Three ways we can face up to ‘green energy’ backlash


4:39 pm - June 11th 2011

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contribution by Andrew Pendleton

One front page does not a crisis make. But the malcontent over climate change policy is growing and, with rising energy prices, can only become worse. While the science and economics of climate change may largely be settled, the politics are not.

Thursday’s Daily Mail splash was a mash-up of two stories, both essentially from the same source; the Global Warming Policy Foundation.

While it would be a mistake to dismiss these views as irrelevant, there is strong evidence that recent controversies surrounding climate science have had little impact on public confidence in climate change.

Using GWPF data, the Mail claimed that ‘cash strapped families pay an average of £200 a year in stealth levies to subsidise Britain’s massive expansion of wind farms, solar panels and ‘environmentally friendly’ heating schemes.’

This claim is at least partially debunked on fullfact.org and it’s worth noting that incentives for renewable heat are in fact funded from general taxation rather than by a levy on energy companies that is passed onto consumer in their bills.

But at a time when energy bills are rising – and rising dramatically – and household incomes are falling in real terms, there is a kernel of political truth at heart of the Mail’s hyperbole.

The same Cardiff University/Ipsos-MORI polling that shows public acceptance of climate science holding firm also sees 78 per cent of people questioned being ‘fairly’ or ‘very’ concerned that electricity will become unaffordable in the future.

The lion’s share of future increases in people’s bills is almost certain to come from rising fossil fuel prices, but politicians may find it increasingly difficult to pile more climate policy costs onto domestic bill-payers.

How then do we defend paying for renewable energy infrastructure at a time when the truth – or a somewhat distorted version thereof – is proving convenient for climate naysayers and fossil fuel lobbyists alike? There are three elements to this.

The first involves stressing the benefits. Unless economic growth in Asia grinds to a halt, demand for fossil fuels can only increase and even coal prices are likely to be high. Renewable energy will be essential in ensuring the UK has an affordable and secure supply of energy in future even if it is costly now. There are strong signs that solar power is now becoming competitive with fossil fuels.

The second involves innovation. In 1984, a well-known consultancy firm advised a well-know US telecommunications company not to bother developing wireless technology because there would never be a sizeable enough market. The same is now being said of some of the key renewables. In addition, the ability of economies to innovate is key to their future growth.

Finally, since renewable energy is highly capital intensive and running costs generally low, we should reduce the burden on current bill and taxpayers by borrowing to pay for energy infrastructure. Lest this should be dismissed as barking mad at a time when deficit reduction is the only game in town, then note that it is not only think tank wonks that are proposing this, but also avowed capitalists.

Faced with the green energy backlash, we can bury our heads in the sand, continue to incant the mantras about the long term risks of climate change or face up to the energy challenge and acknowledge that while most people are not in doubt about climate change, neither are they likely to prioritise spending money on climate change policy while their incomes fall.

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Andrew Pendleton is Associate Director at IPPR

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Reader comments


1. Charlieman

@OP, Andrew Pendleton: “…it’s worth noting that incentives for renewable heat are in fact funded from general taxation rather than by a levy on energy companies that is passed onto consumer in their bills.”

It is not an incentive, it is a subsidy. General taxation versus energy bills? It is the same pot of money from which you wish to pay subsidies. Citizens’ money.

I really, really desire that renewable energy sources or energy efficiency become the norm. When they become the norm will be when the numbers add up, when renewable sources are cheaper than fossil fuels.

You seem to think that giving money to contemporary, ineficient, renewable energy producers is the answer; I have a broader ambition.

Once the externalities of pollution and other environmental costs are factored in then renewables become much more affordable. Currently taxpayers subsidise polluters by covering these costs.

What are your broader ambitions, Charlieman? To sit and wait until either the cost of fossil fuels becomes prohibitive, or someone else develops cheaper ways of producing renewables? Doing nothing doesn’t sound very ambitious to me. What contribution are you making?

