Business leaders urge government to increase green R&D tenfold

The government must increase its annual investment in low carbon technologies tenfold from £250m to £2.5bn if the UK is to meet its climate change targets, according to a report from the Confederation of British Industries (CBI).

Spending must equal the defence budget if the country is to hit targets included in the climate change bill to reduce carbon emissions 80 per cent by 2050, the business lobby group said in a new report released today.

Report author and CBI director of business environment Dr Neil Bentley, said that the UK must undertake a rapid roll out of low carbon technologies, such as biomass, clean coal, wind and nuclear power, but warned that the emerging sector was being hampered by insufficient government support.

"With increasing globalisation, the UK has an opportunity to enter and lead in new markets estimated at $1 trillion," he said. "However, there is currently a general lack of ambition and vision on how to achieve this. The UK needs to act now if it is to be a low-carbon leader. If not, we are in danger of being overtaken by other countries in low-carbon technology markets."

He added that with US president-elect Barack Obama committed to ploughing $150bn (£100bn) of funding into cleantech R&D over the next 10 years, the UK must act fast if it wants to become a global hub for green technologies.

The report outlines a number of recommendations to help bolster the UK cleantech sector, including tighter integration between government innovation and climate change departments to help ensure funding is better targeted, and moves to ensure those low carbon technologies that are closest to commercial deployment are prioritised and offered extra R&D funding.

It also recommends that funding should be targeted at those areas that can deliver the deepest cuts in carbon emissions: buildings, energy production, transport and industrial processes.

In the long-term, the report claims government-backed R&D activities should grouped into technology "families" – such as alternative fuels, energy storage, marine power and vehicle technology – in a manner similar to the way R &D departments are organised in large corporations.

The report praises the government for driving demand for green technologies through the adoption of green building standards such as Breeam and various council's electric vehicle purchasing programmes.

However, it claims green public procurement policies should be more widely adopted, and also calls on the government to better promote science and engineering subjects in schools and universities to ensure the technical and business skills the cleantech sector requires are developed.