The UK newspaper frontpages are dominated by an expected £650 (50%) increase in the energy price cap, set to be announced by energy regulator Ofgem later this morning and followed by a government response. BBC News says the “record rise” will apply from the beginning of April and that chancellor Rishi Sunak “may step in to reduce bills by £200 for many household”. It continues: “But there are doubts over whether the measures will be ready by the time higher prices start on 1 April. Energy bosses have told the BBC that they have been kept largely in the dark about the government’s plans.”

The frontpage of the Financial Times reports that the announcement from Ofgem has been brought forward by several days. It says: “Analysts are expecting an increase in the cap of around £650 to more than £1,900 per household per year. Sunak will immediately respond with a House of Commons statement…The chancellor is expected to cut £200 from all household energy bills, according to those briefed on his plans, with money loaned to power companies which will be passed directly to consumers. Sunak will attempt to claw back that money later, when wholesale energy prices fall, through a levy on future bills, according to people briefed on the plan.” The paper continues: “The chancellor has also promised targeted help for the most vulnerable households, with the focus on how to expand on the existing ‘warm homes discount’ scheme, currently worth £140 for 2.7m households. According to those briefed on his thinking, Sunak wants to expand that support to the 8.5m households that receive universal credit and other state help. A £300 payment to that group could cost about £2.5bn, which the Treasury would not recover. Such a proposal would see all households receive £200 off a projected £650 increase in energy bills, with poorer homes getting a £500 discount. The Treasury declined to comment on ‘speculation’.”

The Guardian frontpage says the Treasury has been “scrambling to complete 11th hour plans capable of softening a national cost of living crisis”. The Daily Telegraph frontpage says Sunak “splashes out to ease bills crisis”, repeating the widely reported suggestion that the Treasury could give energy companies loans to spread the cost of the expected price hike over several years. It adds: “The Telegraph also understands that Treasury officials have been preparing plans for a council tax rebate, a targeted measure that would help the poorest families. The proposal would mean council tax is temporarily cut in the lowest property bands…Three government sources said the plan…was being seriously considered. The Treasury declined to comment.” The paper then quotes Steve Baker of the climate-sceptic “net-zero scrutiny group” of Conservative MPs, former minister John Redwood and “another former minister” calling for the government to scrap – or shift to general taxation – the “green levies” on energy bills that fund renewable energy, energy efficiency and fuel poverty policies. [Carbon Brief analysis published in January showed these levies are expected to fall even as the price cap goes up by 50%.] The Times frontpage splash reports: “Millions of people will be given rebates on their council tax bills worth hundreds of pounds to limit the impact of soaring energy prices on poorer households.” It adds: “Ministers have ruled out cutting VAT on energy as it was seen as ‘blunt’ and expensive, while scrapping green levies on energy bills was deemed impossible because the government is contractually obliged to pay most of them.” The Daily Mail frontpage splash says: “Energy bills to soar by £650 – now the heat is on Rishi [Sunak].” It reports that Sunak will “slash the cost for poorest” but says he will “warn[] he cannot fully insulate them against the cost of living crisis”. [Carbon Brief‘s analysis shows that energy bills are £2.5bn higher than they would have been if climate policies including on energy efficiency had not been scrapped over the past decade.] The Mail says: “Sources suggested that other options to slash bills, including scrapping VAT on fuel and cutting green levies, had been rejected – a decision that is likely to anger some Tory MPs.” It adds: “The hardship [from rising bills] comes at a time when oil and gas giants, such as BP and Shell, are making billions from the global spike in gas prices. This has sparked calls from Labour for a windfall tax.” The Press Association, Reuters, Bloomberg, Channel 4 News and Sky News also have the story. Another Bloomberg article says that the expected increase in the energy price cap will “drag 10% [of households] into energy poverty”.

Elsewhere, Reuters reports that energy prices are expected to continue rising but their effect on inflation should wane, according to Goldman Sachs. Separately, Reuters reports that a scheme to manage energy bill increases in Ireland does not go far enough, according to deputy prime minister Leo Varadkar.

