The best approach I've heard to solving climate change involves a carbon tax. High gas prices are a proxy for that. It's already driving discussions people just weren't having before - how can I make my home more energy efficient? What can I do to save energy? In many ways, high energy prices are a positive thing for society (in the long run).
The problem is, of course, that high energy prices are a huge negative for those who can't afford them. All the proposed carbon tax schemes I've seen are a carbon tax and dividend - you tax carbon, and redistribute the profits to those who can't afford the higher prices.
Right now, we've got the carbon tax, but the dividend is going into the pockets of oil companies - exactly the people you don't want to be building up cash reserves in the fight against climate change.
The other issue we have in the UK (and maybe elsewhere) is that the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord. This means that landlords have no incentive to improve the energy efficiency of their houses, and tenants have no ability to. We should be changing that - make landlords of energy inefficient houses pay for it.
> All the proposed carbon tax schemes I've seen are a carbon tax and dividend - you tax carbon, and redistribute the profits to those who can't afford the higher prices.
UK energy bills are something like this. About 15% of a dual fuel bill goes both on subsidising renewables and social payments.
> The other issue we have in the UK (and maybe elsewhere) is that the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord. This means that landlords have no incentive to improve the energy efficiency of their houses, and tenants have no ability to. We should be changing that - make landlords of energy inefficient houses pay for it.
Just to note that the exemptions on this are quite easy to get.
Right now, you only have to spend £3500. If it costs more than that to get to the required EPC rating, you can get an exemption. There is also the "seven year payback test", which is as it sounds.
What this means is yes, this may drive your landlord to install LED bulbs and thermostatic radiator valves, and maybe some double glazed windows, but it's not going to trigger a mass drive towards modern insulation and solar panels.
Personally I think we should just force landlords to bear the cost of heating to 18c.
> the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord
In addition, as house prices are so high, owner-occupiers often don't have the means to make these improvements until they have been in the house for five or more years.
Landlords get to claim the cost of improvements as a business expense and can save an enormous amount of tax on making those improvements.
Owner-occupiers have to pay out of their net income. So if it costs me 10k, it only costs a landlord 6k. But they still don't do it.
Forcing rented accommodation to have EPC E or better is a really low bar. I think it should be compulsory for landlords to carry out all EPC recommendations to a certain value within a sensible period.
> Landlords get to claim the cost of improvements as a business expense and can save an enormous amount of tax on making those improvements.
> You may not deduct the cost of improvements. A rental property is improved only if the amounts paid are for a betterment or restoration or adaptation to a new or different use. See the Tangible Property Regulations - Frequently Asked Questions for more information about improvements. The cost of improvements is recovered through depreciation. [0]
If you look at the actual HMRC guidance, rather than some random website, you'd see that
"alterations due to advancements in technology are generally treated as an allowable repair rather than an improvement, if the functionality and character of the asset is broadly the same. For example, when single glazing is replaced with double glazing"
So a more efficient heating system, better windows, better external doors, replacing loft insulation with material with a higher R-value are all within the scope of "allowable repair".
There are quite a few grants available for things like improving insulation, but you're right; a landlord doesn't really have an incentive to go through the hassle of applying for it and arranging for the work to be done. An EPC (Energy Performance Certificate) is required when you let a property, and it has to be at least an "E" rating (A: best, G: worst) but that's not really saying much.
Yeah - the EPC is a joke. It's just a tick box exercise. It doesn't take much effort to get a good enough rating to let.
High energy costs could be an incredibly powerful tool to drive changes in the UK housing stock. It's only when energy is expensive that the payback time starts to make sense. That would need sensible and cohesive policy decisions from people with a good understanding of high efficiency housing. Clearly we don't have that.
Aside from a few very simple improvements (LED lights, loft and cavity insulation, double glazing), is there really anything that can be done to an old house to improve its insulation that is actually cost effective?
My 1930s house is a D, so I had an energy contractor round to cost up some improvements. All the obvious cheap-ish ones have already been done. The next ones on the list were things like solar panels which would take 15 years to pay off, solar water heating which would take 30 years and exterior wall insulation which would cost around £40k and take nearly 300 years to pay off! And arguably worse, they couldn't guarantee that sealing up the house wouldn't cause damp problems to emerge since the damp proofing and construction of old buildings can be inconsistent.
