REDUCING INEQUALITY AS A PATH TO NET ZERO AND CLIMATE SALVATION

 

A message for UK Greens. Inequality reduction may be an important political objective, but to put it forward as a primary means to achieve environmental, and especially climate related goals, is a naïve and dangerous distraction. Viable strategies  reverse these priorities. Measures targeted on carbon reduction will mostly help reduce inequality.

 

The new leader of the UK Greens, Zak Polanski, has staked out a new ideology for his party and for the environmental movement. His emphasis is on the notion that a major reduction in inequality is an essential prerequisite for success in tackling environmental problems and particularly climate change. His early pronouncements have been conspicuous in their failure to mention net zero. So is there a substantive argument here or is inequality an important but essentially separate issue?

 

There are certainly major connections. Globally it is the wealthy developed economies that are largely responsible for historic greenhouse gas emissions, while it is the poorest who may suffer the worst impacts and have the least capacity to adapt and protect themselves. So there is a moral imperative for a transfer of funds from richer to poorer. There is also a practical case for this. Some of the best returns, in terms of reduced emissions for a given investment, may be found in developing economies, for example in the substitution of rural electric power for wood and charcoal cooking (as I have argued previously).

 

Even here there are some surprises however. China may still not be seen as a wealthy country, but its per capita carbon footprint comfortably exceeds that of the EU.

 

But the context of Polanski’s argument is that of UK politics. Most people in the UK would count as high income and wealthy in a global context, and Polanski is not campaigning for massive increases in foreign aid for emissions reduction. So we have to interpret the Polanski argument as one about redistribution of wealth and income within the UK. That leads us to a relatively simple question, as to whether a redistribution of income would actually lower the UK carbon footprint. To use the language of economics, is the marginal propensity to consume more energy (and hence generate more carbon emissions) for a given increment of income, higher or lower in high income groups?

 

There is plenty of statistical data with which to answer this question. It is certainly true that the highest income groups also have the highest carbon footprints. In some respects, with use of private jets or billion dollar motor yachts, this can be almost obscenely so. More generally higher income groups are more likely to live in larger houses, use more heat, engage in more leisure road travel, and fly to more distant holiday locations. They will also buy more consumer goods with an embedded carbon content.

 

However this does not imply that a simple redistribution of income would have any effect in reducing CO2 emissions. For the UK, the average income of the top 10% is about seven times the average income of the bottom 10%, but their carbon footprint is only a little over three times as high (according to the Institute for Fiscal Studies). The spending of poorer households is more carbon-intensive, while the enjoyment of extra income becomes less energy intensive among higher income groups. In very simple terms, therefore, the transfer of £1000 of income from a rich person to a poor person will increase carbon emissions.

 

A research study cited by the Grantham Institute at the London School of Economics demonstrates very similar results for the USA. Based on household consumption and World Input-Output tables it found that the 10% of households with the highest incomes had an average carbon footprint of 59.4 metric tons of CO₂ per household while the 10% of households with the lowest incomes had a carbon footprint of 18.1 metric tons.

 

In the words of the study, this creates:

 

a dilemma for policymakers that income equality could increase CO₂ This has been called the ‘equity-pollution dilemma’. It predicts that if the US had the same household income distribution as Sweden, CO₂ emissions from private households would be 1.5% higher, and would increase by 2.3% – or an extra 0.8 metric tons per household per year under total income equality.

 

and calculates that

transferring US$1,000 from a richer household to a poorer household could increase the emissions created by that sum by 5%, or 28.5kg of CO₂

This indicates that changing the focus of environmental policy to inequality may be both naïve and dangerous, especially if the “first round” effects operate in the wrong direction or suggest that climate is a problem that can be attributed entirely to the rich. Discovery that taxing the rich does not after all solve the problems will tend to discredit the promoters of green objectives. The reality is that climate change and net zero pose problems that need to engage the whole of society. The plausible solutions rely heavily on technology but also on behaviour and personal choices, for example the development of efficient heat pumps and the ability of households to retrofit them.

