The Spectator, 23 November 2018
The Climate Change Act is ten years old. It was passed in a different age. David Cameron had been hugging huskies to de-toxify the Tories. It was a year before the Copenhagen Climate Conference. ‘Fifty days to set the course for the next 50 years,’ Gordon Brown declared. China and India’s veto put paid to that, but Britain is still lumbered with a law that puts huge economic power into the hands of an unaccountable body, the Committee on Climate Change, which entrenches climate policy unilateralism. However much greenhouse gases the rest of the world puts into the atmosphere, the Climate Change Act compels Britain to almost completely decarbonise.
Jim Callaghan once told his policy chief Bernard Donoghue that the one thing he’d learnt from his years in politics was that when the two front benches agree, you can be sure they’re wrong. Snow fell gently from the sky as 465 MPs voted in favour of the third reading of the Climate Change Bill. Only five MPs voted against: Andrew Tyrie, punished by David Cameron with the chance of any frontbench job, but now chairing the Competition and Markets Authority, Ann Widdecombe, Peter Lilley, Christopher Chope and Philip Davies.
Looking back ten years on, the Climate Change Act is a threefold failure. It fails the national interest. The case for the Act assumed global action – Britain leads, the rest of the world follows. Of course that didn’t happen. According to the government’s cost benefit assessment, Britain would contribute nearly half of the total global benefit. Why do anything if you’re going to get very nearly half the benefit at zero cost?
None of the cost benefit analysis accompanying the Act took into account Britain fully participating in the European Union’s Emissions Trading Scheme. Unless the EU’s emissions target changes in line with Britain’s, every tonne of carbon dioxide Britain is forced to cut because of the Climate Change Act enables other EU members to emit an extra tonne – all at Britain’s expense. That is to say, 100 per cent carbon leakage. The net effect on overall emissions is zero. There are no climate benefits from the Act – only costs. To Britain.
If this sounds unnervingly similar to Theresa May’s Brexit, it is somewhat ironic that the backers of the Climate Change Act were and remain strong supporters of Britain’s EU membership. Yet when it came to the Climate Change Act, they were all afflicted by ‘fog-in-the-channel’ syndrome. They simply hadn’t taken account Britain’s participation in EU’s Emissions Trading Scheme.
The Climate Change Act is a failure of politics. Politics requires debate and disagreement. With the exception of the five dissident MPs voting against, there was stifling conformity. Politics also requires a degree of honesty, something also absent from this government’s defence of its Brexit deal. Responding to a letter from Peter Lilley on the government’s estimated £404bn of costs, Ed Miliband, the energy and climate secretary, falsely asserted:
‘The impact statement shows that the benefits to UK society of successful action on climate change will be far higher than the costs.’
The impact assessment showed no such thing. Indeed, the assessment was absolutely clear this was not the case. ‘The benefits of UK action will be distributed across the globe,’ it categorically states.
In fact there has not yet been any credible official study on the overall costs and benefits of global warming to Britain, which, it is plausible to believe, could benefit from some modest warming.
Above all, the Climate Change Act is a moral failure. In the 2005 general election, the Labour party pledged to abolish fuel poverty. By 2015, fuel poverty was to have been a thing of the past. By the 2017 election, any thought of abolishing it had vanished. The impact of climate policies means that fuel poverty is here to stay.
When he was energy and climate secretary, Ed Davey admitted that fuel poverty was not something that ‘can be eradicated in any meaningful way.’ Neither did he like the way fuel poverty was measured, complaining it was ‘unhelpful’ because it was too sensitive to rising energy costs. Something had to be done.
So the definition of fuel poverty was changed. The focus was shifted from affordability to the potential to insulate properties. Overnight, the new measure nearly halved the number of households officially defined as living in fuel poverty. Cynical? The interests of the least well off were sacrificed to the powerful interests of the climate change lobby.
The treatment of the economics provides the one glaring contrast with Brexit. The government’s whole negotiating position on Brexit has been driven by maintaining frictionless trade and just-in-time supply chains for manufacturing industry. The Treasury produces forecasts predicting an economic Armageddon if these are in the slightest way interrupted.
But when it comes to decarbonising the economy, the government is entirely indifferent to the impact on economic competitiveness. If decarbonisation is so good for the economy, why is the European Union insisting on maintaining the so-called level playing field and requiring Britain write its decarbonisation commitments into a future trade agreement with the EU?
If the government genuinely wanted to improve competitiveness, raise living standards and abolish fuel poverty, there is a straightforward way. It could repeal, or at the very least, amend the Climate Change Act and remove its blind unilateralism. This is still something that, for the time being, it doesn’t need the EU’s permission to do. But don’t hold your breath.
Rupert Darwall is author of The Climate Change Act at Ten: History’s Most Expensive Virtue Signal published by the GWPF.