BUT this is a post for the real world, in which the LibDems have a veto on anything so radical. Nevertheless, there are still useful things to be done that: can be promoted with compelling logic; do not prejudice taking a more radical approach in the event the Tories one day have a free hand (no laughing at the back); and will in some measure actually have the desired effect
As he comes to review the panoply of green imposts, Cameron should employ these two practical and powerful principles:
- no UK emissions target ahead of actual back-of-the-pack EU achievement
- only intervene strictly according to merit-ranking on the MACC
The first is self-explanatory, and Osborne's recent rhetoric (OK, recent drivelling) has been feeling towards this really obvious approach. It really shouldn't be impossible to sell this politically; we could all come up with appropriate slogans.
MACC may need more explanation. The Marginal Abatement Cost Curve is a very simple concept. Rank CO2 abatement measures according to how much the cost per unit abated by that method, from least to most expensive. The cheapest actually don't cost anything, of course, they are profitable to carry out - without subsidy - and hence "self-financing" (the bars below the X-axis on the left hand end, mostly efficiency measures). So an MAC curve looks like this.
Each bar represents a different abatement method. The width of each bar shows the quantity of abatement that each method could yield. An MACC will apply to a given country or sector, because each one will differ in the details of its energy-economy, and of the abatement-potential of the various measures. (If, for example, in a particular country all light bulbs have already been switched to energy-saving, that abatement technique no longer has any potential there).
The basic use for the MACC is to read off what should be the cost of achieving a particular level of abatement: if we want X million tonnes, we read across from left to right until the cumulative widths of the bars hits X: then we read up the Y-axis to find out (a) the marginal abatement cost - i.e. the most we need to pay per unit to achieve our target, and (b), integrating under the curve to that point, the total cost involved.
There is a truly obvious assumption being made here: you always do the cheapest things first. Right ? I mean, if there are lots of self-financing measures available, maybe overall we could meet a target and actually make money !
Wrong. The idiots at the helm throw money at measures that are way up the right-hand end of the curve, e.g. solar power in NW Europe. It's genuinely outrageous. Why they do this is an interesting topic in itself: but enough said for now. The point is, there is real scope for cutting out this nonsense, and what could be more easily defended than sticking to the left-hand end of the curve ?
[One last comment: some of the "self-financing" items never get financed because the relevant parties don't have the capital (insulation for cash-strapped tenants being the classic example). This may fairly be described as a technical market failure, but we understand it well enough and there is an excellent case for government stepping in to intermediate. They mandate a bit of this via the energy companies, but the schemes have been maladroit and they should do better.]
So - there you go, Dave: C@W points the way. Get cracking & do something useful.