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The real climate change scam

There is a Faragesque/Trumpian line of reasoning that goes something like this: you can tell climate change is a hoax because the establishment/deep state is doing nothing about it.

Sure, they’ve closed down the coal mines and steelworks that used to provide working people with well-paid jobs.  And they’ve bunged a fortune in subsidies at wealthy land owners to build wind turbines and solar farms (which account for less than 2 percent of global primary energy).  But the real things that could make a difference to climate change – like curbing air and road travel, taxing imports from high-carbon countries, cutting meat consumption, etc – have been left alone.

If you are not a scientist, and especially if you are at the bottom of the income distribution in an advanced economy like the UK or the USA, this type of argument is all the more persuasive when you discover that you are being forced to shoulder a disproportionate share of the cost of what few climate policies are being implemented.

One such cost that is becoming politically and economically unsustainable in the UK is the climate change levy added to household energy bills.  The levy is intended to pay for home insulation initiatives and for subsidising and improving new renewable technologies like wind and solar.  The trouble is that energy poverty in the UK is developing into a politically explosive issue as the rising cost of energy forces thousands of households to choose between heat and food.

The problem with the UK climate change levy is that it falls on just two of the sources of carbon pollution – household power and heating – while ignoring far more polluting sources like imported good, food and transport.  Moreover, the poorest households pay the most.  As John Barrett and Anne Owen report in an article in The Conversation:

“Our new research shows that the poorest households not only are hit hardest by the levy but also receive less money back in the form of home improvements than they contribute in the first place…

“We found that, in a year, the richest households each consumed on average the same amount of energy that would be produced by 12.7 tonnes of oil, compared to 3.3 tonnes for the poorest households. But the poorest spent a much greater proportion of their income (10%) on energy than the richest (3%). And the energy used for heating and powering their homes – the part that their climate change levy bill is measured on – represented a much greater proportion of their overall energy use.

“This means that adding the climate change levy to household energy bills hits the poorest households hardest. Energy bills account for a much greater share of their household income and more of their energy use is charged. In fact, the levy only affects a quarter of the total energy consumption of the richest households, compared to 53% for the poorest households. As a result, the richest homes use nearly four times more total energy than the poorest but only pay 1.8 times more towards energy policy costs.”

This is an aspect of climate policy that is almost never raised because of the over-scientisation of the debate.  For while you would need a particularly heavy-duty tinfoil hat to dismiss a body of science that dates back to the 1820s; the economics and the politics of climate change are a different matter.  In the election of Donald Trump and the UK Brexit vote, the same people who are being asked to contribute disproportionately to the cost of curbing carbon emissions have demonstrated a willingness to pull the roof down if their situation continues to be ignored.  In Australia, extremely high energy prices and disrupted supply served to bolster support for climate change denying politicians in their recent election.  And this is not as unreasonable as affluent liberals like to suggest.

When states start raising levies on the copious consumption enjoyed by the wealthy, the poor might begin to take climate change seriously.  But so long as the wealthy continue to bury their snouts in the high-carbon consumption trough, they can hardly expect the poor to do anything other than treat the whole thing as just another neoliberal scam.

As you made it to the end…

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