7 May 2019

Guilt-tripping Britain to net zero

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“To boldly go where no economy has been before” was the theme of the Committee on Climate Change’s net zero report released last week — but with fingers cross behind backs. No industrialised economy has completely decarbonised, as the committee recommended.

Going to net-zero is necessary, feasible and cost effective, the committee’s chair Lord Deben asserts about Britain’s leap into the unknown. Yet a few pages later, the report acknowledges that the easy steps have already been taken; that there is still no credible plan for decarbonising the way people heat their homes and that current policy is insufficient to meet even existing targets.

Going to net zero requires a significant ramp up in policy, i.e. even more cost, hardship and disruption. The ban on petrol and diesel cars will have to be brought forward. One fifth of Britain’s farmland is to be converted to forest or given over to growing crops for fuel. “Societal choices” will be made (how?) so people eat less beef, lamb and dairy. People will need to make changes inside their homes.

Decisions on the split between electrification and the development of a new hydrogen economy are going to be taken and co-ordinated centrally. If you think Chris Grayling and Department for Transport can’t run a railway, just wait until we have Greg Clark and his mammoth department trying to get the shiny, new hydrogen economy up and running.

The committee suggests tearing up British and EU competition rules to encourage cartelisation of heavy industry so firms can pass on higher energy costs to consumers. Another of the committee’s brilliant ideas is carbon tariffs. Quite how any of this would be legal under any Brexit variant short of no deal, the report doesn’t say.

The committee envisages little room for Britain’s manufacturers in a net-zero economy. Economies in the rest of the world are expected to grow faster whereas the development of the UK economy is based more on the service sector, making it easier to get to net zero. It is evident that the path to net zero is by de-industrialising.

The report notes that since the Climate Change Act 2008 came into law, the UK’s emissions have fallen and the economy still grew. But the UK’s consumption emissions, including those emitted in other countries making goods imported and consumed in the UK, are much higher and have fallen more slowly. And boasting that the British economy has still grown is a weak claim.

As everyone but the Climate Change Committee realises, since 2008, the UK has been experiencing a prolonged productivity drought and UK productivity growth has been the worst since the Industrial Revolution. Basic economic logic suggests that if massive government interventions force business to replace efficient, cheaper means of producing energy with less efficient, more expensive ones, the cost of energy goes up and productivity goes down.

Singularly lacking in the 277-page report is anything approaching a rigorous cost-benefit analysis. Its estimates of the costs of moving from an 80 per cent to 100 per cent target are little more than hand waving. Lord Deben in his foreword and the committee in the main body of the report falsely claim that the costs of net zero are within very same cost envelope that had been accepted as the likely costs by Parliament in 2008 “when it legislated the present 2050 target”.

This is sloppiness in the extreme. One thing one might expect the CCC to be an expert on is the genesis of the legislation under which it operates. As the climate change bill was going through Parliament, the 2050 target was raised from 50 per cent to 80 per cent, but the regulatory impact assessment, which set out the expected costs of adopting the revised 80 per cent target, was only signed off by Ed Miliband, the then energy and climate change secretary, on March 9 2009 after the legislation had been passed.

That March 2009 assessment gave a range of £324-404bn for the capitalised costs of meeting the 80 per cent target but warned that these figures did not include the full range of costs, in particular the short-term transition costs. Overall costs could be higher than those estimated by the long-term modelling, the 2009 assessment says, a warning the climate change committee chose to omit.

On the putative benefits side of the ledger, the 2009 assessment gave a stark warning of the consequences if the UK take a lead but the rest of the world didn’t follow:

“Where the UK acts alone, though there would be a net benefit for the world as a whole the UK would bear all the cost of the action and would not experience any benefit from reciprocal reductions elsewhere. The economic case for the UK continuing to act alone where global action cannot be achieved would be weak.”

By contrast, last week’s net zero report replaces rigour with waffle. Set against the costs, there will be “significant benefits”, leading off with the alleged benefits to human health. “People can take action immediately to improve their diet and increase the amount of walking and cycling they do,” the committee says. You don’t need to spend the best part of half a trillion pounds for people to take more exercise or change what they eat.

