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Where should we be targeting low-carbon investment, here or abroad?

By 16th February 2016 Blog, Sustainability One Comment
Where should the UK invest in low-carbon technologies, here or abroad? More at www.remsol.co.uk

Is it sensible to continue investing heavily in decarbonisation of the UK economy, or could we get better value from making investments where it really counts?

According to the Global Carbon Atlas, in 2014, the UK was ranked 15th in a list of global CO2 emitters, producing 428 MtCOâ‚‚ out of a worldwide total of 35,890 MtCOâ‚‚ (or just 1.19%)

The Climate Change Act 2008 commits the UK to maintaining emissions within a series of so-called carbon budgets, and has been used as a significant driver for low-carbon energy investment in the years since it was introduced.

The sources of UK emissions of CO2, and their quantities, are reported annually by the Department of Energy and Climate Change. In 2014, they looked like this:

Energy production (all in MtCO2)

155.6

Business

  72.4

Transport

116.6

Public

     8.1

Residential

  61.1

Agriculture

5.3

Industrial process

12.3

Land use change

  -9.7

Waste management

0.3

(The UK figures add-up to 422 MtCO₂ rather than the 428 MtCO₂ reported by the Global Carbon Atlas, but it’s close enough).

It’s evident from this that to make any serious dent in UK carbon emissions, our best bet will be to tackle energy production, transport and residential energy use.

But we mustn’t underestimate the scale of that challenge: over 60% of electricity is currently generated by burning fossil fuels (mostly gas and coal); the overwhelming majority of passenger and goods transport (road, rail and air) is fossil fuelled by diesel, petrol and other oil products; and over 84% of UK homes are heated by gas.

For a start, it’s going to be expensive.

The costs of switching to low-carbon electricity generation, with a mixture of renewables and new nuclear will be colossal. Ditching our diesel and petrol cars in favour of electric vehicles will not only be a burden for car owners but will create a legacy of end-of-life vehicles that need to be scrapped, safely de-polluted and their components recycled. And replacing gas heating in over 19 million homes, with an electrically operated alternative like heat pumps, would also run to billions of pounds.

And what will all that effort and expense achieve?

Well, actually, not an awful lot. Even if the UK could successfully reduce CO2 emissions in these three key sectors to zero, saving 333.3 MtCO2 a year, that would still only be just 0.92% of total global emissions.

The question, then, is if the move to a zero or near zero-carbon economy in the UK is going to be both disruptive and costly, whilst making virtually no difference to world CO2 levels and temperatures, wouldn’t we be better off exporting technology and expertise, and making infrastructure investments in countries like Brazil, Russia, India and China (the so-called BRIC nations) and other developing countries, where our investment returns (financial and carbon savings) could be so much higher?

Last year, the Chancellor committed the UK to spending 0.7% of GDP on international aid. Based on 2014 data (just for consistency, because that’s the year for which CO2 data has been supplied throughout this article) that’s about £18 billion a year of ring-fenced spending.

Invested wisely in other countries, the UK’s international aid budget could help to spearhead a global move that would not only make more meaningful CO2 cuts, but would also help to support developing economies and boost GDP at home through increased exports. Refocus the subsidies already being used to support renewable energy deployment in the UK (£3.5 billion in 2014) to instead support the overseas deployment of low-carbon technologies built in the UK, and the economic advantages could be quickly amplified.

Wouldn’t that just be a more sensible way of approaching the need to cut emissions rather than a focus on country-level emissions?

What do you think? Should we refocus our decarbonisation efforts by helping other nations embrace technological advances that cut their much bigger CO2 inventories or continue to invest here in the UK? Let us know in the comments.

One Comment

  • ged ennis says:

    Lee ,
    Is it not true that the uptake in renewables is reducing the overall cost of energy .Should we not be doing both ?. ie. embracing change here and investing abroad with the knowledge gained .its a bit of a cheek going to others and trying to persuade them to invest in change if we are not committed to the same . Whatever the decision We need to be clear on where we are going ,why we are going there and committing to it wholeheartedly .

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