07 Jun 2013
The small but influential anti-wind farm cabal in Westminster and the media will have been patting themselves on the back yesterday over a job well done. Their months of lobbying had apparently paid off. Ministers were mobilised and planning guidance was tweaked, all in the name of blocking the development of a cost-effective clean technology that is broadly supported by around two- thirds of the public. A compliant media completed the job, with correspondents swallowing the line that the Prime Minister thinks that "if people don't want to have wind farms they don't have to have them". Reports were duly filed about newly empowered citizens being given the right to "veto" unwanted wind farms.
And yet closer inspection revealed a rather more complex story, because not only is this supposed planning crackdown accompanied by a raft of measures designed to make wind farms more attractive to local communities, it also fails to include any significant changes to the current planning regime. If the latest reforms represent success for the opponents of wind farms it could prove to be a pretty hollow victory.
The reality is far less dramatic than the headlines suggest. There is no veto on offer to opponents of planned wind farms and no plans for the kind of local referendums that would be required to enable such vetoes in the first place. There are no prescriptive planning rules that would force wind farm developers to comply with buffer zones or categorically rule out certain areas. In fact, the only substantive change is a new legal requirement for developers of larger wind farms to consult with local communities before they lodge a planning application - an approach that is already best practice across the industry and is regarded by many developers as an effective means of working with communities and reducing the likelihood of objections.
Instead, what we have is an attempt by Conservative ministers to spruce up planning guidance that has been in place for some time. Local authorities already consider visual impacts, environmental impacts, and so-called amenity impacts when weighing wind farm planning applications, just as they consider the impact on heritage sites and the feedback they receive from the local community. It is hard to see how yesterday's apparent changes to planning guidance actually change any of these considerations. Wind farm developers will continue to operate in a largely unchanged planning environment, while the introduction of more generous community benefit payments and the government's long overdue effort to encourage greater levels of community ownership may in fact make it easier for them to secure even higher levels of public support.
The fact this supposed crackdown lacks any sort of legislative backbone helps explain why the wind energy industry remains fairly relaxed about what its opponents regard as an all-out assault on its future prospects. Obviously the risk remains that the guidance may prove more draconian than it currently appears, while the bizarre hold anti-green Conservatives retain over the government means further changes could be imposed down the line. But at the moment it appears to be a case of as you were for the industry. As with the negotiations around the Energy Bill and the UK's carbon budgets it looks as if Lib Dem Energy and Climate Change Secretary Ed Davey has lost the media battle, but won the far more important fight over policy.
That said, it would be wrong to be too cavalier about the real world impact of the new planning policy guidance. Technically, there may be only limited changes, but the assertion by Communities Secretary Eric Pickles that "any adverse impact from a wind farm development [should be] addressed satisfactorily" gives anti-wind farm campaigners and councils the encouragement and political cover they need to step up attacks on new projects, regardless of the fact polls show only 11 per cent of people nationally are opposed to wind farms. Moreover, the continued lack of clarity in the planning guidance and the vocal opposition of some politicians makes appeals against planning decisions ever more likely, further pushing up the cost of development and delaying the rollout of clean energy capacity.
It is this rhetoric that gave anti-green politicos and editors a reason to celebrate, and it is this rhetoric that again betrays the disgracefully short term, inconsistent, ideological, and politically-motivated thinking at the heart of government. Thinking that serves to damage both the green economy and the wider economy, taking jobs and investment with it. In orchestrating such an explicit attack on wind farms just a day after MPs overwhelmingly approved an Energy Bill designed to drive investment in clean energy the Conservative wing of the government has again sent investors ridiculously mixed signals.
Meanwhile, ministers have risked opening a Pandora's Box in picking out one energy technology for special treatment through the planning system. Green groups have already pointedly asked whether people will be given "vetoes" and offered similar levels of community benefit payments when they are asked to host fracking wells, nuclear power plants, or new runways. In fact, pretty much every kind of development begs the same question: where is my community benefit payment to compensate for the loss of amenity caused by new housing, new roads, new pylons, and, of course, new power stations?
