06 Aug 2013
A couple of weeks ago I spent a very pleasant evening at The Oval watching Surrey take on their local rivals Middlesex. It was a Friday night, a beautiful summer evening, and the cricket, despite a cameo from the great Ricky Ponting, was not at its most captivating. Consequently, the full house crowd at the Oval engaged in what full house crowds at the Oval always do when the home side are winning comfortably and enthusiastically par-took of the hospitality on offer from the bar. The net result is that at around the 15 over mark in the second innings the game was briefly interrupted by a streaker who made it past the first wave of stewards, ran round the square for a few seconds, before eventually being hauled to the ground by the high-vis clad protectors of the wicket.
It prompted a brief conversation in the crowd about why you don't see many streakers at sporting events these days. I say brief because the reason for this decline was immediately apparent - a £1,000 plus fine, a ban from the ground, and a night in the cells with the very real prospect of legal action is enough to deter all but the most exuberant of drunken exhibitionists. The juvenile desire to disrupt the game is almost certainly as present as ever at large sporting gatherings, but the penalties and condemnation that come with them are now so severe that the streaker has become as rare a species as an Australian Ashes winner.
I was reminded of this shift in sporting mores by the news over the weekend that water companies have been fined just £3.5m for over 1,000 breaches of water regulations in the past nine years. It is the corporate equivalent of giving a drunken streaker a £20 fine and a stern talking to from a copper.
In fact, the details of the Observer's investigation into the enforcement of water regulations make for even worse reading than the headline figures. Only a third of the 1,000 incidents recorded - that is almost one every three days - resulted in any sort of fine and then the average fine only amounted £10,800. That is a £10,800 penalty for breaching established rules designed to protect the environment imposed on an industry that made £1.7bn in pre-tax profits in 2010-11 and stands accused of handing out dividends like the proverbial candy.
The litany of regulatory breaches ranging from overflowing sewage to polluted rivers is worth reading in full, but the really worrying aspect of this story is that it is part of a pattern whereby relatively strong environmental policies are backed up by weak enforcement and desultory fines.
We've been tracking this trend for some time and you see it repeated time and again. The Carbon Reduction Commitment remains the government's flagship policy for driving carbon management up the corporate agenda, but when four firms failed to comply with the rules they shared fines totalling £99,000, enough to focus minds perhaps, but hardly punitive. It is an open secret in the building industry that energy efficiency standards are now relatively demanding, but are rarely enforced. Fines for breaches of air pollution rules are similarly infrequent and modest, while the reckoning the government should face over its continued failure to meet EU air quality rules seems to be perpetually deferred. In addition, Conservative Ministers seem to be waging an ideological war against modest fines designed to discourage people from parking in places that cause congestion and encourage them to recycle properly.
The one area where there has been some encouraging activity is in tackling waste crime, where the Environment Agency has targeted resources at the problem. As a result detection rates almost doubled and fines soared last year from £800,000 to £1.7m. But even here industry insiders are concerned fines are still often too low to discourage environmentally damaging activity, while fears remain Defra could impose further cuts on the Environment Agency that would jeopardise its recent progress. Across all departments with an environmental remit, enforcement activity has often been the first in line for cuts when the Treasury comes knocking.
I've always found it bizarre that many of the same politicians who take a "hanging's too good for them" approach to personal crimes are so relaxed about corporate crime, just as I find the complaints about the level of parking fines rather strange when it is possible to avoid them by simply abiding by the rules and not parking illegally.
The problem with weak enforcement and low penalties for breaching environmental regulations is that it sends a signal about the level of importance the government attaches to these issues. Ministers may argue that the reputational impact of being in breach of rules designed to protect environmental and public health is penalty enough, but if reputational pressures really were the only consideration all rules would be complied with and as an added bonus no company would continue to avoid tax - sadly this is not the case.
Businesses are understandably reluctant to lobby in favour of higher penalties, not least because a common reaction to a firm being caught breaching regulations is a resigned "there but for the grace of God go I" from its rivals. There is a mutually assured destruction pact across many industries, which prevents firms from calling for tougher penalties and enforcement. But as the gap between green business leaders and laggards continues to widen this pact needs reassessing.
Just as those companies that pay their fair share of tax have realised they are subsidising rivals who avoid their obligations, those who abide by water, air and corporate reporting rules need to realise that rivals who do not are guilty of freeloading. They are nakedly disrupting the game for everyone, and, unlike cricket's now lesser-spotted streakers, they are not even paying a significant price for doing so.
