The New Era of Green Taxes

UK Climate Change Targets to Cost Every Household £500 a Year, Ushering in Soaring Fuel Bills for Millions of Cash-strapped Households

• UK targets the toughest of any country in the world
• Osborne and Cable fear reforms will harm UK industry

May 18, 2011

Daily Mail - Tough new climate change targets will cost every household in Britain £500 a year [500 British pounds (GBP) converts to about 810 U.S. dollars].

The targets will usher in a new era of green taxes and soaring fuel bills for millions of cash-strapped households.

Energy Secretary Chris Huhne yesterday committed the UK to a legally binding 50 per cent cut in greenhouse gas emissions by 2025 in a move that will leave Britain £13.4billion-a-year worse off. The targets are the toughest of any country in the world and will come at a huge price for Britain’s struggling economy.

In contrast, the U.S. has pledged to cut greenhouse gas emissions by only 3 per cent, while China — the world’s biggest polluter — expects its carbon dioxide emissions to rise.

Critics say the plans could have only a minuscule impact on halting climate change but could stifle economic recovery and hamper business. They will also mean higher fuel bills, hitting poorest homes the hardest.

When he attempted to counter claims that householders would face energy price increases because of the targets, Mr Huhne was only able to say that they would result in no extra cost for customers during this parliament.

The announcement of the carbon budget — the limit on emissions — comes after a bitter rift in the Cabinet between Mr Huhne and Chancellor George Osborne and Business Secretary Vince Cable, who claimed the targets would make the UK uncompetitive. The carbon budget follows the recommendation in December of the Committee on Climate Change, an independent body of experts that advises the Government. It said the UK would need to sacrifice 1 per cent of its gross domestic product to meet the target. At today’s prices that is the equivalent of £13.4billion a year — the money raised by increasing VAT in January — or an average of £500 for every household.

The Government will try to meet the target by raising fuel bills to pay for thousands more wind turbines to be built across the country as well as offshore. It will also have to finance a new generation of nuclear power stations.

The announcement came as it emerged that inflation had risen to 4.5 per cent — and at a time when millions are facing soaring bills, pay cuts and the risk of redundancy.

The Climate Change Act 2008 sets a target to reduce greenhouse gas emissions in the UK by at least 80 per cent on 1990 levels by 2050. It also requires the Government to set carbon budgets for consecutive five-year periods. Carbon budgets must be set at least three budget periods in advance, and the fourth carbon budget — for 2023 to 2027 — has to be set in law by next month. Announcing it, Mr Huhne said:

‘Under this carbon budget, Britain in 2027 will be a different place and transformed for the better with warmer homes powered by green energy, many more cars powered by electricity and far less reliance on fossil fuels to drive our economy.’

He denied that Britain was ‘going ahead’ of other countries. The new target goes far deeper than the EU which has pledged to cut emissions by 20 per cent by 2020, or 30 per cent if the world signs a climate change deal.

Mr Huhne gave the UK a get-out by promising to review the target in 2014 if Europe drags its feet.

Dr Benny Peiser, director of the sceptical Global Warming Policy Foundation, said the UK’s actions would have little impact on climate change when emissions were increasing around the world. Energy intensive industries — such as chemicals, steel, textiles and ceramics — would be particularly badly hit by the soaring costs of gas and electricity.

‘If they go ahead with this it will severely damage the economy, it will be economic suicide,’ he said.

Adam Scorer, of the official consumer body Consumer Focus, said:

‘The need for tough action on carbon is widely accepted, but this will come at a high cost. The consequences of higher bills will clearly hit the poorest households hardest.’

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