Why have Tory MEPs rejected a free market solution to climate change?

By sabotaging reform of the EU Emissions Trading Scheme, Conservative MEPs have shown that they can't be relied upon to champion British interests in Europe.

It may surprise some on the centre left but there is nothing innate to conservatism that makes it less able to take pragmatic decisions in favour of sensible environmental policy. It has had a refreshing ability to acknowledge the intrinsic value of nature and stewardship even if it has become more conflicted about the means to deliver these outcomes. It is a broad church that spans from the one nation Heseltines to the radical free marketeers like John Redwood. But if there is one thing that unites them, it’s the belief that markets offer most of the answers. Which is why it is so baffling that Conservative MEPs voted down a measure that might have kept the European Emissions Trading Scheme alive. Trading is not the only way of tackling emissions but it’s the poster child of free market thinkers because it promises an economically efficient, non-regulatory solution to a giant supranational problem.

The back story is that, on Tuesday, the EU parliament voted against a minor technocratic fix that would have rescued the floundering European carbon market, which is struggling under the weight of too many pollution permits in the system. The fix would have involved 'backloading' the sale of some excess carbon allowances to 2019, so the number of allowances in the system would be reduced, increasing the price which has dropped as low as €3 per tonne of carbon in recent months. While more profound reform is required, it would have been a first step to putting the mechanism back on track. The vote failed by 19 votes. Twenty Conservative MEPs voted against it. In doing so, they failed their constituents and UK business.

A strong carbon price across Europe is directly in the UK’s interest. Its main benefit is to provide financial incentives for switching from coal to gas, with the costs being born by coal heavy countries like Poland and Germany and rewards flowing to those that have already made the switch, like the UK. One of  Thatcher’s less controversial legacies is an energy system which has less and less coal and a relatively high proportion of gas, so UK generators and fuel suppliers stood to gain significantly from the EU carbon market fix. By voting against it, Conservative MEPs have rewarded coal at the expense of gas and Germany at the expense of the UK. This will be the first of many negative consequences arising from the failure of EU emissions trading. At our Chancellor’s insistence, the government has also introduced a carbon price floor, which means we are paying higher carbon prices than our neighbours. It creates an attractive revenue stream for the Treasury but many British businesses will now feel aggrieved that it could now be at least a decade before there is a single carbon price across Europe.

This is part of a pattern of conflicting behaviour from different parts of the Conservative Party that should worry its leaders. There is no evidence that the British public sees climate or environment as a partisan issue. It is a 'valence' issue, like national security, in which voters expect any party of government to be competent.

Emissions trading may be too obscure for the public to notice but experts in business, NGOs and academia do and,  for many, this will be another worrying sign that the Conservatives are struggling to govern coherently on one of the big issues of our age. We’ve already seen this confusion with the Energy Bill, where the Chancellor agreed to spend £7.6bn a year on new low carbon energy (mostly renewables) but then opposed a decarbonisation objective for 2030 which would have ensured that much of the equipment required would have been built in new UK turbine factories.

The debate now moves on to what 2030 climate package the EU should adopt. The UK should be at the heart of the debate, fighting for an ambitious carbon goal that matches our own. But the prime minister has yet to get his ministers to agree a common position. Whether or not the British government takes a lead, the EU will adopt a new climate package at some point in the next 18 months under pressure from France and Germany. Yesterday’s action by Conservative MEPs has made it more likely that it will be focused on fiscal and regulatory measures, and less on trading. That may turn out to be a good thing, but Conservative MEPs have just shot themselves in the foot by making market trading solutions less attractive. They have also made it considerably more difficult for David Cameron to demonstrate that his party has championed British interests in energy and climate change effectively.

Matthew Spencer is director of Green Alliance

Exhaust rises from cooling towers at the Niederaussem coal-fired power station at Bergheim near Aachen, Germany. Photograph: Getty Images.
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Russian pools, despatches from the Pole, and disagreeing with my son Boris on Brexit

My week, from Moscow to Westminster Hour.

With the weather in Moscow last week warm, if not balmy, I thought about taking a dip in the vast heated open-air swimming pool that I remembered from a previous visit. My Russian host shook his head. “That would have been the great Moskva Pool. Stalin actually tore down the Cathedral of Christ the Saviour to make way for it. But, after perestroika, they filled in the pool and rebuilt the church!” So I didn’t have my open-air swim, though I did visit the cathedral instead.

