Ed Birkett and Benedict McAleenan: Hydrogen holds huge potential for British industry – here’s how to achieve it

28 Oct

Ed Birkett is Research Fellow in the Energy & Environment Unit at Policy Exchange and Benedict McAleenan is Senior Adviser at Policy Exchange.

In the fight against climate change, there are no silver bullets. We won’t solve it through technology alone, nor by telling people to mend their sinful ways. But there are some potential game changers, and among those is hydrogen.

The Prime Minister is reportedly a convert to the potential of hydrogen as a pioneering fuel that could kick-start a green recovery. As well as helping a recovery from the Covid-19 crisis, for some regions it would reinvigorate industry after decades of decline, delivering on the “levelling up” agenda.

In 2018, Policy Exchange explored the potential for hydrogen as a fuel of the future and highlighted the opportunities in northern industrial hubs. However, there’s a risk that our politicians will get carried away. It has huge potential but also very real limits, and there’s a danger of government investments going wrong.

Hydrogen isn’t the right answer everywhere

Hydrogen has huge potential as a low-carbon fuel and in revitalising industrial areas of the UK, making it a natural focus for the Government’s net zero and levelling up agendas. Our report, Fuelling the Future, described how hydrogen is widely used in industrial processes, including removing sulphur from fuels, manufacturing fertiliser, and even producing margarine. But most of this is hydrogen produced from natural gas, which releases carbon, leading to the nickname “grey hydrogen”.

There are already pilots underway to trial “green” hydrogen supply and Britain is a global leader in the technology needed for electrolysis (producing hydrogen from water using electricity). In the future, with lots of cheap, clean electricity from offshore wind farms, there is huge potential to scale up hydrogen in the UK, benefitting British manufacturing companies whilst decarbonising refineries and chemical plants.

Once the costs of hydrogen fall, it could be used in the blast furnaces of Port Talbot to replace coal and to secure jobs in our nationally strategic steel industry. It could then be expanded to other industries including glassmaking and manufacturing electronics.

But it is heavy transport that perhaps offers the biggest long-term potential for low-carbon hydrogen. Batteries look likely to dominate the market for passenger cars, with manufacturers like Nissan and Tesla offering vehicles with increasingly longer ranges and shorter charge times.

However, for heavy transport, including lorries, planes, buses and ships, the weight of batteries could be prohibitive. In these applications, hydrogen offers a solution. Once the right infrastructure is in place, hydrogen vehicles will offer fast refuelling whilst minimising weight. Several British manufacturers are champing at the bit to deliver hydrogen-powered public transport.

Despite this potential, hydrogen is not a silver bullet. When compared to petrol, diesel or natural gas, it is much less energy dense, which means it needs to be stored under high pressure, increasing costs and complexity. For many use cases, hydrogen’s Achilles’ Heel is that it is inefficient when compared to using electricity because there are many more conversion steps in the chain. This means that a hydrogen-powered car will use twice as much energy as a battery-powered car to travel the same distance.

Some have touted hydrogen as key to the UK’s energy security, ending our reliance on foreign fuels. The UK is a leading manufacturer of electrolysers, for instance, which produce hydrogen from electricity and water, which means that we could use UK wind farms to power electrolysers, generating hydrogen.

However, based on current forecasts, the bulk of the UK’s low-carbon hydrogen is expected to come from natural gas. The UK’s declining gas reserves means that we increasingly rely on imported gas, so a rapid expansion of hydrogen risks tying us into a fuel that we will increasingly import from countries such as Qatar.

Hydrogen hubs are the right place to start

None of this means that hydrogen doesn’t have an instrumental role to play in a Net Zero UK, but we need to be careful and to consider these challenges.

First, as we argued in 2018, we should create “hydrogen hubs”. This will support innovation in the areas that already use high-carbon hydrogen such as refineries and heavy industry.

Helpfully, demand for hydrogen is concentrated in areas that the Government wants to “level up”, such as Humberside, Teesside and Falkirk. These industrial centres can also deliver economies of scale and therefore cost savings, assuming that government carries some of the development risk in return for regional growth.

Second, these areas should pioneer wider uses of hydrogen, exploiting their engineering skills base to innovate and learn. The Government has already announced that the first “hydrogen transport hub” will be based in Teesside. The Teesside hub will be a testbed for hydrogen vehicles, including boats, trains and planes, following Policy Exchange’s 2018 recommendations.

Finally, the Government should engage the market wherever possible. The success of offshore wind in the UK is a combination of private sector innovation and Government support to push costs down. The same principles should apply to hydrogen. Efficient markets also keep options open if hydrogen remains too costly and other technologies emerge that are better and cheaper.

None of this is bad news. Acknowledging hydrogen’s limits allows us to design the best approach that puts British industrial towns back in the vanguard of an industrial revolution. It may not be the single answer to our future fuel needs, but it has huge potential.

At our Conservative Party Conference fringe event a few weeks ago, Tees Valley Mayor Ben Houchen called for the Government to “put hydrogen on the same footing and on the same platform as other technologies like electrification and batteries”. The Teesside hydrogen transport hub is the first step to achieving this, but there’s lots more still to do.

Robert Sutton: Conservatives have abandoned free market principles in the quest for environmentalism

27 Oct

Rob Sutton is an incoming junior doctor in Wales and a former Parliamentary staffer. He is a recent graduate of the University of Oxford Medical School.

A trend over the last decade in British politics has been a convergence of the major political parties towards near-consensus on environmental issues. Their thesis is that our current economic system will lead us towards environmental catastrophe; that the only way to avoid such catastrophe is radical innovation of that economic system; and that it must be the Government which leads this radical innovation.

