The product has the following important features:

• The electricity is derived from renewable sources. The company says that this is not the key ingredient of the tariff. Later in this note I try to explain why.
• British Gas will buy and retire Renewable Energy Certificates for 12% of the electricity it supplies. This is probably the most important aspect of the proposition.
• British Gas will ‘offset’ all of the carbon dioxide produced as a result of each household’s purchases. This is the most expensive part of the deal for British Gas.
• There will be a small donation to a green education fund for schools.

BG says that it makes no extra money from the sale of its Zero Carbon product. This looks a justifiable statement to us. The important other questions to ask are:

• Why did BG decide that 10% was the appropriate premium to its main tariff? It could have designed a less costly offering with reasonably strong green features. Do mainstream ‘concerned consumers’ regard 10% as an acceptable price increment? Did BG need to ‘gold plate’ the new product to avoid any criticism that it was a proper green tariff?
• How will the company manage to ensure that it buys high quality offsets, and not the dubious offerings sold by consumer offsetting companies?
• The product is slightly complex and difficult to explain. Can BG cut through the competing claims of other green suppliers to build a large customer base for this high quality offering?

The proposition
After recent price reductions, typical British Gas customers now spend £836 a year on gas and electricity. British Gas gave me these figures for the typical purchases:

• 3,300 kWh of electricity costing £341.50
• 20,500 kWh of gas costing £509.69
• Total £836.50 after deducting a discount of £15 for buying both fuels.

(These figures for average consumption are widely used across the industry. They are slightly out-of-date and I believe actual averages are somewhat higher for electricity and lower for gas. This slightly alters the calculation for the typical price premium for the Zero Carbon product because the new tariff increases the electricity price more than the gas price.)

The Zero Carbon tariff increases electricity prices by about 16% above the standard level and about 7% for gas. For BG’s typical consumer, the cost of electricity will rise by about £50 and gas will increase by about £35. The buyer gets the usual discounts for direct debit payment, for signing up online and for buying both fuels together.

The approximate 10% increase in the total price paid over the year buys ‘belt and braces’ carbon neutrality.

• Renewable electricity. BG will supply all customers with electricity from renewable sources. This sounds important, but is actually less critical than it seems. There is a fixed supply of renewable electricity in the UK. It is all used at the moment, and it doesn’t matter much who uses it. The important thing is that purchasing the electricity delivers a signal to generators to increase the supply of renewable power. At present, they don’t actually need that signal. Many forms of renewable generation are extremely profitable because of the government’s subsidy scheme. The constraint on producers tends to be the slow planning process and the difficulties of getting remote sites connected to the high voltage distribution system rather than the underlying profitability of renewable generation.
• Purchase and retirement of ROCs. Those who generate renewable energy are eligible for subsidy in the form of Renewable Obligation Certificates (ROCs). A generator producing a megawatt hour (a thousand kilowatt hours) is able to sell these certificates for about £48 each, or slightly more than the electricity itself is worth. They are bought by other generators who have not themselves produced enough renewable electricity to meet the government’s minimum target. British Gas commits to buying ROCs to cover an additional 12% of their Zero Carbon customers’ electricity use. These ROCs are then ‘retired’ so that they are unavailable for resale. Effectively this means that they are torn up and ignored. The impact of this is to increase the price of ROCs, force other generators to pay more, and increase yet further the incentives to invest in renewables. The value of this part of the Zero Carbon package will be extremely complex to explain to customers, but it is the most innovative and exciting aspect of the tariff. Those of us who think markets can be used to help solve the carbon problem will be particularly keen on this part of the scheme.
• Thirdly, BG will purchase offsets to counterbalance the full carbon cost of the electricity and gas sold. The company has not yet released details of exactly which projects it will support. In communication with the company, I raised the usual concern that consumer offsetting companies support schemes that do not offer verifiable carbon savings and which are almost certainly not ‘additional’ to what would have happened anyway. BG responded by stressing that it will only use certified emissions reduction schemes that are allowed under the Kyoto Clean Development Mechanism. It will then have to ‘retire’ these certificates as well and I presume it will do this. There are, as ever, concerns about some of the emissions reductions projects operating under the Clean Development Mechanism. But let’s give BG the benefit of the doubt in the first year of the Zero Carbon product while it looks for projects that are genuinely additional to what would have happened anyway.
• The company also makes a £5 donation to a schools’ green energy fund.