Number 10's assertion that the Prime Minister thinks that "if people don't want to have wind farms they don't have to have them" might make a good sound bite, but it is truly woeful policy and staggeringly weak leadership. Taken to its logical conclusion it is a recipe for a planning policy defined by that amusing acronym BANANA - Build Absolutely Nothing Anywhere Near Anything. Planning policy is notoriously difficult and temperatures will always run high as governments try to balance local sensitivities with national priorities. But suggesting people can unilaterally block projects of national importance is not a good precedent to be setting at a time when new infrastructure is desperately needed to drive the economic recovery, enhance British competitiveness, and deliver decarbonisation.
No one wants poorly sited wind farms marring the landscape, least of all the wind energy industry, but we have to get clean energy from somewhere and we need a consistent planning system for managing its development.
Like a phoenix from the flames or an unrelenting zombie, depending on your point of view, this afternoon's narrow defeat of the Energy Bill's decarbonisation target amendment will singularly fail to kill off the increasingly vocal campaign for a binding clean energy target.
First up, the narrow nature of the government's victory - a Commons majority of 23 means the amendment would have passed if just 12 more Lib Dem backbenchers had voted in line with their party's official position - means that it is inevitable the House of Lords will take a very close look at the amendment.
Green campaigners are pretty confident enough peers will back the amendment to create an almighty headache for the government. My understanding is the Lib Dem leadership are all too aware they face a major challenge whipping their peers into blocking an amendment supported by many party activists, while a number of the Bishops and cross bench peers who sit in the House of Lords are also preparing to back the decarbonisation target.
The worst case scenario for those green businesses and NGOs campaigning for the amendment is another narrow defeat that still serves to raise the profile of the green energy cause. The best case scenario is a defeat for the government that could yet force it to look again at some form of compromise agreement. The chances of George Osborne caving and adopting the target are even slimmer than the government's majority proved in this instance, but a Lords rebellion could pave the way for some form of compromise that either offers some alternative succour to the green economy or provides stronger assurances that a target will be properly considered when the carbon budget covering the crucial 2030 period are agreed following the next election.
So the battle for a decarbonisation target will continue for at least the next few weeks, and has the potential to drag on for a while yet should the Lords and Commons engage in a game of legislative ping-pong.
Moreover, even if the government does manage to finally decapitate this amendment, it remains on track to pass legislation that gives the next government the power to introduce a decarbonisation target for 2030 in 2016. As Labour pointed out this afternoon, the Energy Bill does not require the government to introduce such a target in 2016, it simply bans it from introducing a target before 2016. But with Ed Miliband hammering his colours to the mast in favour of a target and the Lib Dem leadership still insistent it would have backed the amendment were not for the constraints of coalition, only an outright Conservative victory at the next election (by no means impossible) would stop the debate being revived post-election. Meanwhile, many of the arguments that underpinned the debate surrounding the decarbonisation target and the need for greater policy certainty for the green economy for the 2020 to 2030 period look set to be repeated next year when the government undertakes its controversial review of the post 2020 carbon budget.
Whether businesses like it or not, and given the desire for policy clarity on all sides they do not like it, the debate over the decarbonisation target and the related arguments about the most cost effective way to decarbonise the UK's energy sector is going to run and run. This uncertainty creates numerous challenges, but it is also not without its opportunities for savvy green businesses.
The risks are well documented and were convincingly outlined by the many businesses that wanted to see a decarbonisation target adopted immediately. The Energy Bill may well deliver the promised £110bn of clean energy investment through to 2020, but without a clearer indication of what happens after 2020 businesses will be reluctant to locate supply chain infrastructure in the UK, resulting in missed economic opportunities and higher costs in the long term. Opponents of the decarbonisation target argued that the over-arching carbon budgets should provide sufficient certainty that decarbonisation will continue, but enough potential investors rejected this argument for its credibility to be questioned. Ministers should be very worried about the extent to which their ability to convince clean energy supply chain firms to locate in the UK has been compromised, which is why the House of Lords should now back the amendment and the coalition should look again about how to strengthen post 2020 policy clarity.
There is a very real risk that the investment prospects for renewables, carbon capture and storage, nuclear, and even gas have been harmed given the fact we now face two years of uncertainty over whether or not a target will eventually be adopted. At the very least, the cost of capital will be higher than it should otherwise have been as a result of the political risk.
