Blimey Phil, thanks for the link to "Competitiveness impacts of carbon policies on UK energy-intensive industrial sectors to 2030".

Section 2.1 - Key Messages:

The aim of this task was to estimate and compare final electricity prices faced by electro-intensive industries in the UK and in key competing countries in 2016, 2020 and 2030. As well as explaining the reasons behind the choice of
selected industries and countries, this chapter explains how the different price components of the electricity price were estimated and presents the key results. The following main findings can be highlighted.

1. Electro-intensive industries in the UK face higher electricity prices than most of the international competition despite the existence of substantial relief in the form of exemptions and compensation schemes to offset policy costs. Some UK industries are paying over £40/MWh more than their direct EU competitors, and the price differential is even greater when comparing to electricity prices in the US. Even with sector-based relief in the UK, electricity prices are generally higher than for competing industries overseas. In some cases, UK relief is lower than elsewhere, but the main factor that explains the price differential is higher wholesale and network costs in the UK.

2. Network costs are a larger part of the final electricity price paid by industry in the UK, than among trading countries. Crucially, larger firms in some of the key competing countries benefit from sizeable discounts (exemptions) in network and transmission costs. Wholesale electricity prices in the UK are also higher than those faced by key trading partners. This could partly be explained by the relative illiquidity of the UK market
.
3. Among the most important trade partners for the UK, only Germany has similar before-relief industrial electricity prices. The UK and Germany both introduced policies to finance the promotion of renewables, which are ultimately paid for in consumer (industrial and domestic) electricity prices. The most energy-intensive German firms can pay a lower price than their British competitors.

4. Having estimated projections of the electricity price, we expect the electricity price gap to persist until 2030. This is due to similar predicted increases in wholesale fuel prices, carbon cost and other policy costs in the UK and competing European countries. In the UK, we assume the largest percentage increase in renewable electricity generation over the projection period (increasing from 15% of total generation in 2016, to 50% of total generation by 2030). We assume
that policy costs grow in line with total renewable generation and therefore, in the sectors that do not face policy cost exemptions, the UK price increase is more pronounced than in most other countries.

We also expect the gap between European industries and their US and Chinese competitors to widen, due to an expected increase in the EU ETS price.

"I confess I haven't read it in detail, since it's a political polemic written by authors who work for the Grantham Institute, and who see the world solely through the eyes of the need to reduce GHG emissionsNov 29, 2018 at 3:15 PM Mark Hodgson"

I assume that the philanthropic Jeremy Grantham thinks he is helping to change the World, by helping the poor in wealthy nations, as well as the poorest Nations to develop some wealth. He has been misguided, and his generosity abused.

Under the CCA, UK Taxpayers are being abused and ripped off, and have no choice in the matter.

3,000 UK Deaths per Year due to Fuel Poverty

Nov 29, 2018 at 3:44 PM Mark Hodgson

I made previous comments about the Climate Change Act being the UK's biggest Peace Time disaster. That figure does not include Winter 2017-18.

ALL Political Parties must share the blame and shame for the CCA. How many MPs are now prepared to criticise it, and admit they did not understand that they were made to look foolish?

"We also expect the gap between European industries and their US and Chinese competitors to widen, due to an expected increase in the EU ETS price."

Nov 29, 2018 at 4:18 PM Mark Hodgson

China never wasted energy on carbon emissions. On behalf of the USA, Trump is fed up with waste too.

To avoid further failures, the UK needs to abandon the wasteful CCA, to maximise the benefits of BREXIT.

"The proportion of households living in fuel poverty in 2016 rose for the second year in a row to 11.1%, or around 2.55m homes."

It was nearer 12% when the CCA was enacted, so on aggregate something is working. Also raw numbers of households don't tell the whole picture - the amount of deficit per household has fallen every year since 2011 so the overall amount of fuel poverty has declined. Certainly the claim that 'The critique of the CCA is that it has pushed poor people in the UK further into fuel poverty' is at odds with the data.

I fully accept that there are a number of factors playing in to the cost of energy and also into the question of fuel poverty. However, I'm not aware of anyone arguing (again, correct me if I'm wrong) that the CCA hasn't increased the cost of energy in the UK

I specifically conceded that point, however the 'big picture' is of a decrease in FP.

