Climate change

Here’s a U-turn that we can all welcome: felling the wind farms. Matt Ridley described, in a Spectator cover story some while ago, how George Osborne has turned against them. Today, the Observer has more details, saying that Osborne is:     As Ridley argued, wind farms are a ‘monument to the folly of mankind’, representing the triumph of ideology over reason. We could not afford them in the boom years, and we certainly can’t now. The subsidies make a small number of rich people even richer, and a huge number of companies are doing very well from the renewable energy racket. But if you apply rational analysis to it — ie, how much energy does it produce for the money it costs? — there is no reason at all. They generate just 0.

It did not take long. Last month, Matt Ridley argued in a Spectator cover story that the wind farm agenda is in effect dead, having collapsed under the weight of its own contradictions. The only question is when our ministers would realise. In an interview with the Sunday Times (£), climate change minister Greg Barker admits that his department has adopted an ‘unbalanced’ approach to wind farms and will now look at other options. ‘Far from wanting thousands more, actually for most of the wind we need… they are either being built, being developed or in planning. The notion that there’s some new wave of wind [farms] is somewhat exaggerated.

Bjorn Lomborg’s article on why Germany is cutting back on its support for solar power is well worth reading and has clear implication for this country’s debate about energy policy. As Lomborg argues: ‘there is a fundamental problem with subsidizing inefficient green technology: it is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic (PV) capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

Did we need to replace Chris Huhne at all? Nigel Lawson, a former editor of The Spectator (amongst other things), has an intriguing idea in a letter to today’s FT: just break up the Department for Energy and Climate Change. It has done nothing to encourage the development of shale gas, which — as we argue in a leader in tomorrow’s Spectator — could keep Britain in energy for the next 100 years without the need to build another windmill. Lord Lawson, a former energy secretary, says that Ed Davey: ‘...has the opportunity to enter the history books as the only minister to use his position to abolish it for the wider public good.

George Osborne told a Conservative Party increasingly wary of expensive climate policies that Britain needs to "cut [its] carbon emissions no slower but also no faster than our fellow countries in Europe. That’s what I’ve insisted on in the recent carbon budget."  What he actually insisted on was what Chris Huhne described as "a review of progress in early 2014 to ensure our own carbon targets are in line with the EU’s".  Even if that review is serious, and energy intensive industries have every reason to be sceptical, it is only going to hold our policy to the same standard as today.  The current targets require us to cut our emissions faster than our European competitors, and the policies we are adopting to meet them are far more draconian.

Luciana Berger is a frequent speaker at this year's conference and her creed is simple: tax energy use to tackle climate change. But, journey along the Mersey, from the glamorous fringe events held on Liverpool’s well rejuvenated quays to the post-industrial wasteland that lies beyond and you discover a different breed of Labour MP. ‘Is the green economy a threat to growth?’ asked Ellesmere MP, Andrew Miller at a seminar earlier this afternoon.

Chris Huhne can always be guaranteed to grate. Several Conservatives have cracked wry smiles at the energy secretary’s comments about the “Tory Tea Party tendency”. Mark Pritchard quipped that plenty of senior Lib Dems would soon be at leisure to throw their own tea parties and John Redwood dismissed Huhne’s cant as conference high-jinks. Redwood went on to challenge Huhne’s policies. Speaking to Sky News, he said he was “happy to hear ideas” about “promoting more competition”, pointing out that competition might reduce prices. Then he added that Huhne “has also got to understand it is his policies that are driving costs of electricity up in Britain because we are choosing to generate it in a very expensive way.

Chris Huhne was on the Andrew Marr show this morning. As you might expect on a day when the Sunday Telegraph broke the news that fuel bills will boom by 30 per cent as a result of green taxes, the Energy Secretary was asked to ruminate at length on all matters Murdoch. Eventually, though, Huhne had to answer searching questions pertaining to his brief. Confronted with the Sunday Telegraph’s story, Huhne described it as ‘nonsense’ because it did not take potential savings into account. Huhne also pledged to introduce more competition to shatter the grip that the ‘Big Six’ utility companies have on 90 per cent of the UK's energy market. Greater competition should, theoretically, lower bills.

What do the TUC, heavy industry and the European Commission have in common? This is not the start of a bad joke; the answer is that they all oppose the government’s energy policy. Ten days ago, Tata (formerly British Steel) announced that it was to cut more than 1,500 jobs at plants in Scunthorpe and on Teeside. The directors later confirmed that their decision was influenced, in part, by the introduction of a costly carbon floor price at the last Budget. The floor price, which exists on top of levies imposed by the EU, has increased the burden of taxation on energy consumption to subsidise renewable energy research. In last week’s issue of the Spectator, Matt Ridley predicted how this policy will likely be an expensive fiasco.

At the weekend, it appeared that Chris Huhne had won his battle with Vince Cable and George Osborne over whether or not the government should sign up to the 4th carbon budget. This budget covers 2023 to 2027 and is all part of a plan to cut carbon emissions by 80 percent by 2050 compared to the level in 1990; they have currently been reduced by 26.5 percent from the 1990 level. But it now appears that the greens in government might have been premature in declaring victory. First, the next set of cuts in UK carbon emissions is dependent on the European Union agreeing to embark on an equally significant emissions cut by early 2014. If this does not happen, then the UK carbon budget will default to the EU average.