Sinclair Let Them Eat Carbon

The Price of Failing Climate Change Policies, and How Governments and Big Business Profit From Them
1. Auflage 2011
ISBN: 978-1-84954-205-0
Verlag: Biteback Publishing
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 320 Seiten

Climate change is big business. Much of the money so-called green policies cost us goes straight into the pockets of a bewildering range of special interests. Around the world companies are making billions out of the schemes governments have put in place saying they will curb global warming and protect us from the threat of climate change. There is little evidence that those policies are an efficient way to cut emissions. They simply do not represent good value, and the public are right to be sceptical. In Let Them Eat Carbon Matthew Sinclair looks at the myths perpetuated by the burgeoning climate change industry, examines the individual policies and the potentially disastrous targets being put into place by ambitious politicians, and proposes a more realistic alternative.

MATTHEW SINCLAIR is Director of the Taxpayers' Alliance.

Autoren/Hrsg.

Sinclair, Matthew

Leseproben

INTRODUCTION

Ordinary families are paying a heavy price for the attempts politicians are making to control greenhouse gas emissions. Climate change policies push up electricity bills, make it more expensive to drive to work or fly away on holiday, put manufacturing workers out of a job; they sometimes even make your food more expensive. They hit some people particularly hard: the industrial worker already struggling to compete with rivals in China; the poor and elderly, who feel rising energy costs particularly keenly; and anyone with a big family who needs to drive their kids around because they don’t live in a city centre. At the other end of the scale, politicians who don’t drive because they live in city centres and are on above average incomes won’t feel the pinch in the same way and could easily underestimate the extent of the pressure on household budgets.

Much of the money goes straight into the pockets of a bewildering range of special interests. Climate change has become big business. Across the world, companies are making billions out of the schemes politicians have put in place to try and stop global warming: from windfall profits for electricity generators under cap and trade schemes like the EU Emissions Trading Scheme in Europe, to huge profits for dodgy projects in the developing world under the Clean Development Mechanism. Climate change has justified entire new organisations in the public sector with hundreds of staff and big grants to fund them. Environmentalist campaigns enjoy big budgets, often including generous taxpayer funding.

At least in the short term there is a lot of money to be made out of the unprecedented interventions in the economy being justified with the threat of climate change. When the backlash comes, companies doing well out of climate change policy now could pay quite a price. But right now there are innumerable opportunities to make money from cap and trade and other climate change policies.

Of course, a policy isn’t necessarily a bad one because people can make a profit out of it. There’s nothing wrong with that if it is a reward for providing a valuable service. And the impact on consumers could be a price that we have to pay to avoid climate change. Unfortunately, there is precious little evidence that the various schemes and targets that make up climate change policy are actually an efficient way of cutting emissions. They don’t represent good value and the public are right to be sceptical of them.

Figure 1.1: CO2 emissions, Mt, UK

Look at the long term pattern of emissions. You’ll struggle to spot the advent of big climate change policies. Figure 1.1 uses International Energy Agency data to show UK carbon dioxide emissions between 1970 and 2008 in millions of tonnes.1 In Britain we were being sold higher prices on petrol all the way back in 1993. Then Chancellor of the Exchequer Ken Clarke told the Commons that tax hikes on motor fuel were part of completing ‘Britain’s strategy for meeting our Rio commitment’, referring to the Rio Earth Summit in 1992 where we first pledged to take action to curb greenhouse gas emissions. When you look at the pattern below, can you see any change in the pattern of emissions after the Rio Summit? Or at the introduction of other climate change policies like the Renewables Obligation – which provides big subsidies to renewable energy – around the beginning of the last decade?

Figure 1.2: Emissions intensity, kg CO2/US dollar (2000 prices)

To look at it another way, let’s compare the record of the United States – which did not ratify the Kyoto Protocol – and the developed European economies – which did. Figure 1.2 shows emissions intensity, the amount emitted per dollar of GDP over the period.2 That is a good guide to how efficient an economy is at keeping emissions down without hurting the economy – if a country cuts emissions without lower emissions intensity they are just making themselves poorer.