Even things like a heat pump would either need an incredibly beefy drop in boiler replacement, costing more than £30k, or I would need to install a hot water tank, previously mentioned insulation, larger radiators and upgrade my pipes - and even then savings would be marginal because electric costs so much more than gas.
Is it worth spending all this money upgrading old housing stock, or is it better spent on things like solar farms, wind farms and hydrogen (or synthetic natgas) generation. Even district heating might easier than trying to retrofit heat pumps to our old leaky houses.
Ultimately the goal is net zero. Insulation helps, all else being equal, but if the energy production is zero carbon then the energy efficiency of the homes is basically irrelevant. Given that, where is it more efficient to spend the money?
Whether something is cost effective is directly proportional to energy prices - hence rising prices suddenly reduce payback periods for energy saving.
Sealing houses up without accounting for moisture can cause issues, but it's not insurmountable. Rather than ventilating through accidental means, you seal the house until ventilation needs to be intentional - and then you can do it using mechanical ventilation with heat recovery - which effectively keeps 80% of the heat in the air and transfers it to incoming fresh air. Equally insulating without moisture management can cause issues - but as long as the insulation is designed with vapour barriers and ventilation in the right place, it's perfectly doable. The problem is that it's very easy to do it wrong, and not realise until years later all the timbers are rotting because of condensation.
I'd argue that (at least in the UK) we have far too many old houses not to deal with them. Space heating accounts for 27% of our national energy consumption. So much energy, which could be useful, is just wasted.
Speaking as someone working in the energy industry, we are a very, very long way from zero carbon energy. Renewables only work intermittently - we don't have a solution to fill the gaps in dark winters or calm days. Batteries are at least a couple orders of magnitude too small, pumped hydro needs very specific geography, and all other energy storage methods are unproven or highly inefficient.
Of course, mechanical ventilation and heat recovery helps. I had it in my last place which was a new build. But now you're saying on top of the wall insulation and heat pump, I also have to spend £10k on a MVHR system? My heating bill is only around £1200/yr - I'll never see that all money back even if it reduced my costs to nothing.
The reason costs are high is partially because costs have gone up a lot lately, and I'm in London. Even a new garden fence is going to cost me around £5k. But also, my house would need to have a brick cladding put on after the insulation to get it past planning. There would also be a lot of remedial work required before installing the insulation, such as removing the existing pebbledash render. And I don't even have asbestos to worry about (as far as I know), unlike a lot of other properties of similar age.
I agree we're a long way off net zero, but don't you think spending all this money on marginal improvements to old houses would be better spent on the generation side of things? Personally I can't see a future in the UK that doesn't involve some kind of hydrogen or synthetic natgas generation. We're going to need to solve the generation side anyway.
I had district heating which I had in my last place, which was great and had the footprint and plumbing was comparable to that of a regular gas boiler.
I guess that by itself that would be helpful but the truth is that most people wouldn't really pay any attention to it or certainly not much attention compared to price, location, what the place looks like etc.
There is definitely room for a lot of improvement in the UK housing stock but every possibility is poisoned by the large numbers of people it would affect. Not all Landlords are fat cats and not all tenants are poor, which is why things move so slowly.
Even in new-builds, the quality of insulation work can be somewhere between shocking and non-existent. What do you do? You need umpteen million new houses and don't have enough skilled tradespeople to be able to fire those that do a crappy job.
I think a much bigger win would be further back where we need to align incentives and opportunities for school leavers to the industries that are short of workers. It seems daft to me that people can choose "Health and Beauty" courses when we already have a million of those and a massive shortage of engineering trades.
Doesn't cold weather still kill more old folk than heat in the UK? High heating bills doesn't really move the needle any if they are also significantly subsidized.
Out here in the midwest US, high propane and natural gas prices have caused a massive spike in the installation of wood heating. Our bill went up by nearly 50% this winter due almost entirely to supply issues.
Unfortunately, heat pump installation is still too expensive (many years payback) and electrical heating isn't particularly green (resistance heating a house at -40 degree wind chills off of coal and natural gas at night is the worst outcome possible short of burning petrol generators).
We are much better off saving residential heating for later and focusing on other carbon priorities until the grid itself is greener, I think.
>> In many ways, high energy prices are a positive thing for society (in the long run).
