Green policy takes two steps forward, one step back

25 Jul 2014

Nick Clegg and Ed Davey

It has been a disorientating week for the green economy as good news and bad news has wrestled for supremacy in a confusing battle that has left observers simultaneously delighted and despairing. It is a bit like watching a Commonwealth Games judo bout without knowing any of the rules, only to find that said rules can change every 30 seconds, and that the eventual prize could be either a gold medal or a criminal conviction. Suffice to say, people are feeling confused.

Let's start with the good news. The week started with confirmation the UK's fourth carbon budget would be retained in its current form, bringing to an end uncertainty over the future of the target and reasserting the political classes' support for the long term decarbonisation of the UK economy. This was followed by proposals from the European Commission for a new energy efficiency target, which may have fallen short of the level of ambition green groups wanted but did provide further reassurance the EU remains committed to climate action. The triumvirate of encouraging green policy announcements was completed when the UK set out its new strategy for tackling fuel poverty and enhancing energy efficiency post-2020, outlining plans for new legal targets and minimum building standards to address the issue.

Each of these policies may have their detractors and all could be more ambitious, but they offer green businesses and investors yet more evidence that decarbonisation policies are set to continue post-2020.

Meanwhile, there was yet another poll indicating that the public is overwhelmingly in favour of clean energy deployment and the now familiar march of positive stories detailing how clean technologies are fast maturing and big businesses are embracing more sustainable operating models. Particular highlights this week included Frost and Sullivan's confident predictions solar revenues will double by 2020 to $137bn, Sainsbury's innovative £200m green loan and its ambitious clean tech roll out, and Mars' revelation it is planning a global renewable energy investment drive of a similar order of magnitude to IKEA's €1bn commitment.

So everything is looking up, right? Having finalised emissions targets for the mid-2020s and processed the Committee on Climate Change's warnings that the country is not on track to meet those targets Ministers have surely begun work on beefing up the UK's low carbon ambition? Well, not exactly. Instead, in a disorderly flurry of announcements designed to clear the decks before the summer recess the government has revealed that policies covering everything from energy efficiency to clean energy investment and resource security to nuclear waste disposal are, if not in disarray exactly, then looking extremely frayed around the edges.

Take the confirmation this week from DECC that £205m will be made available each year to support the new contracts for difference (CfD) clean energy subsidy regime. This should have been a welcome clarification of how the primary mechanism for ensuring the UK meets its renewable energy and decarbonisation targets through to 2020 and beyond will operate. Instead it has left virtually the entire renewables industry wondering whether there is enough money to go round and whether Ministers are being entirely serious when they say they want to deliver decarbonisation at the lowest cost.

As the Telegraph reported, the decision to earmark £155m for immature technologies such as offshore wind means the government is likely to be able to confirm support for just one of the five offshore wind farms in the pipeline this year. Meanwhile, the decision to assign just £50m for contracts that will be auctioned to onshore wind, solar, and other mature clean technologies places serious constraints on these sectors, despite the fact they can deliver clean energy at a much lower cost than the offshore wind projects the government evidently favours. Add in the continuing uncertainty over the future of the UK's long-awaited "nuclear renaissance" - underlined this week by the relaunch of the previously thwarted attempt to identify a location for a nuclear waste facility - and the promise of policy certainty that accompanied the passage of the Energy Act looks as illusory as ever.

Of course, there are still encouraging signs that clean energy investment has increased substantially in recent years and it remains vital that the government retains tight control over the subsidy pot for fear of a backlash over the impact on energy bills. And yet, the whole electricity market reform programme is looking increasingly confused. If cost and decarbonisation are the top two priorities, why are the lowest cost renewables getting a smaller slice of the subsidy pot, and why have we not seen more rapid progress on carbon pricing and subsidy auctions, both of which will help cut costs? If cementing the UK's position as a leader in offshore wind is also a priority, why are there not sufficient funds to deliver the projects in the pipeline in a timely manner? If phasing out unabated coal represents the most effective means of cutting carbon, why is the government ignoring the loopholes that will allow coal power to continue well into the 2020s and why is it raising the prospect of subsidies for the industry through its new capacity mechanism? If the cash really isn't available to deliver the next wave of big clean energy projects, why spend years talking up the need for these projects and encouraging businesses to invest in their development? These questions urgently need answering, if the electricity market reform strategy is to ever deliver on its promise.

