The stupidity of a carbon tax

Treasury is the one institution of Government that we have come to trust in recent months.  Why on earth does it want to sacrifice that confidence in pursuit of a hare-brained scheme, one in which its own words will “reduce the economy’s average annual growth rate” (Business Day, 10 November)? If it has its way, “household consumption falls by 0.23 percentage points, employment falls by 0.07 percentage points, and real wages fall by 0.2 percentage points.”

This is the best of a series of outcomes from a model of carbon taxes that Treasury has built.  I seem to recall some recent models, which proved beyond all doubt that Hillary Clinton would be the next President of the USA.  Do we have confidence that Treasury’s model has any greater predictive ability?

For a start, let us look at what Treasury hopes to do. “The modelling results suggest the carbon tax will have a significant effect on reducing SA’s greenhouse gas emissions.” That would be surprising. Remember we have had a carbon tax on large cars for several years – statistics show the 4x4 market growing strongly. Wherever you look in the world, it is the same.  India introduced a Rupee50/t tax on coal in 2010 and increased it to Rupee100/t in 2014.  Since 2010, its emissions have grown by over 600 million tonnes CO2. In 2012, Australia introduced a $A23/t carbon tax; by 2014, emissions had fallen by only 2.5% and the damage to the economy was enough to bring down the government (and remove the tax). So it is unlikely that the tax will have any significant effect.

That begs the question as to whether our greenhouse gas emissions constitute any problem at all.  Our total emissions are a little over 400 million tonnes a year – India’s emissions have grown by 600 million tonnes in five years, while China’s have grown by over 1 100 million tonnes at the same time. If Treasury’s tax resulted in our emissions falling by 2.5% (about 10 million tonnes), it would be less than the measurement error in India’s or China’s emissions.

But Treasury argues that “ratification of the 2015 Paris Agreement emphasises the reality that we will have to prepare to operate in a carbon-constrained economy - - .” Really?? The Paris “Agreement” is no agreement as normally understood. It asks us to state our intentions. If those intentions are not met, we can shrug our shoulders and come up with some new intentions.  And if anyone says they are cross with us for not living up to our intentions, we can walk away with nary a grey hair. Treasury’s ‘reality’ is rather like the 3D-movie reality – lift your head a little, and the illusion disappears. We have just cast off the iron shackles of the International Court of Justice; the silken threads of the Paris Agreement can brushed aside.

As always with taxes, you have to check the detail.  The carbon tax is no different.  All those little job losses, all that slowing of our growth, “will result [from] a modest tax rate - - - during the first phase of the carbon tax, up to the end of 2020.” Thereafter the tax rate increases, growth slows even further, there are more job losses, real wages fall further. Should Treasury not be worrying about us South African citizens, rather than trying to show the rest of the world that we want to play the carbon charade? Where are our priorities?

Something Treasury avoids discussing is the complexity of the system for collecting the proposed tax.  Every emitter (and there are thousands) will have to set up a measurement system to quantify its tax liability, and have an additional audit system to verify the measurements. Government will have a policing function, to make certain that all the emitters are in the tax net, and then there will be an army of assessors calculating the tax due against rules that change annually.  The rules include rebates for specific sectors and all manner of other fiddles that arise when you are trying to tax something so pervasive in nature. 

It also avoids discussing the other carbon taxes we are already paying.  In addition to the tax on large vehicles, there is a renewable energy levy and a tax on electricity generated from coal – these two add about 6cents/kWh to the price of coal-generated electricity. Then there are the liquid fuel taxes themselves, one of the largest contributors to the fiscus, and a tax which was originally set up to pay for road maintenance.  The carbon tax proposals come with a suggestion that there might be a VAT reduction, but remembering what happened to the fuel tax helps to understand the games Treasury can play.

Treasury now has a job to do, to restore our confidence in their operations.  We really don’t need a tax that will reduce the economy further, that will shrink household consumption, that will cost jobs, and that will reduce real wages – and achieve next to nothing.

A really bad proposal!

Our Treasury has finally published a draft bill introducing a carbon tax.  They have been talking about it for years, and one would have hoped that had got it right by now.  They haven't. 

Of course, their timing couldn't be worse. The first protest came from the Chamber of Mines, which has requested a delay in the imposition of any carbon tax for five years.  It deserves every support.  

