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Thursday, October 24, 2013

The EU might have something to say about Cameron's plan to roll back green policies

Former windmill on David Cameron's former home
publicising a former policy?
David Cameron once said his Coalition would be the "greenest ever", he once even installed a windmill on his own house in the hope of publicising his green credentials. No more it might seem. Yesterday he told the House of Commons:

"We need to roll back some of the green regulations and charges that are putting up bills."

The heat in the cost of living debate is only set to rise, but do not hold out any great hope of a dramatic reduction in energy bills. For the most part they flow from legally enforceable EU laws that the UK signed up to. Something we warned against here and looked at again here.

This begs the question, which ones can the UK scrap on its own and will it seek to renegotiate the others?
  • EU Renewables Directive - imposes a legally binding target of 15% of all energy by renewables by 2020, which translates into producing 30% of UK electricity by costly renewables. This is the driving force behind subsidies and support for renewables. 
  • The UK does have more control over its new Carbon Price Floor policy (which sets a minimum carbon price) and some of its strict energy efficiency policies. But even these fall under the overall banner of the EU defined emission's reduction targets which the EU will have to work very hard to hit.
So will the UK seek to renegotiate these headline targets to allow for cheaper forms of CO2 reductions? Lets see, but if not then all talk of reducing electricity bills are for the most part hot air.

UPDATE: Reuters reports on UK Government papers arguing that EU needs to cut greenhouse gas emissions by 50 percent from 1990 levels by 2030 to avoid the worst effects of climate change. The "roll back" is going well then!


Anonymous said...

The EU has a lot to say about everything. The big flaw, however, in their thinking is the commercial element - as usual.

What is the cost to Europe and to European companies?

What is the impact on EU competitiveness?

Of course, the only way to implement these green policies in the EU alone is to impose import tariffs on goods and services from countries that do not have equivalent green policies - and hence the additional cost.

Anything less is commercially unsustainable for EU member states and ultimately for us, the people.

I fear for our childrens' future with these complete buffoons in charge of our lives.


Rik said...

The EU (and nearly all EU countries themselves as well btw) completely lost track of the competitive element.
Hard to see it ending otherwise than having its backside kicked by the new economic powers in this world.
It simply is too expensive compared for what it produces.

Europe's South is effectively competing now with countries like China and India where costs are overall say roughly half. Simply a lost battle.
For the North this competition is now getting started. And all indicates that it will end the same way.

Most Western countries look to end as 60% government of GDP countries (aka as Frances) with a lot of overkill (red tape but also low real added value government services) in the proces.
Look at how the holes in the budgets are closed 2/3 or more is tax increases. Trend being that it will simply continue as most countries have basically a 1% GDP correction to make annually in order to compensate the effects of aging (and healthcosts). Simply donot seem able the make the turn.
As they say it looks like the shore will have to turn the ship.
At which point things will be Spanish/Greek and with no Germanies left to save you.

The priority of big parts of the European population are simply trying to maintain the present standard of living. Anybody who sees it otherwise needs to get his/hers head examined.
Even if people not yet have personally experienced a drop in lifestyle they are very likely to be busy with this issue as they see things changing all around them.

This is the top of the agenda issue politically. And any party that donot properly adress it will get its backside kicked by the LePens and Wilders of this world.

From there and seen the increasing costs of the present welfarestate there is simply no room for new pet projects. Even if these would be better than the present ones. As European politics simply seems unable to sell the such a switch.

Rik said...


Trends because of this look relatively easy to predict:
-rise of populists. Who try to maintain the welfarestate (at the costs of foreigners). With a new hole in the budget the size of Tezas, but making a proper calculation was never one of the strong points of their potential electorate.

-anti-imigration. The visible part of immigration are clearly a)basketcases and b) eroding the way of living of the Western masses by putting pressure on wages, disturbing the social/cultural enviroment etc. But likely on immigration as a whole also the part that works very well and add value. Simply because immigration is not split in 2 parts which could be easily done.
And the new rules will likely work revenue neutral the gain at the bottom end will likley be offset by the loss at the top end of the immigration 'tree'.

-another pet project is global warming. Difficult sell anyway as the fans have messed up the academic proof. But anyway.
And people feel pretty well that all the jobs that are promisesd are simply not adding anything to the standard of living. They only make Europe more expensive compared to the rest. With as a consequence that costs somewhere else have to be cut in order to remain competitive. Basically if you want the envoroment fixed, fix the economy first so there is money for it. History shows that pet projects basically always have to be financed from growth unless a country is forced to it (say got into a war).

Back to the subject matter itself. This is simply pushing economic activities out of Europe. By working as a direct costs increase and increase of red tape (which is an indirect cost increase).
Likely moving the polution from Europe to other countries which basically donot care. And rightly so from their pov. Rise of lifeexp. with say 10 years because of rising incomes offset against may be 2 years of increased polutionrelated deseases. Makes an easy choice. Effectively it is as easy as that.

With very little possibility to tackle it from the European side. Present legal framework (WTO/GATT cs) makes that effectively impossible.
Only way could be completely revising that. And that will not happen the Chinas simply will not agree on that. Plus it will take ages. Next to the fact that the present framework is biased towards the West. With the new rising powers that will unlikely hold.
Only way is starting effectively tradewars which always end badly especially for the ones that have most to lose (the West and especially its weakest part Europe).
It will not work. Which doesnot mean that there won't be a push and a strong one into that direction. In countries where 2/3 lives from paycheck to paycheck and where populism is allowed to rise by failed policies doning very short term things in this respect is a very strong force as long as it assures next months paycheck.

Rik said...

Your update already indicates how awful the reporting in general on this issue is.
This is a worldwide problem. The UKs contribution if it is 50% reduction is not more than a drop in (better out) a bucket.

You name an EM and I will show you a country that will ignore those rules.

So effectively (providing the calculation hold as that has been a bit dubious earlier) the issue is that there likely will be a problem. However likely smaller than asumed as:
a) it hard to see that these agencies understate the worldwide effect; and
b) probably economic growth is overestimated (didnot look it up but want to take a bet on that (with people who havenot looked it up as well btw).

Starting that there likely will be an enviromental problem anyway (if the stuff holds), what should you do about it.
See what is the best way to invest the funds available.
From the fact that the EMs will most likely simply ignore it. Probably higher dykes looks at first sight the best alternative.
Drowning in somebodyelse's rising sealevel sounds as bad is drowning in your own.

Anyway imho the UK could do with a little bit warmer weather. Global warming gave you pretty decenty British bubbles.
Anyway2 a changing Gulfstream doesnot mean it won't be a problem as I read in one UK newspaper.

Jesper said...

Again central planning fails to deal with local conditions.

That being said it is amazing that people still believe it is possible to get something for nothing. Improved energy-efficiency and the build-up of renewable energy producing capacity will cost money. Straw-man argument about it won't cost anything keeps being repeated.
Hopefully the investments will be profitable in the long-term.

Will investing in energy-efficiency and renewables be more or less profitable than:
-subsidising (more accurately encouraging) high cost of housing through subsidising credit?
-subsidising nuclear?
-the hidden subsidy of not charging for the environmental impact of the emmissions from burning fossil-fuels?
-building ghost-estates, ghost-towns, white elephants etc (like it has been done in Ireland, Spain)?
-building roads that are barely used?

Seriously, if investments in energy shouldn't be made but investments in something should be made, in what should investments be made?