"Hollow claims to world-leadership: Britain’s Industrial Decarbonisation Strategy"

Source:

https://www.thegwpf.com/beis-low-carbon-industrial-strategy/

"Between now and the COP26 climate summit in Glasgow in November the British public will be subjected by its own government

to a relentless wall-to-wall carpet-bombing of upbeat public relations announcements regarding climate change policy.

... this week it is the announcement of an Industrial Decarbonisation Strategy.

The Strategy is a somewhat embarrassing document, full of the toe-curling claims to world leadership common to so many announcements across government,

... The sly presentation of data is particularly notable here.

The strategy document tells us, for example, that the world’s industrial carbon dioxide emissions account for about 25% of the 33 billion tonne global total (2019 data).

This fact is then used to suggest by implication the great value of efforts outlined in the Strategy to decarbonize British industry.

The UK can, it is claimed, contribute by “leading global innovation efforts”, by working to “support industrial decarbonisation through trade policy”, and ensuring that the UK can “capitalise on the export opportunities of having a world-leading net zero industry”, as well as working to “encourage industrial decarbonisation in developing countries”.

Rousing rhetoric.

However, those fine words sound ... empty, when one recalls that the UK’s industrial process emissions amount to about 9.7 million tonnes of carbon dioxide per year (2019 figures), which is a scarcely visible 0.03% of the global total, and only about 3% of the UK’s total.

... UK industry doesn’t have the ... physical presence to deliver on any of the world bestriding promises sketched in the Strategy.

It would be harsh to say that UK industry doesn’t matter to global climate change mitigation policy, but it would not be very far from the truth.

Rather than exposing itself and the industries themselves to ridicule with implausible claims to leadership, government would have done better to concentrate on helping these industries to improve their productivity and international competitiveness, to grow and contribute to the UK’s domestic prosperity.

These are modest goals, but achievable and worthwhile.

But why are UK industrial emissions so low?

... Total industry emissions have more than halved over the past 30 years (BEIS, Final UK  greenhouse gas emissions national statistics: 1990 to 2018: Supplementary tables, 2020).

... this can be explained by a combination of the changing structure of the UK’s manufacturing sector, improved energy efficiency, and a shift to lower-carbon fuels.

... Industries in the UK have contracted, while their competitors in Asia and particularly in China expand.

Production emissions in the UK have fallen, by about 45% since 1990 ... but a great deal is to be explained by leakage.

And for industrial process emissions leakage to Asia explains practically all the emissions reduction in the sector,

from just over 19 million tonnes a year in 1990 to 9.7 million tonnes a year,

with a net effect that almost certainly entails increased total global emissions,

since China is coal-fired and thermally less efficient.

 ... In 1990 the UK manufacturing sector, the majority of which is accounted for by heavier industrial process such as those involved in the making of metals, cars and other machinery, plastics, glass, cement, chemicals and petroleum products accounted for about 17% of the UK economy and employed 4.4 million people, some 16% of all jobs.

But by 2019 it accounted for about 10% of the economy and it employed 2.7 million people, 8% of all jobs.

While it is true that the contraction in employment precedes the introduction of climate policies in the 1990s and particularly the early 2000s, the bulk of the recent contraction lies in that period.

Taking another, measure, share of GDP in 2018, it is clear that by international standards the UK manufacturing is small.

South Korea and China may be exceptional cases, with manufacturing accounting for about 30% of the economy, but the UK was well below the EU 28 average.

... the emissions reduction resulting from the UK economy’s “changing structure” is ... largely caused by sharply rising energy costs to pay for subsidies to renewables (£10 billion a year at present) ...

... (is it) possible to produce an industrial renascence in the UK without increasing emissions?

.The Decarbonisation Strategy suggests that this can be done in a way that will command international respect, but the measures offered are unconvincing.

We are told that government will encourage Carbon Capture, Usage and Storage (CCUS) for some 3 million tonnes of carbon dioxide by 2050, about one-third of current emissions, and the adoption of 20 TWh of low carbon fuel supply, largely hydrogen.

But this sounds like decarbonising the status quo at great expense and is very far from a low carbon catalyst for exponential manufacturing growth.

The Strategy  proposes carbon pricing to “send a clear market signal”.

That signal could, of course, simply encourage further leakage to China, whose emissions will be allowed to rise to 2030 and will remain high for decades thereafter.

... there is no persuasive policy in the 170 pages of text to suggest that the department has any clear and realistic idea of how to prevent further contraction of UK manufacturing as the result of low carbon policies.

That is not surprising since the overall energy policy, entailing overwhelming dependence on renewables for electricity, and the use of hydrogen as an energy carrier for heat and transport, is unavoidably of very high cost.

That is incompatible with a resurgence of UK manufacturing in a world where the largest manufacturing economies remain, very sensibly, committed to coal and to natural gas.

... In a desperate effort to stimulate growth in the face of high energy costs the government will offer industrial subsidies – this strategy talks about beginning with a £1 billion package – and these will create temporary flares of activity which will subside rapidly into ashes.

There will then be intense pressure on the government of the day to nationalise these industries ...

... The ministerial intentions behind the Industrial Decarbonisation Strategy are doubtless good, but the policies on offer from the department are timid and misconceived."