New green strategy could create 400,000 jobs

• Miliband outlines plans for low-carbon economy• Coal and nuclear energy will be key to future
Suzanne Goldenberg, Juliette Jowit and Terry Macalister
The Guardian, Friday 6 March 2009

New jobs will be created in low-carbon industries for 400,000 people - from lagging lofts to nuclear power - the government will announce today.
In an interview with the Guardian, Ed Miliband, the climate change secretary, said there was a global race towards creating a low-carbon economy and that Britain must not get left behind. He set out the key elements required - from energy efficiency to a smart electricity grid - ahead of today's low-carbon summit in London, with representatives from industry, unions and the environment movement.
Gordon Brown will launch the summit, which will examine how the UK can boost jobs and investment in areas such as cleaner vehicles and low-carbon energy.
Brown will also call for a "global green new deal" in which government spending tackles economic and climate problems simultaneously.
The summit will be hosted by Miliband and business secretary Lord Mandelson, who will publish their vision of a low-carbon industrial strategy. The strategy, seen by the Guardian, says: "The transition will transform our whole economy. It will change our industrial landscape ... and the way in which we all work and consume."
Miliband said the most important first step was encouraging business to achieve greater energy efficiency, especially for buildings, which is seen as the quickest way to reduce greenhouse gas emissions and could save companies £3.3bn a year. Britain must also make longer-term investments in a "smart electricity grid", using digital technology to improve management of demand and so reduce the overall need for generating capacity.
As well as renewable energy, Miliband said nuclear and coal-fired power plants were central to the strategy. "We need to move towards a trinity of low-carbon fuels," he said. "Coal will remain part of the energy mix in this country certainly for some years to come but it needs to be clean coal." A government announcement on funding for carbon capture and storage technology, which would bury emissions, has been delayed by a dispute with the Treasury over costs. The other key areas are cleaner vehicles, funding for research and development, and skills training.
Responses from the summit and a consultation will be fed into a final strategy, due this summer, which officials said would include new initiatives beyond existing government policies, such as the pledge this year to give every home a green makeover by 2030. There will also be discussions about how to create as many jobs as possible in the UK, using policies such as regional aid and the £175bn a year spent by the public sector.
The government will also publish a report commissioned from consultants Innovas, which forecasts the creation of an additional 400,000 jobs by UK environmental industries in the next eight years.
James Cameron, vice-chairman of consultants Climate Change Capital and an executive deemed to have the ear of ministers, has suggested the government establishes "carbon bonds" similar to war bonds issued in the second world war.
"I believe that now is the time for the government to consider, with urgency, the issue of bonds for ... reducing greenhouse gases ... while at the same time kick-starting the faltering economy," he said.
The Renewable Energy Association supports a bond strategy, which it believes could raise £2bn. It has also called for the government to spend £520m immediately. Friends of the Earth said measures to tackle climate change must be at the heart of next month's budget, with the government investing at least an extra £20bn annually over the next 10 years.
How to cut UK CO2 emissions
Energy efficiency More than half of UK emissions are generated to heat and power buildings. Climate change economics guru Lord Stern calculated that the four best green investments based on cost and benefits were all variations on efficiency improvements for homes, other buildings and their appliances. The government has already pledged a green makeover for every home.
Low carbon energyBuildings - and the rest of the economy - need "clean" energy. Ministers identify three key areas: renewable technologies, nuclear power and carbon capture and storage for coal generators.
Smart gridEnergy experts this week called for £4.7bn to upgrade the National Grid to cope with new wind farms and nuclear power. Minsters want to build a digital "smart grid", including a smart meter in every home by 2020, to monitor demand more finely and so reduce the need for generating capacity.
Clean vehicles Another quarter of emissions are from road transport. After efficiency, Stern rates more fuel-efficient cars as the next best green investment.