All of which brings us to another crucial question: if investing in new energy capacity, be it high or low carbon, is so expensive, why is there not much more focus on cost effective energy efficiency improvements?

The government's energy efficiency strategy has been a conveyor belt of crises in recent years as constant policy changes have led to a slump in insulation rates and thousands of lost jobs. And this week brought a series of further blows to the punch-drunk energy efficiency sector as the government first trumpeted the success of its latest Green Deal incentives, only to close the fund three days later after receiving £70m worth of applications for the crazily generous grants in less than a week. As one industry source complained to me this morning, the whole thing "smacks of amatuer hour" and it is hardly suprising Labour wants the Public Accounts Committee to investigate. Add in the on-going scandal, confirmed this week, that is the Big Six's pocketing of a windfall from the changes to the ECO scheme, and the fact that the promising new energy efficiency targets for the 2020s are fatally undermined by proposed legislation that only requires ministers to deliver improvements that are "reasonably practicable" and you can understand why efficiency firms are today oscillating between anger and despair.

It always feels a little uncomfortable criticising Ministers and policies that are clearly well-intentioned, but the chopping and changing of energy efficiency schemes and incentives and the see-sawing between restrictively tight cost controls and staggering largesse with taxpayers' money is little short of incompetent. This is no way to build an industry. It is no way to tackle fuel poverty. And it is no way to deliver emissions savings. The most cost effective means of decarbonisation is being hampered at every turn by policy confusion and cravenly short term political expedience - jobs and livelihoods are being lost as a result.

Although, at least Ministers seem interested in improving the UK's energy efficiency, however flawed the policies they have enacted. As MPs concluded this week, more than four years into the parliament and the government's resource security and waste strategy still "lacks ambition and leadership", resulting in a "throwaway society" that leaves remarkably accessible economic and environmental gains unrealised. Owen Paterson's controversial handling of the floods and badger culls, coupled with his combustible temperament, may have lost him his job, but virtually anyone you speak to in the waste industry could have told you his disregard for resource policy was arguably the biggest failing of his time in office.

The simple fact is that while the setting of climate change targets and carbon budgets is hugely welcome, it is also the easy part. If they are to be delivered you need a bold, ambitious, co-ordinated, and competent effort from government and businesses. You can't set an emissions target and then deny the economy the policies it needs to meet the target. You can't talk up the importance of cost-effective decarbonisation and then threaten to block onshore wind farms and deliver a policy train wreck for the solar and energy efficiency projects that deliver low cost carbon savings. You can't tout the merits of not "picking winners" and then attempt to do precisely that in almost every aspect of energy policy. And most of all you can't identify climate change as an existential threat and then fail to deliver a co-ordinated response that is commensurate to the challenge.

I remain of the view that the coalition has delivered more progress on the green economy than it is given credit for, not least in the form of the continued growth of the sector and the huge surge in clean energy investment. Moreover, there are undoubtedly aspects of the government's green policy landscape that have proven highly effective. But as the government moves into its final year the past week demonstrates how several of the coalition's green gains are in serious danger of unravelling.

For green businesses the only response is to keep on keeping on. Growing numbers of mainstream businesses, like Mars and Sainsbury's and many others, realise decarbonisation and climate resilience make sense regardless of the policy landscape. Virtually every clean tech firm understands that the policy environment becomes a million times easier if they can continue to deliver the cost reductions that increasingly allow clean technologies to compete with high carbon alternatives on cost. Every policy change and funding cut of the past few years has prompted understandable howls of protests from those affected, but for the most part green businesses and have survived and are continuing to innovate and grow. The latest round of policy setbacks will not derail the green economy, it is far too established for that.

