Ordinary families are paying a heavy price for the attempts politicians are making to control greenhouse gasemissions. Climate change policies push up electricity bills, make it more expensive to drive to work or fly away on holiday, put manufacturing workers out of a job; they sometimes even make your food more expensive. They hit some people particularly hard: the industrial worker already struggling to compete with rivals in China; the poor and elderly, who feel rising energy costs particularly keenly; and anyone with a big family who needs to drive their kids around because they don’t live in a city centre. At the other end of the scale, politicians who don’t drive because they live in city centres and are on above average incomes won’t feel the pinch in the same way and could easily underestimate the extent of the pressure on household budgets.
Much of the money goes straight into the pockets of a bewildering range of special interests. Climate change has become big business. Across the world, companies are making billions out of the schemes politicians have put in place to try and stop global warming: from windfall profits for electricity generators under cap and trade schemes like the EU Emissions Trading Scheme in Europe, to huge profits for dodgy projects in the developing world under the Clean Development Mechanism. Climate change has justified entire new organisations in the public sector with hundreds of staff and big grants to fund them. Environmentalist campaigns enjoy big budgets, often including generous taxpayer funding.
At least in the short term there is a lot of money to be made out of the unprecedented interventions in the economy being justified with the threat of climate change. When the backlash comes, companies doing well out of climate change policy now could pay quite a price. But right now there are innumerable opportunities to make money from cap and trade and other climate change policies.
Of course, a policy isn’t necessarily a bad one because people can make a profit out of it. There’s nothing wrong with that if it is a reward for providing a valuable service. And the impact on consumers could be a price that we have to pay to avoid climate change. Unfortunately, there is precious little evidence that the various schemes and targets that make up climate change policy are actually an efficient way of cutting emissions. They don’t represent good value and the public are right to be sceptical of them.
Figure 1.1: CO2 emissions, Mt, UK
Look at the long term pattern of emissions. You’ll struggle to spot the advent of big climate change policies. Figure 1.1 uses International Energy Agency data to show UK carbon dioxide emissions between 1970 and 2008 in millions of tonnes.1 In Britain we were being sold higher prices on petrol all the way back in 1993. Then Chancellor of the Exchequer Ken Clarke told the Commons that tax hikes on motor fuel were part of completing ‘Britain’s strategy for meeting our Rio commitment’, referring to the Rio Earth Summit in 1992 where we first pledged to take action to curb greenhouse gas emissions. When you look at the pattern below, can you see any change in the pattern of emissions after the Rio Su