However, while these challenges remain a real cause for concern, it would be wrong to suggest the outlook is universally gloomy as a result of this policy confusion. The Energy Bill has the potential to unlock a surge in clean energy investment as soon as the details of the contract for difference and capacity mechanisms are confirmed this summer. The renewables, nuclear, and energy efficiency sectors, in particular, are on the cusp of what could prove to be an historic breakthrough. It would be churlish of supporters of the green economy to not at least acknowledge this reality.
Clean energy firms now have an opportunity to not just mobilise investment, but also continue to make the case for the government to embrace greater ambition through the 2020s. They have the opportunity to prove that their arguments are sound, that their technologies are becoming more cost effective, and that their warnings about over-reliance on gas power are justified. For all the noise created by the fracking-addicted, climate sceptic cabal of right wingers that seek to monopolise the headlines, the continued passage of the Energy Bill and the government's support for an energy portfolio approach proves they remain in a distinct minority. Meanwhile, the way in which the government argued that the Climate Change Act and the support mechanisms contained in the Energy Bill made a decarbonisation target superfluous to requirements at this point means the onus is now on ministers to prove that is ineed the case and secure rapid investment in new clean energy projects and, crucially, factories.
Those businesses and campaign groups committed to holding the government to account over its bullish predictions for the Energy Bill now also find themselves reinvigorated by the on-going battle for a decarbonisation target. The chatter across much of the green community is that the past month feels like something of a tipping point. This may prove to be painfully optimistic, and there have been plenty of false dawns in the past. But there is no doubt that traditional green campaign groups proved far more savvy at marshalling business support and making compelling economic arguments for decarbonisation than they have been during some previous campaigns. The result is that Labour was able to take an unashamedly pro-green economy position, and the group of Lib Dem rebels and green Conservatives saw their hand significantly strengthened. The decarbonisation target may have been defeated, and the Chancellor may have secured a modest victory for his reckless dash for gas, but the green economy's momentum has continued to gather pace - and from where I am sitting it looks more like a phoenix than a zombie.
30 May 2013
For the past few months one debate has dominated the UK's environmental and energy community, although to refer to it as a "debate" implies a level of dignity and rational thinking that has been sorely lacking - "almighty row" is probably a more apt description. The argument in question centres, of course, on whether or not the UK, and by extension Europe, should embrace fracking and join the global rush to exploit its shale gas resources.
For various reasons this relatively narrow energy policy debate has morphed into a much wider argument about climate policy in general, the future nature of the UK's energy mix, and the state of play in various swing seats in the run-up to the 2015 election. On one side, the sensible pro-fracking argument that shale gas can cut emissions in the medium term by replacing coal and providing a transition fuel towards a genuine low carbon energy mix has been hijacked by climate deniers and anti-green media commentators who care more about attacking environmentalists than developing credible long-term energy policy. On the other side, many green campaigners have sought to make shale gas a totemic issue and have vowed to do everything in their power to block UK developments, while conveniently ignoring the fact that, like it or not, the UK is going to source gas from somewhere for several decades to come.
The net result is an increasingly ill-tempered battle, dubbed the "frack wars" by The Telegraph's Geoffrey Lean, and characterised by remarkably aggressive bought-and-paid-for industry lobbyists, intransigent green protesters, anguished Home Counties MPs, and a deep division at the heart of government over whether shale gas represents a useful, if relatively marginal, addition to our low carbon energy mix or a God-given miracle that will revolutionise our economy and is worth tearing up our climate change targets for.
The problem is that this binary debate disguises numerous strata of nuance and complexity that both sides of the argument are guilty of ignoring. The only rational response to the prospect of the UK sitting on significant shale gas reserves should be an in-depth exploration of how to best ensure gas really does act as a cost effective transition fuel that enables the near complete decarbonisation of our energy infrastructure by 2030. The question that needs answering is can we make affordable shale gas compatible with climate change obligations? Mindless cheerleading for a "fracking revolution" and blanket protests against any and all drilling do nothing to help us answer this complex question.
The problem for the fledgling British shale gas industry is that it is possible to make a case for it playing a sizable role in aiding the UK's decarbonisation and ensuring that emission targets are met in principle, but extremely difficult to see how this role can be safely realised in practice. While others argue over whether shale gas represents economic salvation or environmental armageddon, I find myself in the somewhat confusing position of thinking it should be welcomed in principle, but largely, if not completely, blocked in practice.
