New UK Government Gets Aldersgate Advice For First 100 Days
The new Conservative-Liberal Democratic Coalition Government in the UK has a big job on its hands to manage a struggling economy and handle big issues like climate change. New Minister Chris Huhne, who takes on energy and climate change, would be wise to read the helpful advice from Peter Young’s Aldersgate Group on what needs to be done in the first 100 days of the new Government.
Chris Huhne joined the Liberal Democratic Party after the City of London career and many posts as a financial journalist – including a time as the Guardian’s economics leader writer. After entering parliament in 2005, he went on to sway leftwards and it nearly secured him the job of party leader but most believe that was expediency and now he is in the centre. He was Lib Dem environment spokesman.
Here’s a few identified issues and opportunities: Nuclear power is a major point of disagreement between the parties, with Lib Dems vehemently opposed; green investment bank – all main parties are agreed, but details are sketchy; coalition has adopted the 10:10 campaign’s commitment to cut central government carbon emissions by 10% in 12 months; increase renewables target and “huge increase” in energy from waste through anaerobic digestion.
Here’s the advice from the Aldersgate Group: Priorities for the first 100 days of government
This report sets out a list of key priorities for the new administration’s first 100 days. Although the three leading parties have taken up the policies of a Green Investment Bank and measures to improve resource efficiency (both covered in the previous Aldersgate reports), none of the manifestos reflect the true depth and rapidity of change that the UK economy must undergo.
No-one expects the Government elected in May 2010 to enjoy an easy ride. It will inherit a financial deficit which will dominate policy thinking for years to come.
Yet this deficit was brought about because the banks were acting unsustainably, beyond the
security of their true assets, just as today we consume resources way beyond the sustainable
asset base of our planet. If reducing our financial deficit is a key priority for the new Government,
addressing our environmental deficit should be too. Indeed the urgency is greater as prevention is
always more palatable than cure.
Over the last year the Aldersgate Group has spent the greater part of its effort addressing the
three biggest obstacles we saw to accelerating the pace of transition to a low carbon and resource
efficient economy, namely finance, skills and efficient use of resources. Since writing our three
individual reports last autumn it has been heartening to see a growing policy coherence on these
issues, such as the announcement of the Green Investment Bank, the consultation on Meeting the
Low Carbon Skills Challenge and the serious consideration given to resource efficiency in Defra’s
recent Climate Change Plan. But these are merely the first tentative building blocks placed on the
sound foundations of the Climate Change Act. The storm is brewing and we are nowhere near
putting a roof over our heads.
For that reason we wanted to update and consolidate our recent thinking into a series of
recommendations to help the new Government understand what we need to do to change pace
at this vital time. If you look at any graph on greenhouse gases, carbon or resource management,
one thing is universal: during the next five years, the likely lifespan of this next parliament,
the lines all need to change direction.
We need to stop the past profligacy and start building a future economy which can bring growth, wealth, jobs and exports without living beyond our asset base, or for the UK, our fair share of the planet’s assets. Our demand is to use the first 100 days to set the course irrevocably towards a low carbon and resource efficient future.
One point I want to highlight is that no-one must use the reduced emissions caused by the
recent recession as evidence of less urgency to act. Quite the contrary, this is an opportunity
to accelerate the transition by building new jobs and consumption habits which are sustained
by realistic demands on our climate and resources.
Low carbon investment is still a good proposition even in financially stringent times, because building low carbon power generation, closing the circuits of our resource flows, investing in economy-wide energy efficiency, decarbonising transport, enhancing our green skills and fairly pricing carbon emissions will all help solve the financial deficit, and build up our resilience and competitiveness. We can and must out-pace our competitors in these new markets. The new Government must be swift and committed, and I hope that this report gives some directions for early actions. We need that
green roof in place, so we can enjoy a vibrant, sustainable and inclusive economy.
Chairman, Aldersgate Group
The priorities for the first 100 days of the new Government should be:
1. Get the price right
Prices must reflect environmental realities. The current carbon price is not sufficiently stable, high or credible to stimulate the required investment in low carbon technologies. The first Budget of the new parliament should include a floor price mechanism to underpin the EU ETS carbon price, reduce perverse subsidies for environmentally damaging activities and issue a long-term commitment and timetable for green fiscal reform.
2. Don’t rely on pricing alone
Although important, pricing remains a blunt instrument. We think government should aim both to reduce the UK’s carbon intensity and to help UK business become a world leader in resource efficient products and services. Well designed and effective regulation is necessary for both these objectives. The new Government should publish an immediate national energy efficiency delivery plan and make a clear commitment to mandatory carbon reporting that would help drive competitiveness through greater transparency and comparability.
3. Simplify the regulatory framework
Too often, environmental policy has been an ad hoc response to an isolated challenge. This is rarely effective and often creates unintended consequences elsewhere. The Government should publish a review on how to rationalise the large number of complex environmental regulations (and regulatory bodies) that are creating unnecessary administrative burdens and ensure public spending reductions include rigorous analysis of potential long-term environmental benefits.
4. Mobilise the finance
A more effective approach to pricing and regulation would still leave significant barriers to a rapid economic transition. For example, the achievement of carbon targets for 2020 and beyond presents a major financing challenge for the UK economy, estimated at over £70 million a day. To help bridge this gap, we welcome the cross-party commitment for the creation of a Green Investment Bank but urgent action is now needed. The new Government should set up a shadow institution without delay, rather than waiting on asset sales to make finance available. The level of capital should be increased using revenue from the sale of EU ETS auction permits, and primary legislation passed within a year of the election.
5. Develop the industrial strategy
Alongside an upgraded Low Carbon Industrial Strategy, the UK should develop its strategic planning for technologies post-2020 and initiate a supply chain strategy with specific targets for job creation, manufacturing capability and export growth in targeted industries. It should also enhance its skills strategy to accelerate ambition and delivery. To help meet these new targets, the first Budget of the new parliament should include enhanced capital allowances, tax breaks and National Insurance reductions for green industry. As resource efficiency and related innovation increasingly become primary benchmarks of a successful economy, the UK will need to expand its industrial strategy to address critical resource constraints and ensure long-term competitive advantage.
6. Improve accountability across government
Wide-ranging environmental challenges cannot be effectively addressed through segmented government. Departmental carbon budgets are welcome and should be monitored by the Climate Change Committee. The Treasury should assume a greater leadership role, expanding the scope of its carbon budgets and making the design of environmental regulation a key objective in the management of the economy. A resource productivity drive must also be supported across all government departments.
7. Incorporate a lifecycle approach Effective management of resources necessitates a consideration of the whole resource cycle. UK waste policy must move away from a linear model and look towards ‘closing the loop’. More progress would be made by expanding the remit and resources of the Sustainable Consumption and Production Unit in Defra. The UK’s £175 billion public procurement budget is a massively underused lever for progression towards a low carbon, resource efficient economy. The new Government should implement an immediate policy of serious and lasting carbon reductions across the government estate that seeks to outperform carbon budgets.
8. Plan a just transition The radical decarbonisation of the economy has the potential to be a major source of wealth and employment. It will also involve massive and complex changes that will create losers as well as winners. The role of the Forum for a Just Transition should be expanded, so that it reviews the social impact of carbon budgets and has a formal advisory role to the Green Investment Bank. The Goverment should also initiate a comprehensive street-bystreet domestic energy efficiency scheme to reduce carbon emissions and fuel poverty.