Funnily enough, sending all the factories abroad doesn't cut emissions

October 01, 2009 10:59 AM

This issue, which we commented on in our last major paper on green taxes, really shouldn't surprise anyone:



"Our energy footprint has decreased over the last few decades and that's largely because we've exported our industry," he said. Developing countries now made the goods that Britain buys, he added."


The BBC write this up as an argument for Britain pledging greater cuts at international negotiations relative to countries like China, which do the manufacturing now.  But, what it actually shows is the pathetic failure of more than a decade of policy that has cost ordinary British families and workers in manufacturing industries a fortune but achieved nothing.


Right now, 14% of the average domestic electricity bill is made up of climate change regulations and 21% of the average industrial electricity bill.  That is a Government estimate, likely to be an underestimate, and the bill is rising.  Adding a fifth to a major cost for many industrial businesses will clearly make it much harder for them to compete internationally.  That is bad news for a lot of manufacturing workers who want to stay in employment, and makes all the rhetoric about "green jobs" a cruel joke, but also doesn't do much to reduce emissions as often all you've done is move the emitting activity elsewhere.


The Chinese, in particular, aren't playing ball.  There is no way they're going to impose big increases in energy prices (subsidies are more likely) and choke off their economic growth, and it's hard to argue that they should when so many millions are depending on that growth to take them out of poverty.  They aren't going to pledge any hard and fast cuts that they don't plan on achieving anyway, as their industry moves along an environmental Kuznets curve - and what they do pledge they'll ask us to pay for.  That means all that Europe's effectively unilateral policies will do is move emissions to Asia.


It is increasingly clear that the current approach isn't working.  Politicians need to acknowledge that and start thinking about an alternative.  If you want to find out more there is an opportunity next week.  At the Freedom Zone in Manchester next week, we'll have some of the world's top thinkers on this issue - Peter Lilley MP, Iain Murray from the Competitive Enterprise Institute and Jim Manzi from the Manhattan Institute - speaking at an event, "the right response to climate change".

This issue, which we commented on in our last major paper on green taxes, really shouldn't surprise anyone:



"Our energy footprint has decreased over the last few decades and that's largely because we've exported our industry," he said. Developing countries now made the goods that Britain buys, he added."


The BBC write this up as an argument for Britain pledging greater cuts at international negotiations relative to countries like China, which do the manufacturing now.  But, what it actually shows is the pathetic failure of more than a decade of policy that has cost ordinary British families and workers in manufacturing industries a fortune but achieved nothing.


Right now, 14% of the average domestic electricity bill is made up of climate change regulations and 21% of the average industrial electricity bill.  That is a Government estimate, likely to be an underestimate, and the bill is rising.  Adding a fifth to a major cost for many industrial businesses will clearly make it much harder for them to compete internationally.  That is bad news for a lot of manufacturing workers who want to stay in employment, and makes all the rhetoric about "green jobs" a cruel joke, but also doesn't do much to reduce emissions as often all you've done is move the emitting activity elsewhere.


The Chinese, in particular, aren't playing ball.  There is no way they're going to impose big increases in energy prices (subsidies are more likely) and choke off their economic growth, and it's hard to argue that they should when so many millions are depending on that growth to take them out of poverty.  They aren't going to pledge any hard and fast cuts that they don't plan on achieving anyway, as their industry moves along an environmental Kuznets curve - and what they do pledge they'll ask us to pay for.  That means all that Europe's effectively unilateral policies will do is move emissions to Asia.


It is increasingly clear that the current approach isn't working.  Politicians need to acknowledge that and start thinking about an alternative.  If you want to find out more there is an opportunity next week.  At the Freedom Zone in Manchester next week, we'll have some of the world's top thinkers on this issue - Peter Lilley MP, Iain Murray from the Competitive Enterprise Institute and Jim Manzi from the Manhattan Institute - speaking at an event, "the right response to climate change".

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