At the risk of sounding like the proverbial broken record, The Times was staggeringly premature this week in publishing an obituary for the green movement by Tim Montgomerie under the banner, "The greens can't defy gravity. They're finished".
"Finished?" I hear you ask. "How finished exactly?" Well judging by the last five days, not really that finished at all. Here are 10 things that have happened since Montgomerie performed the last rites for "the greens":
1. The London Stock Exchange has seen its largest-ever green IPO – Renewable Energy Infrastructure Group raised £300m in an oversubscribed share issue and is already moving forward with plans to acquire 300MW of renewable energy capacity.
2. New data confirmed the UK's renewable energy output increased 19 per cent last year – Yes, our use of coal also increased, and yes our reliance on imported energy increased. But at the same time renewable output soared as significant new capacity came online. The government remains confident we will generate a fifth of our energy from renewables by 2020.
3. Mars is planning a global renewables investment push – One of the world's largest food and drink giants confirmed that emissions, water use and waste levels are all down, but it needs to go much further to meet its goal of being a zero-impact business, so a huge programme for investing its own renewable energy assets is being planned.
4. The European Investment Bank said it will no longer invest in the dirtiest coal plants – Following in the footsteps of the World Bank, the EIB has declared the most carbon-intensive coal power plants verboten for its investment portfolio. Intriguingly, several of the directors wanted the bank to go further and stop funding any coal plants that lack carbon capture technology. The bank's fossil fuel lending rules are only likely to get tighter over time.
5. It emerged that the UK green economy grew nearly five per cent in 2011/12 – Or 4.8 per cent to be precise, and that at a time when the rest of the economy was as lifeless as the Australian cricket team. The official government figures are far from perfect, covering some industries that might not be immediately regarded as green and including companies that have a range of activities, not all of them low carbon. But what they do show is that industries and businesses with a significant green element are comfortably outperforming the rest of the economy.
6. China's green plans went from strength to strength – The week started with Chinese government officials confirming carbon taxation was on its way, and ended with a pledge to invest $277bn over five years in efforts to tackle air pollution. There were also major solar investment announcements from Thailand and India, and the US EPA continued with its plan to regulate power plant emissions. All this at a time when Montgomerie reckons governments are cooling towards green issues.
7. Data revealed US corporate giants use 20 billion kWh of green power a year – That is enough to deliver emissions savings equivalent to that produced by 2.1 million homes. And, more importantly, the true figure is far higher. The latest stats come from the largest 50 companies signed up to the Environmental Protection Agency's (EPA) Green Power Partnership and include the likes of Intel, Walmart and Microsoft. But numerous other firms are investing in green energy outside the programme, meaning real corporate usage of clean energy is higher still.
8. Sainsbury's announced that it has 100,000 solar panels – And it's not finished yet. Having reached its latest milestone, the supermarket giant is continuing to step up investment in solar, heat pumps and biomass technologies as it seeks to slash its emissions 30 per cent by 2020.
9. It was confirmed that Northumberland will soon be powered by biomass – The government this week gave the green light to the £250m 100MW North Blyth Biomass power plant, which promises to use sustainably certified biomass to provide enough electricity for every home in the county.
10. The North Pole became a meltwater lake – Just in case anyone still thought there was no longer any need for 'defeated' green campaigners, it emerged this week that the North Pole is now home to a lovely meltwater lake. Not only that, but new research suggests the release of methane from permafrost in the far north could have genuinely catastrophic results for the global economy. It looks like we might need to resuscitate the greens after all.
10 is a nice round number, so I'll stop there and not mention British Gas' £200m energy efficiency programme, BMW's investment in the UK's electric vehicle charging network, Climate Change Capital's plans for a new clean energy mega-corporation or the Renault Nissan Alliance selling their 100,000th electric car.
Montgomerie is right to warn that green policies have not yet led to the steep reduction in greenhouse gas emissions that is urgently required. But finished? If this is what defeat looks like I can't wait for a green economic victory.
The "greens" are "finished", declares the headline above Tim Montgomerie's latest attack on environmental policy. They put up a good fight, drawing level at half time thanks to a powerful display down the left flank from Obama and Rudd. But they failed to secure the lead they needed in Copenhagen and since then they've been utterly outplayed by their opponents' pragmatically physical approach. The pre-Copenhagen playmakers are demoralised and exhausted, having been out-muscled by the new lad Shale and outmanoeuvred by the canny new gaffer at Number 11. Referee Montgomerie is preparing to blow his whistle and declare Carbon FC the winner (club motto: "Business as Usual", club logo: a seabird drowned in oil).
