Red, Green, and Blue

What stared as a murmur of discontent is turning into an increasingly vocal chorus of protest as the British public begin to feel the pain of rising inflation, with already high fuel prices predicted to rise by as much as another 40% by the end of the year.

With a tank of fuel for the average family car costing close to $150, high fuel prices have effectively acted as one very large carbon tax – and effective they have been. Britons have reduced fuel consumption by 20% during the past year, driving less, and driving more slowly at the same time. Sales of fuel efficient vehicles are at an all time high.

But unfortunately this is not politically sustainable. The aforementioned protest is hurting the government’s popularity badly as disposable incomes are eroded by fuel bills. Having previously made broad promises to reduce Britain’s CO2 output by up to 80% by 2050 in a bid to profess world leadership on Climate Change, Prime Minister Gordon Brown has been carefully avoiding any kind of statement on environmental targets during previous months. Meanwhile Britain is set to miss most of it’s legally binding and far less ambitious climate change objectives anyway.

In fact, Brown is now heading in completely the opposite direction with a visit Saudi Arabia this weekend in a bid to convince the Saudi’s to increase oil production by 500,000 barrels a day. Quite how an increase in fossil fuel output tallies with targets to reduce CO2 emissions remains unexplained.

The problem is, that whilst the direct impact of higher prices is highly effective in changing consumer behaviour, politicians need a few carrots to go with the sticks. But since green alternatives such as the development of public transport are prohibitively expensive in densely populated countries like Britain, carrots are in short supply.

One system that has never failed to supply carrots is market based capitalism, and baring any fundamental change in Western governmental organisation we are going to need a market based approach to correct the fundamental reliance of our economy on oil. This means that we need to take cap and trade seriously.

Although cap and trade has been described as ‘just another tax’ by it’s many detractors, there are some fundamental differences. Yes, consumer prices will rise in the short term – investment capital required to implement low emissions technology has to come from somewhere. But cap and trade will bring the market to bear on emissions, providing a new competitive vector for firms by starting a race to develop efficient technologies – meaning lower prices and higher profits.

Meanwhile, Gordon Brown’s opposition are making the most out of the situation. “We can’t afford not to go green”, says Conservative Party leader David Cameron, adding that “the era of cheap oil is well and truly over”.

Here Cameron has a distinct advantage – when voters go to the polls in next year’s UK general elections, as the incumbent Brown will be judged primarily on performance – a performance that has presided over some rather bumpy economic times. Cameron, meanwhile, will be judged on potential – the potential to make positive changes, whilst being in the handy situation of being able to blame Brown’s Labour government for the pain that voters are currently feeling.

The only problem is that Cameron hasn’t yet been able to tell us what those positive changes actually are, with no details emerging of any kind of game plan for a green British future.

If the cheap oil era is well and truly over then a game plan that looks beyond the simple political solution of taxing relatively well-off motorists is going to be urgently needed – urgently needed to prevent current protest from turning into dangerous instability.

Read more about Green Great Britain:

Peak Oil In Europe: A Preview

Google Earth Gets Gordon Brown’s Clap on Climate Change Tracking Tool

The Green Tax Man: Good or Bad?

Image credit: Steve Parker at Flickr under a Creative Commons license

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