OK, so it was in the Coalition Agreement: "We will introduce a floor price for carbon". And it's not a floor price for carbon, it's a new top-up tax on CO2 emitters with an effect meant to be similar to how things would be if the actual carbon price was higher. And it hasn't been set particularly high; and only until 2020 ...
But it's downhill from there, because, aside from the Treasury, who benefits ? Bloody EDF, that's who, plus assorted windfarm operators - in fact, anyone who has already built a non CO2-emitting power plant. That's people who neither deserve nor need further subsidy because they've already built the damn' things !
Yes, EDF wins, to the tune of billions: £1.3 bn according to the government's own advisers, anything up to £5 bn according to Jeremy Warner in the Telegraph, who goes on to note
Yet even this isn't enough to convince EDF's UK chief executive, Vincent de Rivas, to build more nukes. Post the uncertainty over costs introduced by the Fukushima disaster in Japan, he wants a standing charge for nuclear renewal on top. I'm not sure UK consumers yet fully appreciate what's about to hit them in terms of rising utility charges.
And it's not enough for the greedy greens either, as we've noted before.
Well, in the long term you know what I reckon: Osborne will back off from higher electricity prices, just like he ran scared of the Fuel Duty Escalator. But if he does back off the 'Carbon Floor' tax, how will he make good on the tax foregone ?
The answer, of course, (if he's determined to press ahead with the Carbon Floor) should start with a windfall tax on the good Monsieur de Rivas. Because another raid on the North Sea producers doesn't look favourite at the minute, eh ? No! says CU, and a bunch of angry oil industry lobbyists (a topic we shall return to).
We really need the 3-figure oil price to work its harsh logic and reorient our energy policy onto rational lines. It can't happen too soon.