PM backs green economy but policy framework is missing

Posted on 5 Feb 2013

Prime Minister David Cameron yesterday told the House of Commons that the UK has no choice but to prioritise investment in green energy and energy efficiency, but detail on manufacturing in a low carbon industry was scant.

David Cameron said only the world’s greenest economies will be able to compete in the global economic race over the coming years, giving his full backing to developing a green economy.

He claimed the UK was ahead on several green measures, with the world’s largest offshore wind industry, the world’s first payments for business for generating renewable heat and “a pioneering carbon capture and storage programme.”

Referring to the EU Emissions Trading Scheme and other carbon trading markets, the prime minister said Britain has the world’s number one financial centre for low carbon industries.

Climate minister Greg Barker said the government had in place an array of policies for driving energy efficiency investments, such as the Green Deal, the carbon floor price, Climate Change Agreements, Enhanced Capital Allowances and the Carbon Reduction Commitment, but there was the need for a more “coherent” approach to promoting these initiatives.

But with green so often seen as non-complimentary to energy intensive industries, a clear explanation of how companies should reduce carbon emissions and remain competitive was missing.

Mr Cameron mentioned manufacturing once, saying “You are the companies and contractors that can develop Britain’s expertise in energy efficient technology, you are the global investors who can get behind those companies and pioneer the new financial instruments that can take investment in green energy to the next level, you are the manufacturers who can use this technology to cut their costs, compete, create new jobs and win new contracts for Britain.”

He said the job was too big for government alone, urging industry to help.

Gareth Stace, EEF head of climate and environment policy, said “We are encouraged to hear the Prime Minister focus on energy efficiency and the need for the UK to be a world leader in the low carbon economy. But, to achieve this we need government … provide a supporting policy framework. The current policy approach is not delivering the desired results

Asked why take up of the Green Deal was slow, and about criticism of the high interest rates underpinning the scheme, he predicted the programme will “build over the months and years ahead”. “The key to it is the basic promise that you are not making an upfront investment and the savings you will make over time will really benefit you,” he said.

On the Energy Bill and investor confidence, Mr Cameron said: “….we’ve settled the debate and now we can go to international investors and say, ‘if, for instance, you invest in offshore wind if you build your turbine before the end of 2017 I can’t just tell you what you’ll earn for one year or two years, I can tell you what you’ll earn for 20 years. What other industry or business anywhere in the world has got that sort of certainty?

EEF’s Gareth Stace added, “We need a clear vision for UK manufacturing in a low carbon economy and in particular one which maintains our competitiveness and does not load UK industry with unilateral tax increases that our competitors do not face.

Get this right and we position UK businesses to export low-carbon solutions to the rest of the world, anchoring these businesses’ economic future in the UK.”

Rhian Kelly, CBI director for business environment policy, said: “Businesses know that going green can boost growth. Our research shows that supporting the UK’s low-carbon economy with the right policies could potentially add £20bn to GDP by 2015.