The path to Glasgow hosting COP26, the latest global summit on tackling climate change, has produced a cornucopia of announcements from the Government, centred around a 368-page uncosted plan for achieving net zero by 2050.
The Prime Minister’s pump-priming of heat pumps has provoked particular ridicule. The scheme, which aims to reduce emissions from heating homes, would likely amount to 30,000 large rural homes a year receiving a £5,000 bung for projects costing £8-45,000. At the same time, costs would rise for the 22 million households still reliant on gas boilers.
The rest of the plan is little better. The Government is promoting nuclear power that takes seven to ten years to deploy and tends to cost two to four times what its proponents predict, while only being useful as baseload. It is hoping that gas-fired power can continue to support intermittent renewables sustainably by attaching it to carbon capture and storage, a technology that impacts the efficiency of both the generation and industrial plant attached to it. It is also putting faith in electrical transport when the environmental and actual cost of batteries is a deep concern.
The IEA will continue to challenge the ropey economics of such pledges and explore free market environmental alternatives such as technology neutrality, consistent carbon pricing, and trusting the public, rather than politicians, to choose winners.
Meanwhile a new paper out by IEA Head of Regulatory Affairs Victoria Hewson puts the Climate Change Committee under the spotlight. It will be available to read on the IEA website from 1pm today.
Victoria reviews the regulator’s perceived conflicts of interest, the lack of rigour and transparency in some their analysis, and the failure to allocate adequate resources to climate adaptation. The body was set up as both a regulator and advocate for the interests it is regulating. This has called into question its ability to act as an honest broker of the difficult trade-offs on the path to net zero.
This highlights the need for a strategic review of UK climate policy, the institutions it has created, and the billions that may be being wasted on flawed government schemes.
Andy Mayer
Chief Operating Officer, Institute of Economic Affairs
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TURNING UP THE HEAT
As Andy mentioned, the government announced this week that it will give households grants of up to £5,000 to install heat pumps as an alternative to gas boilers.
Speaking to GB News and talkRadio, Andy argued that the subsidy was little more than "a woke welfare scheme for the wealthy” that will put up gas bills for everyone else. His comments were featured across the press, including in the Express and City AM. Andy also discussed the costs to British industry of 'climate unilateralism' on the IEA blog.
As the government charges ahead with its green agenda, the Treasury warned that new taxes may be needed to replace billions of pounds in lost income from fuel duty on petrol and diesel cars.
Quoted in City AM, IEA Economics Fellow Julian Jessop said that lost tax revenues “will be significant, but this should not be a key consideration in setting climate change policy”.
If the Treasury does needs to find other ways to raise revenue, Julian noted, they should broaden the base for existing taxes, rather than raise tax rates, or create new ones.
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iN THE MEDIA
Star trekking... Last week, William Shatner, the 90-year-old actor, became the oldest man to journey into space. However, the reaction to the venture was not wholly positive.
In an interview with the BBC, Prince William suggested that billionaires, such as Jeff Bezos, should focus their attention on improving the environment on Earth, as opposed to space travel.
IEA Director General Mark Littlewood took a different view in his fortnightly column for The Times, arguing that space exploration could have untold environmental and technological benefits for humanity and should not be dismissed simply as a hobby for the wealthy.
No direction... In an article for The Sunday Telegraph, Mark argued that Prime Minister Boris Johnson is at risk of having his premiership defined as "limping from one emergency to the next", without any ideology underpinning his policy agenda.
Mark outlined five principles Boris should follow: fiscal discipline; reducing the tax burden; ending the process of national pay bargaining; focusing policy on economic growth; and taking advantage of our new regulatory freedoms.
Internet crackdown... Following the shocking murder of Sir David Amess MP, some politicians and commentators have argued for further regulation of the internet – including a ban on online anonymity – in order to help prevent similar atrocities in the future.
In an article for The Telegraph, IEA Head of Regulatory Affairs Victoria Hewson argued that such measures not only fail to tackle the root cause of extremism, but would represent a severe infringement on freedom of speech. Victoria also appeared on LBC to discuss whether the government should ban online anonymity.
