The Brexiteers are coming for a ‘zero carbon’ economy – we must be prepared

When it comes to bearing the hard costs of the transition to zero carbon, public support is shallow, writes Vince Cable

Westmill Wind Farm Co-op, the first onshore wind farm to be built in the southeast of England, in 2008 (AFP via Getty)

One of the few bits of consensus and optimism in Britain’s divided and fractious politics has been near-unanimity around a zero-carbon future with a specific target (2050). Moreover, it is a vision shared by our otherwise estranged European neighbours.

That consensus is now under assault from two directions: first, a new emphasis on energy security in light of the Ukraine war and disruption to Russia’s oil and gas exports. Second, the politics of populism and the associated difficulties of sustaining unpopular energy policies.

There is still much uncertainty about the impact of the war on energy markets. We do however have the precedent of the 1973, then 1979, “oil shocks”, which produced global inflation, then recession, and a big move to energy efficiency and reduced oil use.

Germany has already announced its intention to stop importing Russian gas by 2024, switching to other gas suppliers and perhaps extending the life of coal mines. But the German response also involves an accelerated move to renewables.

Boris Johnson has announced a new nuclear commitment – as has France – and a shift to licensing exploration for more North Sea gas. But even optimistically, either of these would take 7 or 8 years to make a significant impact on energy supply.

Energy security is broadly compatible with a zero-carbon objective if it accelerates the move towards energy conservation and renewable energy – particularly wind in the UK, and nuclear energy. And, hopefully, tidal energy, if the Treasury took a longer-term view with regard to return on investment.

However, until battery storage is better developed, wind power needs back-up capacity. Gas will therefore remain an essential transitional fuel for a long time. Shrill protests over further offshore production put the environmental movement at odds with reasonable security concerns.

One danger is the unwillingness of politicians to confront the public with the uncomfortable reality that curbing demand is the key to reducing emissions.

My successor as business secretary was unwilling to endorse an international campaign to turn down thermostats by one degree. Reducing motorway speeds is sensible but considered heresy. As for – inevitably – higher prices: that is seen as an assault on our living standards.

One of the biggest criticisms of Rishi Sunak’s statement last week was that, instead of helping low-income households directly, he had used his financial firepower to cut taxes on motor fuel. While there is undoubtedly a problem of fuel costs in rural areas without public transport, the main beneficiaries of the tax cut are well-off people with big cars.

The bigger danger, however, is that when it comes to bearing the hard costs of the transition to zero carbon, as opposed to rather vague and distant aspirations, public support is shallow.

There is a striking similarity to the pre-Brexit public feeling about Europe. The similarity has been spotted by a group of hardened campaigners from the old Ukip, then the Brexit Party. I held a public debate last week with Richard Tice, leader of the Reform Party, which is campaigning for a referendum on zero carbon. He shares Nigel Farage’s personal charm and plausibility. He is the public tip of an iceberg comprising mainly hardline Brexiteers in the Conservative Party.

The grievance is familiar: that the “establishment”, the “elite”, is trying to impose on ordinary, struggling, working families the hidden costs of a questionable project. Tice does not dispute the climate science, though many in his movement do. The fact that much bigger countries are seemingly not trying – as seen in the growth of coal-burning in China and India – inflames the sense of unfairness and the idea that causing domestic pain is pointless anyway.

Tice’s main complaint is that domestic fuel bills are greatly inflated by the cost of renewables in the form of expensive long-term electricity contracts for offshore wind. Renewable levies cost around £150 out of a cost heading towards £3000 for an average household. In fact, the costs of offshore wind are falling rapidly, and onshore wind is even more competitive and could be produced at scale if planning restrictions were eased.

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There are, however, even bigger price challenges ahead. How will low-income families afford electric vehicles as diesel and petrol are phased out? Who will pay for expensive heat pumps when gas boilers become obsolete? There are well-established ideas like mass home insulation; but that will require far more generous grants than have been available in past government schemes. There are real costs which consumers and the taxpayer will have to face.

Richard Tice says he has a silver bullet: fracking. Lots of cheap, indigenous gas currently locked up by timid politicians afraid of a few protesters. In fact, British geology is not encouraging (otherwise the big companies, like Shell, would have piled in) and there are serious local environmental issues. But pressure will mount to lift the current ban.

To reduce these complex issues to a binary choice in a referendum would be ludicrous, but that will not deter Tice and his allies from demanding it. After all, we said that about Europe, didn’t we?

Sir Vince Cable’s podcast, ‘Cable Comments with Vince Cable’, is available here