Climate Chancellor worries insurers
The TUC and 100 businesses, insurance, environment and faith groups are urging the Government to back the so-called “4th Carbon Budget” – see above – recommended by the Independent Committee on Climate Change . Despite government scepticism, the committee says there “no basis” to change its budget for the period to 2027. The five-year budgets provide a managed step down in our carbon emissions from power supply, home insulation, industry and road transport. The table show that by the budget period 2023-2027 the UK emits 2 billion tonnes of CO2, or about 500 million tonnes a year.
The insurance industry fears “a worrying lack of understanding in the Treasury and Number 10 of the impact that long-term mega trends like climate change and resource security can have on the UK’s growth and financial stability. With good reason. Meeting the carbon budgets requires long term and therefore cross-Party political support and market interventions across the economy. However, the consensus that created the 2008 Climate Change Act is in disarray. Last week, the Chancellor committed the UK to shale gas, nuclear, and offshore wind; while onshore wind and home insulation will be scaled back. The Autumn Statement referred to “reliable, affordable energy supplies” – omitting “low carbon”, the supposed third leg of energy policy.
The CCC says: “There is no legal or economic case to loosen the budget.”
The budget provides insurance against risks of dangerous climate change and rising energy bills. It offers significant cost savings relative to a path where action to reduce emissions is delayed until the 2030s … the saving could be over £100 billion under central assumptions about fossil fuel and carbon prices, allowing for expected impacts of shale gas. In a world of high fossil fuel prices, the benefit could be as high as £200 billion. Even with low fossil fuel or carbon prices, the budget would offer a cost saving compared to an alternative path where action to reduce emissions is delayed.
It reminds us what this advice is about:
Our advice reflects a climate objective: to limit central estimates of 21st Century global temperature rise to as close to 2°C above pre-industrial levels as possible, and to keep the probability of an extremely dangerous 4°C rise at very low levels.
Certainly, the TUC and our affiliates in the UK energy-intensive industries are not convinced that enough government support is available to help these industries in the transition to low carbon manufacturing. According to the CCC, the sectors account for around 2% of GDP, 2% of employment (600,000 jobs), and are particularly important in some local contexts e.g. in Wales energy-intensive industries account for 7% of GVA and 4% of employment, with a concentration of industry around Port Talbot. One-sixth of the UK’s chemical industry is located in Scotland.
Meanwhile, The Times managed to lead this story with UK carbon emission targets ‘may have to be jettisoned’ , quoting the committee’s chair, Lord Deben, nicely out of context. Lord Deben said: “There is no point in you doing your bit for climate change if no one else is doing it.” Which is obviously true, and even more clearly not what he believes to be the sane way forward.