We can't rely on the markets alone to fight climate change

The UK government's push for clean coal technology shows it recognises its duty to regulate emissions

Bryony Worthington
guardian.co.uk, Thursday 23 April 2009 18.00 BST

Bryony WorthingtonThe government has finally come up with a clear policy about the sort of power stations it wants to see built: it wants coal and it wants it to be at least 20% cleaner than would be otherwise. This won't be enough for deep green environmentalists but it is nevertheless a significant step forward from where we are today.
Before today the mantra had been "let the market decide" but today's announcement admits that we can't rely on markets alone to tackle climate change or to stop us becoming too reliant on imported gas supplies - the government has acknowledged it has a duty to regulate.
This will, of course, cost more and we the consumers will be footing the bill. Though to be fair, we have been required to do this in the past for nuclear and are already doing the same for renewables now, so it is not such an outrageous suggestion. And one we should bear if we want to live in a country that is taking the issue of climate change seriously – finally.
The public and opposition parties have been very vocal in pointing out, given the significant role coal plays in climate change, that it would be madness to embark on a programme of building new traditional coal fired power stations as many companies appeared to want to do. And it seems their calls have been partially heeded.
Assuming the policies set out today go ahead (they still have to be consulted on over the summer) it will no longer be possible to build a new coal station in the UK without capturing, from the outset, approximately a fifth to a quarter of the carbon emissions. Many will say this is too low and will seek to use the consultation exercise to increase the ambition. In addition, once the technology is deemed to be commercially "proven" – a definition that will be likely fought over – it will then become mandatory to retrofit it to all stations built between now and then. The government estimates that this will be the case by 2020. It will also consult on back-up measures should this not transpire.
Again, many will argue that 2020 is too slow a timeline. If companies with pre-existing plans to build carbon capture and storage using 'pre-combustion' technologies get going quickly then they could be up and running by 2015 and will be far cleaner from the outset. Pre-combustion CCS involves gassifying the coal to produce a synthetic gas made up of carbon monoxide and hydrogen. The former is reacted with water to produce CO2 which is captured, and more hydrogen. The hydrogen can then be burned cleanly to drive a turbine and generate electricity.
If pre-combustion proved successful it would then be hard to argue then that the technology is not available for all. From that point on it should be possible to mandate that all new stations are use 100% CO2 capture. What happens to existing stations will also be up for debate and it will be harder to resist the logic that in fact all stations should be meeting minimum emissions standards from then on.
So why the apparent change of heart? The current structure of DECC has something to do with it, enabling differences of opinion between energy and climate officials to be settled internally rather than escalated to the cabinet. The composition of the cabinet has also helped: Ed Miliband has been much more receptive to the arguments of the NGOs than previous secretaries of state for energy. Treasury officials will have no doubt still tried hard to defend the free market line, but Darling and presumably also Brown have clearly over-ruled them. Mandelson too is currently touting the need for a refreshed industrial policy that embraces future industries rather than protecting incumbents. So the stars were finally favourably aligned. With both Greenpeace and E.ON welcoming the announcement, it seems the new team has successfully dug itself out of a political hole.
And not a moment too soon. Industry needs to know what to build and the previously announced demonstration competition, that ruled out the best projects, was widely perceived to be a mess. The scaling up of ambition signalled today, backed by secure funding sources and tighter regulation, will increase confidence amongst would-be investors and may just be enough to make the UK a global hub for this technology. Let's hope so.
Of course it's important to point out that these measures will not actually save a single extra tonne of carbon from entering the atmosphere because all power stations already have caps on their emissions and unless these are tightened we are just shuffling pollution permits around. It is therefore more an industrial policy for Britain than it is a directly effective climate policy. That said, if it works, we will be doing the world a favour in proving that this technology can be part of the global solution. Committing to pay for this when the pressure to minimise costs is greater than ever, is especially significant, and proof that green and growth are now seen as mutually compatible.