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28 September 2021updated 04 Oct 2021 1:55pm

The power trap: Why the energy crisis is a crisis of politics

The UK paints itself as a leader on climate change – its response to the energy crisis will show whether it can turn words into action.

By Philippa Nuttall

Humanity must “grow up” to halt the climate crisis, Boris Johnson told the UN General Assembly on 22 September. The energy crisis is proof of a lack of maturity, not just in the UK, but globally. Despite headlines about record amounts of wind and solar power and record numbers of electric cars, climate change-causing greenhouse gas emissions and energy use continue to rise, and the world’s thirst for fossil fuels remains insatiable. Failure to deal with these trends quickly and fairly as part of an organised and just transition will lead to further environmental destruction, and social and economic chaos.

[See also: Kermit was right: being green isn’t easy, for politicians like Boris Johnson]

Today’s soaring energy bills are a glimmer of what could happen if we don’t change tack. There are myriad reasons for the spike in gas prices: the sudden economic growth after the pandemic slump, a cold winter in Europe and Asia, local unplanned-for events, and complicated geopolitics are all partly responsible. But a domestic dearth of systemic thinking is also why many UK citizens are disproportionately affected by the increase in gas prices. A lack of long-term funding and consistent policies that enable homes to be properly insulated and support the installation of electric heat pumps means Britons live in some of the least energy-efficient homes in Europe, and remain highly reliant on gas for heating and cooking. “Bad political ideas have helped pave the way for volatile gas prices,” says Tom Burke, head of climate think tank E3G. “There is nothing new about volatility in commodity prices, but there has been a consistent failure to address reducing gas for heating. This is not an energy crisis, but a crisis of politics.”

Likewise, the UK regulator allowed small energy companies to come into the market without sufficient protection against price volatility. “All companies should have some kind of insurance against price hikes,” says UK-based clean energy expert Julian Popov, a former Bulgarian environment minister. And UK citizens are being left to swallow the price increases alone, with little, if any, government support. It is thought that three million households in the UK already live in energy poverty. The £139 increase in the energy cap, which limits the amount that energy providers can charge consumers, from 1 October could mean another half a million households have to decide whether to eat, or heat their homes. Even without extra increases to global gas prices, UK bills are likely to grow again: the energy cap is due to rise by £280 – on top of the £139 hike – in April 2022.

Meanwhile, Spain has reacted to the gas price spike by announcing a series of extraordinary measures that redirect the windfall profits of a number of power producers, worth around €2.6bn, to consumers. The Italian government has already disbursed €1.2bn; prime minister Mario Draghi has indicated he is prepared to spend €3.5bn to shield low-income Italians from increases to power bills. France, in an effort to avoid any gilets jaunes protests during the election campaign, will spend €600m on giving the poorest households a €100 subsidy to help them pay their energy bills.

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One reason for the crisis is the world’s continuing addiction to fossil fuels. World leaders agreed in 2008 to accept climate science and at a minimum to halve global carbon emissions by 2050 through binding targets. During the following 15 years, there has been no shortage of fine words and grand pledges, but little has shifted. While global emissions dipped during the Covid-induced lockdowns of 2020-21, they are now rising rapidly, and in 2019 data showed that fossil fuels still accounted for more than 80 per cent of global energy production.

The reasons for this being status quo are diverse and complicated. But the short answer is that no world leader has designed a convincing vision for the future that includes the transformation necessary to stop dangerous global heating and to create a just transition for all communities, including workers in industries that require drastic change or phase-out. In particular, politicians have failed to fully examine and explain who will pay for this change. Instead, energy policy has remained a political football kicked back and forth between parties, competing countries and the developed and developing world since the oil crises of the 1970s.

