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The ‘Greenest Government Ever’?

Authors: Jonathan Wright Jonathan Wright

09 March 2011

 

The Coalition has ambitions to be the ‘greenest government ever’. Last month, the Energy Secretary Chris Huhne announced a new ‘green deal’.  He has promised that 250,000 green jobs will be created (by 2030) and that Britain will boast the fastest growing renewable energy industry in the EU by the end of parliament; countering the ‘drag anchor’ of the budget cuts.

 

Under the green deal, energy companies will pay upfront to insulate homes (the government plans to make 26 million homes more energy efficient), with householders paying back from the energy savings that result.  The modernisation of 26 million homes will be highly labour intensive.

 

The coalition is also committed to building new nuclear stations - provided that no public subsidy is used - and Huhne wants10% of government revenue to come from green taxes by 2015, such as increased fuel duties.  This will encourage motorists to consider other forms of travel, such as the use of electric vehicles – and the government has announced a subsidy for those buying electric cars.

 

However, Miliband has accused Huhne of ducking ‘tough choices’ at a time when green industry ‘needs certainty to invest’.  Questions have been raised about whether or not the Coalition’s measures go far enough towards creating a high value sustainable low carbon economy for the UK. New research by The Work Foundation has attempted to tackle these important questions.

 

On Friday 11 March we will be presenting our latest work on the East of England’s low carbon economy in Cambridge, as part of Insight East’s low carbon economy research programme. The research builds on The Work Foundation’s A 2020 Low carbon Economy published last year.

 

Our work highlights the inherent difficulty in defining the low carbon economy and predicting how it will develop over the coming years. Instead our research utilises a scenario-based method to explore the potential barriers to the development of the low carbon economy.  We have set out three scenarios:

 

  • Scenario 1 - a low carbon implementation sector: the successful development of economic activities focused on reducing carbon emissions through the implementation of existing and developing technologies.
  • Scenario 2 - a manufacturing led growth in low carbon activities: the development of world class, export oriented low carbon activities based on manufacturing.
  • Scenario 3- a low carbon services led sector: a vision based on the development of world class business, financial and other services related to the low carbon agenda, serving domestic and global markets.

 

Scenario 1 will be highly labour intensive, with many of the jobs requiring lower level skills. And a large proportion of employment in these activities might displace other more carbon intensive forms of activity.  These activities are likely to happen over the coming years.  The government’s commitment to insulating 26 million homes will facilitate progress towards this low carbon future.

 

However, a higher value and innovative low carbon future – set out in scenario 2 and 3 - requires clear direction from central government, to incentivise and steer business into pursuing these activities. Local areas must also continue to develop their own strategies - from the bottom up.  Every place faces its own specific challenges.  The East of England, for example, has the potential to develop a sustainable and high value manufacturing-led low carbon economy.  It has great strengths in R and D and a comparative advantage in offshore renewable energy.  But many barriers stand in the way.  In response, our paper highlights the importance of delivering strong and collaborative leadership, appropriate investment in skills, access to expertise and support, and inward investment.

 

The Coalition’s recent announcements go some of the way to supporting a sustainable low carbon economy in the UK.  However, there is still some way to go if  we are to move to a high value low carbon economy which creates highly skilled jobs and contributes to national economic growth.