Innovation key to low carbon future

In its latest report on how businesses can benefit from the move to a low carbon economy, 'Pulling Ahead: Innovating For Low Carbon Leadership', the CBI says innovation will be the key driver.

The report says the UK has the ability to play a leading role in the global low carbon economy – estimated to be worth £3 trillion. It highlights more than a dozen case studies where UK businesses, large and small, are already pioneering low carbon solutions. But it warns that this advantage could be wasted without a more "sustained effort" on the part of Government and business.

Addressing dozens of business people, researchers and academics at a breakfast meeting in central London to launch the report today, CBI deputy director-general John Cridland said: "Already the market for low carbon goods and services in the UK is estimated to be £106 billion a year and we know it is growing rapidly [...] Businesses that [embrace innovation] and integrate carbon into their business plans are likely to benefit more quickly [from a low carbon future]."

The report makes 10 key recommendations to Government to encourage low carbon innovation, including ensuring investment goes into training to ensure the necessary skills are there to drive innovation; making the best use of public funds to leverage private finance, through business incubators and loan guarantees, for example; implementing the 2008 Planning Act as quickly as possible; and maintaining and improving the R&D tax credit scheme. R&D tax credits allow relevant companies to deduct up to 175 per cent of qualifying R&D expenditure when calculating their profit for tax purposes and in the case of certain small or medium-sized businesses, provide a cash sum.

"It is encouraging that the UK is already home to the R&D centres of many international companies. What is more open to question is whether this can be sustained in the face of increased investment by our competitors, especially the United States," warned Cridland.

In its report, the CBI has also put forward three recommendations to businesses to improve their prospects for low carbon innovation. It is advising them to make carbon part of their core business, rethink their approach to innovation and enable employees to think creatively.

Today, the CBI also called on the Government to ensure UK firms that develop innovative low carbon products will continue to have their intellectual property protected under international law.

Looking ahead to global climate change talks set to take place in Copenhagen in less than 100 days, Cridland said: "There are worrying signs that the Government is preparing to blink on this issue to help the rapid diffusion of low carbon technologies in developing countries. Any compulsory licensing of these technologies would be counter-productive and damaging in the longer term by reducing the incentive for business to continue innovating."