Again, it’s hard to see the achievements of the current approach at the moment. Looking at the numbers like this has led one prominent set of academics to talk about the ‘abject failure of existing policy’.3

That is why, in some areas, I share important common ground with environmentalists such as George Monbiot. When critiquing current climate change policies, Monbiot is more likely to condemn them for doing little to reduce emissions instead of focusing on their enormous cost. But it is important to understand that there is no contradiction in saying that current environmental policies in many countries will do huge harm to the economy while having little or no impact on carbon emissions. Like a man facing a mid-life crisis who blows all his savings on Porsches and Harleys without becoming any more attractive to younger women, we risk wrecking our economies without achieving significant environmental improvements.

Politicians start out supporting these policies for all sorts of reasons. Some really mean it, are thoroughly convinced that something needs to be done and see the current approach as the best way forward. Others also find it useful as a way of trying to change their image: Prime Minister David Cameron, when he was in opposition and the leader of the British Conservative Party, told voters they could ‘vote blue, go green’ as part of an attempt to position the party away from the hard-headed legacy of Margaret Thatcher.

There are politicians who find the threat of climate change a convenient excuse for policies they have always wanted. Bureaucrats in the European Union have been looking for an excuse for a new European tax for decades, to free them from the constraints of appealing to member states for revenue, and a European green tax is one way of achieving that longstanding objective. For many politicians the opportunity to jack up green taxes makes climate change helpful in paying for their wasteful spending.

It is now mostly about momentum, though. Too much political capital has been sunk into the current set of policies, particularly in those countries where all the mainstream parties have supported them, for a reversal to be possible without a lot of embarrassment. There is a sense that questioning the current approach undermines the entire effort to do anything; that whatever their merits the current measures are what we’ll have to work with. That thinking was exposed when a spokesman for the EU Environment Commissioner Barbara Helfferich rejected changes to biofuel policies as disastrous for the environment and the world’s poor. She said: ‘There is no question for now of suspending the target fixed for biofuels… You can’t change a political objective without risking a debate on all the other objectives.’ The problem that creates is obvious. Not only are the current policies ineffective and fiercely costly, they were designed to work as part of an international negotiating process that broke down spectacularly in Copenhagen and showed no sign of a serious renaissance at Cancun. Whether or not the politicians and activists like it, the current set of policies can’t be sustained and need to change.

So why haven’t the vast majority of voters who pay for these policies stopped them?

The basic answer is that they have – when they’ve been given a chance. When a mainstream party opposes it, climate change legislation rarely progresses. In Europe that hasn’t happened, as in most countries the parties have stitched things up without the voters’ involvement. But in Australia, Canada, the United States and Japan the push for emissions trading in particular has stalled. In Australia it was remarkable how the inexorable political drive to get an emissions trading scheme in place fell to pieces as soon as the opposition Liberals got rid of their leader and got back into the business of opposing. Since then, the Prime Minister, Kevin Rudd, has put the plans on ice and been deposed by his own party. In the United States the politicians have found a way around inconvenient democracy: if the public don’t want greenhouse gas rationing pushing up energy prices, then the Environmental Protection Agency, which doesn’t have to appeal to pesky voters for support, can push the regulations instead.

It is understandable that many people prefer to ignore climate change policy as they consider other issues a higher priority, but that allows those committed to the expensive environmentalist agenda to push it forward without real opposition. Whether or not you think climate change is important, no one can afford to ignore climate change policy. In many European countries they don’t even need to put new measures in place; the cost will ramp up without any further legislation. For example, Britain’s climate change targets are set to make energy bills rise rapidly over the next decade, as they require massive investment in expensive offshore wind power, and the mechanisms to make that happen – like the Renewables Obligation – are already in place.

All sorts of other objectives will be undone if we don’t change climate change policies. The fight to reduce poverty and welfare dependency is hard enough without making essential goods like electricity that are a significant part of the budgets of poorer households more expensive. For all the ridiculous hype about green jobs, they’ll be more than offset by job losses elsewhere in the economy; manufacturing firms already struggling to keep their edge against competitors in developing...