Is the pursuit of economic growth compatible with meeting the UK's climate targets?

[geoffk]

From Today's Guardian - "A plan for Rachel Reeves to back a third runway at Heathrow and an expansion of Gatwick and Luton airports has been labelled “desperate”, as the chancellor faces opposition from within Labour. The chancellor is expected to make a swathe of announcements intended to increase economic growth in a speech later this month, including giving a political green light to the airports’ expansion."

"Growth" tends to mean more use of scarce resources, more consumption and more travel.

 

[najaB]

That depends entirely on what economic activity is promoted.

 

[Harpo]

A significant improvement in the sustainability requirements for UK new build housing (e.g. solar + batteries as standard) would both support growth in that sector and support climate change.

 

[HSTEd]

Ultimately decarbonisation will not be achieved in a 2 celsius relevant manner if the current economic model is pursued.
Only economic mobilisation, leading to short term falls in the standard of living, can even get close.

Despite this, the electricity system's current problems and skyrocketing prices are primarily a result of the failure of the post 1990 organisation of the industry, not because of the inherent properties of zero carbon generating plant.
Only root and branch reform, and likely abolition of the current pseudo-market can get electricity prices under control.

As for Heathrow, approving a runway there is not going to do anything but trigger a bleeding sore that will consume political capital, whilst taking decades to actually deliver a runway. Last time it was proposed the estimates ran from 20-30 years to do it - its simply unworkable. And the cost will be astronomical.

 

[Magdalia]

"Growth" tends to mean more use of scarce resources, more consumption and more travel.

But it doesn't have to be like that. Growth can come from use of abundant resources and more investment.

The UK has an abundance of wind (though not all of the time). The optimist in me hopes that the UK can achieve economic growth powered by an abundance of renewable energy, mainly wind but also solar.

the electricity system's current problems and skyrocketing prices are primarily a result of the failure of the post 1990 organisation of the industry, not because of the inherent properties of zero carbon generating plant.
Only root and branch reform, and likely abolition of the current pseudo-market can get electricity prices under control.

I agree that fundamental reform of the wholesale electricity market is imperative and urgent. Here's why.

The UK also has an abundance of brains, and 2 of the top 10 universities in the world, which are huge advantages in the 21st century knowledge economy. But turning that brainpower into growth is going to need a lot of data centres and a lot of electricity to power them. Artificial intelligence consumes humungous amounts of power (I've read somewhere that in Ireland it is already more than 20% of the total).

I suspect that it is easier and cheaper to transport data in fibre optic cables, or by satellite, than it is to transport electricity via high voltage power lines. What the electricity market should be doing is charging for that electricity transport, creating an economic incentive for data centres to locate on the coast, where offshore wind energy comes onshore. Like a nuclear plant they can also use seawater for cooling.

Bringing cheap renewable energy, brains and data together should make the UK a winner. But I think that the wrong market signals are getting in the way.

 

[HSTEd]

I suspect that it is easier and cheaper to transport data in fibre optic cables, or by satellite, than it is to transport electricity via high voltage power lines. What the electricity market should be doing is charging for that electricity transport, creating an economic incentive for data centres to locate on the coast, where offshore wind energy comes onshore. Like a nuclear plant they can also use seawater for cooling.

Bringing cheap renewable energy, brains and data together should make the UK a winner. But I think that the wrong market signals are getting in the way.

Transport of electricity, especially to large point loads like data centres, is a rather small portion of the cost of the electricity.

It doesn't even have significant losses if the power is delivered at 33kV or higher (which a huge datacentre certainly would be!)

The UK is small enough that a well functioning electricity industry would have little trouble moving power around as required. The problem is the industry has been growing steadily more schlerotic for decades, with future investment cut in favour of sweating assets and a dash to an unpredictable, low margin system based on gas.
The system has been sustained up until now by the heritage of the CEGB, but that is aging out.

The price system sort of functioned in a grid dominated by fossil fuels, but in a renewable-nuclear system it has no chance at all. Electricity price swings will become ever more radical and cause no end of social and other problems.
In a competitive market prices will supposedly converge on the marginal cost of production - in a renewable-nuclear system those costs are almost always only of two values - approximately zero and approximately infinite.

35 years since privatisation, ultimately 35 years wasted.

 

[Magdalia]

Transport of electricity, especially to large point loads like data centres, is a rather small portion of the cost of the electricity.

What about the capital cost of new pylon lines, or, even more expensively, underground or undersea cables? That still has to be paid for.

The price system sort of functioned in a grid dominated by fossil fuels, but in a renewable-nuclear system it has no chance at all.

But isn't the difficulty transitory while we move from fossil fuels, that had a significant marginal cost of extraction, to a portfolio of sources, all characterised by high capital cost and very low marginal cost?

