A low carbon economy by 2050?

The UK’s sensitivity to oil and gas price shocks could be reduced by using low-carbon forms of electricity generation, claims energy secretary, Edward Davey.

By 2050, the negative impact that global price spikes have on the UK could be reduced by more than 50%, as a result of climate change policies says an Oxford Economics report which was commissioned by the government.

“Every step the UK takes towards building a low-carbon economy reduces our dependency on fossil fuels, and on volatile global energy prices,” added Davey. “Only last year, the impact of the Arab Spring on wholesale gas prices, pushed up UK household bills by 20%.

“The more we can shift to alternative fuels, and use energy efficiently, the more we can ensure that our economy does not become hostage to far-flung events and to the volatility of market forces.”

The government report shows that energy prices have been steadily increasing over the past decade and are becoming more and more volatile. However, once the UK fully changes to a low-carbon economy, mitigating against the volatility of fossil fuel prices – predicted to be around 2050 – many of the negative impacts of energy price volatility will be halved, it says.  www.oxfordeconomics.com

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