And yet it is also about time that Ministers realised once and for all that decarbonisation and the huge benefits that come with it would be much simpler to achieve if they genuinely prioritised green policies, genuinely prioritised the most cost effective means of cutting carbon, and genuinely prioritised policy stability. If the government really wants to be remembered as the greenest ever it needs to end the boom and bust cycle and bring an end to the two steps forward, one step back approach that defines the UK's decarbonisation journey. Politics is ultimately about choices. Having chosen to the set an ambitious carbon target for the 2020s it is time the government chose to deliver on it.

Kudos to Cameron for his carbon-cutting clarity

22 Jul 2014

Chimney emitting pollution at Conesville power plant

The government's decision to retain the fourth carbon budget in its current form is a hugely welcome development from a commercial, investment, and political perspective. For businesses the confirmation the UK aims to halve emissions against 1990 levels by 2025 provides much needed policy certainty, for investors it confirms once again there will be significant demand for green infrastructure post 2020, and for Westminster it underlines that for all the noises off in the right wing press the green wing of the coalition is alive and well.

David Cameron deserves the plaudits for rubber-stamping a decision that, as the Committee on Climate Change (CCC) has demonstrated, is both economically and scientifically rational. Equally, Ed Davey and his allies deserve huge credit for standing up to Chancellor George Osborne and his scaremongering over the potential impact of the carbon budget on competitiveness. In short, this is a good day for the green economy and a far more significant boost to low carbon investment than the sacking of a single climate sceptic cabinet minister.

Businesses and investors now know with even greater certainty that the next government will be legally obliged to deliver steep emissions reductions beyond 2020. Of course, the over-arching Climate Change Act meant they already knew this, but the clarity provided by a solid medium term target provides further assurance that the green policies required to deliver these emission reductions will continue. These policies will inevitably face reforms over time, but the likelihood is that clean energy subsidies, energy efficiency programmes, clean tech research and development, carbon pricing initiatives, and resource efficiency efforts will all have to now continue into the 2020s. Moreover, with the CCC announcing just last week that the UK is no longer on track to meet its fourth carbon budget the reality is that these various policies will have to become more, not less, ambitious.

The direction of travel has never been clearer. Entrepreneurs, executives and investors have all been warned - the opportunities presented by the green economy and the risks faced by high carbon projects have never been more explicit.

Of course, the newly approved carbon budget still comes with a number of important challenges and caveats attached.

Osborne may have lost the argument about the potential impact of the UK's carbon budget on competitiveness for now, but should the EU fail to agree a sufficiently ambitious emissions target for 2030 or the international community fail to deliver some form of agreement in Paris next year the debate about the merits of a unilateral target would quite rightly be revisited. The UK's current post-2020 target is broadly in line with what its obligations would be under the kind of climate package being discussed in Brussels for 2030, but should those negotiations falter questions pressure for the UK's target to be watered down would inevitably resurface. The current indications from both the EU and UN suggest there is renewed confidence ambitious new agreements can be reached, but businesses need to be aware that this, albeit modest, risk remains.

Similarly, political risks remain in the form of the mounting hostility to environmental policy emanating from the Conservative backbenches. Green groups would be wise not to gloat too much over Osborne's "defeat" on this issue, given the importance of having all three of the main parties committed to retaining the fourth carbon budget following next year's election. It is noticeable that David Cameron having signed off on retaining the current target has not yet commented publicly on the decision (any MPs who care about green issues should try and pin him down on his precise position on this at PMQs as soon as possible). The risk remains that Lynton Crosby was willing to let the Liberal Democrats take the credit for the ambitious target in order to help establish it as another wedge issue within the coalition that the Tories could kick against in the election campaign. He was happy to throw environmental issues under the bus in Australia in the hope that it would mobilise his base and there is little doubt he'd be willing to do it again if given the opportunity.