The reasons for welcoming UK shale gas developments are far more compelling than many within the environmental movement are willing to acknowledge. As the Committee on Climate Change (CCC) has made clear, gas will continue to play a key, if potentially diminishing, role in the UK's energy mix through to at least 2030, particularly for the provision of heat. Moreover, the potential emergence of cost effective carbon capture and storage (CCS) technology could ensure gas forms part of a decarbonised energy mix post-2030. It is clear that the UK, and other countries, will need significant supplies of gas for at least the next 20 years and potentially longer.
Consequently, there is a strong economic, environmental, security, and indeed moral argument for developing our own gas resources. Economically, it makes more sense to tap our own shale gas resources than import gas from elsewhere, and while UK shale gas is unlikely to result in a significant global drop in gas prices any increase in supply should apply some downward pressure on energy costs. Environmentally, gas promises to cut emissions wherever it replaces coal, while there are also additional efficiency savings to be made from developing gas domestically rather than importing it. Energy security benefits obviously come from reducing our reliance on imports from unstable parts of the world. And from an ethical perspective it is worth asking why we expect others to extract our energy for us? Why should we cauterise North Dakota and not Tatton? There are valid arguments about population density and the impact on local communities, but then again wilderness has its own value. If we are willing to require communities to live near nuclear plants, coal power stations, and wind and solar farms in order that our energy needs are met, then a staggeringly compelling case is needed not to ask some of them to live near fracking sites.
And yet all these reasons to embrace fracking get us no closer to answering the key question of how to make shale gas compatible with the need to cut UK greenhouse gas emissions 80 per cent by 2050 - a target which experts are convinced requires the decarbonisation of the power sector by 2030. Shale gas might make short term economic sense, but you still have to face up to the question of how opening up new reserves of fossil fuels can be sensible when the science dictates that we need to start leaving those self-same fuels in the ground?
The fact is that shale gas only becomes environmentally credible if there are cast iron guarantees that it really is going to act as a "transition fuel" and it will, within less than 20 years, either be phased out or only used in conjunction with CCS technology. Many within the shale gas industry argue that this will indeed happen, but when you look at the groups campaigning for the UK to adopt a 2030 decarbonisation target for the power sector that would help deliver such a transition the shale gas industry is notable by its absence. In fact, if the Whitehall rumour mill is to be believed, gas industry lobbying is one of the main reasons Chancellor George Osborne is so vehemently opposed to the adoption of a decarbonisation target for 2030, in defiance of the independent Committee on Climate Change.
As something of a "climate hawk", I'd argue the government would need significantly greater powers than a simple decarbonisation target to ensure that a boom in domestic shale gas supplies did not result in the UK breaching its emissions goals. Ensuring that ministers have the authority to halt production from shale gas wells and close unabated gas fired power stations should not be seen as over-the-top given the critical importance of decarbonisation, although no doubt gas investors would argue differently. But regardless of the precise nature of the legislative safeguards, you need some kind of rock solid guarantee that unabated gas power will be phased out by 2030 and currently we don't even have the protection offered by a decarbonisation target.
However, getting these kinds of safeguards is likely to be the easy part of making shale gas environmentally credible. The other component that is critical to shale gas being regarded as either an effective transition fuel or a precursor to a mass CCS rollout is a global phasing out of unabated coal-fired power. Yup, you read that right, we are going to need a worldwide ban on coal.
The shale gas industry is good at pointing out how the US shale gas boom has helped to cut the country's greenhouse gas emissions, but it is less good at explaining why global emissions have just kept rising despite a sharp reduction in emissions from the world's largest economy. The answer is that the coal that would have been burnt in the US has simply been shipped elsewhere for burning. Shale gas's role as a viable transition fuel only really works if the coal to gas switch happens at a global scale and coal mines actually start to close (or CCS becomes widespread). As one senior government source explained to me recently, we've got to find a way for managing down global emissions from fossil fuels that breaks the current pattern where, like a partially deflated balloon, squeezing down on emissions in one area simply leads to more emissions elsewhere.