 

Paradoxically if we reverse the order of priorities proposed by UK Greens then we might actually achieve a lot more on equality. Most obviously, targeted subsidies for better insulation will disproportionately benefit poor people. Just as obviously, taxing aviation fuel in a way consistent with how we tax road fuel, will hit the users of private jets. And there are multiple reforms to the tax system, and to energy tariffs, which could assist both environmental and equality objectives.

 

There is other low hanging fruit, too, which could have a substantial impact on carbon reduction. Regulation to limit the use of private jets is perhaps the most obvious, but the elimination of cryptocurrency, with a carbon footprint comparable to that of aviation, is another. Both have limited impact on the poor.

 

A conclusion from the above must be that focus on a populist approach to redistribution of income, and the pretence that it is a overwhelmingly dominant Green issue, while largely ignoring the importance of net zero objectives, will ultimately only serve to discredit the environmental movement. This is to the detriment of everyone.

…………..

 

The above comments reference two reliable sources, the Institute for Fiscal Studies and the Grantham Institute on Climate Change and the Environment.

 

1 Tax policies to help achieve net zero carbon emissions. Stuart Adam, Isaac Delestre Peter Levell Helen Miller.  Institute for Fiscal Studies October 2021

 

2 Income Inequality and Carbon Consumption:  Evidence from Environmental Engel Curves  Lutz Sager. London School of Economics and Political Science. November 2017

 

A PAY-PER-MILE TAX JUST FOR ELECTRIC VEHICLES. SURELY NOT?

 One of the ideas being floated for the budget is the imposition of a pay-per-mile tax for driving on UK roads. The immediate motive for this is the growing realisation that revenues to HM Treasury from fuel tax will shrink rapidly as electric cars replace the internal combustion engine.

 

However current proposals, including those from the Resolution Foundation, suggest that the charge, of perhaps 3p per mile, should apply only to electric vehicles and not to internal combustion engine (ICE) vehicles.  I cannot think of anything that would be better calculated to destroy Labour's credentials as a party committed to environmental protection and public health. The international reputation of the UK on climate matters would similarly be demolished, if it were to sabotage what has hitherto been one of the more promising and successful planks in its raft of low carbon policies (after decarbonisation of the power sector).

 

It's worth starting with a simple observation on the current level of fuel duty, frozen since 2011. There is a general principle of sensible taxation for products or activities that cause widespread damage to society. Where the damage is general and a realistic measures and estimates can be made, so-called Pigovian taxes, sometimes described as “sin” taxes, should at least equal the estimated cost to society of the damage done. Otherwise, consumers are not covering the costs of the damage they inflict. If they were obliged to do so, they would tend to consume less of the product, and we would be collectively better off; in this case they would be more likely to switch to low carbon alternatives, hydrogen or electric vehicles.

 

Surprisingly, for ICE fuels, we do have a number that we can use.  Treasury Guidance, which supposedly provides a basis for UK public policy and project appraisal, sets a cost/value to be placed on CO2 emissions/savings. It was set at £265 per tonne of CO2e for 2022. The implication of this is that fuel duty should be set at somewhere around 60p per litre or higher, simply to compensate for the emissions for which it is responsible. For ICE fuels, the current level of fuel duty is 52.95p per litre; in other words ICE vehicles are not paying the true societal costs of the fuel they use.

 

Incidentally this analysis excludes the health costs of urban pollution from ICE vehicles. This is a similar order of magnitude, and is already recognised in London with ULEZ. There are plenty of studies that do cost the health effects, and the numbers are large. So the growing use of electric vehicles is overwhelmingly in the public interest, whether from a national or a global perspective.