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[See also: Why China and the US’s climate announcements are cause for hope]

It is, indeed, time to “grow up”. Nevertheless, it is important to engage with what we mean by “growing up” and the implications this has for climate action and the energy transition. Susan Neiman, an American moral philosopher and author of the 2014 book Why Grow Up? Subversive Thoughts for an Infantile Age, argues that rather than seeing the journey from childhood to adulthood as a process of continual loss, “growing up can mean acquiring freedom and power along with responsibility, achieving the means to push the world more in the direction of the way it ought to be”. Framing the need to reduce greenhouse gas emissions in these terms, rather than around a narrative of renunciation, or “New Age puritanism”, as defined by Rachel Cunliffe in the New Statesman, could help world leaders step up and make some much-needed tough decisions. “That is extremely hard, but also exhilarating,” says Neiman.

Further, politicians across the world have preferred to put the onus on individual actions to reduce emissions, rather than systemic change. Neiman sees Johnson’s latest pronouncement as a worrying continuation of this trend. Climate action in line with the Paris Agreement to limit global heating to 1.5°C above pre-industrial levels “will require a rethinking of the economic premises on which the world has been based for the last 30 years,” she says. “It is more important to focus on that, I think, than on extortions to grow up, and renounce high-carbon living on an individual basis”.

Even if the media headlines are focused on certain countries, the roots of the gas price rises are global. Popov describes a “somersault of economic fundamentals”: the energy economy has been turned upside down. “What was expensive is now cheap and what was cheap has become expensive, what was centralised is becoming decentralised, and what was decentralised is becoming integrated,” he says. We no longer live in a simple, binary world of energy suppliers and users: electric cars, smart meters and rooftop solar panels mean we are all becoming part of a connected, digitalised system in which everyone can increasingly produce and consume energy. “But we too slow in reacting to these changes,” says Popov. 

Government leaders are unwilling, or unable, to engage with this new reality. They are frequently hyper-focused on gas diversification – through “greener” gases, or technology to capture emissions – as a panacea, despite the affordability and availability of energy efficiency technology, and solar and wind power. Certain commentators have even tried to place the blame for rising energy bills on renewables, which Stephan Singer from the NGO Climate Action Network International dismisses as “so wrong: solar and wind bring energy prices down.” Eighty-six per cent of the recent tripling of UK electricity prices is due to “the soaring costs of fossil fuel imports”, and generating electricity from existing UK gas plants is three times more expensive than from new onshore wind and almost twice that from new solar, according to the climate think tank Ember. The Spanish government has reacted to the crisis by announcing it will hold auctions for an additional 3.3 gigawatts of solar and wind.

“Growing up can mean acquiring freedom and power along with responsibility, achieving the means to push the world more in the direction of the way it ought to be”

This myopia is also clouding our perception of energy security. Instead of focusing discussions on gas pipelines and shipments of liquid natural gas, we need to waste much less energy, reduce our dependence on fossil fuels, create and bring online large amounts of renewable energy and expand trans-border interconnections to move around energy supplies when, for example, the wind is blowing hard in one country and less elsewhere. We also need to invest much more in research and development to create and commercialise new clean energy technologies that are not already on the market, such as green hydrogen, and better understand where such solutions are best deployed.

[See also: Why Angela Merkel failed to become a “climate chancellor”]

“Gas diversification as the main solution to energy security is a very narrow and increasingly inadequate view shared by many in Europe and the US,” says Popov. While much is made of the continued reliance on countries such as Russia or Qatar for fossil fuels, “the geopolitics of clean energy are just as real,” says Angela Wilkinson, head of the World Energy Council. One particular concern is surrounding the ownership of the minerals needed to build the world’s wind turbines and solar panels and to power its fleet of electric vehicles: China has almost total control of many of them. The second is surrounding data. “What happens if we have an Amazon of renewable power?” asks Wilkinson. A single company could potentially have access to our energy data. The International Energy Agency has warned that the threat of cyber attacks on energy companies and electricity systems is substantial and growing, and a large-scale data hack could significantly disrupt critical energy infrastructure.

