Political Climate

Will India’s coalition government be the next victim of political backlash against fossil fuel subsidy reform? Last Friday, squeezed by rising oil prices and growing fiscal strain, the Government reduced subsidies on diesel, and prices jumped 14%. The Chief Minister of West Bengal and leader of junior coalition partner in the Congress-led Government has threatened to walk out of the coalition, while more radical voices on both left and right have backed demonstrations and strikes. India’s unrest adds to riots this year in Nigeria, Indonesia and Sudan over subsidy reform.

I have just posted the following as a guest on Duncan Green’s From Poverty to Power blog:

In recent years up to $500 billion a year or more has been spent globally on making high-carbon fuels cheap, with around 40% of that in developing countries, including some of the big emerging economies such as China, India, Indonesia and South Africa.

From a policy perspective, reducing fossil fuel subsidies is a no-brainer. Continue reading →

Think about the populist anti-politics vote and suddenly it’s everywhere – in the UK, across Europe, and currently very much in France. Not always linked to climate scepticism, but sometimes very strongly so, and not going away soon.

Last week the UK Energy Research Council  produced a big report on the route to a demonstration of carbon capture and storage (coordinated by my Sussex colleague Jim Watson), informed by past experience of stimulating innovation in similar types of large scale energy engineering technology. In theory, Continue reading →

Last week saw a pitched battle outside Indonesia’s parliament building, with water cannons and tear gas deployed on 10,000 protestors. The reason? Proposals from the government to cut Continue reading →

Dieter Helm, centre right economist and newly appointed Chair of the Natural Capital Committee has just produced an interesting new essay (hat tip to Matthew Spencer). His approach draws a lot on the work of people like Kenneth Arrow and Partha Dasgupta who have argued for the need to measure the “assets” of the natural world (including a safe atmosphere and biodiversity). What is new is his argument that maintaining these assets should be the primary aim of the state in the 21st century. Continue reading →

Couple of items tonight:

1. As new boy in DECC, Ed Davey seems to have been ambushed by the gas industry, with a ruling allowing new gas power plants to emit up to 450 gCO2/kWh out to 2045. This move will mean that there will be no requirement to fit carbon capture and storage. Someone should tell the Climate Change Committee, who say that average emissions from electricity generation need to be 50 gCO2/kWh by 2030 to meet the 4th carbon budget. The DECC press release unusually quotes George Osborne, so either Davey has already given in to the Treasury within a few weeks, in a way that Chris Huhne managed to avoid for almost 2 years, or else he has done some clever deal in the budget.

2. The strength of public sentiment on fuel tax remains very, very strong. Anthony Wells over at ukpollingreport reports on a YouGov Sunday Times poll:

Unsurprisingly the overwhelming majority of people (77%) would support a decrease in the level of fuel duty. There is still a substantial majority in favour when YouGov asked people to balance the competing priorities of cutting the deficit or cutting fuel duty – 59% think it is more important to cut fuel duty compared to 20% who think it is more important to cut the deficit.