Blog for UKERC, based on public lecture, University of Loughborough, 14th February 2019
In common with many other countries, the UK is implementing a transition to a more sustainable, low carbon energy system. Greenhouse gas emissions have already fallen substantially since 1990, and there are ambitious targets for further reductions. But there is a long way to go. As the Committee on Climate Change makes clear in its most recent assessment, current policies are nowhere near sufficient to deliver an energy system and economy that meets the goals of the Paris Agreement.
At the same time, the UK is experiencing severe political disruption – partly as a result of the decision to leave the European Union. This is not just a phenomenon affecting the UK. Nationalism and challenges to established political ideas are now widespread. But it is a particularly stark challenge to liberal market economies such as the UK, which have tended to emphasise the benefits of trade and other forms of international co-operation.
At a broad strategic level, the impacts of the rise of nationalism have been modest so far. In many countries, energy policy has always been strongly linked to national security. Winston Churchill emphasised this link over a century ago, when he oversaw the shift of the British navy from coal to oil. It also informed the attempts by most US Presidents since Richard Nixon to achieve ‘energy independence’. All of them have failed so far – though the shale revolution means that Nixon’s goal may be reached soon, albeit four decades late.
The objectives of UK energy policy have remained broadly consistent through successive governments in recent years. Starting with the energy White Paper of 2003, the focus has been on reducing greenhouse gas emissions whilst minimising costs and ensuring that the UK’s high levels of energy security are not compromised. However, there have been changes too. In the Foreword to the 2003 White Paper, Prime Minister Tony Blair emphasised a strongly internationalist view of energy policy:
‘Energy can no longer be thought of as a short-term domestic issue. Climate change – largely caused by burning fossil fuels – threatens major consequences in the UK and worldwide, most seriously for the poorest countries who are least able to cope. Our energy supplies will increasingly depend on imported gas and oil from Europe and beyond. At the same time, we need competitive markets to keep down costs and keep energy affordable for our businesses, industries, and households’
Fourteen years later, Theresa May’s Foreword to the 2017 Clean Growth Strategy argued that reducing emissions remains a priority. However, there was much more emphasis on the national benefits to the UK from doing this – including greater ‘economic security’, opportunities for industrial development and cleaner air. In a clear break with the past, our energy policy now includes wider economic benefits as an objective.
There is also much more political focus on the costs of the energy transition for households and industry. Whilst there is some justification for this focus given the UK’s relatively high electricity prices (particularly for industrial consumers), it has been used by some as an argument against support for climate change action. As a recent UKERC evidence review shows, this argument is misplaced. UK policy costs are much lower than those in other countries, and total UK low-carbon policy support costs per MWh are below the EU average.
The Institute for Advanced Studies at Loughborough University highlights two competing views of the nation that are part of the current political debate. The first view sees the nation as a shield against the negative impacts of globalisation, migration and other international threats. The second emphasises a flexible and plural view of the nation – for example, due to the devolution of powers to Scotland, Wales and Northern Ireland.
Whilst these two views are caricatures, they have very different implications for the UK’s energy transition. The first view does not necessarily mean that the transition to low carbon energy will be derailed. It could mean meeting emissions reduction targets in a different way. This includes more of a focus on domestic action and resources, and less emphasis on international co-operation, markets and interconnections.
Yet a low carbon strategy informed by this view has significant risks. Reducing reliance on international trade could make UK energy more expensive, and could make it more difficult to balance supply and demand as electricity systems decarbonise. A broader turn away from international trade and co-operation could also affect low carbon innovation and economic opportunities, and slow down the rate at which low carbon technologies are developed and commercialised.
The second view could lead to more of a focus on bottom up action to meet climate change targets. This is already happening to some extent, led by devolved governments and some Local Authorities. Examples include Welsh government’s plans for a low carbon transition and Greater Manchester’s ambition to become carbon neutral. For some, this decentralisation of policy could be a way to meet emissions targets whilst maximising benefits to local communities and increasing legitimacy. As the Scottish strategy has shown, it can also lead to some healthy competition between different governments within the UK – for example over targets for phasing out conventional vehicles.
However, there are also questions about how far this trend could go in our centralised state. If the current distribution of powers remains broadly the same, it will be difficult to deliver what many the national and local plans have promised. UKERC research on the role of Local Authorities suggests that success will partly depend on the relevant levels of government having more control over policy levers and financial resources. From a national (UK) perspective, there is also a risk that geographical inequalities could be exacerbated by decentralised action.
As with many areas of policy, the UK energy transition is likely to be affected by broader political changes – including the greater prominence of nationalism in different forms. Although the political consensus for a low carbon transition remains strong, this could be undermined if the shifts in politics are not taken into account. This means paying more attention to the wider benefits of the transition at both national and local levels, and ensuring that these benefits (and the costs) are distributed fairly.
Watch
A recording of Jim Watson’s presentation can be viewed at this link. Our thanks to Helen Tighe and the Loughborough University team for uploading this.
Author
Professor Jim Watson is Director of UK Energy Research Centre (UKERC).