Petrol prices will need to rise to “around £5/litre [at 2007 prices]” in 2050 if the UK is to meet its carbon targets, suggests the author of an independent report on the UK’s future energy system.
The report, produced by the UK Energy Research Centre, concludes that for the UK to emit 80 per cent less CO2 in 2050, oil use must be virtually eliminated and the electricity sector fully decarbonised. To achieve this will require a high and stable carbon price of around £200/tCO2 at 2007 prices by the middle of the century.
Professor Jim Skea, research director at UKERC, said that the required carbon price would lead to petrol costing £5/litre, because of its carbon content. He suggested that this price will “all but eliminate the use of conventional fuel” in favour of biofuels and electric cars.
Dr Mark Winskel, Research Associate at the Institute for Energy Systems and co-author of the report, has said that carbon capture and storage (CCS) is likely to prove essential to the country’s future energy needs. He concedes: “We have made relatively aggressive assumptions about the potential of CCS [to reduce carbon emissions] after 2020.”
But investing in this technology leaves the UK vulnerable if climate change progresses faster than expected. In a scenario where 90 per cent emissions reductions are needed by 2050, CCS cannot play a significant role in decarbonisation because it is prohibitively costly to remove all emissions in this manner, according to Dr Winskel.
The authors call for tougher energy efficiency measures to insure against this risk and emphasise the importance of lifestyle changes to manage our future energy demand. Yet they were unable to offer a clear strategy for this, with Dr. Jillian Anable accepting that: “How [lifestyle change] happens in practice does require some more thought.”
The report findings present a challenge to UK energy policy. A carbon price of £200/tonne is almost four time the shadow price of carbon anticipated by the UK’s Department of Energy and Climate Change, at £59.60/tonne in 2050 (at 2007 prices). Commenting on the reported figures, a DECC spokesperson said: “The Government is putting a price of carbon to help achieve our energy goals, but we are clear this needs to be supplemented with other policies to encourage innovation in low carbon technologies, and help people switch to low carbon lifestyles.”
UK businesses are sceptical about the Government’s ability to meet these challenges, with a new poll suggesting that eight in 10 companies think the 2050 emissions targets are unattainable.