Speech

Building a sustainable future

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Speech about transport having a pivotal role in building a sustainable future.

The Rt Hon Philip Hammond MP

Opening remarks

Ladies and gentlemen, distinguished guests. Today (21 September 2011) I want to talk to you about how we go about building a sustainable future.

The case I’m going to make has 3 core arguments: The first is that “sustainability” must be defined in its widest sense; a policy will only, in practice, be sustainable if it supports our environmental and economic goals.

The second is that while there may sometimes be a tension, there is not necessarily conflict between these two crucially important objectives - it is possible to achieve both in tandem. And the third is that, along with power generation, transport has an absolutely pivotal role in delivering that sustainable future.

Paying tribute to Japan’s unbreakable spirit

Before I go on to make those arguments, I’d like to take this opportunity to say a few words about the earthquake and tsunami that struck Japan back in March.

Like everyone in Britain, I was shocked and saddened by the destruction and the tragic loss of life caused by that terrible event.

But I have also been deeply impressed, by the resilience of the Japanese people and their almost super-human efforts to recover from the effects of the disaster.

The work you have done, the progress you have made and the determination you have shown is hugely impressive and, on behalf of my Government and my country, I want to pay tribute to Japan’s unbreakable spirit.

Global challenges - environmental and economic

The earthquake and tsunami were, of course, natural disasters. So, while we can always prepare for events like these, we will never be able to prevent them, or stop them in their tracks. The same cannot be said of climate change. Climate change threatens our planet and imperils our future. That’s not science fiction, it’s science fact.

But this is a man-made problem - which means that it is possible for us to do something about it. Individually as countries, and collectively as an international community, it is within our power to tackle climate change.

So, in order to build a sustainable future it is imperative that we meet this global challenge. But Japan, Britain, all of the mature economies, face a second global challenge - the challenge of maintaining economic growth.

The earthquake and tsunami took a heart-breaking toll in human lives. But they have also hit Japan’s economy - from a recovery bill totalling trillions of Yen, to the inevitable downward pressure on national GDP as output dropped.

And, because Japan is one of the biggest economies in our increasingly inter-connected world, there has been an inevitable knock-on effect for the entire global economy.

On its own, the global economic consequences of what happened in March would have been serious and significant. But they were also part of an unprecedented coincidence of international events.

The past year has witnessed the euro-zone debt crisis, the downgrading of America’s credit rating and rocketing commodity prices in everything from food and oil, to copper and gold - as well as the tsunami and earthquake.

Together, their impact has been magnified beyond the sum of their parts. In effect they have conspired to grind-down confidence and whip-up uncertainty in the financial markets.

End result - right around the world the conditions for generating growth have become much, much tougher. And, just as it is vital that countries reduce their deficits and live within their means, so it is crucial that we grow our economies. That’s the only way to secure the recovery, put people back to work and spread prosperity.

So, if we want that sustainable future, not only must we commit ourselves to the fight against climate change, we must also commit ourselves to delivering economic growth.

I am clear that those objectives do not need to be incompatible. There does not have to be a choice between safeguarding the environment and generating economic growth. This is not a zero sum game.

And one of the key areas where we will see this truth demonstrated is in transport. When the coalition government came to power in Britain last May, we inherited a deficit greater than any in our nation’s peacetime history.

No individual, no family, no business can carry on spending more than they earn indefinitely. There will always come a day of reckoning when the credit card bill lands on the doormat and you either pay off the debt or go bust. The recent upheaval in the global financial markets reminds us that, ultimately, the same goes for governments.

So, from day one in office, our government was clear that our number one priority was - and is - restoring Britain’s public finances to order.

Traditionally, British governments have responded to fiscal pressure by slashing capital investment - avoiding the politically challenging cuts in current spending.

But not this time. In spite of intense pressure on budgets, we made the choice to invest in infrastructure, and transport infrastructure in particular. And for good reason.

We know that transport investment is a key economic driver - strengthening the arteries of commerce, moving people to the workplace and goods to the marketplace.

