Public policy and the green economy
“The UK is losing momentum in the green economy race and there is only a small window of opportunity to assert leadership”, argues the Aldersgate Group in its latest report on the green economy. Published a few days after the first meeting of the new Green Economy Council, the Aldersgate study makes a clear stand on good regulation: “A strong regulatory and fiscal framework will be vital for success, combined with a concerted push to get behind those sectors that have competitive advantages.” Concerns that the Government doesn’t get the economic value of good environmental regulation were expressed at the council meeting. So what part should public policy and Government play in driving the green economy?
Greening the Economy: A strategy for growth,jobs and success highlights the following key public policy issues:
- Current public expenditure for RD&D on the environment should be regarded as a minimum. Any cuts would contradict and undermine the Government’s ambition to be the “greenest ever”.
- Greening public procurement: the £166 billion annual public procurement budget represents a major opportunity to ensure the full analysis of lifecycle costs are considered, accelerating the growth of environmental markets and saving taxpayers money.
- 2011 Budget must set out a clear framework for a comprehensive and progressive green tax shift “to raise significant funds for the public finances” and investment.
- Targetted funding: given the success of the Zero Carbon Hub, it was unfortunate that the Government has withdrawn its funding contribution to the body that has been mainly responsible for de-risking this green housing policy.
- Support for specific sectors: for example, as little as one-fifth of the investment for recent UK offshore wind projects (such as the London Array and Thanet) has gone to British based firms. It is envisaged that benefits for UK firms will be increased through a recent package of measures, such as the commitment for public investment in port infrastructure.
- Skills: the gap between employers who need a skilled workforce in the new ‘Green Economy’ and those looking to acquire them doesn’t seem to be narrowing. Government leadership is urgently required.
These and other proposals for public policy form an integral part of the Aldersgate vision for a green economy. They provide a timely antidote to the mantra of deregulation and free market solutions dominating government thinking.