Never underestimate the ability of humans to scupper the best laid plan

10th Jun 2019

 

The UK led the world in creating the Climate Change Committee, advising Parliament on how to meet its international and legal obligations to reduce greenhouse gas emissions. They are without doubt an influential body; their insight helps focus the mind of policy-makers; their analysis can make or break commercial ventures; their predictions can change career-paths and impact upon investment decisions. In short, they matter.

But what they are not, and this is important, they are not implementers of policy. They do not (or should not) try and pick winners and losers but they model the impact of options against the targets politicians have set them. Here is a revelation, a confession if you like, about industry (not just ours, but any). We live on the words from organisations like the CCC, or Ofgem or BEIS officials. If they say what we want to hear, we celebrate and quote it. And of course, the opposite is true. The recent NetZero report from the CCC is no exception. Their modelling suggested that hybrid heat pumps with hydrogen could hit the targets, so anyone with a commercial interest was overjoyed. But the CCC were not advocating this as the way ahead, merely that it’s modelling suggested targets could be met this way.

What all modelling comes up against is people. As any social scientist will tell you, there is no accounting for the dysfunctional decision-making that the human race make. Economists can model what a “rational” decision might be but that doesn’t mean it will be; and politicians reflect what their electors tell them, not what modelling predicts.

So key to future decisions around decarbonisation of heat is “disruption”. You simply can’t put a uniform price on this; each individual is different. So a hydrogen-hybrid may model well but that doesn’t mean it will become the norm. That is why energy policies that work best are ones which the consumer is unaware of; phasing out of coal for gas, reduces carbon emissions but it doesn’t alter the power in our homes; replacing conventional boilers with energy efficient condensing boilers was easy as the consumer didn’t face noticeably higher upfront costs. The future role of gas in producing heat and hot water has to be delivered in a similar way. That way we avoid the risks of humans disrupting even the best-intentions and laid out plans of others.

Best wishes

Mike Foster, CEO

Mike Foster

EUA's Chief Executive

 

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