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As a bitter British winter bites, spare a thought for its poor and vulnerable who can’t afford power, thanks to its suicidal energy policies.

Principal amongst those policies is the Climate Change Act. 10 years on, Britain is counting the cost of the CCA: it’s staggering and it’s the poor that suffer most.

The Climate Change Act at Ten: History’s most expensive virtue signal

Global Warming Policy Forum

Rupert Durwall

November 2018

Executive Summary

The Climate Change Act (CCA) is ten years old. Parliament passed it overwhelmingly, only five MPs voting against it in the House of Commons.

If truth is the first casualty of war, the poor are the biggest casualties of the CCA. By now, fuel poverty was to have been a thing of the past. Both the Labour and Coalition governments had a target to abolish it. Thanks to the CCA and other anti-fossil-fuel policies, it lives on and is worsening.

Fuel poverty is strongly influenced by energy prices, but decarbonisation policies drive up energy costs. Rather than be honest, in 2013 the Coalition government dropped the standard measure of fuel poverty for a new one less sensitive to energy costs, instantly halving the number of people officially defined as experiencing fuel poverty.

The government and official bodies have consistently understated the cost of forcibly phasing out hydrocarbons from Britain’s energy mix. In advising the government on the draconian 80% emissions reduction target by 2050, the Committee on Climate Change (CCC) reckoned that it would only cost 1–2% of GDP – assuming rational policies. But, as last year’s Helm review on energy costs shows, ‘rational’ is not a word that remotely describes the melange of current policies, which, Helm says, perpetuates ‘the unnecessary high costs of the British energy system.’

Both the CCA and the CCC reinforce the disastrous tendency of politicians to pick winners, something the EU also does with its 2009 renewable energy targets. These were foisted on the EU by Germany, which was concerned that its renewable energy policies were disadvantaging German business.

Wind and solar create hidden costs within the system– and we still don’t know how much they are. When the German Energiewende was launched, the Green energy minister said it would put the equivalent of a scoop of ice cream on monthly energy bills. Nine years later, his CDU successor was saying the Energiewende could cost up to one trillion euros.

After Tony Blair signed Britain up to a 15% renewable target, Department of Trade and Industry officials reckoned it would triple the cost of meeting the UK’s emissions target and argued that the renewables commitment risked making the EU’s Emissions Trading System (ETS) redundant.

Similarly with the CCA, unless the quantity of ETS Emissions Allowances (EAs – essentially permits to emit carbon dioxide) is reduced, for every tonne of carbon dioxide not emitted in Britain, an extra tonne can be emitted elsewhere in the EU. In terms of cutting global emissions, the CCA doesn’t do anything. Yet the economic case for the CCA rests on the fiction that it does.

The official impact assessment puts a price tag of £324–404bn on the CCA, which the government concedes is a lower bound estimate; it also excludes transition costs. But the claimed climate benefits are pure fiction. The upper bound of the £404–964bn range of climate benefits assumes effective global action. Even so, the UK will, apparently contribute 42% of the total global benefits. This makes the CCA a bargain for other countries and a lousy one for the UK, but also assumes away the existence of the ETS and the likelihood of 100% carbon leakage to the rest of the EU.

The impact assessment is correct in pointing out that any benefits from the CCA are global, not national. As yet, there has not been any credible official study on the overall costs and benefits of global warming to Britain, which, it is plausible to believe, could derive many advantages from some modest warming. This did not prevent Ed Miliband, the Energy and Climate Change Secretary, from untruthfully claiming that the CCA’s benefits to British society would outweigh its costs.

The impact assessment also makes the obvious point that, absent effective global action, any economic case for the CCA collapses. Short of repeal, the CCA locks the UK into unilateral decarbonisation irrespective of what other countries do – embedding blind unilateralism into the law of the land.

That blindness also affected the promoters of the CCA, who, almost to a man, were and remain fervent supporters of Britain’s EU membership. Eight years before the Brexit referendum, they were afflicted by ‘fog-in-the-Channel’ syndrome: the CCA was conceived as if Britain wasn’t in the EU and fully participating in the ETS. Thus the principal beneficiaries of the CCA are other EU countries who are getting a free ride courtesy of British business and households.

Indeed, the CCA’s real purpose is not to cut global greenhouse gas emissions. Rather it is to demonstrate British climate leadership. While politicians flatter themselves as climate saviours, the costs are borne in worsened business competitiveness and squeezed household budgets that weigh most heavily on the poorest in society. In one regard though, the CCA has succeeded in its aim as a demonstration project. No other serious country will do anything quite so foolish in the name of saving the climate.

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Global Warming Policy Forum