Our actual carbon emissions today are significantly lower than they were expected to be when the tax was first mooted.  The electricity crisis has increased the cost of power, which has made us more energy efficient, so that we are doing a little more with significantly less. Our economy is struggling for lack of power, but we are emitting about 80 million tons of carbon dioxide less than we were expected to do by this time. So any nudge to do more by imposing a carbon tax could well push our economy over the edge.  

Then we do not know what the outcome of the Paris discussions next month will be, but it is extremely unlikely that we will see any agreement of a legally binding nature, so there is no compulsion on us to try to cut our emissions further. 

It is also unlikely that any funds will be committed to assisting developing countries such as South Africa to reduce their emissions. It is eight years since we offered reductions if we got financial help. According to recent submissions by the Department of Environment Affairs and Tourism to Parliament, we have received about R200 million in aid, but we have already committed over R260 billion to adaptation alone. Less than 0.1% aid is no aid at all.  I can only conclude that the developed nations are giving no more than lip service to promised $100 billion a year meant to support such activities.  

The draft Bill that has been published for comment has some extraordinary provisions.  For instance, you could be taxed for burning wood, or wood waste, or biofuels. “Oh, but we will give you 100% exemption!” is the response.  Really? How kind. The Bill doesn’t define fossil fuels or pollution.  Yet it treats carbon dioxide, the source of all life on earth, as a pollutant. 

Meanwhile, the evidence that a warmer world will be a disastrous one is lacking – while we hear daily that record X has been broken, an examination of the data for the past 150 years of warming reveals no trends of increasing frequency of anything other than warmer days - but that is just what you would expect in a warmer world.  

We do not need a carbon tax now. One fears that Treasury may need more revenue, but to raise it in the name of saving the world from a disaster of the world’s making is a very bad idea.

Why the risks of climate change have been engineered away

One of the greater challenges we engineers face is telling our clients that their dream project doesn’t work.  If it costs too much, they usually accept our advice with ill grace.  Sometimes, it is technically impossible. Then they have great difficulty in believing us.  For instance, few will accept our advice that the ideal of creating a low carbon world within our lifetimes is probably not achievable.

The evidence that a low carbon world within our lifetimes is an unachievable dream is clear.  In 1998, the then developed nations signed the Kyoto Protocol, which placed legally binding commitments on them to reduce their emissions below 1990 levels. Global emissions in 1990 were 22.6 billion tons of carbon dioxide (CO₂).  Fossil fuels made up 88% of the primary energy supply. In 2012, when the first Kyoto commitment period came to an end, global emissions were 34.5 billion tons, over half as much again as in 1990, and fossil fuels made up 87% of the primary energy.  So much for legally binding commitments!

Of course, the developing nations did not foresee the rapid development of China.  That put paid to the Kyoto ambitions.  Recently, there has been much cheering about China’s offer to start reducing its emissions after 2030.  It is perhaps not as encouraging as at first appears. Today China emits nearly 10 billion tons; business-as-usual until 2030 will see its emissions rise to nearly 18 billion tons.

And if the development of China was overlooked, then the possible similar surge in India’s emissions seems to have been forgotten. India has rejected outright any similar offer to reduce its future emissions, citing the need to develop its economy before it can take such a step. Today India emits about 2 billion tons; by 2030 it is likely to be emitting over 5 billion, and rising rapidly.

So the dream appears unachievable.  The question is then whether it will turn into a nightmare.  There are many who claim that a higher carbon world will be wracked by disaster. In this scenario, the seas will rise, storms will rage, drought will strike, and the biosphere will disappear. These are the predictions of many climate models. While all agree that the models are not very good, the question has to be asked – Suppose the models are right?

Back to the engineers.  Today, humanity depends on us engineers to provide the defences against the seas, floods, droughts and even fires and earthquakes.  Generally we do quite a good job.  Many people stay warm and dry, have enough to eat and drink, and rarely experience the disaster of fires or earthquakes.  Of course, our solutions come with a cost, and there are some who are still trapped in poverty whom we have not yet found ways to save.  But this is largely a social problem. We engineers recognise that while we can make a contribution, poverty is not something we alone can solve.

If this is the state of the world today, then the disaster scenario predicted by the climate models implies that the defences we engineers have built will be found wanting.  In this case, to address the risks, we need to enquire where the existing defences may be too weak to withstand a fiercer onslaught.   

Will the seas rise and drown our cities?  The Dutch have done a good job of teaching the world how to live normally below sea level, so that is not an insuperable problem.  Will there be greater floods than ever known?  Generally engineers design for a one-in-a-hundred-year flood. If we start to get more than that, we should have some time to improve the design to cope with the new one-in-a-hundred.  Will droughts strike with greater frequency and severity?  Our water supplies are already reasonably robust, and over half our water is used quite inefficiently for agriculture. It seems likely that we could withstand more extensive drought, particularly if supplies can be boosted.

