Is Climate Alarmism Pushing Up Our Energy Prices?

Just the other day I received a letter from my energy supplier telling me that they were going to be charging me yet more money for my energy ‘needs’. This can obviously be quite annoying given there are cheaper sources of energy available or possible. Coal is plentiful and provides the least expensive electricity per megawatt, whilst fracking provides another cheaper source from shale gas. Yet coal-fired power stations are being shut down because of European Union regulations, and shale gas exploration is moving at a slow pace due to numerous concerns and regulations.

It is against this background that energy companies have announced price rises. The regulations imposed by the Government underlie them, with additional green taxes exacerbating the situation.

The reason this has been done, according to Government , is because of climate change fears. But is it a reasonable or proportionate response? It is widely accepted that carbon dioxide emissions have risen, but there are also concerns over the range of possibilities that climate modeling is predicting.

Sceptics remember that computer modeling was behind the collapse of Lehman Brothers and contributed to the global financial crisis. They also reason that common sense dictates if the Meteorological Office cannot forecast the next season’s weather with any success, it is highly ambitious to predict what will happen decades ahead. However this, of course, confuses short-term variability in weather with long-term trends climate.

The U.K. is responsible for less than 2 per cent of global emissions. So even if the British freeze and our industry is made uncompetitive from high energy prices, it will not save the world. But is this a reason not to act? Britain holds a lot of ‘soft power’ to influence international opinion. It was this nation that started the industrial revolution, so why not lead the charge towards renewable energy?

It is estimated that the UK’s energy infrastructure will need at least £200 billion of investment before 2020 if it is to meet its climate change and renewable energy targets, and enable the UK to move to a low carbon economy. This investment is needed in all areas of energy infrastructure: from upgrading the electricity grid to become smarter; to making UK housing stock energy efficient; to demonstrating Carbon Capture and Storage technology; and developing renewable generation technologies, such as offshore wind. We are currently a long way short of this this. In order to encourage such investment it's important for our Government to establish a more consistent approach to energy given the long term nature of energy investments. The Tories/coalition have made a start with the announcement of a new nuclear power station (with Chinese money) and a long term pricing formula.

The unfortunate reality we are currently facing is that the Government’s carbon tax on these heavily polluting industries - to try and incentivize the market to move towards cleaner energy - isn’t working as emissions are still rising. More positive ideas such as the Green Investment Bank are failing to make any real headway. Thus taxes are being passed onto the consumer as increases in the price of energy with no real alternatives for energy being presented. Not to mention the profiteering of the energy firms, but that’s a whole other issue.

Eschatological fears are an ancient human concern. The Romans expected the world to end in 634 BC owing to a prophecy involving twelve eagles, while the early Christians anticipated the Final Judgement in their own lifetimes. Pope Sylvester II thought AD 1000 would be the last year - a view updated for the modern age by the Millennium bug.

Clearly expectations of a final disaster are part of man’s psychology and the doomsayers of the quasi religious. The Green movement certainly fits the bill. However this time we really do have a greater consensus on climate change and more science behind us. People trust science in many areas, so why not climate? Our growing energy bills may aid skepticism, but not all members of the Green movement are as extreme as the stereotype some in the media like to portray.

Many desire a return to a free market by removing regulation to create more competition in pricing and increase supply. Politicians know that their constituents will suffer this winter and some elderly may die because they cannot afford fuel. Thus you could argue that alarmism is aiding this unfortunate scenario. However, ultimately it is more of a societal problem that we have people unable to afford fuel. Resisting a move towards cleaner energy is short-sighted. Given the abundance of coal left (at least 50 years at current rates of usage), I fear that a free market would rely on coal for far too long, to the detriment of our Earth systems. We need to continue trying to further enhance investment into our future energy supply, which is a great opportunity for all, despite some short-term pains.

I know this wasn't strictly on tipping points... but hey it sure is related, and it has been a fun post to write!