A recognition that we need to tackle the global crisis of coal emissions is gaining momentum - Professor Myles Allen's controversial article in the Mail on Sunday last weekend is basically a call for a rapid phasing out of unabated coal power - but for those who criticise current international climate negotiations as unrealistic to then call for what amounts to a global agreement for a moratorium on coal without CCS is faintly ridiculous.
Inside the world's seminar rooms and lecture theatres, it is possible to make an environmentally credible case for UK and European shale gas. Decarbonisation targets backed by strict enforcement rules and global emissions performance standards for power generation that allows the rapid phasing out of first unabated coal and then unabated gas plants are entirely compatible with the rapid transition to a low carbon economy that is so urgently required. They would lead to deep emission cuts, provide more time for renewables to become ever more cost competitive, and also give fossil fuel firms the long-awaited incentive required for them to properly invest in CCS technology.
The problem is that it is near impossible to envisage such an approach first being adopted and then proving effective.
A global ban on unabated coal power might be entirely rational, but the chances of it ever being agreed are as slim as George Osborne campaigning for the next election with an "I Heart Wind Farms" badge on his lapel. Without international action to tackle coal use and drive a global switch from gas to coal the only way for the UK to ensure its shale gas aids the low carbon transition would be to continue to purchase the coal we would have burned, and then bury it. And yes, I am fully aware of how costly and ridiculous this would be.
More pertinently for the UK, the adoption of watertight decarbonisation targets would make it extremely difficult to find investors willing to develop shale gas projects - hence the current row over the proposed decarbonisation target. You have to ask yourself if you would invest in a shale gas project knowing that without currently untested CCS its domestic market could largely disappear within 15 years. Those wanting to see UK shale gas play a role in the UK's decarbonisation would be left hoping that Lord Browne was serious when he made his arrogant assertion that Cuadrilla would invest "whatever it takes" to extract UK shale gas. With the government happy to import power from foreign state-owned energy projects, but ideologically opposed to getting its own hands dirty in the energy market, it is difficult to see how significant environmentally-responsible shale gas developments would be able to proceed until cost effective CCS is proven at scale.
You also have to ask if such safeguards would hold. Developing a UK shale gas industry is a little bit like Chekov's Gun, once it has been put on the table in the First Act it has to be fired in the Third Act. The government could authorise new shale developments and gas infrastructure while adopting a decarbonisation target. It could assert that the new infrastructure will only be used in the long term as an occasional source of back-up power or a basis for CCS. But once it is there the temptation to continue to use it long after we should have decarbonised will remain. The prospect for further lock in to the unsustainable model of digging up and burning fossil fuels will be strengthened. The gun will almost certainly go off.
The net result it is that in principle it is possible, and in many ways desirable, to develop a UK shale gas industry that supports the decarbonisation of our power sector. But in practice the safeguards needed to ensure shale gas genuinely does act as a low carbon transition fuel are not being adopted. The shale gas industry, meanwhile, is doing itself no favours, arguing that it wants to be part of a low carbon mix one minute, then lobbying against necessary climate protections the next, while all the time failing to properly engage with the need for urgent progress in CCS development.
The government is left trying to navigate between the two increasingly extreme rival factions, while being forced to consider a reckless pro-gas path advocated by George Osborne that only becomes environmentally credible if we assume the Chancellor eventually loses the argument over a decarbonisation target and CCS does indeed prove technically feasible and environmentally cost effective. As I have argued before, barrelling forward with more fossil fuel infrastructure in the hope that CCS will materialise soon is like bingeing on doughnuts because you read in the Daily Mail that a miracle diet pill could be developed one day.
Shale gas could and should play a role in the UK's future energy mix, just as it should play a role globally in efforts to slash greenhouse gas emissions. But only if stringent safeguards are put in place to ensure that it really does deliver deep emission reductions and does not lead to another 40 years of reliance on fossil fuel infrastructure that would only lead to climate crisis. As a climate hawk, I would argue that these safeguards should be robust, comprehensive, and international in their nature. But as an absolute bare minimum they should include a UK decarbonisation target, more ambitious EU emissions goals, a CCS strategy that represents a major improvement on our currently "farcical" efforts, and an indication that international action to tackle the coal crisis is at least under way.
The sad reality is that we do not have those safeguards in place currently, and as such green campaigners and businesses alike have little choice but to oppose the development of UK shale gas on the grounds that its development poses too great a risk to our decarbonisation efforts.