I completely accept that the crash can't be blamed on the CCA, and that the timing is an unfortunate coincidence. However, GDP has increased by only 11% since 2008. You might be able to help me ascertain the GHG emissions fall in the UK since 2008, as I'm struggle to find it. However, since 2008 it doesn't look especially impressive, which isn't surprising, since presumably the "low-hanging fruit" was plucked early.

Take a look at the time series here.. My humble eyeball cannot make out much difference between the slopes before and after the 2008 crash. (The CCA received Royal Assent at the end of November 2008, btw so perhaps 2009 would be a better starting point?)

The CO2 reduction targets in the CCA were baselined in 1990 and included a 25% fall by 2012 and a 31% decrease by 2017. The actual figure for 2017 was -38%. This puts CO2 emissions at a rate not seen since 1890. See the graphic halfway down this piece. The rate of change increased markedly around 2008, when the figure was 527 MtCO2, to 366.9 in 2017, I make that around 30%.

So the Act overachieved in terms of its climate targets, without wrecking the economy.

And in case you try to argue that the CCA is not to blame for the bad and expensive way our energy industry is run, I'd remind you that much of it has been on the advice of the CCC, which is specifically a creature of the CCA - the two go hand in hand

No, this will not do. You started the thread thus:

The President Trump thread is in danger of being derailed by a digression on the Climate Change Act, resulting from Phil Clarke challenging criticisms of the costs and ineffectiveness of the CCA, and seeking to rebut those criticisms by referring to a paper by Bassi & Duffy in 2016, which can be found here:

I probably share some of the criticisms of the CCC, but this thread was about the Act itself, which was a piece of framework legislation setting out targets and granting Ministers certain powers aimed at moving the economy towards a low-carbon basis. How those powers were used and policies implemented were not specified by the Act. If you want to widen the discussion to embrace the CCC policies as well, that is fine by me, we'd probably find more to agree on, but let us not rewrite history.

Phil, we are indeed closer to reaching a modicum of agreement, and I'm pleased about that - I don't actually like falling out with you, and I hope I haven't.

Can I specifically push you on this?:

""The proportion of households living in fuel poverty in 2016 rose for the second year in a row to 11.1%, or around 2.55m homes."

It was nearer 12% when the CCA was enacted, so on aggregate something is working. Also raw numbers of households don't tell the whole picture - the amount of deficit per household has fallen every year since 2011 so the overall amount of fuel poverty has declined. Certainly the claim that 'The critique of the CCA is that it has pushed poor people in the UK further into fuel poverty' is at odds with the data."

That number refers, I think, specifically to English, not UK, fuel poverty, and of course the definition of fuel poverty has been changed, for England, but not for the rest of the UK. Can you make the same claim, even allowing for the change of definition, which I strongly suspect was made in order to make it easier for the Tories to claim their policies are not exacerbating fuel poverty? If not, my point stands. In any event, there is enough evidence on this thread to the effect that energy policy under the CCA has made energy more expensive for UK consumers and businesses alike - in which case, even if you are right (and I am not convinced, due to the sneaky change of definition made by the Government - by statute, apparently), the CCA has still made fuel poverty worse than it would have been had it not been passed. And if it has done so, then that is still a very valid criticism of it.

I don't think you can claim fairly to be off the hook by saying that criticism of the CCC is beyond the remit of a thread about the CCA. The CCC would not exist if the CCA had not been passed - its very existence is because it was created pursuant to the CCA. As its own website says:

"Our role
The Committee on Climate Change (the CCC) is an independent, statutory body established under the Climate Change Act 2008.

Our purpose is to advise the UK Government and Devolved Administrations on emissions targets and report to Parliament on progress made in reducing greenhouse gas emissions and preparing for climate change.

Strategic priorities
In fulfilling this role our focus is to:

Provide independent advice on setting and meeting carbon budgets and preparing for climate change
Monitor progress in reducing emissions and achieving carbon budgets and targets
Conduct independent analysis into climate change science, economics and policy
Engage with a wide range of organisations and individuals to share evidence and analysis"

https://www.theccc.org.uk/about/

I think Dieter Helm, combined with section 2.1 of "Competitiveness impacts of carbon policies on UK energy-intensive industrial sectors to 2030" have seen off Bassi & Duffy, don't you?

