UK climate policy not up to scratch, warns CBI

Juliette Jowit and Terry Macalister
The Guardian, Monday 6 April 2009

Business leaders have delivered a surprise attack on the government's environmental policy, arguing that ministers are not doing enough to cut global warming emissions or make sure the UK does not run out of power.
The CBI says billions of pounds of necessary investment will move to the US and China unless the government takes "urgent action".
It comes amid widespread disappointment that the G20 heads of state failed to come up with any real push on green issues as part of a $1.1tn (£743bn) financial aid package for the global economy.
The warning from the CBI follows a series of announcements by major energy companies, including Shell, BP and Centrica, that they would axe or reconsider investment in "low carbon" energy such as wind and solar power and carbon capture for coal-fired power stations.
Richard Lambert, the CBI's director general, said "politics and policy", not the recession, were delaying investment in the UK. He said the government's policies were on the "right path", but companies were "jittery" about investing in the UK because of delays with planning permission, poor National Grid connections, slow funding for new technology, and uncertainty over long-term carbon prices.
The government needs "to get on with it," said Lambert, ahead of today's launch of a new strategy for the energy industry. "If they don't, the risk is that the private capital needed will not come here in the volumes required."
Further evidence of the growing crisis of confidence in the green energy sector is exposed today by a survey which revealed that more than three quarters of Britain's green energy companies were now facing enormous financial difficulties gaining vital access to loans and investment money - a finding that has seriously shaken the industry's parent body.
Out of 39 member companies that responded to a poll by the Renewable Energy Association (REA), 32 said they were suffering from a shortage of cashflow and other problems, while only six said they were not affected at all.
Philip Wolfe, the director general of the REA, said the survey highlighted the need for immediate action by ministers. "Given all the rhetoric on the Green New Deal and Green Tech, it is astonishing that the renewables industry has received no dedicated support - even in areas that don't cost extra money," he said.
"As so little has been done, the last opportunity comes in this month's budget. Other countries have already committed huge stimulus monies to their renewables industries while we have nothing, so the UK industry is now at a serious competitive disadvantage."
Lambert said: "It's a bit of an edgy moment. If we're going to go to where we want to get to by 2020, we need to be moving pretty aggressively on policy."
The CBI's new strategy, one of four "road maps" to a low-carbon economy published today, will call for immediate and short-term actions, including clear planning guidance to fast-track investment in offshore wind farms and nuclear power stations and an upgraded National Grid. Ministers also need to make a quick decision about a promised trial of carbon capture and storage, and fund at least one other, says the business group.
The Department for Energy and Climate Change said there were "clear signals that there's an appetite for investment in nuclear energy" and this month it had increased the incentive for offshore wind power by 50%.
"The government has been working to ensure that the short, medium and long-term environment for energy investment remains healthy in Britain and that any barriers identified are swiftly removed," the department said.