EnergyUK policyReshuffle: DECC folded into new department headed by Greg Clark
Theresa May, the new prime minister, has axed the Department of Energy and Climate Change, by folding it into the Department for Business, Innovation & Skills and thereby creating a new ministry called the Department for Business, Energy and Industrial Strategy.
I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.
It is not Clark’s first brush with the climate change brief. Between 2008 and 2010, while the Conservatives were in opposition, he was shadow secretary for energy and climate change.
In this time, he made his views clear on climate change. Here are some quotes that might give us some idea of what to expect from him in the future.
Advances in climate science mean that we have an increasingly good idea of what the most likely outcome is for a particular level of carbon in the atmosphere – and, on current trends, this would be bad enough. Yet, we can’t overlook the fact that these represent midrange estimates. That might not matter if we could be certain that the actual outcomes won’t deviate very far from the central predictions; but, to use the statistical jargon, these are left-tailed, fat-tailed distributions – meaning that the worst that could happen is really very bad indeed.
Thanks to factors such as the release of methane from melting permafrost, there is a danger that higher temperatures could trigger a vicious circle of runaway global warming, with truly disastrous consequences. There are some risks, which are so extreme, so unpredictable, so global in their consequences, that they can’t be tolerated.
We’ve come to know these as ‘black swans’, a term made infamous by the credit crunch, where conventional risk management techniques came spectacularly unstuck. When faced with a black swan risk the only way to protect yourself is to reduce your exposure in the first place. In the case of climate change, that means ending our grand experiment with the planet’s atmosphere. The net costs of decarbonising the economy should therefore be regarded as an insurance policy – much as any sensible householder would pay to insure themselves against the remote, but real, risk of fire and flood. And not just the climate risks.The insurance principle doesn’t just apply to climate change.
Some have asked can we continue to afford to fight climate change at a time like this? Shouldn’t we perhaps put it off until the economy gets moving again? It’s a good question… though one that is sometimes asked in bad faith by those who’d oppose action on climate change at anytime. That might be because they just don’t believe the mainstream scientific position on climate change or, in some cases, because it doesn’t suit their vested interests. Either way, the recession argument is, for them, just the latest in a series of delaying tactics.
Policies to decarbonise the UK economy should never be treated as some sort of sideshow or distraction. Nor should they be seen as an irrelevance during a time of economic downturn. “Green” policies do a lot more than protect our environment; they create immediate new jobs in construction, manufacturing and services, they reduce energy bills through greater efficiency and they will help reduce our balance of payments deficit in the longer term by reducing our dependence on imported fossil fuels. We should be using the downturn to make this conversion to a more resilient economy, not putting the problem off again until the next unsustainable boom turns to bust.
It is frustrating that in this crucial technology – in which British know-how, skills and geological assets in the form of depleted North Sea wells give us a huge advantage – we have ceded leadership to Germany, China and the US. I hope that it will not be too late to catch up. The country that leads the development of CCS will unlock the potential for many thousands of jobs and investments around the world during the decades ahead.
I am also concerned that the government’s plans for carbon capture and storage potentially leave the door open to huge new, highly polluting coal-fired power stations. Without a clear cap on the emissions levels from new power stations, a policy known as an emissions performance standard (EPS), the government’s plans could mean only a small fraction of the emissions from new power stations will be captured. My party is committed to setting an EPS that would require all new UK base load generation to have emissions no greater than that of a modern gas power plant.
Energy efficiency is the key to achieving this: we can save energy, cut carbon emissions, and cut energy bills. But Britain’s homes are among the most energy-inefficient in Europe. Why do millions of families not have enough insulation? When the Conservatives looked into why Britain’s homeowners weren’t falling over themselves to make their homes warmer, we found good reasons for their inaction: not knowing where to start; not having a trusted supplier to carry out the work; and not having the cash to pay for the upfront costs.
Literally and figuratively our North Sea is still a sea of energy. Where else in the world do renewable resources coincide, in such abundance, with unusually shallow waters and enormous energy markets – not just on one coast, but two? We possess the world’s best offshore wind, wave and tidal resources. Britain could and should be the Saudi Arabia of marine energy. We could and should be creating export markets in the design and manufacture of these cutting edge technologies.
