UK must invest in green technologies or lose out to other countries, MPs warn

Britain's transformation to a low-carbon society could be delayed by a lack of people trained in the right skills, says report

Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 16 December 2009 11.55 GMT
Britain's transformation to a low-carbon society will be delayed by a lack of people trained in the right skills unless the government significantly increases its investment in the sector, a group of MPs have warned. They said that hundreds of thousands of jobs could be created if the government doubled its funding of green technologies, making the UK a world leader in a market worth £3tr worldwide.
"The government has missed a big opportunity to kick-start a green industrial revolution with its £3bn fiscal stimulus. Germany, the US, Japan and China have invested billions in their low-carbon industries," said Tim Yeo MP, chair of the House of Commons environmental audit committee (EAC).
In the US, the government has spent about £50bn to create half a million new green jobs, while Germany, Japan and Korea have also announced major plans to grow their domestic environmental sectors. China's economic stimulus plan includes £142bn for environmental measures.
"Only one sixth of the UK's government's fiscal stimulus package was devoted to green industry," said Yeo. "At the same time as cutting carbon emissions we could be boosting employment and putting UK firms at the forefront of the huge global market for green technologies."
The EAC's report on green jobs and skills, published today, identified about £405m for low-carbon industries and advanced green manufacturing in the 2009 budget. But members of the committee said the size of funding was nowhere near enough to allow the UK to compete internationally in this sector. "It could have been double that if you have regard to what's happening in other countries," said Yeo. "£1bn wouldn't have been too much – it would have been justified and quite effective as well."
The report identified a shortage of skilled people available for environmental firms, which could prevent the government from delivering the promises in its low-carbon transition plan, published earlier this year.
Yeo said there were three areas where the government should encourage green industries and create more jobs. As well as focusing more of the economic stimulus on the green sector, the MPs suggested launching a street-by-street programme of energy-saving measures for households.
"Most of the work is labour-intensive and involves pretty rapid paybacks – improving the insulation in older buildings often produces a payback much quicker than five years," said the report. David Cameron has said a Conservative government would make councils go "house-to-house, street-to-street" to identify areas most in need of energy-efficiency improvements.
The committee said that increasing the speed and scale of the programme to insulate UK homes could kick-start a market worth up to £6.5bn a year.
Ministers must also give industry long-term stability through government policy, in order to encourage companies to invest in training and skills for new green jobs. "The potential for Britain to display its skills [in low-carbon industries] is considerable but it doesn't look as though the government is leading in that direction," said Yeo.
He added that moving quickly would put the UK at the forefront of the world's green economy: "The global need is very urgent indeed, so those countries which do invest now will have significant first mover advantage - in five years' time, the opportunity will have gone. London has 87% of the international emissions trading taking place at the moment. That's a huge first-mover advantage and reflects our strength in financial services historically. The danger is we're going to cede a similar advantage to other countries in some of the other technologies."
Friends of the Earth's senior economics campaigner, Ed Matthew, said the government had to urgently steer the country to a low-carbon economy. "Developing Britain's huge renewable energy potential and cutting energy waste could make this country a world leader in creating a safe and prosperous future. The [EAC] rightly highlights the importance of a 'street-by-street' energy saving programme – this has massive potential to create new jobs, cut fuel bills, tackle fuel poverty and slash emissions."
He added: "But far bolder action is needed to raise finance to make the low-carbon transition. Ministers must set up a green investment bank to give the UK's low carbon sector the turbo boost it so desperately needs."