Green transparency? About time too

There’s bad news on the green front – good bad news that is.

But is there enough time for it to filter into the public consciousness for next month’s general election?

Readers with good memories might recall an earlier analogy of thrown stones submerging into a murky river, before finally a causeway emerges.

It’s possible that Europe has reached such a moment in its decarbonization transition.

For years, the reports and complex spreadsheets explaining that net zero will be ruinously expensive have disappeared imperceptibly into the river.

Now the stones are breaking through.

Despite a commanding lead in the opinion polls, Britain’s Labour party managed to lose the by-election for Boris Johnson’s outer London constituency.  The big issue was the impending $25 per day tax – imposed by London’s Labour mayor – for driving an old car anywhere in London.   

Last month we reported on the German government’s discovery that its people didn’t want mandatory replacement of fossil fuel heating systems to start next year.  And its hasty commitment to postpone the problem at a cost of €2.5 billion a year.

It seems strong public support for net zero did not take into account the possibility of having to pay for it.

But politicians are facing enormous difficulty in dodging the regulatory juggernaut.

As Allister Heath reports in London’s Daily Telegraph, such policies are locked into the system on a long-term basis – in the UK, since 2008 in the form of carbon budgets.

He asks, no doubt rhetorically:

“Did you realise that the next two [carbon budgets] – up until 2037 – have already been enshrined in law, making a mockery of the next two or even three general elections?”

And he finds a few more consequences waiting around the corner for the great British public:

“Were you aware that all of the consumer-facing changes – in 18 months, no newly built home will be fitted with a gas boiler, in seven years’ time, it will be illegal to buy new petrol cars, in 12 years, you will no longer be allowed to replace your existing boiler like-for-like – have been accounted for in the plans, gravely limiting room for political manoeuvre?”

You might imagine each of these generating a more desperate and expensive ad hoc response, until finally the finance minister has to admit that the money has run out.

But the political debate has yet to take the next step of focusing on the gross deficiency of this regulatory approach (when compared to a market-based approach).

Heath likens carbon budgets to a Soviet or Chinese five year plan.  It’s a good analogy.

Bureaucrats set targets which cannot recognise adaptation to change, individuals lose control and the ability to adapt, and reality delivers a worse outcome than expected.

Another good analogy is the flagship government infrastructure project, which comes in over budget and where demand fails to match the projections.

Government estimates for compulsory insulation, for example, are unlikely to capture the efficient solution, which just may be insulation for a new house, and cold bedrooms for an old one.  

And the answer to high rents is unlikely to be mandating landlord expenditure on improvements that tenants may not want, and certainly dislike paying for.

Perhaps National and ACT’s leaderships feel they have enough policy wiggle room to respond to a new understanding of the government failure unfolding in Europe.

But it will not be easy to scrap the targets, the mandates and the subsidies and rely on painfully expensive carbon.

Because that would be transparent.

Then again, perhaps some of the public are realising that it would be less painful – indeed much less painful – than the centrally planned approach.