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Economy

Abandoning ‘environmental taxes’ on energy bills will harm your health and wealth

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On a typical energy bill of £1,500, environmental taxes add around £70. That £70 invests in the development of clean, limitless and domestically generated energy. It creates jobs in the new economy and reduces our dependence on scarce fossil fuels, with volatile prices from unstable regimes.

There’s been lots of nonsense spouted in the national press and on television about the huge burden to households and industry of surging environmental taxes.

Wholesale prices represent 67% of the gas bill and 58% of the electricity bill. Environmental costs (including the Warm Home Discount, which makes the headline percentage slightly misleading) is 6% and 11% respectively. In reality, ‘environmental taxes’ only contribute 4-5% of the whole bill. It is volatile wholesale prices, rising energy company profits and the massive subsidies to the fossil fuel industry that contribute the greatest cost uncertainty to households.

Energy companies are not simply passing on wholesale costs. The latest Ofgem statistics, from mid-September, show that the average profit margin made on the £1,315 bill is £65. This was £30 higher than September 2011 and September 2012.

In the UK, fossil fuels receive £9-12 billion of taxpayer subsidy compared to the £3 billion for renewables. Fossil fuel subsidies and the tax on bills contribute a far greater proportion of cost to domestic and commercial energy bills (£3-4 to every £1 of renewable ‘subsidy’).

Burning fossil fuels creates poor air quality, estimated to cost the taxpayer and economy £20 billion (a massive underestimate according to parliament) and particular harmful to the young (with immature respiratory systems), those with respiratory illnesses (such as asthma) and the weak. That’s seven times the renewable subsidy.

Relying on scarce fossil fuels, bought at volatile prices from unstable regimes, has meant risking the lives of our brave soldiers to fight wars to protect the supply chain, when we have an abundance of clean domestic wind, solar, tidal, hydro and biomass options. If we were to capture just one third of our offshore renewable potential we would become a net exporter of energy.

Public ‘subsidies’ (a debater’s sleight of hand used as a derogatory term for ‘taxpayer funded’) have created the infrastructure, schools, universities, hospitals and the internet, upon which the private economy and wealth creation is wholly dependent. Public subsidy has built every energy producer in the UK. Some members of parliament, lords, commentators and blokes down the pub have decided that renewable energy subsidies are bad, but the other subsidies are good.

The tailored, pinstriped elephant in the room

The real tax that has been imposed on society has been the banks’ bailout of 2008. Incorrectly deemed too big to fail, the legitimate aims of protecting depositors, maintain liquidity and capital and encourage banks to keep lending has come at a heavy price which eclipses any renewable subsidy or ‘tax’. The outstanding support as of March 31 2013 was £141 billion or £47 for banks for every £1 for renewables.

According to the National Audit Office, “Once the opportunity cost and risks are factored in, the schemes have represented a transfer of at least £5 billion from taxpayers to the financial sector.”

Truly a reverse Robin Hood. The report continues, “It is likely that a substantial proportion of these schemes and investments will be with us for some time and the eventual profit or loss to the taxpayer will not be known until all the support is removed, the loans repaid and the shares sold.”

We know that we cannot depend on fossil fuels for our future energy supply. We need a rapid period of transition from a high-carbon to low-carbon economy and this public good needs to be funded. But the modest charge on household energy bills creates vast volumes of media coverage and outrage in some quarters. Less discussed and outrageous, it seems, is the unprecedented taxpayer subsidy for the wealthiest private organisations in the country that have done more harm to our economy and free markets than any other in the history of modern capitalism.

Providing tiny subsidies to the infant renewable energy industry will provide energy security, economic certainty, new jobs and valuable exports. Providing massive subsidies to banks has impoverished future generations, locked in casino capitalism, done nothing for commercial lending which powers our economy and represents the biggest transfer of wealth from the poor to the rich since the Norman conquest.

Such economic and environmental illiteracy is a disgrace in our national press, broadcasters and in No 11 Downing Street.

Further reading:

The real energy subsidy scandal

What have subsidies ever done for us?

The long goodbye to fossil fuel subsidies

Governments are throwing ‘green money after brown’

Ditch energy subsides for a better world, says IMF report

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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