 

There are a few rather specious excuses for the proposal to levy pay-per-mile charges on EVs. The main one is that they tend to be heavier, like for like, and may therefore incur higher road maintenance costs. Apart from the fact that the UK sensibly and rarely hypothecates taxes in this way (duties on wines and spirits are not used to subsidise pubs or off-licences), there are two responses that demolish this argument. One is that the relative impact of EVs, compared to large commercial vehicles, or to other factors like weather, that impact on roads is firly insignificant. The other is that if this really were a serious issue we should already be imposing differential weight-based charges on ICE vehicles as well

 

Purely from a climate or public finance perspective, there should not necessarily be any objections in principle to the introduction of pay-per-mile. Road use charging is potentially just one more method of revenue raising, with the advantage that it is to some degree related to an infrastructure cost, with the disadvantage of being quite hard to implement effectively. Like any tax it will also be examined for its wider impacts. But if introduced these taxes should apply to all vehicles, in order to retain the incentive for cleaner vehicles, whether hydrogen or EVs.

 

But if we do introduce charges per mile, we should go all the way to a proper system of road pricing, charging only for the most heavily used and congested routes. This would alleviate city congestion, save time and money, and, while we still have mostly ICE vehicles, would also reduce pollution and improve health outcomes.

 

Perhaps most importantly, imposing a tax specifically targeted at EVs, after a long period when governments have been actively encouraging their purchase, would destroy the credibility of future incentives that governments may wish to use in pursuit of their policies. Such a loss of trust in the consistency and stability of future economic incentives would not be confined to the energy sector or to zero carbon issues.

 

IN DEFENCE OF CARBON CAPTURE AND STORAGE

I am not an expert on CCS, and prepared to be agnostic. Also I usually have a lot of time for George Monbiot, but this week I was puzzled by his vitriolic attack on carbon capture proposals, backed up by a number of Guardian readers. 

 

Both the IPCC and the UK’s own Committee on Climate Change (CCC) support a crucial role for carbon capture. IPCC extends this to the much more expensive DACC - direct atmospheric extraction as opposed to the presumed retro-fitting to capture at the point of combustion.  Both IPCC and CCC are serious bodies, tasked with climate concerns, and with access to the best technical and science expertise. CCC has an excellent overview of the UK energy and CO2 scene. Neither are compromised by financial links to fossil lobby groups. 

First nobody should dispute the simple truth that the cheapest and first best solution is to burn as little fossil fuel as possible. So we should pick the low hanging fruit first. That includes not just home insulation but also "obvious" but contested proposals like suppressing bitcoin and many other cryptos (ultra high energy use and zero societal value).

Second the UK has proven itself perfectly capable of screwing up major projects (cf HS2) so there are no absolute certainties this won’t happen again with CCS, but that concern applies to any of the many major infrastructure or retro-fitting projects that we need to get to net zero, including heat pumps and grid expansion.

Third the much harder and costlier option of DACC will certainly be a necessity as we are already well past the degree of CO2 limitation needed for 1.5 degrees. And no, we can’t  do it all through managing land use. If we can’t even do retro-fitting to fossil plant or industrial process CCS, what hope is there for DACC ?

Fourth the abandonment of earlier CCS projects surely stemmed from the shameful austerity programmes and Tory retreat from Cameron's “Green crap” rather than from infeasibility. Here there are more shades of the British disease in which political vacillation stalled the kind of nuclear programmes the French completed so successfully in the last century

Finally the recent September 2023 Royal Society report also touches on CCS, but makes it clear that alternatives like hydrogen storage are also substantial infrastructure projects with significant project risks.

 

Carbon Capture. Getting behind the hysteria.

Carbon capture is in the news again, as the new Labour government announces a substantial new programme for the development of the technology. This has attracted a barrage of criticism from both Left and Right, in spite of the fact that carbon capture is widely regarded as an essential component of any mitigation strategy. So it’s worth exploring a bit further.

 

Some technical background.

 

We should get the terminology clear. There are many approaches to carbon capture, including the use of natural processes in the carbon cycle, for example by improved land use, planting trees or through various “geo-engineering” schemes to increase the “fixing” of the carbon in the oceans.  Greens and others, unsurprisingly, tend to favour the most “natural” and least environmentally intrusive of these. 

 

Second, when CO₂ is captured, it can either find a useful purpose, or it can be sent to a safe permanent store. Use in the soft drinks industry will be trivially small, but it can also be used in the production of synthetic fuels. Most recently there has been a lot of interest in synthetic aviation fuel (SAF) for the hard-to-decarbonise aviation industry.

