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Coffee House

An important intervention on energy policies, but will the Lib Dems pay attention?

6 February 2012

12:48 PM

6 February 2012

12:48 PM

The economist Dieter Helm is one of the few policy thinkers respected on both sides of
the coalition. Oliver Letwin is a long-standing friend of his and Clegg’s office views him as one of the best economic brains in the country. All of which makes Helm’s attack on Chris Huhne’s energy policies in The Times today as interesting as the anti-wind farm letter signed by a 101 Tory MPs.

Helm argues that the policy of huge subsidies for renewables is a mistake and that shale gas is a game-changer. Helm writes that, while renewables have a role to play,

‘Coal burning is not going to go away because of wind. Gas is one transition option, a bridge to decarbonisation. If we concentrated on getting a proper carbon price in place —
including on all those carbon-intensive imports — then we would find out which way is quickest and cheapest to get emissions down. Carrying on as we are will probably end in tears. It
won’t do anything about climate change and it will put up bills.’

The question now is whether the coalition gets this and whether the Liberal Democrats are prepared to move away from ideological greenery and take a more pragmatic approach. I suspect
that Ed Davey might be prepared to but he’ll want to be careful of the feeling of his party, who’ll take any change of tack as evidence of caving into the Tories now that the combative Huhne
has gone.

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