The former Environment Secretary seems to be endorsing Ukip energy policy. Photo: Getty
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The Tory right is becoming desperate on climate change and energy

The former environment secretary will tell climate change sceptics this week that his party should adopt Ukip policies.

The former Environment Secretary, Owen Paterson, will this week demonstrate how desperate the right wing of the Conservative party has become in its attempts to force energy and climate change policies into an ideological straitjacket.

In a speech on Wednesday to Lord Lawson’s lobby group for so-called climate change sceptics, the Global Warming Policy Foundation, Paterson will argue that the UK should turn its back on renewable energy in favour of fracking and nuclear power.

Paterson’s speech was leaked over the weekend to the Sunday Telegraph and the Mail on Sunday, the two newspapers that most aggressively oppose efforts to tackle climate change.

According to the front page splash in the Sunday Telegraph, Paterson will call for the UK to weaken its target of cutting its annual greenhouse gas emissions by 80 per cent by 2050, as set out in the 2008 Climate Change Act, unless other countries enact similar legislation.

He will warn that the Act will require the building of many new onshore windfarms, and will ultimately result in power cuts for homes and businesses.

Instead, he will argue, the UK should aim to slow down the rate of decarbonisation of its power sector, and instead generate more electricity from shale gas and, bizarrely, by developing across the country a new fleet of small nuclear reactors like those that power some submarines.

Paterson, who was sacked from the cabinet in July, told the Mail on Sunday that the repeal of the Climate Change Act and a ban on new wind farms would make the Conservative party more popular among supporters who are being attracted to Ukip.

The title of Paterson’s speech, "Keeping the Lights On", is the same as Ukip’s energy policy document, and Ukip's communications director, Patrick O’Flynn, responded to the newspaper reports by tweeting: “Nice to see Owen Paterson commending Ukip energy policy to his party”.

Paterson’s intervention is clearly designed to rally the right wing of the Conservative party, but his proposals lack the coherence and credibility required to appeal to a broader audience.

His dogmatic rejection of the scientific evidence about the scale of the risks of climate change – he will point to the temporary slowdown in the rate of global warming to justify his complacency – as well as his opposition to onshore wind farms, forces him into an extreme position based on myths and misinformation.

Paterson will claim that onshore wind is both unpopular with the public and expensive for consumers. Neither is true.

While there is some local opposition in communities to the nearby construction of wind turbines, nationally 67 per cent of the public support them as a source of energy.

Similarly, the latest figures from Ofgem show that, of an average annual household bill for gas and electricity of £1330, just £41, or about 3 per cent, is due to the cost of the Renewables Obligation through which wind energy and other sources are currently subsidised.

The government has indicated that climate policies as a whole, including carbon pricing, are likely to add about a further £100 to bills by 2020, but this could be more than offset by energy efficiency measures to cut waste.

The main driver of the rise in household energy bills over the last 10 years has been the increase in the cost of natural gas, the majority of which the UK has to import.

It makes sense to explore the potential of domestic supplies of shale gas, if the environmental risks can be managed, but it is not yet clear how much is economically recoverable, and even optimistic forecasts suggest that it will not stop our reliance on imports or lead to a significant reduction in household bills.

Natural gas could help to quickly reduce emissions if it used in power stations instead of coal, which generates twice as much carbon dioxide per unit of electricity and is responsible for about a quarter of the UK’s annual production of the gas.

But, as the independent experts on the Committee of Climate Change have pointed out, the UK’s power system needs to be decarbonised by 2030, so gas-fired power stations beyond that date will either be used only sparingly to provide back-up to renewables, or else will need to be fitted with carbon capture and storage technology to prevent greenhouse gases from being pumped into the atmosphere.

Unlike Paterson, the Committee has carried out thorough economic and technical analyses of the UK’s electricity system and has concluded a broad mix is likely to be most cost-effective.

So without renewables, the UK will find it more difficult and expensive to reduce its emissions in line with the 2050 target of the Climate Change Act, which was set to allow the UK to contribute to the international goal of avoiding dangerous global warming of more than two centigrade degrees.