It is unsurprising that the energy debate continues to be so polarised. The lobbying power of the fossil fuel giants is huge, and even if European companies such as Shell and BP are starting to accept that they need to change their ways, this is still far from true for US oil and gas firms. Governments continue to prop up the industry, spending $180bn on subsidies for fossil fuels every year. In 2019, the European Commission released a report that put the UK first in the EU for subsidising fossil fuels; it spent more than €12bn a year on them compared to €8.3bn on renewable energy. “Being grown-up means being honest about what is going on around us and seeing the huge opportunities in the changes and in the crisis,” says Popov.

“A grown-up debate would mean industry abandoning misleading and irrelevant arguments,” says Alex Mason, who works on biomass policies for the WWF in Brussels. “If you ask the average person if burning trees is the right way to tackle climate change, they will say no and they are right,” he says. “Yet many politicians continue to be swayed by the idea that anything must be better than burning fossil fuels.” One example is the UK power station Drax. Self-described as the “largest decarbonisation project in Europe”, it has reduced its emissions by more than 85 per cent by replacing coal with biomass. However, the UK Climate Change Committee, among other organisations, is starting to question the claim that burning wood is carbon neutral. Ember reports that Drax received £832m in direct government subsidies for biomass in 2020, and is due to receive billions more to build a biomass energy and carbon capture and storage plant. “The UK government has spent billions of pounds subsiding something that has potentially accelerated climate change,” says Mason.

What the UK does is very important. In November, it will host the COP26 climate conference in Glasgow. The UK is a leader of sorts in the climate world. The country’s move away from coal, its impressive and speedy increase in offshore wind and its success in growing the economy while cutting emissions are genuinely impressive achievements. However, in addition to serious glitches in other domestic policies such as energy efficiency, and the lack of progress in cutting emissions from transport, the UK caused consternation internationally with its decision to slash overseas aid from 0.7 to 0.5 per cent of GDP.

[See also: The age of the megafire]

“We have walked the talk,” says Burke. “We have the headlines, but what Britain does and has done is much more important than what it says. We need big bucks, but the cut in foreign aid can only be got back in a balanced budget and we haven’t had one of those for 20 years.” Figures released in a parliamentary report in mid-September show how much developing countries will lose from this cut; it will hamper their efforts to mitigate and adapt to the impacts of climate change. As well as the direct impacts to countries including Ethiopia, Kenya, Mozambique, Somalia and South Sudan, this decision looks incredibly hypocritical in the face of Johnson’s calls not just for the world to “grow up”, but also to cough up more cash to raise the annual $100bn that, back in 2009, developed countries pledged to spend on climate action in poorer regions.

The first step towards maturity would be for leaders to “become more energy literate, stop finger-pointing and lose the hubris implicit in the idea we are waging a war on climate change,” says Wilkinson. “No one wins in a war.” For her, the debate on energy and climate is too polarised to succeed. “We have lost the middle,” she says, expressing her deep concern about the focus on targets and technology at the expense of people. We need a more “human-centric” approach, which brings people together for “good quality, action-focused conversations” and puts affordability, social justice and different economic models of growth at the heart of the energy transition, says Wilkinson, whose organisation is carrying out projects in many countries to see how such ambition can be put into practice. There are “no plug-and-play solutions,” she says. “I am still hearing a conversation about fixing the energy machine, rather than about growing a new energy ecosystem and changing human behaviour. We seem to be stuck in the 19th century.”

How much more do people have to endure before the “global moral strategic leadership” that our world needs comes? “How much must global temperatures rise before we end the burning of fossil fuels?” These were two of the questions Mia Mottley, prime minister of Barbados, put this month to the UN General Assembly. “We have the means to invest in protecting the most vulnerable from a changing climate. But we choose not to,” she said. “Regrettably, the faceless few do not fear the consequences sufficiently.”

This article appears in the 29 Sep 2021 issue of the New Statesman, Spirit of the Age