I think Dieter Helm, combined with section 2.1 of "Competitiveness impacts of carbon policies on UK energy-intensive industrial sectors to 2030" have seen off Bassi & Duffy

I am sure you do think that, but you oddly missed a quote from the competitiveness study:

The impact of low carbon polices on energy prices and their role in the decline of the three case study sectors (aluminium, cement, steel) has been negative but relatively small. Under the EU ETS, each sector benefited from the overallocation of free emissions allowances. For industry as a whole, this helped to offset the indirect costs associated with increased electricity costs.

Darwall is toast, however. He claimed a carbon leakage rate of 100% (page vii). In reality the ETS identifies industries at risk of this phenomenon and grants them free allowances, a relevant fact that you will not discover from his inaccurate polemic.

I quoted the decrease in England fuel poverty figures in response to a quote on England fuel poverty figures. A UK wide analysis is probably impossible:

UK fuel poverty statistics are no longer available as a whole from the Department of Business, Energy and Industrial Strategy (BEIS). The reasoning is that fuel poverty is a devolved issue and each nation has its own definition. Scotland and Wales have their own targets and set policies to tackle this therefore the UK Government recommends that the figures are non-additive (ie should not be combined) in relation to a UK total.

OK, so we are discussing Government measures implemented since the Act was passed, not just provisions contained in the Act. In that case we can include official measures introduced to mitigate increased fuel costs such as the Warm Home Discount and energy saving measures such as the Energy Company Obligation, the Energy Efficiency Commitment, the Carbon Emission Reduction Target and Community Energy Saving Programme …..

No, we're not in agreement yet.

I still need to see a like for like comparison regarding fuel poverty over the relative period, not one based on a changing definition (in England). If the claimed fall in fuel poverty over the period claimed by you is represented by a change of definition rather than by a real reduction on a like-for-like basis, then the point is not resolved.

As for industry costs:

"For industry as a whole, this helped to offset the indirect costs associated with increased electricity costs." Helped to offset, maybe, but not reduce to nothing.

"In reality the ETS identifies industries at risk of this phenomenon and grants them free allowances". Maybe Darwall's 100% claim is wrong. But nothing you have cited proves that the figure isn't high. The study you cited at 11.56 am today doesn't prove that either. I read it. You relied on this quote:

"Leakage is limited to 15% of the emission reductions in the pioneering regions, and depends on the size and composition of the pioneering coalition and the decarbonization strategy in the energy sector. There is an incentive to delay action to avoid near-term costs, but the immediate GDP losses after acceding to a global climate regime can be higher in the case of delayed action compared to early action. We conclude that carbon leakage is not a strong counter-argument against early action by pioneers to induce other regions to adopt more stringent mitigation."

It was a world-wide review, not one specifically looking at the UK, CCA and ETS. The figures might be correct world-wide (but see the next point), but there's nothing in that report to say they're the figures in the UK. Unless I've misunderstood it, "Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets", which you quote in support of your argument, is a forecast based on a variety of models and policy assumptions, and not an analysis of what has actually happened to date or what is happening here and now. It's a best estimate for the future, nothing more or less. If I'm right about that, as I think I am, then it doesn't rebut Darwall's claim (even if Darwall is wrong, which he might be, for all I know).

Leaving all that aside, and let's say the 15-16% figure is more than just a best-guess projection, and actually reflects current reality, it's hardly insignificant. And if the leakage is from the UK, with higher environmental standards, to say China or elsewhere in Asia, with lower environmental standards, then the "damage" would be rather more than that 15-16% figure suggests.

As for "official measures introduced to mitigate increased fuel costs such as the Warm Home Discount and energy saving measures such as the Energy Company Obligation, the Energy Efficiency Commitment, the Carbon Emission Reduction Target and Community Energy Saving Programme ….." I can only repeat tomo's point. None of these come free. They all have to be paid for. They're using taxpayer or consumer money to place a sticking plaster over the wound of CCA-imposed higher costs, so they don't really deal with the point either.

It was a world-wide review, not one specifically looking at the UK, CCA and ETS.

It considered the US, China and Europe (ETS) actually, The model would have to have an error factor of 600% in order for Dawall to be correct.

Seems to me you're at risk of letting the search for the perfect drive out the good; nobody claimed tackling climate change could ever come at zero cost, nobody claimed it would singlehandedly reverse the rise in global emissions. At the time there was overwhelming political support for action - 463 of 466 members voted to pass the Act at its Third Reading - and judged on its own intentions it has been a success, the CO2 reductions have been above target while the impact on the economy and competitiveness have been manageable.