Montgomerie's nakedly political attack on "the greens" in The Times yesterday was nothing if not predictable, so much so that it could almost have been written by algorithm. An enterprising intern at a think tank somewhere near Westminster is probably working right now on a labour saving bit of code that automatically selects the most fashionable anti-green canards and presents them in an argument that suggests the failure to tackle grave environmental crises is both inevitable and nothing to get too agitated about.
Such an algorithm would need to include plenty of factual cherry picking; a quote or two from Lord Lawson; some heartfelt praise for fracking; a citation for Bjorn Lomborg and his "brilliant book"; a patrician suggestion "greens" are too naïve to cut it with the big boys of politics; an acknowledgment climate change is happening that also implies we shouldn't worry too much about it; and a pop at "bird-chopping wind turbines".
The code would also have to make sure a few points are excluded from the text. For example, you wouldn't want to mention, let alone engage with, any inconvenient facts that challenge your thesis; you'll want to gloss over the entire cottage industry of scientists and economists dedicated to pointing out the flaws in Lomborg's "brilliant" books; you won't want to mention Lord Lawson's repeated refusal to reveal who funds his Global Warming Policy Foundation; you'll have to ignore the role of volatile fossil fuel prices in pushing up energy bills; and you won't want to offer any more than a throwaway line about what an alternative approach to tackling climate change might look like.
In reality, Montgomerie remains one of the most thoughtful and effective columnists working in the UK today - no matter how tight commissioning budgets get he would have no truck with robot columnists. But yesterday's article is such an effective summation of current attacks on the green economy that it should become a reference point for anyone who cares about the development of both a sustainable economy and a coherent response to climate change.
Thankfully, the declaration of green defeat made in The Times is so easy to refute it would be possible to give the entire article a good "Fisking". But as I've argued in the past a line-by-line deconstruction of an opposing viewpoint is a pretty juvenile way to conduct a debate. Better to focus on a few of the more glaring factual omissions and dubious arguments contained in the article.
First up, Montgomerie's suggestion Barack Obama and Kevin Rudd have pretty much ditched their climate strategies is not one that either man would recognise. Montgomerie reports how Rudd last week "announced that he would ditch the carbon tax". But what he neglects to mention is that Rudd hasn't ditched carbon pricing, he has simply pulled forward plans for a floating carbon price to replace the tax. Yes, it represents a watering down of carbon taxation plans during a tough election year, but it is not a full-blown U-turn and it is easy to envisage Rudd looking to reinvigorate Australian climate policy if he secures re-election.
"All over the world green politicians are presiding over similar climbdowns," states Montgomerie, which is a pretty strange way to characterise President Obama's decision to make climate regulation a centrepiece of his second term agenda. Is Montgomerie unaware of Obama's plan to regulate power plant emissions or has he chosen to ignore it because it doesn't fit with his narrative? The Chinese government introducing carbon trading and rapidly accelerating clean energy investment does not look like a "climbdown" either. Closer to home, the EU debating a significant strengthening of emissions targets for 2030 does not constitute a "climbdown", nor does David Cameron proudly opening the world's largest offshore wind farm and signing off on a transformation of the energy market designed to boost clean energy sources.
All columnists, myself included, are occasionally guilty of selecting examples and statistics that support their argument. But while greens tend to acknowledge that there have been setbacks to their economic vision in recent years that have to be set against their many successes, those who want to undermine the development of a low carbon economy often prefer to wipe from history huge green investments and policies that contradict their argument. It is reminiscent of that old Vietnam-era line about declaring victory and going home.
Secondly, Lord Lawson's claim that "one renewable company after another is going bankrupt" may be backed up by the failure of some unfortunate early stage companies. But to suggest an entire sector is doomed because of the failure of a few individual companies is like arguing the internet failed because Bebo and MySpace saw their valuations collapse. Like I say, we can all cherry pick facts to support our arguments, but if Montgomerie wants to prove that "greens" have been "defeated" he needs to do a much better job of explaining why high profile companies from IKEA to Unilever, BT to IBM, Google to RBS, Nissan to Virgin (to name just eight) are forging ahead with major green investments. He also needs to explain how greens, in their apparent defeat, have managed to convince a clear majority of the public that climate change is a serious issue and clean energy sources are to be favoured.
Montgomerie wants to take on the "green movement" in the narrowest sense, clearly aiming his criticism at a handful of NGOs while ignoring the emergence of a sizable and increasingly influential green business community. If the green movement is finished, then why didn't Bill Gates, Jeremy Grantham, Elon Musk, Richard Branson, Warren Buffett, and the boards of those multinationals investing in clean technologies get the memo?