The problem is the industry has been growing steadily more schlerotic for decades, with future investment cut in favour of sweating assets

That's not peculiar to the electricity industry!

 

[HSTEd]

What about the capital cost of new pylon lines, or, even more expensively, underground or undersea cables? That still has to be paid for.

Enormous rating achievable with modern technologies for overhead lines - there are some technologies suggest that would allow a conversion of an existing 400kV line to transport ~15GW indefinitely, these costs rapidly amortise to nothing. For examples see "high phase order" conversions of existing lines, or advanced conductors with much higher operating temperatures like ACCC (essentially aluminium wrapped around a composite tube core that can withstand 180C indefinitely).

The cost of an electricity grid is predominantly driven by the cost of the number of customers and how much land area they are distributed across. The last few kilometres drives the cost to a far greater extent than the rest.

But isn't the difficulty transitory while we move from fossil fuels, that had a significant marginal cost of extraction, to a portfolio of sources, all characterised by high capital cost and very low marginal cost?

So far as I know, noone is suggesting a move away from the current electricity "market". Which simply won't function well when electricity prices are either enormous or nothing, and not much at all in between.

 

[RailWonderer]

As for Heathrow, approving a runway there is not going to do anything but trigger a bleeding sore that will consume political capital, whilst taking decades to actually deliver a runway. Last time it was proposed the estimates ran from 20-30 years to do it - its simply unworkable. And the cost will be astronomical.

We need heavy deregulation and a British Elon Musk. Everything costs multiples more to do here than in any other country, and it's toxic for growth, as well as the nimby culture. This country deterrs international investment and does not imspire any confidence. Planes are burning tons of petrol circling waiting to land at Heathrow as well as idling in eight plane long queues for take off. A third runway needs to happen as soon as possible and in any other country in Europe it would have been done decades ago. This country needs an entire change of mentality. You cannot achieve any great things without upsetting some people and that's the reality.

The UK has an abundance of wind (though not all of the time). The optimist in me hopes that the UK can achieve economic growth powered by an abundance of renewable energy, mainly wind but also solar.

We need policies of pragmatism not wishful thinking. While we should pursue renewable energy investment and make the most of our home grown expertise, the UK government does nothing to spur cottage industries, invest in them or support them besides lobby for foreign investment in our nation bogged down in red tape and high taxation.

 

[HSTEd]

We need heavy deregulation and a British Elon Musk. Everything costs multiples more to do here than in any other country, and it's toxic for growth, as well as the nimby culture. This country deterrs international investment and does not imspire any confidence. Planes are burning tons of petrol circling waiting to land at Heathrow as well as idling in eight plane long queues for take off. A third runway needs to happen as soon as possible and in any other country in Europe it would have been done decades ago. This country needs an entire change of mentality. You cannot achieve any great things without upsetting some people and that's the reality.

The problem is that a third runway will not fundmentally overcome the major issues facing Heathrow.
The prize simply isn't worth the fight.

In most countries in Europe Heathrow would have closed years ago and been replaced with a modern airport that doesn't blight the homes of literal millions of people!
Indeed Heathrow was on borrowed time before the oil crisis.

Heathrow is, at best, Paris Orly - I think it has more in common with Le Bourget.

 

[RailWonderer]

In most countries in Europe Heathrow would have closed years ago and been replaced with a modern airport that doesn't blight the homes of literal millions of people!

I do agree, it was chosen for being so close to central London but that's also its problem, the area is too built up. Expanding other airports might be better like Gatwick or Stansted. If they commit to that and not a third runway you could transfer more flights from Heathrow to other airports to reduce pressure on Heathrow. BA could also move more flights to Gatwick then to help ease capacity as well. Tokyo Narita and Haneda come to mind.

 

[brad465]

As someone who believes the whole GDP growth model is not sustainable, I'm actually pleased with the government's constant growth rhetoric and saying it is their priority in relation to a host of plans. Why? Because this will lead more people to link what they despise most to the growth model and in turn see it as the problem/cause of their ills.

This doesn't mean there shouldn't be growth areas, but growth in what we need should come at the expense of things we don't need, or need less/fewer of.

 

[Magdalia]

As someone who believes the whole GDP growth model is not sustainable, I'm actually pleased with the government's constant growth rhetoric and saying it is their priority in relation to a host of plans. Why? Because this will lead more people to link what they despise most to the growth model and in turn see it as the problem/cause of their ills.

This doesn't mean there shouldn't be growth areas, but growth in what we need should come at the expense of things we don't need, or need less/fewer of.

Without economic growth the UK public finances are doomed to collapse. No growth is definitely unsustainable.

Growth matters because it generates tax revenue that pays for public services, pensions and the interest on existing borrowing.

With no growth the UK will run out of money.

So far as I know, noone is suggesting a move away from the current electricity "market".

Greg Jackson, chief executive of Octopus Energy.

