Chris Huhne's Economist UK Energy Summit speech - in full

Introduction

This is the first coalition in sixty five years. The last coalition won a world war. This one must tame our biggest ever peacetime deficit.

Coalitions can provide strong and decisive government because of their broad support. Indeed, seven of the ten biggest fiscal consolidations in the developed world since 1970 were under coalitions.

But it is not just a question of recovery from recession, difficult enough though that will be. The real challenge is to build a different kind of economy. One that cuts our carbon emissions to tackle climate change and which makes our energy secure in a volatile world.

In this challenge lies a tremendous opportunity. By putting in place the right incentives for low-carbon growth, we can help create the investment, exports and jobs we need to bring back economic prosperity.

This is what I would like to talk about to you today. I aim to show you how our approach will be different from that of the last thirteen years; and how we intend to make a reality of our pledge to make this the greenest government ever.

A stable framework for business
I understand the role that business has played in so much of the progress made in the last few years on infrastructure, investment and new technology. We need to built on this progress to create a new partnership between business and Government. You need clarity, certainty and stability from Government to deliver the investment we all need.

We’ve inherited bad habits. For too long we heard about knee-jerk reactions that had no real understanding of finances, and indeed, the business world. But the absolute necessity of dealing with the public spending deficit means that we can’t lurch back into a patchwork of solutions, initiatives and agencies, doling out grants. Those days are gone.

The imperatives of economic recovery, energy security and climate stabilisation all march hand in hand. All require a commitment to a consistent policy set for the long term.

I look at these challenges in the same terms as businesses and investors – in terms of risk and reward.

My business background was starting and running one of the biggest groups of economists looking at country risk. Helping to run a successful ratings agency taught me a lot about risk. In particular, I learned the need to take decisions yourself - or the decisions get taken for you. I learned that business needs firm frameworks from policy-makers – just as much in energy as in banking. And I learned that short term headline-grabbing gimmicks from government are worse than useless.

This coalition aims to provide stability and predictability – not least, a fixed-term five-year parliament.

Given the tough decisions we have to take – starting with this week’s budget – we are determined to see the country through to growth and prosperity again.

But the type of growth is crucial. Simply going back to dependence on fossil fuels would be folly. It would make us vulnerable to oil price spikes and volatility. It would deny us opportunities for green growth rich in jobs and export chances in the low-carbon markets that are expanding around the world.

The case, to me, is clear – we must fix ourselves on a path to a decarbonised society and economy, stimulating growth while meeting the twin challenges of climate change and energy security.

The challenge of climate change

Let me turn to the first of those challenges: climate change. Science tells us the probability of climate change being man made is 90 per cent. If someone told us that there was a nine in ten chance of your house being burned down, I suspect most of us would take care to renew the fire insurance.

And that is the calculus that most Governments are making despite the disappointments of Copenhagen.

It is simply not true that others are doing nothing, as some have argued. Even as we continue to seek a legally binding global agreement, there is rapid action in China and Japan. Even in the United States, where prospects of early cap and trade legislation are slim, the administration is planning on pushing business hard through the Environmental Protection Agency.