The cynical politics of emissions targets and COP26. How government is poised to declare success while delivering failure.

25 Jan

Dissenters can go figure.  Yes, China is still stacking up new coal plants.  But it is also the world’s largest invester in renewables.  Meanwhile, America was pouring record amounts into them – even under Donald Trump.

Those on the right who don’t believe in man-made climate change can protest as loudly as they like about this shift in the zeitgeist.  Their own capitalist system is turning its back on them.

BP’s plan to increase its renewables twenty-fold, cut oil and gas production by 40 per cent, and not to enter new countries to explore for either is only the tip of a non-melting iceberg.

Slumps, black swans and wars could slow the pace of change.  But the direction of travel is unmissable.  Fossil fuels are out – at least as traditionally used – and renewables are in.  The rejectionists might as well seek to shout down a hurricane.

In many ways, this is all to the good.  Energy security demands decreasing our reliance on, say, Russian coal.  Emissions reduction suggests not looking to our own for a replacement.

We have no quarrel with “the science”: as Roger Scruton pointed out, “the greenhouse effect has been known for over a century and a half”. But giving the shift to renewables a thumbs-up in principle is not necessarily the same as doing so in practice – that’s to say, when a plan is on the table.

The Government has a series of targets for reducing emissions.  Two of the best-known are the ban on the sale of new diesel, petrol and hybrid cars, and the zero emissions 2050 target, rushed in by Theresa May as a legacy policy.

We want to look at these targets, and the pace of change which they suggest, through three lenses: those of people, politics and Parliament. First, people.  Our columnist James Frayne writes on this site that he “has probably done more work on the environment than any other single issue”.

He finds a class and age divergence among support for environmental policies.  They’re important to everyone, more so to younger, urban voters – and in different ways.

To many of those people, Greta Thurnberg is a hero.  Lots of those older, provincial ones have never heard of her.  Their concerns are concrete, not abstract: “excessive use of plastics, the destruction of areas of natural beauty and animal welfare.”

Yes, there’s an overlap.  But how will they react when or if governments tax their hybrid cars, bar the coal they use for their fires, hike their electricity bills, export their jobs and ban them from eating meat?

Cambridge University is blazing a trail for that last policy – a reminder that urban, younger people are concentrated in Planet Remain, and provincial, older ones in Leave Country.  Welcome to the latest version of culture wars.

Now, it’s true that voter protest so far has been muted.  Which brings us to our second p: politics.  Britain’s democracy is geared up to a five-year election cycle.

It is built into the very stuff of Parliament, therefore, for MPs to fixate on the date of the next election (due in this case to be May 2 2024) – and often to look no further.

To make a complex story simple, green technologies mean subsidies, subsidies mean jobs, and MPs want those jobs for their constituents.  Who can blame them?

Hence the rush of articles on this site, more numerous by our count than on any other subject, from backbench MPs making the case for green technologies that will mean “green jobs” in their seats.

What about the bills?  They will mostly arrive on the doortsteps of taxpayers, consumers and business in the medium-run, if not the long-run.  And “in the long run we are all dead,” as Keynes put it.

So, third, to Parliament.  We quoted Scruton earlier on the known factor of the greenhouse effect.  But withheld until now the context of the quote.

The greenhouse effect “implies that, other things being equal, the accelerating production of carbon dioxide will cause the earth to warm”, he added, before briefly citing one of those other things: “fluctuations in solar energy”, he added.

There is more detail in his book Green Philosophy, but one would have thought that this position (the greenhouse effect is a cause of global warming – even the main cause, but not the only cause), would be shared by some on the Conservative benches.

Even if not, one would certainly have imagined that, by now, a band of Tory MPs would be pointing out that the bills for this green programme will come in sooner or later – at which point, a choice may open up between mulcting the taxpayer or losing those jobs.

Perhaps we are not reading Hansard closely enough, but we can find no evidence that such a group exists.  That suggests a new dimension to change in the Commons.

It’s often said that modern MPs are increasingly rebellious (not least by this site).  But they are so in a particular kind of way.  More stand ready to put the interests of their constituents ahead of the blandishments of the whips.

