David Merlin-Jones: The EU's flagship environmental policy is producing crime, corruption and profiteering

David Merlin-Jones is a Research Fellow in economics and energy at Civitas.

The EU’s flagship environmental policy is a disaster on a titanic scale. Not only is it adding to energy bills, aggravating fuel poverty and leading to international trade wars, it has also had no real environmental benefit and is unlikely to provide any until 2016, over ten years since its inception. Indeed, the only beneficiaries of the EU’s Emissions Trading System (EU ETS), the jewel in the crown of European climate change legislation, are big banks and businesses making windfall profits.

The EU ETS is a cap-and-trade scheme, meaning there is an upper limit to the emissions allowed in EU countries. This quantity is represented by transferable credits dished out to the ten thousand or so installations covered by the ETS across Europe, a mix of factories and power stations emitting the most CO2. Installations are given a set level for free and must buy extra credits if they emit more CO2 than their allowance permits, or they can sell their spare credits. The theory goes that, as the cap falls, the price of credits rises and companies are forced to invest in reducing their emissions. The scheme was set up in 2005 and is promised to run until at least 2020, with the cap getting increasingly tough from 2013.

David Merlin-Jones: A strategy for economic growth

David Merlin-Jones is a Research Fellow in economics and energy at Civitas.

The UK is still in an economic crisis, and Chancellor George Osborne’s Autumn Statement is therefore eagerly and nervously awaited by many. Mr Osborne must bear in mind that with the economic outlook appearing increasingly dismal, the time for ad-hoc policies has passed, and must be replaced by a long-term economic strategy if growing unemployment is to be stemmed and confidence buoyed. Without such a plan, Britain risks another recession.

Many might recoil in horror at the idea of having a long-term economic plan, which smacks of the failed policies of the 1960s & 70s, national champions and white elephants. That is not what is being advocated here. Instead, a modern plan must be centred on improving the business climate of the UK to make it attractive to investors, not granting hand-outs to businesses and certainly not propping up ‘lame ducks’. What it does require though is intervention in specific areas of the economy.

Any long-term plan for economic growth must centre on manufacturing, not for nostalgia’s sake, but for practical reasons. We have lost much industry over the past few decades, from manufacturing contributing 20% of GDP as recently as 1997 to just 11% now, and this means the rapid expansion of private sector employment hoped for by the Government is unlikely to happen. The only way to bring some of the UK’s record 2.6 million unemployed people into work, and permanently, is to concentrate on re-industrialisation. This means providing support for all forms of manufacturing, not just the high-tech sectors the Government has focused on so far which make up only 14% of British manufacturing. Indeed, it is high-value industry we need more of, which is often labelled derogatively as ‘metal-bashing’ as the products are unassuming, even if they are created by some of the most precise machines on the planet.

David Merlin-Jones: Chris Huhne's energy policy is unaffordable, and will fail to have much of an environmental impact

David Merlin-Jones is a Research Fellow in economics and energy at Civitas.

Chris Huhne’s ability to stretch the truth has reached new levels after his speech at the Lib Dem party conference. From 2004-9, Britain has experienced the worst energy bill increases throughout Europe: domestic electricity prices rose by 75%, and gas prices by 122%. Now, thanks to Huhne this is continuing, but he wants to pass the buck and hide his complicity in this scandal.

In his speech, the Energy Minister claimed he wants to "get tough with the big six energy companies to ensure that the consumer gets the best possible deal". He goes on to say "it’s simply not fair that big energy companies can push their prices up for the vast majority of consumers." The resulting question the British public should be asking, is why are they raising their bills so much? The answer, and the elephant in the conference hall, is Huhne’s green tax regime.

David Merlin-Jones: The Government's demands on carbon reduction are anti-industry and will drive business abroad

David Merlin-Jones is a Research Fellow at Civitas, where he specialises in economics, energy and industry and author of Chain Reactions: How the Chemical Industry Can Shrink Our Carbon Footprint.

‘We are sending a clear signal to the international community that the UK is committed to the low-carbon economy.’ So said Energy Secretary Chris Huhne when he announced the fourth carbon budget last month. The Government has been at pains to prove its green credentials ever since taking office, but has been doing so through measures that will raise the cost of energy, erode British industry, and undermine the low carbon economy they claim to value. With Huhne’s departure seemingly imminent, there has never been a better time for the Coalition to seriously reconsider its environmental wrecking ball.

Put simply, the demands of current green legislation ask for too great a reduction in emissions in too short a time frame. The UK is going much further than any other country, and has committed itself to reduce emissions on 1990 levels by 34% by 2020, 14% more than any other EU state. The fourth carbon budget will now legally bind a reduction of 50% by 2025, and again, no other country has set specific targets beyond 2020. The new carbon price floor will also make British companies pay more than the market rate for their EU emission credits. In total, costs for an average UK energy-intensive firm will soar from £3 million now to £17.5 million in 2020 - a rise companies in no other country face.

Huhne said that these unilateral decisions ‘give investors the certainty they need’. They do, but not in the way he intended – rather, they show investors the UK is anti-industry and not a good place to invest. This is because the energy price rises designed to curb usage, and consequently greenhouse gas emissions, will price many companies out of the UK.