Oil spike gives coalition's green wing the opportunity it has been waiting for

07 Mar 2011, 10:52

The coalition's green wing is mobilising. The spike in oil prices that has resulted from the unrest in the Middle East and North Africa appears to have emboldened those Lib Dem and centrist Tory Ministers most closely aligned with the coalition's low carbon agenda, providing them with the perfect opportunity to accelerate their plans and finally force Whitehall departments to better deliver against green goals.

According to the front page of yesterday's Observer, Lib Dems Nick Clegg and Chris Huhne, undoubtedly stung by their sixth place finish in last week's Barnsley Central by-election and under intense pressure to take ownership of some of the more positive aspects of the government's agenda, are using soaring oil prices as a trigger to accelerate efforts to reduce UK oil dependence. Significantly, they have secured the support of Prime Minister David Cameron, who seems to have realised that without more rapid progress towards a low carbon economy his "greenest government ever" boast could quickly become an albatross round his neck.

Specifically, all government departments will be required to adhere to a new "Carbon Plan", the Department for Transport will be forced to deliver a national strategy for installing electric car infrastructure, and firm deadlines will be set for the launch of the Green Investment Bank and the finalising of zero carbon building rules. In addition, NGOs such as Greenpeace will be invited to monitor government progress against its environmental targets.

The news will be hugely welcomed by green NGOs and businesses who have been complaining for several months that there is a clear split within the government between those departments who appear happy to sideline environmental issues (the Treasury, the Department for Transport, Communities and Local Government) and those who wish to put them at the heart of the coalition's agenda (Department of Energy and Climate Change, the Cabinet Office, Number 10).

The threat of oil prices that some analysts firmly believe could exceed $220 (£134.7) a barrel gives the low carbon hawks within the coalition the perfect opportunity to revitalise a green agenda that appeared to have stalled following the forest sell-off debacle, the failure to finalise plans for a Green Investment Bank, the cuts to green advisory services, and the decision to curb some solar incentives.

However, while the ambition presented by the new Carbon Plan will be welcomed by green business leaders (and indeed all business leaders fearful of soaring oil prices) the scale of the challenge faced by Cameron, Clegg, Huhne and co is immense. All coalitions are characterised by splits, but alongside the obvious divide between the Conservatives and Lib Dems there is an additional divide within the government on green economic policy between those who believe it is the second most important challenge the UK faces behind the deficit and those who, quite frankly, could not care less. As The Observer reported Clegg has chaired a series of meetings with ministers on low carbon policy and has reportedly grown increasingly frustrated "that some departments were not taking their green responsibilities seriously enough".

The net result is a remarkably disjointed green policy programme that delivers a wide range of promising and progressive initiatives in the form of the proposed Green Deal, Green Investment Bank, Renewable Heat Incentive, Electricity Market Reforms, zero carbon building standards, and so on, that are then undermined to a greater or lesser extent by measures such as Eric Pickles' Localism Bill and its promise of planning delays for green projects, Philip Hammond's talk of an "end to the war on motorists" and relaxed speed limits, the rumoured scaling back of the Green Investment Bank plans, and even DECC's own decision to cut incentives for solar farms on the grounds that the feed-in tariff scheme is proving too successful.

These divisions were hammered home just a day before the Observer story appeared, when Chancellor George Osborne gave a speech to the Conservative spring conference in Cardiff offering the clearest indication yet that he would, like a latter-day King Canute, attempt to hold down fuel prices in the upcoming budget. Having promised in the coalition agreement to raise 'Green Taxes', the Treasury is now looking to cut one of the most effective means of curbing transport emissions and reducing oil consumption. It is also worth noting that the Labour opposition is not helping, opportunistically calling on the Chancellor to cut fuel taxes still further regardless of the impact on emissions. Equally, there is nothing new in departmental divisions on green policy, many of which were similarly evident under the last administration - remember the third runway at Heathrow fiasco anyone?

The threat of spiralling oil prices coupled with the apparent willingness of the Prime Minister and Deputy Prime Minister to force recalcitrant ministers to embrace greener policies offers the best opportunity in decades for the UK to develop a genuinely coherent and joined up green policy that promises to accelerate low carbon development across all areas of the economy.

It is no coincidence that those nations furthest along the path to a low carbon economy, such as France and the Nordics, are those that responded to the 1970s oil shock by consciously reducing their dependence on imported energy. As the old adage goes you should never waste a good crisis and it is encouraging that senior ministers have recognised that oil above $100 a barrel could prove the best sort of crisis imaginable for the low carbon economy - if only they can get their colleagues to agree them.

  
blog comments powered by Disqus

ABOUT JAMES' BLOG

Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray

Browse posts by date

Cal_navigation_previousNovember 2014Cal_navigation_next
MonTueWedThuFriSatSun
       
12
       
346789
       
1013141516
       
171820212223
       
242627282930