UK government does nothing to spur cottage industries, invest in them or support them besides lobby for foreign investment

Cottage industries tend to stay in cottages and don't deliver economic growth. What is needed is companies that grow from nothing to something big.

Large projects needing to be funded by foreign investment is a consequence of decades of running a structural balance of payment deficit. The UK doesn't have sufficient funds of its own.

 

[HSTEd]

Greg Jackson, chief executive of Octopus Energy.

No, he is demanding that the "market" be made even more market-driven, which will not solve any of the actual problems we face.

It will also create new ones, including by creating a direct financial incentive for people in rural areas to vandalise transmission infrastructure, and ensure that no more is even built ever again.

His system would create an environment where setting a fire under a rural pylon to make it collapse will actually reduce the electricity bills in the area.
ALmost all power generatoin is and will contiue to be in rural areas, which under his "regional pricing" scheme will lead to prices in rural areas being depressed if transport to urbanised areas is inhibited.

 

[Magdalia]

It will also create new ones, including by creating a direct financial incentive for people in rural areas to vandalise transmission infrastructure, and ensure that no more is even built ever again.

His system would create an environment where setting a fire under a rural pylon to make it collapse will actually reduce the electricity bills in the area.

I don't understand that, can you explain please?

 

[HSTEd]

I don't understand that, can you explain please?

In essence, he wants regional pricing to try to force people renewable generation to move nearer to consumers.

What this means is that areas with a glut of generation will have lower prices than areas with too much demand, encouraging arbitrage that will make people like him an enormous amount of money.

It will be possible to generate an artificial glut by sabotaging transmission infrastructure, preventing electricity being moved out of generation rich areas. This will have the effect of reducing the price of electricity in those areas.

Disabling the connections across the Scottish borders would pretty much drive electricity prices north of the border to zero.
Building further infrastructure would literally increase prices north of the border, making any construction impossible and leading to the end of the National Grid, which he has repeatedly decried as "Stalinist".

 

[brad465]

Without economic growth the UK public finances are doomed to collapse. No growth is definitely unsustainable.

Growth matters because it generates tax revenue that pays for public services, pensions and the interest on existing borrowing.

With no growth the UK will run out of money.

The world also has finite resources that are being consumed at a rate higher than they can be replenished/recharged. Without these resources, the growth model will eventually collapse whether we like it or not. It is far better that we come up with an alternative ourselves ahead of this, as waiting for change to be forced upon us is usually worse.

 

[Magdalia]

The world also has finite resources that are being consumed at a rate higher than they can be replenished/recharged. Without these resources, the growth model will eventually collapse whether we like it or not.

No it won't. As one resource is used up, it becomes more scarce and technological advance finds a new resource to use instead. As we are talking energy, we have moved from coal to oil and now we are moving on to renewables. I'm old enough to remember half a century ago when most of our electricity was generated by burning coal.

In essence, he wants regional pricing to try to force people renewable generation to move nearer to consumers.

My reading is that he wants consumers to benefit through reduced prices when new infrastructure goes up in their back yard.

Yes, he has a vested interest, and yes, his ideas might have some perverse incentives that would need to be addressed, but he is talking about it!

 

[geoffk]

"Any day now, the Chancellor is set to announce a huge raft of climate-wrecking airport expansions right across the country. The Chancellor says new runways will boost growth. In reality, they will just set our climate goals on course for a crash landing." A quote from Possible (formerly 10:10 Climate Action), which also asks all of us to e-mail our MPs. I could email mine, adding to previous emails about the lack of commitment to electoral reform and the economic damage caused by brexit............ ​

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[Gostav]

A significant improvement in the sustainability requirements for UK new build housing (e.g. solar + batteries as standard) would both support growth in that sector and support climate change.

Also note that a large number of new residential buildings are being built in suburban areas where public transportation is very weak and many old buildings in town centres are left vacant.

 

[Yew]

From Today's Guardian - "A plan for Rachel Reeves to back a third runway at Heathrow and an expansion of Gatwick and Luton airports has been labelled “desperate”, as the chancellor faces opposition from within Labour. The chancellor is expected to make a swathe of announcements intended to increase economic growth in a speech later this month, including giving a political green light to the airports’ expansion."

"Growth" tends to mean more use of scarce resources, more consumption and more travel.

That seems like a short-sighted view to me, we're already seeing jet engines being certified to work on 100% sustainable Aviation fuel, as well as investment in Hydrogen and Electric options. Given the timescales of such major infrastructure projects, presuming no progress in technology seems like an unwise decision.

"Any day now, the Chancellor is set to announce a huge raft of climate-wrecking airport expansions right across the country. ​

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I was not aware that London Heathrow was single-handedly responsible for all global carbon emissions.