Despite the impression given by media coverage and the doomsayers of the Twittersphere, these clauses are neither internally undisputed nor natural consequences of each other. Global warming is a generally accepted phenomenon, with a strong empirical basis in historic climate data and a convincing theoretical basis in our understanding of the physical chemistry of the atmosphere.

What is much less well understood is the future trajectory, the range of possible outcomes, and what policy positions might be inferred from those uncertain outcomes (for those unclear about the distinction between scientific models and reality, the current pandemic has given us some important lessons.)

That has not halted the political convergence on the necessity for urgent action. But for the Conservatives, the adoption of the rhetoric of climate catastrophism and the unquestioning call for an eco-friendly planned economy puts us in an internal ideological conflict with one of our most valued principles: that no central economic control can outperform the efficiency of the free market in exchanging resources, maximising returns on labour and assigning value to products and services. Government interventions invariably introduce inefficiencies. The best way to encourage innovation is for governments to cut regulations and generally stay out of the way.

Yet this principle seems to have taken a back seat as the proclamations of the most pessimistic of environmental oracles dominates the policy conversation. The proposals suggested in the 2019 Conservative manifesto pointed towards an economic intervention of a scale not attempted by any government since the Second World War. There is an assumption that the principle of the free market is flexible if the goal of the economic intervention is sufficiently noble.

One red flag was the apparent interchangeability of the major parties in their pledges for the 2019 general election. The Conservatives stood for “reaching Net Zero by 2050 with investment in clean energy solutions and green infrastructure to reduce carbon emissions and pollution” and “investing in R&D; decarbonisation schemes; new flood defences…; electric vehicle infrastructure…; and clean energy.” These enormous government spending plans were proposed despite the simultaneous claim that “we believe that free markets, innovation and prosperity can protect the planet.”

Labour had similar prescriptions: “More rewarding, well-paid jobs, lower energy bills and whole new industries to revive parts of our country,” while scalding Conservatives for “leav[ing] the fate of whole industries and communities at the mercy of market forces.” The Liberal Democrats predictably followed suit, but with the added promises to plant over 100 trees per minute for the foreseeable future and an entirely unenforceable “legally binding target” on emissions for future parliaments to promptly ignore.

None of these proposals recognises the true economic or human impact of such an artificial remodelling of our entire society. Nor have they provided concrete plans for how these radical transitions might be carried out (with job losses being strategically ignored.) And those new jobs which are flaunted are unlikely to be efficient or self-sustaining. Once government support is pulled, they have a habit of promptly drying up as the reality of weak demand sets in.

The Government has a moral obligation to take sensible steps to build a regulatory environment which supports the protection of our natural one. But there is no amount of cutting red tape which will make buying a Tesla instantly affordable to the masses or will allow electric vehicle charging points to pop up on every street corner overnight. The mass repurposing of territory for solar, wind and hydroelectric requires that land be taken from someone and kept for the foreseeable future.

These barriers cannot be lowered quickly through deregulation alone. There are considerable economic, technological and logistical problems. However much some argue for state intervention on an unprecedented scale to rebuild our economy as an eco-friendly arcadia, there is no way this can be done on a short time-scale without great pain and waste. The bloat of a government attempting to rebuild our entire economic machine in an idealist vision would be horrifying to anyone calling themselves a fiscal conservative.

Green conservatism’s flaws are tied to the ideological fragility of one-nationism. In trying to be all things to all people, we have sacrificed free market economics at the altar of environmental catastrophism. We have abandoned a basic principle of our ideology for a policy position which has yet to be clearly articulated. To embrace the radical goals of the environmental lobby would require imposing further market distortions at a time when the economy is already haemorrhaging from the self-inflicted wounds of the Government’s severe and unremitting Coronavirus response.

The current government has struggled to articulate a positive vision for environmental policy. As such, we are forced to act as a brake on the radical proposals of left-wing organisations who have the media and public rapt, slowing the movement but inevitably drawn in their direction.

Conservatism is about more than tempering the madness of the left. We need an honest and consistent position on this most pressing of policy issues. Facing up to the absurdity of our current inter-party arms race to see who can come up with the boldest pledge to save the planet would be a good place to start. Net zero by 2050 sounds nice but is conveniently beyond reproach or scrutiny for at least the next six parliamentary terms.

A transition to a low-carbon economy will happen at some point. The limit to the reserves of fossil fuels necessitates this. But it must happen organically. Using state aid to drive the transition is incompatible with innovation. The British automotive industry of the 1970s was an example of the stagnation which occurs when a government permits market distortions in order to achieve political means: the workers, consumers and companies each suffer.

Some would argue that the dichotomy between environmentally-motivated economic intervention and free markets is a false one and that we can, in some unspecified way, have our cake and eat it too. This implies a flexible understanding of at least one of these principles. Conservatives should advocate for a realistic and distinct stance on environmentalism, and one which does not require the sacrifice of our key principles.

Richard Ritchie: The climate crisis – and this pandemic – have made the case for a carbon tax stronger than ever before

15 Oct

Richard Ritchie is the author of a recent history of a secretive group of Conservative MPs called The Progress Trust (Without Hindsight: A History of the Progress Trust 1943-2005). He is Enoch Powell’s archivist and is a former Conservative Parliamentary Candidate. He was BP’s director of UK Political Affairs.

There is something in the air, and it’s not just carbon or virus emissions. Earlier this month, ConservativeHome carried a piece by Rachel Wolf, championing carbon pricing – that is the polite way of describing some form of carbon tax. Then, the influential economist Dieter Helm published in September a new book, Net Zero: How We Stop Causing Climate Change, which explains in detail the rationale behind a carbon tax. And from The Times, we’ve learnt that the Chancellor is considering such a tax for his next, Covid-19 budget.

