It’s no good drawing a correlation between green policies and rising bills. The figures don’t back it up

If Labour is to provide the genuine green alternative to the Tory luddites, they must highlight the missed economic opportunity of a low-carbon economy, using the top economic voices in the party. Lower and more stable bills help our companies compete, while low-carbon infrastructure itself is a key growth area in jobs and investment.

Green energy

Oliver Hayes is a campaigner for Friends of the Earth

Last week the latest in a series of articles attempting to frame action on climate change as costly and unwanted appeared in the right-wing press. The article in mind cited a government survey claiming that ‘just one in 20’ people are most concerned about climate change; but – as if this were totally unrelated – six out of ten are worried about spiralling energy bills.

The article assumes, wrongly, that environmental costs are the main driver behind rising bills. In fact, Ofgem says that environmental costs have remained broadly static as a proportion of bills since 2008, and that increasing gas prices have been, and currently still are, the main reason our bills are on the up.

Over the coming decades bills will rise, predominantly because our energy infrastructure is knackered and rejuvenating it will be expensive. But how much electricity will cost in the future depends on the kit we build now to power it – with stark differences between the options.

Cleaner energy results in lower bills

According to a study by the government’s climate advisers, creating an almost entirely carbon-free power sector over the next decade or so will lead to annual fuel bills being £600 lower than the ‘high gas’ option favoured by the chancellor.

Whether this actually happens – and happens at the least cost to bill-payers – depends on whether the government gets together a good plan for rejuvenating the energy sector. That plan takes the shape of the Energy Bill, a draft law that appears inadequate even by its own terms. Much of the detail is still missing. But what is in there is worrying:

  • Subsidies for new gas power plants (level unspecified);
  • Subsidies for existing gas power plants (again, unspecified);
  • Gas plants built now allowed to pollute without any carbon capture until 2045;
  • Subsidies for new nuclear (secret negotiations to decide the level);
  • Subsidies for existing nuclear (unspecified level);
  • Government contracts to nuclear industry to last until around 2055;
  • Support for renewables? Yes, but only if you’re a massive company – so-called ‘contracts for difference’ will offer little for the smaller players and new entrants to the market;
  • Support for renewables after we meet the EU renewables target in 7 years’ time? TBC;
  • And nothing at all to reduce energy demand, the cheapest option of all.

With all of that to fix, it’s no wonder industry, investors and environmental campaigners alike have rallied around Tim Yeo and Barry Gardiner’s amendment to the Bill to introduce a target to decarbonise power by 2030. If passed, the amendment would force the government to shape up its policies to meet the target.

Labour’s alternative

What has Labour done to counter this shambles of an energy policy, with its potentially disastrous consequences for the economy, future bill payers and the environment?

Support for the decarbonisation target is extremely welcome, as are the strong performances by Caroline Flint and her shadow DECC team on much of the Bill’s failings. But we await a clear alternative to the list above.

If Labour is to provide the genuine green alternative to the Tory luddites, they must highlight the missed economic opportunity of a low-carbon economy, using the top economic voices in the party. Lower and more stable bills help our companies compete, while low-carbon infrastructure itself is a key growth area in jobs and investment.

That’s why in September Friends of the Earth set out five green tests for Ed Balls. At the moment he’s scoring poorly, notwithstanding this week’s welcome missive on the risks of missed opportunities for the green economy.

Few politicians talk about climate change, for fear of seeming out of touch with voters’ concerns. But its absence from the political agenda is a reason for – not symptom of – low public concern. Labour has a responsibility to demonstrate leadership, the plans and the appetite to pull together the pillars of a low-carbon economy – bringing all the jobs, growth and environmental benefits we so desperately need.

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