Having both emissions trading and feed-in tariffs is a waste of time

Dan Box
The new feed-in tariffs are nothing if not controversial, but they also run the risk of conflicting with other, international, climate change policies

Government climate change champion Ed Miliband calls it a 'local energy revolution'; the Independent 'a real green money-spinner' that will 'ease your eco-guilt'.

What are they talking about? None other than the new ‘feed-in tariffs’, which mean that, from April 1st, power companies will pay you to generate electricity from solar panels or wind turbines on your roof.

Now, I like free money as much as the next man, and my eyes lit up when I first heard of this idea. Only on closer inspection did I establish the problem; that in terms of fighting climate change, feed-in tariffs are a nonsense.

One issue very well-rehearsed is that the Government’s plans will literally throw billions at promoting solar panels, which are a stupid way to generate electricity in this dark but windy country. Solar panels allow you to ease your eco-guilt expensively - they are effectively a fashion accessory, or eco-bling (there has been a fair ding-dong over this in the pages of the national press).

Another fault is that forcing power companies to pay person X for his solar power will provoke them to put up all our bills in return – Miliband estimates by about £50 a year, though expect it to be more – creating a merry money-go-round where we pay with one hand and take with another (or, worse, where person X gets paid by person Y, who can’t afford any eco-bling herself).

But, most seriously, feed-in tariffs simply don’t add up, for one good reason – the European Emissions Trading Scheme. Under the ETS, carbon reductions in one industry can be traded against increases elsewhere. The British launch lags an identical decision by the German government in 2000, a report on which published in the journal Energy Policy says feed-in tariffs 'do not imply any additional emission reductions beyond those already achieved by ETS alone'.

Either have feed-in tariffs, or emissions trading. Having both is a waste of time. Miliband’s revolution may be a votewinner, but in terms of cutting Britain’s carbon emissions, it looks dangerously like multi-billion pound coup de theatre, nothing else.


Agree? Disagree? Leave your comment below...

Is Adair Turner this blog’s Favourite Person™?

With the end of the financial year fast approaching – the time when these things are totted up – Lord Turner of Ecchinswell is certainly making a storming run for the title.

This, after all, is the man who, as chairman of City watchdog the Financial Services Authority, said British banks engaged in 'socially useless' activity. The FSA itself, formerly dismissed by Private Eye as the Fundamentally Supine Authority, has also started to show some bite, trebling the fines it can levy on businesses and businessmen, and securing a conviction in the largest case of insider trading it has ever brought – of a former executive from Cazenove, the Queen’s stockbroker, no less.

Turner also chairs the Government’s influential Committee on Climate Change, and has used his seats on high to talk up both a carbon tax on imports and a Tobin tax on financial transactions to help the poor.

Other nominations for the Favourite Person™ award are welcome (winners receive a total of no prize money, prestige or worldly fame), but a word to those hoping to make the inside track: it’s going to be hard to elbow out the good Lord T.

UK to pay public for generating green energy - but will it be enough?
Campaign groups believe the payments will be too low to encourage significant numbers of people to install small scale renewable energy in their homes and communities
10p to create a solar power sector in UK
A higher tariff for green electricity generation would help the UK catch up with the rest of Europe
Roundtable on renewables
The Ecologist harnessed the power of several luminaries from the renewables world to find out why a wholly renewable future seems no closer than before.
LSE's Anne Power: my recipe for 80 per cent energy savings in your home
Anne Power, Professor of Social Policy Housing and Social Exclusion at the London School of Economics, on why nearly all homeowners can afford to insulate properly, and how to save energy on a budget

More from this author