It’s not a new idea. When I worked for BP and climate change first entered the political agenda – before, the main worry was that oil would run out and become too expensive – thoughts on how to price carbon were already in circulation. The oil and gas industry saw some merit in the concept, but favoured emissions trading over a tax, correctly identifying this as a less expensive, Europe-inspired fudge. Now, the combination of a pandemic and climate crisis gives the idea of a carbon tax real traction.

The political implications are important. Climate change and Covid-19 have much in common. Both require us to “follow the science”, although in neither case is the science unanimous. Both are manna from heaven for those who wish to “shut-down” the economy, and limit personal freedom. Both provide excuses for expanding the state. And in both cases, the cure can prove worse than the disease.

There can be little doubt that, so far, global policies to reduce carbon emissions have failed. This won’t worry those who are sceptical of the causes of climate change. But if one believes a failure to act now is to bequeath a catastrophe to future generations, then those on the “right” should be as concerned as those on the “left”.

Where we differ will be on the remedies. So far, “left-of-centre” remedies have generally been the norm. The Kyoto Protocol in 2007 and the Paris Agreement in 2015 have been little more than an opportunity for governments and lobbyists to parade their compassion. Whatever Trump’s motives may be surrounding climate change, his analysis of the Paris Agreement is basically sound. Some of course think its failure is due to inadequate targets; but their targets would make the economic consequences of Covid-19 seem trivial in comparison.

So the question is whether there is a policy which would reduce carbon emissions effectively, in an economically rational way. This is surely one reason why Rishi Sunak is attracted by the idea of a carbon tax as a means of reducing carbon consumption.

In Dieter Helm’s view, the word “consumption” is pivotal. It is no good concentrating solely on industrial emissions, as these won’t necessarily have any global effect – it simply drives emissions abroad, frequently to China. But a carbon tax which crucially incorporated a carbon border tax on imports would, by targeting attention on everyone’s personal carbon footprint, incentivise many things which probably make sense in themselves anyway.

There will be many Conservatives who will argue that all taxes do harm, and that the introduction of a “new” tax is incompatible with Tory beliefs. But unless one is totally sceptical of the science, and dismissive of the need to balance the books, there is much to be said for taxing “bads” rather than “goods”.

Of course it is open to many objections. For example, does the Treasury regard a carbon tax as an emergency measure to raise revenue, or a longstanding instrument to influence behaviour? If it is to serve its purpose, it will eventually yield less revenue.

Equally, if applied in the wrong way, it could merely make this country less competitive. Without care, it could prove regressive. Indeed, if the Paris riots over fuel duty are any guide, it could also prove politically impossible.

Then, for it to work, there must be alternatives for consumers to choose from. Not many will choose an electric car, for example, if there is no guarantee that it can be charged along the journey. (Although mention of electric cars also serves as a reminder that not everything is at it seems – an electric car takes twice as much carbon to produce than a conventional one. A carbon tax would sort that out too).

On the other hand, if properly devised a carbon tax has the capacity both to raise government revenue and to reduce carbon emissions, and even to incentivise other countries to follow suit. Matters to be decided include how the carbon price is fixed and at what level it should be introduced. Should it be levied on consumption or production? Does the tax provide sufficient time for consumers to adjust?

This is the political danger. Carbon taxes could come to the rescue of a cash-strapped Chancellor, because they hold out the prospect of raising new revenue without breaking a manifesto commitment not to raise existing taxes. But if the carbon tax is set too high at the outset, it will be counter-productive. If the Treasury is following Helm’s advice, “the trick is to start low, but credibly signal that the price is going to go up as high as is necessary to achieve the (carbon reduction) target.”

There is no painless way of reducing carbon emissions. Those on the “left” will embrace a policy which involves “picking winners”, nationalisation, subsidies, exemptions, regulation and illiberal compliance. A lobbyist’s paradise. The alternative is to incentivise new technologies, create new markets and provide practical signals to consumers. This is the purpose of a carbon tax. It will never be “popular” because the costs of transforming the networks, communications and transport of this country to facilitate lower carbon emissions are enormous.

But compared with the alternatives, a carbon tax is at least rational and addresses all the major sources of carbon emissions, namely agriculture, transport and electricity. Moreover, it produces a new source of government revenue at a time when it is desperately needed.

Any new tax is depressing to a free market Tory. But climate change, like pandemics, raises issues which are more important than economics. If it is a whole load of nonsense to claim that today’s climate change is man-made, then we are free to carry on as we are.

But if not, Tories have an obligation to advocate alternative solutions to those of the socialist “greens”. The market is the best way of allocating scare resources effectively. But in a time of war, the market cannot tell us how much to spend on butter or guns. That is a political choice, and it is the nature of the choice presented by climate change, if most scientists are to be believed. On so many levels and for so many reasons, it is hardly surprising if Sunak is pondering one.

Ryan Bourne: Johnson’s green jobs. Subsidy-reliant, expensive, price-raising. And a job loser elsewhere.

14 Oct

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

It is said that, during the 1960s, Milton Friedman was visiting China, where guides took him to a canal-building site. Shocked at the prevalence of men bearing shovels, Friedman asked why the project wasn’t utilising modern technologies, such as mechanical diggers.

“You don’t understand, Professor Friedman,” his host explained, “this is a job creation programme.” To which Friedman retorted, “Oh, I thought you were trying to build a canal. If you really want to create jobs, then by all means give your workers spoons, not shovels.”

That tale is beloved by economists because it contains an important truth: gross job creation is a poor metric to judge success when considering government-led infrastructure. We could “create jobs” through getting people to fill in holes.

What matters is the net value added of the output created, as determined in markets – i.e: by consumers and open trade. Using more workers less efficiently to produce a canal reduces the output’s net value, because labour is a cost of production.

