In recent years, in my work in the parliament, I’ve become more and more concerned about an issue that is scarcely if ever mentioned, either in the media, or indeed in Brussels (except by me — I mention it all the time).
Let me offer you a striking and topical example. Seven or eight years ago, the bien pensant establishment — politicians, the media, green lobby groups — were vilifying petrol engines and their drivers, and urging us all to switch to diesel. Didn’t we know that CO2emissions were the greatest threat facing Planet Earth, mankind, and the biosphere? Didn’t we understand that we all have a duty to minimise our emissions — and therefore to switch from petrol engines, with their somewhat higher fuel consumption and emissions, to diesel, with lower emissions?
Gordon Brown as Chancellor backed up this advice with differential duty rates designed to drive the switch to diesel from petrol
So both manufacturers and drivers took the advice, and diesel became more popular. For the first time in my life, I bought a diesel car.
But now, for heaven’s sake, they’ve noticed that diesel cars produce higher levels of SOx2 and NOx and particulates than petrol cars. And these emissions (which unlike CO2 really are pollution) are causing widespread respiratory illnesses and excess deaths. In our cities, we are in breach of EU clean air regulations. I bitterly resent Britain being told by the EU what clean air rules we should apply, but there is no doubt that these pollutants are at dangerous levels. (We need to keep it in perspective — life expectancy continues to rise, so we must be doing something right).
So now in less than a decade we’ve had strong advice to switch to diesel, suddenly countermanded by strong advice to switch to petrol — with some advocating sanctions against existing diesel vehicles. (Please bear in mind that the industry has done a great job of cleaning up both petrol and diesel engines, both of which are much cleaner today than they were ten years ago).
But the development cycle for cars is around seven years. And the average life-span of a car is well over ten years. The lifetime of an engine factory may be decades, and while factories can be redesigned and re-tooled, it’s an expensive process.
Take Jaguar’s exciting new engine plant in Wolverhampton — a very welcome investment indeed. Half a billion pounds, and employing 1400 people. And the first engine it will produce? The new Jaguar XE’s 161 and 178 bhp Ingenium diesels. I imagine there will be some red faces in the Jaguar boardroom at this sudden broadside against diesel. Long-term and essential investment programmes are undermined on the whim of the commentariat who hadn’t paused to think of the air quality implications of their dash for diesel (and in any case the power industry produces more of most of these pollutants than transport).
Another example. As UKIP’s Industry and Energy spokesman, I sit on the relevant committee in Brussels, ITRE. The European institutions have been having a comparable change of heart over bio-fuels. First of all, bio-fuels were the silver bullet to decarbonise road transport (and perhaps air transport). Bio-fuels did nothing but recycle CO2. Plants take in CO2 from the atmosphere, we make bio-fuels, burn them and return the CO2 to the atmosphere. A carbon-neutral solution!
Then we started to realise that there’s quite a lot of CO2-based input into the agriculture behind bio-fuels. Diesel for tractors. And transport. And processing. Energy for fertilisers and pesticides. So the savings envisaged had to be substantially discounted. But still there were some savings, weren’t there? So we mandated 10% bio-fuel content for petrol and diesel.
But just recently another issue has raised its head. If you take a thousand acres of land in South America for sugar-cane and ethanol, or in Indonesia for palm oil and diesel — the population still has to eat. They’ve just lost a thousand acres of good agricultural land. So off they go down the road and cut down a forest, or drain a swamp, or disturb a peat landscape. And guess what? The emissions associated with that change of land use may (depending on the crop and the circumstances) greatly outweigh the CO2 emissions saving you thought you were making. The new buzz-word is “ILUC”, or Indirect Land Use Change.
So now we’re amending the law to 7% (or maybe 5 or 6 — it’s on-going). And companies which have made massive investment in dedicated refining capacity for bio-fuels are cut off at the knees.
Think of the impact of this regulatory uncertainty on investment plans. Who wants to build an auto-engine factory when the rules may be changed on a whim, according to the latest modish theory from the green lobby? Who wants to invest half a billion (as one company did) in a bio-fuel refinery, only to have the market cut back at the stroke of a pen?
And for nuclear, the situation is worse. Who wants to invest £10 billion in a nuclear power plant with a design life of sixty years, when Angela Merkel may get a touch of cold feet and close down the industry? It’s not too alarmist to say that regulatory uncertainty may be the biggest threat to the capitalist system of investment and production. At last a credible argument for nationalisation. No one else can afford to invest in this environment. But maybe if the politicians have to take the hit, they’ll be a little more circumspect in their decision-making.