Last week I had one of those weird days where events appeared to conspire to create their own narrative arc, which is always handy when your job entails wrestling a narrative from seemingly disparate events.
The day started with a breakfast briefing hosted by PR company Edelman on whether energy companies can restore their battered reputation, which raised plenty of interesting questions about why utilities are held in such low regard they make your local estate agent look like a beacon of trustworthiness, but provided far fewer answers about what energy executives can do about their dismal popularity ratings.
One of the most interesting aspects of the discussion was the way in which the industry representatives on the panel, led by Energy UK's chief executive Angela Knight, were pretty dismissive of the role green energy could play in restoring consumer trust. There was an acknowledgement renewable energy companies had done some "good things" marketing themselves (did I detect a hint of condescension?), but there was also a warning that we have to consider renewable energy costs and a pretty clear rejection of the idea that clean energy can play a key role in restoring consumer confidence in energy companies, regardless of the fact a clear majority of the public favour clean energy.
Coincidentally, that afternoon I then had a coffee with a contact at BT who gave me the nod that the telco giant was preparing to announce that it had signed a deal with Npower to source 100 per cent of its power from renewable sources. Some commentators have questioned the impact this commitment will have on actual UK renewable energy capacity, given we have a binding renewable energy target and investment is primarily driven by the government's various subsidy mechanisms. But one thing is clear: if a company that uses almost one per cent of the UK's power says it only wants renewable power, it seems strange to suggest that the provision of green electricity has no role to play in improving relations between energy companies and their customers.
The day then ended with John Ashton's lecture on the parlous state of UK climate politics and the binary choice we face between what he described as a "must, now, can" approach to decarbonisation and a "mustn't, not now, can't" mentality. According to Ashton, the "mustn't, not now, can't" approach is in many ways just the more respectable face of the climate denier dismissal of climate change as a threat, given that both schools of thought urge businesses and policymakers to "cling to business as usual and hope for the best".
It is a compelling and hard-hitting analysis and one that took me full circle, back to the breakfast briefing earlier in the day and the panel's reluctance to talk about decarbonisation and how energy companies should use green technology as a means of reaching out to disillusioned customers. It is a stance that is not only in contradiction to growing demand for green energy from BT and others, it also looks like an example of the "musn't, not now, can't" mentality in action.
Across numerous industries this approach has become worryingly embedded. Most intelligent executives accept that we have to decarbonise our economy and take action to tackle climate change, but when it comes to the steps that are actually needed there is a tendency to argue that we "musn't" take such bold steps, or we should but "not now", or we could but they "can't" work. In the most blatant cases, as embodied by BusinessEurope's recent efforts to trash modest climate policy reforms, these delaying tactics are a pretty transparent attempt to destroy all policies that challenge business-as-usual, while clinging to the fig leaf argument that you would like to see action on climate change taken at a later date. More insidious are the numerous industries that accept decarbonisation in principle, but still quietly lobby against ambitious policy and technology deployment on cost or feasibility grounds. Sometimes their concerns are justified, often they are not, and always they lead to a delay in the steps necessary to deliver decarbonisation.
Of course, delivering decarbonisation at the lowest possible cost is hugely important, as Policy Exchange's Guy Newey eloquently argued on BusinessGreen earlier this week. It is possible, indeed it is highly desirable, to embrace an ambitious "must, now, can" approach to climate change that is in no way financially profligate and seeks to deliver decarbonisation in the most cost-effective way possible. In fact, Newey puts forward some credible proposals for how this could be done – personally, I don't agree with all of them, but it is clear you can raise concerns about the cost of some low-carbon technologies and then set out an alternative approach that you think can still deliver rapid decarbonisation.
The problem is that many of those industry groups and commentators who criticise the cost of clean energy or seek to undermine low-carbon policies and investment don't do this. They explain why we "musn't" follow a particular path to decarbonisation, but then fail to offer any credible proposals for climate action that we "must" take instead.
