Such is the ongoing turmoil in the financial markets, that there has been relatively little attention paid to a potentially extremely important development at this week’s EU summit. High on the EU’s agenda is the subject of climate change and carbon reduction targets.
Just to recap – the EU has a target for cutting man-made CO2 emissions by 20% by 2020. The original base year was 1990, but this is to be revised to 2005. In comparison the UK Climate Change Bill, soon to achieve Royal Assent, has a target of cutting CO2 emissions by between 26% and 32% by 2020, compared with1990. The EU has two main policy weapons for attempting to achieve the targets: charging for the permits in the EU’s Emissions Trading Scheme (ETS) and a major switch to renewables, as outlined in the latest Renewables Directive.
The purpose of cutting carbon emissions is, of course, to reverse the “dangerous global warming” that, according to believers, is not just happening but will wreck the planet. The fact that global temperatures have not risen for the past decade and have, if anything, actually fallen in the past couple of years does not shake them from their unshakeable beliefs. Moreover, they claim, the main cause of “dangerous global warming” is man-made carbon emissions. Cut this dangerous “pollution”, then temperatures will fall and climate change will be “controlled”. Leaving aside the many, convincing challenges to the thesis that, firstly, man-made carbon emissions are the main cause of global warming and, secondly, the notion that by changing just one of the thousands of relevant variables (i.e. carbon emissions) the climate can be “controlled”, one should ask the question whether such a policy will be effective.
Of course, global warming, if it exists, calls for global solutions. But Britain is a bit player in this exercise, responsible for less than 2% of global emissions. And the notion that where we lead (with all its potentially horrendously expensive and damaging policies) all others will follow is laughable. China and India will certainly not follow and, when the chips are down, the USA probably will not either. And neither will many EU member states when it suits them and quite understandably so. Britain’s lead will be Britain’s folly. Global man-made carbon emissions will continue to rise.
Now the potentially important development at this week’s EU Summit is that eight eastern and central European member states have challenged the EU’s climate change policies. They wish to have the CO2 emissions targets revised in the light of “serious and financial uncertainties” and they refer to the “very high social and economic costs” of implementing these policies. But they are not alone in their doubts. It was recently reported in the “Financial Times” that the German government has decided to back an almost total exemption for industry from the worst aspects of the revised ETS scheme. Angela Merkel was quoted as saying that she “could not support the destruction of German jobs through an ill-advised climate policy”. If only a British government would say the same. Britain’s chemicals, cement and steel industries, to name but three, are likely to shrink, jobs will be lost and the balance of payments will deteriorate. Yet this has barely been discussed in this country. Does no-one care?
EU Commission President Barroso has warned that “climate change does not disappear because of a financial crisis” (indeed not, it’s getting cooler) and “tackling climate change is central to Europe’s future prosperity” (not according to Mrs Merkel apparently). But the truth is Mr Barroso and the rest of the Commission are well behind the curve. “Tacking climate change” may have been seen as a pleasant diversion and a jolly little conceit when economies were growing and prosperity increasing. But as economic prospects deteriorate and unemployment rises, the idea of “fighting climate change” with ever more onerous costs on businesses and consumers will increasingly be seen as a self-inflicted lunacy.
The mood is changing. Politicians please take note. And completely ineffective “climate change” policies will surely be one of the first casualties of the current financial crisis and the impending recession. They will be hijacked by economic reality.