If you don't mind, I wonder if you might expand on this? For me it seems a bit blithe. For instance, we know that higher energy prices cascade into many, if not most, consumer end items, and so I think it follows this decreases the standard of living generally.
I understand the important consideration of negative externalities, and how fossil fuels negatively impact 3rd parties (the world generally/climate change). I think the economic argument that there should be a carbon tax to account for these externalities is quite right. This is true regardless of climate change. So let's assume for arguments sake, we're going to tax above and beyond that to account for climate change as well.
Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities? And if this turns out to be the case, then these austerity measures if you like, turn out to be transient, and the temporary lower standard of living sacrifice is made for the betterment of posterity. Or is it simply we must accept a lower standard of living permanently lest we allow climate change to continue unabated, as it were?
Sorry if this distracts from the main point you were making.
> Are we hoping then, by hiking the cost, it ushers in a new discovery of lower cost energy, with fewer externalities
Not just discovery. We already have plenty of measure to either use energy more efficiently (such as improved insulation in a home) or things like renewable energy. And as you say, the cascade of energy use into many more aspects of the economy than people expect should trigger a realignment of consumption to means that are less likely to have energy-based externalities somewhere in their supply-chain or operation.
> Or is it simply we must accept a lower standard of living permanently
Depends upon the implementation. If we are replacing existing taxes (like corporate or income tax), or refunding the amount (via a citizen dividend or similar) the net impact shouldn't be a lower standard of living, though the distribution will affect people differently.
If it's truly about externalities, the proceeds of a carbon tax should be distributed in the same way as legal compensation for damages. Compensation payments to people affected by climate change, proportional to the increment of damage caused by the amount of GHGs emitted. That's pretty much impossible to calculate though.
Right, and I agree to both. This also lowers their standard of living.
My question was probably too vague. Maybe more directly, is raising costs across the board as a matter of policy more effective in our fight against climate change than other interventions? Like subsidizing research into renewable energies, etc. Have we given up on those?
I am far from qualified in judging the effectiveness of alternatives, I just wonder if these taxes are draconian, and if so, have we given up hope on these alternatives.
This was besides the point the parent was making, however, so I am regretting my digression now.
Is not consuming energy you don't need really lowering your standard of living?
I mean, is being pressured into driving a 30mpg car vs a 20mpg car which serves your needs just as well - does that lower your standard of living?
If we don't reduce fossil fuel use will that negatively affect the ability of the planet to support humanity? If so, isn't that lowering your standard of living?
To your first question, yes I think it does. Government coercing my decisions is negative ( individually, not necessarily society/humanity ). In the same way, if government policy mandated televisions to be twice the cost because they deemed it hindered education, that would make me worse off as a consumer of televisions.
To your second question, I suppose I would argue that it lowers my standard living now, but _may_ raise the standard of living for posterity, since obviously climate change time scales are vastly greater than the effect of a tax now. However you could rightly argue that by UK citizens reducing their carbon footprint now, 3rd parties downwind directly benefit now by being less harmed by UK pollution, yes.
Think about how many people drive half a mile to the shop. They don't care about hidden costs even though all of those short trips might add up to $50 a month that they didn't need to spend.
Visibility of prices is OK on a Smart Meter but it is still disconnected from where energy is used e.g. not obvious that having your 80" TV on all night uses up a tonne of energy although only a little at a time.
And then you have a lot of people, as mentioned elsewhere, who are paying because their landlord won't spend the money on improving the insulation on the house. You can't always vote with your feet so although some people can and do sort things out, a lot of people don't.
Then they complain that the government should help them out!
Certainly high energy costs, in the absence of any action to reduce energy usage, reduce standards of living. Ultimately almost every aspect of our "comfortable" life comes from expending energy - heating, concrete, entertainment, transport, home appliances, fertiliser, mechanised farming - at the heart of everything is external energy expenditure to make us comfortable.
However, in most cases comfort isn't proportional to energy expended. For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.
Honestly - I don't know for sure whether high energy costs will drive innovation, or just lower living standards for everyone. However, it's pretty clear that relying on fossil fuels isn't a good long term strategy, and that at historical energy prices (which don't take into account externalities at all) there's essentially no headroom for new energy saving R&D. High energy prices make efficiency improvements and novel energy production highly lucrative - and then capitalism can do the rest.