In the short term, transport investment supports job creation through the development, manufacture and application of new technologies and the construction and maintenance of infrastructure across the sector.

And in the longer term, it drives the productivity growth which is the key to future competitiveness.

But this investment will also be a key part of our plan to make Britain cleaner and greener. Economic growth and decarbonisation. Being delivered hand in hand across the transport sector. Let me take you through some of the steps we have taken in pursuit of our double-headed goal of sustainable economic growth.

Sparking a green motoring revolution

For a few years, UK government policy, focussed on the need to tackle climate change, drifted into what appeared to be an unthinking hostility to cars and motoring.

But a “war on the motorist” is not sustainable. Motorists are voters, and a sustainable policy, in a democracy, must be a policy that voters will support. So our government recognises the absolute centrality of the car to people’s lives.

For many journeys it is, and will remain, the only practical and convenient choice. Indeed, 84% of all journeys in the UK are undertaken by car.

The enemy is not the car, it’s the carbon. So, in Britain we have ended the war on the motorist and are prosecuting the war on carbon - sparking a green revolution in motoring with a blend of supportive public policy and dynamic private enterprise.

And I’m pleased to say that Japanese investment and Japanese companies are playing a central role by committing early and clearly to our “Plug-In Car Grant” which gives consumers a 25% subsidy, up to £5,000, if they buy an ultra-low emission car.

Alongside this new grant is our “Plugged-In-Places” Programme, designed to meet the infrastructure needs of electric car drivers, setting up a targeted network of electric vehicle recharging points around the country - everywhere from streets, to car parks, to retail and leisure facilities.

And we’re using it to understand how the infrastructure to support electric vehicles needs to develop. That will differ from country to country - depending on culture, travel and work patterns and existing infrastructure.

For us, in Britain, on-street re-charging is certainly part of the answer. But we have concluded that putting a charge-point on every street corner is not the right approach.

Many drivers, perhaps most, will find it better suits their daily routine to plug-in at home, at night-time when electricity is cheaper, or while they’re at work.

And we are reforming planning controls to make it easier for private enterprise to play its part.

By committing to this programme, we have ensured that the UK has been and is an attractive launch market for ultra-low emission vehicles and an attractive location for major private sector companies to build these new products for the European market.

Nissan is leading the way by constructing a plant to manufacture its electric vehicles and batteries in the North East of England. Others will follow and the supply chain and supporting technology development companies are already moving in.

A truly sustainable approach, promoting the change that will deliver our environmental objectives - while creating high quality jobs, regenerating our regions and rebalancing our economy.

Of course, reduced emissions from private cars can be mandated by regulation - but must ultimately be delivered by the private sector. Our government also believes it’s important to support more environmentally friendly forms of public transport - an area where we have more direct levers to influence behaviour. For example, in promoting low carbon buses.

These use at least 30 per cent less fuel and emit nearly a third less carbon than a conventional bus. Yet, when my government came to office, they made up just 0.2 per cent of the country’s bus fleet. So, we have invested in a multi-million pound Green Bus Fund which will kick-start the market by helping operators with the up-front cost of buying low carbon buses - as well as maintaining ongoing enhanced subsidy for green bus operation.

We estimate that, by March next year, this will result in more than 500 new hybrid and electric low carbon buses being on the roads - meaning that public transport will be making a contribution to shrinking the carbon footprint of road transport, just as the private sector is beginning to do.

The railways are another essential part of Britain’s public transport networks. And they offer carbon reduction possibilities in everything from regenerative braking to trackside energy storage. Making existing rail journeys more carbon efficient, and attracting more and more passengers from other, less carbon-efficient, modes.

One important way that our government is tapping into this potential is through a major programme of rail electrification.

Electric trains emit no air pollution at the trackside and they generate less CO2 than their diesel counterparts. So electrification of the railway - going hand in hand with de-carbonisation of the power generation sector, makes good environmental sense.

But investing in electrification makes good business sense too.

And that’s because electric trains are much more reliable than diesels, they are cheaper to operate and often cheaper to buy, they require less maintenance and have lower energy costs and they are also lighter and so cause less damage to the track.

