The oil giant BP has reported a record profit of £6.4bn, and among the gloom and carnage of the stock markets the company’s share price has soared dramatically.
In the face of renewed calls for a windfall tax on oil companies, a pundit on Radio 4’s World at One news programme patiently explained that the markets were not just reacting to the size of the profit; when oil prices are volatile, such companies will inevitably make large profits or losses. What made BP’s financial results special was that they showed that managers had controlled costs more effectively than any of their competitors. During a recession, it is this ability to operate efficiently that particularly distinguishes the winners from the losers.
Contrast this piece of good news with a potentially far more important story that received hardly any media coverage at all. On the same day, the Climate Change Bill passed its final stages in the House of Commons before being considered by the House of Lords. Legally binding targets for reducing the UK’s greenhouse gas emissions by 80% before 2050 are now likely to become a part of all our lives.
A deeply unpopular government threw this remarkable piece of legislation together at a time when only its environmental policies were not under fire. This was probably because the majority of voters saw attempts to save the planet as being harmless at best, and at worst irrelevant.
Now the Climate Change Bill is being described by Gordon Brown – and the environmental pressure groups that his government is seeking to appease – as a worldwide first. Apparently no other government has introduced such legislation, and it is not difficult to see why. Most politicians set a very high priority on creating conditions in which businesses that generate the wealth of their nations can operate competitively.
Here is an extract from the Financial Times report on the Bill’s progress that gives some indication of what is in store:
Mid-sized companies face mandatory reporting of their carbon emissions from 2012 after MPs on Tuesday night passed sweeping legislation setting ambitious targets to tackle climate change.
So even medium sized companies will be required to set up whole new departments to monitor their greenhouse gas emissions and ensure that the new legislation is complied with. These seekers after environmental data will, of course, make no contribution to the company’s profits, but will simply increase its overheads to an extent that will have to be passed on to their customers. And of course there will also need to be a new army of inspectors and enforcers patrolling the country to make sure that there is no cheating. Add this to the increased costs of using more expensive and less efficient forms of energy and you have a formula that legislates for increased inflationary pressure and reduced competitiveness at a time when the economic downturn makes it particularly important that costs should be minimised.
But all is not lost. It would seem that the new legislation is not really intended to be effective. Here is a little more from the Financial Times:
Most significantly, ministers halted a growing revolt over the proposed exemption of aviation and shipping from the targets by saying the sectors would be “taken into account” once a method of measuring “international” emissions was found.
Or in other words, the inclusion of aviation and shipping in the bill is no more than window dressing that no one need worry about.
An editorial in the Guardian had no illusions about this threadbare and dubious piece of legislation:
The low-carbon future always seems to begin tomorrow. If the law works as it should, governments will have no option other than to get it under way today. It should be a straitjacket, binding departments into policies they would not otherwise follow: no new third runway at Heathrow, and no new coal power station at Kingsnorth. But the shame of busting five-yearly carbon budgets may turn out to be much smaller than the political pain caused by enforcing emissions reductions. The call from both main parties for lower petrol prices is just a small hint of contradictions to come.
All this put me in mind of the Hunting Bill, which was pushed through parliament in similar circumstances. There was no significant public support for any such legislation, but because the controversy that it inevitably caused was a welcome distraction from the problems of law’n’order, the health service, dodgy dealings with party donors, and a foreign policy that linked us more closely with the US than the government’s core voters liked, it suited a deeply unpopular government. The government commissioned Burns Report had found that fox hunting was no more inhumane than any of the other means of controlling the fox population, but this was ignored. The bill was an expedient means of buying-off a hard core of animal rights activists and their advocates among Labour backbench MPs, most of whom were motivated less by animal welfare than by a nostalgic glee in resurrecting the kind of class warfare that went out of fashion before the end of the last century.
The result was an unworkable and unenforceable piece of legislation that achieved nothing other than to bring the legislative process into disrepute. People who had previously known little about hunting began to take an interest in the sport, leading to a rapid increase in hunt membership and also those attending meets as spectators. Far from stamping out hunting with dogs, the legislation drew attention to a part of our cultural heritage that was in jeopardy and gave it a new lease of life. It has also lead to a marked increase in the number of foxes that are being killed by hunts – hardly what the authors of the legislation had in mind.
It will be interesting to see if history will repeat itself. Even a half-hearted attempt to implement the provisions of the Climate Change Bill will certainly draw attention to dependence on fossil fuels, and to the far higher cost and woeful inadequacy of the alternatives. People who so far have gone with the flow in the climate change debate are likely start asking why this new bureaucratic affliction has come upon them. They will want explanations that go far beyond the present lame mantra that it is because the experts say so, and we should comply even if we do not really understand what they are talking about. Unfortunately, this is a process that is unlikely to start until the Climate Change Bill becomes law, and that will be a bit too late.
That leaves us with the conundrum of why BP’s record profits have grabbed the headlines and the Climate Change Bill has been virtually ignored. Just a few weeks ago, the progress of a major piece of legislation with supposedly far reaching consequences for the economy, lifestyles and the future of the planet would have been headline news.
If the present government has any claim to distinction during its decade in office it is for the supreme skill of its news management. It would seem that Downing Street can set the media agenda whenever it wants to, and with just the right spin. So why were we not confronted with a barrage of stories hailing Gordon Brown’s latest victory in the crusade against global warming? Is it too far fetched to suspect that the government would really rather not have the media spotlight turned on a policy that seems ridiculous in a time of economic meltdown, and is fast becoming a political liability that they are unable to abandon?
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