Illustration by Jesse Kuhn www.rawtoastdesign.com
Ignorance and Ineptitude
October 31st, 2012
The so-called choice between going green or going for growth is a false one - John Cridland, Director General, CBI
Sometimes it feels like the last 40 years never took place. Recent pronouncements in relation to how environmental challenges relate to economics provide a case in point.
The idea that looking after Nature is bad for the economy is one that is less and less heard these days. Such a fringe view, one that flies so squarely in the face of a mounting body of evidence, would normally raise more amusement than it would concern, except that recently this view has come from George Osborne, the leader of the UK’s finance ministry, a figure at the very heart of government.
In October 2011 he told his party conference that saving the planet risked “putting our country out of business“. He went on to claim how “a decade of environmental laws and regulations are piling costs on the energy bills of households and companies.” Osborne evidently believed the UK was doing too much to protect the environment, and for economic reasons should do less. Unfortunately this outburst was not a one-off.
A month later, in his Autumn Statement, Osborne lashed out at the EU Habitats Directive, claiming that it placed “ridiculous costs on British businesses”. So convinced of this conclusion was he that he asked the Department for Environment, Food and Rural Affairs (Defra) to conduct a review of the Directive.
He then spent much of 2012 trying to slash the support available for onshore wind energy in the UK. This industry, having been under attack from more than 100 Conservative MPs, seemed ripe for a reduction in the level of official support it received, to the point whereby investment in the technology would stop, in the process ending expansion in what is for the UK the cheapest way of generating renewable electricity. While the onshore wind power industry was able to muster sufficient support to at least temporarily win this particular battle, other renewable energy technologies remain vulnerable to Treasury scepticism, for example geothermal power and anaerobic digestion.
And as the government prepares its landmark legislation on electricity market reform, the Treasury is opposed to new targets that would limit the amount of carbon released for each unit of electricity generated. If the UK is to actually achieve the goal of its world-leading legislation on climate change, then many experts believe this will be one vital tool to do it.
Of course Osborne has been subject to some bitter criticism. Sir John Lawton, one of the UK’s leading ecological scientists and a former chair of the Royal Commission on Environmental Pollution, called the chancellor an “idiot” for remarks he made about wildlife protection laws. And not only have leading experts exposed Osborne’s failure to grasp the facts, but so did an official review that he commissioned himself.
The Defra assessment of the Habitats Directive demanded by Osborne found that the claim it was some massive burden on business simply was not the case, and that in over 99% of cases where a project was affected by this directive there was no problem at all. And there was an ironic twist, with this review finding that the tiny minority of development projects that did have difficulties were onshore wind power developments. The very industry that so many Conservative MPs are hell-bent on destroying.
But why does George Osborne say what he does? Some on the right of politics (though not all by any means) are environmental sceptics, but does this explain why he is at such pains to set the green agenda back so dramatically? And if it is not pure political ideology that takes Osborne in his particular direction of travel, then what does?
The influence of former Chancellor Nigel Lawson could be part of it. He and Osborne are close, and what comes out of Osborne often sounds spookily similar to views that come from Lawson, a well-known environmental sceptic who set up his own foundation, which campaigns to discredit climate change science.
People closer still to Osborne, and with reasons to be wary of some aspects of the green agenda, are members of his own family. His father-in-law is Lord Howell, a foreign office minister with responsibility for international energy issues in the Lords. He is also president of the British Institute of Energy Economics, which has major gas and oil companies as corporate members.
Then there is the right-wing press, and the headlines carried by the Daily Mail and Daily Telegraph that have among other things dramatically exaggerated the costs of meeting environmental goals, particularly in relation to renewable energy. While from the outside it might seem unbelievable that policy could be led by such ill-informed propaganda, this kind of coverage can have more impact than is often credited, especially when it is welcomed by so many back-bench Conservative MPs.
Many Conservative MPs do not like renewable energy, and dislike wind power in particular. In order to keep these people onside, Osborne seems to want to do something to please them.
But many people from all backgrounds roundly reject Osborne’s views. What is really interesting to see is how his analysis is thrown out by business – the very group he says he is speaking for! And it’s not only the green and clean companies who say he’s wrong, but also the mainstream Confederation of British Industry (CBI). John Cridland, the CBI’s director general, said last summer: “The so-called choice between going green or going for growth is a false one . . . [W]ith the right policies in place, green business will be a major pillar of our future growth.”
Cridland pointed out that the green parts of the economy, for example renewable energy, delivered a third of the UK’s growth in the previous year. This was a really significant intervention. If the head of the CBI says he got it wrong (and he did) then Osborne is dangerously isolated. He has nonetheless done a lot of damage.
One obvious effect has been in relation to investment in renewable energy. Delays in policy decisions caused by Treasury scepticism have led to investors putting on hold their own plans to invest in the UK economy, thereby causing the exact opposite to what Osborne said he wanted; and far from helping the UK’s recovery, he is stopping investment, squandering opportunities for green growth, and losing jobs.
So much for slogans like “Vote blue and go green”, which were put to the electorate before the last general election by the Conservative Party, or indeed comments made after election by the prime minister to the effect that we would see the “greenest government ever”. Neither has been the case, and the main reason is the Treasury, and the man who leads it: Chancellor of the Exchequer George Osborne.
This is not to say that the Conservative Party lacks green thinkers with track records. It does have them: for example Tim Yeo and Zac Goldsmith in the House of Commons, and the likes of Lord Deben (John Gummer) in the House of Lords. The question is, what direction will the party take in the run-up to the next general election? Will it allow the Treasury to continue to drag the country back to the 1970s, or can it still change direction?
Sooner or later economics and ecology will need to be recognised as the two complementary faces of the same coin. The longer we leave it in making that the case, then the more difficult, expensive and complicated it will be to do it. George Osborne is unfortunately wasting a lot of time, and in the process doing a lot of damage. It is time he and other Conservatives realised how disastrously out of touch Treasury policy has become, and changed those policies before too many more UK companies suffer from its ignorance and ineptitude.
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