The one point that Energy UK's Knight made last week that I agreed wholeheartedly with was the assertion that "we should not run away from the fact that we are going to go through a transition period that will lead to more investment, more jobs but also more costs. We may want to move to more renewables that cost more at the moment – in that case be upfront about it and sell the story." It is great advice, the energy industry, green NGOs, and politicians should be making a compelling case for investment in clean energy that we must make in order to realise a huge range of environmental and economic benefits. But is the energy industry really doing this? Is Energy UK doing this? Is it demanding a honest debate about energy policy and costs in order to make the case for why decarbonisation and clean energy is essential? Or is it demanding that debate so as to turn the public against clean energy and energy efficiency policies that are having a (still relatively modest) short-term impact on bills? The fact that the answers to these questions remain opaque tells its own story.
It would be better for everyone if the debates on energy and climate policies were honest and open – honest and open about costs, benefits and climate impacts. It would also be better for everyone if the companies that actually stand to benefit from the low-carbon transition fully embraced the future and started cheerleading for it, rather than clinging to a business-as-usual approach that threatens everyone's long-term interests.
As the UN Global Compact and Accenture's upcoming survey of global CEOs will soon reveal, a gap is opening up between those businesses, like BT, who have embraced the "must, now, can" approach to climate threats, and those who are nominally committed to tackling climate change but are all too willing to obfuscate and delay in support of the status quo. It is perfectly justifiable for businesses to have a problem with certain low-carbon policies and technologies; after all we are at the start of a long economic transition and some of these policies and technologies will be flawed. But it is not justifiable to attack measures that are designed to deliver decarbonisation without putting forward credible alternative pathways towards a low-carbon future. Ashton is right: there are only two options. All business leaders should be asking themselves whether they embrace the "must, now, can" brio that should always characterise the best entrepreneurs, or whether they are happier siding with the "musn't, not now, can't" stance beloved of corporate dinosaurs.
"Lord, make me chaste - but not yet." That, in a nutshell, is the hypocritical, counterproductive, and staggeringly short-sighted strategy currently being deployed by one of Europe's largest business groups when it comes to efforts to strengthen the EU's climate strategy. Through flawed arguments and questionable lobbying techniques, BusinessEurope is threatening to undo years of progress that have helped establish the EU as one of the world's leading low carbon economies, while at the same time innocently proclaiming that it accepts the need for something to be done to tackle address climate risks. Any business committed to ambitious action to tackle climate change should be hugely concerned and asking itself whether it is happy to be associated, even indirectly, with dinosaur arguments that only serve to lock the EU into a high carbon future.
As we revealed last month, BusinessEurope, the organisation that represents many of the largest industry groups from across Europe, left several of its most influential members deeply frustrated at the manner in which it lobbied vigorously against modest efforts to try and salvage the EU's emissions trading scheme (ETS). But rather than reflecting on complaints that it was guilty of overstating the degree of business opposition to backloading and parroting the party line of heavy industry while downplaying the views of other sectors, BusinessEurope has clearly decided to now double down on its anti-green rhetoric.
Since playing an integral role in ensuring MEPs voted down the "backloading" proposals that would have offered a temporary fix for the oversupply in the carbon market, BusinessEurope has also voiced its opposition to proposals to require businesses to report on non-financial performance because it will "create red tape and further disadvantage for a large number of European businesses in international markets", and called on the Commission to ensure energy policy is "totally reshaped" post-2020 to ensure it is not "too much driven by climate" and is more focused on "cost-competitiveness and security of supplies".
Each of these interventions bear exactly the same hall marks: they make the same tired old, mealy-mouthed argument that businesses are not against action to climate change, per se, but we must make sure that no one is actually required to do anything in the short term, because that would be an unbearable "burden" on business as usual that may actually require carbon intensive industries to innovate and adapt.
As WWF's Sam Van Den Plas eloquently argued last week, BusinessEurope has, in a few short weeks, argued that Brussels should take not take emergency action to fix the carbon market because wider reforms are needed, while also arguing that wider reforms should ideally wait until 2020, and then arguing that the post-2020 period should see a watering down of ambition to tackle climate change. It amounts to a staggeringly clumsy and transparent drip, drip, drip attempt to water down the bloc's climate strategy.
There remains an important and necessary debate to be had about how to limit the impact of higher energy costs on European industry, avoid the risk of "carbon leakage", and ensure the bloc retains its competitiveness - a debate for which effective policies can and are being developed. But it is increasingly apparent from its public statements that rather than engage in these discussions in a constructive manner BusinessEurope simply wants to undermine a policy agenda that it regards as "too much driven by climate" - as if treating a looming existential threat to European security and competitiveness as a priority is somehow a mistake.
