Government’s lack of certainty a barrier to investment in green technology, CBI warns

The warning came with the launch of a series of ‘roadmaps’ in which the CBI sets out low carbon strategies for transport, power, industry and buildings – strategies which it believes will put the UK on track to meet its 2020 climate change targets, secure its energy supply and make the transition to a low carbon economy.

“Achieving all of this in the ambitious timeframe that has been set will require massive investment of private capital, much of it from abroad,” said John Cridland, deputy director general of the CBI. “But this will only be forthcoming if there is certainty about the direction of Government policy, a robust price for carbon, a clear planning and regulatory structure, the right regime for tax and intellectual property, and the skills that will be needed to bring all this new kit to market.”

On the day that the latest car sales figures were issued, showing sales in March down by more than 30 per cent on the same month last year, it is perhaps appropriate the most detailed of the roadmaps is the one for transport, which includes a range of measures to stimulate the market for low carbon cars.

These include a call for the Government to buy a fleet of electric cars to show its commitment to low carbon vehicles; a scrappage scheme to reward consumers who replace older inefficient cars with newer, more efficient models; a substantial uptake in gear shift or dashboard indicator displays of real time fuel consumption by 2012, with a view to these becoming fitted as standard; and for biofuels to be more widely available on petrol station forecourts.

“The UK’s automotive sector is among the most efficient in the world, and has the capacity to be a serious player in the manufacture of ultra low-carbon vehicles,” said Mr Cridland. “But business needs certainty if it is to go ahead with investing in developing new vehicles, infrastructure and filling stations.”

Among the most eye-catching proposals in the other roadmaps are the call for approval of the Severn Barrage project and for a national policy statement on renewable power to be produced as a matter of urgency.

Not used to being on the same side of the argument perhaps, the roadmaps have been welcomed by environmental campaign group Friends of the Earth. "It's good to hear businesses pointing out that not enough is being done to cut UK greenhouse gas emissions by switching to low-carbon sources of power. The Government's insufficient support for renewable energy has lasted far too long,” said executive director Andy Atkins.

But he warned that the CBI’s intervention also falls short of what is needed: "Even the CBI's road map to a low carbon economy won't get us where we need to be ... to avoid catastrophic climate change,” he said.

Friends of the Earth wants the Government to send what it describes as “the right signal” to industry by setting a carbon budget to ensure UK emissions are cut by at least 42 per cent by 2020. It also wants “real incentives” – in particular tax breaks – to encourage companies to invest in renewable energy.