This lesson sprang to mind last week during Boris Johnson’s speech to the Conservative Party Conference. As part of his ode to offshore wind, Johnson talked of the UK’s natural abundance of the stuff (the “Saudi Arabia” of wind) and his excitement at the technology (floating wind islands). But he also extolled the idea of a UK “green industrial revolution” that “in the next ten years will create hundreds of thousands if not millions of jobs.”

Any market-led or government-incentivised shift towards wind will see new jobs in the industry “created.” But this shouldn’t be the goal. To echo Friedman, “we thought you were trying to produce electricity, subject to mitigating climate change. If you wanted to create jobs, why not have people make the wind turbines by hand?” We should judge the desirability of a pro-wind energy policy framework, in other words, by its contribution to this social value added, not numbers employed in the sector.

“Gross job creation in wind and other renewable generation is clearly a cost in economic terms,” Professor Gordon Hughes of Edinburgh explained to me last week. “The higher the number [of jobs], the larger the subsidies required and the larger the damage to the rest of the economy.”

He views this outcome as an unacknowledged problem of wind power generally, which does require labour for operations and maintenance, particularly as turbines age. If we are purely looking at how to produce power most efficiently, then these jobs are a hindrance – an economic failure, not success. According to Hughes, talking of creating “millions of jobs” is a “shortcut to national impoverishment”.

Of course, the desire for climate change mitigation means policymakers reject the premise that we just want our energy sector to simply prize efficiency. Due to the “social costs” of carbon, they aren’t just concerned about traditional measured value added, but are explicitly willing to take an economic hit in targeting a broader conception of economic welfare that takes into account these CO2 externalities.

And that’s fine, in principle. Yet even then, “green jobs” shouldn’t be the aim. An economist would say we should try (albeit imperfectly) to price this social cost, and then let markets find the most efficient way of delivering power accounting for it. What that does not require is industrial strategies, picking winners, and seeing the green energy sector as some sort of jobs machine.

Indeed, simple logic would suggest that making energy less efficiently than socially necessary reduces net jobs across the whole economy because of its impact on energy prices. “Energy is a labour-extensive industry. It does not employ a lot of people” Richard Tol, the renowned climate economist, explains. “If the energy sector would start to employ many more people, retail energy prices would rise rapidly.”

Given every other activity uses power as an input, it surely doesn’t need to be said that “more expensive energy means less growth and so less job creation” elsewhere. Given the sizes of the “energy” and “non-energy” sectors too, “a large relative increase in employment in energy is easily offset by a small relative decrease in employment in the rest of the economy.” An explicit aim to “create jobs” in the wind industry, in other words, would be vastly outweighed by job losses elsewhere.

Note: none of my analysis here is passing judgment on the desirability of decarbonisation. Tol believes that given the energy framework of UK policy, wind power will probably be cheaper than coal or gas through the 2030s. What I am simply saying is that aiming for more employment in wind, rather than merely trying to deliver power cheaply subject to any climate goals, is a deeply economically destructive way of thinking.

So why is the Prime Minister talking of millions of green jobs? Well, unfortunately, many politicians have moved beyond simply wanting to set frameworks for energy or even climate goals, and their green credentials have become wrapped with their becoming re-inured to the idea of national industrial strategies.

Not content with allowing consumers and producers to find the best ways to allocate resources, the Conservative Government increasingly wants to decide which sectors the national economy specialises in, thinking the state will this time do a good job of picking winners. And Boris Johnson’s “Saudi Arabia of wind” suggests that he wants to try to use policy to actively push the UK towards exporting wind power.

Would that work? No, says Tol. “Electricity is much more expensive to transport than oil…Wind power in the UK is cheaper than, say, wind power in Italy – but wind power generated in the UK and transmitted to Italy cannot compete with wind power generated in Italy.” Exporting the end product is a non-starter.

What about manufacturing the parts? “Despite what he [Johnson] says, no one is going to manufacture wind turbines in the UK without massive subsidies – that game is long past,” Hughes concludes. So having the Government tilt the deck further to try to create a wind manufacturing export industry would not only drag resources away from other activities with higher net value added, but make us a hostage to technological fortunes.

As Hughes has previously written: there’s no guarantee technological progress is more likely to come in renewables than fossil fuels or nuclear (see, for example, fracking).

To return to the Friedman analogy: we might accept some more shovel than machine use for canal building, if there were greater environmental costs of using machines, though recognising this makes us poorer. It’s another thing to say that rather than building a canal as efficiently as possible subject to this, the national government should intervene to support canal building or our selling shovels around the world. Yet with his promise of a green revolution, that is precisely what the Prime Minister implies.

Anthony Browne: Are we really going to pass a law that would devastate many of the world’s poorest people?

11 Oct

Anthony Browne MP is MP for South Cambridgeshire, and is Chairman of the All Party Parliamentary Group on the Environment.

Would you support a law that could ban imports of tea, coffee and bananas into the UK, devastating many of the world’s poorest economies – and people? Or that effectively bans food imports from developed nations which have a trade deal with us – but allows them from those that don’t?

No, I didn’t think so.

But that would be the impact of last week’s House of Lords well-intentioned but ill thought-out amendment to the Agriculture Bill, coming to the Commons tomorrow, which insists that agricultural imports under any trade deal would have to be produced to the UK’s environmental protection, animal welfare, food safety and plant health standards.

Making sure we don’t allow trade deals to undermine our environmental and animal welfare standards is an issue I passionately support, to the extent I made it the thrust of my maiden speech. I have been environment correspondent of two national newspapers, and am chair of the APPG on the Environment.

I have a rural constituency, and like most MPs, my inbox is flooded with demands – many prompted by Jamie Oliver’s campaigners – that I support this amendment. The Conservative Manifesto is also committed to ensuring trade deals don’t undermine our animal welfare, food safety and environmental standards. I know that the overwhelming majority of my colleagues support this aim.