Personally, I'd wager that a Conservative Party led by Cameron would find it extremely difficult to go back on this decision. Any Tory victory next year followed by a post-election attempt to water down the target just months after it was finalised would torch the Prime Minister's credibility, prompt a civil war between modernisers and climate sceptics on the backbenches, and face howls of protest from business groups and a legal challenge. However, should Owen Paterson and co end up holding the whip hand in a Conservative government with a vanishingly thin majority, then all bets are off.

Of more immediate relevance are the challenges presented by rubber-stamping the fourth carbon budget. As mentioned the Committee on Climate Change (CCC) warned only last week that the UK is off-track in its efforts to meet the target and as such urgent action is needed to deliver deeper emissions cuts. The coalition now has an obligation to maintain progress through the final months of the parliament and all of the main political parties have a responsibility to set out in their manifestos how they will meet a target, which by the time of the election will be less than a decade away. Specifically, more progress is urgently needed on energy efficiency, carbon capture and storage, nuclear, and renewables.

Again, the challenge is particularly acute for a Conservative Party which is currently refusing to support a decarbonisation target for the power sector that the CCC says represents the most cost effective means of meeting post-2020 emissions targets and has indicated it will oppose new onshore wind farm developments after the election without providing sufficient detail on how it will plug the clean energy gap that will result. Cameron still needs to deliver an alternative decarbonisation strategy.

However, all the current evidence suggests the fourth carbon budget is now here to stay and that the challenges it presents are far from being insurmountable. Consequently, business leaders need to assess the policy clarity provided by Davey and Cameron and factor in the implications it presents for their business and investment plans.

This decision means that in little more than a decade the UK will be one of the world's leading green economies, powered by a significant and rising proportion of clean energy, transported by hundreds of thousands, if not millions, of electric and low carbon vehicles, and dominated by cutting-edge and energy efficient clean technologies. It is here that the opportunities lie and while not every business investing in these areas will succeed, those that do will know that this emerging green economy is being driven not just by inspiring technology and growing public demand, but also an increasingly ambitious and clear cut policy landscape.

If Paterson's 'green blob' exists it is a lot bigger than he thinks

21 Jul 2014

Department for Environment Food and Rural Affairs

If you look really hard for it you can just about detect the political nous in Owen Paterson's intemperate and inaccurate attack on the environmental community, or "green blob" as he prefers to style it.

As Michael Gove understood before him, if you characterise all your critics as an indeterminate mass you damn those with legitimate and well-intentioned concerns by association with those partisan voices who invariably look a little unhinged when aiming hyperbolic criticism at cabinet ministers. So by eliding all of those who have concerns about fracking and climate change, with those who oppose GM crops, badger culls and questionable pesticides, and then further associating all of them with the disgraceful and pathetic individuals who allegedly sent him death threats Paterson seeks to dismiss all his critics as being in cahoots with the most deluded eco-anarchist.

The problem is that in making the "green blob" appear so ridiculous and all-encompassing Paterson only serves to drown his handful of legitimate points in a sea of his own evidence-lite vitriol.

As I've argued previously, Paterson faced some attacks from environmentalists that crossed the line between legitimate criticism and tactless gloating. Equally, he made some encouraging progress on fisheries policy and contributed to an entirely valid debate about GM crops, food security, and even fracking, where there are credible arguments to be made on both sides. His critique of some of the worst excesses of the green NGO community may even have some merit, had it been backed up by solid evidence rather than cheap insults.

But Paterson's Sunday Telegraph broadside quickly loses its weight as he over-reaches himself on almost every front. He accuses Greenpeace of burning him in effigy, despite the fact this never happened. He lambasts environmental NGOs for taking €150m from the EU, but as the Guardian's Damian Carrington points out today he fails to mention most of this money is used to support specific development projects and that it is all publicly declared, unlike the sums given to Paterson's new friends at the Global Warming Policy Foundation. And he suggests that "a powerful self-serving caucus" has undue influence on UK environmental policy, as if all those people who apparently went into environmental campaigning to get rich have somehow managed to build a green nirvana without anyone noticing. Believe me, if there really was a "green blob" pulling the strings in Whitehall the UK would not still be in breach of air quality rules, fuel duty and air passenger duty would not have been frozen for years, and the government would not have cut funding for energy-efficiency programmes and slashed support for renewables.

