Coal, oil and gas industries in the UK cause at least £44 billion pounds of damage each year, according to a new estimate by environmental campaigners.

Friends of the Earth have called for the “polluter pays” principle to be applied, with a new carbon tax levied on companies so they can contribute to a green transition.

They argue the fossil fuel industry has long been aware of the harmful effects of climate change, such as its impact on extreme weather.

“If you pollute, you pay. It’s a simple fix to help avoid catastrophic climate breakdown. For decades the oil, coal and gas industry has extracted, processed, sold and profited from fossil fuels,” said Mike Childs, head of policy for Friends of the Earth.

“The costs of this industry are being felt by people and nature across the world through more extreme weather, such as floods, droughts and wildfires. 

Britain’s nuclear power stations recorded a 12% decline in their contributions to the country’s energy system over the past month, as outages raised concerns over how long the ageing plants will be able to keep operating.

A temporary closure of two of the country’s eight nuclear plants resulted in a double-digit drop in nuclear generation in January, compared to the same period last year.

Prospects for new nuclear projects have commanded headlines and government attention in recent weeks, with Hitachi and Toshiba scrapping their plans for major new plants.

But the fate of the existing plants, which usually provide about a fifth of the UK’s electricity supplies, has been pulled into focus by outages due to safety checks and engineering works running over schedule. Nuclear outages also push up carbon emissions because any capacity shortfall will typically be replaced by fossil fuel power stations.

Plans for the first new nuclear power station for nearly a generation in the UK have got the go-ahead from the energy secretary, who has said he is granting planning consent 

Ed Davey told the House of Commons the French energy firm EDF would be allowed to build two new nuclear reactors at Hinkley Point in Somerset, on the site of an existing power station, which is due to close in 2023.

“It’s vital to get investment in new infrastructure to get the economy moving,” Davey said. “[Hinkley] will generate vast amounts of clean energy and enhance our energy security. It will benefit the local economy, through direct employment, the supply chain and the use of local services.”

The two 1.6-gigawatt reactors will become one of the biggest power plants in the UK, providing enough electricity for up to 5m average homes. The nuclear plant is expected to be the first in a series of new ones the coalition has proposed as part of its plans to replace ageing coal and nuclear facilities that are due to be closed over the next few years.

However, the symbolic decision on planning permission still leaves Davey’s department for energy and climate change and EDF locked in negotiations over how much subsidy the company will get during the life of the plant. It is thought officials are discussing a contract that would guarantee the French company being paid nearly £100 for each megawatt hour of electricity produced over 30 to 40 years.

EDF Energy is extending the operational life of two of its UK nuclear power stations by seven years.Hinkley Point B in Somerset, and Hunterston B in North Ayrshire, are now expected to remain operational until 2023. Both had been due to cease generation in 2016.

Two other nuclear plants, Heysham in Lancashire, and Hartlepool had their life extended by two years in 2010.EDF also hopes to build a new power station at the Hinkley Point site. Last month it took the first step towards that goal when its subsidiary NNB Generation Company was granted a nuclear site licence by the Office for Nuclear Regulation.

The licence means the company has developed the required plans, procedures and structures to build a new power station.

The government’s nuclear energy plans were in trouble on Wednesday with Chinese investors withdrawing interest in two projects and local councils postponing a decision on hosting atomic waste storage.

Areva, the French nuclear engineering group, confirmed that it had pulled out of the running to buy a stake in Horizon Nuclear Power, the enterprise planning to construct new reactors at Wylfa in Wales and Oldbury in Gloucestershire. Areva said its partner, the state-owned China Guangdong Nuclear Power Group (CGNPC), had also shelved its bid.

“Areva and CGNPC have suspended their interest in the planned sale of Horizon Nuclear Power and did not submit a bid,” an Areva spokeswoman said, adding that the company was still committed to new nuclear in the UK through other avenues.

This is a blow for the government because Areva is the most advanced with getting regulatory approval for the design of its European Pressurised Reactor (EPR) while the Chinese are considered to have the deepest pockets.

Two other bidders, one involving US based engineering group Westinghouse and the other led by Hitachi of Japan, are still in the running to take a stake in Horizon – although Westinghouse’s backer, another Chinese state-owned firm, China National Nuclear Power Corporation, is also understood to have withdrawn from the consortium.

“The Chinese could not get the commitments they were looking for from the British government,” said one source with contacts in the Beijing nuclear industry, adding the problem was about technology rather than political issues. Some British MPs and commentators had raised questions about the wisdom of allowing Chinese state firms access to sensitive UK energy systems.

“China is poised to make a dramatic intervention in Britain’s energy future by offering to invest billions of pounds in building a series of new nuclear power stations.

Officials from China’s nuclear industry have been in high-level talks with ministers and officials at the Department of Energy and Climate Change (DECC) this week about a plan that could eventually involve up to five different reactors being built at a total cost of £35bn.

Greenpeace described the move as desperate, while others warned of security fears, but the government has been courting China as the UK atomic programme has been hit by rows over subsidies and worries that EDF – the French company with the most advanced plans to build new reactors in the UK – could be hampered by the change of government in Paris.

China has operated its own atomic plants since 1994. It is awash with cash from its hugely successful industrial expansion and sees the UK as a potential shop window for exporting its atomic technology and expertise worldwide.

Companies from China have already invested in or taken over other infrastructure assets in Britain, such as Thames Water, the port of Felixstowe and the Grangemouth oil refinery. They also own businesses ranging from Weetabix to the Gieves & Hawkes tailoring brand.”

“The Mox nuclear fuel plant at Sellafield was closed on Wednesday , with the loss of around 600 jobs. The closure is a consequence of the Fukushima incident in Japan in March, which has closed down much of the nuclear industry there and led to a rethink of nuclear power around the world. But the government said the move had “no implications” for the UK’s plans for new nuclear reactors.”

Wages in West Cumbria are amongst some of the highest in England but are heavily dependent on the nuclear industry – this will be a real body blow to the local economy with few other earning opportunities of this scale for those affected.

It leads me to reflect on the current discussions about the distribution of business rates to local authorities going forward. Allowing authorities to keep most or all of their local rates could cause a major redistribution of local authority resources in a potentially really challenging process making the status quo very hard to retain in any form over the next 3 years. Overall urban authorities will be gainers but for some individuals rural authorities which host big bits of infrastructure like this might be winners in this particular lottery

Food for thought?