This is the latest suggestion from the UK Committee on Climate Change, a statutory body set up under the Climate Change Act, and to which the government is obliged to listen. The committee’s role is to propose a series of increasingly stringent carbon budgets as a roadmap to guide the country towards the current legal obligation to reduce overall greenhouse gas emissions by 80% by 2050 (from a 1990 baseline).
The committee is, of course, only doing its job, but each piece of advice it offers makes it increasingly clear that, given the current state of technology, such targets can only be met by imposing tougher and tougher statutory requirements on energy suppliers, industry, the transport sector and homeowners. What is more, the cost of meeting the targets will, ultimately, be borne by all citizens.
But the whole complex and costly edifice of emissions reduction is beginning to look increasingly shaky. With the continuing and deepening crisis in the eurozone, no European countries can feel very optimistic about the medium term economic outlook. This is, of course, is most obvious for Greece, where painful, major restructuring is inevitable and continuing social unrest unavoidable. Spain, Portugal and Ireland are not in a much better position, and neither is Italy showing any real signs of overcoming its systemic problems.
Germany, on the other hand, has benefitted enormously from the euro, but will also suffer either from having to make larger net transfers to weaker eurozone economies or from the massive losses resulting from the effective collapse of banks in Greece, Spain and elsewhere. Being outside the eurozone is no real protection for the UK, either, given the size and exposure of its banking sector and its reliance on the EU as its main export market.
In these circumstances, it is inconceivable that climate change mitigation can be a higher priority than recovery and growth. Parliament may have saddled the UK with a nominally legal obligation to comply with certain targets, but governments will be voted in or out of power on the basis of other factors, with the economy being top of the list.
Unsurprisingly, given the economic situation, carbon dioxide emissions fell by about 2% across Europe last year. Connie Hedegaard, the climate commissioner, has predictably claimed this as a success for the Emissions Trading Scheme (ETS), but it seems more likely that it was simply down to lower industrial output and reduced energy needs. Despite the continued decrease in carbon intensity, the lesson is that economic performance and emissions are still inextricably linked.
The resulting drop in the carbon price to only €7/tonne, with a great many more permits being issued, means that the cap and trade policy will have very little effect on green investment over the next couple of years. This highlights the folly of complex, expensive, top-down planning, which has done little other than make profits for middlemen and provide new opportunities for fraud. If politicians really wanted to reduce emissions, they should have heeded the advice to introduce a simple, flat-rate carbon tax.
In this context, placing more obligations on local authorities to reduce emissions from transport or waste or to insulate more houses looks like a rather pointless exercise. The UK is not cut off from the rest of the EU, and neither is the EU unconnected with the wider world. Whatever emissions savings may be made here must be looked at as part of the global total.
With so much international trade, there is a school of thought that argues that a nation’s carbon footprint should be based on consumption rather than production. In other words, we could lose all our manufacturing industry to lower cost producers and reduce emissions from heating and transport, but our imports of fuel, manufactured goods and agricultural produce might still mean an overall larger footprint. The ramping up of European energy prices and continued loss of manufacturing jobs to China and other emerging economies may be all pain and no gain.
The fact that it is global emissions which count is one of the reasons for the EU’s recent inclusion in the ETS of all airline flights which land or take off in the bloc. Air travel, despite being a minor contributor to CO2 emissions, has become a focus of attention because it is believed that the altitude at which planes fly makes their climate impact relatively greater and also because air traffic continues to increase. But, not surprisingly, many non-European airlines have objected to this action, and Chinese and Indian companies have refused to take part in the first stage, which is merely to report emissions. The test will come when airlines need to begin paying for permits. The possibility of a greater level of non-compliance cannot be discounted, although airlines will in any case pass the cost on to their passengers.
Other factors also complicate the best-laid plans of policymakers. For example, the continued drive to reduce exhaust emissions from road transport, coupled perhaps with steeply rising prices, may cut petrol and diesel sales enough to dent government tax receipts, which would need to be recouped elsewhere. Similarly, if electric vehicles were ever to become a viable mainstream option, even more fuel duty would have to be replaced.
I’m sure that finding creative ways to tax people will remain a core competence for politicians, but we can begin to see the unintended consequences of planning radical decarbonisation. In this context, emissions targets for local authorities are just a further complication, essentially irrelevant to the broader picture.
The Scientific Alliance
St John’s Innovation Centre
Cowley Road
Cambridge CB4 0WS
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