"For a given heat, a well insulated room is as comfortable as a badly insulated one"
I actually disagree with this. There are factors beyond air temperature, such as air movement and radiation.
Air movement is pretty obvious, if your house is draughty, 20c may still feel chilly.
But radiation is commonly ignored and in my experience contributes more to comfort than air temperature beyond a certain level. If your room is at 20c and your walls are 12c, there's a good chance you will still feel uncomfortable compared to a building with well insulated walls. I've been in old buildings where even at 25c it still felt a little chilly. Worse, if only the exterior walls are cold, you might find one side of you is too hot and the other is too cold!
This is commonly experienced as "why is my house still cold in winter even though the thermostat is at 22c, when in the summer it's too hot even at 18c?".
> For a given heat, a well insulated room is as comfortable as a badly insulated one - but with less energy input. A modern computer is as useful (more so) than a Pentium 4, but with less energy input. An LED bulb provides as much light as an incandescent, but with less energy input. When energy becomes expensive, it makes energy saving worthwhile, which makes the return on investment higher, which draws in R&D money.
You're right, and I think these are compelling examples. And climate change need not even be considered for these to support a carbon tax.
The landlord/tenant thing would be mitigated by publishing the energy cost of the property to allow price comparisons.
If prospective tenants knew the energy costs of the different options when looking, a place with higher energy costs would then attract a lower monthly rent (commensurate with the difference in energy bills) than an otherwise identical place with cheaper energy costs. Tenants would ideally see the combined cost of rent+taxes+energy+bills when comparing places.
Edit: perhaps this could be an idea for a website.
I'm fairly sure we are due a political swing back towards the left in the UK, and my expectation is we are going to see increased calls for the re-nationalisation of various national infrastructure and services, including energy supply.
As the article says at the end, clearly the Torys are not going to do this, and Labour will be very quiet about this as they need to play the middle ground if they have any chance of gaining a majority. But, if they were to win in the next general election we will see increased calls for them to act on the aspirations of the left of the party to nationalise these things.
The Tories have renationalised many of the train companies, and are currently toying with nationalising the General Practice (GP) service in the UK - which most of the public would not realise was private sector (albeit GPs have strict rules against private practice, unlike dentists).
There are some obvious reasons to want to renationalise critical infrastructure like water and power, particularly given the absolutely piss-poor job done by the private contractors. And in many areas - like the trains - the "private enterprises" running the services turn out to be commercial arms of other European public sector bodies anyway, and are not private sector in any meaningful sense.
I don't think this is Left vs Right any more. If the Tories want red-wall voters and broad appeal, they have to move a lot more than Labour needs to stay in the middle ground. Left vs Right does not capture the complexity of what's happening here.
Worth noting that water in Scotland was never privatised - domestic properties pay for it (and waster water treatment) by fixed charges linked to council tax band:
Mostly agreed - they went bust and/or withdrew from contracts, and yes pandemic was an issue, but these companies were also getting huge amounts of public money (Gov was typically buying the trains), and the infrastructure/rail element has been properly nationalised for a few years now.
The idea that competition can have any real meaning on a highly constrained and contended single resource - like railways - is a bit laughable, so the market doesn't really offer much opportunity for optimization. Equally though, the old British Rail was nothing to get excited about. We just don't seem to have a decent economic model for running loss-making services with positive general externalities for the benefit of society.
The private model does work elsewhere in the world but I'm not sure whether we completely understand the differences and what makes these other countries work so well.
On the other hand, we tend to have rose-tinted memories of how cheap everything was in the old days, which I don't think is true. For the level of subsidy that our railways have, they are probably not actually that bad. Many people have said before that even places like France might do well on the high speed lines but their secondary routes can be as rough as ours and they get much more investment.
>The idea that competition can have any real meaning on a highly constrained and contended single resource - like railways - is a bit laughable, so the market doesn't really offer much opportunity for optimization
Of course not. The Tories always meant for it to be a vehicle through which they and their mates could extract rents.
The energy sector is already dominated by the government. They set the market, set regulations, and determine if new power stations can be built. For offshore wind they own the seabed and give development rights. Any nationalisation would still have to depend on the same kind of expertise that already exists in the industry. They could how new developments are financed and use national debt. But beyond that I am not sure it would actually make much difference.
