Green reform is vital for next Govt, says Aldersgate Group report

by Search Gate staff. Published Thu 29 Apr 2010 00:04, Last updated: 2010-04-28
Tackling environmental reform is key for next Parliament

Whichever party wins the election in May must prioritise environmental reform with the same urgency as economic reform, according to a new report from the Aldersgate Group (AG), an influential, high-level coalition of businesses, NGOs, think tanks, MPs and individuals, who believe that high environmental standards are essential for future economic growth and competitiveness.

The report, ‘Accelerating the Transition: Priorities for the first 100 days of the new government’, draws together recommendations from three previous Aldersgate Group reports which address the UK’s main obstacles to achieving a low-carbon, sustainable economy - finance, skills and resource efficiency.

The new report proposes priorities for setting the UK on a low-carbon, resource efficient path.

It comes just ahead of the General Election next month and 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, none of the manifestos reflect the true depth and rapidity of change that the UK economy must undergo. The AG priorities include:

• Create the Green Investment Bank immediately: The report welcomes cross-party agreement on the creation of a Green Investment Bank but warns that the new government must move swiftly, setting up a shadow institution without delay and aiming to pass primary legislation within a year of the election.

• Underpin the price of carbon: 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 and reduce perverse subsidies for environmentally damaging activities. The new government should also confirm its commitment to green fiscal reform by publishing a commitment in the first Budget for 20 percent of the UK’s tax revenues to come from environmental taxes by 2020.

• Simplify company reporting regulations: Too many industry bodies and too much red tape are preventing businesses from effectively addressing their carbon emissions and resource usage. Many corporations face confusion over best practice. For example, there are over 30 different guidelines for reporting carbon emissions. Some regulations aimed at businesses are also contradictory e.g. the CRC energy efficiency scheme and on-site renewables. The new government needs to review and streamline these regulations and regulating bodies.

• Incentivise green industry: The new government must develop the Low Carbon Industrial strategy, to build in a supply chain strategy with specific targets for job creation, manufacturing capability and export growth in targeted industries. 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.

• Publish a national energy efficiency plan: The government must provide support for UK businesses to become world leaders in resource efficient products and services. This will require well designed and effective regulation. The new government should publish an immediate national energy efficiency delivery plan and make a clear commitment to mandatory carbon reporting, that can help drive competitiveness through greater transparency and comparability.

Peter Young, Chairman of the Aldersgate Group, said: “It is imperative that the new Government tackles low carbon and resource efficiency issues immediately, to help place the UK firmly on the path to recovery.

“Government intervention and early-mover advantage are essential to drive investment and stimulate innovation in environmental markets. Each political party has expressed its concern for environmental issues, now we need to see this translated into solid actions”

Richard Evans, President of PepsiCo UK & Ireland, an Aldersgate Group member and contributor to the report, said: “It is clear from the policy recommendations in this report that the business sector is ahead of the Government and other major political parties in terms of environmental ambition and action. Whoever forms the next Government should realise this and be prepared to step up to the plate.”

Sir Michael Rake, Chairman, BT Group, an Aldersgate member said: “We need an entire workforce of policy makers, company directors, engineers, accountants, scientists, teachers, journalists and retailers, that understand, think and ‘do’ low carbon. It should be a priority of the next Government to deliver this.”

Peter Young added: "Given the pressure on public finance, some may consider these recommendations to be expensive. However, we can’t use the financial crisis as an excuse not to act.

“Addressing the long-term environmental challenges of climate change, energy security and resource depletion are just as critical for the new administration as its response to the global recession and reducing the budget deficit. In fact, the two are dependent on each other. The race to develop domestic environmental industries will help define economic prosperity in the 21st century.”

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