The amendment sounds entirely reasonable, but its consequences could be utterly unreasonable. It is based on very solid principles which we can all support – but simply legislating for good principles rarely makes for good law.

Even its supporters should accept from the outset that this law is not a preservation of our current standards on imports, but a dramatic raising of them. It creates a potentially vast set of new conditions, which do not exist under any existing EU or UK agreement.

It would be extremely unlikely that trading partners would agree to all requirements; in some cases, it might not even be possible for them to do so. The EU is instinctively protectionist, but even it does not require that all imports have to precisely meet our environmental and animal welfare standards. Do campaigners think EU standards are unacceptably low?

We import bananas from many countries including the Dominican Republic, Belize and Cameroon. We import coffee from Indonesia, Ghana and Vietnam and black tea from Kenya. We do all this under existing (EU) rules.

But this amendment would require all these countries to have processes in place to show that they meet thousands of pages of UK domestic environmental and animal welfare legislation. The cost would be prohibitive and also unnecessary: I can tell you for free that they do not meet the carbon emission targets of the Climate Change Act that are now UK law. If we pass this amendment, pretty much all food imports would be banned from pretty much all developing countries if we signed a trade deal with them.

Developed nations can better afford to provide the evidence that they meet UK standards, but many of them are seriously inappropriate. Our geography and climate mean that we need strict legal controls on nitrate concentration in soils, which are inappropriate for other countries. We have laws (to protect nesting birds) on what time of year farmers are allowed to cut hedges, which would be completely wrong-headed to impose on producers with different eco-systems.

Campaigners would take cases to court to decide what imports are allowed. We were the first major economy in the world to legislate for Net Zero by 2050. Do we ban all agricultural imports from countries without those legal targets? There is a contradiction between us wanting to be world-leading on environmental standards, and then insisting we will only trade with those who have the same standards.

There is also the bizarre unintended consequence that the amendment only applies to trade where there is a free trade agreement. So we could import coffee from Vietnam if we have don’t have a trade agreement, but if we do have a trade agreement we would have to ban coffee imports. Our trade deals would become anti-trade deals.

Like the EU, we should be pragmatic. The detail is so complex, we can’t tie the hands of our trade negotiators with blunt legislation, but rather we should examine in detail whether we support what they are proposing.

That is why the government has agreed with campaigners to set up an independent Trade and Agriculture Commission to advise on how best the UK can seize new export opportunities, while ensuring animal welfare and environmental standards in food production are not undermined. I think there are strong arguments to make this commission permanent to scrutinise future trade deals. If you don’t trust the assurances of ministers, Parliament already has the power to reject any trade deal that it does not like.

Debate on this issue often ends up focused on the US’s chlorinated chicken. But there is already a UK law banning any product other than potable water from being used to decontaminate meat. Whatever is agreed in any trade deal, chlorinated chicken could only be sold in the UK if Parliament passes legislation allowing it. As Sir Humphrey would say: that would be very brave.

The overwhelming weight of political opinion is against us lowering our standards. We need to keep the same high standards on food and agriculture imports as we had in the EU. And that is exactly what the Government is doing.

Anthony Browne: Are we really going to pass a law that would devastate many of the world’s poorest people?

11 Oct

Anthony Browne MP is MP for South Cambridgeshire, and is Chairman of the All Party Parliamentary Group on the Environment.

Would you support a law that could ban imports of tea, coffee and bananas into the UK, devastating many of the world’s poorest economies – and people? Or that effectively bans food imports from developed nations which have a trade deal with us – but allows them from those that don’t?

No, I didn’t think so.

But that would be the impact of last week’s House of Lords well-intentioned but ill thought-out amendment to the Agriculture Bill, coming to the Commons tomorrow, which insists that agricultural imports under any trade deal would have to be produced to the UK’s environmental protection, animal welfare, food safety and plant health standards.

Making sure we don’t allow trade deals to undermine our environmental and animal welfare standards is an issue I passionately support, to the extent I made it the thrust of my maiden speech. I have been environment correspondent of two national newspapers, and am chair of the APPG on the Environment.

I have a rural constituency, and like most MPs, my inbox is flooded with demands – many prompted by Jamie Oliver’s campaigners – that I support this amendment. The Conservative Manifesto is also committed to ensuring trade deals don’t undermine our animal welfare, food safety and environmental standards. I know that the overwhelming majority of my colleagues support this aim.

The amendment sounds entirely reasonable, but its consequences could be utterly unreasonable. It is based on very solid principles which we can all support – but simply legislating for good principles rarely makes for good law.

Even its supporters should accept from the outset that this law is not a preservation of our current standards on imports, but a dramatic raising of them. It creates a potentially vast set of new conditions, which do not exist under any existing EU or UK agreement.

It would be extremely unlikely that trading partners would agree to all requirements; in some cases, it might not even be possible for them to do so. The EU is instinctively protectionist, but even it does not require that all imports have to precisely meet our environmental and animal welfare standards. Do campaigners think EU standards are unacceptably low?

We import bananas from many countries including the Dominican Republic, Belize and Cameroon. We import coffee from Indonesia, Ghana and Vietnam and black tea from Kenya. We do all this under existing (EU) rules.

But this amendment would require all these countries to have processes in place to show that they meet thousands of pages of UK domestic environmental and animal welfare legislation. The cost would be prohibitive and also unnecessary: I can tell you for free that they do not meet the carbon emission targets of the Climate Change Act that are now UK law. If we pass this amendment, pretty much all food imports would be banned from pretty much all developing countries if we signed a trade deal with them.

Developed nations can better afford to provide the evidence that they meet UK standards, but many of them are seriously inappropriate. Our geography and climate mean that we need strict legal controls on nitrate concentration in soils, which are inappropriate for other countries. We have laws (to protect nesting birds) on what time of year farmers are allowed to cut hedges, which would be completely wrong-headed to impose on producers with different eco-systems.