Worst of all, though, Paterson's description of the "green blob" as an entity so big that it takes in anyone who supports wind farms, questions whether shale gas will deliver "affordable" energy, or reckons climate impacts and extreme flooding could be related, results in a constituency so large that it becomes impossible to accept the "blob" can really be dismissed as a "tangled triangle of unelected busybodies".

In reality, Paterson is raging against not just the usual suspects in the green NGO community, but also against the world's leading science academies; the myriad of multinational businesses that fear climate impacts and are investing in clean technologies; the insurance industry that reckons climate change could make it unviable; the institutional investors who warn fracking could result in stranded assets; the vast majority of his parliamentary colleagues, including many in his own party, who accept more ambitious environmental policies are essential; the National Farmers' Union (NFU), which may have supported some of Paterson's reforms, but has also consistently voiced concerns about climate impacts; and the vast majority of the public who favour clean energy over fossil fuels. Oh, and given the contradiction between his protests against "heavily subsidised" renewables and his position within a government that recently passed an Energy Act to subsidise clean energy, he is also raging against himself.

When Paterson says he was ridiculed for trying to "shatter the crippling orthodoxy that growing the rural economy and improving the environment are mutually exclusive", he conveniently ignores the fact that while some within the environmental movement continue to push an anti-growth agenda, many, including those notorious hippies at the CBI, are now utterly convinced that sustainable "green growth" is possible. If he had accepted a few more of those meeting requests from green groups he would have known all of this.

The problem – as always with the increasingly frequent attacks on green thinking from the right of the Conservative Party – is how to respond.

Unfortunately, the inevitably angry reaction from green groups only serves to reinforce the perception among some Conservatives that "Big Green" has become an excessively powerful bullying force. Consequently, the temptation is there for environmentalists to simply ignore Paterson's ravings and get on with their work safe in the knowledge that the green economy is continuing to expand and public support for green policies and clean technologies remains rock solid.

However, Paterson's name-checking of Australia's Tony Abbott and Canada's Stephen Harper, not to mention his transparent desire to set himself up as a hero of the Conservative right, serves as a useful reminder of the damage that can be wreaked to the environment and the green economy when mainstream political parties are commandeered by a climate-sceptic insurgency.

The allegation that environmental policy is dominated by a "green blob" that includes the green business community demands a response, and it is better led by business groups, politicians, and academics, than by the green NGOs who are the primary target of Paterson's ire. There is no such thing as a "green blob", but there are numerous shades of environmentalists and green businesses, many of whom vehemently disagree on specific issues, who are nevertheless united by an urgent desire to curb greenhouse gas emissions and develop a more resource efficient and environmentally sustainable economic model. Within this wide-ranging and loose alliance are business leaders and politicians who when asked directly about Paterson's management of climate risk and resource issues would ruefully shake their head and privately question both his competence and judgment. Considering the Prime Minister's decision to dispense with his services, David Cameron may even count himself as one of them.

These critics will be understandably reluctant to join the increasingly intemperate slanging match between Paterson and the green NGOs, but it is critical they use whatever political capital they have to impress upon those considering joining the former Environment Secretary's war on the "green blob" that targeting such an indeterminate mass will only serve to damage a British business community that is hugely concerned about climate, resource and energy security.

Paterson's assessment of the dangers posed by the green community is about as accurate as his allegation that he was burnt in effigy by Greenpeace. Mainstream politicians and businesses should let it be known that the former Environment Secretary's occasionally legitimate concerns in no way justify his blinkered obsession with a "green blob" that doesn't really exist.

A tale of two Tories

15 Jul 2014

owen-paterson-update

What are the implications of the government's dramatic reshuffle for the green economy? The truth is that this is a reshuffle that is thus-far defying attempts to impose upon it a clear narrative - beyond Number 10's heavily spun suggestion that it is replacing middle aged white men with more women - and this appears to be particularly true for environmental and climate change policy.

