Professor Hamish Low


James Meade Professor of Economics Hamish Low talks about the UK’s legal commitment to reach net-zero climate emissions by 2050

Published: 22 January 2021


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QUAD editor Richard Lofthouse interviews James Meade Professor of Economics, Professor Hamish Low (Brasenose, 1990) about the UK’s legal commitment to reach net-zero climate emissions by 2050.

The report is titled Absolute Zero and considers how the UK might attempt to fulfil its climate goal, starting with existing technologies rather than assuming that we will be rescued by a technological silver bullet.

As a specialist in applied microeconomics Hamish has valuable and original insights, while the report itself is an extraordinary wake-up call for the UK.

Richard Lofthouse  0:02 

Well, thank you very much indeed for speaking to us.

Professor Hamish Low, James Meade Professor of Economics at the University of Oxford and a fellow of Nuffield college.

So we have this wonderful report in front of us, quite radical, called Absolute Zero. Delivering the UK's climate change commitment with incremental changes to today's technologies. And it's multi-authored. And so you're one of several authors. But you're coming at this from economics. And then there's the report itself, which has a quite a hard hitting executive summary saying that we need to do all sorts of pretty radical things to be within a chance of hitting net zero climate emissions by 2050.

Tell us how you first got involved?

Hamish Low  0:56 

Sure. So as you said, there's a list of numerous co-authors in this, the bulk of the team are engineers, and I'm an economist, because my involvement was from talking to engineers, in particular, to [Professor] [Julian] Allwood, who's the lead engineer on the on the project, about the gap between engineering and economics. And we realised that our two disciplines are coming at this question from very different points of view. And they're not really talking to each other or getting things to kind of add up. So that an engineering perspective is all about trying to think of what's the kind of magic engineering solution, the technical solution, which can solve our climate change problems. And economists were not thinking about those technical solutions at all, they were just thinking about how do we get the prices right? And how to get them the crisis, right, and lead us to get to the right sort of outcomes. And that sort of mismatch of communication is what we tried to, to bridge. And that's where we then started working together on this report trying to come up with what does it actually mean in terms of our engineering options, what's actually feasible in terms of economic adjustment over the next 30 years. And that's what we, that's where it all kind of came from.

Richard Lofthouse  2:07 

Fantastic. I noticed immediately in the executive summary, that one of the core points of the report is that politicians have tended to speak about these immense challenges in terms of technological silver bullets. We've just got to wait a little bit longer, and they're just over the horizon. And then, actually, as a society, there's not much we have to do except sit back and watch technology takeover. But the report's really saying absolutely no to that, that  on the timeline that we've got to 2050. That's not feasible.

Hamish Low  2:45 

This is correct. So one of the things we wanted to do was distinguish between what happens between now and 2050. When we get to what we call absolute zero, we have zero carbon emissions to now 2050. This is a very hard deadline. And the notion that we've got some silver bullet, which we don't currently have in place at scale, which will then come along and solve the problems by 2050, which I don't think is realistic. But all the evidence from history and all the evidence we have on scalability means we've not been able to do that. It's not to say that some of these solutions, which which are coming forward now, are not going to be the kind of valuable tools for us in 100 years, or 80 years or in the long term. But in the short run in the medium run, for us to meet the 2050 guidelines we have to rely on we believe that we have to rely on technology, which we currently have available.

Richard Lofthouse  3:43 

So the sorts of discussions that society should be having. They range here really in terms of diet, travel...there's a direct reference to beef and lamb being a problem because ruminant livestock are a large source of emissions. And then there are the really big ones like flying, and maybe even when we're talking about electric cars, but they're getting heavier, and they're going to be very, very hungry in their demand for electricity. But I believe that your position in particular is one where you see electricity as absolutely key.

Hamish Low  4:26 

commodity here for all the things we want to do is that right? Yes, maybe in way we can think about all the things which we like to do today, which produce carbon and all the things which we like to do, how substitutable are they? How much of the thing can be substituted into other activities. Now, the other activities could be activities where the production happens differently or it could be different sorts of consumption. I think kind of the distinction there has to be some activities which we think the one No, at the moment no viable substitutes, like making cement, we don't think there's any viable substitute for that at the moment. There's other activities where we think we can shift the way in which we're producing goods, the way we're consuming things, to make them more electrified. So for instance, cars are a good example. Because then it becomes, it's no longer about how much carbon has been produced by cars, we know we've got these targets that we're going to have only electric cars in the UK, that target is going to, obviously lead to an increase in the amount of electricity is going to be needed. And electricity for us to meet our carbon targets has to be on a non-emitting basis that electricity produced. So the heart of this is, is where all the activities we want to do, we can then think about it as being non-emitting in terms of being driven by electricity. But the unit then that really matters is what's the price of electricity?

