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The debacle of Copenhagen shows that conventional climate policies have no future and we need alternative approaches that are politically realistic and economically feasible, writes Dr Benny Peiser, director of the Global Warming Policy Foundation.

Whatever the outcome of the forthcoming election, Britain’s extravagant climate policies are unlikely to survive intact. The coming battle over the cost of unilateral CO2 targets and utopian decarbonisation will be overshadowed by the next government’s desperate attempt to revive the UK economy, raise its competitiveness and radically reduce the rising debt burden.

In short, the economic crisis has rendered costly and unilateral climate policies unsustainable, both financially and politically. The climate agenda has become unpopular among voters and businesses who are increasingly hostile to any climate taxes that are amplifying their energy, petrol and heating bills.

In many ways, carbon and climate taxes have turned into considerable political liabilities. While the Australian government has been forced to shelf its controversial emissions trading scheme, President Obama’s administration is struggling to push its cap-and-trade bill through the US Senate because senators of his own party, the Blue Dog Democrats, are opposed to proposals they fear as being too costly and too risky.

After suffering a crushing electoral defeat, French President Nicolas Sarkozy has been forced to scrap his unpopular carbon tax. The French government made clear that its climate tax has been postponed indefinitely “in order not to damage the competitiveness of French companies”, fearing that it would be too risky for France to go it alone without the rest of the EU. Similar concerns over the economic risks of unilateral climate policies are likely to ascend in Britain after the general election.

What is more, concern among the British public about the potential threat of climate change has declined sharply after months of Climategate controversies and growing disillusionment with costly Government schemes.

At the same time, the international deadlock over climate diplomacy has led to growing scepticism among the business community regarding the burden of unilateral carbon emissions reductions.

After the Copenhagen debacle, the probability of a Kyoto-style treaty with legally binding emissions targets is now close to zero as the gap between the developed and the developing nations has been growing ever wider.

Developing nations are demanding financial support to the tune of hundreds of billions of dollars (per year) in return for their support of a post-Kyoto climate treaty. In view of the astronomical demands made by China, India and Africa, Western governments and their voters are increasingly reluctant to agree to injurious obligations that risk weakening their economic competitiveness even further.

All the same, the Government’s target of an 80 per cent reduction in greenhouse gases by 2050 is the most ambitious in the world. To meet the Government’s target, household gas and electricity bills are expected to shoot up fourfold to nearly £5,000 a year by the end of the decade according to a recent uSwitch report. In effect, climate policies are gradually pricing the working and lower-middle classes out of their comfort zone.

A report by Citigroup warns that Britain’s current climate policies risk causing an “affordability crisis” even for families on average incomes.

While ordinary taxpayers have been hit badly, the damage to industrial energy users is even more dramatic. According to the Government’s own estimates, the price of electricity for industry will go up by up to 70 per cent and the price of gas by a further 50 per cent as a direct result of meeting its renewable energy targets.

It would be extremely risky for the next government to press ahead with huge rises in energy and heating bills while, at the same time, asking ordinary families to tighten their belts. No wonder that a recent survey among 141 conservative candidates shows that the top priority was cutting the deficit while reducing Britain’s carbon footprint is regarded as the lowest priority.

The solidifying deadlock over a binding climate treaty is likely to trigger a rethinking of UK and EU climate policy. Especially East European member states will be demanding a drastic reassessment of unilateral climate targets which are turning into an economic liability and a political risk. They are already putting a heavy burden on European economies as well as driving ever higher the costs for energy, industrial output and the general public.

Most likely, all efforts of reaching a binding climate agreement will fail in coming years. The pressure of lowering expectations of a green utopia will therefore increase. The developing countries cannot afford to slow, let alone reduce their dependence on cheap energy and economic development as any significant curtailment would undermine their social and risk political stability.

Even in Europe and the Western world, the general climate hysteria shows a marked cooling. The novelty of climate change and the habitual alarms have lost their original shock value. Instead, the public seems to be warming to the idea of gradual and inevitable climate change. In the UK, the party-political consensus on climate change is unlikely to survive the general elections as all three parties are confronted by a growing public backlash against green taxes and rising fuel bills.

Above all, the debacle of Copenhagen shows that conventional climate policies have no future. What is necessary now is the development of alternative approaches that are politically realistic and economically feasible.

Public Service, 23 April 2010