EU climate change targets will cost Britons £150 a year

Louise Gray, Environment Correspondent
Last Updated: 2:01pm BST 13/10/2008

Ambitious EU climate change targets will cost the British tax payer £150 every year just as the credit crunch begins to bite, according to a new report.

The EU is committed to cut emissions by 20 per cent by 2020. On top of this are targets to get 20 per cent of all energy from renewables and 10 per cent of transport fuel from biofuels.

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However an independent think tank has said meeting the targets will cost the UK £9bn every year and push one million more people into fuel poverty.
Open Europe, that is backed by Marks and Spencer chief executive Stuart Rose as well as other leading business people, predicted the cost to goods and services of cutting emissions and making substantial investments in renewables.
The EU puts the annual cost to the UK at between £4.4 and £6.3bn. But Open Europe estimate it would be closer to £9bn.
The report found the most significant cost, that will ultimately be passed on to consumers, was for electricity because power companies will have to pay for carbon emissions or convert to renewables.

The targets would add £130 to £200 a year to the annual domestic energy bill for a family of four in Britian, pushing one million extra people into fuel poverty.
The extra cost of carbon passed down to retailers, services and transport will cost the average person £150 extra every year or a family of four £600, rising to £730 if technology remains at current levels, according to the report.
Across Europe the cost of the targets will be £130 per person or £520 for a family.
Hugh Robinson, author of the report, said it was not a cost effective way to save the planet. He said: "At a time of rising energy bills and worries over the economy, the EU's climate change package is the last thing that hard-pressed consumers need.
"Now more than ever, it should be obvious that we need to reduce carbon emissions as efficiently and cheaply as possible - but the EU proposals are extremely bad value for money. This means we will pay far more than necessary in fighting climate change; or put another way, we could spend the same amount of money and reduce emissions by a lot more.
"It is legitimate for the EU to set targets for absolute carbon emissions reductions, which should be our ultimate priority. However, it is wrong for the Commission to micro-manage national energy planning by setting binding targets for renewables and biofuels. This will artificially drive investment towards very high-cost methods of cutting carbon.
"The politicians who sign up to this deal will be out of office in ten years time - but pensioners and the poor will be left with the biggest bills."
Mr Robinson said the EU should stick to the overall target to cut emissions by 20 per cent by 2020 but scrap all the other targets that are forcing companies to invest in renewables that are not necessarily effective. Instead he suggested a uniform tax on carbon that would force industry to cut emissions in the most cost effective way.
However Ed Miliband, the new Secretary of State for Energy and Climate Change, said the UK would stick to the targets.
He said: "Now is not the time to scale back our ambitions in tackling climate change. Cutting the costs of energy is good for people as it keeps down their fuel bills, and it's good for the planet as it reduces dangerous climate change. The current economic difficulties make these issues more important, not less."
Tom Picken, climate change campaigner at Friends of the Earth, said doing nothing will cost up to 20 per cent of GDP annually by 2050, whereas if emissions are cut costs could be limited to 0.5 to one per cent.
"Urgent action to cut carbon dioxide emissions makes sound economic and environmental sense. Even ambitious EU climate policies are likely to cost less than one per cent of member states' GDP - delaying action will increase the devastation caused by climate change and make this figure seem like small change.
"Investing in a comprehensive energy saving programme and exploiting Europe's vast renewable energy potential will be good news for the economy and good news for the environment.
"It will help tackle fuel poverty, end our dependency on damaging fossil fuels and provide the bedrock for a green revolution that could create hundreds of thousands of new jobs.
"Failing to manage the economy properly has created a huge financial headache - failing to tackle climate change could be terminal."
"The cost of inaction on climate change is 20 times higher."