Campaigners would take cases to court to decide what imports are allowed. We were the first major economy in the world to legislate for Net Zero by 2050. Do we ban all agricultural imports from countries without those legal targets? There is a contradiction between us wanting to be world-leading on environmental standards, and then insisting we will only trade with those who have the same standards.

There is also the bizarre unintended consequence that the amendment only applies to trade where there is a free trade agreement. So we could import coffee from Vietnam if we have don’t have a trade agreement, but if we do have a trade agreement we would have to ban coffee imports. Our trade deals would become anti-trade deals.

Like the EU, we should be pragmatic. The detail is so complex, we can’t tie the hands of our trade negotiators with blunt legislation, but rather we should examine in detail whether we support what they are proposing.

That is why the government has agreed with campaigners to set up an independent Trade and Agriculture Commission to advise on how best the UK can seize new export opportunities, while ensuring animal welfare and environmental standards in food production are not undermined. I think there are strong arguments to make this commission permanent to scrutinise future trade deals. If you don’t trust the assurances of ministers, Parliament already has the power to reject any trade deal that it does not like.

Debate on this issue often ends up focused on the US’s chlorinated chicken. But there is already a UK law banning any product other than potable water from being used to decontaminate meat. Whatever is agreed in any trade deal, chlorinated chicken could only be sold in the UK if Parliament passes legislation allowing it. As Sir Humphrey would say: that would be very brave.

The overwhelming weight of political opinion is against us lowering our standards. We need to keep the same high standards on food and agriculture imports as we had in the EU. And that is exactly what the Government is doing.

Alex Game: Students are the key to environmental progress – but we need to lose the tribalism in our debates

9 Oct

Alex Game is a Campus Coordinator with the British Conservation Alliance. He studies at Manchester Metropolitan University, where he is the founder of the British Conservation Alliance Society.

With a new academic year now upon us, around a million students have returned to their campuses after a strange summer, to say the least. This is where environmentalism has to be forged and nurtured in the very near future. Student activism within our universities is an important part of our democracy. It’s a perfect environment for students to gain confidence in their own ideas, and debate with those whose opinion differs from their own. This is not only because they are usually echo chambers of one’s ideas and views, but they give students confidence to explore different opinions that they wouldn’t probably hear if they weren’t on a university campus.

It is for this reason that I have in recent months become a lot more pro-active in this area. I have joined the British Conservation Alliance (BCA) as a campus co-ordinator and set up my own BCA society at my university, Manchester Metropolitan University, both to promote the BCA’s ideas and policies and to help bring about change on a broader scale.

The BCA is important in this conversation about the environment because we offer students an alternative, not just the same anarchism that most students seem to want to follow. This is why we have set up an extensive network of campus leaders at over 30 UK universities to promote our ideas. Environmentalism is something I have always felt passionately about. But I sat on my hands for far too long. Then, I stumbled across the BCA and, as they say… the rest is history. Students are essential to environmentalism, because we are going to be dealing with the mistakes made by past generations unless real change is made soon.

Recently we have seen Extinction Rebellion (XR) causing havoc in Londonlimiting our free press and even a flash mob outside Buckingham palace. They are asking the Government to employ reckless policies, such as committing to net-zero by 2025. A policy such as this simply is impossible. We do not have the capacity to achieve this yet and our economy isn’t robust enough either. The process of reaching net-zero has to be a gradual process achieved through market-solutions, the BCA supports the Government’s legislation of reaching net-zero by 2050.

XR doesn’t really propose many policies; its activists just shout and scream about us wishing to turn green at a ridiculous rate. XR’s actions are often not productive or helping save the planet, it is more often than not just turning people away from environmentalism completely. Not only that, but when policy is proposed by the Government, it is shouted down as “not going far enough”. This must not be the case going forward. We must encourage any change no matter how small or incremental it is. Of course, we can always encourage our government to go further but we must not criticise it when it does commit to real change.

The BCA over recent months has released a book called Green Market Revolution. This states simply how we can change our economy to a green one, not recklessly but carefully and intuitively. It includes real ideas and policy propositions that can help governments understand what they have got to do to. These policies will help turn our economies green and achieve carbon neutrality through market mechanisms such as clean tax cuts or “green loans” for businesses aiming to pursue solutions which are advancing to our goal of preserving the environment for future generations to come.

The conversation about our environment is well overdue and students need to be at the heart of it. They will be the ones suffering if we don’t take real action soon. They are also the ones who will be making decisions in future governments. This means we must make people aware now of what they can achieve in government towards helping preserve our environment.

But we must soon come to a cross-party consensus on how to move forward on our environmental issues and end the tribalism. The sooner we do that, the quicker we can act and more effectively.

Guy Opperman: We are making your pension safer, better and greener. Here’s how.

7 Oct

Guy Opperman is the Minister for Pensions and Financial Inclusion, and is MP for Tynedale and Ponteland.

Over the past decade, Britain has made great progress in boosting pension power and delivering better outcomes for savers.

The introduction of automatic enrolment in 2012 is undoubtedly one of the greatest long-term policy success stories of the Coalition Government, which has now been taken forward by this Conservative Government. More than 10.5 million employees are auto-enrolled into a workplace pension, saving eight per cent a year.

Today, our Pension Schemes Bill returns to the Commons, after clearing the Lords earlier this year. It is a Bill that delivers pensions for the next decade. It will make your pension safer, better and greener. This is how: 

Safer  

Pensions are a life asset, built up over decades. When we save for a pension, we expect that money to be there for us in retirement.

This Bill cracks down on the callous crooks who put people’s pensions at risk through their reckless behaviour. In future, reckless bosses who plunder people’s pension pots to line their own pockets will go to prison.

