Working together: how to mobilise investment in green technology
Speech by Greg Barker, Minister of State for Climate Change, at the Responsible Business Summit
I’m delighted to be here at this important event.
The sheer breadth of variety in the organisations present demonstrates:
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How central to growth the sustainability agenda has become
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How central to a resilient business model the sustainability agenda has become
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How central to commanding the confidence of investors the sustainability agenda has become
I certainly believe that for the long-term health of the economy, green is essential.
But to maximise the opportunities for green growth, responsible businesses and governments must work together.
However it would wrong to think that green growth is limited to the green sector. New ways of looking at our environment are currently being pioneered by companies large and small – from start-up entrepreneurs to FTSE 100s.
They recognise that nature is a provider of vital resources and services, and that its value needs to be accounted for in both their day to day operations, as well as in investment decisions.
As a result such businesses are making their companies more resilient and competitive.
Managing risk more effectively, concentrating on the right relationships with customers and suppliers and strengthening their reputations.
For the economy as a whole this shift in understanding I believe will drive innovation, improve resilience and enhance competitiveness.
Because we recognise the importance of this changing business paradigm, the Government established the Ecosystems Markets Task Force.
This is a practical, business led review of the business opportunities that arise from valuing nature correctly.
The work of the Task Force was a key commitment in the Government’s Natural Environment White Paper.
The White Paper’s ambition is to create “a green economy, in which economic growth and the health of our natural resources sustain each other, and markets, business and Government better reflect the value of nature.”
The CBI has estimated that green growth contributed at least a third of all the growth in the British economy in 2011/12.
In 2010-11 green jobs across the UK were estimated as close to one million: more than were directly employed in motor trades and telecoms combined.
We are sixth in the global league table of green goods and services with a £122 billion market share.
We have a £5 billion trade surplus in green goods and services.
Recognising this growth and potential, the Prime Minister recently said:
“We are in a global race and the countries that succeed in that race, the economies that will prosper, are those that are the greenest and the most energy efficient.”
Today I want to tell you about:
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Government’s commitment to investing in energy efficiency
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Government’s commitment to investing in green energy generation
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But Government can’t do this alone.
Government’s commitment to investing in energy efficiency
Greater energy efficiency and low carbon electricity is key to stimulating UK business growth.
The shift to low carbon will strengthen our exports, add value to the UK economy and stimulate the growth…
…But we’re in a global race for limited resources…
…and it is the most resource efficient that will win.
Energy consumption is set to grow by a third over the next two decades alone.
The businesses that are best insulated from energy price shocks will be competitive.
And the consumers who are least vulnerable to energy prices with lower household bills can have greater confidence in a more stable future.
Greater energy efficiency therefore belongs at the heart of a low carbon economy.
Pioneering new financial models such as the Green Deal will make doing more with less possible.
The Green Deal will drive innovation in the supply chain and support up to 60,000 jobs in the insulation sector alone by 2015, up from around 26,000 in 2011.
Embracing energy efficiency will mobilise the building sector and reduce bills.
By 2020, household energy bills will be 11% lower on average than otherwise because of the net effect of our policies.
The Green Investment Bank – the first of its kind in the world – has £3 billion available to support green projects and it will attract private-sector capital.
Partnership strategies between government and business on low carbon technology will bring benefits across the whole economy.
The ‘push’ from public innovation support is essential if we are to transition to a low carbon society cost effectively.
We expect to invest in excess of £1 billion in this spending review period to directly support a range of innovative low carbon technologies.
Innovation is key to keeping the UK ahead of the game. As an attractive place to base low carbon businesses, boosting jobs, expertise and skills.
Government’s commitment to investing in green energy generation
The energy sector is one of our largest infrastructure programmes.
Unlike other infrastructure projects, low-carbon investment is shovel-ready and geographically spread.
Crucially, it’s possible without adding to the Government’s balance sheet - by attracting private funds.
Our Electricity Market Reforms will put in place the institutional and market arrangements needed to attract private investment to deliver a secure future with a low carbon energy mix.
But Government can’t do this alone
To avoid future international shocks, we need a healthy economy that is built on resilience and sustainability, not risk.
Energy efficient and green economies will be the winners
Energy efficiency provides jobs now, cuts waste and makes our economy more productive. And it is vital that industry sits at the heart of this.
Replacing and upgrading our electricity infrastructure over the next decade will require huge amounts capital investment – roughly the equivalent of building 20 Olympic stadia every year until 2020.
We have to gain momentum and increase commercial deals to unlock investment decisions.
Government reforms to the electricity market and forward-think policies such as the Green Deal will create clear and certain frameworks for the transition we need.
We can make Britain a global champion for the green economy.
This will require us to mobilise private sector finance sooner, scale up quicker and learn to do more with less.
We will have to be speedier and more nimble, innovating to push promising technologies ahead.
In the words of the PM earlier this year:
To those who say we just can’t afford to prioritise green energy right now, my view is that we can’t afford not to.
Thank you.