Today's announcements on carbon emissions by Ed Miliband, and why they're wrong

November 23, 2015 2:40 PM

Taxpayers will be overjoyed – Ed Miliband is using his front bench retirement to once again make the foray into domestic energy policy.

In his latest intervention, a week before the climate change summit in Paris, Ed has called for the existing target of cutting emissions by 80 per cent (by 2050) to be raised to 100 per cent. Arguing that by implementing such measures, in law no less, it ‘sends a message’ to British businesses and recognises that ultimately we’ll be looking for a 100% carbon emission-free nation in the coming years anyway.

Reading his comments got me thinking about how we’d come to enforce such a policy and reminded me of a similar move industry-heavy Germany brought into force in 2011, the publicity-generating Energiewende strategy. The key policy document for Energiewende included aspects such as reducing greenhouse gas emissions by 80 – 95 per cent by 2050, ensuring renewable forms of energy generation made up 60 per cent of the market and attempting a huge research drive in favour of renewable sources. The goal: clean and renewable energy sourcing for Germany in line with the European Commission’s aim for a low-carbon European Union by 2050.

The convenience of the Energiewende policy in Germany is that due to the attention it has garnered, leading the charge on the move from fossil fuels and nuclear power, much study has been made into the side-effects, costs and effectiveness of such a policy.

So what could the British public expect to see from a government attempting a carbon emission-free nation?

Well, frankly, big problems.

The first one: higher electricity prices. At a time when British consumers are already struggling to pay their increasing energy bills, enforcing renewable subsidies via fixed high prices for solar and wind producers and preferred access to the electricity grid means the difference between the market price and the fixed price for electricity is passed onto the consumer, translating into even higher monthly bills. For example, the average German household in 2015 was paying an extra €260 a year to subsidise renewables.

Secondly, there is a huge administrative bill for operating such a policy. In Germany, attempting to lead on reducing emissions by 80 – 95 per cent has meant over 4,000 different subsidy categories for renewable sources, with bureaucrats simultaneously overseeing the expensive process of withdrawing nuclear power stations and coal plants from the energy landscape. The UK coal and nuclear generation figures currently come to around half of our national electricity production. Nuclear power plants especially are not something that can be withdrawn overnight on the cheap; they take time and a lot of money to remove.

And thirdly, renewable energy generation doesn’t win the award for the most reliable source of energy. You’ve seen them, perhaps on a long motorway drive, the many wind turbines stood stationary on what seems to you a rather breezy day. You’ve probably also seen the overcast British summers and the sad-looking solar panels on your neighbour’s roof. Germany has the same problem, and has resolved to deal with it by keeping some old, dirty brown coal-fired power plants on stand-by in case of a supply emergency, a costly, counter-productive and inefficient solution to a man-made problem.

And this is just the outlook for an 80 percent carbon emissions reduction. Aiming for an entirely carbon emission-free UK, we could expect to see even higher costs, an even more distorted energy market and further bills for the bureaucracy to manage it all.

*Image credit to Montgomery County Planning Commission

Latest Blogs:

The sugar tax and the public finances

6:00 AM 05, Dec 2016 Harry Fairhead

Working for the taxman

6:00 AM 26, Nov 2016 Harry Fairhead

Further thoughts on the Autumn Statement

4:56 PM 24, Nov 2016 James Price