Energy justice and the transformation to a low carbon society Jim Skea Research Director UK Energy Research Centre Energy justice in a changing climate: defining an agenda InCluESEV Conference Coin Street neighbourhood centre 10 November 2011

Structure of the presentation UK energy and climate policy Affordability

The energy policy “trilemma” Environment Affordability Security

What Government and the CCC have to consider under the Climate Change Act scientific knowledge technology economic circumstances and competitiveness circumstances at European and international level energy policy fiscal circumstances the estimated amount of reportable emissions from international aviation and international social circumstances differences between England, Wales, Scotland and Northern Ireland Central Emerging “Rear view mirror”

The long-term target and the emissions trajectory 2050 allowed emissions 3.2% p.a. reduction 2008-2030 Scenario emissions to 2030 4.7% p.a. reduction 2030-2050

Carbon budgets recommended by the CCC

The decarbonisation/electrification/efficiency story Reducing power sector emissions: Renewables (Wind, solar, tidal and marine, biomass), nuclear, CCS Application of power to transport and heat Reducing heat emissions: Energy efficiency Behaviour change Electric heat (e.g. heat pumps, storage heating) Biomass boilers CCS in industry Reducing transport emissions: Fuel efficiency Electric/plug-in hybrids Sustainable Bio fuels

The decarbonisation “trilemma” Decarbonising electricity Environment driven Security/affordability driven Electrification Efficiency

This is a technology narrative – why? Culture/skill-sets of government and advisory bodies Lack of evidence relating to the impact of policies targeting “lifestyle” and “behaviour change” Technology interventions are believed to be amenable to quantification and hence “bankable”... ....but outcomes of course mediated by social factors

Affordability

Affordability and paying for supply side decarbonisation Renewables, nuclear and CCS will all cost more than conventional fossil fuel generation (forgetting about externalities and future generations) The cost per household is likely to rise to the low £100s per year Only two ways to pay – bills or taxes “Stealth” payments via bills has been the chosen route Consumers Association arrival in the debate Increased transparency is unavoidable The (independent) National Statistician has deemed that subsidies financed through bills should be regarded as “taxes” for macro- economic /statistical purposes Using bills is socially regressive compared to using taxation

Addressing affordability Re-define fuel poverty (the Hills review) Rising block tariffs? Finance subsidies through taxes not bills Choose cheaper low-carbon technologies –which means onshore wind Scale back de-carbonisation ambitions Justice for future generations? Link energy policy to other goals – housing, transportation etc Reduce energy needs

“Hills review” of fuel poverty Level of income and level of expenditure on energy

The “fuel poor”, incomes and costs (2004)

The “fuel poor”, incomes and costs (2009)

Fuel poverty: definitions Current definition a member of a household living on a lower income in a home which cannot be kept warm at reasonable cost ⇒ household is in fuel poverty if it would need to spend more than 10 per cent of its income to achieve an ‘adequate’ level of warmth through the year and on other energy costs. Proposed definition Fuel costs above the median level If they were to spend that amount, they would be left with a residual income below the official poverty line. Look at fuel poverty “gap”

Framework for policies dealing with poverty/energy Need income support Fend for themselves Target of EE polices True fuel poor

Residential efficiency/decarbonisation measures get harder… Loft insulation Cavity wall insulation Boiler replacement Solid wall insulation Heat pumps/electricity

Tensions going forward Cost of low-carbon supply “Acceptability” of ambitious efficiency measures that affect perceived quality of life Not only poor people may feel injustice…

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