By Paul Goodman
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Christopher Booker today ridicules the Government's 2050 pathway calculator – an interactive device published by the Climate Change Department. The calculator allows its users to pretend to oversee Britain's future energy policy. Booker repeats Tim Worstall's argument that the calculator is biased cost-wise in favour of renewable energy and against fossil fuels, not to mention nuclear power, and adds that it takes no account of shale gas development.
The calculator was devised by Professor David MacKay, the chief scientific adviser to the department. Mackay has said that shale gas costs can be incoporated into its model – an example of how the Department's judgement differs from Booker's. But either way, there is an inherent problem with the calculator and therefore for Chris Huhne. No Secretary of State can know what future energy demand will be, how technology will develop, how behaviour will change, and so on.
All of which struck me when I spent the best part of an idle day over the Christmas period manipulating the calculator myself. It has four essential elements: demand, supply, cost, emissions. The user must make assumptions about the degree to which the demand for energy is likely to rise or fall. Once he has made these, he can go on to provide supply from the menu of sources the calculator provides. The choices that he makes will determine emissions and costs.
It follows that, as elsewhere in life, assumptions are everything. If you're determined to reduce emissions below the Government's target of 80 per cent before 2050 but send energy bills soaring into the stratosphere, the calculator will let you. If you want to let emissions spiral and protect consumers, it will do so too (though accompanied by the solemn warning: "This pathway does not reduce emissions by at least 80% on 1990 levels").
I started with the following presumptions: that Britain should have greater security of energy supply, that emissions should be reduced and that the consumer should be protected. I ended with a solution that both cut emissions by about 50% and was cheaper than the alternatives provided (including doing nothing to reduce emissions). Since I believe that it isn't necessary to hit the 80% target, I regarded my policy solution as a bit of a triumph.
Or rather, would have done had I not recognised, as I do above, that the assumptions of the calculator are necessarily challengeable – and, furthermore, that I had achieved my result by loading my demand calculations in order to produce it. But my purpose in writing isn't to agree or disagree with Booker or Worstall, or to criticise the calculator or even Chris Huhne: after all, any Secretary of State will try to calculate what will happen to demand, and so on.
It is instead to make a point about the Government's own assumptions. However much I fiddled and fussed with the calculator, I found it impossible to deliver sufficient supply at lower cost than the alternatives without a substantial increase in nuclear. The pathway alternatives that the calculator provides tended to show less nuclear and higher costs (and bigger cuts in emissions). Please note: emission reduction tends to shows supply dipping during the run-up to about 2025.
The lesson Booker draws is that the calculator's flawed. The lesson I draw is that according to the Government's own calculations it needs more nuclear as fast as possible. Not so long ago, Huhne and the Liberal Democrats were unmistakably anti-nuclear. And David Cameron's own position was that nuclear power was a "last resort". However, our own party shifted its position as the last election approached and Huhne has done so since.
Questions that follow are: since the Government's calculator shows that more nuclear is needed – at least, if Ministers aren't willing to hit the consumer's pockets even harder or give up on reducing emissions or abandon trying to achieve more security of supply – is the planning system ready to deliver that end? And whether it is or not, how are the lights going to kept on during any future dip in supply? We haven't been making big decisions quickly enough.