Today’s report from Bob Wigley’s Green Investment Bank Commission will no doubt ricochet between policy-makers at departments across Whitehall.
The report’s prediction that £550bn of investment in low-carbon infrastructure and supply chains will be required over the next decade if the UK is to meet its emission-reduction targets certainly underlines the scale of the challenge we face.
The Green Investment Bank (GIB) – confirmed in the Budget last week – will have an important role to play as a catalyst for much-needed private sector investment. Wigley’s commission suggests the absorption of a number of environmental quangos into the GIB. These bodies currently provide more than £2bn a year in grants, which could be used to help fund the bank.
While it is too early to say whether government will adopt such proposals, what’s clear is that yet more changes are likely for a public sector which is now in no doubt that the long-mooted ‘age of austerity’ is much more than a soundbite.
But while policy-makers grapple with the prospect of departmental cuts of up to 25% - and the inevitable personnel reductions that will follow – the challenges facing government remain daunting. And certainly, while the desire to pay down the deficit coursed through every line of last week’s Budget statement, the Chancellor’s references to all matters green were less easy to spot.
Given that the global market for low-carbon goods and services is already worth over £3trn and growing rapidly, the employment and economic growth opportunities presented by the transformation to a low-carbon future must remain at the forefront of policy development – even as austerity storm clouds hover above Whitehall.
The UK was 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 – and at a time when the recovery is still fragile, carbon reduction needs to be delivered in a smart way that drives economic growth and helps create new clean technology industry leaders from within the UK.
The UK has a number of historical strengths that it can use. In addition to London’s position as a global financial hub, our traditional leadership positions in innovation, R&D and manufacturing can all be drawn on to deliver a thriving cleantech economy.
The primary role of government – whatever its political complexion – is to set a policy and delivery framework that will ensure policy stability and that enables the allocation of capital at scale to new technologies that will transform the business landscape, company supply chains and the way in which we all work and live.
Investors, both UK-based and around the world, need increased confidence in the returns that these investments can deliver over the next decade and beyond. Government’s role in establishing a foundation for investment confidence cannot be overstated.
Whatever the level of cuts and changes to the size and role of the public sector in the years ahead, delivering ‘Scale at Speed’ for the most impactful technologies needs to be the mantra for all those committed to a low-carbon economy,
Steve Lang is Cleantech leader at Ernst & Young