The hard truth is the Committee on Climate Change couldn’t construct a quantified cost benefit analysis to justify its net zero recommendation so it didn’t even try. “In setting a net-zero target, the UK will be among a small group of countries handling climate change with appropriate urgency,” it says.

Instead of being about economic rationality, net zero is about morality and assuaging the UK’s historic climate guilt. “As the birthplace of the industrial revolution the UK has large historical emissions,” the report says. “By reducing emissions produced in the UK to zero, we also end our contribution to rising global temperatures,” a line also taken up by the energy and climate minister Claire Perry.

The Committee states that the 0.87 degree Centigrade rise in global temperatures since 1850-1900 – used by the Intergovernmental Panel on Climate Change as an approximation for pre-industrial levels — was caused solely by the Industrial Revolution. Only the most hardened green would deny that the enormous and ongoing human benefits of industrialisation are outweighed by any negative climate impact from a 0.87 degree rise. Yet here is a British minister arguing that Britain should suffer a huge economic penalty as punishment for the climate crime of being the nation where the Industrial Revolution was born.

A quick look at the numbers demonstrates the delusional nature of a gesture that will cost the UK hundreds of billions and even trillions of pounds. According to the most recent ONS numbers, excluding land use changes, the UK emitted a total of 352.9m tonnes of carbon dioxide last year. According to the IEA, in the eight years to 2016, developing nations (defined as the non-Annex I parties in the UN climate talks) increased their carbon dioxide emissions by 4,362m tonnes.

Let’s suppose they emit the same amount of CO2 over the next eight years and that the Committee on Climate Change waves a magic wand. At midnight on 31 December 2019, the UK becomes net zero. By 10pm on 23 August 2020, the growth in developing nation emissions will have completely wiped out the fall in global emissions from the UK going net zero, delaying temperature rises by less than nine months.

In his speech on the Commons debate declaring a climate emergency, the environment secretary, Michael Gove, reminded MPs that Margaret Thatcher had raised the alarm 30 years ago, “a scientist following the evidence,” Mr. Gove declared. It’s a useful reminder that we have now had more than three decades of climate alarm.

In 1989, Mrs. Thatcher told the UN General Assembly that the threat to the global environment was akin to the risk of global annihilation from warfare. A year earlier in her famous global warming speech to the Royal Society, she had spoken of warming of one degree Centigrade per decade. The same year saw the Toronto climate conference that declared the dangers from growth of greenhouse gases second only to nuclear war, although its forecast temperature rise of between 0.25-0.75 degrees Centigrade per decade was less alarmist than Mrs. Thatcher’s. We now know Mrs. Thatcher was badly misled. The evidence to date says she was wrong. Since 1988, the rise in global temperature has averaged 0.175 degrees Centigrade per decade. Thirty years on, it’s time to dial down the climate hysteria.

There is one saving grace to the Committee on Climate Change’s shoddy report. Worried about the risks of Britain going it alone and cheap zero carbon technologies not being available, the committee says “if needed a revision to the UK target could be permitted by the Climate Change Act”. This, like the committee’s assertion that Parliament knew the costs of the 80 per cent target when it debated the legislation, is also untrue.

Section 2 of the Act enshrines what a report on the Act’s tenth anniversary calls “blind unilateralism”. As the law stands, the 80 per cent target can only be amended to take account of “significant developments” in either scientific knowledge or in European or international law. Lack of affordable technology falls into neither category. For a public body to suggest a course of action to ministers that is potentially unlawful calls into question that body’s competence to discharge its statutory functions.

Nonetheless, its recommendation highlights the insanity of the Act’s climate unilateralism. If, as a result of the Committee’s suggestion, MPs take the opportunity to amend Section 2 of the Climate Change Act to require ministers to take full account of what other countries are doing, the Committee on Climate Change will have done some good. Otherwise it will do much harm.

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Rupert Darwall is the author of 'Green Tyranny'.