 

Trees are one form of direct atmospheric carbon capture (DACC). But there are also industrial process approaches to direct capture, sometimes referred to as mechanical trees, which rely on established chemical techniques to separate CO₂  from the atmosphere. It’s claimed that the cost of DACC and subsequent storage (DACC+S) could be brought down to below $200/ tonne, a level that could imply total costs of emission-free oil use well within the historical range of oil price variations. Proposed options for storage include geological formations such as depleted oil reservoirs  and the deep oceans

 

Problems with and arguments against the various DACC methods include:

 

·       excessive requirement for land use, sometimes in competition with food production; this will apply to some but not all methods of both a “natural” and industrial nature; this places an upper limit on what they can achieve

·       excessive land use can also have ecological and human rights implications

·       unproven nature and potentially high costs, and, in the case of natural methods, science unknowns around whether particular land-use policies will be net emitters or receivers of CO₂

·       for industrial methods, high energy use requirements

·       the argument that carbon capture is a distraction from the preferred alternative of eliminating fossil fuels

·       in relation to storage, doubts about suitability of locations, safety and permanence; transport of CO₂and injection into storage may also be expensive

 

The above has all been about direct air capture. However it is, for obvious reasons, likely to be much easier and cheaper to capture high concentrations of CO₂  at the point of combustion when it is released from the fossil fuel. A Green version of this technique involves the use of sustainable bio-fuels, known as bio-energy carbon capture and storage or BECCS. BECCS is likely to be severely supply limited in relation to the scale of what is needed. More generally carbon capture can be fitted or retro-fitted to fossil burning plant, including power generation, and this has generally been the main focus of carbon capture and storage policies, usually referred to as CCS.

 

An additional issue for CCS is that it is likely to be less than 100% effective, with a leakage rate of perhaps 10% or more, so it is not a silver bullet.

 

Is carbon capture an essential component of climate strategies?

 

The IPCC is fairly clear that carbon removal, ie DACC, will be an essential component of any feasible route to a sustainable future. It also endorses continued use of fossil fuels, where this is accompanied by CCS, as one of the options for getting to a net zero future. CCS is also supported by the UK Committee on Climate Change (CCC) as part of a UK strategy aimed at this objective. Both these bodies have the advantage of access to a huge body of scientific and technical advice on the subject, in the context of means to mitigate climate change.

 

So should the UK government be promoting CCS?

 

On the basis of IPCC and CCC advice, the principle of promoting CCS seems to bejustified. There may be alternative means of getting to net zero, but if this is the quickest and cheapest option, then there should be no reason to object to it. Moreover this will not just be a UK issue. Much of the world is even more locked into fossil-based technologies than the UK, so the potential of CCS as an interim or transition technology may be quite important.

 

Whether it has a positive contribution to a UK industrial strategy is another question. Potentially the answer is that it does. Countries like Germany have a much higher lock-in to fossil fuel. But as ever, geography and trading relations matter. Not all countries will enjoy the storage options that the UK has, and Brexit will make the potential to exploit European markets harder.

 

Finally there is a history to this. In 2015 the Cameron/ Osborne government cancelled a CCS programme after the spend of £ 100 million of public money and substantial private sector investment of time and resources. This was part of a major rolling back of  Cameron’s Green promises and accompanied the slashing of budgets on other “easy win” measures such as home insulation. As a marker of determination to take net zero seriously, the Labour government's move is a welcome step. But it does not detract from the need to continue to explore the wider DACC options for carbon removal and storage, nationally and globally.

WHAT ARE THE REAL ISSUES WITH LIFESTYLE AND CLIMATE POLICY?

 

Arguments about the supposed war on motorists operated by a Labour London mayor, with ULEZ, the Welsh government with its 20 mph speed limits , and, allegedly, its  planned extension to England becomes ever more bizarre, as do the allegations of a prospective tax on meat, the likely household cost of replacing gas boilers, and anything that the culture warriors of the Tory party think can be turned into a populist rallying cry. So perhaps it’s time to reflect on what are the elements of truth about lifestyle and climate, and what are simply creative approaches to reality, or lies and falsehoods as they might be called by the less charitable.

