Business gives cautious welcome to Government plans for low carbon economy

The white paper provides an outline of the 'UK Low Carbon Transition Plan', which is designed to achieve emissions cuts of 34 per cent by 2020 compared with 1990 levels. The Government claims that successfully meeting these targets will move the UK onto a permanent low carbon footing in which the benefits to UK businesses will be far-reaching – maximising economic opportunities, with plenty of growth and jobs.

Among other things the Government pledged to put more than 1.2 million people into 'green' jobs by 2020, to make the average car emit 40 per cent less carbon emissions than now, and to ensure 40 per cent of electricity will come from low carbon sources, such as renewables, nuclear and clean coal. Significantly, the Government claimed that its measures would not come at huge cost to the consumer in terms of energy bills. In a statement, the Department of Energy and Climate Change (DECC) said, on average, an additional eight per cent – or £92 – would be added to today’s household bills through all of its climate change policies.

The Government also today published 'The Low Carbon Industrial Strategy', presenting a series of interventions that are designed to support industries critical to tackling climate change. The Government claims it will put workers and businesses in the UK at the forefront of massive global opportunities by targeting key industries, for example offshore wind, marine power and carbon capture and storage, and regions in which the UK has competitive or commercial advantage.

Business Secretary Lord Mandelson’s said: “The strategies we are launching today outline the Government’s vision for achieving a low carbon future… [that will position the UK] to benefit both economically and environmentally.”

Dr Neil Bentley, the CBI's director of Business Environment, commented positively on today's announcement, saying: “This is a promising start, and includes many measures the CBI has been calling for to reduce emissions across the economy”. But he also struck a note of caution: “Question marks remain over the ability of these plans to attract the £150 billion of private sector investment needed to renew our energy infrastructure, improve energy security, and allow us to meet climate change targets”, he said.

Measures announced today that will directly impact UK businesses include a 10 per cent target of annual emissions cuts between now and 2020 to be achieved through greater efficiencies in UK workplaces. The Government pledged to help support all businesses to be more energy efficient, with a campaign due to be launched later this year to help small and medium businesses in the shift to low carbon.

The Government also outlined how some of the £405 million of low carbon investment funding announced in the Budget would be spent. It pledged £120 million to the offshore wind industry in the UK, and up to £60 million to cement the UK’s position as a global leader in wave and tidal energy. Beneficiaries of funding include the the Wave Hub, a testing facility off the Cornish coast; the European Marine Energy Centre (EMEC) in Scotland; the New and Renewable Energy Centre in Blyth, Northumberland; and a new Marine Renewables Proving Fund to support testing and demonstration of pre-commercial renewable devices.

At the same time, the Government designated the South West as the country's first 'Low Carbon Economic Area', saying it would invest a total of £19.5 million into a two-year £100 million programme to turn the region into a leading centre for marine energy technologies.

As par of its long-awaited Low Carbon Transport Plan, the Government today pledged to cut carbon emissions from transport by up to 14 per cent by 2020 and gave further details of cash incentives of £2,000 to £5,000 for new electric vehicles as well as outlining how it will tighten emission regulations across the haulage sector.
Also published today, was the Renewable Energy Strategy, which maps out how the Government will deliver the UK’s target of getting 15 per cent of all energy – electricity, heat and transport – from renewables by 2020. It said it would do this by speeding up the planning process for renewable projects and taking direct control over access to the grid, ensuring renewable projects had fast access to it. Among Government actions will be the setting up of an Office for Renewable Energy Development within DECC and £11 million to help local authorities smooth out the planning process.

To further lend its support to the renewable energy sector, the Government also announced a consultation on the future of the Renewables Obligation scheme, including proposals to extend the subsidy scheme to 2037.Such is the wide-ranging nature of the measures being proposed that they will literally affect all aspects of life, with direct consequences to the business sector.

“Ultimately, the real driver of change will be the public," commented Dr Bentley. "Directly or indirectly consumers account for three fifths of emissions. It will be their buying power, and how they decide to use energy at home, that will create the demand for firms to come up with products and services that help drive energy efficiency."

Energy and Climate Change Secretary Ed Miliband stressed that a partnership between Government and business was necessary to meet its goals: “We must combine the dynamism of the private sector with a strategic role for Government to deliver the benefits of innovation, growth and job creation in the UK,” he said.

Plenty of UK businesses were lining up to lend their support. Tesco executive director Lucy Neville-Rolfe took the opportunity to trumpet the supermarket giant’s green credentials while commenting, “We welcome the white paper as we know how important combating climate change is now and to future generations. Tesco is a leading player in tackling the challenge. Our measures are designed to reduce our own emissions and make it easy for customers to make green choices,” she said.

Other business leaders said it was important for the Government to maintain a strong sense of direction while navigating the roadmap to a low carbon economy. Roman Webber, Deloitte UK head of Renewable Energy, commented: “The fear is the Government's white paper may reveal that the ‘aspirations’ may stay but the roadmap is likely to be re-drawn”.

Some environmental groups also lent their support. John Sauven, executive director of Greenpeace, said: “If this plan becomes a reality, it will create hundreds of thousands of green jobs and make Britain a safer and more prosperous country”.

However Friends of the Earth executive director, Andy Atkins, was critical of the Government's low carbon transport strategy. "We're pleased that the Government accepts the need to change the way people travel – but today's announcement contains few new initiatives to make this a reality," he said."New technology such as greener vehicles will make a big dent in emissions, but it would cut much more carbon if the Government gave people far more alternatives to driving cars."

With the wind, wave and tidal sectors expected to deliver the bulk of the targets, it was crucial that the renewable energy sector lend its support to the proposals. Maria McCaffery, chief executive of BWEA, the UK’s leading renewable energy trade association, endorsed the proposals, saying: “We welcome the Government’s commitment to delivering on the 2020 targets”. She called for cross-party consensus on the detail of delivery. “This will help convince investors that the country is serious about fighting climate change and developing domestic, renewable sources of energy.”
 
Ms McCaffery was in no doubt about the responsibility of UK businesses, as well as Government and consumers, to travel in the same direction towards a low carbon future. “We are at a point where industry, Government and the people of this country have a converging interest in protecting the UK’s environment, while ensuring our long-term energy security,” she said.