This is the basic message that seems to have been lost in the panic about the risks of climate change – we already have a high degree of resilience against the climate, thanks to generations of engineers working in the service of humanity.  That resilience needs maintenance if it is to continue to provide the desired level of protection. It may need reinforcement if the climate should become more extreme.  But the risks presented by climate change are by no means insuperable. The costs are most unlikely to be as excessive as some doomsayers would have us believe.

Moreover, some of the benefits of more carbon dioxide in the atmosphere should not be overlooked.  Satellite images show the world greening and deserts retreating. Many European greenhouses are being controlled at over 1000 parts per million CO₂, two-and-a-half times atmospheric levels. This has been found to boost vegetable and fruit production very significantly.

So the risks that climate change may prove unduly destructive are almost certainly overstated, while the supposed driver of climate change, carbon dioxide, is proving beneficial to life. The proposed “solutions” to climate change, such as carbon taxes, can now be seen to be the chimeras they really are.

Anyone for a carbon tax?

Our Treasury seems wedded to the idea of a tax on carbon emissions.  In this, they are cheered on by the Department of Environmental Affairs, but the Department of Energy and the Department of Public Enterprises both seem to be having some reservations. If it is proving difficult to finance Eskom, and economically undesirable to hike the cost of power any more, why would we want to increase the power cost yet further in the vain hope of saving the planet?

It all goes back to that proud moment in November 2009, when our State President stood before the world at a gathering in Copenhagen. He offered to reduce our carbon emissions by large amounts provided the developed nations would help with the costs of the reductions.  At the time, it was seen as a noble gesture on our part.  Now, the gilt has fallen from the offer, not least because the anticipated help has been conspicuous by its absence.  The developed nations have come face-to-face with the economic downturn. Saving the planet has moved lower on the list of priorities.

There are three major things wrong with the tax idea.  First, the plan announced by President Zuma wasn’t a plan in the first place.  What he said was:

With financial and technological support from developed countries, South Africa for example will be able to reduce emissions by 34% below ‘business as usual’ levels by 2020 and by 42% by 2025.

This was a scenario from the Long Term Mitigation Scenarios, which was called “Required by Science.” Now scenarios are not plans, they are sketches of what might be possible.  Moreover, science does not require anything; it merely provides a platform for understanding.  But the Department of Environmental Affairs sprang upon the scenario with glee, believing in their zeal that science really had produced a plan out of some magic hat.  With no further thought of the implications of what they were doing, they set about trying to implement something that had every chance of not being possible. The carbon tax is part of their plan of implementation.

The second thing wrong with it is that it is an economic disaster.  Treasury evaluated the impact, and found it made the rich richer and impoverished the poor. Indeed, the impact was hardest on the poorest. To understand why it is a disaster, you need to recognize that there is a very strong relationship between economic growth and the consumption of energy.  To grow the economy, you have to provide more energy. But over 90% of South Africa’s energy comes from fossil fuels. Most of our energy gives rise to carbon dioxide emissions.  So economic growth means more energy which means more emissions.

It is possible to reduce the linkage between economic growth and energy consumption, but this cannot happen overnight.  Nowhere in the world has there been delinkage at the rate that the Long Term Mitigation Scenarios would require – and, note well, the scenarios were long-term to begin with.

It is also possible to reduce the reliance on fossil fuels.  Indeed, this is precisely what the Department of Energy’s renewable power programme is designed to do.  But even the latest Integrated Resource Plan Update would not produce the sort of drop in reliance that the Mitigation Scenario would require.

The Department of Environmental Affairs recognizes these problems, so it has come up with a different plan.  It aims to set up a carbon trading platform, which will allow companies that produce carbon in excess of some arbitrary limit (which the Department will set) to buy emission credits from companies which produce less carbon than the limit.  Treasury, advised by a group of would-be carbon traders, has agreed to this ploy. 

There are at least three objections – on Treasury’s own calculations, there is insufficient volume of tradable carbon to support such a scheme; a few industries which have found ways to save carbon have already cashed in on the various pre-existing schemes such as the Clean Development Mechanism; and, most damning of all, it would establish a bureaucracy within the Department of Environmental Affairs which could control emissions and thereby the entire economy at the merest whim. The fact that carbon trading platforms have been a disaster in the US and have cost the European Union billions in ineffective support (and lost VAT) has not been sufficient to persuade either the Department or Treasury that such a scheme is ill-advised. Treasury is doubly culpable in this – the foxy carbon traders showed it how to design a carbon henhouse, a sure-fire way to lose the chickens!