Whatever Labour do, they’ll be raked over hot coals for the mess the Tories leave them and be hamstrung. Then Tories will be back in power shortly after. That’s their usual play. It’s frustrating as hell
I hope you're right, but the current Labour Party are more right wing than the party has ever been, indeed right of the tory party of 15 to 20 years ago, and they've been purging the left since Starmer took over. I think we've missed our chance to take these things back into public ownership.
The British political system incentivises short-termism - our politicians largely see no point in implementing a policy that will benefit the entire country in 10 years time when someone else may be in charge, hence the sell-off in the first place. In an ideal world we'd have gone the same route as Norway [0], and could possibly have still done so if Corbyn had won. Now though, that ship has sailed and we've sold short-term selfish thinking to the public, have a "left" party that is almost indistinguishable from the right, and all of them are pushing populism above all else.
Can I ask why you think the government can run utilities better than a private company? (Not trolling - actually interested in other opinions). My understanding as to why trains [0], etc moved to private ownership in the past was because a lack of competition, unions, and other factors caused massive inefficiencies. Looking at the NHS right now, no matter how much money the tax payer pours into it, it simply isn't efficient enough.
Basically I remain unconvinced the government can run a utility company better than a private organisation can which has efficiency as a primary goal.
[0] Now trains seem bloody expensive to me - but were they in the 80's? Or were they subsidised by the tax payer...
Private companies care about capital efficiency, not service efficiency. The two concepts are occasionally related but not always. When it comes to public utilities, however, you want a guarantee that the latter concern will win over the former, always, even if it doesn't make economic sense. It's a guarantee that the private sector just cannot give - because their priority is profit, not service levels; they are only interested in delivering the minimum amount of service that results in profits. They can end up paying dividends even when the service is failing, by cannibalizing the business if necessary. This is not acceptable for public utilities.
Things can be run just fine by public institutions; the BBC is an example of that - despite the occasional inefficiency, it has managed to deliver high-quality content to pretty much everyone over the decades, and even spearheaded new technologies (from BBC micro to iPlayer). Which, incidentally, is why Tories hate it with such a passion.
As long as there is accountability and a degree of oversight, with an engaged public, state-run enterprises can do well. The problem is that the political classes have skirted their responsibilities.
Trains lack competition regardless.
Is someone going to build competing tracks?
Can trains pass each-other in a bid for speed?
Privatise and they'll bid for the operating contracts of lines and then pass that cost on to the consumer with some added cost for profit and poof expensive trains in Britain.
Also sometimes trains are subsidised by the taxpayer and that's ok. Like here in Belgium the train runs a loss tho the fares are comparatively cheap. I'm damn sure it can be optimised if some overpayed management was replaced, obvious inefficiencies worked out, the weird splitting of services required by the EU reversed, etc
But they also provide a huge societal boon despite that subsidy because we lose boatloads of money on roads like the ring around antwerp and brussels being the most congested in europe which can only get exponentially worse given how much commuting happens here.
I know. And if they were privately owned there would be a lack of open competition just the same. Society isn't going to allow for building a bunch of competing tracks.
Looking at the NHS right now, no matter how much money the tax payer pours into it, it simply isn't efficient enough.
It's hard to compare, but there is no specific evidence that the NHS is noticeable less efficient than the healthcare system in any other developed country – so this is a weird thing to say. https://www.bmj.com/content/367/bmj.l6326
A private organization does not have efficiency as a primary goal, it has making profit as a primary goal. In a highly competitive market where consumers have many viable alternatives efficiency is required to be able to compete and offer the lowest prices. In quasi-monopoly situations efficiency is not required at all to make a profit since there is no alternative for consumers to switch to, and in reality private companies will generally be less efficient in this situation because they have less accountability to their customers than the government, which means they are more than happy to raise rates more and skim more money off of the top.
Because the government actually has an incentive to run infrastructure well. It's democratically accountable if it doesnt. There is a lever there that you can push if you are unhappy.
If you run the electric grid or the last mile water pipes privately competition is essentially impossible so there's no reason for the owners not to just neglect it and milk customers dry.
With trains the really criminal part was that the land around stations got sold off for cheap to hedge funds who made a LOT of money. Japanese trains can be run at a profit despite taking losses on tickets because they didnt do this.
