Big problem if Britain’s climate change numbers don’t add up. Bigger if they do

A benefit of Brexit is that Britain will have more scope to make better policy choices. That doesn’t necessarily mean they are going to be made.

In the pre-Christmas rush, Boris Johnson announced that sales of internal combustion engine powered vehicles in Britain will stop in 2030. But it will take more than this to meet the UK’s target of net zero carbon emissions by 2050, according to the latest advice from his climate change advisory quango. It’s hard to see how he can stretch his enthusiasm for electric cars and wind turbines to the sort of policies his advisors think are necessary, while retaining his avowed preference for market-led growth.

The Climate Change Committee (CCC) plan assumes a gigantic programme of state-directed investment. Resource prices and capital costs will behave tractably, technology will improve smoothly with consistent productivity gains and programmes will not be afflicted by cost overruns or unexpected surprises. The history of government failure in these areas is apparently not relevant.

But beyond the hope-and-miracle stuff lurk some more worrying assumptions. Getting to total decarbonisation by 2050 will require Britons to drive a lot less, eat a third less meat and dairy produce and (one infers) live in smaller but thankfully not colder or darker homes. Despite (by the committee’s reckoning) being one-third richer in real terms. One hopes this delivers the anticipated “striking positive benefits for health and wellbeing” because in other respects it seems to resemble the society in which our parents grew up but with smartphones and Netflix.

Changes of this magnitude imply big movements – yuge even – in relative prices. Which suggests average folk would get to consume a smaller share of the smaller pool of carbon-rich goodies than they do now. This might lead to calls for a government rationing system – what could possibly go wrong with that.

The picture isn’t necessarily all bleak. Human ingenuity might come up with more enjoyable alternatives for spending those higher incomes.

But rich westerners could still get irritated by rising consumption in countries like China and India of the goods they are increasingly denied. And as consumption levels converge, they may become more interested in the wealth transfer from themselves to others in the race to be first to net zero.

To get a rough idea of the scale of the numbers in play, the value of the current world output of 50 billion tonnes of CO¬≤ equivalent is 15 trillion US dollars at the (marginal) carbon abatement price for 2050 used by Britain’s CCC. This is equivalent to China’s current GDP or one-sixth of global GDP. Which means early decarbonisation could end up as the biggest foreign aid programme in history – and one of the few aimed at helping strategic competitors. Let’s hope that the Paris agreement holds up then.

Boris will need a compelling strategy to get his people to take these sort of changes in their stride and a ban on petrol-driven cars doesn’t seem like it. More like a punt to the future with the hope that technology – or something – will fill the gap.

One thought on “Big problem if Britain’s climate change numbers don’t add up. Bigger if they do

  1. So when were these “pre-industrial levels” the Paris Agreement talks about? You will search in vain for them. The whole thing is a massive confidence trick by neo-Malthusians with the aim of controlling every aspect of your life.

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