A number of ex colleagues are now actively campaigning to stop the first new coal station being built in the UK since the 1970’s. The ‘Stop Kingsnorth’ campaign is in many ways a classic battle. Coal stations, even shiny new ones, produce far more greenhouse gases for every unit of electricity that they generate than other power stations so logic says we simply shouldn’t be building any more given what we know about the threat of climate change. But coal is cheap, there is loads of it left and it’s relatively easy to get hold of so, unlike oil and gas, coal could be with us for another couple of hundred years. This is where emissions trading is meant to help by placing limits on pollution and making it more expensive to emit greenhouse gases which disadvantages coal. The problem is the price of permits has to be a lot higher than it is at the moment to put investors off. Technology could be added to the station to capture and store the greenhouse gases but the technology is not yet commercially proven, costs money to install and run and makes the station approximately 10% less efficient. So again it will need a very high permit price to make people invest in it.
The fact that permit prices are too low and people still want to build Kingsnorth could be taken as a sign that emissions trading isn’t working. But this isn’t necessarily the case – emissions trading makes sure emissions don’t exceed a given level and seeks out the least cost ways of doing so. It does not guarantee emissions reductions will take place here in the UK. To do that the Government would need to introduce additional policies. So while prices remain low it makes sense for the Government to introduce a clear policy that all coal stations will need to use capture and storage technologies once they are proven and that any investment now is made in the clear knowledge of that intention. If investors decide even then to go ahead then they are clearly confident that they can afford the extra costs this would involve and the Government can safely regulate in favour of capture and storage in the next few years.
And at the same time campaigns like sandbag need to succeed in reducing the numbers of permits in circulation so emissions trading becomes more effective.