REPEAL OF THE CLIMATE CHANGE ACT
WE ARE A NON-PARTISAN CAMPAIGN OF VOLUNTEERS
Already over 4 million people, who voted UKIP in the general election, voted to repeal the Climate Change Act. This is substantially more than the 20,000 Friends' of the Earth activists who sent postcards to their MP in support of a climate law.
We ask government to do a cost benefit analysis of the 2008 Climate Change Act - to listen to the voice of the 4 million who are struggling to pay their energy bills, and debate the true £300 billion cost of this climate law.
Please read MP Peter Lilley's new report which underlines the harm this climate law is causing.
The 22 key findings of this report are below and here is the FULL REPORT
Support #RepealClimateAct and email a copy of this report to your MP.
1. The costs of the Climate Change Act, which were not discussed at all during its passage through Parliament, are coming home to roost.
2. Those costs – all ultimately borne by households through higher energy bills, increased taxes and a higher cost of living – are already substantial, growing rapidly and hit the most vulnerable hardest.
3. The best way to help ‘just about managing’ households would be to rein back on these costs.
4. Despite the recent decisions to curtail onshore wind subsidies, solar subsidies and the Green Deal, the total cost of levies, taxes and subsidies to payfor climate policies is set for an 80% increase by 2020, nearly trebling by 2030 and more than quadrupling by 2050.
5. On the basis of figures from the OBR, DECC and the Climate Change Committee (CCC), the average cost of decarbonising electricity to meet Climate Change Act targets was or will be (in 2014 prices): • £327 per household in 2014 • £584 per household in 2020 • £875 per household in 2030 • £1390 per household by 2050 – for the impact of the carbon dioxide emissions tax on electricity prices alone.
6. These costs place a cumulative £10,800 burden on each household, between 2014 and 2030. This is money that could be spent on families’ own priorities, and in more efficient sectors of the economy. Country-wide, this cost amounts to an extraordinary £319 billion, over three times the annual NHS England budget.
7. The post-coalition ministerial team at DECC1 woke up to this impact and began to rein back on some costly subsidies, which is welcome, but merely reschedules the timing of costs. Unless they relax the emissions targets they will not reduce the overall costs.
8. This government should be transparent about the costs of transforming the economy to operate virtually without fossil fuels. Yet coalition DECC ministers tried to pretend climate change policy was practically costless and would even make us better off. Rather than try to persuade people that these costs are justified to benefit future generations, they and other supporters of the Act simply prefer to ignore its costs entirely. xi
9. That position was always incredible but has been totally discredited by figures released by the CCC,2 which show total public spending on climate change policies via levies and taxes amounted to £6.76 billion in 2014/5 – equivalent to £248 per household. This figure is on a financial year basis and differs in some components from those we have compiled from DECC sources; notably, it excludes carbon taxes. However, it demonstrates that the cost is already substantial.
10. Official figures understate the system costs of intermittent renewables, omit the cost of biofuels in transport fuels, ignore Britain’s share of the EU budget (even though ‘at least 20% of the entire European Union budget for 2014–2020 will be spent on climate-related projects and policies’3), include nothing for DfID (which is likely to amount to at least £25 billion by 2030) and FCO spending on climate and exclude the mounting indirect costs such as lost jobs and output as a result of having rendered British industry less competitive.
11. Coalition DECC ministers’ claims that climate policies cost little and would even make households better off involved a number of devices:
• They only took account of the one third of levies and taxes which fall on household energy bills. But households also pay through an increased cost of living for the two thirds of climate policy costs that raise the cost of energy for industry.
• They ignored the cost of measures that are financed by general taxation – but ultimately households bear the cost of taxes too.
• They largely ignored most of the additional costs that intermittent renewables impose on the electricity system – the need for back-up capacity when the wind does not blow or the sun shine; additional ‘balancing’ capacity including ‘spinning reserve’ ready at short notice to cope with fluctuations in supply; and the need to extend and strengthen the grid to connect to distant wind farms etc.
• Having understated several-fold the impact of climate policies on household costs they offset against it the notional energy savings from more efficient appliances, better insulation and so on, giving a wholly spurious positive figure for the impact of climate and energy policies on households. It is a mistake to offset these efficiency savings against climate policy costs because: continuous improvement in energy efficiency would be desirable (and occurs under market pressures) even if there were no carbon dioxide emissions; energy efficiency reduces the cost of energy, which usually boosts energy consumption thus offsetting any savings and, as energy is decarbonised, energy savings become increasingly irrelevant to reducing carbon dioxide emissions. xii
12. Other apologists for the Climate Change Act do not stoop to these devices to hide its costs but still claim that the cost of decarbonising the economy will be comparatively modest.
13. Such claims merit more sceptical scrutiny than they have received, for two reasons. First, replacing fossil fuels by low-carbon energy is a grandiose project that is unprecedented in peacetime, and lesser mega-projects from the ground nut scheme to nuclear have invariably overrun in time and budget or failed outright. Second, the current cost of producing electricity from all the alternatives to fossil fuels is a multiple of the current electricity price.
14. The bulk of the reduction in UK emissions of carbon dioxide below their 1990 level so far has not been due to a switch to renewables but instead the dash-forgas, the great recession post 2008, the closure of coal fired power stations (to comply with EU directives to reduce particulate emissions not carbon dioxide), and outsourcing manufacturing to China and elsewhere. Indeed, on the basis of carbon dioxide emitted in producing the goods and services we consume rather than those produced in the UK, our carbon footprint has actually risen despite all the costly efforts so far.