 

Let’s deal with some of these in turn.

 

ULEZ

 

Actually this has little or nothing to do with climate policy. It was first mooted as a sensible proposal by Tory London Mayor Boris Johnson. It’s primary purpose is to improve air quality and public health. It may have increased CO2 emissions slightly in the short run, by driving out diesel cars faster than petrol cars, but this will have been offset by encouraging a faster take-up of electric vehicles.

 

Congestion charging

 

Again the primary benefit for this has usually been argued as the reduction in congestion and the substantial saving in the time drivers have to spend at the wheel. There is an important secondary benefit in reduced particulate emissions and in reduced CO2 emissions, because the stop-start involved in congestion reduces overall fuel efficiency.

 

Some of this benefit was negated by the rather illogical exemption of electric vehicles from the London congestion charge. At a time when most vehicles are still petrol or diesel, EV vehicles will still have increased congestion, and hence emissions from all the other non-EV vehicles on the road. When all vehicles are EV, there will still often be a strong case for congestion charging, or road pricing, even though the incremental health and CO₂ benefits have become minimal. 

 

The reality therefore is that there is a climate policy case for congestion charging, but it is not a case that has been promoted particularly vigorously.

 

Speed limits

 

Reduced speeds will generally tend to reduce fuel and energy use. This is a matter of simple physics. But the effect in residential areas where the limit is already 30 mph is likely to be relatively trivial. Much more significant would be a reduction from 70 mph to 60 mph on motorways and dual carriageways. In the 1970s US governments imposed 55 mph limits in the face of the OPEC cartel and global oil price hikes, primarily in order to reduce fuel consumption.

 

There are therefore strong arguments to be made, on climate policy grounds, for reduced speed, at least while the majority of vehicles are petrol or diesel. But, at least for the UK, climate has never been the most significant consideration. The drivers for speed limits have always been road safety, and, more recently, air quality.

 

Once again truth is the first casualty of today’s politics, so we might note, inter alia, that:

 

·      Most Tory members of the Welsh Senedd supported the 20 mph default limit.

·      It is subject to local decision making and is not a “blanket” limit.

·      Minimal analysis shows it has almost negligible effects on most journey times.

·      There is no evidence that it has caused congestion or traffic problems.

·      There is evidence that lower speed limits reduce injuries and fatalities.

 

Significant emissions reductions could, fairly obviously, result from limiting higher speeds, for example on motorways, or from enforcement of existing limits, but this is not currently a plank of policy in the major parties. Meanwhile the 20 mph limit has already been widely extended to English cities, with little comment.

This issue, bizarrely given its relative insignificance in relation to either economic activity or climate, is the one that has produced the most insane claims of economic damage, with Welsh Tories claiming it could have economic impacts on the Welsh economy of between two and nine billion pounds. We await any form of explanation for this number.

 

Heat pumps and the end of gas boilers

 

This is perhaps one of the hardest energy sector transitions for the UK, and heat pump issues are hard to cover adequately in a short post. But there are a few important points to note. The first is that major infrastructure transformations are possible in the UK, for instance in the rapid conversion from town gas to natural gas. A second is that we should expect further efficiency improvements and cost reductions for heat pump technology, and a third is that the era of cheap gas (from the 90’s onwards) is coming to an end, reducing the cost barriers for consumers wanting to switch to heat pumps.

 

Of equal importance is the need for tariff reform so that the price per additional kwh of electricity use more closely reflects the actual incremental cost of supply. This would have a dramatic effect on the competitiveness of heat pumps against gas. It implies a radical restructuring of electricity tariffs to change the way that fixed and legacy costs are recovered, but this simultaneously provides an opportunity to deal with some of the other issues on the distributional impact of current tariff structures. 

 

 

Less meat and dairy consumption

 

This really is a major lifestyle choice that would have a major impact on emissions, given the amount of land used for raising crops that are then used as animal feed. It’s potentially much larger in scale than what we have discussed above and will persist as a significant question even after transport has been fully decarbonised.

