How green socialism can save the UK

Britain is ideally placed to lead the world on renewable energy. But a free market lacks the nerve to avert climate change crisis

Neal Lawson
guardian.co.uk, Sunday 30 August 2009 09.00 BST

It may be a crisis that is too good to waste but we have to move fast to define and win support for a progressive response to the failures of the market. But a new socialism can only be built on the politics of sustainability.
We must remember that it is not just banks that have failed. Two years into the worst economic crisis since the 1930s, with more than 2.4 million already without work, the official closure earlier this month of Britain's only wind turbine blade manufacturing plant, Vestas, is a sharp reminder of the failure of blind reliance on free markets to solve the economic and climate change crises. The plant's closure, with the loss of 400 jobs, was blamed on the slow pace of growth in the UK's wind turbine market and the drawn out local planning process to agree projects.
It has brought home the reality that the changes needed to protect us from catastrophic climate change are exactly the opportunities that can catalyse an upturn in our economy. Clean, fuel-free renewable energy is a huge international growth sector – allowing countries to achieve energy security, protect themselves against volatile fossil fuel prices and stimulate economic development without the consequence of dangerous carbon emissions that are the primary cause of climate change.
Worldwide in 2008, at $155bn (£95bn), more was invested in sustainable than conventional energy production. It is no coincidence that it is the world's most economically dynamic countries – such as Germany and China – that are shaping markets and driving investment to benefit from an almost exponential growth in renewable technologies.
Britain almost couldn't be better placed to profit from this emergent sector. We are one of the windiest countries anywhere in the world. We already have engineering expertise for offshore windfarms from exploiting our dwindling gas and oil reserves. The skill sets of our ailing car manufacturing industry, together with our aerospace industry, are easily transferable to wind turbine manufacturing. Research from the business advisory group the Carbon Trust shows that by 2020, the UK could capture 45% of the global offshore wind energy market, and that by 2050 our wind energy industry alone could be worth £65bn to the UK economy. Our badly hit construction sector is well placed to lead the energy efficiency revolution needed for our aged housing and public building stock. The UK wave and tidal power research and development industry is already a world leader.
We have a serious road map to deliver some of these economic and climate solutions set out by the energy and climate change secretary, Ed Miliband, in July's Low Carbon Transition Plan and Renewable Energy Strategy. The plan, which rhetorically at least has cross-party support, could create up to half a million more jobs in the UK. But, as a legacy of the free-market fundamentalist, non-strategic approach of previous energy ministers, the UK still languishes near the bottom of Europe's renewable energy league table. The sector in the UK has been hit hard by the slump in investment, including problems accessing finance.
What we need now is support for the scale of investment needed to jump start the industry, and confidence that the bumper crop of neo-Thatcherite Tory MPs heading for parliament next spring will let more than a tiny handful of wind turbines through the planning process. Figures from the Department of Energy and Climate Change show Conservative-run councils have been blocking three times as many windfarms as they approve. Unless David Cameron publicly commits to meeting the government's target to generate 15% of energy from renewable sources by 2020 – and sets out a convincing strategy for how this will be achieved – his blue-green agenda will look to the public and investors like nasty party brand decontamination rather than long-term commitment.
Bold Keynesian bailouts by Alistair Darling and Lord Mandelson of other parts of the economy, notably the finance sector and car industries, have saved them from catastrophe. Along with other major bailouts internationally, they have also ended the disastrous era where state intervention was taboo. But, only £405m was allocated in the budget for developing green industries – just £108m of which is for direct funding of renewable energy development. Even the failed RBS bankers reportedly won £775m for bonuses from the chancellor. This is still nowhere near the scale of support needed capitalise on the competitive advantage we could have in clean energy.
The passion of the protesting workers and the obvious synergy of economic and environmental interests has helped to make the campaign against the Vestas plant closure a cause celebre for both the trade union and environmental movements this summer. In other parts of Europe and the US the benefits to ordinary working people are already manifest – new skilled jobs, training, more comfortable insulated homes, measures to alleviate fuel poverty and protection from spikes in fossil fuel bills. These are the kind of benefits that can be achieved here too, but only with the kind of ambition and sustained, political commitment that will attract rapid investment and overcome a knee-jerk rejection of windfarm developments.
The stakes are too high to left to anonymous free market forces driven by fossil fuel and nuclear interests. The economic cost of inaction – laid out in the authoritative Stern Review report – is bleak. Stern estimated the cost to the world economy of unabated climate change would be around 5% to 20% of gross domestic product per year – a figure that would dwarf the cost of the banking crisis. An alliance of red and green politics would transform the landscape of Britain. The moment to do it is now.