Ambling towards a low carbon economy
A funny thing has been happening in the UK over the last 7 years. We have had two Conservative Prime Ministers since 2010 who have rarely paid more than lip service to sustainability issues in general and tackling climate change in particular. We have a press which is largely sceptical about climate change science, or possibly worse, cynically calculate that climate denial sells papers. Green activists fume and rage about all of this, but how come UK renewable energy is booming and coal is dying?
Here’s a few things which might explain things:
1. Ninja legislation: Some simple legislation, such as Feed-In Tariffs, the press and green activists can get their head around, but there are other bits and pieces which are more complex and stealthy in operation. A good example is the Carbon Price Floor, which has been lurking quietly in the background putting the coal-fired power sector to the sword and boosting the opportunities for renewables.
2. Supply and Demand: one good reason for cutting solar feed-in tariffs is that they have been far more effective than their designer, one Ed Miliband, expected, leading to a precipitous fall in solar PV installation prices. Cutting the tariffs may have slowed the original goldrush, but installations continue to make financial sense. Demand not only pushes down prices, but incentivises innovation – a virtuous cycle which will drive ever more demand and remove the need for any subsidy in time.
3. Responsible Business: as businesses grasp the full business case for Sustainability (ie going beyond a simplistic ‘go green, save money’ mindset), they are investing in renewables whatever the direct financials as they know the indirect benefits (PR, winning business, attracting and retaining staff) will deliver many times the return.
4. High fossil fuel prices: while the price of oil plummeted from its 2008 peak, at $55 a barrel, we are still facing historically high oil prices and the $147 peak in 2008 is a brutal reminder that nailing your colours to the fossil fuel mast brings significant risk.
Which all begs the question, how good could the UK be if senior politicians showed real leadership and the press woke up and smelt the coffee? I live in hope, perhaps naively.
In the meantime, if they don’t do it, the rest of us will get on with the job!