Businesses have praised the Act for providing the clarity about the future of government policy that is essential for unlocking billions of pounds in investment in a clean energy economy.

However, Paterson’s call to scrap the Act creates uncertainty, undermining the confidence of investors and increasing the cost of capital.

It shows that Paterson and others on the right wing of Conservative party have yet to identify a set of sensible energy and climate change policies that they will support.

Bob Ward is a fellow of the Geological Society and policy and communications director at the Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science

Bob Ward is policy and communications director of the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science.

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What is the EU customs union and will Brexit make us leave?

International trade secretary Liam Fox's job makes more sense if we leave the customs union. 

Brexiteers and Remoaners alike have spent the winter months talking of leaving the "customs union", and how this should be weighed up against the benefits of controlling immigration. But what does it actually mean, and how is it different from the EU single market?

Imagine a medieval town, with a busy marketplace where traders are buying and selling wares. Now imagine that the town is also protected by a city wall, with guards ready to slap charges on any outside traders who want to come in. That's how the customs union works.  

In essence, a customs union is an agreement between countries not to impose tariffs on imports from within the club, and at the same time impose common tariffs on goods coming in from outsiders. In other words, the countries decide to trade collectively with each other, and bargain collectively with everyone else. 

The EU isn't the only customs union, or even the first in Europe. In the 19th century, German-speaking states organised the Zollverein, or German Customs Union, which in turn paved the way for the unification of Germany. Other customs unions today include the Eurasian Economic Union of central Asian states and Russia. The EU also has a customs union with Turkey.

What is special about the EU customs union is the level of co-operation, with member states sharing commercial policies, and the size. So how would leaving it affect the UK post-Brexit?

The EU customs union in practice

The EU, acting on behalf of the UK and other member states, has negotiated trade deals with countries around the world which take years to complete. The EU is still mired in talks to try to pull off the controversial Transatlantic Trade and Investment Partnership (TTIP) with the US, and a similar EU-Japan trade deal. These two deals alone would cover a third of all EU trade.

The point of these deals is to make it easier for the EU's exporters to sell abroad, keep imports relatively cheap and at the same time protect the member states' own businesses and consumers as much as possible. 

The rules of the customs union require member states to let the EU negotiate on their behalf, rather than trying to cut their own deals. In theory, if the UK walks away from the customs union, we walk away from all these trade deals, but we also get a chance to strike our own. 

What are the UK's options?

The UK could perhaps come to an agreement with the EU where it continues to remain inside the customs union. But some analysts believe that door has already shut. 

One of Theresa May’s first acts as Prime Minister was to appoint Liam Fox, the Brexiteer, as the secretary of state for international trade. Why would she appoint him, so the logic goes, if there were no international trade deals to talk about? And Fox can only do this if the UK is outside the customs union. 

(Conversely, former Lib Dem leader Nick Clegg argues May will realise the customs union is too valuable and Fox will be gone within two years).

Fox has himself said the UK should leave the customs union but later seemed to backtrack, saying it is "important to have continuity in trade".

If the UK does leave the customs union, it will have the freedom to negotiate, but will it fare better or worse than the EU bloc?

On the one hand, the UK, as a single voice, can make speedy decisions, whereas the EU has a lengthy consultative process (the Belgian region of Wallonia recently blocked the entire EU-Canada trade deal). Incoming US President Donald Trump has already said he will try to come to a deal quickly

On the other, the UK economy is far smaller, and trade negotiators may discover they have far less leverage acting alone. 

Unintended consequences

There is also the question of the UK’s membership of the World Trade Organisation, which is currently governed by its membership of the customs union. According to the Institute for Government: “Many countries will want to be clear about the UK’s membership of the WTO before they open negotiations.”

And then there is the question of policing trade outside of the customs union. For example, if it was significantly cheaper to import goods from China into Ireland, a customs union member, than Northern Ireland, a smuggling network might emerge.

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.