Climate change targets will push up energy prices

Household electricity bills will rise by a quarter over the next decade to pay for sharp reductions in greenhouse gas emissions, the Government's climate change advisor has warned.

By Louise Gray, Environment Correspondent Last Updated: 10:50PM GMT 01 Dec 2008

Lord Turner recommended the UK reduce output of carbon dioxide and other gases linked to global warming by more than a third in the next 12 years.
He admitted the cuts will be tough, shrinking the economy by one per cent by 2020 and demanding big changes in consumer behaviour.
The biggest impact will be on energy prices which are expected to rise by 25 per cent for the average family, pushing 1.7 million people into fuel poverty.
Britons will also notice a change in everyday life. It is estimated 40 per cent of cars will be plug-in hybrids or electric, smart meters that ensure more efficient use of electricity will be installed in every home and the cost of "carbon heavy" goods and services that use a lot of energy are likely to go up.
Lord Turner, , the chairman of the Committee on Climate Change, said the UK must cut greenhouse emissions by 80 per cent by 2050 to avoid catastrophic climate change.
In the first phase of cuts, he has recommended legally binding targets of at least 34 per cent by 2020. But if a global deal to cut emissions is agreed next year, which is likely, that target will go up further to 42 per cent.
Buying "carbon offsets" from developing countries, for example by paying to halt deforestation, will only be allowed to count if the higher target is adopted.
The biggest cuts will have to be in the energy sector, which produces the largest proportion of UK emissions.
Lord Turner recommended the use of renewables is increased from the current five per cent to more than a third. This would include a massive increase in wind power which was cited as the cheapest option in the short term and could provide almost a third of the UK's electricity by 2020.
The report also said nuclear power and coal could play a role in low-carbon electricity generation.
However Lord Turner emphasised any new coal fired power stations must be fitted with carbon capture storage (CCS) to store emissions underground, making it more difficult for the controversial Kingsnorth Power station to go ahead.
The change in energy make up will cost billions of pounds which will ultimately be passed on to the consumer. Lord Turner said 1.7 million people will be pushed into fuel poverty, although this number could be reduced as a result of improvements in home energy efficiency in their homes and increased subsidies for the poorest households.
"The ordinary citizen will be paying more for their electricity and gas which is why we spelt out the particular importance of energy efficiency – particularly in poorer households – and social tariffs," Lord Turner said.
He defended the cost of the measures needed to meet his targets, likely to include higher taxes on energy intensive goods like motor vehicles.
"The cost of not achieving the reductions, at a national and global level, will be far greater," he said.
Ed Miliband, the energy and climate change minister, promised changes across Government.
"This is a task which requires ambition and urgency. It will bring about not just changes in policy but a revolution in thinking," he said.
But Andy Atkins, executive director of Friends of the Earth, said the targets will not be met unless the Government scraps plans for a third runway at Heathrow and Kingsnorth power station.
"The Committee clearly acknowledges the major threats that aviation and coal pose to our climate change targets – but it has fudged the question of what the Government must do," he said.
"Ministers must scrap plans to allow UK airports to expand and not allow any coal-fired power stations to be built without carbon capture and storage."
The key points
Power
+ Renewables will have to generate at least a third of electricity, with the majority of growth in the short term expected in onshore and offshore wind.
+ Nuclear will form part of the mix, with the possibility of new stations being built in the future.
+ Coal will continue to be used but will only be viable in the long term if technology is developed to store the emissions underground.
Transport
+ Cost of flights expected to go up as airlines face penalities for producing emissions.
+ Increased use of public transport through Government policy to cut carbon.
+ At least 40 per cent of cars will be hybrid plug-ins or completely electric as taxes increase on polluting cars and new technologies come online.
Agriculture
+ Increased use of feed additives that increase productivity of cattle but decrease methane produced.
+ Reduced use of fertiliser by using organic alternatives or different plants.
+ More energy efficient machinery for example hybrid tractors.
Consumer
+ People will be expected to eat less “carbon intensive” meats like beef and lamb.
+ Carbon heavy products such as vegetables transported from abroad will increase in price with energy prices.
+ People will be expected to turn off lights and cut down on air conditioning or heating as electricity becomes more expensive.