We have all heard the stories of cruel pension scams, too. I don’t like to call these crooks scammers, because they are thieves who rob victims of their hard-earned savings. Last year, we banned pension cold calling, but this new Pension Schemes Bill strengthens the powers of the Pensions Regulator to prevent scams happening, making your pension safer.

Better  

If you’ve ever tried to check how much you have saved for retirement, it can often involve emptying out draws in the hunt for lost paperwork.

Thirty years ago, many of us had just two or three jobs throughout our entire lifetime. Research shows the average millennial now expects to have an average of 12 jobs, and with auto-enrolment meaning more of us are saving for retirement than ever before, keeping track of pension pots from multiple employers can be tricky.

The Pensions Dashboard aims to change that by creating one single place – just like any other app on your phone – to see all your pension pots.

Dashboards will unite billions of pounds in lost, unclaimed pensions with their rightful owners, and users will be able to clearly see how much they have saved through information that is easy to access and understand.

Privacy is crucial, so dashboards put you in control. You can decide how and when your data is accessed, and who has access to it. This new technology puts consumers in control, and undoubtedly makes your pension better.

Greener  

The 2019 Conservative manifesto pledged to get Britain to Net Zero by 2050. As the Prime Minister made clear yesterday in his brilliant conference speech, we can do it with investment in clean energy solutions, like wind, solar, and hydrogen.

With trillions in assets under management, our pensions have a crucial role to play.

When you save into a pension, your provider invests that money to provide long-term returns on your savings. If your savings are invested sustainably and ethically in green infrastructure and new technologies, your pension can play its part in getting Britain to net-zero. The evidence is also clear that this still ensures a safe and good return on your investment.

Last year, I introduced new Environmental, Social and Governance regulations – ESG. These require pension funds to take due account of climate risk when making investment decisions.

This Bill goes one step further, requiring pension schemes to take the Government’s Net Zero targets into account, as well as the goals of the Paris Agreement. This helps manage climate risk. and makes sure you know if your pension is invested sustainably.

Some have argued that we should simply divest pension funds away from high-carbon stocks. I am afraid this is a fundamentally flawed idea. Selling assets to others without the same environmental concerns is unproductive and will do nothing whatsoever to get Britain to Net Zero.

Instead, a partnership with business is the way forward, so we can deliver the innovative change required. By investing in the right assets, trustees can nudge, cajole and vote firms towards lower-carbon business practices.

I have seen this in practice across the country. Since last year’s general election, I’ve visited inspiring businesses and innovative organisations that are helping lead us to Net Zero.  I met with BP and visited their solar farm in Angus to see how their organisation is evolving from an oil and gas company to a modern sustainable energy company. I’ve also had the opportunity to see how the team from Logan Energy is making hydrogen commercial, working to transform energy systems across the country, including in Teesside under the leadership of its Mayor, Ben Houchen.

The Pension Schemes Bill will transform our pensions system for decades to come, by cracking down on bad pension bosses, utilising new technology to put the consumer in charge, and making sure pensions are playing their part in getting Britain to get to Net Zero. I hope the Bill gets widespread cross-party support from across the Commons at Second Reading later today.

Mike Lockett: We need a national hydrogen strategy to build the UK’s net-zero future

2 Oct

Mike Lockett is the Uniper UK Country Chairman & Chief Commercial Officer Power. This is a sponsored post by Uniper.

Last June – which seems like a lifetime ago – the UK became the first major country to legislate for a net-zero target for greenhouse gas emissions by 2050. We’ve all been through a huge amount since then, as Covid-19 upended our personal and working lives and now looks like it will be something we’ll have to deal with for a good while yet.

However, while so much government time and attention naturally turns to the pandemic, it’s vital that we don’t lose sight of the 2050 target and act quickly to bring about the changes that will not only make net-zero a reality, but underpin a sustainable economic recovery and countless new jobs.

Now is the time to accelerate a UK-wide strategy for hydrogen, the only fuel that can decarbonise heavy industry, transport, heating and power – which are all still dependent on carbon emitting fuels. Both green hydrogen, which is produced from renewable energy sources, and more conventional hydrogen-production methods with carbon capture and storage technologies are needed at scale.

Once produced, clean hydrogen can also be refined into renewable liquid fuels – such as synthetic diesel and aircraft fuel – providing a clean energy source for vehicles and whole industries that currently rely on carbon intensive fuels.

But to realise hydrogen’s potential – and the UK’s capacity to be a leader in the fuels of the future – we need to develop an enabling framework that will provide incentives and support for companies competing at a global level.

The government’s new Hydrogen Advisory Council, which is partnering with industry to enable supply of low carbon hydrogen at scale is a welcome first step. It’s vital that this council’s outcomes inform a national hydrogen strategy that commits the government to invest in hydrogen infrastructure and skills development, as well as enabling collaboration between businesses, academia, the public sector and other institutions – accelerating development and deployment of net zero technologies and creating green jobs.

This strategy should be built around four enablers:

  • Applying a mindset of innovation to projects that are developing clean energy solutions, viewing decarbonisation as a cross-sector endeavour.
  • Building partnerships – such as the multi-party hydrogen projects springing up in industrial areas of the UK including the Humber and the north-west – that bring cross-sector groups together and accelerate adoption
  • Investing in the skills that create a workforce capable of delivering the green economic recovery, through tailored apprenticeships, world-class degrees and ongoing training programmes
  • Crafting the policy that will harness the UK’s skill base, industrial heritage and ability to innovate to find the long-term solutions to achieving net-zero. Policy can supercharge the growth of a UK hydrogen economy by incentivising businesses to develop and expand the hydrogen infrastructure, as well as providing the framework for hydrogen’s use in industry and transport. This aligns with the government’s commitment to invest in infrastructure projects and hi-tech jobs in the UK’s regions and industrial heartlands.