In aggregate, the cost of these features comes to about £84, meaning that the company makes no extra profit on the Zero Carbon customers. The extra revenue from the tariff matches the cost.

The consumer appeal
BG has had some success in getting its 15m UK domestic customers interested in taking action to reduce carbon emissions. About 10% of its customers took up the company’s offer of a bespoke energy audit of the home. BG says that 51% of these volunteers said that they would take further actions, and have achieved 10% average savings as a result.

BG says that it thinks that about a quarter of its customers will pay more for a green tariff, and that this number is increasing. This is in line with the impression we are getting from other companies with strong consumer brands.

Nevertheless, it is going to be an uphill task to persuade customers to take the new product. There are three problems:

• British Gas is not necessarily the best positioned utility company to initiate a new green product. Though it has a huge customer base, its relatively high domestic customer prices in 2006 will have dented its ability to sell higher priced premium products today. Customers will be concerned that BG is attempting to profit from their willingness to pay a proper price for a green tariff.
• ROCs are a mystery to all but a handful of nerdy specialists. I have seen people leave the room when they are mentioned. Retiring ROCs is a first-rate idea, but it won’t excite middle England.
• Consumers are beginning to be suspicious of offsetting. M&S has publicly said that it will ‘only use offsetting as a last resort’. There may be ‘good’ offsetting and ‘bad’ offsetting, but asking consumers to believe that British Gas’s offering is genuinely reducing emissions elsewhere in the world is a tough challenge.

Nevertheless, it is possible to sell this product as genuinely the greenest product in the UK market today. (I don’t say that other companies such as Ebico and Ecotricity wouldn’t challenge this assertion, but British Gas can certainly make aggressive and justifiable claims in its marketing.) With enough persistence and consistent advertising, this offering will work.

But I think it is a definite mistake to have launched this product alongside an offering in a lighter shade of green. A second new tariff, Future Energy, uses a much smaller £20 annual price premium to fund investment in renewable electricity and to give money to the schools’ energy fund. If you are launching one complicated product, the last thing you do is increase the confusion by putting out another complex offering at the same time.

The company is rightly pressing Ofgem for a new labelling system that awards stars to good quality green offerings from UK utilities. Such a scheme would give British Gas a high rating for the Zero Carbon product and would help sell it to confused householders. Until we get a simple and comprehensible rating system, some consumers are likely to sit on their hands.

So, high marks to British Gas but considerable concerns about the marketing of the new tariff.

Tyndall has acquired an excellent reputation for its informed and passionate stance on aviation. Broadly speaking, its view has been that continued expansion of aviation is incompatible with the tight emissions targets that the EU and other bodies have set for the years to mid-century. It has consistently said that by 2050 unconstrained air travel will be using up most of the total carbon emissions that the world can allow itself. Aviation expansion will drown out emissions reductions in other areas.

The new report, commissioned by Friends of the Earth, examines what will happen when aviation is included in the European Emissions Trading Scheme (ETS). The ETS is a ‘cap and trade’ scheme that has awarded tradeable allowances to major polluters. The cap will be gradually tightened over a period of decades, obliging CO2 emitters either to produce less carbon or buy increasingly expensive additional allowances from the market.

The major conclusion of this month’s review could have been predicted from previous Tyndall work. After aviation is incorporated into the ETS, aircraft will emit far more than can be sustained if Europe is to rein in its emissions at a rate needed to meet its share of global reductions. Nobody should be at all surprised by this; at today’s carbon prices, the cost of CO2 allowances to cover the flight to Barcelona would be about €5. Even at ten times today’s carbon prices of €20 per tonne, air travel growth is going to continue.

