Those Daily Mail figures keep coming – who’s counting?

  • 19 Aug 2011, 15:00
  • Robin Webster

The Daily Mail's volley of contradictory numbers attacking green energy is continuing. This week they are aided by the release of a new book, Let Them Eat Carbon, by the free market TaxPayers' Alliance.

In an editorial entitled "No room for dogma in these hard times", the newspaper discussed the impact of rising fuel and food prices on households. It said:

"…the Mail urges ministers to do what they can to ease the corrosive effects of inflation by halting their politically correct obsession with green energy taxes. As we reveal today, EU emissions directives alone are costing households up to £115 a year - money that is desperately needed elsewhere in the economy."

The estimate that "EU emissions directives alone" are costing households up to £115 a year appeared to be based on the following figures, outlined elsewhere in the paper and sourced to the TaxPayers' Alliance:

"Figures show the Trading Emissions Scheme, which caps businesses' carbon emissions, cost UK consumers £1.9billion last year, equivalent to £75 per family.

"The Renewables Obligation, under which energy companies have to invest in alternative energy sources, costs £1.1billion, or £40 per home.

"These schemes are in addition to [other hidden] green taxes consumers pay in their energy bills."

£75 plus £40 is £115.

Attributing the costs of the Renewables Obligation - which is the UK government's main mechanism for supporting large-scale generation of renewable energy - entirely to the EU seems a bit tenuous and perhaps says more about the Mail's attitude to the EU than anything else.  

Leaving that aside, the figures quoted by the Mail are wildly at odds with government estimates. When we asked DECC for their figures on the impact of the Emissions Trading Scheme and the Renewables Obligation on domestic bills, they pointed us their latest figures in Appendix D and E of this document (pdf). Table E2 (p21) indicates that in 2010, the Emissions Trading Scheme accounted for £26 of the average annual domestic electricity bill, and the existing Renewables Obligation accounted for £16. These figures are due to be updated this Autumn.

Ofgem in contrast estimated in 2009 that the Emissions Trading Scheme contributed £24 to the typical annual domestic electricity bill and the Renewables Obligation added around £12 to a typical bill. In January 2011 Ofgem's estimated numbers were £13 for the Emissions Trading Scheme and £16 for the Renewables Obligation, as we highlighted in this blog.  

So where does the TPA get their numbers from? Chapter 3 of their book, officially launched yesterday, contains the calculations on the Emissions Trading Scheme. The core to the calculation is how much of the cost of the Emissions Trading Scheme is passed on to the consumer.

The TPA book estimates that in the UK about 65 percent of the cost of the scheme are 'passed through' to consumers. But this appears to ignore the fact that, in this country, households only account for 36 percent of electricity consumption - so they are hardly likely to bear 65 percent of the cost.

Secondly, it is possible that the figures do not take into account the role of industrial emitters of carbon dioxide. As a policy expert from Sandbag told us:

"I suspect he has failed to disaggregate power generators from combustion installations…the combustion category includes power [electricity], but it also includes combustion for industrial processes like blast furnaces etc. UK combustion accounts for 50 percent more carbon permits than UK power alone."

However it was achieved, the TPA's estimate for the cost of the ETS on domestic electricity bills is about three to four times higher than those by Ofgem or DECC. The TPA's estimate for the costs of the Renewables Obligation is about two to three times Ofgem's and DECC's.

Anyone reading the Daily Mail is likely to be getting very confused. Over the last two months they have also:

  1. Claimed in a series of articles that 'green measures' were adding £200 to an average household energy bill. After it was pointed out that this figure was based on unreferenced claims by climate skeptic lobbyists the Global Warming Policy Foundation, the Mail quietly stopped using the £200 figure.
  2. Suggested that an average energy bill would double over the next five years, rising by £1000 to around £2000 "to fund a switch to green energy and build new nuclear power stations". This figure came from a report by Unicredit bank which is not publicly available, which the authors would not discuss, and which contained no further detail about how the figure was calculated.
  3. Claimed that "the green tax con" is "costing families £500". This figure used an out of date methodology as we discussed here. The TaxPayers' Alliance responded to our blog here, but the Huffington Post then laid out further criticisms of the calculation here.

If the Mail believes that there is no room for dogma in these stretched financial times, it should perhaps consider what that means for its own reporting of energy issues.

UPDATE Monday 22nd August: Matthew Sinclair, the author of the book by the Taxpayers Alliance, has written a response to this blog, which makes some reasonable points. We will be writing more on this.

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