Furthermore: a) as Cherub said, externalities are currently subsidised – polluters should pay; b) for the foreseeable future, renewables will have high startup costs – it doesn’t matter how much cheaper they are over time if nobody can afford to switch, so loans need to be available. B) will eventually be done by private lenders, but they aren’t doing it NOW, and it’s urgent.

One thing I keep hearing is that there’s a less mentioned side to it – changing the structure of the electricity grid, but also the social economics behind it.

In short, the reason why the nuclear lobby is seeking the benefits of the anti-carbon push and fossil fuel lobby are effectively resisting it it is precisely because they’re a lobby. They naturally form big corporations with big power stations and massive national energy grid to distribute it. They can distort both the energy market and the politics around it because they’re Big Energy.

So this allows independent personal energy like roof solar panels to give energy generation directly to the consumers. They’re huge hidden benefits to that, not just in the energy not lost along power lines, in the lack of bureaucracy and above all a powerful energy lobby. No matter how many people have solar panels, they will never be a powerful interest group, just ordinary citizens.

They’ll never get together to fund a front group like the “Global Warming Policy Foundation”. Even if green energy is inefficient, at least it’ll be honest.

@Charlieman

“General taxation versus energy bills? It is the same pot of money from which you wish to pay subsidies. Citizens’ money.”

No it’s not. Just because it all comes from “the taxpayer ultimately” doesn’t mean it’s all the same. Most tax money comes from Income tax of NI, so that means general taxation is levied on the rich.

If the government abolished income tax and levied a 100% tax on energy bills that would lead to completely different people paying completely amounts.

It’s like you’re saying the poll tax is the same as corporation tax because they all come from “us” eventually.

Above all remarks like this give the lie to the silly shorthand “taxpayer” for citizens. In an unequal country with an income tax system, Richard Branson is billion of times as much of a taxpayer as pensioner in Slough.

Taxpayer DOES NOT EQUAL citizen DOES NOT EQUAL energy bills.

@5

That is of no comfort to us taxpayers who believe we already pay too much tax. More redistribution of our income.

7. So Much For Subtlety

2. Cherub – “Once the externalities of pollution and other environmental costs are factored in then renewables become much more affordable. Currently taxpayers subsidise polluters by covering these costs.”

I am inclined to doubt that. I would have thought the externalities for modern British power generation were roughly zero. Let’s assume you have half a case for nuclear. And coal-fired power stations kill a person a year or so through pollution.

Where are the other external costs? And I mean real ones, not fake ones some Green lobby group has been able to find, magically, out of thin air.

If you look around Britain today, power-related externalities are hard to find.

8. So Much For Subtlety

5. splem – “No it’s not. Just because it all comes from “the taxpayer ultimately” doesn’t mean it’s all the same. Most tax money comes from Income tax of NI, so that means general taxation is levied on the rich.”

This is quibbling at its best. He is not claiming it is the same. Just that it is a dishonest sleight of hand to claim that if it comes from taxation it does not come from ordinary people. Yes, rich people pay a lot of income tax. But they don’t pay all of it. Most – and isn’t it nice to see the Left agreeing that the rich pay more than their fair share? – may come from the rich but we all pay tax.

“It’s like you’re saying the poll tax is the same as corporation tax because they all come from “us” eventually.”

A splendid strawman there. No one is saying that paying these costs through stealth levies on power bills is exactly the same as paying through general revenue. Just that you cannot say that people are not paying because it comes from general revenue.

“Above all remarks like this give the lie to the silly shorthand “taxpayer” for citizens. In an unequal country with an income tax system, Richard Branson is billion of times as much of a taxpayer as pensioner in Slough.”

That is simply logically specious. Taxpayer is an excellent shorthand for citizen because we all pay taxes. Even the unemployed. We don’t have to pay equal amounts for us to be paying tax.

“Taxpayer DOES NOT EQUAL citizen DOES NOT EQUAL energy bills.”

No, some taxpayers are not citizens. And no one is claiming that citizens are energy bills. But we as a community pay for Green energy one way or another. One way is through higher power bills. Another is by taxation. Hard to deny.

What’s the potential of windfarms in terms of the percentage of national energy they can provide? Somewhere around 5% in a hurricane?