Economic and Environmental context

Manufacturing industry is an important source of GHG emissions. In 2011, industry accounted for 164 MtCO2 (36%) of UK emissions, covering both direct and indirect emissions. Emissions in this sector are concentrated among energy-intensive sectors, which together accounted for 80 MtCO2 of industrial emissions in 2011 of which 60 MtCO2 are direct and 20 MtCO2 are indirect. Across industry as a whole, energy costs account for around 3% of total costs. It is therefore unlikely that low-carbon policies will have significant impacts for most of industry. While costs will increase due to higher electricity prices, for most of industry the impact should be small:

In our December 2012 Energy prices and Bills report we estimated that energy costs would rise by 20–25% from 2011 to 2020 for industrial users, due to low-carbon policies;

• Assuming a 3% share in total costs, this will result in total cost increases of around 0.6%;

• If this were passed through to higher prices then it would add 6 pence to every £10 spent on manufactured goods. There is a higher risk of competitiveness impacts for energy-intensive firms, defined as spending around 10% or more of their Gross Value Added (GVA) on energy. The key energy intensive industries are paper, basic metals, non-metallic minerals, coke manufacture and refineries, chemicals, rubber and plastics, wood, wood products and textiles.

Energy costs in the energy-intensive sectors represent 5 to 30% of total costs. Given that energy is a larger proportion of total costs, these industries have a relatively higher incentive to reduce energy consumption and therefore emissions than manufacturing as a whole. Since 1990, industry direct emissions have reduced by 27%. Indirect emissions have also reduced substantially, by 26% between 1990 and 2011; however this is largely due to decarbonisation of the power sector rather than mitigation measures in the industrial sector. To the extent that these sectors face competition with countries that are less carbon constrained, low-carbon policies can reduce profits and over time lead to offshoring of production. It is possible that trade intensity increases over time and supply chains globalise, which would result in a greater competitiveness risk associated with any increase in energy costs. Together the energy-intensive industries account for around 2% of UK GDP (2.5% of GVA4 ) and 2% of total UK employment.

Managing competitiveness risks of low-carbon policies
Committee on Climate Change I April 2013

https://www.theccc.org.uk/wp-content/uploads/2013/04/Competitiveness-report.pdf

(Remember the Cambridge Econometrics report described the impact on energy-intensive industries (2% of the total) as 'relatively small')

One last comment for this evening, then I'm done for today. Cambridge Econometrics and the Government clearly don't agree:

https://www.gov.uk/government/news/100-million-a-year-boost-for-energy-intensive-industries

"Regulations to save heavy electricity users like steel and chemical companies around £100 million a year in energy costs have been laid in parliament today.

The government expects the new measures to benefit over 130 eligible energy intensive companies across the UK in sectors including steel, chemicals, glass and cement. The new measures will exempt these companies from a proportion of costs of the Contracts for Difference scheme, which is designed to encourage investment in low-carbon energy generation.

Contracts for Difference are won through a competitive process which drives down costs and guarantees companies a certain price for the low-carbon electricity they produce for a set number of years. This gives them the support and certainty they need to attract investment and get projects off the ground.

The costs of funding the scheme are recovered through a levy on energy suppliers which is passed on to domestic and business energy bills. This only makes up a minor part of most electricity bills, but has a more significant impact on those industries that use a lot of electricity.

The government committed in the Industrial Strategy green paper to minimise business costs and commission a review of the opportunities to reduce the cost of achieving our decarbonisation goals in the power and industrial sectors.

Energy Minister Jesse Norman said:

We want the UK to be one of the best places in the world to build and grow a business, and that means creating the right conditions for companies to thrive and succeed.

These industries are worth £52 billion to the UK economy, support 600,000 jobs and produce essential products that people use every day. That is why we have taken this action to support them.

Although energy costs on average account for 3% of UK business expenditure, there are 15 sectors where this reaches 10%.

In addition to the support announced today the government is continuing discussions with the European Union about securing further exemptions from policy costs for energy intensive industries. In the meantime a compensation scheme for the policy costs of the Renewables Obligation and Feed-in Tariff schemes remains in place."

10% in 15 sectors "£52 billion to the UK economy" doesn't sound like 2% of the economy, nor does the cost seem relatively small at 10"of the business expenditure. Given that many businesses operate on margins of much less than 10%, that sounds pretty crippling to me. Against that, £100M p.a. sounds like chickenfeed, but that cost is still being passed on to other energy users.