Admittedly, the argument that greens can't "defy gravity" and break into the mainstream while clean technologies are seen as being more expensive than their counterparts is more complex. But again the blanket dismissal of clean technologies as too costly fails to make the crucial distinction between upfront capital costs and running costs. There is intriguing evidence now emerging in Germany that once built renewable energy technologies are helping to hold power costs down, while it is increasingly obvious that a raft of clean technologies, such as energy efficiency improvements and electric cars, offer lower total cost of ownership than the incumbents. More important still, Montgomerie's discussion of costs takes no account of environmental costs and the risk attached to our continued reliance on volatile fossil fuel sources. Renewables are already a lot cheaper than fossil fuels when environmental impacts are appropriately priced, and even if we choose to ignore these environmental costs the cost trajectory of many clean technologies is steadily downwards.
Finally, Lomborg's siren argument, endorsed by Montgomerie, that we should focus on tackling global poverty and investing in clean tech R&D in pursuit of low cost carbon power has always struck me as staggeringly naïve on a number of fronts. Firstly, the suggestion money saved from ditching green policies would instantly be diverted to tackling HIV and delivering clean drinking water to impoverished communities is so hopelessly utopian that it is redolent of the criticism often aimed at tie-dye environmentalists. When peacenik campaigners suggest the billions spent in Afghanistan should be used to tackle homelessness instead it is many of the same right wing commentators who now promote using green funds to tackle poverty who are the first to point out that government budgets don't work that way in the real world.
Lomborg has the kernel of a credible argument in saying money spent on green policies could be better spent on the R&D needed to bring down the cost of clean technologies and the development policies needed to tackle poverty, many of which - like replacing unhealthy wood stoves and investing in climate adaptation - would have a large environmental element. A proper carbon pricing mechanism that tackles the polluting externality while raising funds to help the fuel poor, enhance development efforts, and boost clean tech R&D remains the most elegant green policy proposal out there (although you would probably still need some other policy mechanism to help drive initial demand in emerging clean tech markets).
But is there anyone, Montgomerie and Lomborg aside, who really thinks politicians like George Osborne want to ditch current green policies to free up funding for a multi-billion pound clean tech R&D and global development push?
However, for all its faults, Montgomerie's article makes one incontestable point: many green policies have failed on their own terms. It is impossible to conclusively prove the counterfactual and demonstrate whether or not emissions would be higher still without green policies, but we do know greenhouse gas emissions are continuing to rise. Montgomerie is right on this point. Green policies are yet to deliver on their promise, and some of them, like the more scandalous biofuel policies, may never do so. This failure is categorically not a cause for celebration, just as it is not a sufficient reason for a new fossil fuel boom and the repeal of every regulation that is designed to deliver a green economic transition, as Montgomerie suggests. But we cannot deny the fact that the current approach is not working, or at least is not working quickly enough.
Yesterday's Times was a timely reminder we are still a long way from building the successful policy and technological mix that is needed to ensure fossil fuels are left in the ground. Green NGOs, businesses, and politicians all need to deliver much more focus on R&D, on cost effective clean technologies, on the unerring economic logic of carbon pricing, on the desirability of clean technologies that boast lower health impacts and running costs than the dirty incumbent technologies they replace, and on the grave economic and environmental threats posed by inaction. There also needs to be much more focus on protecting the political consensus on the need to tackle what Rudd, Obama, and countless others have described as a planetary crisis.
Are the greens finished? Not at all, they are three-two up and the second half has barely started. It's all to play for. The vast majority of the crowd will be hoping for a green victory.
The future is a foreign country, they do things differently there, as L. P. Hartley almost said. It is part of human nature to try and predict the future and those who get good at it - whether it is in the boardroom, on the stock exchange, or at the track - tend to reap huge rewards. And yet even the very best tipster will acknowledge that we do not live in a science fiction novel, accurately predicting the future is impossible and any responsible prediction has to come couched in the terms of probability and risk.
The problem for the business leaders, as the latest row over energy cost projections proves, is that detailed projections based on complex assumptions and containing a high degree of risk do not make for good headlines - "The 'green tax con' that is costing families £500" does.
The latest reports on projected energy bill increases neatly serve to highlight the challenge faced by green businesses and energy industry execs alike. Last week's highly controversial report from the Taxpayers Alliance predicting energy bills will rise by over £400 by the end of the decade and npower's slightly more realistic warnings that bills could rise by £240 by the same date are both based on contested assumptions about what will happen to gas prices, energy efficiency schemes, and the cost of renewable energy. The authors themselves acknowledge there is considerable uncertainty, yet much of the reporting on these studies has no truck with such grey areas, focusing on the headline conclusion that energy bills are going to soar and green tariffs are to blame.