BusinessEurope may shroud its argument for inaction with legitimate questions about competitiveness and acknowledgements that some action on climate change will be required at some undetermined point in the future. But its failure to set out a compelling alternative approach for decarbonising (without deindustrialising) the European economy and its attempts to undermine modest improvements to the carbon market and corporate reporting rules tell their own story - it is the story of corporate dinosaurs, the story of oil majors who admit climate change will cause a major disruption within decades but continue to move forward with plans to drill in the Arctic, the story of businesses who reject any short term investment that leads to long term returns and resilience.
Thankfully, this Neanderthal corporate culture has been on the wane in the UK for several years; countless blue chip firms are fully committed to the transition to a low carbon economy, while the CBI has become one of the most powerful advocates in the UK for a more progressive policy approach to environmental issues. But with the economic slowdown continuing and European business leaders desperately looking for something to blame it looks like this regressive approach to the biggest long term threat faced by businesses today is now being revived in Brussels.
Does any of this matter? Well, it does not matter as much as BusinessEurope likes to think. Most MEPs are increasingly aware that the organisation's agenda is to a large extent the agenda of heavy industry and fossil fuels, rather than the business community as a whole. Meanwhile, groups such as the Friends of the ETS and the Corporate Leaders Group on Climate Change are becoming more adept at demonstrating that there are plenty of progressive businesses out there that want to see more, not less, action on climate change. But the short-sighted arguments being espoused by BusinessEurope and others are still important, given that they provide right wing MEPs and governments with the cover they need to block green measures and push anti-green policies.
Business leaders at those firms committed to the development of a low carbon economy need to urgently ask themselves if they are happy to allow these arguments to be presented unchallenged, particularly when BusinessEurope has on at least one occasion engaged in the dubious tactic of presenting its position as being the same as that of the wider business community. Do green firms really want corporate dinosaurs armed with economic arguments from the last century to speak for them? Should they publicly distance themselves from such groups and such arguments? Should they do more to present the compelling counter-argument that action to tackle climate change will spur innovation, create jobs, and drive growth, at the same time as addressing a risk that threatens to badly undermine European security?
Jobs and economic growth, as well as climate security, are at stake. As Alastair Harper of green business think tank Green Alliance observes, BusinessEurope's stance threatens to undermine those industries that are providing one of the few growth areas for the European economy, while concealing the fact that volatile fossil fuel prices and our reliance on energy imports are one of the biggest drags on recovery. "The fossil industry is the sick man of Europe and a key cause of the slowdown," he says. "We can't let it get in the way of those low carbon businesses that are driving investment, innovation and leading us to a recovery. When Europe is desperate for growth, this odd trade body of trade bodies is trying to wreck one of the most exciting areas of investment."
More specifically, the CBI needs to ask whether it is genuinely happy with the strategy BusinessEurope is currently deploying. The UK-based employers group is one of BusinessEurope's largest members and retains considerable clout in Brussels. But while the CBI campaigned for the adoption of mandatory carbon reporting rules in the UK for listed firms, BusinessEurope remains hostile to EU-wide CSR reporting rules. While the CBI has repeatedly called on government to show more ambition in tackling climate change (while taking steps to ensure we don't deindustrialise as we decarbonise), BusinessEurope is currently espousing much less nuanced arguments explicitly designed to undermine the kind of market-based climate policies many UK businesses favour.
My understanding is that those members of BusinessEurope who are privately frustrated by its increasingly anti-green rhetoric are reluctant to quit the group, arguing that they can better influence the organisation by retaining membership and putting forward more progressive arguments. It is a reasonable strategy, but they urgently need to exercise this supposed influence or else they will have to take their share of the blame for the blocking of green policies they are actually in favour of.
Business leaders who understand the threat posed by climate change need to tackle head on BusinessEurope's suggestion that we can indefinitely defer ambitious steps to build a greener economy on the spurious grounds that it will help the economy in the short term. If businesses allow themselves to be represented by dinosaurs they only have themselves to blame if they end up facing an increased risk of extinction.
ABOUT JAMES' BLOG
Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray