Osborne’s carbon conceits

George Osborne told a Conservative Party increasingly wary of expensive climate policies that Britain needs to “cut [its] carbon emissions no slower but also no faster than our fellow countries in Europe. That’s what I’ve insisted on in the recent carbon budget.”  What he actually insisted on was what Chris Huhne described as “a review of progress in early 2014 to ensure our own carbon targets are in line with the EU’s”.  Even if that review is serious, and energy intensive industries have every reason to be sceptical, it is only going to hold our policy to the same standard as today.  The current targets require us to cut our emissions faster than our European competitors, and the policies we are adopting to meet them are far more draconian.

Just look at our current 2020 target.  Here is a graph from the European Commission which shows how Britain is cutting emissions more aggressively than Germany, France, Italy or Spain — much more aggressively than the EU average.  

There is every sign that new targets will follow this kind of pattern.  When Ministers talk about wanting to shift the EU emissions target from a 20 per cent cut to a 30 per cent cut, the Committee on Climate Change expects that will mean a 42 per cent target for Britain.  Britain is mandated to cut its emissions more and, unless things change, will continue to have to cut them more than our European competitors.

At the same time, the policies are costing us more.  As I pointed out in an earlier post, Citigroup expect that we will have to invest more to meet environmental targets than all of our major European competitors put together.

We have the most ambitious renewable energy target and we’re installing lots of very expensive offshore wind to meet it.  And we’ve just introduced a carbon floor price that will make the European Union Emissions Trading System more expensive for us and, because there will be fewer emissions from Britain, will reduce the carbon price and the cost in other countries.

Of course, we aren’t just competing with other European countries and the disparity between what we’re doing and the actions of the major emitters (the United States, India and China) is stark. Politicians here should be honest about the degree to which Britain is out on its own in the vanguard of radical climate policy.

Matthew Sinclair is Director of the Taxpayers’ Alliance and author of Let them eat carbon.