A low-carbon reality
The minister for energy and climate makes the case for the coalition’s policies
Gone are the days of governments banging on about the green economy divorced from the challenges facing the rest of business and without any reference to what was happening in the real economy.
The truth is that businesses - especially small and medium-sized enterprises (SMEs) - are finding it hard to make ends meet at the moment. These really are tough times. And the last thing that companies need is more Whitehall greenwash rammed down their throats.
We need a new low carbon reality. One which sees green business - and the effort to reduce emissions - as part of the wider success of the economy. One in which efforts to improve resource efficiency and drive down carbon emissions underpin, rather than compromise, the competitiveness of the British economy.
That reality lies at the heart of this coalition’s approach to Britain’s low carbon transition.
Business is right to demand certainty and direction from government. And that’s what this coalition is determined to provide. My mantra is give business plenty of TLC - transparency, longevity and certainty. It’s what guides our policy making and is vital to establishing a successful prosperous green economy.
As part of our wider growth effort and work to rebalance the economy, we want a successful green economy in the UK, moving away from our dependence on expensive fossil fuels to a future powered by low carbon energy and green technologies. This shift of course represents challenges but also a massive business opportunity with tens of billions of pounds of investment needed and green job opportunities up for grabs over the next decade.
The green economy isn’t just an economy for big companies. Businesses of all shapes and sizes will be at the forefront of this drive. Success will require great innovation and technological progress - one of the key attributes of Britain’s SME sector.
And I know for myself that there are already many great British firms that are stealing a march on this global low carbon revolution and are at the forefront of green tech innovation. I want this to continue and it is up to this coalition to create the right conditions to allow them to thrive and prosper.
Firstly, despite the massive deficit we inherited, the coalition is investing billions of pounds of public money into the low carbon transition.
Not just throwing money at the problems but investing smartly, with rigour and in ways that leverage in the maximum private sector investment and create opportunities for our businesses.
We are putting £3bn into the Green Investment Bank as well as £860m to support renewable heat, stimulating investment in green heat technologies by a massive £7.5bn by 2020. Hundreds of millions of pounds of further funding has also been made available to boost a variety of low-carbon technologies including offshore wind.
This represents a huge boost for the low carbon goods and services market in the UK and also represents a huge opportunity for UK exports too. The global market for low carbon goods and services is currently worth £3.2trn and is estimated to grow to over £4trn by 2015.
But the “green economy” isn’t just about government spending. Our second priority is to undertake radical reforms that are designed to create new markets and to attract greater amounts of private investment into the green economy. It’s about freeing up the private sector to do what it does best: innovate and create wealth. Our proposals for electricity market reform will create a new market which - for the very first time - will create large scale energy efficiency investment to compete with new power generation projects.
It’s also about business becoming more energy efficient - a key requirement for any competitive firm in the 21st century. For all businesses, energy efficiency can make a real difference to the bottom line and increase competitiveness.
That’s why we’re bringing in the Green Deal, to be introduced next autumn for households as well as businesses, to help address the stumbling block of access to capital for green improvements.
Up and down the UK, from shops and offices to pubs and clubs, firms will be able to improve the energy efficiency of their buildings at no upfront cost. The expected energy savings should be higher than the cost of repayment and will help businesses spread the costs over time rather than shelling out upfront.
The Green Deal is not only a great way to tackle the financial barrier to energy efficiency, it also represents a massive new business opportunity with tens of billions of pounds of investment needed, products to be developed and jobs to be supported.
By creating a new market opportunity for private sector finance we will provide another major opportunity for growth and employment with tens of thousands of jobs likely to be created in the home insulation market alone by 2020. We want the Green Deal to be a real success story for British business.
The Prime Minister has committed this coalition to be the greenest government ever. We are driving forward the agenda in tough economic times but we are also absolutely certain that success depends on a business friendly approach to low carbon policy. That is what you’ll get from this coalition; big ambition, long term vision but absolutely grounded in the economic realities of today.