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The five climate pitfalls of the Autumn Statement

From higher taxes on renewables to inadequate energy efficiency, experts warn Jeremy Hunt’s climate policies are “damaging”.

By India Bourke

“Cheap, low-carbon, reliable energy must sit at the heart of any modern economy,” Jeremy Hunt, the Chancellor, said in his Autumn Statement today. “Unless we act rapidly to change our approach, we will both bankrupt our economy and harm our planet.”

The rhetoric is nice, but the Conservatives have failed to match it with action. From taxing low-carbon energy companies more than their fossil-fuel equivalents, to scrapping the tax relief for electric vehicles, here are five ways the government’s pursuit of a low-carbon future doesn’t quite add up.

Extending the windfall tax to renewables: is it fair?

The introduction of a 45 per cent windfall tax on renewable electricity generators was perhaps the statement’s most shocking climate-linked mistake. As well as being higher than the new tax announced on the oil and gas sector (25-35 per cent), it also does not include the same tax exemption allowances that have been granted to the latter if they invest in new development. The policy risks “severely damaging” investment in vital renewable energy projects, warned Dan McGrail, CEO of the energy trade association Renewable UK. “Ministers now need to work with the industry to ensure that the implementation of these plans ensures a level playing-field, rather than imposing unfair burdens on renewables.

Energy efficiency support: is it adequate?

Long overdue action on energy efficiency has finally emerged in the form of a £6.6bn investment, plus the creation of a taskforce to achieve a 15 per cent reduction in energy consumption from buildings and industry by 2030, which could include retrofitting and insulation measures. That target would equate to a £28bn saving on the national energy bill, Hunt boasted. But green campaigners are wary: there is no immediate plan to offset sky-high bills this winter, and no sense of how the demand reduction will break down. As Chaitanya Kumar, of the New Economics Foundation think tank, tweeted, the EU is aiming for a 15 per cent gas demand reduction in just 6 months, not 7 years. The £6.6bn is also still short of the £9bn promised in the party’s 2019 manifesto.

New nuclear power: will it achieve energy independence?

A £700m investment in the Sizewell C nuclear power plant in Suffolk, proposed by French and Chinese state-owned energy firms. While Hunt claimed that nuclear expansion is key to achieving lower emissions and energy independence, the industry is arguably neither the safest nor cheapest option. As Greenpeace UK’s Doug Parr has written, expensive nuclear energy is only necessary if you are unduly pessimistic about the ability to store renewable energy and reduce demand. Even the government’s own independent Climate Change Committee has advised, in half of its emissions reduction scenarios, that no more nuclear capacity is required. 

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Ending road tax exemption on electric vehicles: is it short-sighted?

In 2025 the government will end the vehicle excise duty exemption for electric vehicles (EVs). Hunt said this would make motoring tax “fairer” but support for fossil-fuel powered cars is certainly not fair on the climate, and will probably slow down the country’s green transition. “This may well give sales a knock at a time when UK manufacturers are looking to ramp up EV production,” Colin Walker, transport lead at the Energy and Climate Intelligence Unit, said.

“Introducing a new tax on EVs, but no new levies on polluting vehicles, is just plain wrong,” added Ralph Palmer of Transport and Environment, Europe’s leading clean transport campaign group.

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Re-committing to the UK’s climate targets: is it enough?

In the one and only section of the statement where climate change was directly mentioned, Hunt reiterated the government’s commitment to a 68 per cent reduction in UK emissions by 2030. Yet this is far from the “increased ambition” the UK called for at the Cop26 climate summit just 12 months ago. “Omitting plans as to how this will be financed risks undermining the Big Bang economic recovery the Chancellor wants,” said Heather McKay of the E3G think tank.

Furthermore, while the climate got a low billing, nature recovery and agricultural reform were ignored entirely. “Our economic prosperity is entirely dependent on a healthy natural environment,” Elliot Chapman-Jones of the Wildlife Trusts reminded, yet the Chancellor chose to focus on flashy new infrastructure instead.

“There’s no economic security on a dead planet,” WWF’s Becky Spencer said.

Hunt may have hoped his Autumn Statement would provide “balance” and “stability” but his unfair and short-sighted climate policies, combined with a blind spot when it comes to nature, will fail to bring the UK’s economy or ecology back to life.

[See also: Can the Amazon rainforest be saved from environmental destruction?]

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