UK will miss out on green opportunities, says panel of top advisors

by Published Wed 03 Jun 2009 00:37, Last updated: 2009-06-03
Political leaders need to be more pro-active, say advisors

The UK Government's distinguished panel of climate change specialists has warned the country's attempts to become a green world leader are in danger of being eclipsed by other nations because of a lack of a joined-up and systematic approach.

The group of high-level experts believe the UK should show more urgency if it is not to be left behind in the race to dominate the international climate change sector, particularly in light of a resurgent United States.

A study by the highly influential Aldersgate Group interviewed all the former members of the Commission on Environmental Markets and Economic Performance (CEMEP).

Drawn from business, trade unions, universities and NGOs, the CEMEP was created by Prime Minister Gordon Brown in response to the Stern Review to make detailed proposals to ensure the UK was ideally positioned to capitalise on the new opportunities of the low carbon economy.

It was led by four Ministers and published its recommendations in November 2007 which were eagerly welcomed by the Government at the time.

In the Aldersgate Group's Commission Statement report, the former Government advisors acknowledge that “steady progress” has been made in response to a number of their recommendations, not least with the creation of ambitious and innovative legislation such as the Climate Change Act.

However, they stressed the need for further, more pressing action, including:

* An injection of urgency: They claim that without a change of pace, the UK is in danger of missing out on the economic benefits associated with early mover advantage.

* A more joined up approach: The panel revealed a thorough step change across the piece is required - penetrating all government departments and at all levels.

* Systematic and transparent implementation: The follow-up report proposed environmental policy-making must shift from the margins to the centre ground, scaling up good practice and ensuring a more methodical approach to implementation.

* Delivery to match the rhetoric: The report authors highlighted the need for global leadership, claiming valiant rhetoric and aspiring target setting are rarely reflected in delivered action, leading to a credibility gap.

The report, released today at the Houses of Parliament, explained: “As the Government publishes and then develops its Low Carbon Industrial Strategy, the message from the panel of experts who initiated the process is clear: the starting point must not be a blank page.

“A wealth of expertise, time and resources went into producing the CEMEP recommendations
which are still relevant despite the current economic crisis. As such, the CEMEP analysis should
be explicitly incorporated into any industrial strategy moving forward and more robust and
transparent monitoring and reporting mechanisms must be put in place – alongside strengthened
pan-departmental structures that can more effectively manage the unprecedented cross-cutting
nature of environmental policy-making.

“As this agenda progresses, the role of good regulation in forcing the pace of industrial change
should be a central element of economic policy. There must also be more focus on the deliberate
design of supporting infrastructure to enable the desired transition to be made in the most
economically beneficial way; demand side policy must be matched by development on the supply side.

“Furthermore, the wider benefits of high environmental standards must be addressed, as resource
efficiency and innovation will increasingly become primary benchmarks of a successful economy.
The government cannot leave these things wholly to the market and just as it is their job to regulate, it is their job to make consistent and holistic policy to create absolute certainty on the direction of travel.

“Only then can the private sector invest and drive to maximum pace the industrial transition
to a low carbon economy.”

The report lists the follow-up comments of each author, including:

“One of the biggest missed opportunities in regard to CEMEP is alternative energy, where a
persistent lack of leadership has led to the UK falling further behind Europe. The world leading
programmes which we have been promised have not materialised,” according to Jim Brathwaite, Chairman, SEEDA

“The CEMEP report identified many of the key ways to put the economy on a low carbon, resource
efficient track. Its analysis of the role of long term policy frameworks, whole life cost public
procurement and the more focused low carbon R&D; spending should be required reading for
Ministers as they draw up their low carbon industrial strategy,” according to John Cridland, Deputy Director General, CBI

“The CEMEP report provides the foundations to develop a much more comprehensive low carbon
industrial strategy. The UK can still become a global hub for low carbon innovation but we are in
real danger of losing out without more steadfast commitment and effective delivery,” according to Tom Delay, Chief Executive, Carbon Trust

“The focus now is not simply to plan for a low carbon economy per se but a low carbon economy
in a very tight credit situation, with some threatening Asian competitors around,” according to Professor David Fisk, Chair in Engineering for Sustainable Development, Imperial College

“When CEMEP was devised the prevailing view in Treasury was that if you get the carbon price
right, the rest will fall into place. The market was sovereign and interventionist policies were viewed with scepticism.

“Recent events have exposed the limitations of this view and stipulate the need to explore further regulatory and support measures that were not seriously considered by CEMEP,” according to Dr Jonathan Frost, Director, Johnson Matthey Fuel Cells

“The Government should have published its response to CEMEP as a consultation to help gather
useful and direct stakeholder analysis on a wide range of issues ranging from dynamic performance
standards to carbon pricing,” according to Julie Hill, Associate, Green Alliance

“Building on CEMEP, more work needs to be done to focus on different mechanisms to drive the
changes we need. For example, with tax hikes expected in the near future, how do we stimulate
behavioural change that penalises high carbon activities and incentivises low carbon activities?” asked Emma Howard Boyd, Director, Jupiter Asset Management

“Key barriers remain for effective CEMEP implementation, particularly in the water sector.
The recession means that there is even greater focus by all parties on managing customer bills
and therefore less opportunity for long term investment to encourage innovation. This is too
commonly viewed as discretionary spending,” according to Sir Peter Mason, non-executive Chairman, Thames Water

“There have been good intentions in the Government’s response to CEMEP and the recession
has heightened the Ministerial commitment for industrial activism. The difficulty is translating
this focus into effective actions that lead to green jobs,” according to Paul Noon, General Secretary, Prospect

“The economic collapse means that there must be renewed focus on the consequences of the
industrial restructuring for employees. We must ensure a just transition to the low carbon
economy,” according to Frances O’Grady, Deputy General Secretary, TUC

“CEMEP almost vanished without a trace afterwards. The vision for a Low Carbon Industrial
Strategy (March 2009) covered much of the same ground but retreated into generalities,” according to Professor Jim Skea, Research Director, UK Energy Research Centre

“The UK’s implementation to CEMEP has been adequate and the recession will make things much
harder politically as people will be more concerned with their jobs rather than dealing with longer-term challenges like climate change. In response, the Government must try to ensure that the costs of environmental policy are minimised and innovations are effectively delivered to the market,” according to Professor John Van Reenen, Director of the Centre for Economic Performance, London School of Economics.

“The recommendations put forward by CEMEP do not actually require a huge amount of public
spending, rather sweeping structural and institutional reform. The real issue is whether the
Government will be able to focus enough on the environmental agenda in light of the financial and
economic crisis,” according to Dr Anthony White, Senior Adviser, Climate Change Capital

“The Climate Change Act and the creation of DECC have been a good start to the massive shift
in emphasis and institutional structures that the CEMEP agenda requires. However dispersion
of the individual policy developments to multiple departments leaves limited accountability and
transparency for delivery. This is slowing pace and risks inconsistent and contradictory signals
to the market,” according to Peter Young, Chairman Aldersgate Group and Strategy Director, Enviros.

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