Although the nursery song is much older, the Grand Old Duke of York usually refers to Frederick, the titular commander of the British army during the Napoleonic wars. Despite some good innovations, such as founding Sandhurst, his grasp of strategy and financial control was fragile. Eliminating carbon emissions is certainly a good idea but the leadership is a bit wobbly on how that can be achieved and the costs. The Committee on Climate Change (CCC) is chaired by Lord Deben who, in his ministerial days, was famous for rarely, if ever, reading his briefs and for reassuring the public, during the mad cow disease era, by feeding beef-burgers to his children. But the CCC is only advisory.
As previously discussed, current forecasts by the Department for Business, Energy and Industrial Strategy (BEIS) show an alarming shortfall in UK electricity generation capacity by 2050 if zero carbon is to be achieved. The CCC estimate the costs to be £50bn. p.a. by 2050 (1% of GDP). BEIS and HM Treasury reckon on £70bn. p.a. or £1 trillion overall, although the latter’s calculations are not due to be released until later this year. The BEIS is also due to publish its long-delayed energy White Paper this autumn. In the absence of any numbers from government, the Global Warming Policy Foundation (GWPF), in their October submission to the Treasury Select Committee Inquiry, put their estimate around four times higher, i.e. £4 trillion.
The Grand Old Duke would have been proud of CCC’s response to the request from the GWPF (President: Nigel Lawson) for their annual figures leading up to 2050: “We do not hold the information you have requested. The purpose of the net zero report was to establish when the UK should reduce emissions to net zero, which we recommended be legislated for 2050. The focus of our scenario analysis was therefore on whether achieving net zero emissions was feasible in 2050, and what the additional costs would be in that year.” In other words, CCC recommended marching up the hill with no idea how to get there.
That is a remarkable admission given their 304 page, May 2019, Technical Report which provided analyses across nine headings: Power and Hydrogen, Buildings, Industry, Surface Transport, Aviation and Shipping, Net-Agriculture and LULUCF, Waste, F-gas emissions and Greenhouse gas removals. Unfortunately, CCC provided no executive summary so it is unclear how the figures add up. LULUCF, as any fule kno, stands for “land use, land use change and forestry” and F-gas is not that emitted by cows and humans but “fluorinated gases” emissions from refrigeration, air-conditioning and heat pumps due to refrigerant leakage.
The Guardian was not impressed by the progress one year on from the government’s net zero commitment: “John Sauven, the executive director of Greenpeace UK, said: ‘If the government wants businesses, local authorities and households to make the appropriate investments over the next decade, they will need confidence that Britain really is committed to decarbonising the economy. But the practical measures taken by the government over the past 12 months add up to a tiny fraction of what is needed to keep us on course to meet that commitment.’”
Alongside the Technical Report, CCC published a 277 page Advice Report with an exceptionally long (27 page) executive summary which consists mostly of political exhortations. Being responsible for 1% of greenhouse gases apparently puts the UK in the global driving seat. 1% is also stated, with little visible support, as the cost of moving up from the previous 80% elimination target which was itself going to cost an extra 1% of GDP. So far as the power sector capital investment is concerned, “our scenarios imply an extra investment requirement of around 1% in 2050” (p.29). It is hard to take a report seriously where, whatever the question, the answer is always 1%.
The UK, in partnership with Italy, chairs the UN Climate Change Conference of the Parties (COP26) in Glasgow next November. As part of the run up to that, in case you had not noticed “This year, we’ve launched a Year of Climate Action”. The energy White Paper and the Treasury commentary may be part of that Action. Add to that the Treasury Select Committee has been holding an Inquiry into “Decarbonisation and Green Finance” since March and their report can be expected within the next couple of months or so. The technicalities of green finance reporting will annoy quite a few company secretaries but otherwise concern few voters. On the other hand, the effects of net zero carbon on consumer prices, as distinct from production costs, are another matter. Ofgem may be encouraged to keep prices high so that the Government can use the margin elsewhere and consumers are motivated to use less electricity. Conversely, Ofgem might be encouraged to push energy prices down to popularise the net zero target. In 2014 the BEIS predecessor ministry published “Estimated impacts of energy and climate change policies on energy prices and bills”. In 2018, BEIS promised to update it but have yet to do so. This needs discussion.
Chapter 7 of the Advice Report makes a valiant effort to assess the costs of zero carbon. The clarity of presentation is not helped by mixing costs and benefits together as “resource costs”. Carbon capture and storage is pretty much an unknown at this point and the assumptions are crucial for the reliance the report makes on hydrogen as a key part of the solution. The cost analysis is unconvincing.
Land use is also an interesting part of this conundrum: humans breathe oxygen and exhale co2 whereas plants, notably peatland, do the reverse. The CCC recommends more use of the land to remove carbon whereas the government’s planning White Paper seems to want to concrete it all over with new housing.
The Advice Report concluded that a net zero carbon 2050 “is only possible if clear, stable and well-designed policies to reduce emissions further are introduced across the economy without delay. Current policy is insufficient for even the existing targets.” In other words, it is only possible if the government makes it happen. As the Grand Old Duke explained to Wellington, “you are only going to win Waterloo, my boy, if Napoleon loses”.