Leading article: Greener living comes at a price

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The Independent Online

We were disappointed that David Cameron made no reference to green issues in his speech to the Conservative conference. Indeed, he seems to have dropped environmentalism as if it were part of a pre-election rebranding exercise for which he has no use now that he has to attend to more important matters, such as imposing the biggest public-spending cuts since 1921.

Yet it is possible that this is one issue on which the Liberal Democrats will keep the coalition honest. Chris Huhne, Secretary of State for Energy and Climate Change, is to make an announcement tomorrow. His most eye-catching decision is to scrap plans for a tidal barrage across the Severn estuary, as we report today (page 2). There were green arguments against the barrage, for its effect on local wildlife, but it seemed as if they were outweighed by the need to curb climate change.

Indeed, this newspaper has been enthusiastic about tidal power in the past. We greeted the go-ahead for a feasibility study of the Severn barrage three years ago with the front-page headline, "The tide turns". Well, the tide has turned again. There is no doubt that the costs of generating electricity from the Severn are far in excess of those of the main green alternatives. We still believe that climate change is a global emergency, but a realistic, economically hard-headed green strategy is right to discard tidal power in favour of the "holy trinity" of low-carbon energy: nuclear, clean coal and wind.

There are problems with each. Nuclear power still faces problems of safe storage of waste, and of the technology used by EDF, the leading candidate to build the next wave of power stations. The technology for capturing and storing the carbon produced by coal power stations has not yet been proven on a commercial scale, and is probably 10 years away from going live. Wind power costs most per kilowatt and, because the wind does not always blow, it can only ever supplement a baseload source of electricity generation.

Yet the advantages, above all of cost, and, in the case of wind power of speed of deployment, mean that these three should take priority over the vast, costly Severn project.

The Independent on Sunday prides itself on being a green newspaper, but we have always insisted that this is compatible with a rigorous understanding of economics; indeed, we have long argued for the use of the price mechanism to achieve the most efficient green outcome. To this end, we have advocated putting a price on carbon emissions, whether in the form of a "pure" carbon tax or some proxy such as the European Emissions Trading Scheme.

It is here that the Government faces the really hard choices. Mr Huhne has finessed his own party's historic opposition to nuclear power by saying that new power stations will not be subsidised. He is right in the sense that they should not be subsidised in relation to other forms of low-carbon energy, but plainly the economics of green energy cannot be made to work unless the price of "dirty" coal and gas reflects the environmental damage caused. That means that the price of electricity and gas has to rise, which would give consumers the incentive to use less. Without offsetting help, this would impose a heavier burden on the poor.

Thus is raised the issue of fairness, which is likely to be one of the defining themes of this week's Comprehensive Spending Review, both of the Government's claims for it and of the Opposition's attacks on it. As our ComRes opinion poll suggests today (page 12), the voters have little confidence that the spending cuts will be "fair".

This is the real way in which the financial crisis constrains our green ambitions. As we reported last week, people's interest in and willingness to make personal sacrifices for the long-term sustainability of the ecosystem have waned in this time of stringency. But the lasting problem is that energy bills need to rise, and the public finances do not readily allow Mr Huhne and his colleagues to protect the poor from the consequences of an economically credible green energy policy.

Some of our praise for Mr Huhne's rigour in analysing environmental priorities needs to be reserved, therefore, until the coalition can convince us that it can apply similar commitment to the cause of social justice.

Mr Huhne has made the sums add up; it is now up to Mr Cameron to prove that his greenery was more than mere window dressing and to show true leadership.