Despite Orson Welles diatribe about Switzerland in the Third Man, the country is an important and successful economy. So, the recent June 2021 referendum result from Switzerland should be a wake-up call for the Green lobby around the world about zero carbon.
Voters voted against measures to reduce the country’s carbon emissions by 51% to 49%. The measures include a tax of airline tickets and a car fuel levy. Opposition was strongest in poorer, rural areas.
My concern is that the referendum result is an example of the failure of the Green lobby to convince citizens of the measures needed to achieve carbon targets, of a complacency and laziness that people will accept measures whatever the cost. Unless this issue is addressed, then we will see further resistance to measures to reduce carbon which affect ordinary people and voters.
It is not as though recent events do not provide examples where citizens have not accepted policies imposed on them. The gilet jaune protests, Brexit and Trump all illustrate that elites should not ignore the ordinary citizen. This appears to have been significant in Switzerland. Being told something is good for you or is necessary is not enough. No matter how many times Sir David Attenborough tells us what we need to do, when the actions start to affect our lifestyles and standard of living, then people will question the remedies proposed, particularly the poorer members of society.
Instead, politicians and green experts need to be honest about the scope of change needed to achieve net zero. They need to be honest about what it will cost an ordinary family and the changes in their lifestyle and standard of living it will engender. They have to get out of the green bubble where the change to net zero is achieved effortlessly. It won’t be. Changing domestic heating, only allowing electric cars and pricing airline flights will all affect the poorest 50% the most. Reconciling reducing carbon and the cost on the poorer is a crucial challenge.
Offsetting is promoted for those hard to decarbonise activities as a green solution to meet net zero carbon. Apple has announced a $200 billion forest fund and other corporates are using the same method.
This seems a great idea and as net zero needs finance, using corporate funds makes sense – or does it?
The issue that isn’t talked about is that offsetting isn’t a limitless way to escape from decarbonising. Offsetting requires land and as Mark Twain said, they’ve stopped making it. So offsetting will compete with other land use, agriculture, housing, etc and there isn’t an infinite amount of land for offsetting given these competing demands.
First mover advantage is therefore sensible as Apple is demonstrating. But which emission sources should be prioritised for offsetting? Should offsetting, in land use terms, in effect, be licensed by governments? If it isn’t regulated, will some activities that we really need lose out?
Should the disposable business model be prioritised ( for example, upgrade your mobile phone every two years, don’t maintain the software for old models to nudge consumers to buy new phones or with new model i phones introduce a new charger and ensure the old charger won’t work) or should other sectors be prioritised?
On the basis that net zero goes hand in hand with the circular economy, shouldn’t governments be thinking about which sectors should have priority over others for access to offsetting in strategic terms (cement, steel etc).
This is not to criticise those businesses which are investing in offsetting, but to question whether we should allow the market to decide which businesses have access to offsetting, which is what is happening de facto at present.
I gave the attached presentation to students and staff at the University of Gloucestershire in March. I have given other presentations to amenity societies tailored to their interests.
What has been interesting is that people are unaware of how much their personal lifestyles will need to change to achieve zero carbon. As my subsequent post will show this is an indictment of politicians and advocates of carbon reduction who have failed to explain the consequences for ordinary people.
There is a real danger of a backlash against proposals a la yellow vests in France.
COP 26 needs to be honest with citizens about the changes as they affect them.
In “Zero Carbon Our Choice”, I argued that while many people think that achieving zero carbon is the responsibility of government and business, in fact it is impossible without a change to the choices which we as consumers make.
Using the 2018 final statistics as summarised in “2018 UK Greenhouse Gas Emissions, Final figures 4 February 2020 National Statistics” as the basis for this. “In 2018, 28% of net greenhouse gas emissions in the UK were estimated to be from the transport sector, 23% from energy supply, 18% from business, 15% from the residential sector and 10% from agriculture. The rest was attributable to the remaining sectors: waste management, industrial processes, and the public sector. The land use, land use change and forestry (LULUCF) sector acted as a net sink in 2018 so emissions were effectively negative.”
