Call this fair?

Simon Roberts says that poorer households shouldn’t foot the bill for UK carbon emission cuts

11 March 2013

As we report here, UK policies to cut carbon emissions are delivering a ‘triple injustice’ on low-income households who: 1) Benefit least from energy policies; 2) Pay a higher share of the cost for these policies; and 3) contribute least to the problem - i.e. carbon emissions - which the policies are designed to address.

Simon Roberts, CSE's Chief Executive, explains why this is simply not fair.

"The poorest fifth of the GB population have already significantly exceeded the Government’s carbon reduction target for 2020.  Their direct household carbon emissions – for home energy, transport and air travel – are already 43% below the GB average. They heat their homes less, drive less, and fly much less.

"So why is it they are carrying more of the burden of cutting carbon emissions than better off households?

"The answers can be found in new research by the Centre for Sustainable Energy for the Joseph Rowntree Foundation, published on 13 March. Based on detailed analysis of the Government’s own figures, the study reveals that the lowest income households are paying more than their share towards the cost of carbon reduction policies – and they are due to receive less than their share of the policy benefits.

"So lower income households have much lower carbon emissions but they are paying most for policies. And the policies tend to support better-off households to cut their carbon emissions.

Why is this? 

"At a simple level, it’s because this Government – like its recent predecessors – is using levies and charges on our gas and (particularly) our electricity bills to fund many of the policy measures designed to cut energy-related carbon emissions. And fuel bills represent one of the most regressive means of collecting money to fund policies.

"But it is also because many of the policies which are in place require households to have money – or the ability to borrow money – to take advantage of them. The most obvious of these, though by no means the only example, is the Feed in tariff for home-based micro-renewables like PV.

"Our analysis shows that it really is the case that the apocryphal ‘little old lady’ (or, more officially, a ‘low income single pensioner household’) is subsidising through her electricity bills the generous returns being enjoyed by the professional couple proudly displaying their PV panels on their suburban roof. The injustice in this case is not that she pays very much on her bill for FITs (she doesn’t); it’s that she has no opportunity to see any of the benefits.

"But the ultimate reason why this triple injustice exists is because, in spite of the rhetoric, successive governments don’t seem to have genuinely understood the importance of establishing fairness as a key building block of our climate policies. Sustained action across the population to cut carbon emissions almost certainly depends on a sense in each person that they are part of an endeavour which is fairly shared.

"Ending this triple injustice is central to long-term policy success. That will require a much stronger link between the responsibility for causing emissions and the responsibility for paying for policies and taking action to cut them. Which means shifting the costs of policy away from fuel bills towards less regressive funding mechanisms like general taxation. And where fuel bills are still used, we need to put in place specific measures to ensure lower income households can access the policy benefits rather than just pay the policy costs."

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