Maitland Green: Our weekly update—9 August 2017

9th August 2017

Oxford economist Professor Dieter Helm has been asked by the government to carry out an energy cost review and report back by the end of October. Simon Evans published an in-depth analysis of the review, the policy context that it comes into, and of Professor Helm’s role in Carbon Brief yesterday. Helm, a vocal critic of UK energy policy for years, will only have been on the project for 30 days himself before he is to publish the work, with the advice of a panel of other experts. The cost of energy has long been the topic of contentious debate in the UK, although households are now spending a similar amount of their incomes on their energy bills as they did in 1990 and in 2010 thanks to reduced demand. However, energy bills remain in the news, as evidenced by the recent row over British Gas’s decision to boost their prices. The costs to business are another factor to the debate, as UK business faces some of the highest electricity prices in Europe. The “independent review of the costs of energy”, announced by the Department for Business, Energy and Industrial Strategy this week, is aimed at identifying “inefficiencies in all components of electricity supply” and making recommendations on how to minimise costs.

Across the Atlantic, the US has delivered its official notice to withdraw the country from the Paris climate agreement, but has said that it will still continue to participate in international climate talks. The drive to electric cars has also been highlighted by the news that BHP Billiton, a global mining company, has announced that it will shift its sights onto the growing EV market by building the world’s largest nickel sulphate plant. Tesla has also had a good week, with their Model S setting a new electric vehicle distance record of 670 miles on a single charge.

This week, our analysis comes from climate scientist John Abraham who shines a light on the thriving fossil fuel subsidies problem, and calls for a new system to be put in place to finally shift away from polluting energy sources once and for all. In our opinion of the week, George Monbiot calls for a new way of talking about the environment, so that our impact on and appreciation for nature to be better captured.

Must reads


  • Oxford academic, Dieter Helm, has been given 30 days to conduct a wide-ranging independent review of Britain’s energy costs.
  • Leaked draft guidance suggests many landlords could take advantage of exemptions from new energy efficiency legislation.
  • Tesco will stop selling “single use” 5p bags from the end of the month.
  • The GLA and TFL have announced that they have allocated £4.5m to 25 London boroughs to roll-out 1,500 new charging points for electric vehicles across the capital.



Analysis of the week

‘Fossil Fuel Subsidies are a staggering $5.3 tn per year’ – John Abraham, The Guardian

“Fossil fuels have two major problems that paint a dim picture for their future energy dominance.” In addition to causing climate change, fossil fuels are expensive. The expense is not widely known as much of their costs are hidden. A new study by the journal World Development quantifies the amount of subsidies directed toward fossil fuels globally. “The subsidies were $4.9 tn in 2013 and they rose to $5.3 tn just two years later. According to the authors, these subsidies are important because first, they promote fossil fuel use which damages the environment. Second, these are fiscally costly. Third, the subsidies discourage investments in energy efficiency and renewable energy that compete with the subsidized fossil fuels. Finally, subsidies are a very inefficient means to support low-income households.” The authors of the paper argue for a broader view of subsides as this will better “reflect the gap between consumer prices and economically efficient prices.” The paper also reveals the “top three subsidizers of fossil fuels are China, USA, and Russia, respectively. The European Union is a bit less than half of the entire US subsidy…There are two key takeaway messages. First, fossil fuel subsidies are enormous and they are costs that we all pay, in one form or another. Second, the subsidies persist in part because we don’t fully appreciate their size. These two facts, taken together, further strengthen the case to be made for clean and renewable energy. Clean energy sources do not suffer from the environmental costs that plague fossil fuels. As a climate scientist, I focus almost exclusively on the scientific questions related to climate change. But equally important are the economic issues that, when dealt with, will usher in a new era of energy.”

Opinion of the week

Forget ‘the environment’: we need new words to convey life’s wonders—George Monbiot, The Guardian

George Monbiot professes his disdain for the way in which we describe the environment which we seek to protect, using “cold and alienating” words like ‘reserve’, ‘resources’, and ‘stocks’. Monbiot argues that the use of empty and bland wording serves only to sanitise and disguise our impact on the environment. “Words encode values that are subconsciously triggered when we hear them. When certain phrases are repeated, they can shape and reinforce a worldview, making it hard for us to see an issue differently” he writes. Instead, Monbiot calls for a shift in the way that we talk about nature—using phrases like “places of natural wonder” to describe protected areas or “living planet” to describe the environment. That way, the value that we should be placing in the world around us can be better captured and appreciated. “We are blessed with a wealth of nature and a wealth of language. Let us bring them together and use one to defend the other.”