling fastest, we could still we
fined under EU directives for not having the mandated amount of renewables.
It’s a funny old world.