My argument is that we need to analyse these figures to look at who is responsible for the emissions by the choices they make?
On this basis, the emissions of energy supply (23%) – mainly electricity generation – are decided by government decisions and regulations. It was government dictat which stopped coal use in power generation by imposing a cost penalty on coal burnt in power stations. These emissions are not business emissions as although business is an end user, like we the consumer, they do not determine the power mix of power generation, it is government regulation and pricing mechanisms which do.
18% from business is business’s responsibility.
28 % from transport. “Road transport is the most significant source of emissions in this sector, in particular passenger cars; and the changes which have been seen over the period were heavily influenced by this category. Figure 5 shows how the volume of traffic on the roads has changed over time in Great Britain, which reflects the trend seen for the UK. Motor vehicle traffic volumes have generally increased throughout this period, other than a fall seen between 2007 and 2012 following the recession.”
56% of transport emissions relate to passenger cars, so even if one assumes that all the other transport emissions are business then 12% of total UK emissions are business transport emissions but 16% are public emissions, from our choice to drive ICE vehicles.
15% from the residential sector “The residential sector consists of emissions from fuel combustion for heating and cooking, garden machinery, and fluorinated gases released from aerosols and metered dose inhalers. It is estimated to have been responsible for around 15% of UK greenhouse gas emissions in 2018, with carbon dioxide being the most prominent gas for this sector (96%). The main source of emissions from this sector is the use of natural gas for heating and cooking.”
These are not business emissions. Again, these are emissions from our choice to use carbon fuels in our homes. There are roughly 27 million homes in the UK, the government has a target to install 600,000 heat pump systems per annum. At this rate, we will still have carbon heating in 2066 and nearly 10 million UK homes will still have carbon heating by 2050. To put this in perspective in 2017, 20,000 heat pump systems were installed.
10% Agriculture. If one considers agriculture to be a business, then these emissions are business emissions. But half these emissions arise from the production of meat products. One can argue that again these emissions arise as a result of the choice which we the consumer makes to eat meat and therefore that “business emissions” in agriculture are 5% of the total.
2% from industrial processes is a business responsibility.
2% Public sector is not a business responsibility.
5% Waste management (mainly landfill). At least half of this is from food waste in landfill. So, I would suggest business is responsible for 2% of these emissions at most.
Land use is negative 2-3% mainly from forestry.
Using this basis, business is responsible for the emissions from total UK emissions of business 18%, business transport 12%, Industrial processes 2%, waste management 2% , a total of 34%. If agriculture is included this increase to either 39% or 44% (depending on how meat production emissions are treated).
Consumers are responsible for emissions from private transport 16%, residential 15%, waste 3%, a total of 34%.
Government is responsible for Energy supply 23% and public sector 2%, a total of 25%
This doesn’t allocate the negative land use of 2-3%.
Using these UK numbers, business is responsible for (and can control and reduce) under half of the UK emissions. It does not control the emissions of Energy Supply, (even if it is a part end user like consumers) nor of the public sector nor of consumers themselves.
A recent poll showed that 67% of UK respondents thought the government should do more about zero carbon. What these figures show is that those respondents need to do more about their own emissions if net zero carbon, is to be achieved. Buying electric cars, using non carbon heating for their homes, minimising food waste in land fill and probably eating a lot less meat are all decisions we need to make. And I haven’t included emissions from flying.
Net zero carbon is about our choices as well as government action.
“Why house prices may dip but will not crash” – Merryn Somerset Webb (FT January 15, 2021), contains the following sentence:
“In 2008, the UK spent 1.5% of gross domestic product to alleviate the global financial crisis; this time we have spent 26% of GDP.”
