Translating IDS

James Murray
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Iain Duncan Smith | Credit: Chris McAndrew [CC BY 3.0]
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Iain Duncan Smith | Credit: Chris McAndrew [CC BY 3.0]

Iain Duncan Smith's proposal to abolish the carbon price floor points to a much bigger plan to undermine the government's Green Brexit vision

Failed Conservative Party Leader and failed Work and Pensions Secretary Iain Duncan Smith has this week penned his latest missive explaining how the government could make a success of Brexit if only it listened to him, a failed Conservative Party Leader and failed Work and Pensions Secretary.

More informed observers have already torn apart his central argument about how the UK can prosper under 'no deal Brexit' based on WTO terms, explaining why it makes little sense from both a political and technical perspective. But the real cause for concern for green business types comes via a throwaway line where IDS detaile how "outside the EU, and unencumbered by EU rules, the UK could, for example, decide how to reform emissions trading, and wider climate change policy." He adds that a "good way" to start these "reforms" would be with the "abolition of the damaging carbon price floor mechanism".

This contention merits unpacking, because a) it doesn't make much sense, and b) it provides yet more worrying evidence about the Hard Brexiteers plans for a 'dirty Brexit'.

It is true that quitting the EU, as Duncan Smith proposes, with just a skeleton agreement to keep planes flying and medicines moving across borders would allow the UK to reform climate change policy. Whether you refer to it as a 'no deal scenario' or spin it as a 'WTO deal' the UK would be free of Brussels' insistence that close alignment on environment and climate policy forms a critical and non-negotioable part of any new EU-UK trade deal.

But to suggest this is required to abolish the carbon price floor mechanism is just plain wrong. As ECIU's Richard Black notes in our story yesterday "the carbon floor price is a unilaterally British policy, so leaving the EU has absolutely nothing to do with whether the floor price stays or goes".

What is more, it is not just a unilaterally British policy, it is a highly effective one at that. It has been the primary mechanism for driving coal off the grid, which has been the primary mechanism for cutting UK emissions. Since its introduction coal's share of the power mix has plummeted, falling to nine per cent last year and still dropping. Cleverly targeted support packages have addressed the risk of energy intensive industries migrating overseas in pursuit of lower energy costs, and while there has been some upward pressure on domestic energy bills as a result this has been more than offset by energy efficiency improvements and relatively low renewables and gas costs. As ECIU notes domestic energy bills have fallen by around £115 a year in real terms since 2008 and were down £6 last year.

So what does IDS mean when he talks of reforming climate policy post-Brexit and why does he link it to the carbon price floor?

The reality is the only way the carbon price floor is linked to EU climate policy is through its role as one of the primary mechanisms for the UK meeting EU-imposed emissions targets for 2020, not to mention the 2030 targets that would almost certainly have to be agreed to by the UK as part of any new deal with Brussels.
IDS's argument could be that freed from EU carbon targets the UK would no longer have any need for a carbon price floor that acts as a levy on energy bills.

But there is a problem here, because the carbon price floor is not the only unilateral British climate policy, there is also the Climate Change Act, which similarly sets domestic carbon targets and budgets that are basically in line with the EU's targets (and are arguably more ambitious).

Leave aside for a second the fact every major party into the UK went into the last election either backing current climate policy framework or calling for more ambition, meaning that Duncan Smith and his allies have precisely zero mandate for reforming UK climate policy. And park for a moment the fact Energy UK and numerous other trade bodies like the idea of emissions trading and are broadly in favour of the UK's current decarbonisation strategy and the jobs, investment, and environmental benefits it brings. Ignore all that, and IDS is right to say a no deal Brexit could technically allow the UK to reform its climate policy framework.

But if that is the plan then an honourable politician has an obligation to publicly explain how they intend to meet the legally binding carbon targets set out in the domestic Climate Change Act without the carbon price floor as the primary mechanism for decarbonising the power sector. Or they need to come clean and admit their goal is the repeal of, or drastic watering down of, the UK's flagship climate change law.

It is unclear if Duncan Smith understands the logical policy implications of his words and the knock on impact such a move would have on investment and the UK's position as a world leader on climate action, or whether he is simply channelling the arguments of his favourite 'think tanks'. Looking at the previous statements of his allies in the European Research Group it is possible to guess what the preferred end game is. But if the Brexit strategy they are now proposing really is the complete torching of the government's Green Brexit promises and the UK's position as a low carbon technology and green investment hub then it would be nice and democratic to have that explained publicly.

Arguably the most important guide for this most volatile of political eras remains Maya Angelou's timeless observation: "When someone shows you who they are, believe them the first time".

This post first appeared in BusinessGreen's Overnight Briefing email, available exclusively to all BusinessGreen subscribers.

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