Why Net Zero often seems more expensive than it really is

© istockphoto
At the end of last week, I had another of those conversations along the lines of “how on earth do you manage without a car?” And every time I explain it, the other person shakes their head and says “I don’t know how you manage.” Well, as 36% of households here in Newcastle don’t have access to a car, they can still get to work/studies, buy food, socialise etc etc (some pro-car activists would have you believe they are starving alone in their garrets).
Of course I’m not 100% car-free, I use a car club car a couple of times a month for those journeys where a car is required. But an interesting consequence of the car club model is it allows a direct financial comparison of car use with other transport modes.
What do I mean by this?
If you own a car, unless you are very wealthy or own a really crappy car, you will be paying the purchase cost off over many years. Then you have all the annual costs: VED (aka “road tax”), MoT, servicing/repairs and insurance. You have to pay these whether or not you drive anywhere, so on top of these sunk costs, you are only really paying for fuel every time you get behind the wheel. This makes car use feel cheap compared to public transport (or cycling for that matter) when it really isn’t.
The car club flips all this on its head. Fixed costs are minimal: purchase costs, insurance, tax, fuels, repairs etc are all folded into a usage charge calculated on time and distance. This makes public transport cheaper than car use in many cases, so I find I use the car club even less often than I was using my redundant car, as I may get the bus or Metro instead. If you can compare costs properly, Sustainability often wins.
I find similar financial-alignment issues in other area of Sustainability. One coaching client was frustrated that low carbon options were losing out to higher carbon equivalents in investment appraisals. Digging into the issue, we found that carbon compliance costs were being treated as an overhead and not factored into the appraisals. Once this was changed, things improved rapidly. If only we could factor in the PR costs and benefits as well…
On low carbon energy, huge figures are often flung around on the capital costs of renewables and storage. But these figures are rarely net of the cost of the alternative: fossil fuel systems also need to be constructed, maintained, repaired and upgraded, and spinning/non-spinning reserves have to be paid for just like back up/constraint payments for renewables. While the transition does have a net cost, it is a fraction of what many blowhards claim.
With my political hat on, I’ve been fighting to stop our Council signing a 30 year waste incineration project which will prevent the Council meeting the national target of 65% recycling by 2035. The administration’s argument is that a big fixed contract is cheaper than purchasing incineration capacity on a short term basis, but that turns a financial incentive to perform well on recycling into a financial penalty for doing well on recycling as we will be contracted to ‘feed the beast’.
All of this comes down to the fact that our systems have evolved over decades to give us high carbon economy. A low carbon economy is still the outsider which doesn’t fit comfortably into the system. If we update the system (and our mindsets), then we can feel the full financial benefits of a low carbon economy and things will move faster.