Just take a moment, 26% of GDP! This is breathtaking and the important point is that most of this money has been borrowed. The UK’s 2020 GDP is estimated by the World Bank at roughly $3 trillion (World Bank figures are US$ for comparative purposes). So, we have spent roughly $750 bn (£550bn) on Covid.
When it comes for additional government expenditure on achieving zero carbon this will inevitably have to be funded by additional borrowing in addition to this existing debt.
These numbers are enormous, my book came up with a figure of £1tn for the expenditure to achieve zero carbon in the UK and that is probably conservative. Financing this for government would have been a challenge, given the fiscal impact of Covid that challenge just got significantly greater.
Advocates of the new green deal claim large numbers of new jobs created by the new green economy, this is correct, there will be new jobs but most of them (outside of construction) will be more highly skilled due to the technology involved. What is not quantified, is the number of jobs which will be lost as carbon is removed from the economy and that a high proportion of those jobs are lower skilled jobs. A search on papers produced emphasis the new green jobs but do not quantify the distributive effects skilled vs lesser skilled.
What follows is the start of a discussion of the list of sectors and occupations that will be affected. A serious study of the numbers is needed.
Carbon goods (oil, coal and lpg) comprise 40% of total sea freight by volume. There are 7,400 carbon tanker ships compared to 5,150 container ships. The consequences of not shipping carbon on shipbuilding, port services and maritime employment will be significant on a global basis.
In addition, in country transport of carbon is a significant employer. Tanker lorries for oil, petrol and lpg and lorry and train transport of coal. Port facilities to handle carbon imports and exports. In a zero-carbon economy, all this investment will be redundant and its difficult to see alternative use. All these jobs will disappear.
13% of rail freight in the UK is oil or coal. 1500 road tankers in the UK distribute petrol and diesel. There are 8,385 petrol stations in the UK. All these jobs will disappear.
Much is being written about the need to tax airlines given the tax subsidy currently provided by zero fuel duty and zero vat. If airline fuel includes a carbon price as well, if the real carbon cost of flying is taxed, the cost of flying will increase and the numbers flying decrease.
To give some numbers, Heathrow is claimed to generate 76,000 to 190,000 jobs.
“Heathrow is already one of the UK’s largest single-site employers with more than 76,000 people directly employed on the site. In the surrounding area, Heathrow supports a total of 114,000 jobs and accounts for one in five (22%) of local jobs.” Source “The Promise of Heathrow”.
“Heathrow expansion will create more than 120,000 new jobs and has the potential to end youth unemployment in the five local Heathrow boroughs.”
“Based on figures from 2011, in Scotland, Glasgow and Edinburgh airports directly employ a combined total of around 7,500 people, whilst Birmingham employs 7,500 and Bristol 2,700. Manchester airport directly employs around 20,000 people across the north west. House of Commons answer.
The Air Transport Action Group claims “There are over 10 million women and men working within the industry to make sure 120,000 flights and 12 million passengers a day are guided safely through their journeys. The wider supply chain, flow-on impacts and jobs in tourism made possible by air transport show that at least 65.5 million jobs and 3.6% of global economic activity are supported by our industry.”
1,200,000 work in airports in the US.
Let us assume that flying reduces by 25% (which is conservative) as ticket prices rise to reflect the carbon cost of flying. The impact on Heathrow could be roughly 50,000 jobs. Manchester 5,000, Scotland 1,875, Birmingham 1,875 and Bristol 675. If we extrapolate globally and use the ATAG figures, then globally this is a loss of 2,500,000 jobs. In the US, it is 300,000 jobs.
We need to transition to zero carbon given the environmental consequences of the alternative. But advocates need to be transparent about the costs of this transition, and in particular about the employment impacts. If the population is going to accept the transition, they need to understand the consequences.
A number of reports have come out claiming that zero carbon can be achieved at little cost, recently for the EU. Many of the advocates of the Green New Deal are on the left. I’m not sure that these advocates have resolved the dilemma of how the poor afford zero carbon technology. There is no magic money tree for new zero carbon technology, either the government funds it through taxation or borrowing, consumers pay or investors in the new technology receive lower returns to reduce the cost to the consumer.