The reason that people are unconvinced is that despite subsidies on an unprecedented scale, wind power is something of a dud. Maybe the government backed the wrong horse – many years ago wasn’t HEP supposed to be the saviour of makind? Made more sense than a chain of ghastly windfarms from the outside…

The left also needs to grow up and accept that nuclear is part of the solution. What we need is a mix of supply and energy independence. We should probably look at clean coal on a bigger scale too.

http://outspokenrabbit.blogspot.com/

10. So Much For Subtlety

“There are strong signs that solar power is now becoming competitive with fossil fuels.”

So this suggests the best solution – wait. Solar power is slowly becoming price competitive. We don’t need to subsidise it or to ruin our economy with taxes and higher electricity prices. We only have to wait for it to become cost effective.

Simple.

11. So Much For Subtlety

4. splem – “One thing I keep hearing is that there’s a less mentioned side to it – changing the structure of the electricity grid, but also the social economics behind it. …. So this allows independent personal energy like roof solar panels to give energy generation directly to the consumers. They’re huge hidden benefits to that, not just in the energy not lost along power lines, in the lack of bureaucracy and above all a powerful energy lobby. No matter how many people have solar panels, they will never be a powerful interest group, just ordinary citizens.”

Except someone makes the solar panels. Who does that? Chip design and manufacture tends to be quite concentrated. More so than power generation. What makes you think solar cell manufacture won’t become so too?

But the main problem with this is the simple naivite. Solar cells may give some generating capacity to individuals. But not enough. None at night. Little when it is cloudy. A steady supply when the sunshines – so too much most of the day and too little when you need it. You need to be connected to a larger grid so that there is power when you need it. That grid has to be vastly more complex than our existing grid. Power will flow both ways for instance. In tiny amounts. At unpredictable times. Across several countries. So far we don’t have the simple technical ability to run a grid like that. How can power supply be kept in pace with power demand? We would need a large hydro-electric supply on permanent stand-by but basically the grid would fall over twice a day. Maybe we could manage it. One day.

The bottom line is that this is not simple. It is vastly more complex than any system we have now. It would need a massive effort at managing. This is not going to be some citizen-led renaissance. It means Big Power in control of the country in a way it is not now.

“They’ll never get together to fund a front group like the “Global Warming Policy Foundation”. Even if green energy is inefficient, at least it’ll be honest.”

They have already and Green energy has not been honest up to now. There is no reason to think they will change.

Makhno @3 – ”What contribution are you making?”
I can’t stand it when people say that.
As if it matters. China is to build 50,000 skyscrapers in the next 20 years.
http://www.guardian.co.uk/business/2008/aug/27/riotinto.commodities

Trust me, I work in the renewable energy sector and am happily making a fortune from it.

The whole thing is one enormous scam. Ask yourself why there are no tidal farms using underwater turbines. Completely predicatable to the minute, reliable, and invisible.

Surely a few thousand highly-subsidised windmills that don’t rotate when it’s cold (like last December) and enrich big landowners are worth a few thousand dead pensioners each winter ? It’s not as if there’s a shortage of pensioners, is it ?

Honestly, the Mail just has its priorities completely skewed.

@13

Another conspiracy! Whoo hoo!

The “competitive with fossil fuels” link is broken.


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  1. Liberal Conspiracy

    Three ways we can face up to 'green energy' backlash http://bit.ly/l6ML8p

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    Three ways we can face up to 'green energy' backlash | Liberal …: While the science and economics of climate c… http://bit.ly/lom9kj

  5. Bishop Hill

    IPPR says avoid green energy backlash by increasing borrowing to keep bills down in the short term. Seriously.
    http://t.co/lkEcsoK

  6. Autonomous Mind

    IPPR says avoid green energy backlash by increasing borrowing to keep bills down in the short term. Seriously.
    http://t.co/lkEcsoK

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    Three ways we can face up to 'green energy … – Liberal Conspiracy: Liberal Conspiracy posted on Three ways we … http://bit.ly/jqzj11

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