So much promising and important work is already going on, but the power of a government strategy to galvanise a movement to drive real change cannot be underestimated. This isn’t just about hitting that 2050 target. The quicker we can decarbonize UK companies in heavy industry, aviation and shipping, the more competitive they’ll be on the global stage.

With the questions of Covid-19 and Brexit on the UK’s horizon, the announcement of a national hydrogen strategy can provide certainty and direction, as well as setting us on a path towards a net-zero future and creating new, highly skilled green jobs. This is hydrogen’s moment, and we need the vision and framework that will allow it to fulfil its potential.

Rachel Wolf: Net Zero risks upending our lives and livelihoods. Here’s why carbon pricing gives it a better chance of working well.

2 Oct

Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.

Worrying about the state of the environment in the middle of a pandemic might feel like rearranging the deckchairs on the Titanic. Will the public question the Government’s sense of priorities if ministers start talking about how to protect the environment in the midst of a health crisis and a long potential downturn?

Actually, no. This week marked the first substantial policy intervention of the Prime Minister in months – a long awaited change to the education system that will make it easier for adults to retrain, and support more technical education. The rationale was clear: now, more than ever, we need to make sure people are trained for their next job.

The same argument can be made for the environment. The hard lockdown and the gentle recovery reminded people of two things: that everyday life is better for everyone when roads are quieter and the air is cleaner; and that economic growth is always precarious. That means we need to focus on industries and technologies of the future that will help maintain jobs and living standards.

In short, precisely because of their Covid-19 experience, the public have seen the importance of a practical, commercially-minded environmentalism.  That is fortunate, because there are some major choices to be made, and we are unprepared for them.

The target of Net Zero emissions by 2050 was passed into legislation with little public notice – most people still haven’t heard the term. There was also remarkably little Westminster debate: all the leadership candidates in 2019 signed up to the policy, so scrutiny was absent. Then, of course, the pandemic halted the entire domestic policy agenda. For this reason, we are still waiting to understand exactly what ending a 200-year dependence on fossil fuels really entails.

In my view, carbon pricing must form a large part of the answer.

As someone on the centre-right, I have always simultaneously applauded the aims and had great fears about the execution of Net Zero.

First, I worry it might upend too much. Our economy and lives are built off copious amounts of affordable energy. It is the main reason we were able to escape the destitution of the past. A life unimaginable to even the elite in the eighteentj century is now accessible to nearly all.

Therefore, any successful programme to reduce emissions must understand that people will not go backwards. Policies must work within the grain of people’s lives – not rewire them. We cannot be against trade; or consumption; or travel.  We just need ways to achieve all three without catastrophic environmental effects.

Second, I worry the plans rely on an implausible level of omniscience and competence from governments. We cannot engineer economies. We do not know exactly what innovations to support. We are likely to end up with endless unforeseen consequences and costs. We can encourage and support technology and invention; but prescribing what it should look like in 50 years time? That’s implausible.

It is for both of these reasons that I have spent much of the last six months working for an independent commission on how carbon pricing might practically, and technically, work.

To put it simply, possibly too simply, a carbon price requires those who produce, distribute, or use fossil fuels – or who produce greenhouse gas emissions in other ways – to make a payment for every tonne of greenhouse gases that enters our atmosphere.

In principle, the arguments for a carbon price are fairly obvious. It works with the grain of the market. It doesn’t make grand regulatory predictions about what will work, what we should do, or how exactly people ought to change their behaviour. It just prices in the ‘bad’ – in this case, emissions.

In practice, too, it has been effective. Electricity is the only area we have had a consistent approach to carbon pricing in the UK, and that is why electricity is the area where we have driven down emissions the most.  But electricity represents only a minority of our carbon emissions, and we now need a clear approach to the rest of the economy.

Carbon pricing also provides two things that we now – badly – need.

First, revenue. In some countries, carbon pricing is completely revenue neutral, and the money is distributed back to households. This deals with the challenges of the environment without leaving people worse off. But in others, it is used to support general government objectives – like funding the health service (or reducing the deficit).

If the Government needs to raise money, doing it in a way that will win public support and support environmental aims, without burdening businesses excessively, is a sensible way to do it. The other way to use revenue is to support transitions to cleaner energy alternatives and new green jobs – incentivising people away from carbon emissions, while supporting innovation.

Second, it provides certainty. A lot of the money for net zero should come from private investment. A fixed, clear price gives them the confidence to spend.

We already have some carbon pricing in the UK tax system. Unfortunately, it lacks transparency, is far too complicated and is piled sequentially on top of electricity bills. It has the bizarre consequence of actively encouraging people to move from electricity to gas – the opposite of what we want if we care about carbon emissions. Neither consumers nor suppliers have a clear idea of who is paying what and why.

Carbon pricing is not a silver bullet. I have oversimplified the changes necessary to reach Net Zero, and in our commission report we outlined a list of complementary policies required for different sectors to reach it. They recognise that the cost of reaching Net Zero is likely to be different for electricity, heating, industry and agriculture, and that the technologies are less mature for some sectors than others. Nor can it be too high: the economy is fragile, and business must be able to recover and grow. But the basic human principles remain – if there is a price, people will change their behaviour, and human ingenuity will always outstrip governments’.

We have been submerged in environmental rhetoric for years. Now the UK, alongside other countries with similar commitments, is having to make some real choices. Often, understandable fear of a public backlash has held them back – our research suggests there’s a credible way of gaining public consent and achieving our environmental aims: by having a clear price, credible alternatives for people to switch to, and cushioning so that no one is too badly affected. That is both deliverable and desirable, and it should form the core of the UK’s net zero roadmap.