The government’s timidity on green investment is costing us all
This morning I joined UK Climate Change Envoy Sir David King at the TUC’s annual climate change conference, looking at how we address the urgent challenge of climate change, and maximise opportunities for green growth.
Green investment is an area where the government has been consistently guilty of dithering, just as they have on the UK’s cost of living crisis. Both issues have rarely been out of the headlines in the past few weeks, and I believe both are closely linked.
Last month Ed Miliband promised a 20-month freeze on electricity and gas bills if Labour wins the election. A welcome challenge to price hikes at a time when real pay is being cut.
The big six energy firms responded immediately, claiming such a move would starve infrastructure of investment. Energy chiefs tried to blame green obligations for the size of consumer bills. Not top pay or shareholder dividends but the cost of a corporate responsibility to invest in energy efficiency. SSE wasted no time in announcing they would hike bills up by 8%, and just last week British Gas announced a shocking 9% rise. And it’s likely that others will follow.
This is nothing new. TUC research shows that over the past decade energy bills have risen by four times the rate of inflation. And with people suffering the longest real wage squeeze in over a century, many will be left with a Hobson’s choice this winter: to heat, or to eat.
Consumers want action from politicians to tackle the excess profits and undeserved bonuses of the big six energy companies. But instead, green investment is now being criticised, often by the same people who champion tax breaks for fracking, recently announced by the Chancellor.
Recent reports that 1,400 staff at the Environment Agency are to lose their jobs, at a time when we need their expertise and experience the most, is an indication of how little the government is prioritising green growth.
And politicians’ timidity on green investment is costing us all dear. Cutting carbon emissions should be a great opportunity for the UK to create new apprenticeships and jobs, and rejuvenate our manufacturing sector. Moving towards a low-carbon economy could generate sustainable growth outside London and the South East.
But as things stand, we are losing the global race for green growth. While competitors such as France and Germany press ahead with active support from their governments, in the UK ministers have shown little appetite for supporting low-carbon business.
The theme of today’s conference was “green growth – no turning back” because the paradox we face is this. As evidence of catastrophic climate change mounts, the Government’s commitment to sustainable low-carbon growth seems to be faltering.
The crash, the recession and tensions within the coalition – in different ways, all have deflected us from the critical task of greening our economy. Yet that task is now more urgent than it was even five years ago and the penalties and cost of inaction are more severe.
The Intergovernmental Panel on Climate Change’s latest report, published last month, made for pretty sobering reading. It highlighted not just the risks of global warming, but the role that humanity’s carbon addiction has played in causing it. Within two to three decades, we face rising sea levels, heatwaves, droughts and extreme weather.
All of which underlines the need for a global carbon budget.
As Lord Stern recently warned, unless we act now we will exceed our absolute maximum CO2 limit within the next 15 to 25 years. That’s why we’re right behind the EU’s attempt to develop a 40% carbon reduction target for 2030. Or 50%, if a global deal is struck in Paris by the UN in 2015.
The TUC wants a recovery that is sustainable in every sense of the word, environmentally and economically.
The government needs to take the lead in facilitating green growth in the areas that need it most, starting with a smart, active low-carbon industrial strategy. Connecting all the pieces of the policy jigsaw. Green apprenticeships and skills. R&D, innovation and science. Ambitious investment for the future through a proper Green Bank and the Business Investment Bank.
We need state support for strategically important low-carbon sectors and industries where Britain still has the potential to lead the world: renewables, electric vehicles and carbon capture and storage (a technology that could not only revitalise our coal industry and deliver strong economic benefits, but also provide a much better deal for consumers).
Our green economy is already worth around £120 billion and it accounts for nearly a million jobs but it could be so much bigger and better. We have the workforce, the scientific know-how, the creativity, to lead the world in green economics by 2020. All it needs is the political will to make it happen.
It’s time for the government to stop dithering and make a firm commitment towards reducing carbon emissions. It can start by taking a firmer grip on an energy sector that is very good at generating short-term profits, but which is so far failing to meet our longer term low-carbon energy needs.