The UK government has unveiled its flagship “levelling up” strategy in a white paper, but the “need to reach net-zero” and green jobs “received scant attention”, reports The Guardian. Instead, the white paper lists the “green industrial revolution and transition to net-zero” close to the bottom of its 16 priorities, according to the publication. While the government promises £26bn of capital investment, analysts told the newspaper that it is “not clear if any of this was new money or how it would be spent”. Despite the current energy price crisis, campaigners told the outlet the levelling up strategy lacks any commitments to better insulate UK homes or reduce reliance on “expensive imported gas”. Renewable energy, too, was given short shrift, it says: an RE industry body executive called the “levelling up” paper “a missed opportunity”. According to the story, the “few examples of green investment” include £1bn for electric vehicle manufacturing and “battery gigafactories” and £1bn for carbon capture and storage.

Business Green’s James Murray, analysing the paper, writes that “a government that properly prioritised the net-zero transition, rather than treated them as a separate silo, would find it much easier to embed climate action in its response to the gas price crisis.” In another comment on levelling up in Business Green, Prof Henrietta Moore writes that “without tax reform, the cost of funding net-zero will fall disproportionately on the shoulders of those least able to afford but most likely to suffer the consequences of a rapidly degrading environment”.

Floods and other weather extremes have cost Europe “about half a trillion euros in the past four decades”, as well as between 90,000 and 142,000 deaths, the Guardian reports, citing European Environment Agency data. It says the “worst-hit countries” are Germany, France and Italy but adds that the data “does not show a clear trend of increase in losses over the decades from the impact of the climate crisis”. It continues: “This is because the economic impacts tend to be concentrated in a few major events…and these can strike anywhere and cause vastly different results.” The paper quotes one of the report’s lead authors and says: “He said the fact that losses were not clearly increasing should not make people complacent, but underlined the importance of adapting infrastructure and making preparations for extreme weather, which is likely to become more frequent and intense as the climate crisis progresses.”

Investments in certain gas and nuclear projects would be “labelled as sustainable under rules proposed by European Commission on Wednesday”, Reuters reports, adding that the plan “has split countries and investors”. The newswire explains: “Brussels has taken more than a year to decide if gas and nuclear energy should count as green investments in the EU’s taxonomy, an investor rulebook designed to help raise massive amounts of private capital to meet EU climate change targets. In final rules published on Wednesday, gas power plants would be labelled green this decade if they emit less than 270g of CO2 equivalent per kWh, or have annual emissions below 550kg CO2e per kWh over 20 years…New nuclear plants must receive construction permits before 2045 to get a green investment label, and be located in a country with a plan and funds to safely dispose of radioactive waste by 2050.” Reuters adds: “EU countries and the European Parliament have four months to potentially block the rules, which could be done by a super-majority of 20 out of the 27 EU countries – a threshold seen as unlikely – or a majority of lawmakers.” It reports: “The Austrian government on Wednesday repeated its threat to take legal action over nuclear’s green label.” Associated Press says the proposals have “divid[ed] member countries and draw[n] outcry from environmentalists as ‘greenwashing.’” It continues: “Under certain conditions, gas and nuclear energy could be part of the mix, making it easier for private investors to inject money into both. The plan seemed designed to please the EU’s two most powerful nations: France is reliant on nuclear power, which raises concerns about long-term impact on the environment, and Germany depends on gas, a fossil fuel many consider a bridge to renewables.” The Guardian says the European Commission proposals have been “widely criticised as undermining efforts to keep global heating below 1.5C”. It quotes Laurence Tubiana, one of the Paris Agreement’s architects and chief executive of the European Climate Foundation (which funds Carbon Brief): “Europe is undermining its climate leadership and lowering standards in the EU and beyond.“ EurActiv and BBC News also have the story. Politico has an article exploring “the impact of the EU’s new investment rules”. It explains: “In its more audacious form, the taxonomy may redirect financial capital flows into truly green investments. Otherwise, it’s just a list that thanks to political fudges will simply be ignored. Here are two reasons why the fuss is warranted. And two reasons why it’s not.”

A Chinese state-owned nuclear power group, China National Nuclear Corp, has signed a contract in Argentina to build an $8bn nuclear power plant in the South American country using Chinese know-how, Reuters reports. The newswire says that the plant will use China’s Hualong One technology, a third-generation pressurised water nuclear reactor power plant technology. It adds that the reactor will be installed in the town of Lima in the province of Buenos Aires. The Global Times – a state-run Chinese newspaper – notes that each Hualong One nuclear generator has an installed capacity of about 1.2m kilowatts. It adds that it is “expected to generate about 10bn kilowatt hours of electricity every year, which can meet the power use demands of one million people”.

