Huhne declares green growth is here to stay

Chris Huhne has today again set out the case for shifting towards a low-carbon economy, reiterating his view that the coalition’s green policies become cost-neutral once oil prices break $100 (£61) a barrel.
In a speech to the liberal think-tank CentreForum, the energy and climate change secretary said investment in enhancing the UK’s energy infrastructure and rebalancing its economy in favour of cleaner technologies would avoid the economic risks and volatility epitomised by the current spike in oil prices.
Building on themes laid out in his Perfect Storm address last week to the Royal Geographic Society, Huhne said prices were likely to stay above $100 for some time, and were likely to reach $108 a barrel by 2020, making fossil fuels a riskier option than shifting towards low-carbon generation.
“If oil prices continue on this trend, and gas prices rise to meet them, then our consumers will be winning hands down, paying less through low-carbon policies than they would pay for fossil fuel policies,” he said.
Huhne also used the platform to call on the EU to set a steeper carbon price and push for 30 per cent cuts in emissions by 2020 rather than the current 20 per cent goal.
“The carbon price set out by the EU Emissions Trading Scheme is not high enough to drive the change we need,” he said, adding that the government also wants to see “a much stronger emissions target”.
A number of countries in eastern Europe are blocking proposals put forward by the UK, Germany and France for a more ambitious emissions target amid fears the 30 per cent goal could harm European competitiveness.
But Huhne insisted it would be relatively easy to meet the more demanding target. “Two years ago, we had already made it to 17 per cent,” he said. “Going to 30 per cent will add just €11bn [£9.4bn] to the costs that were originally estimated of going to 20 per cent. In an economy the size of Europe’s, that’s small change.”
In a wide-ranging speech, Huhne also reaffirmed his faith that a global deal limiting emissions was still on the cards, despite the ongoing standoff over the future of the Kyoto Protocol.
And he again made the case for the government’s proposed electricity market reform proposal, which he said would ensure “all low-carbon technologies will benefit from support by virtue of being low carbon”.
He said the right reforms would provide the necessary incentive for investors to come forward with the £200bn of new investment that Ofgem estimates will be required over the next decade to secure electricity supplies as ageing nuclear and coal power plants shut down.
While the reforms would impose some costs on the consumer, Huhne argued any charges would be minimal when compared to the alternatives offered by business as usual.