Cameron’s downgrading of environment policy bodes ill for the future


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As the economy goes back into recession, David Cameron has downgraded an appearance at the Clean Energy Ministerial Conference from a keynote to ‘remarks’. Environmental NGOs are concerned.

David-Cameron-huskiesFriends of the Earth’s Andy Atkins says it will:

“…further undermine confidence in his commitment to leading the self-styled ‘greenest government ever’.”

John Sauven of Greenpeace has also expressed disappointment. But why did the prime minister change his plans?

I asked that question on Twitter this morning and got a range of responses from right wing voices.

The Daily Express’s Patrick O’Flynn replied:

“Answer is that blue collar Britain wants lower energy bills not posh blokes going on about wind farms.”

While Conservative activist Sarkis Zeronian tweeted:

“Because he has important matter to attend to, you know, real world stuff like the economy and Iran…”

Let’s deal with each claim in turn.

Lower energy bills

There is little doubt that blue collar, and indeed white collar, Brits want lower energy bills. Combined gas and electricity prices have risen by 75 per cent since 2004 – an astonishing rise. But it is soaring wholesale gas prices and not renewables that are primarily behind this.

A report (pdf) from the Committee on Climate Change released last December found that of the of the £455 increase in energy bills over the period, rising gas prices accounted for £290; transmission and distribution costs accounted for £70; energy efficiency schemes added £45; investment in renewable energy was just £30; and VAT added the final £20.

 


See also:

Clean energy summit will expose more coalition divisions 23 Apr 2012


 

Meanwhile, new research by IPPR shows how complicated tariff structures from energy companies means some customers in some parts of the country are paying £330 more than their neighbours for the same amount of electricity. The government only seem to care about so-called switchers who bother to change energy firms while poorer and elderly customers who find the whole thing baffling get ripped off.

Ensuring Ofgem enforce their own rules around cost reflectivity, rather than sticking our head in the sand on clean energy, is the main way to bring down prices.

The economy

As we now know, Britain is back in recession but the combined effect of anaemic growth over the last 18 months means the economy is now smaller than when George Osborne delivered his Spending Review in October 2010. One sector that is growing rapidly, and which could provide new sources of income and jobs, is clean energy.

According to the Pew Charitable Trusts (pdf) the sector has grown more than 600 per cent worldwide since 2004. Britain is the world’s sixth largest investor in clean energy but fell behind India last year. Germany invests three times as much as the UK.

Of course the low carbon transition is not the only answer to all our economic prayers but encouraging investment in clean energy, as well as low carbon transport, and energy efficiency is critical to get our economy moving again. Some of these jobs will be in high tech sectors but others are in traditional manufacturing sectors.

Steel and cement are in high demand for wind turbines while thousands of other firms making gear boxes, bearings and generators are adapting their business models to meet this new demand. And not only can increased supply meet domestic demand. As other countries – including those in the developing world – step up efforts to lower their carbon emissions, there are new opportunities for British exports which will help rebalance our economy.

Cameron appears to get this and will, at least, direct his remarks today to new wind projects. It’s a pity more on the right don’t yet understand the link between sustainability and growth.

Iran

It may not seem obvious that Iran is linked to clean energy but it is. Policymakers care more about volatility in the Middle East than in, say, the Horn of Africa because of its oil production. This is perfectly rational given net import dependency in 2011 was 36 per cent, the highest since 1976.

Last year, domestic oil production fell 17.5 per cent while natural gas production fell 21 per cent. According to DECC (pdf) this is due to ‘maintenance activities and slowdowns’ – nothing to do with environmental regulations. Fracking, to extract shale gas, may in the future help plug some of this gap if safety concerns are fully addressed and so could nuclear if potential providers stopped pulling out of the market.

But for security, as well as cost reasons, it is foolhardy not to invest in enewable.

The answer

These stock answers from the right do nothing to help us understand why David Cameron has not made a keynote speech on the environment in two years. The answer is party politics. More than 100 backbenchers, primarily conservatives, are opposed to renewables.

Following the budget backlash, Abu Qatada cock up, and Murdoch mess he has never been weaker as Tory leader and simply doesn’t want to rock the boat.

 


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