Meanwhile, the South China Morning Post reports that China’s national emissions trading scheme “could see transaction volumes reaching 100bn yuan ($15.7bn) in 2030”, according to “climate experts and officials”. (Carbon Brief has analysed how the scheme could help China tackle climate change in this in-depth Q&A.) Separately, Bloomberg runs a piece titled: “China’s new energy heavy trucks will see more growth in 2022.”

Elsewhere, China’s state broadcaster CCTV reports that various parts of China saw “heavy or worse air pollution” due to the fireworks set off to celebrate the Lunar New Year. The affected regions include north-eastern China, the Yangtze River Delta, central China and Xinjiang.

A passage criticising Japan for continuing to finance overseas coal projects has been deleted from an International Monetary Fund document, Reuters reports, citing “a copy of an earlier draft”. It reports: “The IMF issued the report on 28 January at the conclusion of a routine country surveillance mission to Tokyo to review Japan’s economic policies.” It says the earlier draft included the sentence: “While the Japanese government pledged to end new unabated coal financing, ending exceptions from the pledge and phasing out of existing commitments to support coal projects abroad would further contribute to the global efforts on climate policy.” The newswire adds: “The Japanese government, which has backed exports of coal power plants to Indonesia, Vietnam and Bangladesh, adopted stricter rules for such projects in 2018 and 2020. However, it has resisted divestments of such projects, and has continued to grant exceptions to a June 2021 policy pledge to stop backing coal projects that lack measures to reduce carbon emissions.”

The lack of a clear plan for decarbonising heating and insulating homes will prevent the UK from meeting its net-zero target, according to a cross-party group of MPs, the Financial Times reports. It says: “The government needs to help develop low-carbon heating technologies, scale up the market for heat pumps and support gas boiler engineers as they reskill to carry out the conversion work, according to the report by the House of Commons’ business, energy and industrial strategy committee.” It adds: “The MPs said energy companies needed to explain to bill payers why switching away from gas and insulating their homes was ‘not only important in tackling climate change, but also a route to reducing energy bills’.”

The Guardian says the government is “failing” to cut emissions from home heating, according to the MPs’ report. Citing the findings, it adds that there is “little sign of a clear plan for ending reliance on increasingly expensive gas”. Many people are unprepared for the “revolution in home heating” over the next 10-15 years, reports BBC News, citing the committee findings. It reports: “[T]he MPs…said the government’s approach to decarbonising home heating lacked clear direction. Current policies are also not on the scale required, they said.” It adds: “The committee’s chairman, Darren Jones, said replacing gas boilers, the major source of pollution from homes, was ‘a huge task and we are not making near enough progress’.” New Scientist adds: “A poll by Opinium for innovation agency Nesta found that 88% of 2,000 UK adults under-estimated how many tonnes of carbon emissions a domestic gas boiler produces each year. Only 12% correctly said they were the equivalent to seven London-to-New York flights.”

The UK industry regulator has approved a new oil and gas project in the North Sea, Sky News reports, adding that it comes “just months after the UK hosted the COP26 climate change summit”. It says the “Abigail” field is relatively small and separate to “the controversial Cambo oilfield, which was halted in the face of significant public pressure”. The Times reports: “Green campaigners have said the approval of a new oil and gas field in the North Sea ‘only worsens’ the climate crisis.”

Separately, Unearthed reports that the greenhouse gas emissions intensity of the oil and gas extracted in the UK reached a record-high last year, citing “analysis of industry data”. It explains: “The data, from Norwegian oil intelligence service Rystad Energy, shows that the carbon intensity of UK oil and gas drillers had improved from 2018 to 2020, albeit marginally. In 2021, however, the industry’s upstream CO2 emissions intensity is estimated to have jumped 15%, rising by approximately 3kg of carbon dioxide per barrel of oil equivalent (boe) to 23kgCO2/boe – higher than at any point since the industry regulator began monitoring the metric in 2016. Experts say the increase was at least in part due to pipeline outages.”

Meanwhile, it other news from the UK, ITV News reports that plans to expand Bristol Airport have been approved by the government’s Planning Inspectorate, after an appeal against the earlier refusal by the local council.

The Independent follows up the Carbon Brief story, published yesterday, revealing the slide show that UK prime minister Boris Johnson says changed his mind about climate change in early 2020, shortly after he was elected. The paper reports that the revelations have “sparked renewed concern over the Conservative Party’s approach to the issue”. It quotes shadow climate secretary Ed Miliband saying: “I welcome all converts to the idea that we need to tackle the climate crisis. But Boris Johnson still needs to learn that rhetoric isn’t enough.” It also quotes Bob Ward of the Grantham Research Institute saying he hopes the presentation “will be shared with some of [Johnson’s] fellow Conservative MPs, such as Steve Baker and Craig Mackinlay, who clearly still do not understand the risks we all face if we do not cut out greenhouse gas emissions to net-zero.”