Economically left wing parties haven't been popular in the UK since Atlee. The UK public hold fairly economic left positions when polled, but that doesn't seem to ever translate into voting for left wing parties. Corbyn was deeply unpopular and much of the reason for that was he was seen as far too left wing (nationalise Greggs etc.).
There have been three elected labour leaders since 1950: Wilson, Callaghan and Blair. Wilson was the most left wing of the bunch, and most would consider him soft left at best. Blair was fairly centrist or even centre-right by historical standards and, until he destroyed his reputation with the Iraq War, was likely one of the most popular leaders Labour has ever had. I think if it wasn't for the war, he would still be held in extremely high regard.
I'm not even sure Labour is or ever has been fundamentally a socialist party. They are a trade unionist party, and the types of people in unions in the UK aren't especially socialist. Atlee was, in some ways, a deviation from the norm, in a highly unusual historical context.
The most popular prime ministers of the latter half of the 20th century are arguably Churchill and Thatcher.
Whipping members to abstain on the policing bill (effective criminalization of protest) is pretty indicative of how right Labour has drifted.
The starkest one I thought was a plan mooted Priti Patel to set up prison/concentration camp ships to house asylum seekers, the idea of which was to deprive them of legal rights while processing them coz they werent onshore (Guantanamo style). Starmer said it was a bad idea because.... too expensive.
Not sure if you're trolling or not, but it's hard to say really, given that their current stance is to just agree with tory policies and not really have any of their own. It's more the fact that any socialist policies they did have prior to Starmer have gone.
Pretty obvious what the scam is here. Starmer lied to the membership to become leader, has ruthlessly purged the left including the former leader, and now plans to sit tight doing and saying nothing, hoping the Tories self-destruct as they occasionally are want to. Meanwhile Labour will suck-up to the right-wing press in the hope that Murdoch et al will decide not to destroy them on a whim as they did the previous iteration, enough to sneak the next election. Net result, the 40% of the population who voted for a left-wing party in 2017 will have no representation for the next decade minimum. Again. Great democracy we have, brilliant stuff. Signed, extremely bitter former Labour member.
Getting a little too off topic and political for HN, but...
I think the trouble here is that the only way Labour could win is by aggressively moving towards the centre, which as you describe they are doing. Loosing Scotland to the SNP has completely cut them off at the knees.
What we really need is complete electoral reform and moving to a proportional representational system. Exactly as you describe we no longer have a simple left and right to our politics, Brexit proved that. It will be painful while the main parties shrink and smaller parties grow but I believe the outcome would be a more effective and representative government. Trouble is neither main party could push it though as it would result in them having less power, that's a hard sell.
Yes, proportional representation would be nice, and might solve some of the UK's many problems. But it isn't going to happen in my lifetime. They won, we lost, and as a result living standards are going continue to get worse for most people in this country for the foreseeable. That's really the whole story.
I've not gone back and checked the results, and done the maths, however:
I did read that each time Labour got in government, it would have occurred irrespective of the parties the Scottish MPs represented. That because the swing within England was so great as to make the Scottish votes an irrelevance (England being about 10x the population of Scotland).
Genuinely curious. I'm not very familiar with UK politics and I was always under the impression that Labour was more left wing than Lib-Dem and Conservative so I was surprised to read that description of them.
Ah, very fair question then - I think even a lot of actual UK voters have the same impression too, largely down to the whims of a few billionaires who own all the newspapers in the country and essentially get to decide who wins. As long as Labour policies are a threat to their money, they'll be presented as dangerous lefties to the public hence, as @flooow pointed out above, their current strategy of just trying not to be noticed at all.
Big issue in the UK is the standing charge and how (thanks Ed Davey) that got raised and was a huge impact for all. Many caps learn towards an ideology of 4.2 children household's in many respects and see's those responsible in energy usage and general low usage household's bear the burden with high energy users in effect getting a cheaper deal on the back of those responsible low usage consumers (yes did raise with local MP at the time - Ed Davey and ignored, though not forgotten).
How should this be fixed, well like taxation it should be scaled and a usage threshold per person in which you pay X amount and over that, you pay more for your fuel usage, so the more you use, the higher it gets that you pay and not sadly as we have, the reverse.
Sorry but whole subject a bit of a personal issue when my local MP sends out election voting paraphernalia stating how he has saved households money on their fuel bills when the reality for me was the polar opposite and again, he ignored that. But I shall have my day soon upon this.