Carbon reduction - and greater efficiency. Environmental and economic benefits, hand in hand.

And as part of that electrification programme, we have given the go ahead for the £4.5 billion Inter-city express programme - which will mean new trains, more capacity and better reliability for passengers using some of Britain’s busiest rail routes. And, again, a Japanese company, Hitachi, is helping us to deliver this project as part of a consortium with the British infrastructure company John Laing. With Hitachi building a new train factory in a high unemployment area of Britain and creating 600 jobs, here is another example of transport investment providing an economic shot in the arm, as well as delivering the goods for passengers and for the environment.

High speed rail

Here in Japan, you will also know the potential of high speed rail networks to attract passengers on to trains and away from more environmentally damaging forms of travel, such as long-distance driving and short-haul flying.

What’s more, you will understand the way that high speed rail can transform a nation’s social and economic geography for the better.

Japan has a long and proud record as a high speed rail pioneer. Indeed, we in Britain have looked on with admiration at your achievements in this field.

But we have learned from your experience, as well as admired your progress. And now we are proposing a national high speed rail network in our country.

I am convinced that, as in Japan and in France and Spain, such a network would not only slash journey times between our major cities and regions, but transform the way our economy works.

Improving connectivity for our communities and our businesses; boosting productivity and improving competitiveness. And by making high speed rail the mode of choice for long-distance inter-city journeys, we will reduce the carbon footprint of domestic travel still further.

Aviation

I cannot talk about reducing transport emissions without highlighting the urgent need to tackle the aviation sector’s fast growing emissions. Aviation plays a vital role in the global economy. However, in Europe and increasingly in other parts of the world, governments are facing demands to ensure that aviation is put on a sustainable path that it can deliver growth with decarbonisation.

It is clear that aviation emissions will best be managed at international level, but this can take a painfully long time. That is why, alongside operational and technological measures, the UK fully supports the inclusion of aviation in the EU Emissions Trading System or ETS. The ETS delivers an emissions cap in a cost effective, monetised and flexible way, allowing airlines to choose how best to meet their emissions quotas.

I recognise the concerns that have been raised in the last few months, but doing nothing is not an option. In addition to taking concrete steps, we will continue to work with like-minded states, such as Japan, in international negotiations in the International Civil Aviation Organization (ICAO) in the hope that we can deliver an ambitious global agreement.

Shipping

Maritime transport is another area where carbon emissions must be reduced. The adoption of the Energy Efficiency Design Index, as championed by Japan at the International Maritime Organization earlier this year, was very gratifying.

This was an important first step towards securing a comprehensive global agreement. So some progress has been made - but not yet enough. Once again, the EU is prepared to set the pace with a unilateral scheme if IMO cannot deliver the goods.

We, in the UK, look forward to working with the new Secretary-General, Mr Sekimizu, on this and IMO’s many other challenges.

Concluding remarks

In speaking to you today I have argued that, in our present circumstances, the only sustainable policies are those which deliver carbon reduction and economic growth.

Anything else will be rejected by an electorate that is more currently focussed on jobs and prosperity than the climate change agenda.

So we must focus on initiatives where there is overlap in delivery of these twin objectives and prioritise them, for the moment at least, over those where environmental objectives are at odds with the urgent need for growth and jobs.

I am proud to say that the transport sector can lead the way in demonstrating the path to green growth; in showing how we can maintain the momentum of decarbonisation while delivering the growth and jobs our electorates demand.

The twin challenges of economic growth and climate change; both urgent and both fundamental to our future. To meet them will require a particular focus and determination.

Not unlike the focus and determination Japan has shown in response to the effects of the earthquake and tsunami. This country and its people have reminded us that all things are possible with courage, determination and vision. And we will need plenty of all three to meet the twin challenges of climate change and economic growth.

Learning from Japan’s example, I know that it’s possible for us to come together, and work together, to build that truly sustainable future.

Thank you.

(This speech represented existing departmental policy but the words may not have been the same as those used by the minister.)

Published 21 September 2011