The Rt Hon Chris Huhne MP has written about why the Coalition Government has set an ambitious fourth carbon budget. The article appeared in …
The Rt Hon Chris Huhne MP has written about why the Coalition Government has set an ambitious fourth carbon budget. The article appeared in the Germany newspaper Frankfurter Allgemeine Zeitung on 4 July and the French newspaper Les Echos on 5 July.
In fifteen years’ time, the UK’s net carbon emissions will have halved.
This is no idle ambition: it is law. The Coalition Government has just committed the United Kingdom to the most ambitious act of environmental business planning in our history.
We have just set our fourth Carbon Budget, for 2023-2027. By the time it is complete, we will be responsible for 50% less greenhouse gas emissions than we were in 1990.
It was not an easy decision. No other country has binding legal targets into the mid-2020s. Environmentalists and sceptics alike have lobbied hard - for more ambition, or for less.
But amidst the noise, a simple truth has gone unnoticed: the path we have chosen leads toward growth. The fourth Carbon Budget sends a clear and cogent signal to investors: the
UK is now sure ground on which to build a sustainable business.
Why? Because we have established a clear line of sight to 2027.
The downward carbon trend is now written in law. Businesses can plan for the future. Nascent industries can grow; established ones can adapt. Our economy will be better balanced - and our consumers will benefit from clean, secure energy at the least cost.
Yet pervasive myths about controlling carbon persist, in the UK and throughout Europe.
It is uneconomic, say the doubters. It will curtail growth and ruin industry. Now is not the right time.
This is simply wrong. Decarbonisation need not mean deindustrialisation for the EU, or putting planet before profit. For us, it is about looking to the next global growth sector.
Let us take the arguments in turn - and put the tired myths to bed.
First, some claim ambitious emissions targets will make Europe less attractive to inward investment - damaging growth and risking jobs. Going too far too fast threatens our competitive advantage.
History suggests otherwise.
In the 1980s, billions of pounds - and hundreds of thousands of jobs - were invested in chlorofluorocarbons.
CFCs were used in thousands of products and processes; the alternatives were thought unworkable or wildly expensive. Industry lobbyists fought to maintain the status quo.
Yet before the decade was out, a treaty banning CFCs was in place, and the global economy was prosperous still.
Environmental regulation drove innovation; new products came to market that rendered the harmful gases economically irrelevant.
Many of the arguments deployed against the ban on CFCs are now being given a second hearing. Yes, change brings risk; and yes, some sectors are more exposed than others.
For energy intensive industries, the low-carbon transition must be managed carefully. Rising electricity costs pose a key risk to these sectors which are critical to our growth agenda. Known risks can be planned for, and government can help. We are drawing up measures to support those industries that face competition and fear ‘carbon leakage’. We will, by the end of the year, take steps to reduce the impact of government policy on the cost of electricity for these businesses, thereby allowing them to continue to play their part in delivering our green industrial transformation.
Longer-term, the picture is not one of destruction, but change. We see it on our own trading floors; many of the companies listed on the FTSE100 today did not exist twenty years ago. This natural churn is what drives the economy, not what threatens it.
The industries of the future are coming on strong. Globally, the low-carbon sector is worth over £3 trillion; it has been growing faster than world GDP.
In the UK, we believe that we can become a global hub for green investment - in wind, wave and tidal power - as well as carbon capture and storage. By investing in energy efficiency for our buildings and supply chains for low-carbon goods like electric vehicles, we can gain early-mover advantage.
The second line argument concerns not principle but timing: we cannot cut emissions now, the recovery is too fragile. It cannot bear the weight of another percentage point or two. We should act later, and trust in technology to save us.
But if not now, then when?
People have a tendency to discount the future: dividends today are more alluring than the promise of profits tomorrow. At this stage of the business cycle, it is natural to wonder where the growth will come from.
We cannot simply rely on old industries to pull us out of recession. It will be emerging industries that lead the way - just as it was in the 1930s, when new electrical goods and cars brought Britain back from the Great Depression.
In fact, now is the perfect time to set Europe’s economy on a more sustainable path.
That’s the approach we’re following in the UK. With a quarter of our existing power stations set to close before the fourth Carbon Budget begins, investment in clean energy and energy efficiency is as essential for energy security as it is for cutting emissions.
We want our economy to be less reliant on imported energy, less reliant on any single technology - and more resilient against fossil fuel price spikes.
By setting a long term target, we are giving business the time and space it needs to adjust to the changes the country needs. By showing ambition, we can delink carbon emissions from economic growth. Together with our neighbours and partners in Europe and the world, we can make the low-carbon transition an irresistible force.
The decisions the EU takes over the next few years will be central to determining how other major powers act. That’s why the carbon budget encourages the EU to raise its sights, and its emissions reduction target - to 30 per cent by 2020, rather than 20 per cent.
When the UN meets to talk about climate change solutions, we can show through our actions that the low-carbon transition is not just affordable, but desirable.
This is not an altruistic gesture; nor one designed to give us a little extra muscle at the negotiating table. Instead, it is in our own naked economic self-interest.
For promise of the green economy is real and growing. From renewable energy to home insulation, dynamic new markets are emerging. The third Industrial Revolution is underway; we each stand to gain from it.
Fifteen years from now, we want the UK to have a vibrant, low-carbon economy - with more electric vehicles, more renewable energy, and more efficient buildings.
Some countries are further down the low-carbon path than us. But the fourth Carbon Budget is a statement of intent. It supports people, profits - and the planet. So forget the myths, and see it for what it is: a budget for growth.