The ‘greenest’ Government ever? (Not)


We set out below the contents of a blog by Simon Wren-Lewis. It is a succinct and useful analysis of Government policy.

Paris, climate change and the UK government
In a recent column, Paul Krugman bemoans the consensus view among Republican politicians that we should do nothing about climate change, and that many of the Republican nominees for president actually deny the science. He also complains about how the conventions of political journalism mean that public perceptions about the science become distorted as a result. He says that this situation – where parties on the right deny the need to take action on climate change – is unique to the US and Australia.

What about the UK? While everyone remembers Cameron promising to make his 2010 government the ‘greenest ever’, three and a half years later the Sun reported him as ordering aides to “get rid of all the green crap” from energy bills. Of course actions speak larger than words. The Conservative’s hostility to onshore wind farms is well known, and subsidies are due to be phased out soon. Subsidies for solar also face severe cuts. The government has passed legislation ‘to maximise economic recovery of UK oil’. A scheme to encourage home owners to improve energy efficiency is to end, the aim to make all new homes ‘zero carbon’ is to be scrapped, the Green Investment Bank is to largely sold off, tax breaks for buyers of ‘green cars’ ended.

Now all this might be understandable if the UK was well ahead in the amount of power produced by renewables. In fact, among EU members, only 3 have a smaller proportion. The government expects its EU target of 15% by 2020 will be missed by a wide margin.

Does all this reflect climate change denial of the kind we see in the US, with the only difference being that the Conservatives are acting duplicity in still paying lip service to the aims of the Paris summit? Duplicity may be understandable given Cameron’s 2010 ‘greenest ever’ commitment. However the UK government have just signed a deal for a Chinese state-controlled company to help build a new nuclear plant at Hinkley Point. Ministers have undertaken to guarantee for 35 years an index-linked price of £92.50 per megawatt hour. That is more than twice the current market rate, and it is also higher than for every renewable source except offshore wind. Yet unlike renewables those subsidies will be paid by consumers when the plant starts producing around 2025.

Put alongside virtually abandoning measures to encourage renewables, and this seems more like economic incompetence than ideology. In a classic piece of irony, a wind farm application near to Hinkley was turned down by the government. It is not as if the UK is currently awash with energy capacity. Last month an unexpected surge in demand led the national electricity grid to ask heavy users to reduce consumption.

So it is difficult to tell whether this is about ideology masked with duplicity, or politically driven economic incompetence. Ideology, duplicity and incompetence: have I combined those words together before?

http://mainlymacro.blogspot.co.uk/

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