The environmentalists' bogeyman Owen Paterson may have been sacked in reportedly intemperate circumstances, but his ministerial antithesis, climate change champion Greg Barker, is also stepping down. The incoming team with responsibility for environmental issues - Liz Truss at Defra, Matthew Hancock and Amber Rudd at DECC - are all on record as supporting action to tackle climate change, which represents a distinct improvement on Paterson. But equally none of them has a track record of campaigning on environmental issues and, in the case of Hancock in particular, their support for clean technology and renewable energy has been decidedly mixed.

Only time will tell how these Ministers respond to the challenges and opportunities presented by the green economy, and the reality is that with less than a year to the next election they do not have long to deliver much of an impact in either way. But there is a risk these changes could end up as a further blow to the increasingly battered green wing of the Conservative Party - they certainly don't signal that David Cameron is preparing to make ‘Vote Blue, go green' a central plank of his election strategy for a second time. The confusion that increasingly characterises the Conservative Party's approach to climate change - an issue that the Prime Minister still apparently regards as one of the biggest threats faced by the UK - is more evident than ever.

This confusion is particularly apparent in the contrasting fates and conflicting records of the two high profile green departures from the government, Paterson and Barker.

Paterson's sacking is undoubtedly good news for the green economy. Some of the criticism of the outgoing Environment Secretary has been unfair, and his willingness to defend the Environment Agency during last winter's floods and his delivery of Fisheries Policy reforms deserves some credit. But his dismissive attitude to climate change risks, mishandling of the badger cull, and staggeringly slow progress on water and waste policy mean there will be few green business executives who will miss Paterson. He liked to position himself as pro-business and he certainly won friends in the agri-business lobby, but I have lost count of the number of senior executives I've spoken to who despaired of Paterson's simplistically dismissive attitude to environmental regulation, the green economy, and climate change science.

Ultimately though, I doubt it was Paterson's climate change scepticism that lost him his job, as much as questions over his day-to-day performance. Plenty of commentators in the right wing media have bemoaned his departure from Defra, but few could point to any major achievements beyond his status as a Eurosceptic standard bearer. I was once informed by a reliable source that when he was appointed to the role Paterson was instructed by the Prime Minister to serve as a safe pair of hands and make sure nothing went wrong with the badger cull or Defra's challenging cuts programme. The badger's memorable "moving of the goalposts" and the scandal of cutting flood management budgets as parts of England were submerged soon put paid to those twin goals. Add in an approach to media appearances that always felt as if interviews could end up becoming somewhat combustible and it is easy to see how Cameron would have asked himself, 'will giving Paterson a prominent role help me win the next election?' and answered firmly in the negative.

In contrast, Greg Barker has received numerous plaudits from green campaigners and business leaders since it was confirmed last night that he was to step down. As with Paterson there is a case for a more balanced assessment of his record, particularly given the continued travails faced by the Green Deal scheme and the fact the government is now on the hook for a £132m compensation claim relating to unlawful changes to the feed-in tariff incentive. And yet, Barker's unrelenting optimism and fierce support for a green economic transition which he understands is both essential and entirely compatible with Conservatism won him deserved praise from across the business and NGO community. He was willing to make the case for ambitious action on climate change and highlight the merits of the green economy at a time when several of his colleagues were expressing barely concealed hostility towards both concepts. His resignation letter features a list of green achievements, from the introduction of the Green Investment Bank to the world's first Renewable Heat Incentive, that Barker can be rightly proud of.

Significantly, Barker remains good friends with the Prime Minister and it is to be hoped that he will fulfill his pledge to now work with Number 10 on the "formulation of an exciting and ambitious set of green policies to take to take to the country at the next General Election". And yet, this reshuffle feels like it could prove to be, if not the end of an era, then a late staging post on the road towards the end of the once ambitiously green, localist, Big Society Cameroonian vision.