Of course, no model is ideal, though when we see initiatives for solar and electric cars that learn towards those who can afford such items over those who can not and those that can not paying for such subsidies, you do feel the brunt of unfairness and why the rich get richer (not saying having solar or an electric car makes you a rich person, but for those who don't own their own house and rent or use public transport, relativity does become a factor)
I think this article is basically making the argument that the energy cap failed because it didn't do something that no one reasonably expected it to do in the first place. The energy cap was put in place very simply to stop energy companies from slowly raising rates on customers who don't switch, because generally people are very unlikely to switch providers and so could be exploited by the companies. That's what it was there for. Recently, it's actually done a fantastic job of protecting UK consumers from facing quick shock increases in their energy prices, delaying the impact in a way that allowed the government to take action to mitigate the real problem.
Now, that's nothing to do with the fact that fundamentally energy prices are the result of long term government policy in terms of how they fund our national grid and invest in building power plants. It's got nothing to do with the price cap that the UK government failed to build (enough) Nuclear power plants and it certainly has nothing to do with the fact that the whole of Germany went insane and shut down all their Nuclear plants just in case Germany suddenly became geologically unstable as forewarned in the factual documentary Geostorm.
The real problem is a combination of the fact that the UK government has failed to really tackle its long term energy strategy, and the fact that given this crisis it has chosen some really weird levers to pull to help people, choosing to give out loans and lower council taxes temporarily rather than use the actual benefit systems that they just spent the best part of a decade re-designing.
This is a pretty unconvincing article, because it ignores that the energy price cap wasn't really intended to shield consumers from massive swings in underlying wholesale prices – so it can't really be said to have failed at a thing it wasn't intended to do.
The cap was mostly there to stop some people from being fleeced in specific situations when they were on a standard variable-rate tariff or prepayment plans. It was already set at a pretty high level.
There are a lot of errors here. Not least that the price of renewables somehow ignores their lifespan or that there is a price cap in place on the producers of energy that might discourage investors (there isn't).
I feel like the purpose of the cost cap is kind if misconstrued here, too. It was mostly in place to ensure the poorest people, who are often on PAYG meters and the worst tariffs, don't pay way over market rates. It was never designed to stop the kind of huge increases in costs we're seeing now.
One thing is for sure, we desperately need to ween ourselves off natural gas. Switching to heat pumps etc. for heating can't come soon enough.
tl;dr price controls didn't work (again) surprising no one who understands anything about how supply and demand work. If there's an underlying reason why costs are rising then a price control is just a band aid solution as the underlying cost pressure typically doesn't go away.
The privatization of energy companies in the developed world to me is a giant failure and a classic example of how public-private partnerships like this just end up privatizing the profit while underwriting the losses and it's sold to us on supposed "efficiency" gains.
If you think about it energy consumption is basically a hugely regressive tax. The cost of heating 2000 square feet doesn't change much depending on if you're poor or a billionaire.
I'd honestly support nationalizing these companies, cover grid connection through taxation and provide resident individuals (not corporations) a rebate for $X every year in their tax return to cover expected usage.
The argument doesn't go away though that nationalised industries are largely unaccountable like the governments they report to.
I worked for the railways immediately before and after privatisation. I can't speak for the whole network but there were a few of us who enjoyed the work and a whole load of people who were happy to sleep through most of their night shift (including the Managers). The awful truth is that money is a powerful motivator for Directors and shareholders although clearly with the danger of moving too far the other way.
I'm not sure there are any decent models that could get the best of both worlds. They tend to be nasty bureaucratic PPP type deals which bring more mess than they clean up.
The problem is, of course, that high energy prices are a huge negative for those who can't afford them. All the proposed carbon tax schemes I've seen are a carbon tax and dividend - you tax carbon, and redistribute the profits to those who can't afford the higher prices.
Right now, we've got the carbon tax, but the dividend is going into the pockets of oil companies - exactly the people you don't want to be building up cash reserves in the fight against climate change.
The other issue we have in the UK (and maybe elsewhere) is that the cost of energy is borne by the tenant, but the cost of renovations would be borne by the landlord. This means that landlords have no incentive to improve the energy efficiency of their houses, and tenants have no ability to. We should be changing that - make landlords of energy inefficient houses pay for it.