Forecasts estimate £880 billion green economy boost to 2050

Posted on 19 Feb 2013

Low carbon vision key to unlocking growth, says EEF

Britain’s manufacturers have called on the government to provide a "green economy vision" needed for industry to build a low carbon economy by the end of 2013.

A new report launched today by EEF reveals estimates that the UK economy could be boosted by up to £880 billion between now and 2050, if companies can fully exploit opportunities in manufacturing for the low carbon economy.

‘Tech for Growth’ – Delivering green growth through technology, looks at how government can help key manufacturing sectors unlock investments in breakthrough technologies that will reduce carbon emissions.

This would help manufacturers to develop these solutions and export them to the rest of the world, the manufacturers’ group says.

But the UK’s position as the sixth largest producer and provider of low carbon goods and services is faltering, with manufacturing output contracting, the EEF analysis shows.

The UK is placed towards the bottom of the OECD countries in government research spending on climate and energy related research and development, spending just over 1% of its R&D budget on energy against the OECD average of almost 4%, the analysis shows.

“If we can build an early lead in key areas we have the chance to export our solutions to the rest of the world,” said Gareth Stace, EEF Head of Climate and Environment Policy.

“But we are currently failing to take advantage of this opportunity to be a world leader in low carbon goods and services. We need government to set out its vision of manufacturing’s place in the low carbon economy, focus more on innovation and provide greater regulatory stability and predictability to unlock investment in breakthrough technologies that will deliver it.”

EEF says that manufacturers are already investing in “green growth”, with six in 10 companies developing new processes to improve their own environmental performance.

Over half of large companies who were surveyed are developing new products and internal processes to help them and their customers manage climate & environment issues.

But despite these investments, EEF warned the UK’s performance is faltering with manufacturing output in low carbon goods falling in 2010/11. In contrast, China, the US, India and South Korea, countries that have a strategic policy framework of growing their low carbon industrial base, recorded double digit growth in this period.

To address this, EEF is calling on government to set out a clear vision by the end of 2013 for UK manufacturing in a low carbon economy to provide certainty for large scale, long-term market opportunities.

EEF’s recommendations to develop a low carbon economy include:

– Complementing the 2013 decarbonisation target with a goal to match the OECD average for government expenditure on energy and environment R&D over this period and make progress in each Spending Review.
– Outlining the portfolio of low carbon technologies on which the UK’s innovation effort will be focused by summer 2013 and ensure intervention is additional, focuses on cost reduction and market failures.
– Developing the Low Carbon Funding Navigator which brings together private and public funding opportunities in low carbon energy projects to include R&D funding opportunities available to manufacturers
– Undertaking a review of Enhanced Capital Allowances to ensure they are targeting low carbon technology investment
– Ensuring the Green Investment Bank becomes a one stop shop for all sources of low carbon project finance and that its fund managers allocate money to projects that otherwise wouldn’t go through. Mandating the Growth Implementation Committee to monitor the progress of the GIB in providing finance for investment in low carbon technologies