Green shift demands root and branch changes

The Times
March 6, 2009
The Government is determined that UK industry will adapt quickly to the needs of a low-carbon economy
Ed Miliband and Peter Mandelson

Imagine somebody telling you that 20 years from now almost everything you do in your life you will do differently. That is how fundamental the transition to a low-carbon economy in the UK will be. Many of the changes in the way we generate the energy and in the supply chains that produce the goods we use may not affect us directly. But the changes will nevertheless be profound.
Convinced of the economic and environmental urgency of change, the UK and Europe have adopted some of the most ambitious climate change targets in the world. By the middle of this century, all the UK’s goods and services will need to be produced using one tenth of the carbon they do today.
We have changed the law to speed up the adoption of energy generated by wind, solar and tidal power, to encourage the development of low-carbon vehicles and to put a price on carbon emissions.
The shift to low carbon in the UK and around the world is now largely inevitable. What is not inevitable is that Britain benefits industrially from the transition in both the short and long term. Yet the benefits to the economy are potentially huge, both in terms of money saved through a quick shift to energy efficiency and through building companies capable of competing in the huge global market for low-carbon goods and services, now worth £3 trillion a year and growing fast. British taxpayers and businesses could benefit from more resource-efficient businesses and public buildings, saving billions of pounds a year.

Research released today shows that more than a million people in the UK could be employed in the low-carbon sector by the middle of the next decade, in everything from manufacturing and construction to environmental consultancy and low-carbon venture capital.
To achieve these things, Britain will need a strategic approach from government that combines the right targets to drive the shift to low carbon and an industrial activism that supports British companies and British workers in competing for the opportunities that will be created.
The vision of a low-carbon industrial strategy that we are launching today will help us explore solutions with businesses, unions, environmentalists and others. We will specifically focus on four fundamental issues – each of which reflects an area where the UK now needs to make a step change.
First, we know energy efficiency is key for businesses; it helps to save money and reduce carbon emissions. However, in a downturn and with credit conditions tight, it is understandable that making changes or investing in energy efficiency measures can be a difficult decision to make, even if the costs of change are quickly covered by the savings. Today we are exploring how Government can work together with business to make the shift quicker and easier.
We are also committed to setting the right example in the public sector and are looking for ways to scale up the Government’s own shift to energy efficiency – saving British taxpayers billions in the process.
Second, the UK must now begin to shift its energy generation infrastructure on to more sustainable sources and create an electricity grid that is both energy efficient and adaptable to new forms of power.
Our commitment to new nuclear power has made the UK the second most attractive market in the world for nuclear investment, we have put measures in place for a huge expansion of renewable electricity and we are determined to drive forward trials of carbon capture and storage to clean up how we use coal.
Today we are inviting industry leaders to voice their opinions and share their expertise with us so these changes can truly benefit the UK economy and equip British companies to compete for similar clean energy business overseas.
Third, we have created a £350 million package to help Britain to make the shift to low-carbon vehicles. In tandem, we need to act to make the UK the best place in the world to demonstrate, develop or manufacture low-carbon vehicles or their components. This is a huge global market in which the UK has the potential to be a leader. But it will mean a more coherent approach from government in how we sponsor research, promote innovation and attract manufacturing.
Finally and fundamentally, to really capture the benefits of the global shift to low carbon, the UK needs to be the best place in the world to locate or build a low-carbon business. That means policies that make research and development here easy and productive, infrastructure that meets the needs of low-carbon innovators and a training system that helps British workers get the skills they will need to handle new technologies and ways of doing things.
Today we will be asking for recommendations on how we do this and more. These recommendations will shape a comprehensive Low Carbon Industrial Strategy for the UK. The shift to low carbon is vital to creating the jobs and growth that will help the UK fight its way out of the downturn.
But this is more than a green job creation scheme, or “greening” the recovery. This is about looking beyond the short term, to Britain’s industrial future. Low carbon is not a sector of our economy. It is, or will be, our whole economy and a global market.
While the shift to low carbon requires significant change and adaptation, it also has huge economic and industrial benefits if we combine a strategic approach from government with the dynamism of private enterprise and compete for them. A low-carbon industrial strategy must seize the opportunities that will come with change. That requires a new industrial activism for a new green industrial revolution.
The writers are the Energy and Climate Change Secretary and the Business Secretary