Simon Less

Today, the government publishes its consultation proposals for reform of the electricity generation market. The key debate over the next few months will be whether Britain continues to have a competitive market, or reverts to central planning of the power generation sector. New Labour paid lip-service to a competitive electricity market, while chipping away at its ability to operate effectively – through a constant accretion of new policies, typically promoting renewables. The effect has been to salami-slice the market into technology-specific segments, to increase political and regulatory uncertainty, to encourage lobbying and rent-seeking, and to increase financing costs.

With the latest round of international climate change negotiations at Cancun less than a week away, Policy Exchange has published research showing that the UK’s and EU’s performance in reducing carbon emissions is not quite what it seems.   According to the official measure, used to determine performance against the Kyoto agreement, the UK’s emissions have fallen.  The UK is set to exceed its Kyoto target of 12.5 percent reduction from 1990 levels.  But, in our new report Carbon Omissions, Policy Exchange has estimated that total UK carbon consumption emissions in fact rose by 30 percent between 1990 and 2006.