15. Plans to reach the Climate Change Act target of an 80% reduction in carbon dioxide emissions require virtually eliminating emissions from electric power generation, which counts for about one third of current emissions, and converting the bulk of transport and heating, each of which accounts for a further third, to electricity. Most forecasts largely ignore the cost and even feasibility of those conversions; switching heating from gas to electricity and heat pumps plus storage looks particularly problematic. Instead the focus is on decarbonising a much enhanced electricity sector powering most of the economy.
16. Those who claim that the costs of moving to a carbon-dioxide-free power system will be modest predict that the current huge differential between the cost of low-carbon and fossil generation will soon diminish and eventually disappear. They make several arguments:
• Subsidies on existing wind and solar capacity will end after 15 years. This is true, but a rising carbon dioxide tax on fossil fuels will provide an ongoing subsidy.
• The cost of low carbon dioxide electricity should not be compared with the current depressed wholesale price of electricity but with the cost of electricity from new thermal plant which would be the alternative. Insofar as new low carbon plant is needed to expand capacity or replace out of date thermal plant, this is a valid point.
• When calculating the cost of electricity from new thermal plant they do not use current fuel prices but projected fuel prices over the life of the xiii plant. DECC’s forecast in September 2014 was that the oil price (to which gas is linked) would average $96.40 per barrel in 2015 rising to $135 by 2035. It is currently little more than $50 per barrel, having fallen below $30!
• They also include in the cost of thermal plant a projected carbon tax/price over the life of the plant. Whatever the merits of the case for putting a price on carbon dioxide emissions, this is an increase in cost of energy. It is ludicrous to present it as saving consumers money.
• They argue that deployment of low-carbon technologies will lead to a fall in their costs as they ‘mature’. There is no guarantee that this will occur – nuclear costs have risen despite 50 years of deployment. No allowance is made for possible improvements in fossil technologies yet the shale revolution has dramatically cut the cost of oil and gas and there is scope for continued improvement in the efficiency of thermal generators.
• Optimistic projections assume that the levelised cost of some low-carbon electricity will achieve ‘grid parity’ with thermal. But this ignores the potentially substantial ‘system costs’ of variable renewables, which reduce the value of variable renewable electricity (VRE) below that from dispatchable alternatives by 30–50%, even at 30% penetration.
• This cost largely arises from the under-usage of dispatchable plant when used in conjunction with VRE. This would make the cost of using high capital intensive plant like nuclear or carbon capture and storage (CCS) in conjunction with variable renewables even more prohibitive.
• Yet the official decarbonisation strategy depends on using nuclear and CCS in conjunction with VRE. • For technical as well as cost reasons, nuclear is ill-suited to work in conjunction with VRE. So CCS is vital. So far, the feasibility of deploying this technology at scale remains unproven. Attempts in several countries to develop it have been abandoned. And the UK’s £1billion offer to fund pilot projects has finally been shelved.
• However, ‘meeting the UK’s carbon targets without CCS would cost the UK around £30–40 billion more each year. . . roughly doubling the expected annual costs’ according to Carbon Connect.4 Even the CCC admits5 that ‘Our estimates, and those of others, suggest the cost of meeting the 2050 target would be twice as high without CCS’.6
17. In short: hopes of a low-cost transition to low carbon are based on projections of rising fossil fuel prices (contrary to recent experience), aggravated by continually rising tax on carbon dioxide emissions (itself a cost, not a benefit), the presumption that technical advances in renewables will outpace those in fossil fuels (contrary to recent experience), and ignoring the large system costs xiv of integrating variable renewables, costs that become prohibitive if back-up power comes from CCS and nuclear. Yet, without CCS, the cost of decarbonisation could double.
18. The government should be transparent about the true cost to households and the dramatic transformation of the economy required by climate change policies.
19. Britain could then have a sensible debate about:
• the most cost-effective ways of achieving the Climate Change Act target.
• whether the likely benefits expected to flow from meeting that target justify the costs.
20. A sensible debate on the most cost-effective ways of reducing emissions would reveal an unusual consensus among economists that the current bewildering array of targets, subsidies, levies, taxes and permits is not the most cost-effective way to reduce emissions. The total amount of carbon dioxide that major industries can emit each year is rationed by the European system of permits. So when British companies are induced by quotas, subsidies or taxes to make additional savings using high-cost renewables they simply increase the cost of achieving a given reduction while releasing permits to be used by their EU competitors without reducing total emissions at all.
21. The referendum decision also opens up new opportunities for UK climate policy even if we remain committed to the Climate Change Act. Britain need no longer be bound by EU surrogate targets for renewables and so on. These merely increase the cost of achieving the primary Climate Change Act target. So the UK could reduce the cost of achieving that target by resiling from unnecessary subsidary targets and relying on either Emissions Trading Permits (possibly linked to the EU scheme) or a rising carbon tax.
22. It may be that after such a debate the public would be persuaded that the current and likely costs of cutting our carbon dioxide emissions by 80% are worthwhile. But so far the debate has been averted by pretending that the Climate Change Act is virtually costless, that there are not more cost-effective ways of meeting these targets and that the climate risks averted are imminent, not centuries hence.
Read the FULL Report HERE
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