Testing times for peer juggling financial crisis and climate peril

Lord Turner puts forward 'budgets' for green progress - recession or not
Juliette Jowit
guardian.co.uk, Thursday November 27 2008 00.01 GMT

Gas being flared off at the Grangemouth oil refinery. Lord Turner's interim recommendation to reduce emissions by up to 80% was taken up in a climate change bill. Photograph: Murdo Macleod
It is hard to think of anybody who has a busier diary at the moment than Lord Turner of Ecchinswell, who has found himself advising the government on how to save both capitalism and, between meetings, the planet from climate change.
Turner became chairman of the Financial Services Authority in September, on a weekend sandwiched between the collapses of global investment bank Lehman Brothers and UK mortgage lender Bradford & Bingley.
Between meetings about the crisis in the stockmarket and multibillion-pound bank bailouts, the former management consultant has also been working as chairman of the government's independent environment watchdog, the Committee on Climate Change.
Turner described his first weeks in charge of both bodies as "the most extraordinary weeks of my professional career", which has also seen him run the Confederation of British Industry and a government review of pensions.
On Monday, the committee will publish its first report recommending targets to cut greenhouse gas emissions, working towards the government's pledge to reduce climate change emissions by 80% by 2050.
The much-awaited announcement will include interim targets for the first three five-year periods - covering 2008 to 2022 - and advise the government on what cuts could be made from which sectors, particularly energy, transport and industry.
Turner has announced he will give up the committee chairman's role after this report, but will stay on the panel at a time when many fear green policies will be blunted by the need to battle the looming recession - or "temporary downturn" as Turner calls it.
As he has promised at the FSA, he is likely to take a tough line: "The recession will flatter our [emissions] figures over the next two years because one of the immediate effects is less output, less development, etcetera," he told the Guardian. "Hopefully we'll pull out in 2010, but the fact we're going into a recession now really doesn't change the medium- or long-term plan or costs of driving towards a low-carbon economy."
In the past, Turner has called for the UK to stop using fossil fuels to produce power within 20 years. This week he went further, saying that to make such steep emissions cuts the country was likely to need a big increase in renewable power, nuclear power and carbon capture and storage equipment for coal plants to replace existing high-carbon generation. Other changes would include replacing gas heating in homes with electric heating and oil-fuelled cars with electric ones.
"Even though we'll get more and more efficient in our use of electricity it's quite possible that the long-term trend of electrical production will be up because we'll use more electricity to do things," said Turner.
Turner did not comment on whether the committee will criticise plans to build new coal power stations without or with only partial carbon capture equipment, which may affect the government's decision on the first proposed such plant, at Kingsnorth in Kent.
However Monday's report will provide support for government plans to build new nuclear stations, as well as renewable energy, Turner said. "We think the way forward will have to include all three of those, rather than just one or the other."
The interim report urged the government to be more ambitious by increasing its target to cut emissions from 60% to 80%; to include all greenhouse gases, not just carbon dioxide; and to include aviation and shipping.
All three recommendations were adopted in the climate change bill, which was due to become law last night. However, at least initially, emissions from internationally regulated aviation and shipping will not be part of the five year "budgets".
The budgets were set to take account of progress towards the 2050 target, the UK's commitments to European Union emissions goals, and a bottom-up analysis of what it was possible to do in different sectors, said Turner.
The report will also make a recommendation about how many offsetting credits UK companies can buy from projects which cut emissions overseas.
The EU has set a target to cut emissions from 1990 levels by at least 20% by 2020, and by 30% if there is a global deal with other large-scale emitters.