The UK has been one of the success stories regarding CO2 reductions. It has been able to half its emissions per person from its peak in 1973 of 12 tonnes of CO2 to 6 tonnes of CO2 now. Not many countries can match that.
Can we now eliminate the last six tonnes in the next ten years? Good question.
May I suggest to the prolific Tim Harford a new entry to his “100 things which changed the modern economy” series. The yellow vest, the symbol of protest which changed the French government plans to introduce higher charges on fuels. These charges were like a carbon tax. They are now dropped. A change of plan of at least 5 billion Euro extra taxes, which is not bad for a bit of yellow plastic worn by French protesters.
And this is exactly the reason why Richard Murphy is against it. A carbon tax is regressive, and would hit poorer people more than the rich. As it would have done in France.
Anyway, the reduction in CO2 we have seen will have been the result of regulation, which Richard Murphy also proposes, not further taxes on fuels.
No suggestion of a carbon tax from Paul Johnson, father of four (according to his twitter handle) and Head of the Institute of Fiscal Studies. He is also part of the UK’s Climate Change Commission, which is partly responsible for the elimination of CO2 which we have seen in the past. “We should be aiming to get to net 0 by 2050”, I slightly paraphrase his latest article for The Times, although “we do need to get a move on”. So we do need to get a move on, but if we are aiming for 2050, that is 30 years from now – what is it? Are we in a hurry or can we dawdle?
The problem is that 2050 might be too late, as Extinction Rebellion protesters and many scientists will confirm, although nobody can be sure.
I suspect Paul Johnson might concur, were he the father of four kids in Bangladesh, which will be hard hit by climate change, or the father of four polar bear cubs.
So, what would we have to do to eliminate 6 tonnes of CO2 each in Britain in the next ten years, just to set a good example for the rest of the world that it can be done?
Here is a six point plan:
Let us look first where we actually blow CO2 into the atmosphere, by person in the UK. This now includes CO2 emissions due to flying, which increases each person’s share by about 10% to 6.6 tonnes per year. All figures derived from the UK Digest of Energy Statistics.
First – The above table shows that to eliminate CO2 we need to decarbonise liquid fuels for flights and (mainly) road transport. And to do the same for natural gas used for mainly electricity production and heating. We will have to use carbon-free electricity instead.
Second – We do not use all of the CO2 personally. Only about half is used directly, the rest is used in commercial premises, factories or offices and will be used when we buy things or use services.
Third – How do we make sure that CO2 actually reduces? CO2 Certificates could be issued for free by the government to each citizen in the UK to allow them to either use them themselves or sell them to commerce, industry and government. (6,600 kg of CO2 in year 1, the following year 6,000 kg of CO2, then 5,400 kg, and so on.) These CO2 Certificates would work like loyalty cards, however, nobody would be able to buy fuels, gas or electricity without giving up some the CO2 Certificate credits. Each petrol station, electricity and gas provider, flight booking service would need payment in money and CO2 Certificate credits. So a return flight from London to Madrid might cost £200 and 600 CO2 Certificate credits (representing the 600 kg of CO2 used for the flight)
If trade/industry/government want to emit CO2 they have to buy CO2 Certificate credits from citizens, at a price determined by the government. The money will be paid into special accounts of these citizens which can subsequently only be used for investments in renewable energy.
So poor people, who might use less CO2, would be able to benefit, while rich frequent fliers with big hard-to-heat mansions would need to buy CO2 certificates from them, just as industry and commerce does.
Fourth – Road transport will need to be electrified, alternative synthetic fuels for flights or trucks will need to be developed, and each house or flat will need to be well insulated and subsequently heated by electric heat pumps.
Fifth – Heating by heat pump currently does not make any sense. If a heating boiler in the UK breaks down, there is a theoretical choice between investing in a new gas boiler (£2,000) or an electric heat pump (£10,000). The heat pump is less powerful and slightly more expensive to run than the gas boiler. That is where carbon tax can have a useful role to play.
The last column in the table above shows that per tonne-of-emitted-CO2 natural gas is the cheapest fuel, by far. To put one tonne of CO2 into the atmosphere with natural gas costs £165 at the cheapest retail prices. It costs 3 times as much to burn diesel or petrol, as natural gas is very lightly taxed.
However, to make heating with heat pumps more attractive, the higher cost of initial investment will have to be set off by lower running cost – similar to LED bulbs and electric cars now. It will therefore be useful if gas prices could be increased each year by a new gas carbon tax to make a heat pump investment more attractive. The same is true for jet fuel. There are no taxes on jet fuel, thereby making it cheaper to fly when it might be less polluting to take a train, even after air passenger duties. So let us tax jet fuel and natural gas and let us increase taxes slowly over ten years. (Higher gas heating costs of less well off people might have to be subsidised, before gas is substituted by heat pump electricity)
Sixth – Finally, huge investments will be necessary to pay for this. Probably about £1 trillion, about an investment of about 5% of GDP a year (£100bn) for each of the next ten years. Who pays for it? Ultimately it will be a mixture of industry/commerce/government who pay for certificates from citizens, the government through government borrowing, individuals and companies through their own savings and private borrowing.
Some of it are investments which would have to be made anyway, as cars, trucks and boilers are up for natural renewals.
Other investments are new in order to double electricity generation (to run heat pumps and transport), to research synthetic fuels, to insulate homes, to switch to expensive heat pumps.
Government subsidies will play a huge part, especially for low income families and to set off huge cost of heat pumps, making up perhaps 50% of the investment of £1 trillion in total.
In total the investments are estimated to be
insulating homes – £125bn
installing solar panels on each home – £135bn
subsidising 30 m electric cars £5k each – £150bn
new electric generating capacity – £150bn
cost of heat pumps £10k each – £270bn
other R&D costs, investments public
transport, synthetic fuel develpmt.,
factories for heat pumps, electric cars – $170bn
Total £1,000bn over 10 years
These six points are the plan in short. It will be expensive, although all of these numbers are guesses. It will take major planning and effort. And it can be done in 10 years, although is very, very ambitious.
However, an investment of £100bn a year is about 5% of GDP. In 2017 energy accounted for just under 3% of GDP. In 1982 it accounted for over 10% of GDP. (see page 19 of Digest of UK Energy Statistics)
So these investments are not completely out of line with historic costs for energy.
There is no question that it could be done. Or that it would be affordable. Which government would say that they cannot invest 5% of GDP per year to transform our country?
Is there any reason to delay? Would it be cheaper to do this decarbonisation of the UK over 30 years instead of 10 years? Exactly the same actions would have to be taken over 30 years as over 10 years. At exactly the same cost.
The only reason it would be slightly cheaper is because higher polluting assets (such as gas boilers, petrol cars, diesel trucks and kerosene planes) would be allowed to pollute for longer.
So anybody querying these figures should try to explain why it is not possible to invest 5% of GDP into renewable energy to allow for a CO2-free United Kingdom within a time frame of ten years.
Or, more importantly, perhaps the influential Paul Johnson (the one from the Climate Change Committee) can explain in detail to his four kids why he thinks 2050 instead of 2030 is a good target to aim for, when many scientists say otherwise. Everybody would be interested in his detailed answers. After all, “we do need to get a move on”.