As I write, negotiations at the UN climate summit in Copenhagen have been suspended after developing countries withdrew their co-operation.
No-one thought this was going to be easy and doubtless the talks will resume – in some form – but the fact they have stalled is testament to the issue’s complexity. With 192 countries at the negotiating table, not to mention countless other organisations and interested parties all jostling for position, a quick agreement was never on the cards.
Here in the UK, the prime minister yesterday flew to Copenhagen to add fresh impetus to the talks. Certainly, he could point to last week’s Pre-Budget Report as evidence of his government’s commitment to green business.
At this time of austerity, the chancellor still managed to find £120m for low-carbon industries, including £50m for manufacturing and testing facilities for offshore wind technology and £30m for ‘green’ transport projects.
With the global market for low-carbon goods and services already worth over £3 trillion and growing rapidly, Alistair Darling was right to spotlight the employment opportunities offered by transitioning to a low-carbon economy.
Through the Climate Change Act, the UK became the first country in the world to adopt a legally binding target to reduce carbon emissions – by at least 26% by 2020 and by 80% by 2050. Hitting these targets will transform the business landscape, companies’ supply chains and the way in which we all work and consume. We should not, however, think about the size of the challenge but rather the scale of the opportunity.
The measures the chancellor announced are certainly helpful but the scale of his commitment demonstrates the fiscal constraints he faces. Other countries are also making big commitments. For example, the US has committed $112bn and China $221bn to green funding as part of their fiscal stimulus. Clearly, the UK’s low-carbon industry needs every last penny of government support to help ensure sustainable progress.
That the UK is just one player in what is now a global low-carbon market was one of the key messages I took away from the World Low Carbon and Eco-economy Conference, which took place in Beijing recently.
The conference, which was attended by 1,300 delegates from more than 25 countries, offered a glimpse into a low-carbon future, one where transport systems are powered by hybrid technology, and industrial growth does not equal higher emissions and consumption.
Achieving this goal is not straightforward, however. Economic growth in the UK is far from assured. The dire state of the public finances has put paid to any notion that ours will be a painless recovery. Nevertheless, low-carbon business and investment is one possible route out of the current malaise.
Central government is right to set targets and the framework for implementing the global changes required for low-carbon growth. Local government and regional development agencies now need to step forward to provide support and funding for companies and public sector bodies. It is then up to companies to increase jobs and maximise the efficiency of their operations to deliver on carbon reduction targets.
James Close is a partner in Ernst & Young’s government services practice