A number of stories about the cost of green technology for the poor, question this. The Independent has reported that 1/3rd of UK adults have no savings, other reports show over 40% of UK adults have less than £1000 savings. So how are these people going to make the investment in an electric car or an air source heat pump? And if not they, who?
Although the price of green technology is falling, it is still a large capital outlay. So, financing this investment for the poorer half of the population is a big issue. A report by the RAC in November 2020, claimed that 30% of the UK population could not afford even the cheapest electric cars. This is regardless of the fact the running costs are lower, the barrier is buying the electric car.
When I posted on the zero carbon Britain Facebook group about air source heat pumps, more than half the comments were about them being too expensive, from a group which supports zero carbon! All this suggests that financing zero carbon technology is a major issue. This may be why the Finance Industry is such a strong advocate – they will make significant returns on the investment cost of zero carbon technology.
For domestic heating and hot water, this problem is aggravated for poorer 50% of the population, by their probable lack of control over their housing. They are more likely to be renting from social housing or private landlords. So, it is those landlords who will need to make the investment in zero carbon domestic heating. But will they without regulation?
The question is who will fund the investment in zero carbon technology for the poorer 50%? How will the landlords. letting to this group be persuaded to invest in zero carbon heating? What will be the effect on their returns? How will the acquisition of electric cars be affordable for the poorer 50%?
One of the larger contributors to UK emissions is domestic power use for heating, hot water, etc taking 15% of UK emissions. The main fuel source for heating in the UK is gas with 63% of the total. The primary option for zero carbon emission heating (based on used zero carbon electricity) is an air source heat pump. Hydrogen may be an option in due course, but it will require a significant investment in renewable power as currently over 90% of hydrogen is produced using carbon sources.
So, Air Source heat pumps or Ground Source heat pumps are the main option for carbon free residential heating and hot water (if they use non carbon electricity). This is simple technology, outdoor ambient heat is transferred to a coolant using a heat exchanger coil, this coolant is compressed and the temperature increased, this heated coolant transfers heat to the hot water store through a heat exchanger coil. A “standard” domestic air source heat pump can extract useful heat down to about −15 °C (5 °F).
I had an air source heat pump installed earlier this year. The main difference from conventional central heating is that it operates at a lower background temperature throughout 24 hours a day. Its sophistication is that based on sensors outdoors that will adjust the temperature of the water in the system.
The controls of the Unit .
My calculations are that it is competitive with gas and four times as efficient as an electric boiler. The investment cost is higher than a gas boiler, but the maintenance costs lower. The costs are further reduced if electricity generated from residential solar is used.
The issue for the UK is that a conventional plumber’s training is not sufficient for installing and maintaining air source heat pumps. As a result, there may be logistical issues in installing the over 20 million systems that would be needed in the UK. Only 207,000 systems had been installed in the UK by 2018 so the rate of installation would have to increase dramatically. There are UK producers of air source heat pumps, but most pumps fitted in the UK are imported.
My experience of the air source heat pump is favourable. It is known technology capable of mass rollout. The take up to date is disappointing despite the Renewable Heat Incentive support. While new homes will have to fit non carbon heating from from 2025, the question is will consumers switch to this heating? Zero carbon is our choice as consumers – will we make that choice?
There has been a strong reaction to the announcement that China (the world’s largest CO2 emitter 28% of global emissions) will achieve net zero emissions by 2060 and the pressure this may place on the equivocal position which the US maintains on emission reduction.
The announcement by Xi Jinping was light on details about what net zero means in the mind of the Chinese government, but some of this will become clear when the next five year plan emerges. Some have been sceptical about the timing, to quote the New York Times:
“Pledging to do more on the climate could at least counterbalance the rising anger China faces in Europe and beyond over its record of oppression in Xinjiang and Tibet, its territorial conflicts in the Himalayas and the South China Sea, military threats toward Taiwan and a sweeping crackdown on Hong Kong’s autonomy.”
