Green agenda is a big political risk

Julian Harris
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Energy minister Chris Huhne engaged in a battle of words yesterday, dismissing claims that the UK could end up with energy prices “towards the highest in the EU” – as calculated by the Electricity Policy Research Group at Cambridge University. “Absolute nonsense” snapped Huhne, arguing that prices would eventually be lower if the UK moved towards low-carbon sources of energy. This is a gamble by Huhne, who is looking to push through a radical set of green proposals to force down carbon emissions -- all of which will put even more upward pressure on prices. Britain was the first country in the world to set a legally-binding target of cutting emissions, aiming for at least 80 per cent in reductions by 2050. Renewable Obligation Certificates see utilities forced to buy a certain proportion of energy from renewable sources, inflating costs that are then passed onto consumers. A carbon floor price will push up the cost of energy from fossil fuels, further boosting prices. The climate change levy is another cost added onto (companies’) energy bills; not to mention the Brussels-enforced Emissions Trading Scheme. It is thus little surprise that the Cambridge academics estimate that household bills will rise by 32 per cent by 2030. Green policies are supposed to be about tackling global warming, but this would require global solutions – not unilateral measures that may not be replicated by peer countries. The government’s green agenda risks driving companies away from the UK and towards countries with cheaper energy costs. It also poses a serious electoral threat to the coalition, with pensioners set to be hardest-hit by rising energy bills.