 

It is also, undeniably, a social trend that many more people are choosing to eat less red meat, in particular, on health grounds, and that vegetarian food has become more popular.

This is certainly an important area of debate for the future, although even the greenest of climate campaigners tend to focus on reducing meat consumption rather than eliminating it. We also know that some meats are intrinsically less carbon intensive than others. And it’s quite clear that none of the major parties in the UK are currently in a hurry to demand meat bans or meat taxes.

 

Looking ahead we might expect that the pressure on food resources, especially if accentuated by a changing climate, will increase the price of many important commodities, including both grains for human consumption and animal feed, and this will affect the price of meat and hence consumption. In terms of lifestyle changes, this really is a huge question, affecting as it does national and global agricultural systems as well as personal diets and elements of social life. Agriculture and land use is also a hugely complex subject.

 

Time for an intelligent conversation

 

It is time to step back from the more hysterical arguments that attempts to limit environmental damage somehow threaten important personal freedoms of all kinds, or the fundamentals of modern life. There are undoubtedly potential conflicts, although, as shown above, few if any lifestyle initiatives have so far been driven primarily or at all by climate objectives. Health and safety have been far more salient factors. 

 

But this may need to change, and it would be good to see more serious discussion of the choices that we may in future have to make as the existential threats of climate change become increasingly apparent, and alarming.

MORE DISINFORMATION ON NET ZERO. COINCIDENCE OR CONSPIRACY?

Sadly we have become accustomed to the routine parade of untruths in government. But what should concern us almost as much is the peddling of ridiculous theories, misleading statistics and nonsensical arithmetic by bodies that pretend to offer some kind of independent analysis. Nowhere is this more evident than in the numerous self-styled

think-tanks and “expert” groups that set out to dispute the scientific consensus over climate science, or the relative costs of climate change versus mitigation policies.

 

One such has been the All Party Parliamentary Group on Fair Fuel, a lobby group composed of numerous climate sceptic MPs. (It should be noted that APPGs do not have an “official” parliamentary status and are very different from the Parliamentary Select Committees who do excellent work and produce well-researched reposts. They are in fact often just lobby groups for MPs pursuing particular agendas). I dealt with some of the “analysis” provided by this APPG in earlier posts.

 

THE CASE FOR ELECTRIC VEHICLES IS STRONG ENOUGH TO SURVIVE ATTACK FROM THE ICE LOBBYISTS, 

 

and

 

COSTING AN ELECTRIC VEHICLE FUTURE. IGNORE THE ALARMISTS.

 

The latter showed the lobby report had got its numbers wrong by a factor of 50, largely because of a failure to understand either elementary physical principles of energy or the units of measurement it chose to employ.

 

This level of incompetence was however surpassed by another “think-tank”, Civitas, which was sufficiently shamed to withdraw its report on account of “factual errors” after a withering assessment by Simon Evans in the Guardian. Some of the “errors” in this case were of the order of millions. 

 

How a think tank got the cost of net zero wildly wrong

 

Losing six or so zeros might merely be seen as carelessness. But as the Evans article demonstrates, it indicates a much deeper failure of understanding. It is failure to grasp the difference between power (kW) or capacity, on the one hand, and energy (kWh), on the other. This translates, unsurprisingly,  into order of magnitude errors on cost. For those not familiar with the units used for electricity, this is akin to confusing the cost of a button with the cost of the factory that produced it.

 

There seem to have been other errors in the report, such as an equally inexcusable failure to understand the difference between the total cost of investments made under a particular policy, on the one hand, and the net costs or benefits of that policy as a whole.

 

We await with interest the revised report. Civitas, on its website, claims to “… strive to benefit public debate through independent research, reasoned argument, lucid explanation and open discussion. We stand apart from party politics ….”

Odd, then, that this report should appear immediately following Sunac’s alteration of course on UK net zero. Readers will no doubt form their own view of its “independence”, as well as the competence of its authors.