But the Commons seems to be producing fewer Andrew Tyries – the awkward, angular former Treasury Select Committee Chairman, now a peer, who campaigned against climate change orthodoxy, for all his establishment status.

At any rate, climate change sceptics outside Parliament warn of terrible things to come – higher electricity bills, for example.  We take the point, but query the scale – because we suspect that rebellion will finally come when the proverbial hits the fan.

To put it plainly, try telling Robert Halfon that his Harlow constituents must pay higher fuel duty to help meet some government target.  He will revolt.  As will all those other backbenchers who have no ideological or constituency stake in the push for zero emissions.

Maybe government will manage the transition, after all.  But with COP26 coming down the tracks, and with a mass of coporates, lobbyists and cheerleaders clinging to its wagons and rooftop, this is a good moment to take stock.

Reducing emissions and securing supply are only two of a quartet of main policy objectives, the other two being keeping the lights on and keeping prices low.  Remember: the Tory manifesto promised to lower energy bills for those in social housing.

How can these objectives be squared?  Finding an answer doesn’t require a drive-by shooting of green policies.  In some cases, we need more. For example, Rachel Wolf and others have made a strong case for a carbon tax, which is robust regardless of targets.

Nor are these wrong in themselves.  For example, it would make sense to have a timetable for the take-up of Flood Performance Certificates – documents that set out the severity of flood risk for homes, and steps that could be taken to mitigate it.

And there are worse things in the world than politicians declaring success (“we’ve made great progress towards our zero emissions target”) while delivering failure (i.e: backing off some of the tax hikes necessary to actually hit them).

But the landscape ahead looks to be one of conflicting policy objectives, punts in new technologies that won’t always come off, pressure on consumers, business and taxpayers, jobs that won’t always be sustaintable – and further damage to the standing of politics.

In which case, a small boy ought to halt the wheezing emperor of government policy, and point out not that he has no clothes, but that he is overdressed amidst this warming weather.  And would move more lightly were he to cast off the 2050 target.

ConservativeHome will run a mini-series on climate change policy tomorrow, Wednesday and Thursday.

The Deal in Detail 4) The environment and energy

31 Dec

Benedict McAleenan is a Senior Adviser to Policy Exchange’s Energy & Environment Unit. Ed Birkett is a Senior Research Fellow at Policy Exchange.

If you listen to much of the anti-Brexit rhetoric, you’d think that the EU was the sole driver of environmental progress in the UK and its only protector. Given half a chance, the UK would apparently repeal every environmental and climate change policy it could find. Given the UK’s cross-party support for environmental protection and for Net Zero, this risk was always theoretical.

The deal includes substantial provisions on the environment and on climate change as part of the ‘Level Playing Field’ and associated ‘non-regression’ clauses, which will require both the UK and the EU to uphold existing protections.

On energy, the deal introduces new mechanisms for the UK and the EU to cooperate on nuclear power, natural gas and electricity. The deal also looks forward to future cooperation on cross-border energy projects in the North Sea, which, as we’ve previously written, holds the key to a Net Zero economy. It also suggests an intention to cooperate on carbon pricing and hints at a linked Emissions Trading System. On both energy and the environment, this deal is a sensible starting point for longer-term cooperation.

Protecting the environment

On fishing, the big negotiation points were about the business of fishing fleets, not sustainability. So once the fisheries transition period ends the UK will be responsible for managing the sustainability of its own resources. Now that we understand how fisheries will operate with regard to our European neighbours, the UK Government should recommit to its sustainability pledges. This should include the sustainability of ‘shared stocks’, i.e. fish that swim across borders, so we’ll need to collaborate closely with the EU on marine standards.

The level playing field rules allow both sides to diverge on environmental standards. Throughout the Brexit debate, the EU has often been painted as a gold standard while the UK has been presented as quite the opposite. That isn’t accurate: The UK exceeds the EU on a number of protections, from climate policy to animal welfare. Diverging from the EU’s farm policies, for example, will be a major boon for the UK’s environmental wellbeing.

However, membership of the EU provided important environmental oversight. This has helped to address the tragedy of the commons which can arise from more local political trade-offs. The Environment Act aims to fill this void with an Office for Environmental Protection (OEP), which will replace EU institutions in scrutinising environmental protections.