And this isn’t just about renewables. Beneath the shallow waters that surround us, within reach of safe harbours, we possess a vast resource of depleted gas fields and saline aquifers, with space to store not only natural gas, but also carbon dioxide – captured through the use of CCS technology. The power stations, refineries and energy intensive industries to which CCS could be applied are waiting on our shores – and those of our neighbours – ready to be connected by pipelines to those conveniently located storage sites. As in the case of renewables, the infrastructure requirements present a challenge, but also the opportunity to build new industries and create new jobs.
This is “watermelon environmentalism” – green on the outside, red on the inside. It is a gift to those who oppose all forms of environmentalism – allowing them to portray efforts to curb pollution not as necessary regulation, but as part of a much wider programme to control our lives. As a Conservative I oppose the red-green approach on principle. But as an environmentalist I oppose it because it doesn’t work.
If we want to beat a problem as big as climate change, then we need innovation on a massive scale – not only in technology, but also in the everyday engineering, logistics, finance and marketing required to turn inventions into world-changing enterprises. That doesn’t mean that government has no role. The price of pollution isn’t always automatically internalised by the market. Public policy is needed to price-in the cost of carbon and to do so in a way that sends a clear and consistent signal for investors.
I believe [the] biggest threat to our prosperity, social fairness and economy will be staying on our current increasingly volatile, expensive and inefficient high carbon path…The British economy has paid a high price over the past year for its over reliance on high risk, unsustainable investments. The transition to a low carbon economy gives us the opportunity to rebuild our economy on the firmer ground of hard infrastructure and greater efficiency, which will result in a more resilient, and more equitable, form of national prosperity in the future…In reducing our climate risk and the exposure associated with dependence on fossil fuels, we will…be transforming our debt culture into a savings culture. The long term, low-risk opportunities offered by energy efficiency and other low carbon investments will drive our economy, relieve fuel poverty and act as one of the rocks on which we rebuild our national capacity for genuine wealth creation.
Greg Clark has also recently found himself embroiled in the debate around fracking. As communities secretary, he decided that he should take the final decision, which is still pending, on whether Cuadrilla should be allowed to frack for shale gas in Lancashire because it was a project “of more than local significance”.
At this stage, a question mark hovers over the importance of climate change in the newly created department. The exclusion of the phase “climate change” from the title of the department is already a cause for concern, tweeted the former Labour leader Ed Miliband who also was the former department’s first secretary of state.
DECC abolition just plain stupid. Climate not even mentioned in new dept. title. Matters because depts shape priorities shape outcomes.
Angus MacNeil, chair of parliament’s Energy and Climate Change Committee, also said that the abolition of DECC raised questions about the focus on climate change in Theresa May’s new government.
Reacting to the announcement that DECC is to be abolished, MacNeil said:
DECC’s disappearance raises urgent questions. To whom falls the central statutory obligation, contained in the Climate Change Act 2008, to reduce the UK’s carbon emissions by 80% from their 1990 baseline? Which Department will take responsibility for the energy and climate aspects of negotiations to leave the EU? Who will champion decarbonisation in Cabinet? Who will drive innovation in the energy sector?
Greg Clark was not the only significant appointment of the day for climate change and energy.
Andrea Leadsom, who was relatively unknown as minister of energy and climate change before shooting to fame through her ill-fated bid to be prime minister, was promoted to the position of environment secretary at the Department for Environment, Food and Rural Affairs.
Among other tasks, this will see her overseeing a small portion of the UK’s international climate finance.
The job had previously been occupied by Liz Truss, who was given the role of justice secretary. Before this, it was notoriously filled by Owen Paterson, who has since made a name for himself in climate sceptic circles through an annual lecture for lobby group The Global Warming Policy Foundation and derisive columns about “Green Blob” campaigners.
Downing Street and Whitehall street signs in Westminster, London. Credit: Pres Panayotov/Shutterstock.com
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DECC folded into new department headed by Greg Clark