Oil price rises that are expected to happen will cost Britain £45bn over 2 years,and Energy Secretary Chris Huhne is expected to make major announcements about taking action to steer the economy away from his current levels of dependence ( one could say addiction)to oil.
Oil today is at $102 , a two and a half year high,and no-one is expecting that will go down any time soon. Gadaffi's determination to fight every inch of the way and Saudi Arabia's likely inability to sustain new production are pointed upwards, not down.Huhne is predicted in this morning's Guardian to say that this price of oil changes dramatically the economics of climate change.
The Guardian predict that Huhne will say:
"If the oil price doubled, as from $80 last year to $160 this year, it could lead to a cumulative loss of GDP of around £45bn over two years. This is not just far-off speculation: it is a threat here and now."
Drawing on research conducted for the previous government by Lord Stern, Huhne will argue that a $100 a barrel price is the exact point at which the economics of climate change pivot so that it becomes cheaper for British consumers and businesses to invest in green technology than remain with the status quo.He will insist still wants to see a much stronger emissions target for Europe of a 30%, as opposed to the current 20% cut by 2020, claiming the extra cost of €11bn is "small change to Europe".
This is the moment to invest in green infrastructure, homes and transport, according to Huhne. Fossil fuels are now the costly, high-risk option for energy: it is "crazy" not to prepare for a low-carbon future.
If the country is to avoid an energy crunch by the end of this decade, "the UK must cut our carbon emissions by 34% on 1990 levels. We must generate 15% of our energy from renewables by 2020, up from 6.7% in 2009."
Huhne has previously talked of a seismic shift towards cleaner energy and is due to finish consultation on electricity market reform before the middle of this month.
The government is due to finish consulting on 10 March on a major shakeup of the energy sector with its electricity market reform, which Huhne has previously said would lead to a "seismic shift" towards cleaner energy.
Photo courtesy of Guardian.co.uk
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