Number 10's criticism of DECC lacks credibility without new energy ideas

Ben Moxham's leaked analysis of the government's green policies has some merits, but it could do more harm than good

05 Sep 2011, 14:37

The immediate question posed by any political leak, beyond our curiosity-induced desire to know the identity of the anonymous source, is why has this information been surreptitiously released? Who benefits? What are they trying to gain?

This is certainly the case with the policy briefing document from David Cameron's energy advisor, Ben Moxham, which has conveniently found its way into the hands of Telegraph political editor Andrew Porter. The nature of the leak, and the trouble it appears to be trying to stir up ahead of conference season, is far more significant than the content of the document itself.

Moxham's criticism of DECC's claims that rising energy bills will be offset by energy-saving measures is neither new nor particularly insightful.

A broad church of critics has already questioned DECC's calculations and its prediction that an increase in average energy bills would be cancelled out by the adoption of domestic and corporate energy efficiency measures.

Anti-renewables and climate sceptic groups have ignored the prospect of energy efficiency savings altogether to claim green subsidies will lead to soaring energy bills, while even green NGOs have questioned whether the proposed Green Deal loan scheme can, in its current form, deliver the full-blown energy efficiency revolution required to help cut average energy bills.

Moxham's claims that DECC's analysis is "unconvincing" and average electricity, not energy, bills will rise by about 30 per cent by 2020 may anger some DECC civil servants, but he is not alone in his criticism.

Intriguingly, Whitehall sources have already made this point, telling the Guardian's Damian Carrington that when you remove the Telegraph's spin, Moxham's analysis is not that different from DECC's own figures, and noting that he also calls for further measures to promote the Green Deal scheme.

Of far greater concern to green businesses is the fact that what should have been a private conversation between a handful of senior aides about the need to improve energy efficiency schemes (according to the Telegraph the briefing note was only sent to 12 people at Number 10) has been leaked and deliberately spun as an attack on DECC and a signal that David Cameron is "very worried" about rising energy bills.

It is apparent that someone in Downing Street is keen to simultaneously destabilise Chris Huhne's low-carbon agenda and signal to the Tory faithful that the prime minister is not happy about green taxes. It is a case of crass political point scoring over one of the most significant challenges the UK faces.

More concerning still is the way Moxham's leaked briefing fits into a pattern of attacks on Huhne's green energy policy and, in particular, his electricity market reforms, all of which are big on criticism and low on credible alternatives.

As a matter of course, those who attack the government's plans to overhaul the energy market to drive investment in low-carbon technologies should be forced to answer two simple questions before their interventions are taken seriously.

The first is whether they accept the broad scientific consensus on the causes of climate change and the economic consensus that it is more cost effective to try to address climate change now than to wait and hope for the best. Many of the attacks on green taxes and rising energy bills that have surfaced in the media over the past few months originate from work done by groups such as the Global Warming Foundation, which are either openly sceptical or pretty indifferent to mankind's contribution to climate change. It is a free country and they are perfectly entitled to go about their scientifically illiterate work, but people have a right to know if those who believe the costs of low-carbon energy are too high also believe no climate change cost will arise if we continue to rely on hydrocarbons.

The second question is, what would you do instead? You can criticise DECC's low-carbon reforms, if you like, but that criticism lacks all credibility if you do not have an alternative plan, particularly when a large chunk of the UK's energy-generating capacity is due to be retired over the next 10 years and will need replacing one way or another.

Few would pretend DECC's plans are perfect, but they go a long way to tackling the looming energy crisis the UK faces and, if executed properly, should serve to curb greenhouse gas emissions, enhance energy security, create jobs, bridge the energy gap that will result in the second half of the decade if no action is taken, and reduce energy bills in the long term.

One of the strongest aspects of DECC's analysis of its proposed reforms is its projection of the way in which the changes it proposes become more and more cost effective the higher the cost of oil rises. The idea that green taxes will prove the primary driver of energy price hikes over the next decade is, quite frankly, ludicrous when you consider how reliant we still are on imported oil and gas.

Worryingly, Moxham and his colleagues in Number 10 do not appear to have a magic plan that will deliver the benefits of DECC's proposals at the same time as removing the inevitable cost risks associated with renewables.

More worrying still, he hints Downing Street should now pursue such a plan, asking "can we open some of our policies?" and suggesting the government look again at high-cost renewables such as offshore wind turbines "in a way that minimises cost and disruption to investment".

The leak from Number 10 may have appeased the anti-green Conservative base, but it will also send a shiver down the spine of low-carbon investors who, after years of uncertainty, have professed themselves broadly happy with DECC's proposals. The prospect of yet another review of green policies that many thought were close to being finalised will infuriate green investors of all stripes.

You could just about argue that the leak of this briefing paper makes for smart politics, but it also highlights a paucity of leadership and hints at the prospect of yet more u-turns and internal rows from a government that keeps getting matters of policy badly wrong.

The uncomfortable truth is there is no easy, low-cost, low-risk way to deliver low-carbon infrastructure. But if you accept the looming reality of climate change, then the kind of green policies being pursued by DECC are an order of magnitude more cost effective than the alternative presented by inaction. Party conference season or not, it is hugely irresponsible of anonymous sources within Number 10 to suggest otherwise, particularly when their boss has promised to head the "greenest government ever".

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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray

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