But Tyndall’s methodology is much more sophisticated than a simple examination of the impact of CO2 pricing on flying habits. In fact, the report is so complex that Tyndall and the Friends of the Earth will not capture many new supporters for their view that aviation must be severely restricted.

This highlights a recurrent dilemma in climate change research. The uncertainties and complexities in good scientific work are almost impossible to summarise accurately for a time-constrained audience. In this case, the assumptions, theories and methods are buried deep. To communicate their research to the widest possible audience the researchers would have benefited from laying out their technique in a flow chart and from providing a summary of their conclusions in a full summary.

With these reservations, let’s try to build up the structure of the work.

1. Tyndall notes the 6% current annual rise in European air travel and assumes that this will continue until about 2012. It then develops three scenarios for emissions growth beyond this date which reflect increasingly rapid rates of technological improvement in aircraft and slowing rates of passenger growth. In one of these scenarios, European emissions from aviation start to decline by 2017. Tyndall is not actually predicting this is going to happen; it is saying that if Europe is genuinely committed to emissions reduction, then national and international policies will have begun significantly to constrain aviation within a decade. Technological improvements (primarily in fuel consumption per passenger) will mean declining absolute emissions.
2. The researchers then examine what level of allowances will be granted to the EU airlines. They argue that giving the industry an initial allowance equal to the 2012 emissions from aviation will mean that the ETS will have very little effect. If the airlines are handed a huge batch of carbon vouchers, the incentives to reduce emissions will be negligible. They will rarely have to buy from the external ETS pool and so ticket prices will not increase much. Perhaps surprisingly, this is a very unconventional way of looking at the issue. The general theory behind emissions permits is that polluters price in the full cost of carbon certificates, even if they haven’t had to buy them. For example, most studies have shown that electricity prices around Europe now include the implicit cost of ETS certificates, even though electricity producers have been awarded these allowances at no charge.

Unsurprisingly, Tyndall shows that if the airlines just include the cost of extra emissions after 2012 in their ticket prices, the impact is extremely limited. At current carbon prices, the additional cost of carbon allowances would add a few Euros to short haul prices.

3. The report then looks at the share of the EU’s total carbon allowance taken by aviation in 2050. They show that in some scenarios air travel uses up the continent’s entire carbon allowance. The authors point out that:
   • even if the industry is properly included in the ETS
   • and it achieves major technological advances
   • and passenger growth falls to very low levels

   aviation emissions will still be higher in 2050 than in 1990, whereas other sectors of the economy are expected to make a 75% to 90% cut. They say that the ETS is not enough – the EU must find other ways of radically restricting aviation growth.

This is a difficult report and full of interesting assessments. But it does contain some quite striking divergences from the conventional approach to looking at the share of aviation in the total emissions portfolio. Some of these are highly favourable to the airline industry, others are not.