Last Sunday, IEA Director of Communications Annabel Denham appeared on BBC's Sunday Morning Live to discuss how we can lift more people out of poverty.
Annabel argued that the debate is too often framed around how government benefits can raise living standards rather than how government interventions can raise living costs, for example with childcare, housing, and employment regulation.
The View.. On Tuesday, Annabel appeared on The View on Sky News to discuss the day's opinion pages, including the importance of R&D, the government's plans to increase take-up of heat pumps, and the West's relationship with China.
Annabel also appeared on BBC Radio 4's Westminster Hour, alongside Conservative MP William Wragg and Labour MP Darren Jones, last Sunday. You can listen back here.
Off the rails... This week, supporters and opponents of of the second phase of the HS2 rail link, which would connect Birmingham to Leeds, called on the government for clarity as to whether the project will go ahead.
Quoted on the BBC News website, Annabel argued that changes in working patterns post-pandemic could well weaken the case for the project further.
IEA Editorial and Research Fellow Professor Len Shackleton also commented on the state of Britain’s railways in his latest IEA blog.
Len agreed with Annabel that new working arrangements may reduce demand for rail travel. He also suggested the government’s new Great British Rail network model will remove much needed private investment in the railway.
Taxing times... In an article for CapX, IEA Policy Advisor Sam Collins reacted to news that the Chancellor is considering taxing online sales and home deliveries in a bid to 'save' bricks and mortar businesses.
Sam argued that high street shops are over-taxed but the answer isn't to lump more taxes elsewhere, especially on the online businesses we heavily relied on during the pandemic.
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ON THE BLOG
Eco trade offs... Former IEA intern Josef Städter discussed the various trade-offs present in environmental policy, specifically how good environmental protection may inhibit the provision of adequate housing. Read here.
Feed the world... Pope Francis recently tweeted that the "cold logic of the market" was to blame for world hunger.
Policy Correspondent at the Foundation for Economic Education Brad Polumbo argued that the market has played a vital role in reducing world poverty, fostering technological innovation which has made food more abundant and more affordable. Read more here.
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IEA PATREON
Thank you to all of you who have already signed up to become an IEA Online Patron. Becoming a Patron grants you VIP access to our latest videos, priority invites to our virtual events, and the opportunity to engage directly with IEA Director General Mark Littlewood and the IEA team. For just a small donation you can get all these benefits and more.
To visit the page and find out more about the IEA’s Patreon, follow the link here or watch our trailer here.
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YOU'RE INVITED
On 25th October, 5.45-7.45pm, the IEA Book Club will host an event with Alex Edmans, Professor of Finance at London Business School and Academic Director at the Centre for Corporate Governance, to mark the re-release of his book “Grow The Pie: How Great Companies Deliver Both Purpose and Profit”.
IEA Senior Academic Fellow Professor Philip Booth will chair the event. This event is exclusive to IEA Book Club members. To find our more about the IEA Book Club, please contact [email protected] or follow the link here.
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IN CASE YOU MISSED IT
In the latest episode of The Swift Half with Snowdon, IEA Head of Lifestyle Economics Christopher Snowdon speaks to Matthew Lesh, Research Director at the Adam Smith Institute.
They discuss the sluggish booster jab campaign, online anonymity, and how the NHS compares to other countries' healthcare systems. You can watch here.
On the IEA podcast this week, Communications and Marketing Assistant Kieran Neild-Ali was joined by former IEA Research Director Dr Jamie Whyte in the studio to discuss his new book, Why Free Speech Matters. He was also joined by IEA Head of Political Economy Dr Kristian Niemietz. You can listen here.
Kristian also recorded a podcast with Martin Ågerup from CEPOS, our Danish sister think tank. They spoke about the various new (or not-so-new) versions of socialism, how socialism became popular again, especially with Millennials and Zoomers, and how the left keep making the same old mistakes. Listen here.
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