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Net zero is about to get even more painful - by Annabel Denham for The Telegraph - 29.12.23

Few would challenge the need to decarbonise – but our current approach will be economically ruinous.


Human beings are an adaptable species – which is fortunate, given that modern-day politicians incessantly foist new laws, rules and regulations on us.


In few areas of public policy is this more exhaustive than net zero. So we’ve grown accustomed to paying 50p for a plastic bag in some supermarkets. Driving in many cities now brings an array of charges, and that’s before bewildered motorists accidentally stray into a new bus or cycle lane, yet still we just shrug.


As of October this year, single-use plastic straws, bowls, trays and cutlery have been banned, but seldom do we complain.


And the wider green drive is paying dividends, of sorts. This week it was reported Britain has become the first major economy to halve its carbon emissions. Curiously, the news has not been widely shared nor lauded by the nation’s usually noisy eco-fanatics. Perhaps it doesn’t fit their common refrain that the Government “isn’t doing anything” about climate change.


Some people may think this reduction has been painless, but they’d be wrong. While the minor inconveniences can be downplayed, the costs should not be.


Green levies now make up a significant proportion of energy bills. Restrictions on new North Sea developments and a windfall tax are likely to have combined to drive up energy bills further at a time when the post-Covid rebound and war in Ukraine had already sent them soaring.


Progress on environmental aims may have been aided by the failure of successive governments to build homes and lockdowns, but those policies have themselves wrought enormous harm on the UK economy.


It has, however, been relatively straightforward. The decarbonisation of power and offshoring of heavy industry, for instance, accelerated an existing trend. The consumption of intermittent renewables was able to increase because fossil fuels could be relied on to provide baseload power.


The next half will be much more difficult, clobbering the economy and imposing massive costs on the consumer. Conscious that the public’s patience may begin to wear thin, the Prime Minister earlier this year promised a more “pragmatic, proportionate and realistic approach” to net zero. This primarily involved pushing back the deadline for the end of new petrol and diesel cars and the phasing out of gas boilers – but even the new 2035 date will be a stretch.


Despite the subsidies and the exemptions from resident parking permits or congestion charges, only a small proportion of vehicles in the UK are currently electric.


The charging infrastructure is hopelessly inadequate and battery duration is prohibitive for many. Meanwhile, the Government is shovelling money towards homeowners to boost heat pump uptake, yet is falling far short of its annual installation targets.


The bigger problem is that Rishi Sunak has far less wriggle room than he might have voters believe.


If the 2050 net zero target – the most consequential economic policy decision for generations, made by a piece of secondary legislation without a proper parliamentary debate – wasn’t restrictive enough, the Government is obliged to set binding, five-year carbon budgets which cap the maximum amount of emissions allowed during each period. Ministers face legal action if they fail to do enough to reach them, as judged in part by the apparatchiks on the Climate Change Committee (CCC) quango.


We are currently on the fourth (2023-27) carbon budget, which requires a 52pc fall in emissions compared with 1990. This might be achievable, but the fifth and sixth (involving a 77pc fall by 2037) surely won’t be, at least not without a walloping blow to our economy, freedoms and living standards.


In its sixth Carbon Budget Paper, the CCC, which ostensibly provides advice to the Government but often acts more like an eco-activist NGO, advises homeowners to turn on their heating in the afternoon, so that they can turn it off again in the evening when demand for electricity is higher. Rishi Sunak was ridiculed when, in September, he announced there will be no tax on meat nor new levies on aviation, as though such ideas were preposterous.


And yet they’re right there in this document, which says that around 10pc of emissions saving will come from “changes that reduce the demand for carbon-intensive activity” – particularly “an accelerated shift in diets away from meat and dairy products... slower growth in flights, and reductions in travel demand”. Will the public tolerate such radical changes to their lifestyles, ones that may not even be necessary?

 

Few would challenge the need to decarbonise, but our current, highly dirigiste approach will be economically ruinous. There will be huge waste, with the taxpayer footing the bill: when the Government asked the economist Dieter Helm to look into what it was doing to meet the net zero target, he concluded that up to £100bn had been squandered, largely from investment in technologies which hadn’t matured to the point where they were cheaper than the alternative.


The market discovery process will be shut down, meaning costs will inevitably rise. Regulators may be captured, rents will be sought, and poor decisions will be maintained long after it is clear they are irrational.


Responding to the news that the UK had halved its emissions, Energy Secretary Claire Coutinho hailed the country as a “world leader” in tackling climate change. This might be true, but is not something to trumpet given we are responsible for less than 1pc of global emissions.


It would be far more reassuring to learn that the main polluters – China, whose emissions are up nearly 50pc since 1990, or the US, or India – were leading the charge. But why would they row behind an agenda at such speed it might damage their domestic interests? Why, indeed, are we?


Germany is emitting 666 million tons of CO2, the US 5,057 million tons. We shouldn’t take heart from going further than other G20 nations: we should slow down.



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Net zero is about to get even more painful - by Annabel Denham for The Telegraph - 29.12
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