The Deal’s ‘rebalancing’ mechanism (part of its level playing field provisions) will provide some checks on top of the OEP, but these will be limited. By allowing both sides the chance to impose tariffs (among other things) if the other loosens environmental checks, it may help to prevent backsliding. However, the provisions only relate to how the changes affect trade and investments. That is, if a loosening of regulations can’t be explicitly shown to impact trade, then they won’t come under the remit of the Deal. So, the onus is back on British politicians, the OEP, civil society and voters to ensure the environment is protected. That’s perfectly reasonable within the terms of a trade deal between sovereign nations.

Of course, the UK and the EU have different legal philosophies that govern the evolution of law and regulation. The EU’s French-style precautionary approach jars with the British ‘common law’ tradition. How they will manage divergence is still to be seen.

There’s also a question over devolved administrations. Environmental protections are mostly devolved to the Scottish, Welsh and Northern Irish administrations, so the UK government can’t easily prevent the Welsh, for example, from relaxing environmental rules and potentially affecting trade.

Cooperation on energy and climate

When it comes to energy, the UK and the EU have a lot to gain from cooperation, so it’s not surprising that the deal includes substantial provisions in these areas. The benefits of close cooperation will continue to grow. One area where the Deal is ambitious is cooperation on renewable energy projects, particularly in the North Sea. There’s massive potential for low-carbon energy projects in the North Sea, including offshore wind and offshore electricity grids.

By 2050, offshore wind capacity in the UK’s part of the North Sea is likely to increase tenfold. Both sides have recognised that, to make the most of the North Sea, they need to work together on offshore wind projects and offshore electricity grids.

When it’s windy in the UK, we can export our excess electricity to Norway, Denmark, the Netherlands, Belgium and France. Whereas on cold, still days, we will increasingly import electricity from the continent. This mutual cooperation directly reduces electricity bills by making the most of cheap renewable energy when it’s available.

From January 2021, Great Britain will no longer have access to the automated ‘market coupling’ system that improves the efficiency of trading electricity. However, the deal aims to develop a new system for trading electricity by 2022. In the meantime, electricity bills are likely to rise in both the UK and the EU. Any cost rises will be manageable, but the biggest effect could be felt by customers in Ireland and Northern Ireland, because the Single Electricity Market (which covers ROI and NI) is small and only interconnected to Great Britain.

The Deal also leaves open the possibility of cooperation on carbon pricing. For now, the UK is setting up its own Emission Trading Scheme (ETS) to replace the EU ETS. Longer-term, the UK and the EU could link these Emissions Trading Schemes, as Switzerland has done with the EU. As we’ve previously written, the UK and the EU should also explore cooperation on carbon border pricing, which is critical to decarbonising heavy industry without offshoring manufacturing jobs to countries with higher carbon emissions.

On electric vehicles, the UK and the EU have agreed transitional arrangements that will make it easier for EVs manufactured in the UK to qualify for tariff-free exports to the EU. This is a sensible step that will give UK car manufacturers more time to build up their supply chains for EVs, including battery “gigafactories”.

Under this deal, the UK Government regains control over regulation of emissions from vehicles. This will give the Government more freedom to go further and faster on the rollout of Electric Vehicles, including the ability to legislate to ban the sale of new petrol and diesel cars by 2030, which was announced as part of the Prime Minister’s ten-point plan for a Green Industrial Revolution. We have previously written about how a California-style Zero-Emission Vehicle Mandate (‘ZEV Mandate’) can reduce the cost of the transition to zero-emission vehicles powered by electricity or hydrogen. Under a ZEV Mandate, manufacturers would be required to sell an increasing proportion of electric and hydrogen vehicles each year. Next year’s Green Paper on the petrol and diesel phase-out is the perfect opportunity for the Government to introduce a ZEV mandate and show how we can use new-found regulatory freedom to boost both the environment and industry.

In summary, it’s a good deal, but there’s still work to be done to develop collaborative partnerships on energy systems and environmental protection. From liberal energy markets to legislating on net zero, both parties have been close for decades. The key now is to implement these provisions as smoothly as possible so that we can continue to trade with increasingly sustainable industries on both sides.

This is the fourth in a series of pieces from Policy Exchange looking at specific issues that arise from the Brexit trade deal.