The third thing wrong with a carbon tax is that it would achieve nothing.  There seems to be some sort of zeal in our Government to save the world from a possible carbon hell.  South Africa emits around 1% of global emissions.  Suppose we were to reduce our emissions by a quarter, which would probably wreck our economy for good, the global impact would be absolutely nil. 

It might be justified if the rest of the world had similar zeal, but it demonstrably has not.  The Kyoto Protocol came into effect in 2005. In the first commitment period, 2008-12, many developed countries agreed to legally binding limits on their emissions. What happened? Well, between 2008 and 2012, global fossil fuel use went up by 8.5%, and the contribution of fossil fuels to global primary energy supply was unchanged at 87%.  Is it worthwhile committing economic suicide to protest the failure of others to observe legally binding limits?

Moreover, with every passing year the whole rationale for reducing carbon emissions is becoming weaker and weaker.  In the past 16 years, emissions have gone up 40%; global temperatures have been stationary.  Indeed, there has been only a short period in our history when the hypothesis that carbon emissions and global temperatures are linked was supportable. That was between 1970 and 1997. Before then, the world cooled as emissions increased, and since then the temperature has not changed.

Instead, a different hypothesis has emerged. This proposes that there will be more extreme weather in a warmer world.  However, it is not demonstrable.  To the contrary, it has been possible to extend many measures back to the late 1800’s. We can now see how extreme the weather was in earlier times.  Even though the world has demonstrably warmed over the past 150 years, there has been no detectable change in the frequency or severity of extreme events.  One of the surprises has been that the world has not become measurably wetter, which seemed very likely in a warmer world.

So the rationale behind a carbon tax is now very weak.  It always was weak.  The idea that a tax will encourage a change in social behaviour is seductive, but a little thought will soon show the flaws.  It was long hoped, for instance, that swingeing taxes on tobacco would reduce smoking, but it had little effect. Other laws became necessary to bring about the desired social change.  Alcohol consumption continues unabated – the annual increase in the sin tax has an imperceptible effect.  At least with tobacco and alcohol, it is possible to cut down on consumption.  Carbon, with its direct linkage to energy and wealth creation, can only be cut back by greater efficiency. Most large users of energy have already done much to improve their efficiency as far as possible.  Further improvement is up against the law of diminishing returns. 

Carbon emissions are therefore inelastic, in economic terms. Adding a cost to energy has an impact on the demand by closing otherwise profitable industries. Jobs are then lost.  It is happening in our economy right now. That is ultimately the reason why there are no grounds for taxing carbon.

The C-c-c-razy Concept of a C-c-c-arbon Tax

Our Treasury proposes to introduce a carbon tax from 2015.  It is a serious mistake.  Not only are the reasons advanced by Treasury flawed, but international experience has shown that carbon taxes do not achieve what is hoped, namely a reduction in carbon emissions.  Instead, they capture wealth that could easily put to better use. They cost jobs. The burden of the tax falls largely on the poor. Treasury’s own paper shows this.

Treasury sought to justify a carbon tax in its 2010 discussion paper.  It claimed that climate change was an example of market failure, in that the environmental costs of climate change were not factored into energy prices. That, of course, presumes that one can determine the environmental costs.  A huge pan-European team laboured for 15 years. It found that the total environmental costs – health impacts from emissions, acid rain impacts on crops, water chemistry changes on fish life and climate change - amount to something between about €0.20 and €0.75/kWh.  That sounds horrendous, but the cost of not having energy, i.e. the benefit of energy, is about €25/kWh, so society is far better off! The market failure thesis fails.

Treasury also argued that South Africa was one of the largest emitters of greenhouse gases in the world.  That overlooks the fact that we are actually quite a populous nation.  When the number of South Africans is taken into account, we are only 34^th in world rankings. We contribute a little over 1% to the total.  Anything we did to reduce our emissions would be invisible against the background of surging output elsewhere in the world.

A third reason Treasury advanced was the possibility that failing to address our emissions might result in trade sanctions.  Our primary trading partners all emit more per capita than we do, so the risk of sanctions would seem remote.

