The Scottish government needs a constructive partner to address the climate emergency
Two cheers for Labour's victory in Rutherglen
Labour’s victory in Rutherglen is a milestone on its way to Westminster. I am a supporter of Scottish independence - but I give a qualified welcome to that. That is for one reason - the climate emergency.
Under devolution, the Scottish government is powerless to pull the big levers that need to be pulled to move towards a just transition. The Conservative government is not a constructive partner in this - I hope that a Labour government in Westminster might do better. Independence may eventually enable Scotland to do more on its own - but the two governments will still need to work together on this.
I am going to put in a little aside here because intelligent friends are telling me they don’t really “buy” the whole climate emergency thing. They say things like ‘C02 is good for plants’ and ‘the climate changes naturally’. It is actually pretty simple.
Climate change - in a nutshell
For millennia the amount of carbon dioxide produced on earth was roughly in balance with the amount that was absorbed. But each year, a wee bit was left over at the end of the sum - and this remainder was very, very slowly compressed into fossil fuels.
Then humans started burning these, throwing a significant amount of the stored CO2 back into the atmosphere in less than 200 years. The earth is doing what it can to absorb that - into plants and the ocean. So the earth is greener actually. But its systems are getting overloaded. The earth can only absorb a certain amount. The rest sticks around in the atmosphere, traps sunshine and warms the air.
Warmer air has more energy so storms get bigger and more frequent. There is more water vapour from the warmer seas and that leads to more rain failing in shorter periods.
Scotland’s floods this weekend are linked to climate change
This weekend Scotland has experienced widespread flooding - rivers formed along railway tracks. A month’s rain fell in 24 hours in some places. Drivers were airlifted from roads closed by landslips. That is exactly the kind of event predicted to take place as a result of climate change. Climate change modeling has been around long enough now to be tested against reality.
Scotland is ready to be a leader in the just transition - but the UK government is holding us back
Scotland has huge potential to harness the power of the wind, tides and solar energy. It has some of the windiest areas in Europe. It could be a renewables power house. But there will be tough global competition to attract investment. The US and the EU are investing heavily in the green economy.
Meanwhile, Scotland is jumping up and down on the sidelines - desperate to get into the game. But there is virtually nothing Holyrood can do about that. At the moment, the Scottish government lives within a regulatory, subsidy and investment regime controlled by the UK. Maybe one day that will change - but this stuff won't wait.
Here are five examples of Scotland getting held back:
1 Offshore wind
The Scottish government auctioned off the right to build offshore wind - Scotwind. They got criticised for not charging more for these rights. But actually, a couple years later there are virtually no final financial decisions in place for building Scotwind turbines. Why?
That is because the market conditions are set by the UK government. This year’s energy round in the UK saw not one single company offering to build ANY offshore wind installations anywhere in the UK.
The Westminster government put offshore wind into the same ‘pot’ for the price it will pay for power as onshore wind. That’s crazy. It is more expensive and difficult to build offshore and it takes a different supply chain to do it. People in the industry warn that Scotwind has been set back by years already - even if the UK gov does change the price next year - because order books will be full for the kit they will need.
The Scottish government doesn’t control offshore wind access to the grid.
2 The feeble grid
The real weak point in the UK’s energy systems is the grid. It was privatised under Margaret Thatcher - in Europe only one other country has a privatised grid (Pprtugal) and that was forced firesale.
Some of our shared UK infrastructure has since been sold on. A controlling share of National Grid’s UK gas transmission was recently sold to Macquarie Infrastructure and Real Assets - sometimes known as ‘the vampire kangaroo’ because of its practice of loading infrastructure with debt and then selling it on.
The UK grid has been starved of investment. It doesn’t have the capacity where it is needed. It is still largely configured around coal-fired power stations in the north of England that no longer exist.
Renewable providers in Scotland are charged ten times more than English ones to get onto the grid and often told that they can’t connect for a decade or more. The Scottish Farmer recently carried a letter from an industry professional saying that Scottish farmers are unable to get permission to connect any renewables to the grid.
Scotland desperately needs investment in the grid. A smart grid can also be used to manage demand to reduce the peaks and troughs that can make energy more expensive - this is the big new game changer in the energy world.
3 Pumped storage hydro
The Scottish government has given planning permission for six pumped storage hydro projects - that is a way of storing power by pushing water uphill. The projects in development could double the UK’s storage capacity and create thousands of jobs.
But again nothing is actually getting built. Why?
It is because the UK government has not put in place the floor-and-ceiling price framework that private companies require before they are able to invest. It has been expected, hoped for, even promised for years but it hasn’t come through.
4 Hydrogen - Scotland desperately needs investment
Green hydrogen can be used to strengthen a renewables-based grid. A hydrogen plant can be built next to a new wind project. It can produce hydrogen when the grid doesn't need power - during the night or when it is extra windy.
The Scottish Government wants Scotland to deliver 5 gigawatts of hydrogen production – more than 10% of Scotland’s current energy needs, and to develop a hydrogen supply chain in Scotland.
The Scottish government is investing £10 million to encourage innovation in hydrogen but it doesn’t have the budget, capacity or borrowing powers to build green hydrogen facilities by itself.
5 Nuclear power
Nuclear power is an outdated, expensive technology that gives future generations the job of looking after radioactive waste for thousands of years. The UK government is putting a levy on energy bills across the UK to pay for more nuclear power - but we don’t need it.
Unlike renewables, the cost of nuclear power is rising. When completed, Hinkley Point C will be one of the most expensive power stations in the world. The fuel it generates will cost £90 per MWh, at least double that of renewables.
Don’t buy the radioactive, fake chestnut that we need ‘a baseload’ for when the wind doesn’t blow. We don't Offshore wind is more or less constant. There are ways of adding a flexible top-up (which nuclear can’t provide) when needed - battery plants, hydro, smart grid.
6 Carbon credit system trashed
I could go on but just one more. The Conservative government has also heavily watered down the carbon credit system that was supposed to put a price on the right to release C02 into the atmosphere in the UK - including Scotland.
The ‘Lex’ investor opinion column in the FT wrote: “The obvious implication of current prices is that the market no longer believes the UK will stick to midterm objectives. That is worrying. Low carbon prices harm the UK economy in the long run.”
Conclusion
Labour is promising investment in green jobs on a par with the EU. I do have some concerns about their programme. Shadow Chancellor Rachel Reeves announced earlier this year that a longstanding commitment for a Labour government to spend £28 billion a year on green investments would be delayed. Labour now will not spend that much until midway through the next parliament, so potentially 2027 at the earliest.
Another Labour promise is to ‘get Britain building again’. But a third of global carbon emissions come from construction. Sam Knight wrote in the current New Yorker: “Humanity is paving and enclosing the earth at an unthinkable rate. According to the International Energy Agency an estimated $2.6 trillion square feet of new floor area will be added to global building stock between 2020 and 2060 - that’s the equivalent of throwing up a New York City every month.” Any solution to the housing crisis that takes account of climate change will have to make better use of existing housing stock - limiting short term lets and second homes as Scotland is now doing, and reusing and adapting existing buildings - and to that end perhaps moving more economic activity out of the south of England.
Labour has renewed momentum from the result in Rutherglen. They say they take the climate emergency seriously - mind you so does Rishi Sunak, who keeps pronouncing that the UK is on track to meet its 2050 net zero target although the Climate Change Committee doesn’t agree.
So I could be disappointed. But in the short term, a Labour government seems like the best hope for a more constructive approach to the just transition and boosting Scotland’s green economy.