Richard Lofthouse  5:52 

If we go back 20 years, there was this attempt in Europe to have a carbon market with carbon pricing. And so I, I was coming into this interview with you thinking that everything is about the carbon price, but I think your view is somewhat different

Hamish Low  6:21 

Carbon pricing was the right discussion when we were thinking about trade-offs between different activities that produce carbon. So maybe we won't have more volatility, less one other activity, both of which are producing carbon just in different amounts. So the price allows that sort of market for trading between carbon that's no longer relevant. That's not the discussion which we should now be having. It's not the discussion because we need to be in a world where we're not producing any carbon. And the only price which that's consistent with is a price of carbon, which is infinite. That's going to stop us consuming any carbon. So I think that's where the debate has moved on, I think a lot of the discussion we've seen is still couched in terms of carbon taxes and so on. I just think that's the wrong debate. That's not the right way of thinking about what the problem now is, we've got to think about all these demands  on electricity. And we've got a limited capacity and how much emitting or non-emitting electricity we're going to have. And how do we allocate that. So that's where the electricity price is the key one, rather than the carbon price, what do you think's going to happen? I mean, I know the report says that we need a 300% increase in non emitting electricity generation storage, distribution and load balancing. And even that only gets us to about 60% of our current net energy needs, on this normative basis. So I mean, that's a huge change in the next three, three decades. Yes, just to be clear, what we're calculating, we're thinking if we take all the activities, which are currently emitting, like driving, and for instance, in manufacturing, and we transfer all of those to being produced by electricity, and then ask us ask ourselves on the basis of our current rollout of non emitting electricity, how much of that result in demand for electricity we will be able to meet. Now bear in mind, at the moment, we're able to meet, we're currently meeting 50% of our current electricity needs with non emitting sources. The problem is, by the time we have scaled up the demand to allow for all these new changes, we're only going to be able to meet 60% of the resulting electricity demand. So that's exactly why the price is such a big issue, we've got to find some way of cutting our electricity demand by 40%. And deciding which bits of society we want to cut. And I think it's fallen, I think that's where the key issue is, the individually, as firms or as producers were thinking, Oh, I can move to an electric situation, I can move to complete electrification, and that will mean zero carbon. What that misses is this aggregate problem across the country or across the world about the total amount of electric electricity, which will be produced is not enough to meet those demands.

Richard Lofthouse  9:17 

What I really like about the report is the way that you don't dodge the painful subject. So for instance, if we just keep going with our electric car discussion. This calculation of being 40% short, they actually say, therefore, by 2050, we will either use 40% fewer cars, or they will be 60% the size -  that the cars will become smaller or lighter. That's the only way you could square that circle. There's no other way. I find that very thought provoking because that's a problem that society could begin to get his head around.

Hamish Low  10:00 

It's not obvious that as many people need to drive all over the place as they do, currently, it could be that there's a modal shift to electrified light rail, for instance, or electric bicycles. In certain senses. This is the sort of thing you're starting to see, isn't it? But I think even just narrowly thinking about cars, if we electrify cars, but keep them at the same size as they are now, then that does actually solve the problem. And you can see Tesla introducing these large electric cars. And sometimes that just kind of perpetuates the problem because the amount of electricity that you use, and that's where I think there's over the last 30 years, the average car sizes doubled.

And it's like, what we actually benefited from Well, how much have we gained from that doubling in size? So I do think there are changes we can make. And one of the points about making these little report and these numbers is just to be clear about where the trade-offs have to fall?

Richard Lofthouse  10:56 

Can we perhaps just jump in and raise the two thorny issues that I've mentioned, lots of people are thinking about one is nuclear. And the other would be, you know, whether it's green, truly green? Because it's a non-fossil source of energy. But it's still controversial. I mean, could you just comment on that?