Finally Treasury held out the hope that we might develop some wondrous low-carbon technologies, which would enable us to develop new markets.  Yes, it is possible that we might, but the world is so heavily dependent on fossil fuels that any change towards a lower-carbon energy scene will not happen rapidly.  At best, Treasury’s hopes can only be regarded as a long shot.

So the reasons Treasury put forward for wanting a carbon tax in the first place are all flawed. Matters get worse when we turn to Treasury’s economic arguments.

First, its own models predict a significant loss of economic growth.  It admits its models are inexact, but they produce some surprising results.  For instance, a carbon tax would have, apparently, no impact on electricity sales – yet most of our emissions come from generating electricity! Nevertheless, Treasury’s admission that we will nearly all get poorer seems to be one of those sacrifices we need to make to save the world.

What is really surprising is Treasury’s calculation of where the burden of poverty will fall hardest.  I did not think I would live to see a day when an organ of this Government would seriously propose impoverishing the poorest of the poor while enriching the richest of the rich.  That is precisely what Treasury estimates.

But is there any hope that a carbon tax could achieve what it sets out to achieve, namely reduce our carbon emissions? Treasury has looked at a number of instances of carbon taxes elsewhere, but has not checked the effects.  In the EU, for instance, cited with approval by Treasury, emissions have levelled off – but the price of carbon has recently collapsed, and the Germans are quietly taking full advantage of the collapse by building 23 new coal-fired power stations. The Finns introduced a carbon tax as early as 1990 – and their emissions have grown relentlessly. Costa Rica introduced a carbon tax in 1997, since when its emissions have grown by over 60%.  India slapped a carbon tax on coal in 2010, since when its consumption has grown by nearly 30%.  Australia introduced a carbon tax in July 2012; by July 2013 the economic damage ran to billions, which cost Julia Gillard her government, and Kevin Rudd, her successor, immediately ditched the tax. We introduced a tax on gas-guzzlers, and the streets have grown more crowded with SUV’s.

Why does a carbon tax not work?   Most (over 80%) of global energy comes from fossil fuels, so energy use and emissions go hand in hand. Energy is an absolutely necessary element of wealth creation. It is not sufficient, because other factors such as skilled labour play their part, but without energy you cannot grow the economy, and you cannot create jobs.  As a developing nation, we need to grow our economy. That means our emissions are going to grow whether carbon is taxed or not.  In economist’s terms, the demand for energy is inelastic. Of course, it may become possible to produce energy economically without emissions, but it is going to take a long while to move away from the global level of more than 80% reliance on fossil fuels.

How could Treasury have gone so astray?  I think they were first misled when Government tried to turn the Long Term Mitigation Scenarios into plans. Scenarios explore extremes that have little chance of being realized in practice.  They have also been poorly advised by a British economist, Lord Stern.  Lord Stern moved into Tony Blair’s office in 2007 to produce a political excuse for a carbon tax.  His economics have been severely criticized by fellow economists, so that he has had to rely on ethical arguments to justify his belief in a carbon tax.  Invoking ethics usually means you have lost the argument.  Britain has not followed his prescriptions – why should we?

I can only conclude that Treasury’s proposals are flawed from start to finish.  But does that mean we should just give up on a lower carbon world?  Of course not.  The US has recently managed to get its emissions back to where they were twenty-five years ago.  An analysis by Yale university staff has shown that the arrival of shale gas is largely responsible; energy efficiency, less thirsty cars and fewer miles flown have also helped. We could easily do something similar.  Most nations get about a third of their energy from natural gas; we get only 3%.  If we grew our gas consumption by 20%, and cut our coal consumption by 20%, we would reduce our emissions by nearly a third.  Rather than destroy our economy with a carbon tax, let us explore vigorously for gas.   

Will Government stop dithering and positively encourage gas in all its forms?

Who's who in the carbon zoo?

Every year, BP produces a "Statistical Review of World Energy".  It is a wonderful resource, not least because it comes complete with a database which allows you to draw your own graphs (and your own conclusions).

This year's edition has just been published.  It includes a listing of the carbon emissions from burning fossil fuels over the past 57 years:

Zowie! We have been told the world is heading for disaster; that we will fry if we don't mend our ways; that eternal damnation awaits us if we continue to burn fossil fuels.  Yet what does this show?  The "Evil US" has actually cut back its emissions, without any guff about signing the Kyoto Protocol.  Europe cut back at the beginning of the nineties - nothing to do with Kyoto, and everything to do with the arrival of North Sea gas. And Asia/Pacific is going absolutely bananas, now nearly half the total fossil-fuel-derived emissions.