Undoubtedly their may be some short-term benefits from the announcement, but this is a major policy change, not a short term tactical ploy, so what are the reasons for it?
In my book Zero Carbon Our Choice, I set out the difficult decisions and the scale of change in moving from our current carbon economy to a net zero economy and how it affects all sectors of the economy, private as well as public and business. Democracies may struggle to achieve agreement to these changes in the timescale needed to achieve the target.
China has the advantage that it can make policy happen relatively quickly. A brief digression. A western visitor asked the manager of a Chinese steel mill how they could expand to justify the increased iron ore purchases they were discussing. The manager said there would be a new steel plant over there pointing at the neighbouring town. When asked what would happen to the town, he answered, we will move it. China has an advantage in achieving dramatic change quickly.
China suffers, like some other countries from poor air quality. Net zero is a way to tell the population that this will be sorted out.
Net zero by 2060 is a long time away, it is a major policy change, but its achievement won’t be clear for a long time. It does however provide a policy framework which only the Communist Party can achieve, and it will be undoubtedly branded in the same way as the economic leap which started in the eighties.
China holds a dominant position in the production of equipment for a net zero global economy. In solar panels and wind turbines and as the largest manufacturer of electric cars and buses and with a strong position in battery production. It is able to implement infrastructure projects like the Three Gorges dam. China can exploit this technological lead. It also has a dominant position in rare earth mining and has mining joint ventures around the world which ensure security of supply for its manufacturers.
As a form of soft diplomacy, this policy change plus its dominant position in supply will be very powerful.
The key signs about how serious China is on net zero will be in its policy on coal powered electricity generation. Given the life of a power station, it will need to start a moratorium on building coal plants in the 2020s and definitely by 2030. As this is a net zero pledge, it will be interesting to see how aggressive China is in using offsetting. Will it be just domestic or will China invest in offsetting elsewhere as well? What will the target for new trees in China be (it will have to be very big).
For all the reasons above the announcement makes sense and gives China a big policy to come out of the Covid era. China has the levers of power domestically to achieve it and the manufacturing sector which will benefit from an acceleration of investment in renewables. The devil will be in the detail. The interesting question will be how does the US respond and how does this affect the balance of power between China and the US?
“Fund manager Schroders will allow thousands of its employees to continue working from home even after the pandemic, marking a huge shift in the way the City works.
In a recent interview, Schroders’ chief executive Peter Harrison said the pandemic had “changed society irrevocably”.
“The contract between society and business has changed forever,” he said. “The office will become a convening place where you get teams together, but the work will be done in people’s homes.”
This is likely to raise fresh fears among government figures that the shift in working patterns triggered by coronavirus will be permanent.” City am.
This illustrates the change being considered currently and the scale of that change. We are possibly seeing peak metropolitan life. While the Schroders decision is covid provoked, there are other carbon emission issues which will erode metropolitan life.
As my book, Zero Carbon Our Choice describes, Metropolitan areas contribute to emissions but are poor at emission mitigation, ie in terms of renewable power investment in particular, and conversion to non carbon heating is more challenging in higher rise buildings. The changes will be enormous, if Schroders and other firms adopt this business model then city CBds will be hollowed out (walk round the City of London to check this out). The ancillary service jobs will migrate or disappear. Demand for public transport will decline (many systems are radial from the CBD or focussed on it).
Cities are considering how to replan for a low or zero emission future. Paris is considering a “15 minute city” where you can walk to all your daily needs. There is no reason why employment patterns will not follow this. This means that cities will need to create a planning strategy to make these changes over the next decades.
Smaller cities will find it easier to adapt to this future and it is not surprising that the press is full of stories about the attractions of non metropolitan life. If Covid is making people consider the scale of change we see, thinking about zero emissions will require even more dramatic change.