I am delighted to be part of this conference on sustainability focusing on climate-friendly growth to unblock business potential. It addresses one of the most important issues facing the world today – climate change. It also represents and one of the biggest opportunities since the industrial revolution.
In the UK, this is ‘Climate Week’ so I am happy to be involved in sustainability dialogue here.
I am also delighted to be sharing this space with business leaders and senior decision makers from government, whose presence here demonstrates how seriously India and states like Tamil Nadu approach energy efficiency and low-carbon development.
Low-carbon growth is a top priority for the UK too. We have committed to reducing greenhouse gas emissions by 80% below 1990 levels by 2050 have enacted the first ever Climate Change Act in the world which creates a legally binding framework to hold us to this.
When he came to power, the Prime Minister David Cameron pledged to make his Government “the greenest Government ever”.
The UK has provided global leadership both in giving this issue the profile and attention it merits. Our Climate Change Committee – established by the 2008 Act – gives independent and expert advice to the government on what it needs to do to keep us on track to meet our global and domestic commitments.
How are we going to deliver this? Some action involves changing our way of living. (That can be different from our quality of living, by the way.) Others require us to become far more energy efficient – in making our homes near zero-carbon or travelling more efficiently.
The changes have to happen quickly and they need to be permanent. That is why the UK legislated for an 80% reduction in carbon emissions by 2050, with specific markers along the way - just in case you were wondering how politicians in 2010 will ever be held accountable for a performance measurement exercise that could be decades away.
A good deal of it will come through a dramatic increase in the generation of energy from renewable sources, mostly through Offshore and on shore wind. And because of the investment required to electrify and decarbonise our transport and heating, we will need the total capacity for power generation to increase as carbon pollution goes down. We need to de-couple economic growth from carbon. And we’re committed to this.
Like most other countries, renewable energy is a vital part of the energy mix we need to create a low-carbon future. We are aiming to hit a target of 15% of our overall energy needs coming from renewable sources by 2020. Just over 5% of the UK’s electricity is from renewable sources and we estimate that this will need to increase to over one third by 2020 – a seven fold increase! So, you can see, we’re looking for transformational change.
Over a third of our economic growth in the current year is likely to come from green business. The UK has already reduced carbon emissions by more than 20% from 1990 levels and to accentuate that we have set up the world’s first Green Investment Bank – devoted to leveraging billions of pounds for green infrastructure. We are the first country where listed companies will include emissions data in their annual reports.
Offshore wind power is another area of enormous potential in the UK. Any of you who have had the fortune (or perhaps misfortune) of travelling along the coastline of Britain at around this time of the year will know just what gale-force winds can be whipped up. We are already number one in the world for offshore wind – and have plans for significant further growth. Onshore wind power, biomass, hydro, wave and tidal power will also play an important role.
The UK approach has synergies with action being taken here in Tamil Nadu, as stated in the latest revision to the vision 2023, to rapidly increase the energy generated from renewable sources – although naturally your priorities might be more weighted towards onshore wind and solar power. I know that the State government has announced plans for a green energy corridor.
But how can this be done without proving a drag on economic performance? Especially when the focus in India, and around the world, is on delivering high levels of sustained growth and prosperity. It is a huge dilemma. And if a straightforward solution existed, it would have been found and implemented already!
But the hard truth is that India has much lower emissions per person, hundreds of millions of people in poverty and is growing much quicker than the developed world. So India can’t cut its emissions straight away. So the focus is on slowing the growth in emissions, reducing the emissions intensity of the economy and finding low carbon growth pathways that show clear development potential. The growth in emissions, according to the Government of India would be reduced by 15% just by increasing the renewable portfolio.
To do this in both the UK and India will need an increase in sharing of technology. I am optimistic that the UK’s domestic low carbon commitments would pave the way for development of more advanced technology and create opportunities for sharing.
Meeting targets has always been a big challenge in UK. But industry saw a huge opportunity. A new industrial revolution is in progress: new age, low-carbon, green businesses. A range of technologies have been developed, a host of consulting firms have come up, manufacturing process changed, and the mechanism to power industry is changing.
If this opportunity is to be fully encashed as envisaged by industry, government needs to step in with conducive policy. The UK was a pioneer in the low carbon market. We started early and benefitted from an early mover advantage, but we have made mistakes. So we hope we can share with you what we learned.
As momentum towards a low carbon global economy accelerates, the UK is positioning itself as the best place to build low carbon businesses and as a global hub for low carbon solutions.
Despite the economic downturn, the low carbon and environmental goods and services sector (LGEGS) in the UK is one of the few areas of the economy expected to grow by an average of over 4% per annum up to 2014/15, comparing favourably with the forecasts for other large economies.
- Many UK businesses are placing low carbon at the heart of their products, services and supply chains and developing low carbon expertise in demand across the globe.
- Strengths include partnerships in industry and the private and public sectors, world beating innovation in companies, universities, and research organisations, and a flexible and dynamic business environment.
- The Office for Low Emission Vehicles brings together the key strategic priorities of Whitehall into one team focused on delivering the maximum economic and environmental benefits from the transition to ultra-low carbon vehicles. Support for an early market for ultra-low carbon vehicles requires policies focused on encouraging demand, supply and infrastructure.
Because of the scale of the challenge and tough targets we set for ourselves, we had to take a range of steps some very hard hitting, others supportive. A range of fiscal instruments came into play and gave us the opportunity to share lessons with the States in India through the project “Fiscal Instruments for Low carbon Industrial Development”. The project on identifying workable fiscal instruments for promoting low carbon growth was one such initiative in India. You will hear about this in detail during the day from the experts.
In 2012, the Lord Mayor of the City of London launched the first report in Chennai. It recommended a fiscal route to a low-carbon pathway in Tamil Nadu.
I am delighted that two years on, the final report released today, offers detailed, innovative and focused policy suggestions, some of which draw on the UK’s own experience. We hope that these ideas will encourage new investment and technology that will help Tamil Nadu, one of India’s most industrialised and urbanised states, to realise its plan to reduce its carbon footprint while accelerating and sustaining economic and industrial growth.
The UK is already a leader in low-carbon and we are pleased to be collaborating with Tamil Nadu in this exciting project. We hope it will encourage other states to follow suit.