By Joseph Willits
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Matthew Sinclair, Director of the TaxPayers’ Alliance (TPA) has written a new book exposing the crippling cost of climate change policy, and the special interests that profit most. His ultimate call is for such policies to be scrapped, that are detrimental to the consumer, and are only beneficial to huge businesses that thrive at their expense.
‘Let them eat carbon’ evaluates the financial implications involved in climate change policy. In ‘Let them eat carbon’ Sinclair reveals the financial implications of regulations such as the Renewables Obligation and the EU Emissions Trading System (EU ETS).
Sinclair cites these two examples amongst others, as already costing billions, yet they are expected to cost even more in the future. His findings state that:
- In Britain the EU ETS cost industrial and commercial energy consumers nearly £1.9 billion in 2010, equivalent to nearly £75 a family. That is despite a fall in industrial emissions with the recession and a depressed carbon price. At the Government’s target price of £30 /t CO2 that would have been over £178 a family.
- In 2009-10 the Renewables Obligation cost over £1.1 billion, equivalent to an additional £40 a family (up from under £900 million in 2007-08).
These and other climate change polices have caused an ‘affordability crisis’ according to Citigroup, for energy consumers. Compared to Italy, Germany and France, Britain will be required to invest further to sufficiently keep up with targets. Energy prices are likely to be 50% higher because of this. Sinclair writes that:
“Regulations that are supposed to cut greenhouse gas emissions are adding to energy bills, and making it much harder for a lot of people to make ends meet.”
Whilst energy consumers across the country will be facing an ‘affordability crisis’, Sinclair argues in ‘Let them eat carbon’ that special interests shall be able to make considerable profits. He cites steelmaker ArcelorMittal as an example, as major companies were able to benefit from large amounts of valuable surplus emissions allowances, due to 2009 and 2010’s decline in industrial production.
In five major economies – Germany, the UK, Italy, Poland and Spain, earlier studies have shown that energy companies were earning between £17 and £53 billion in windfall profits between 2008 and 2012 due to the EU Emissions Trading System. Sinclair writes that:
“The only ones who benefit are a handful of big businesses that can make billions in profits at the expense of ordinary consumers. With the dismal failure of these policies, and the cost mounting, it is vital that we scrap them.”