• Tyndall only includes the impact of CO2. Aviation is also responsible for other pollutants which are normally thought to double or triple the effect of the carbon dioxide. The authors clearly want to avoid controversy since the precise multiplier is the subject of huge debate. In particular, no one yet even guesses at the global warming impact of contrails on cirrus cloud formation. The Tyndall assumption is advantageous to aviation.
• By contrast, the authors use a low estimate of the total future carbon budget that the EU will allow itself. They’ve taken recent and well-respected work by the Swiss scientist Meinshausen as the basis for this view. Meinshausen says that the world will need to keep under 450 parts per million (ppm) of CO2 and other warming gases if it wants to achieve a more than 50% chance of keeping temperature increases 2 degrees below the pre-industrial figure. (So far, we’ve seen about 0.8 degrees of this rise.) The world is already at 430ppm, and the total is rising at over 2ppm a year. So not only does Meinshausen implicitly say that we need to stop emissions rising soon, but we also need very quickly to cut future emissions to below the rate of natural absorption. She may well be right about this, but the consequences of her work are not yet fully incorporated into the assumptions of governments. Nevertheless Tyndall takes her more cautious view.
• As I said above, Tyndall says that ETS costs will only be reflected in ticket prices to the extent that the airlines have to buy incremental allowances in the market. The conventional view among economists is that this is illogical. Even though electricity producers were given huge allowances for free, they still increased prices because a new generator competing against them would have to be buying allowances. Freshman economics says that it is the marginal or new producer that sets the price. But this may not be important: even if the airlines did incorporate the full value of the ETS allowances in their prices, it would still have a negligible effect on what travellers have to pay.
• The airline industry says it can make substantial technological improvements. Many people doubt whether this will happen. For example, an ‘open rotor’ jet engine would undoubtedly cut fuel consumption, but only at the price of much higher noise levels. This would, of course, be extremely contentious politically. It might have been better for Tyndall to assume existing technological improvement rates of 1% to 2% per year. This would have made their assumptions more plausible, as they would have known, but only at the risk of making it easier for the aviation industry to attack their work.
• The researchers are also unusually optimistic about the political commitment of the EU achieving real and early cuts in emissions. Once again, the reason is obvious – they did not want the Commission attacking their work for its failure to include the impact of political action. But one does not have to be a cynic to believe that the EU is still wrestling with the problem of emissions reductions and is a very long way from agreeing to rein back the very rapid growth of aviation.

So this is a useful and thorough study. It says again what the Tyndall Centre has said before – rapidly growing aviation and climate stability are incompatible. The additional pillar derived from this study is that the researchers show that current levels of ETS pricing are simply insufficient to dampen air travel growth. The EU needs other packages of measures, such as an aviation fuel tax.

For fuller analysis of aviation and climate change, go here. (I have prepared a much longer briefing document.)

The debate on whether organic agriculture reduces greenhouse gas emissions is a lively and sometimes acrimonious affair. The calculations are complex, the results depend on myriad factors that are difficult to quantify, and much research remains to be done. Those who give unequivocal answers to the question ‘is organic better?’ may not be recognising the extraordinary uncertainty that still surrounds many aspects of agriculture. Rather than produce a simple answer, this note offers a statement of the competing cases.

This topic has been widely researched but has produced very varying answers. There is certainly no consensus. In general, organic farming seems to be slightly better for the atmosphere than conventional cultivation, but for every ten studies that say this, five say something different. Almost all the conclusions are the subject of passionate debate.

The argument against organic agriculture: conventional farming is better for the planet

1. Conventional farming produces far more food per acre than organic farming. Though comparison is surprisingly difficult, organic yields probably vary from about 50% to about 70% of the conventional equivalent. I say ‘probably’ because some people give figures that are well outside this range. It depends on the crop, the type of soil, and the climate. The importance of lower productivity for climate change is that for every unit of input, the output is lower. Think about organic milk, for example. The cows need to be fed, at least in winter, and the food requires a lot of energy to produce. If an organic cow gives half as much milk as a conventional milker, the energy cost is double. This argument is even clearer when includes the methane output of cows. Methane is a powerful warming gas, and cows produce huge volumes of it. Organic cows produce less milk than conventionally farmed cattle so the methane output per litre tends to be much higher.
2. Most organic agriculture is more labour-intensive than conventional farming. Usually, but not always, the tractor needs to criss-cross the field more often. And if yields are lower anyway, the cost of the energy used is far greater per unit of output. Or take organic tomatoes grown in a heated greenhouse: the labour needed is the same, but the yield is less.
3. Organic agriculture can involve more disruption of the soil. It needs more ploughing, for example. This may increase the losses of soil carbon, though this conclusion is fervently disputed by organic proponents.
4. A system that relies on natural manures may require more methane-producing animals on the farm. Methane is a dangerous greenhouse gas. More manure may also result in higher emissions of nitrous oxide, an even worse climate-changing gas. Replacing inorganic fertilisers with farmyard manure certainly does not have an unambiguously beneficial effect on GHGs.
5. Organic food tends to be imported. The food miles are greater.
6. There may be more wastage in organic systems. Organic fruit and vegetables are more likely to suffer pest damage, perhaps reducing storage life. Data on this is particularly sparse.
7. Ruminant animals in organic systems mature more slowly, so they emit methane for a longer period before becoming productive. (This is particularly important with cows.)
8. Conventional farming may work better with the new(ish) ‘no-till’ or ‘min-till’ cultivation systems. These techniques entail the maximum avoidance of ploughing, which is thought to cause the loss of soil carbon to the atmosphere.

