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Should we be blaming high energy bills on going green?
A lot of us have been quick to blame the big energy firms for rising fuel bills (not to mention profits). But earlier this month, George Osborne blamed something else: green laws and regulations.
“Now we know that a decade of environmental laws and regulations are piling costs on the energy bills of households and companies,” the Chancellor told party loyalists at the Conservative Party Conference.
Osborne’s comment fits in nicely with the Government’s ‘Red Tape Challenge’, which recently rounded on environmental regulations, of which apparently there are 287 that apply to businesses. And, yes, it’s true we have some of the toughest emissions reduction targets in the world.
Are our green laws and regulations to blame for rising energy bills, though?
It would be hard even for Osborne to argue that, for example, the landfill tax was pushing up our energy bills, or indeed that it’s a regulation that we can afford to do away with. And is he seriously suggesting that the green goods and services sector, one of the few sectors that can point to strong growth in the UK, has not been driven by strong laws on climate change?
It is true, big polluters such as the energy firms, do have to buy allowances under the European Emissions Trading System (EU ETS), but the big news there isn’t how much it’s costing the polluters, but how cheap those allowances still are.
Then, of course, there’s the now controversial Carbon Reduction Commitment (CRC), which was supposed to work a bit like the EU ETS to get UK firms more energy efficient and cut emissions but now – thanks to Osborne – is a carbon tax in all but name (although the Chancellor didn’t mention that in his speech).
The big energy firms, meanwhile, are required to make savings in the amount of CO2 emitted by householders through the Carbon Emissions Reduction Target (CERT). And yes, there’s the Feed-in Tariff, the Government policy to encourage the take-up of small-scale renewable electricity generation, which is subsidised through our energy bills.
But can all this explain the sharp rise in energy bills we’ve been seeing lately?
Speak to the energy companies and they’ll tell you quite plainly what it is to do with: “It is the rising cost of wholesale energy that has contributed to the increase in customers’ bills this year,” Christine McGourty, director of Energy UK, said today in response to Ofgem’s announcement that the profit margin for energy firms has risen to £125 per customer per year. In other words, our reliance on expensive imported gas.
Our addiction to fossil fuels is exposing us to massive hikes in our energy bills. Yes, energy companies are making profits and we need to address that, but to blame laws and regulations that are driving investment in energy efficiency measures and green energy that will break our dependence on fossil fuels – that is not the answer.
If we want to protect ourselves against these rising costs, there is only one way to do it: to invest in green and stop using green laws and regulations as a smoke screen for cutting back on our green commitments.