By David Powell, Source: BusinessGreen

You read all sorts of wobbly hoopla about the alleged costs of “green” on our energy bills. Hooray, then, for a nice sane bit of perspective.

Today the Committee on Climate Change (CCC) – the Government’s statutory advisors on the economics of climate change – publishes a new version of its 2011 report into the real costs and benefits of renewables and energy efficiency on domestic, commercial, and industrial energy bills.

You can detect a battle-weary sigh of the CCC’s honcho, former World Bank economist David Kennedy, infusing the report. He’s probably not in the mood to be trifled with, given recent annoyances.

His report says this. Look, yes, all things being equal, bills will rise by about £100 by 2020 compared with today as a result of subsidies for clean energy and helping people insulate their homes – although by even more, a further £130, because of the rising price of gas.

The CCC stress four things. First, that clean energy cost is far less than the rather more shrieky numbers some people like to flap around. Second, these costs won’t continue to rise forever: they are short-term, front-loaded investments to give vital technologies a leg-up here and now. Third, if we use less energy, our bills won’t rise by anywhere near as much as all that. And fourth, to focus one’s ire on the costs alone is to completely miss the point: the alternative is likely to be much more costly.

Rising gas prices have done far more damage to our energy bills than clean investment is ever likely to. Since 2004, the CCC says, the wholesale price of gas has pushed up our bills by an eyewatering £300.

The Chancellor may insist with Cnut-like verve that gas is both cheap now (it isn’t) and will be cheap in the future thanks to shale gas (it won’t), but the CCC and indeed the Department of Energy and Climate Change think otherwise.

In addition – gathering around us the tatty shreds of remaining optimism as we must – assuming the world does one day get its act together on a global climate agreement, the price Governments levy on polluting fuels will have to go up.

Keep on guzzling the gas, the CCC suggests, and the short-term costs of renewable energy deployment will be small beer: fossil fuel and carbon prices could combine to push up bills by an estimated £600 by 2050.

No wonder Kennedy suggests the Chancellor’s planned “dash for gas” should be “Plan Z” for the economy. This stark choice – Osborne’s quest to remain in hock to fossil fuels for decades, or cracking on with decarbonisation now for the long-term health of the economy – looms large in the battle between Treasury and DECC for what kind of mix the current Energy Bill will end up supporting.

It’s right to keep an eye on costs, of course, and who pays. We can’t be blasé about the impacts of rising energy bills – whether for clean energy or the far greater contribution of rising gas prices.

With five million households in the UK already in fuel poverty and national home insulation policies sputtering (the Green Deal has yet to insulate a single home), government has to do far more to bring all households, particularly those of the most vulnerable, up to a decent standard of energy efficiency.

The CCC repeats its handbagging of the Green Deal as simply not up to the scale of the job. Friends of the Earth wants to see the money Mr Osborne will nab from future carbon taxes put to good use by insulating homes.

And what of big industry? The CCC is looking into this in more depth, but suggests here that competitiveness concerns arising from rising energy bills will actually affect only a “small number” of energy intensive industries.

Where there is a real problem, Friends of the Earth agrees that genuinely affected electricity-intensive industry should be given help, linked to them making energy efficiency improvements. Ideally, of course, the Government would have a decent set of sectoral industrial strategies that avoid the need for clumsy retrohacking of climate change policies in the first place.

The Government could certainly help to keep costs down by cutting out the damaging rhetoric and sticking to a long-term decarbonisation target to give investors confidence. But with our economy in desperate need of long-term thinking, we have to start looking at clean energy investments today through the right lens.

With food prices soaring because of climate change, major insurers warning of premium hikes to make good increasingly frequent flood damage, and the grim-set upward march of the gas price, it has to be time to focus on clean energy investments as exactly that: an extremely wise insurance policy against the alternative.