The billions being invested in renewable energy, nuclear and 'clean' coal will pay off financially if oil is over $100 a barrel in 2020, says the energy and climate change secretary
The UK's ambitious low-carbon energy plans will mean energy consumers paying lower bills in 2020 if oil is over $100 per barrel, compared to a fossil-fuelled future. That price is the break-even point, said the energy and climate change secretary, Chris Huhne, today.
I think it is an important number, because it clearly shows why a failure to invest the large sums of money needed into renewable energy, nuclear power and carbon capture and storage would be a false economy.
Here's what he told a conference at the Royal Geographical Society in London today. Bear in mind the price of oil (Brent crude) is $104 as I write:
If we relied on oil and gas, and the price stayed relatively low at $80 a barrel then consumers will pay more under our policies – about an extra 1% on their bills by 2020.
At the oil price reached this month - $100 a barrel or more – consumers will pay less through the low carbon energy policies than they would pay for fossil fuel policies.
And if the US administration is right, and the price is $108 a barrel in 2020, then our consumers are winning hands down.
So, as Huhne put it, when people say the energy policies his government are pursuing are far too costly, the reply is "hang on, what is this other world?" Predicting oil prices is a black art of course, but the question is do you think the price of oil is going to remain flat for the next nine years?
He also made another argument for low carbon energy investment: insulation from oil and gas price shocks. He said:
I asked economists at DECC to look at how a 1970s style oil price shock would play out today. They found that if the oil price doubled, it could lead to a cumulative loss of GDP of around £45 billion over 2 years. [The oil price rose fivefold in the 1970s].
And this is not just far-off speculation: it is a threat here and now. The Office of Budget Responsibility forecast that if oil prices rose by 20% - as they have since October – the total cost to the economy would be £4.5bn.
Oil and gas will play an important role in the low-carbon shift. But in the long term, getting off the oil hook will make our economy more independent, more secure and more stable.
We rightly hear a lot about the need to reduce greenhouse gas emissions, and are promised that the UK's economic recovery should include an industrial resurgence based on clean technology. In terms of the three crucial tests of energy policy - low carbon, security and cost - it's the latter that had been least convincing, making the arguments above significant.
One other part of the speech stuck out for me: more startling numbers from China, which just might change the world with its new five year economic plan. China is undoubtedly running fastest in the race for leadership in green technology.
Huhne reeled the numbers off - China's $34bn pumped into the low-carbon economy in 2009 - by way of arguing that even if the UN climate talks look like dragging on for years, some countries were acting anyway. These two stuck out for me:
China will build 24 nuclear power stations in the time it takes us to build one. By 2020, their nuclear capacity will have increased tenfold.
They will complete 16,000km of high-speed rail in the time it takes us to go from London to Birmingham.
Friday, 18 February 2011
Co-operative Group commits to ambitious ethical operating plan
Co-op aims to cut carbon emissions by 35%, increase Fairtrade product lines and invest £1bn in green energy
Tom Bawden The Guardian, Friday 18 February 2011
The Co-operative Group is launching an ethical operating plan that it hopes will set a benchmark for corporate responsibility on carbon reduction, fair trade and community involvement.
The group, which employs 120,000 staff, also plans to increase its membership from 6 million to 20 million and double its support for green energy to £1bn. In addition, it will increase its involvement with schools and create 2,000 apprenticeships in the next few years, as well as invest £5m a year to tackle poverty around its stores and branches.
Chief executive Peter Marks believes that the recession represents a major opportunity for the Co-op to grow by trading on its ethical traditions. "Trust in business has taken a real knock in recent years as the credit crunch has caused people to seriously question the capitalist model," he told the Guardian in an interview. "The mutual is an alternative business model which chimes with the times. People want a business they can trust, with a strong sense of social responsibility. This is our DNA."
The most ambitious target is to reduce the group's operational carbon emissions by 35% by 2017, which the Co-op claims is the most progressive policy of any major business in Britain. It will also reduce the environmental impact of its packaging and continue to cut down on carrier bag use.
There are also plans to increase the number of Fairtrade product lines. The Co-op says that by 2020 it wants 90% of its developing-world primary commodities to be certified as Fairtrade.
Harriet Lamb, executive director of the Fairtrade Foundation, said: "Always a pioneer of Fairtrade, The Co-operative's commitment to ensuring that virtually all primary commodities that can be Fairtrade will be Fairtrade sets the bar anew for the corporate world."
Marks also said that he was planning to widen the Co-op's involvement in communities by helping to set up local worker co-operatives through the "enterprise hub" he established last year. These include Sunshine Care, a care home in Rochdale run by a group of former local authority workers, and a garden-furniture factory employing disabled people in York.
Marks is hoping these projects could be the start of something bigger, possibly seeing the enterprise hub develop into a consultancy business "providing advice and limited funding, that shows people how to do it for themselves".
"We are toying with ideas and looking around to see what we can do. Maybe a consultancy arm, giving advice, helping schools and other initiatives to set up. It would be very much a self-help project – we're not going to do it for them, we're going to show them how to do it."
Interview: guardian.co.uk
Tom Bawden The Guardian, Friday 18 February 2011
The Co-operative Group is launching an ethical operating plan that it hopes will set a benchmark for corporate responsibility on carbon reduction, fair trade and community involvement.
The group, which employs 120,000 staff, also plans to increase its membership from 6 million to 20 million and double its support for green energy to £1bn. In addition, it will increase its involvement with schools and create 2,000 apprenticeships in the next few years, as well as invest £5m a year to tackle poverty around its stores and branches.
Chief executive Peter Marks believes that the recession represents a major opportunity for the Co-op to grow by trading on its ethical traditions. "Trust in business has taken a real knock in recent years as the credit crunch has caused people to seriously question the capitalist model," he told the Guardian in an interview. "The mutual is an alternative business model which chimes with the times. People want a business they can trust, with a strong sense of social responsibility. This is our DNA."
The most ambitious target is to reduce the group's operational carbon emissions by 35% by 2017, which the Co-op claims is the most progressive policy of any major business in Britain. It will also reduce the environmental impact of its packaging and continue to cut down on carrier bag use.
There are also plans to increase the number of Fairtrade product lines. The Co-op says that by 2020 it wants 90% of its developing-world primary commodities to be certified as Fairtrade.
Harriet Lamb, executive director of the Fairtrade Foundation, said: "Always a pioneer of Fairtrade, The Co-operative's commitment to ensuring that virtually all primary commodities that can be Fairtrade will be Fairtrade sets the bar anew for the corporate world."
Marks also said that he was planning to widen the Co-op's involvement in communities by helping to set up local worker co-operatives through the "enterprise hub" he established last year. These include Sunshine Care, a care home in Rochdale run by a group of former local authority workers, and a garden-furniture factory employing disabled people in York.
Marks is hoping these projects could be the start of something bigger, possibly seeing the enterprise hub develop into a consultancy business "providing advice and limited funding, that shows people how to do it for themselves".
"We are toying with ideas and looking around to see what we can do. Maybe a consultancy arm, giving advice, helping schools and other initiatives to set up. It would be very much a self-help project – we're not going to do it for them, we're going to show them how to do it."
Interview: guardian.co.uk