The opposing view: organic farming is the way forward

1. Organic farming avoids nitrogenous fertilisers. These fertilisers take much energy to produce. Their use also adds, perhaps very substantially, to nitrous oxide. Nitrous oxide is far worse than methane or carbon dioxide. Agriculture is the single most important source of this gas.
2. Organic cultivation probably helps build carbon in the soil. Soils that receive inorganic fertiliser tend to have lower carbon levels than fields in long-term organic cultivation.
3. The methane output from the manure from free-range animals in organic systems is far less than from the slurry tanks in intensive beef farming, for example.
4. Though much organic food is imported, the percentage is tending to fall as consumers react to the poor publicity about food miles and adjust their purchasing behaviour.
5. Organic farmers tend to work harder to sell their food locally rather than to the supermarkets or to processors. This reduces the energy in transportation and in manufacturing.
6. Cows do take longer to mature in organic systems, but they don’t wear out so fast from exhaustion, so fewer calves are needed at any time to maintain the stock of productive animals.
7. It is possible that people may waste more organic food, but the consumer will be conscious of the price and the general need to cook and eat the food soon after purchase. The purchase of organic food tends to bring with it an enhanced sensitivity to the need to use foods as soon as possible and not waste expensive ingredients.
8. The calculations of emissions from conventional agriculture very rarely include the impact of GHGs from liming soils to redress the increased acidity coming from the use of inorganic fertilisers. The lime will degrade to give off CO2.

Typical research conclusions
Most research suggests that organic agriculture has marginally lower emissions than conventional methods. But the results are debatable and depend on the crop, the soils, and the skill of the farmer. It is often remarked that comparisons are difficult because organic farmers may well be better at their job. Good farmers become organic farmers. This may artificially advantage organic methods.

Unfortunately, we probably need even more research to get clearer conclusions. Until then, the protagonists on either side will continue to debate the issue with passionate intensity. Of course, organic food is almost certainly better for biodiversity, for the maintenance of soil quality, and for animal health. It may, only may, be better at providing micro-nutrients, but there is very little to support the view that organic food is inevitably healthier. But there is intriguing early evidence that vegetables stressed by the need to protect themselves against pests that would be destroyed by pesticides in conventional farming contain higher levels of complex compounds useful for human health.

‘Is organic better?’ may not be the right question to ask
Organic tomatoes grown in March in heated Dutch glasshouses will be far worse for the environment than imported conventional Israeli fruits. Someone trying to minimise the GHG impact of the food he or she eats would probably do best to follow some simple rules:

• Animal products are generally worse for GHGs than plant-based foods, so vegan diets are far better than carnivorous. This result is generally agreed.
• Raw food is better than cooked. Cooking can represent a large fraction of the total energy in the life cycle.
• Food processing, particularly keeping foodstuffs chilled in factories and in supermarket refrigerators, is usually worse than equivalent minimally processed ambient foodstuffs.
• Local food is not necessarily better than food from afar. ‘Food miles’ do not necessarily imply high greenhouse gas emissions. Sugar made from Brazilian sugar cane, which has very low fertiliser input, may have a much lower carbon impact than East Anglian sugar beet, which has taken large doses of nitrogen fertiliser and then required substantial amounts of energy to process. But, all other things being equal, local food grown and sold in its natural season and not retailed through energy intensive supermarkets is better than products grown on the other side of the globe.
• So, in a conclusion that will not please high-living gourmands, the best foods from a climate change viewpoint are unprocessed, unpackaged vegan wholefoods sold locally and produced in season.