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The new book 'Let them eat carbon' from TaxPayers' Alliance Director Matthew Sinclair looks at the poor record and incredible cost of climate change policies, and the special interests that profit. It provides new insights into the cost of major regulations driving up energy prices, particularly the Renewables Obligation and the EU Emissions Trading System (EU ETS). Just those two regulations are costing billions already, and are expected to become more expensive over time:
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- In Britain the EU ETS cost residential, industrial and commercial energy consumers nearly £1.9 billion in 2010, equivalent to nearly £75 a family. That is despite a fall in industrial emissions with the recession and a depressed carbon price. At the Government’s target price of £30 /t CO2 that would have been over £178 a family.
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- In 2009-10 the Renewables Obligation cost over £1.1 billion, equivalent to an additional £40 a family (up from under £900 million in 2007-08).
The rising cost of these and other climate change policies is resulting in what Citigroup have called an “affordability crisis” for energy consumers. They have estimated that Britain will need to invest more than Germany, France and Italy combined to meet the targets, and as a result prices are likely to increase by more than 50 per cent in real terms.
But while consumers face higher prices, special interests are able to make substantial profits:
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- Some major companies enjoyed large amounts of valuable surplus emissions allowances, largely as a result of falling industrial production, in 2009 and 2010. For example, surplus allowances at the steelmaker ArcelorMittal were worth over €1 billion (around £800 million) over those two years.
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- Earlier studies have shown energy companies earning between £17 and £53 billion in windfall profits from EU Emissions Trading System over the period 2008 to 2012 in five major economies – Germany, the UK, Italy, Poland and Spain. That compares with Microsoft’s total net income of around £12 billion a year in the fiscal year ending June 2010.
Matthew Sinclair, Director of the TaxPayers’ Alliance and author of 'Let them eat carbon', said:
“Regulations that are supposed to cut greenhouse gas emissions are adding to energy bills, and making it much harder for a lot of people to make ends meet. At the same time manufacturers are finding it harder to compete and jobs are being lost as industrial capacity relocates to other countries not placing the same burden on industry. The only ones who benefit are a handful of big businesses that can make billions in profits at the expense of ordinary consumers. With the dismal failure of these policies, and the cost mounting, it is vital that we scrap them.”
Other issues covered in the book include the challenge of meeting climate targets; green taxes; the record of green jobs; and environmentalist and corporate lobbying. The introduction can be downloaded here. And you can contact Biteback Publishing or the TaxPayers' Alliance for a review copy.
Lord Lawson, former Chancellor of the Exchequer and author of 'An Appeal to Reason', said:
"This book offers a great insight into the increasingly important but poorly understood world of climate change policy. Anyone who wants to understand how they are affected, and what can be done about the gross failure and exorbitant cost of politicians’ attempts to curb greenhouse gas emissions, will find it invaluable."
Ruth Lea, Economic Adviser to Arbuthnot Banking Group and former Head of Policy at the Institute of Directors, called it:
"A terrifically well-researched, well-argued and persuasive exposition of the huge economic and personal costs of our current energy policy. Read it. And heed it."