Study calls for clear strategy on green growth in Budget

The Aldersgate Group — a group of business, political and social leaders seeking to promote a sustainable economy — will release its 'Greening the Economy: A Strategy For Growth, Jobs and Success", next week, to promote economic recovery and keep the UK on pace with other countries in promoting a green economy.

The study shows that other countries around the world are creating plans to gain global investment in environmental technologies, while the UK is lagging behind. It argues that creating a Budget for green growth would help reduce the budget deficit and promote economic growth while creating more jobs.

"The Chancellor has promised a 'budget for growth' but we believe this must be a 'budget for green growth’," said Peter Young, Aldersgate Group chairman. "The UK needs an explicit strategy to take advantage of the global shift to a green economy; driving jobs and exports. Cuts alone will not deliver a competitive economy."

Pointing to other nations, such as India, which has created a National Action plan on Climate Change that is estimated to generate over £600 billion over a decade, the report warns the UK economy risks being left behind unless the Government takes urgent action.

Green innovation
It proposes the Government adopt a policy that encourages green innovation and backs sectors the UK is strong in, such as automotive and construction, but which don’t fall within environmental categories. This way, it says, the UK could gain competitive advantage. The report also suggests that by taking a sector-specific approach in terms of green investment will make it easier for new companies and innovation to flourish.

"The UK needs a simpler and more ambitious policy framework so that businesses take the lead in the low carbon market," said Richard Evans, PepsiCo UK and Ireland president and Aldersgate Group member. "This must include a robust carbon price and incentives to spur innovation. To be a growing and green economy, we need to tax what we burn and not what we earn — the forthcoming budget can start this shift."

Green Investment Bank
One of the mechanisms being called for to fund the green growth is a well-capitalised Green Investmtent Bank.

"To drive jobs and green growth, we would urge the Government to commit Budget 2011 to the creation of a Green Investment Bank (GIB), operational within a year and well capitalised," said Brendan Barber, TUC general secretary and Aldersgate Group member. "The GIB is vital to drive the £110 billion of new investment required for green energy infrastructure and jobs by 2020. The GIB should operate as an accountable public body, ensuring that it invests in the national interest."

In order to place the economy on a more sustainable footing, the Aldersgate Group report suggests that prices must reflect environmental realities; regulation must prioritise long-term value; waste must be managed on a lifecycle basis; climate and resource risks must be addressed; and a socially just transition must be enabled.

United Nations report
The United Nations has also just published a study that shows that a global investment of two per cent GDP in the green economy could greatly increase economic growth while keeping environmental impacts within sustainable limits. It also suggests that green investments will result in a higher rate of GDP growth over six years.

"The comprehensive green economy report by the United Nations debunks any myth that we must choose between greening or growing. We can and must do both. The most successful and progressive businesses are already showing the way and no one can afford to be left behind," Young said. "The UN report also finds that there are more jobs in the green economy than the brown economy. Acting early will be a massive driver for job creation and can provide the foundations to drive a dynamic economic recovery."

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