Britain falls behind on investment in 'clean' energy

By Fiona Harvey, Environment Correspondent
Published: April 21 2009 03:00

Britain has fallen behind countries such as Bulgaria, Chile and Peru on investment in low-carbon energy, and is likely to miss key targets on renewable energy generation without drastic intervention by Alistair Darling, the chancellor, according to two studies published ahead of tomorrow's Budget.
Investment in "clean" energy in the first quarter of 2009 fell to only £138m, putting Britain in 15th place in an international league table of green investment compiled by New Energy Finance, a consultancy.
In 2008, Britain took fifth place with £2.5bn invested in the sector through the year. By comparison, Spain spent more than £2bn on clean energy in the first quarter, while the US and China each invested more than £800m.
Poor progress on renewable energy means Britain will miss its European Union target of generating 15 per cent of energy from renewable sources by 2020, according to Cambridge Econometrics in a separate study. But on the bright side for Mr Darling, who has talked of his intention to provide help for the low-carbon economy in the Budget, meeting the commitment to cut emissions has become easier thanks to the recession.
Cambridge Econometrics forecasts that carbon dioxide emissions will fall by about 3 per cent in both 2009 and 2010 as energy use declines because of lower economic activity. If the recession is deep and followed by a delayed recovery, that would bring forward needed emissions cuts by five years, as carbon dioxide levels by 2015 would hit the level that had not been expected until 2020.
These are not the kind of cuts Mr Darling has been hoping for, however, as the government wants to create a "green economy" based on jobs in renewables and energy efficiency.
Joan Ruddock, climate and energy minister, said: "We're serious about cutting our emissions, which is why as part of the Budget the UK will be the first country to set out legally binding carbon budgets limiting emissions for the next 15 years."
Doubt was also cast yesterday on the government's strategy of boosting electric car production and usage. The UK Energy Research Centre said more emphasis should be placed on reducing the need to travel by car and promoting walking, cycling, and public transport.
Copyright The Financial Times Limited 2009