 

[najaB]

That seems like a short-sighted view to me, we're already seeing jet engines being certified to work on 100% sustainable Aviation fuel, as well as investment in Hydrogen and Electric options. Given the timescales of such major infrastructure projects, presuming no progress in technology seems like an unwise decision.

I don't disagree, but it does seem a bit too much in way of capacity expansion, and all centred on London. More importantly, if none of those airports already existed in their current locations would we build them there now? In the case of Heathrow and Gatwick I'm pretty sure the answer would be no.

If you want to talk real forward-looking capacity expansion, how about a six runway Luton with high(er)-speed rail connections north and south?

 

[Ediswan]

If you want to talk real forward-looking capacity expansion, how about a six runway Luton with high(er)-speed rail connections north and south?

Luton is constrained by being on the top of a hill.

 

[najaB]

Luton is constrained by being on the top of a hill.

When you're talking about new runways at Heathrow and Gatwick, hills become much less of an obstacle. The Kansai Airport site was constrained by being several metres below sea level...

 

[Class 317]

We need to move away from growth based on consuming more physical resources and concentrate more on improving quality of economic activity to get more value from the same or less resources. Making products and services better so people will pay more for them.

Other growth areas should be in research, technology, science, high value manufacturing sectors and IT.

The other thing that needs to change is a massive shift away from short term financial investments strategies to ones that encourage long term investments for future growth. Also supporting our entrepreneurs to push new products and create new markets.

There are plenty of useful jobs and growth that needs to happen to encourage the transition away from fossils fuels like home refits. One other area the city needs to work on is a financial vehicle allowing the cost of home refits, Home renewable installations and home batteries to be paid for over a suitably long period by both current and future owners of properties including in the private rented sector.

 

[Class 170101]

All the talk about Heathrow today but how about the surface transport to get to / from Heathrow?

Does this mean Southern and Western links are back on or is Rachel Reeves removing 'obligations' on the private sector to build them as part of making the 3rd Runway a more fundable private sector project?

 

[Gostav]

We need to move away from growth based on consuming more physical resources and concentrate more on improving quality of economic activity to get more value from the same or less resources. Making products and services better so people will pay more for them.

The problem is that these measures themselves require long-term investment and a lot of resources, such as a large number of housing renovations. There are good example in the infrastructure thread is the Manchester Oxford Road Station Remodelling Scheme, the station will be even smaller after the renovation because of limited resources.

Such large-scale projects like quadrupling the corridor Castlefield Corridor, extra platform for Piccadilly are implemented, a large amount of construction materials and energy also would be require.

We have also seen that due to insufficient funding resources, there are only half part electrification work was finished on Midland mainline and GW mainline, resulting in diesel trains still running. The lack of infrastructure has led to inefficient public transportation, which has further caused the public to rely heavily on private traffic.

 

[Cdd89]

Growing aviation is obviously not compatible with climate targets, but that's not what Heathrow expansion is about. A lot of the individuals claiming concern for this are just using a worthy cause as convenient air cover for their real passion: NIMBYism - it has a "bootleggers and baptists" feel to it.

The fact is, London has plenty of space capacity for origin/destination traffic across its many airports, where more flights could be added without a single word being said about carbon emissions. Just look at how Emirates and Qatar have ramped up operations at Stansted and Gatwick.

Expanding Heathrow is not about increasing emissions per se, but about making the country more attractive to connecting traffic, that is to say being the country that accommodates the global increase in demand, benefiting UK Airlines, UK retail from bored tourists in the duty free shops, UK hotels from overnight stops, and the UK generally from passengers who decide to stop over for a day or two.

Carbon emissions are important, but taking futile action is even worse. The planet is a global issue, and aviation is a global industry, so it makes no sense for the UK to worry about climate targets in the context of its role in global aviation (originating aviation is another matter, and that's why we have APD). We might feel better about ourselves for refusing to participate in global aviation growth, but the market would ensure that any reduction we do achieve would simply be compensated for by a bigger increase elsewhere - either in EU hubs, or increasingly the Middle East.

 

[Harpo]

In a radio 4 interview yesterday, Willie Walsh of IATA was scathing about the current cost-per-passenger charges at Heathrow and their unfavourable comparison with other airports here and abroad.

His views sounded more like a warning to Heathrow than to HMG.

 

[Magdalia]

We need to move away from growth based on consuming more physical resources and concentrate more on improving quality of economic activity to get more value from the same or less resources. Making products and services better so people will pay more for them.

Other growth areas should be in research, technology, science, high value manufacturing sectors and IT.

The other thing that needs to change is a massive shift away from short term financial investments strategies to ones that encourage long term investments for future growth. Also supporting our entrepreneurs to push new products and create new markets.

There is some good stuff here.

The place where that is already happening is the Oxford Cambridge Growth Corridor.

To borrow the Chancellor's phrase, it needs to go further and faster.