In the evening, spiritually if not physically refreshed, I addressed a gathering of Russian businessmen and bankers who were keen to learn what impact Brexit might have on the London property and investment scene, the UK being a prime destination for their money. We met in the old Ukraina Hotel, now splendidly refurbished and relaunched as the Radisson Royal, Moscow. A Rolls-Royce Silver Wraith was parked in the foyer, a snip at £150,000. “There is a great democratic debate going on in Britain at the moment,” I told my audience. “The issues are finely balanced. I’m for staying in. But on 23 June, the British people, not the politicians, not the tycoons, nor the lobbyists, will decide.”

I noted some uneasy laughter at this point. Russia’s fledgling democracy probably still has some way to go before matters of such moment are left to the people.

 

Culture club

I spent the next afternoon in the Tretyakov Gallery. A rich businessman, Pavel Tretyakov, collected thousands of items of Russian art (mainly icons and paintings) and donated both them and his magnificent house to the state in 1892. Over time, the state has added many more artefacts, including some from the vast storerooms of the Hermitage Museum in St Petersburg.

My guide, Tatiana Gubanova, a senior curator, had recently organised the loan of several items from the Tretyakov to London’s National Portrait Gallery, where they are currently still on display in the splendid “Russia and the Arts” exhibition. She said that she was looking forward to returning to London next year: “The Royal Academy is planning a special exhibition to celebrate the 100th anniversary of the Russian Revolution.” Whatever happens at the political level, it is good to know that our cultural links with Russia are still flourishing.

 

Heading south

Just before I left for Moscow, I attended ­Adrian Camrose’s funeral in St Bride’s Church, off Fleet Street. The scion of a great newspaper family, Adrian made his mark as the Daily Telegraph’s science correspondent.

In early 1984, I went to Antarctica with him. We shared a cabin on a British Antarctic Survey ship while it visited research ­stations “down south”. I was writing a book on Antarctica, subtitled “the Last Great Wilderness”, while Adrian sent a series of crisp despatches to the Telegraph via the ship’s radio-telex. Adrian’s dateline was “On board the John Biscoe, Antarctica”. Distant galaxies were Adrian’s consuming passion. I am sure he is filing stories from the spaceship Spacey McSpaceFace even as I write.

 

Green surge

As co-chairman with Baroness (Barbara) Young of Environmentalists for Europe, my life has been fairly hectic recently. I am sure it will get more so as the referendum day approaches. I know perfectly well that one of the reasons the invitations to speak or write articles ping into my inbox is the titillation factor. Are Families Divided on the Referendum? Is “Boris’s Dad” (that’s me!) going to Disagree with Boris?

Notwithstanding the family relationship, which I deeply treasure, the answer is “yes”. I am going to disagree. Boris and Michael Gove and other key members of the Brexit team have injected a wonderful level of vigour and energy into the referendum debate. They have raised issues, besides the economy, which needed to be discussed, particularly sovereignty, immigration and the EU’s general direction of travel. For this, the nation owes them a debt of gratitude. That said, I am convinced that this is not the moment to call time on the UK’s membership of the EU. As I see it, the best way to address the obvious problems is not to leave the EU but to “Remain” and to fight for change from within. In the end, this will benefit not just the UK but Europe as a whole.

 

Quiet no more

Last Sunday evening, I took part in the BBC Radio 4 programme Westminster Hour. My fellow panellists were the former work and pensions secretary Iain Duncan Smith and Baroness Smith of Basildon, formerly Angela Smith MP, now the shadow leader of the House of Lords.

We had a very lively and sometimes rowdy discussion. IDS is the “quiet man” who, since his resignation from the cabinet a couple of months ago, has regained his voice in no uncertain terms. Baroness Smith, a delightfully unpushy lady, sometimes found it difficult to get a word in edgeways. I don’t think I did so well myself.

But I did, I hope, make it clear that, from my point of view, there was still time to build on all that was good in the EU (such as its environmental record), while seeking common rather than unilateral solutions for the problems that persist.

On 24 June, if the Remain side wins, the government should go into action in Europe with all cylinders firing and with our politicians and diplomats working overtime, to get the arrangements that we need and deserve. On the way out, IDS said to me, “It won’t work. They won’t have it.”

He may be right. But I still think we should give it a go. You don’t file for divorce as a result of a single tiff, not after more than 40 years of marriage.

On the issues of immigration, for example, and possible changes to the EU’s freedom of movement rules, we may find more allies in Europe than we think.

Stanley Johnson is co-chairman of Environmentalists for Europe: environmentalistsforeurope.org

Stanley Johnson is an author, journalist and former Conservative member of the European Parliament. He has also worked in the European Commission. In 1984 Stanley was awarded the Greenpeace Prize for Outstanding Services to the Environment and in the same year the RSPCA Richard Martin award for services to animal welfare. In 1962 he won the Newdigate Prize for Poetry. He also happens to be the father of Boris Johnson.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad