We have the energy for a green future

Labour's only bold green budget initiative was a Conservative idea – only our policies will ensure a low-carbon future

Greg Clark
guardian.co.uk, Wednesday 6 May 2009 11.04 BST

For the best part of a decade, Britain has had no energy policy to speak of. As a result, we are grossly unprepared for the decade ahead, during which much of Britain's current electricity-generating capacity is due to be closed down and we will move from being a net exporter of oil and gas to importing 80% of our supplies from overseas. All this while we face stringent binding targets for renewable energy and the reduction of our greenhouse gas emissions.
As a result of this vacuum in energy policy, the scramble to replace our energy supplies and to meet our climate change duties will mean that the actions needed are more costly and uncertain (pdf) than if they had been planned and executed in an orderly way.
The budget was the last major opportunity this year to take action to move towards a low-carbon economy. Policies to decarbonise the UK economy should never be treated as some sort of sideshow or distraction. Nor should they be seen as an irrelevance during a time of economic downturn. "Green" policies do a lot more than protect our environment; they create immediate new jobs in construction, manufacturing and services, they reduce energy bills through greater efficiency and they will help reduce our balance of payments deficit in the longer term by reducing our dependence on imported fossil fuels. We should be using the downturn to make this conversion to a more resilient economy, not putting the problem off again until the next unsustainable boom turns to bust.
A week before the budget George Osborne and I set out 10 policies that, if they were announced, would have the support of the Conservative party. As well as laying the foundations for a stable, competitive and low-carbon future for Britain, they would unleash £30bn of private sector investment.
Against that benchmark, the budget itself was a great disappointment. The government failed to take up the biggest and most obvious green boost of all: to bring about a step change in the energy efficiency of our homes, currently among the worst in Europe.
For most homes, investment in energy efficiency actually saves money as well as CO2. So giving every household an entitlement to £6,500 of efficiency improvements, with the cost repaid through savings in people's fuel bills, would save money and create much-needed jobs in the construction sector. It is inexplicable that this opportunity has been missed.
It is also a blow that there was no plan to upgrade our electricity grid. Smart technology and new marine electricity cables could combine to allow greater use of renewables – especially from offshore – and allow demand to be managed. This is essential if new technologies like electric vehicles are not to outstrip the capacity of a generating system. It is mystifying that the rollout of smart meters – giving people the information and ability to manage their energy use – will not take place until the end of 2020, when they are being installed across the world right now.
The temporary increase in the level of support for offshore wind is a recognition that achieving our 2020 target for 14.5% of energy to come from renewables is a distant prospect. Currently we generate less than 2% of our energy in this way, the lowest level of any major European country.
The one genuinely bold measure mentioned in the budget, and expanded upon the next day, was the government's decision to adopt longstanding Conservative plans to invest in the infrastructure to support Carbon Capture and Storage (CCS) for new coal-burning power stations, and to require all new coal plants to be partially carbon-abated in this way. It is frustrating that in this crucial technology – in which British know-how, skills and geological assets in the form of depleted North Sea wells give us a huge advantage – we have ceded leadership to Germany, China and the US.
I hope that it will not be too late to catch up. The country that leads the development of CCS will unlock the potential for many thousands of jobs and investments around the world during the decades ahead.
There are still some questions to be answered as to how this investment will be funded, and when it will finally happen, but the adoption of this part of our 10-point plan is a very welcome step forward.
Just as time ran out for the government's stewardship of the economy, it is fast running out on its ability to secure Britain's energy needs and meet our international obligations. Now is the time for action, and Conservatives will be pushing the government to implement the new CCS policy without further delay and to turn again to the opportunities to secure a low-carbon future for Britain.