Booker: the carbon tax cometh

30/09/2012

This sets the background for the lead piece in Booker's column this week, who warns us that the government has another massive shock in store for us with its weirdly distorted energy policy.

Despite the abnormally high proportion of coal being used to keep our lights on, by next March, we learn, some of our largest coal-fired plants, capable of supplying a fifth of our average power needs, are to be shut down, much earlier than expected, under an EU anti-pollution directive.

This is our old friend the Large Combustion Plants Directive, but the reason they are being hammered through their remaining quota of hours allowed by the EU is that a new UK tax comes into force next April, which aims to make fossil-fuel power significantly more expensive.

In 2010, George Osborne announced his intention to impose, from April 2013, a "carbon floor price" of £16 on every ton of CO2 emitted by British industry, rising to £30 a ton by 2020 and £70 a ton by 2030.

An explicit purpose of this tax is to make the cost of electricity from fossil fuels so uncompetitive compared with "renewables" that it will, in the Treasury's words, "drive £30-£40 billion" of investment into "low carbon" sources such as wind and nuclear. On paper, the effect of Osborne's new tax on our electricity bills looks devastating.

Using the latest figures from the Department of Energy and Climate Change (DECC), our power plants burnt 40 million ton of coal in 2011, emitting 116 million ton of CO2. They also generated 175,000 gigawatt hours from gas, at just over half a ton of CO2 per gigawatt.

At £16 a ton, this CO2 would cost £3.5 billion – on top of our total current wholesale electricity cost of some £19 billion. Thus the new impost would represent nearly 20 per cent added to our electricity bills next year, and would almost double them by 2030.

Some of this, however, we already pay through the EU's Emissions Trading System (ETS), which counts towards our £16 floor price. Osborne's calculation in 2010 was that, initially, we would have to chip in less than an additional £2 per tonne to make up the £16 price. (The ETS price at that time was predicted to continue rising towards £40.) Since then, however, with falling demand due to the EU's recession, the price of EU carbon permits has fallen dramatically.

Thus, to reach the initial £16 level, the Treasury says we will now have to pay nearly another £5, making our electricity significantly more expensive. But since it made that guess the EU price has slipped still further, to well under £6 – leaving a gap of £10 a tonne to be made up by Osborne's tax, rapidly rising every year thereafter.

Thus, to meet that tax level in the years after 2013, we in Britain will have to pay electricity bills soaring to a level far higher than any others in Europe. And all this is to promote the building of thousands more heavily subsidised windmills, which will in turn require us to build more gas-fired power stations to provide back-up for the constant fluctuations in wind speed.

These plants will then be paying Osborne's fast-rising tax on all the CO2 they emit, with the bill to be picked up by the rest of us on a scale which, within 18 years, could alone almost double the cost of our electricity.

In short, the Treasury has made an incredibly damaging miscalculation. And even if there is little chance that our Energy and Climate Change Secretary, Ed Davey, could get his head round such lunacy, says Booker, perhaps someone might lay out for Osborne the bill that his delusional new tax is going to land us all with.

As to the reason why people like Daley are impervious to reason, this comes in Booker's second piece, which records the latest instalment of the Great Arctic Ice Scare. Daley is a true believer, and is thoroughly imbued with warmist propaganda

That we saw in spades in September 2007, when the summer melt reduced Arctic ice to its lowest level since satellite records began in 1979. Then, there were hysterical predictions that within five years, thanks to runaway global warming, Arctic summer ice would have vanished completely.

Predictable, when Nasa satellites showed last month that this year's melt was about to break even that 2007 record, the same hysteria recurred. All the usual suspects, from the BBC's Roger Harrabin and The Guardian to Greenpeace and WWF, piled in to proclaim that the end was nigh. And from prof Peter Wadhams, that tireless alarmist, we got: "the final collapse… is now happening and will probably be complete by 2015/16".

But then, as the sea recently began to refreeze, Nasa itself put up a video showing how a severe cyclone in early August had "wreaked havoc on the ice cover", pushing vast amounts of it into warmer waters further south where it melted. (Reuters headlined its report: "Nasa says Arctic cyclone played 'key role' in record ice melt".)

A Nasa surface temperature graph has long shown that the Arctic was considerably warmer in the late 1930s than it has ever been since. Furthermore, what the warmist scaremongers always forget to tell us is that polar ice at the other end of the world has been reaching record highs in recent years.

Last week, Antarctica's sea ice area was only just short of the greatest extent ever recorded at either pole. A graph on Watts Up With That, charting the combined global sea ice area over the past 33 years, shows the overall extent having remained virtually constant ever since 1979.

Isn't the point about this warming that it is meant to be "global?", asks Booker – even if it's good enough for Daley, and excuse enough for Mr Osborne to double our electricity prices.