It is too early to judge the new Conservative environment and energy ministers, but it is clear that if there are no natural successors to Paterson, there are no natural successors to Barker either - a fact only underlined by the bizarre decision to appoint Rudd as Parliamentary Under Secretary of State for Climate Change, rather than Minister for Climate Change, an admittedly minor change that still feels like a downgrading of climate change on the list of government priorities. Equally, the culling of moderates such as Ken Clarke, David Willetts, and - worst of all for the balance of climate warriors in cabinet - William Hague, suggests Lynton Crosby has called time on the modernisation project once and for all.

Truss, Hancock, and Rudd may yet earn their reputations for pragmatism by looking dispassionately at the climate risks the UK faces and concluding more ambitious action on decarbonisation is required. But it is notable so few of the new wave of Conservative up-and-comers have lobbied for a bolder position on climate change and green business issues in the way that Barker once did. As prospective London Mayoral candidate Michael Liebreich has demonstrated it is possible to be a radical Conservative voice while recognising the necessity and attractiveness of decarbonisation. It is surprising more of the 2010 in-take have not attempted to emulate his thinking. 

Of course, the erstwhile driving force behind green Conservatism remains in Number 10 and as such I suspect the Party's manifesto will find a way to incorporate a number of positive environmental policies, not least because the complete ditching of the environmental agenda would leave Cameron open to justified accusations of hypocrisy. But at the same time, George Osborne and Lynton Crosby's influence over the party is more pronounced than ever, bringing with it at best a desire to push environmental issues down the political agenda and at worst a suspicion of the green economy.

Consequently, the battle between the green Conservatism embodied by Barker and the climate reckless, short termism defined by Paterson shows few signs of being resolved any time soon. If the departure of Paterson represents a victory for the Tory modernisers (and for all the Eurosceptic backbenchers lamenting his departure there are a fair few of his colleagues who will be absolutely delighted at his ignominious exit from government), the ongoing failure of the Prime Minister to publicly encourage the soon to be depleted green wing of his Party is a serious cause for concern. This encouragement is needed now more than ever, given that today saw the government's own independent advisers warn the UK is slipping off course in its attempts to decarbonise in the most cost-effective manner possible.

I hope I'm proved wrong, but until the Conservative Party leadership resolves some of its serious internal tensions over climate and environment issues it is hard to see how any reshuffle could deliver the more ambitious decarbonisation policies the green economy so urgently needs. The once clear narrative on green Conservatism is being squandered and it is ultimately up to the Prime Minister to restore it.

Tony Abbott: Not very repealing

11 Jul 2014

Australian prime minister Tony Abbott

There is much wry amusement in environmental circles today, after Tony Abbott, Australia's climate-reckless Prime Minister, saw his plans to repeal the country's carbon tax blocked by the Senate. Any sense of schadenfreude (I know it's an unappealing trait, but sometimes it's very hard to resist) was only amplified when it emerged that the Australian edition of The Spectator had already gone to press with a cover splash celebrating Abbott's "victory" and a borderline onanistic editorial congratulating itself over its role in bringing an end to "global warming alarmism".

Writing as a journalist who has often experienced the surging fear that a story written in preparation of an announcement may have been mistakenly published it is hard not to have a modicum of sympathy for the team at The Spectator – leaving aside, of course, the fact that this is a publication that routinely treats the biggest environmental crisis the world faces with all the maturity and sophistication of the sixth form common room that so many of its columnists seem to wish they had never left. Most journalists will read The Spectator's premature plea to "allow us a little gloating" and think there but for the grace of God go I.

But if the embarrassing timing of The Spectator's publication – not to mention the amusingly hyperbolic self-revelation of its core mission as being to stand "athwart history, yelling stop" – is ultimately of little consequence, the remarkably misguided analysis that has attached itself to Abbott's laughably cack-handed attempts to repeal Australia's carbon tax does matter.