Hamish Low  11:23 

I don't want to say the nuclear is not part of the solution. I mean, nuclear is a key non- emitting electricity production. And that can be part of the solution. I think it requires an astonishing political commitment to get anything like the degree of nuclear power up to help us solve the problem. And history. If we look at what the history is of trying to get nuclear power stations up and running, to get nuclear power stations at the scale we need on the grid by 2050. Seems to me a pretty tough event seems to be an impossible answer for this problem.

Richard Lofthouse  12:06 

The other the other subjects who wanted to raise concerns carbon capture and storage CCS. Not ready really scale. I was expected to have they were expected to be utility scale, demonstrating plants 10 years ago, I think the report says that they never even happened. Is that another example of a silver bullet technology? That's a bit of a claim error? Yeah.

Hamish Low  12:35 

I think it's a kind of really classic example of the silver bullet technology, because it's so attractive. And it looks like there's the principle of it can be achieved. It looks like we should be able to make it work. The reality is, is you're saying it hasn't actually been produced? at any scale, any commercial scale, anywhere. Now, what that means is for us to go from the point of having no scale at all, to being of significant scale by 2050. Is not that seems to me that the that's the that's the fairy tale solution. That's the silver bullet. No, maybe it will happen. But it's a fairy tale. It strikes me as not to say that in 100 years, that's not going to be part of the solution to our problem, which it will probably develop and implement CCS, maybe that's the solution. And maybe, I think for us to focus on what we should be focusing on is where are we going to be in 2050? How do we actually achieve 2050 with technology, which is currently shown to be workable, and currently show but shouldn't have the potential to be scalable? And CCS hasn't got that. It has a lot of backers and a lot of talk, but it hasn't actually got that level of potential on the horizon we're talking about.

Richard Lofthouse  13:52 

Yes, thank you very much. This is a UK report, commissioned by the EPSRC [Engineering and Physical Sciences Research Council, UK]. So it's principally about the UK. But there's obviously an international dimension to climate change, which is an international problem. I think you said that the UK is a little bit naughty as being stands because it doesn't own the emissions that are imported. So when a ship docks in Southampton, the flow of goods from China, the emissions associated with the manufacturing of those goods, sit with China, they don't we don't own them ourselves.

Hamish Low  14:33 

To be fair, no country calculates emissions in the way you just described. So every country calculates their emissions on the basis of what they're producing. In that particular countries and UK would calculate how much carbon we're contributing to the the climate problem by looking at how much we're producing domestically. So if we shut down domestic industries and we shift those industries abroad, then that helps the Carbon situation. It's a common practice. And it's a really counterproductive practice because it allows a pretence that we're doing something. As we've seen in the UK, these big declines the amount of, of carbon being used in manufacturing, that's not a sign that we're actually making a lot of progress. In reality, what we're doing is we're just exporting it.

Richard Lofthouse  15:21 

So that's, that's on the negative side. But on the positive side, you're convinced and your fellow authors as well, I think that despite this international dimension, which is thorny to put it mildly, there's no excuse for not doing anything. And actually, there are lots of silver linings as well. So when, beyond 2015, the report is quite notable for noting all sorts of renaissances in things even such as manufacturing, where having done all the right things now taking the hit, or the pain or the dislocation and adjustment, we're actually come out of it looking quite good. Is that right?

Hamish Low  16:02 

Well, I think there's the potential for how we can come out of it. I think that the key thing I want to stress the report is, the risk is what are what are the long term prospects? Like what are the long term prospects for prosperity in the UK and prospective world, those long term prospects depend on the speed at which we can increase nonlimiting electricity production. The faster we do that the faster we can grow, and the more prosperity can increase. I think that growth is something which we can be thinking of as happening once we've achieved our zero emission. So we can characterise as being up to 2050. We've got this, in some sense, this adjustment process to the electrified nonlimiting economy, and then the growth in the economy. From that point onwards, you can see it's being driven by how fast we can innovate and produce more electricity in an automated way. So the long term prospects, I think, are optimistic. In the sense of these technologies, we're talking about silver bullets, which aren't the silver bullets for a short term problem, but they can have that benefit in a much longer term. And that's when they'll start to pay off. So I think that's the kind of positive message on this.

Richard Lofthouse  17:11 

Great. Well, thank you very much. Professor Lowe, talking to us today about the report called Absolute Zero energy emissions 2050 delivery in the UK is climate change commitment with incremental changes to today's technologies. And this report can be seen at the website, you can find us. So go there in order to find the report and download it. Thank you very much. Thank you.

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