In a comment for the Times, Guy Newey and Josh Buckland, both former government advisers, write that energy policy “is long term and requires long-term thinking”. They continue: “Those talking heads pointing to simple, short-term solutions are in cloud cuckoo land. Take the argument that fracking for British shale gas would have avoided the current price shock. The idea that a fivefold increase in European gas prices…could be turned around quickly by a couple of wells in Lancashire is fanciful.” Instead, Newey and Buckland write, there are three key areas the government should prioritise. First, they advocate a “new approach to incentivising low-carbon electricity projects” to “reveal the best combination of nuclear, long-duration storage and back-up power stations” to fill in when “low-cost wind…likely to be the workhorse of the future UK electricity system” is not blowing. Second, they call for retail market reforms so suppliers “will hold the hands of consumers as they switch to electric vehicles and new ways of heating their homes”. Third, they question how much of the transition can be funded by “regressive” levies on energy bills, noting: “Even if existing green levies are not the cause of today’s price crisis, their presence emboldens those who would prefer us to give up our environmental leadership.” Instead, they point to the potential of “carbon taxes or standards, including at the border, and protecting the most vulnerable through more targeted support”. The pair conclude: “Yet the fact that significant changes to the energy system are painstaking underlines the urgency of reform. If the government wants to avoid spending the next ten years in a cycle of energy crises, it needs to start now designing an energy system fit for the future.”

An editorial for the Daily Mail responds to the expected announcement later today of a 50% increase in the UK energy price cap, saying: “The impact will be crippling, leaving hard-pressed families and pensioners facing the distressing choice of warming their homes or feeding themselves. That’s why we welcome chancellor Rishi Sunak’s plan to soften the blow.” The editorial continues: “This should be the spur to confront our exposure to volatile energy markets. It is absurd we are not exploiting cheap oil and gas reserves ringing our island, only to import fossil fuels at higher prices.” [The paper does not acknowledge that oil and gas prices are set by international markets.] An editorial in the Sun criticises the prime minister for “refus[ing]” to cut VAT on energy bills, having previously “boast[ed]” that Brexit allows him to do so. For the Daily Telegraph, associate editor Gordon Rayner blames the energy crisis – which is being caused by a spike in international gas prices – on “a trap laid by Labour’s Ed Miliband”. He writes: “After 12 years of Conservative prime ministers, energy customers are still standing in Ed Miliband’s shadow,” later adding: “The problems date back to 2008, when the Labour government imposed a series of green levies on households through their energy bills using the Climate Change Act, the brainchild of Mr Miliband.” [Policy costs are currently falling even as wholesale gas prices are set to push energy bills up by around 50%.]

An article for the New York Times by climate reporter Brad Plumer explores the implications for climate policies of “soaring” oil and gas prices and coal use “reaching record highs”. Plumer writes: “There’s a broader lesson here, energy experts said. Even as governments and businesses invest in low-carbon energy sources like wind and solar power, the world will remain deeply reliant on fossil fuels for years to come. Unless that transition is carefully managed, many countries could face volatile energy prices and other disruptions that, in turn, threaten to undermine support for policies to reduce greenhouse gas emissions.” Separately, Reuters reports: “A rushed transition away from fossil fuels risks driving electricity prices higher, a senior Russian official said on Wednesday.”

A new study “provide[s] evidence for at least two episodes during which the Arctic Ocean and the adjacent Nordic seas were not only covered by an extensive ice shelf, but also filled entirely with fresh water”. Using measurements of isotopes in marine sediments, the researchers propose that “these Arctic freshwater intervals occurred 70,000–62,000 years before present and approximately 150,000–131,000 years before present”. However, a “matters arising” paper puts forward “several strong arguments that contradict this interpretation and render it unlikely that the Arctic Ocean and Nordic Seas were filled by freshwater during the intervals discussed”. In a reply, the authors of the original study say that “the arguments against a glacial freshwater Arctic Ocean mostly rely on the use of one proxy that is not appropriate here, and poorly preserved”. (For more on proxy data, see Carbon Brief’s explainer.)