The UN Climate Change Conference will be under way in Paris on Monday, writes Jean Curran. This event throws into sharp relief recent UK Government announcements on the future of energy policy in this country.
Back in 2008, we witnessed the devastating impact of the financial crisis on the property development sector. The impact on investor confidence was such that, almost overnight, the industry and its supply chain experienced a near collapse from which it is only now recovering.
In late 2015, investor confidence in low carbon industries is similarly threatened, not because of the state of the economy but rather due to the UK Government’s uncertain commitment to the low-carbon economy.
A recent speech from UK Energy Secretary Amber Rudd had some important things to say about reducing carbon emissions. On the positive side, it included a commitment to phase out coal-fired power generation from the UK energy mix by 2025. But rather than shift focus to renewable forms of energy, the UK Government proposes to replace this capacity with gas, including domestically sourced shale gas.
In phasing out coal, Ms Rudd talks about setting an example to the rest of the world. But by shifting to another fossil fuel, the UK Government’s low-carbon ambitions appear at best half-hearted, at worst counterproductive to the process.
Cost appears to feature heavily in the Energy Secretary’s calculations when determining the future direction of UK energy policy. Of course, how you define those costs has a critical impact on the decisions you make. If we fail to address climate change, acknowledged to be the single biggest long-term threat we face, the cost of inaction or of taking the wrong decisions will be astronomically high.
What is more, the mantra of “being tough on subsidies” and resisting low-carbon energy “at any cost” sits in stark contrast with the huge levels of subsidy being committed towards a new generation of nuclear power stations and the enormous costs of decommissioning associated with that technology. Meanwhile, increased reliance on imported gas could further expose the consumer to sudden price rises. We all know the effect such rises have had on household bills in the recent past.
It is also somewhat ironic to hear Ms Rudd talk up the positive economic benefits in building a new industry in the form of shale gas exploration when the renewables sector is facing the prospect of substantial job losses as UK energy policy pulls the rug from under it.
In reality, the cost of renewables has reduced significantly in recent years precisely because of the positive policy framework that was, until recently, in operation in the UK. A premature, knee-jerk change in direction will kill that progress in its tracks.
The signals it sends to the wider investor community are particularly negative. By sowing the seeds of uncertainty, the UK Government risks irrevocable damage to the fledgling supply chain we need to make the transition to a low carbon economy. Put simply, if we are unable to demonstrate a clear and consistent commitment to low carbon, the talent and innovation tied up in that supply chain will go elsewhere.
Meanwhile, the UK Government is also in the process of dismantling policies previously introduced to deliver a step change in energy efficiency, generally considered to be the cheapest and most cost-effective mechanism to cut household energy bills.
Ms Rudd has said: “Paris must deliver a clear signal that the future is low carbon that unleashes the levels of private investment and local action needed.” But the UK Government’s future energy policy is now heading in a direction completely contrary to that goal.
There is an opportunity at Paris to show that this country has the talent and resources to be world leaders in tackling climate change.
We have a disproportionately rich natural environment for a country of our size and a long tradition and history of innovation in science and engineering. There is an opportunity to demonstrate a collective passion for that natural environment and its value to wellbeing, economic resilience and prosperity. In Scotland, we have begun to debate the huge value of this, our natural capital, and the enormous economic dividends it can deliver if harnessed correctly.
The UK could yet show global leadership on climate change. But to assume that leadership role will require a radical rethink in energy policy.
Jean Curran is operations director of environmental consultancy Atmos Consulting.
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