Unfortunately, the likelihood remains that Abbott will eventually find a way to appease the Palmer United Party after it blocked the repeal legislation at the 11th hour. Commentators are predicting Abbott will secure his delayed victory in the coming weeks. But the latest developments contain two important lessons for both policy makers and business leaders around the world.

The first is that if it is difficult to pass environmental legislation, it is even harder to repeal it. It has taken Abbott no end of horse-trading and a huge amount of political capital to get even this far and all he is trying to do is to repeal a relatively modest tax that will deal a major blow to Australia's green economy, but will have a negligible impact on wider energy costs and competitiveness. And this is in a country with a hugely powerful right wing political and media elite and arguably the most well-established climate-sceptic network in the world.

In other countries repealing environmental legislation is even harder. Outside of the Anglosphere polls have shown that climate scepticism has next to no sway, either with the public or in the corridors of power. Meanwhile, in the US, President Obama's climate strategy is based on a Supreme Court ruling that requires the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions. Even if the GOP retake the White House, which is a big if given recent polling and demographic trends, the chances of overturning the Supreme Court ruling and rolling back climate legislation is slim.

In the UK, The Spectator and its allies in the right wing press may be doing everything in their power to serve as the media wing of the Conservative right in an attempt to deliver a government that would be more hostile to green policies. But if there is little doubt environmental policies will change following next year's election, it remains almost impossible to see how a majority can be secured in Parliament for the repealing of the Climate Change Act. And even if some green policies are watered down, the fact remains that if the UK stays in the EU and if it wants to play a proactive role in UN climate negotiations then the general direction of travel in favour of decarbonisation will continue.

Secondly, even if Abbott manages to repeal the carbon tax, the Australian government's opposition to ambitious climate policy remains an almost lone international anomaly. The Spectator's assertion that "Mr Abbott reflects the growing consensus on the futility of carbon pricing" is as mistaken as its early declaration of victory is embarrassing.

The are some powerful politicians around the world who oppose bolder action on climate change, but it is notable that when Abbott recently teamed up with Canadian premier Stephen Harper to call for right wing governments to unite in pursuit of a "climate realist" approach they were met with a stony silence. In the meantime, Obama got on with unveiling the latest phase of his climate strategy, US Secretary of State John Kerry continued with his now frequent meetings with his Chinese counterparts to discuss bolder climate change policies, India's newly elected Narendra Modi underlined his commitment to clean energy, the Chinese government continued with its carbon pricing trials, and the EU stepped up efforts to deliver a post-2020 climate strategy. If there is a "growing consensus on the futility of carbon pricing" it has grown from virtually non-existent to tiny, and it does not include the world's three biggest emitters: the US, China, and the EU.

As the GLOBE network of legislators chaired by the UK's Lord Deben – bizarrely dismissed by The Spectator as "thermomaniac climate-change Cassandra from England" – 64 of the world's 66 largest economies are making progress on climate and clean energy legislation. In recent years almost 500 climate laws have been passed around the world; that is the true context in which the still as yet unrepealed Australian carbon tax sits. 

Moreover, confidence is mounting that a new international agreement to tackle emissions can be delivered next year by both the UN and the World Trade Organisation. The Spectator declares that "prospects for a binding and enforceable global post-Kyoto deal in Paris next year are about as likely as England winning the soccer World Cup in 2018". Well, England may deserve to be long shots for the World Cup (albeit they represent just as good a bet as Australia), but there are plenty of serious observers who think the odds on a more ambitious climate agreement are shortening. Any deal is unlikely to go far enough, but a dispassionate assessment tells you that the chances of encouraging progress are looking better than they have done in years.

Abbott's war on climate policies is undoubtedly a blow to Australia's green economy and international efforts to tackle climate change. But its impact should not be overstated. Business leaders and investors need to be aware that the general direction of both global climate legislation and technology development remains broadly in favour of decarbonisation. There is no value for businesses in using a single setback to justify ignoring the wide-ranging green policy and clean technology progress that has been achieved over the past few years. Jumping the gun will only lead to poor decisions and embarrassing mistakes. Just ask The Spectator.

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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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