Over the last few days, it has been extremely encouraging to see groups across the spectrum of British politics acknowledging the problems with our overly expensive climate change policy. Unfortunately, the Department of Energy and Climate Change (DECC) appears to be retreating into overly optimistic delusion and the Government policy is therefore still heading for a crash.
Yesterday the Energy Intensive Users Group and the Trades Union Congress released a major report on the potential impact of climate change policies on energy intensive industries. Here is what some of the groups involved said about the potential impact on jobs (sorry to quote at length but this is an important statement from a number of major employers):
"Managing Director and CEO of Tata Steel Europe, Kirby Adams said: “Many governments have determined that man-made climate change is one of the most pressing issues the world faces today. Corus can be part of the solution through relentless process improvements, investing in breakthrough technologies and supplying and developing new products that underpin a lower CO2 economy.
Many of the taxes and costs identified in this report are UK-specific and will reduce the competitiveness of Corus’ British operations. Moreover, the very significant cumulative nature of the additional costs likely to come in under European legislation will damage the competitiveness of all EU steelmakers and limit their ability to fulfil their crucial role in a low carbon future.”
Chief Executive Officer of GrowHow, Paul Thompson, said: “The fertiliser industry has been identified by the EU’s own study to be the sector most exposed to the risk of ‘carbon leakage’. Despite our substantial recent investment to reduce greenhouse gas emissions by more than 40 per cent, the combined effect of these climate change policies will almost certainly make this a reality in the UK.”
British Ceramic Confederation President and Chief Executive of Ibstock Brick Limited, Wayne Sheppard said: “Ibstock has already invested more than £50 million in energy-efficiency improvements in the UK in the last decade. We had reduced our carbon emissions pre-recession by 18 per cent as a result. We want to invest more in the UK, but we are competing for funds from our parent company with our other plants in Europe and around the world. The UK’s climate change policies are seriously out of line with other countries’ more pragmatic approaches.”
As an earlier Civitas report showed, the closure of just one plant, the INEOS Chlor chlor-alkali plant in Runcorn, could cost 46,000 jobs directly and 87,000 jobs in the wider economy. That plant has no chance if energy costs keep rising to pay for failing climate change policies.
Last year, I wrote a report for the Taxpayers Alliance about the changes needed to reform climate change policy and reduce costs for families. Now Policy Exchange are taking up that cause. Neil O'Brien has written about reducing the costs this morning for the ThinkTank blog. Most of what he says I absolutely agree with, particularly this part:
"If the economy is being weighed down with “green” costs that do little to limit carbon production, then opposition to green measures will only increase. On top of that, the public finances are now under unprecedented pressure. Any form of Government expenditure that is wasteful or does not have a hope of achieving its goals is now even more unjustified than it was before."
While most green policies do not affect the public finances directly, by putting further pressure on household budgets they will make the political challenge of a fiscal adjustment far more severe. So any government hoping to get borrowing under control needs to ensure that it isn't undermining that effort with an expensive climate change policy.
