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23 April 2013

What would Margaret Thatcher have done about climate change?

In the late 1980s, Margaret Thatcher became the first major leader to warn the world about global warming. It is claimed in some quarters that, had she remained in office, she would have changed her mind – perhaps on the principle that euro-scepticism and climate scepticism go together (but try telling that to Zac Goldsmith). 

Of course, when it comes to climate change policy there are many kinds of scepticism. For instance, there are those who flatly reject the mainstream scientific consensus on the issue and insist that its all a big misunderstanding/fraud/conspiracy (delete as appropriate). Then there’s a somewhat larger and less excitable group who broadly accept the science, but argue there’s nothing we can practically do to stop global warming, so we might as well learn to live with it.

But there’s a third option – to accept the case for action as well as the science, but not the same actions as those pursued by the European Union. Not one to deny reality nor shrink from the fight, one can imagine Margaret Thatcher following this course – or, rather, leading it.

What one can’t imagine, however, is the Lady keeping quiet about the counter-productive farce that is the EU’s policy on renewable energy. For instance, consider the following facts – as reported by the Economist:

  • “In its various forms, from sticks to pellets to sawdust, wood... accounts for about half of Europe’s renewable-energy consumption... After years in which European governments have boasted about their high-tech, low-carbon energy revolution, the main beneficiary seems to be the favoured fuel of pre-industrial societies.”

In an irony that Margaret Thatcher would not have enjoyed, coal-fired power stations are being adapted to harvest subsidies for wood burning:

  • “...power stations can be adapted to burn a mixture of 90% coal and 10% wood (called co-firing) with little new investment… Drax… one of Europe’s largest coal-fired power stations, said it would convert three of its six boilers to burn wood. When up and running in 2016 they will generate 12.5 terawatt hours of electricity a year. This energy will get a subsidy, called a renewable obligation certificate, worth £45 ($68) a megawatt hour (MWh), paid on top of the market price for electricity. At current prices, calculates Roland Vetter, the chief analyst at CF Partners, Europe’s largest carbon-trading firm, Drax could be getting £550m a year in subsidies for biomass after 2016—more than its 2012 pretax profit of £190m.”

Any serious climate change policy should be shutting down coal-fired power stations, not subsidising them. 

It’s not even as if burning wood (much of which now has to be imported, pushing up prices for the paper producers and furniture makers) reduces carbon emissions on any relevant timeframe: 

  • “Tim Searchinger of Princeton University calculates that if whole trees are used to produce energy, as they sometimes are, they increase carbon emissions compared with coal (the dirtiest fuel) by 79% over 20 years and 49% over 40 years; there is no carbon reduction until 100 years have passed, when the replacement trees have grown up. But as Tom Brookes of the European Climate Foundation points out, ‘we’re trying to cut carbon now; not in 100 years’ time.’”

Faced with this and other nonsenses, what would Maggie have done? Not nothing, but something different. Instead of the subsidies, the targets, the tradable permits and all the rest of it, she would have favoured something clear-cut and straightforward – for instance a carbon tax whose revenue could have been used to (a) reduce other taxes and (b) cut energy bills by carrying out basic energy efficiency improvements that are still left undone while the EU pays the coal industry to burn trees.


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