George Monbiot – Paying for green energy interview

The ink isn’t dry on the government’s low carbon transition plan, and already the whingeing has begun. The talkshows are buzzing with complaints about the impact on energy prices. Some punters suggest that this will be the end of life as we know it: the government’s plans will wreck the economy and bankrupt struggling families.

There’s no doubt that fuel poverty remains an important issue in this country. It still accelerates the deaths of elderly people every winter. Being able to maintain your home at a habitable temperature is a basic human right. But the new plans will make no appreciable difference.

According to the government, the impact of all its climate change policies – old and new – will be to add an average of £92 (or 8%) to household bills between now and 2020. Does that sound like the end of life as we know it? If so, you have a short memory.

Between November 2004 and November 2005, the average wholesale price of electricity rose from 2.1 pence to 3.6 pence – by 71%. In the 12 months to February 2006, the wholesale price of natural gas in the United Kingdom rose by 75%. In the three years to that date, it rose from under 20p a therm to 70p – an increase of 350%.

Wholesale prices don’t translate directly into retail prices – the hit for householders wasn’t quite as great as that – but you get the general idea. The rate by which the wholesale price of gas rose between 2003 and 2006 was 160 times greater than the rate of increase in retail fuel prices likely to be caused by the government’s climate change programmes. Compared to the wild fluctuations in energy prices caused by geopolitics and resource constraints, this increase will be scarcely detectable. The signal generating such angst today will be lost in the noise.

Did the price rise of 2003-2006 cause the economy to collapse? No. That was achieved by other means. It made life harder for some people. The government sought to address this with its winter fuel allowance, and today it proposes to create “mandated social price support”, mostly focused on older pensioners on the lowest incomes. I don’t know whether this is sufficient to eliminate fuel poverty. We should keep pressing the government to ensure that it is.

But let’s get this straight: fuel poverty and the climate change programme have very little to do with each other, except inasmuch as government intends to help us insulate our homes, which means we’ll need less fuel to heat them. As the secretary of state Ed Miliband pointed out on the Today programme this morning, failing to replace our energy supplies will also raise prices: fossil fuels will become more expensive as a result of rising demand in China and India.

There is, however, a government policy, or absence of policy, which does threaten both to exacerbate fuel poverty and accelerate economic collapse: its flat refusal to make contingency plans for the possibility that global supplies of oil (and, presumably, gas) will one day peak. Peak oil and gas will wreck more than the government’s plans for eliminating hypothermia: it will make all current economic and environmental planning redundant. Yet, in the 228 pages of today’s white paper about our future energy supplies, you won’t find a word about it.

Source - The Guardian