10% in 15 sectors "£52 billion to the UK economy" doesn't sound like 2% of the economy, nor does the cost seem relatively small at 10"of the business expenditure.

You're right. £52 billion is more like 2.5% of GDP ;-). If my arithmetic is correct, this measure will cost less than 0.005% of GDP.

Hardly worth measuring.

"So the Act overachieved in terms of its climate targets, without wrecking the economy."
Nov 29, 2018 at 5:29 PM Phil Clarke

In the preferred vernacular of the normal Phil Clarke, that is Bollocks.

Only an Economist dependent on Climate Science funding could conclude that.

Hardly worth measuring.

Nov 29, 2018 at 9:11 PM Phil Clarke

Climate Scientists and their Economists can't measure, and have a dodgy dossier full of inappropriate statistics to prove it.

BTW the price of gas (Excel file) supplied to manufacturing industry (excluding the climate levy of 0.11p) rose from 1.675p per KWh in Q2 2017 to 1.958p in Q2 2018. That's a massive 28% and would dwarf any 'green taxes'.

Clearly those businesses that are reliant on fossil fuels must be able to absorb massive fluctuations in their energy costs. 'Cos they have to.

As Chart 6 shows, 63% of UK adults agree that the UK should be a global leader in tackling climate change (66% of under 40s agree and 56% of Conservative voters); 64% agree the UK should aim to cut its carbon emissions to zero in the next few decades, so it doesn’t add any more greenhouse gases to the atmosphere (64% of under 40s agree and 58% of Conservative voters); and 61% agree that, by cutting its emissions, the UK will benefit economically by creating new low-carbon industries (65% of under 40s agree and 56% of Conservative voters).

Interesting poll.

Finally got round to looking at the EEF stuff. It's based on an increase of 50% by 2020.

The 50% projected increase refers to an EEF projection of a 47% increase in electricity prices for large industrial energy consumers between 2014 and 2020.

Sample question:

EEF projections show that electricity bills could increase by 50% between now and 2020. In these circumstances what would be the impact on your business?’

That's quite a hike! But I've been unable to discover the assumptions behind the projection. Even the underlying report just repeats the statement above. I don't think this is good enough. Is all that 50% deemed to be down to climate taxes? 50% is significantly higher than the highest Government projections, which include all influences on price.

I am sure the EEF would never just invent a scary number (then round it up to make it even scarier) for propaganda/lobbying purposes.

Nov 29, 2018 at 9:40 PM | Phil Clarke
Nov 29, 2018 at 9:56 PM | Phil Clarke
Nov 29, 2018 at 10:33 PM | Phil Clarke

All bollocks.

For reality try here:
https://wattsupwiththat.com/2018/11/29/a-rebuttal-to-the-climate-change-timeline-meme/

Not often you see the words 'Reality' and 'WattsupWithThat' in the same sentence.

Thanks for that, a nice bedtime larf.

Nov 29, 2018 at 10:52 PM | Phil Clarke
You could try this news instead. Brazillians are going to sleep so much better knowing their economy and lives are not going to be ruined by Climate Scientists or their Economists:

https://wattsupwiththat.com/2018/11/29/brazil-cancels-major-un-climate-conference-cites-cost-savings/

"Bolsonaro’s incoming foreign minister, Ernesto Araujo, a career diplomat, has called the movement to reduce global warming a plot by “Marxists” to stifle the economic growth of capitalist democracies while lifting China.

In a statement, Brazil’s Foreign Ministry said the decision was made to save money. It also cited the “transition process” as Bolsonaro prepares to take office."

The CCA is the UK's biggest Peace Time Disaster.

Is that the Anthony Watts who used to let his mods sockpuppet in the threads they were moderating?

Not a huge amount of integrity on display....

<I>unachievable</I>

2017 CCA target - CO2 down 31% on 1990. Actual reduction -38%.

Situation normal on Planet Tomo.

"Is that the Anthony Watts who used to let his mods sockpuppet in the threads they were moderating?
Not a huge amount of integrity on display....
Nov 30, 2018 at 8:38 AM | Phil Clarke"

So much more honest and accurate than anything produced by Hockey Team devotees.

Phil Clarke, why don't you substitute yourself again, so that a more grown up discussion about the failed economics and politics of Climate Science can continue? Everyone now knows the "Science" was a failure from the moment Climate Scientists Peer Reviewed Mann's Hockey Stick.