The thin brown stripe is the whole of Africa.  For those of us in South Africa who think we can save the world by cutting our emissions, building windmills and huge solar plants, please think again.  In the scheme of things, we are truly insignificant.

Should we support a carbon tax?

Last year Treasury put out a Discussion Paper on a carbon tax. Discussion was muted in the extreme. Indeed, Government may have been left with the idea that a carbon tax is positively desired. Recently the WWF and others have argued that business should meekly lie down and accept the tax. Nothing can be further from the truth.

Most arguments for a carbon tax start with the assumption that it would be possible to reduce the impact of climate change if we as a nation reduced our emissions. This would be true if all nations agreed to reduce their emissions, but that day is far off. Carbon emissions have dropped in a few European countries, to be true, but globally they have risen. Indeed, since the Kyoto Protocol came into force in 1998, emissions have accelerated, not declined.

Moreover the present trend is towards further increases. Many optimists speak of ‘the transition to a low-carbon world’, but it is presently a truly fruitless wish. There is no transition. Instead we face a world with ever-increasing levels of carbon dioxide in the atmosphere.

In 2010, South Africa’s emissions were about 400 million tons per annum, which amounts to less than 1.5% of the global total. At present China emits about 8 000 million tons, growing annually by over 600 million tons. Whatever we did would be insufficient to offset the annual Chinese growth.

That being said, South Africa has a policy which seems reasonable. Our Climate Change Response Green Paper commits us to “making a fair contribution to the global effort to achieve the stabilisation of greenhouse gas concentrations in the atmosphere at a level that prevents dangerous anthropogenic interference with the climate system.”

However, the Green Paper also gives a rider. “South Africa …. is committed to reducing its own greenhouse gas emissions in order to successfully facilitate the agreement and implementation of an effective and binding global agreement, together with all the other countries responsible for significant greenhouse gas emissions.” So Government recognises that it would not be effective to act alone. If we are to reduce our carbon emissions, it can only be as part of a global agreement involving all other significant emitters.

IRP2010 showed that any significant reduction in our emissions would increase our energy costs significantly – and already it is clear that the recent increases in prices are causing closure of industries, such as our only zinc smelter, with attendant job losses.

An argument for a carbon tax is that we could face trade sanctions unless we act to reduce our emissions. There are few nations that would be able to impose such sanctions, for the simple reason that there are few that have managed to reduce their emissions. Thus the threat is more imagined than real.

Those in favour of a carbon tax argue that we cannot continue on our present path. They claim that business-as-usual is not an option. The trouble with this view is that our present path is not working. We are not creating jobs at the rate needed to drag ourselves out of poverty. We need an environment conducive to growth, not one littered with artificial constraints and bureaucratic traps. We certainly do not need new taxes, particularly a tax like the proposed carbon tax which will achieve nothing except further slowing of our growth (and even the Discussion Paper accepts that).

A problem with growth is that it comes at the cost of greater demand for energy. There is a very direct relation between the domestic product per capita and the energy used per capita. Nearly all the wealthy nations have emissions of over 9t of carbon dioxide per capita per year. Nearly half the world’s nations have emissions of less than 3t, and they are all poor.

The supposed solution to this dilemma is to grow the renewable sector of the energy economy. This presumes that renewable energy technologies are a replacement for our existing fossil fuel technologies. Unfortunately, that is not yet true. The UK Department of Energy and Climate Change has just released its latest figures. It has been working hard to reduce Britain’s carbon emissions, and they have definitely fallen. Nearly 10% of its energy comes from low-carbon sources – but nuclear power is two-thirds of that, and wind energy is less than 5%, or 0.4% of the total supply.

Analysis of the reasons for the drop in the UK emissions soon shows that it is due to the decline in coal use, which has more than halved since 1990, and an increase in natural gas, which has nearly doubled over the same period. However, this has come at a cost – nearly 40% of the gas is now imported, so Britain no longer enjoys the energy security it has had historically. Its demand now exceeds what it can produce.

There are high hopes in South Africa, expressed in the IRP2010, that we will soon be able to resolve our energy supply problems via renewable energies. But renewable energies have not provided Britain with a sustainable solution to growth with a reduction in carbon emissions, and they seem most unlikely to provide us with an answer. If the British experience is anything to go by, our best hopes are to rush to nuclear power and to hope that the Karoo will yield its shale gas to fracking. The recent proposal by WWF and its lobby, that we should rush into a carbon tax to achieve low-carbon growth, seems very misguided.