Tackling Fuel Poverty OR Tackling Climate Change

John Leech, MP for Manchester Withington makes a valiant, but failed, attempt to reconcile tackling fuel poverty with combating climate change. The reason’s why such an attempt will always fail are as follows:-

  1. Reducing carbon emissions by 80% will mean moving into zero-carbon fuels. Nuclear power is the cheapest alternative, but still more expensive than fossil fuels, especially when decommissioning at the end in taken into account. Other alternatives – wind and solar – are not only astronomically more expensive per unit produced, but also increase the unit cost of back-up fossil fuel power stations.
  2. Then we have the carbon trading schemes. These act as a cost to pollute. They will only become effective if they are made much scarcer and therefore much more expensive.
  3. For the poor, we could then give them huge grants to insulate their homes and get more fuel-efficient heating systems. However, although some gains can be relatively cheap (loft insulation and thermostatic controls on radiators), the costs mount steeply to gain large reductions. Replacing boilers and radiators, putting in new doors and windows, or cavity wall insulation, are all highly expensive. The payback period is many years, or in some cases not at all (with interest costs taken into account).
  4. The elderly are disincentivised to reduce consumption by the winter fuel allowance. Yet rising fuel costs will lead to calls to increase this subsidy as well.
  5. Whilst in the UK we pay through the nose for non-fossil fuels, oil prices will continue to rise as demand from developing countries continues to increase.

 

Fuel poverty will only reduce substantially if fuel costs come down. That will only happen if someone comes up with a cheaper, clean alternative to fossil fuels. That will not happen for a generation or more. Subsidising alternative energy sources that will always be much more expensive than oil is currently may divert attention away from that search. It is the poor who will suffer from most.

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