The government and green campaigners are engaged in a manful struggle to highlight the dubious nature of some of the assumptions that underpin these reports.
Greenpeace did not take long to point out that the Taxpayers Alliance, an apparently well respected organisation that secures itself a fair amount of time on the nation's airwaves, has no problem with assuming domestic gas prices will increase by the same amount as domestic electricity prices, because the "two commodities are substitutes". That's right, the latest round of debate over energy bills was sparked by an organisation that thinks if electricity bills rise by a couple of hundred quid a year people will switch to gas-lighting and manufacturers will invent a gas-fired fridge, which would in turn mean the government would have to introduce levies to increase gas prices. Taxpayers Alliance may well have some legitimate questions about the effectiveness of green policies (as set out in its various responses to Greenpeace's analysis and a letter from Ed Davey complaining about its calculations) but it has rather undermined its case by clinging to the evidence-free assertion that the government will have to increase levies on gas to match levies on electricity.
Energy and Climate Change Secretary Ed Davey similarly took npower to task over its projections yesterday, accusing it of overestimating the cost of the ECO energy efficiency policy, while failing to acknowledge that the cost of this policy would lead to benefits in the form of lower energy consumption in the future. He also reiterated yet again that the government's modelling and similar projections from the Committee on Climate Change show that when all of the government's energy and climate policies are taken into account energy prices will rise by less than they would otherwise have done so and average energy bills will remain pretty much flat as a result of efficiency improvements.
The problem for the government and green groups is that as soon as you engage in these arguments it invites entirely legitimate questions about why you think your own, more optimistic, projections are accurate. You can argue that the government's modelling is more robust, that evidence suggests gas prices are likely to rise and that energy efficiency policies will prove a runaway success, but you are still dealing with future assumptions that are impossible to verify. You can similarly argue that much of the more pessimistic modelling is politically motivated and based on suspect assumptions, but that does not make the central assertion that the government's projections rely on a belief that energy efficiency policies will significantly curb average consumption. There is risk in the projections put forward by both sides of the debate, even if the balance of probability still lies with the government's modelling being the more accurate.
The question then for businesses is how to navigate this forest of projections and increasingly fractious debate. It would be useful to know what the energy price will be in the coming years, just as it would be useful to know whether the government's energy policies will prove a success - as mentioned at the start those who are best at crystal ball gazing tend to prosper.
The answer has to be to strip out as much of the risk contained in these projections as possible and make decisions based on what we do know. For example, we know the UK has a Climate Change Act that sets legally binding carbon targets that require the decarbonisation of the power sector over the next two decades. And we know the government is about to pass an Energy Bill that will formalise many of the policies that underpin the projected increase in energy bills. Anyone who looks closely at the political debate surrounding these issues also knows there is far more political consensus on this agenda than the media typically suggests. The high profile row between DECC and the Treasury over energy policy is largely focused on what happens to the energy mix after 2020, the various green policies and levies are pretty much finalised for this decade and are unlikely to change significantly, regardless of what happens at the next election.
More broadly, we know investment in energy infrastructure is urgently required to replace aging capacity and we know this investment will have a knock-on impact on bills. We know there is considerable uncertainty over future fossil fuel prices with a combination of a lack of clarity on future shale gas development and the perennial risk of insecurity in the Middle East meaning all gas and oil price predictions come with a truckload of salt. We know that proving the counter factual of what happens if we don't decarbonise is impossibly difficult and is often based on absurdly optimistic projections for those self-same hard-to-predict fossil fuel prices. We also know the public are very concerned about rising energy bills, but are also strongly supportive of the decarbonisation agenda.
For households and business alike these facts add up to a handful of important conclusions. First, it is impossible to be absolutely certain what energy bills will be in 2020 - technological breakthroughs could send them plummeting, just as geopolitical tensions could send them spiraling - but the vast majority of expert opinion suggests they will increase as investment costs filter through and global demand for energy continues to climb.
Second, whether you like it or not we have to decarbonise our energy infrastructure, to fail to do so would be environmentally reckless, economically a huge missed opportunity, and legally in breach of British law. Regardless of noises off in the press it is highly unlikely that this government or the next will shift from this agenda - the technology mix may change, the pace of investment may accelerate or slow down, but decarbonisation will continue.
Third, energy efficiency remains the most cost effective means of cutting carbon emissions and the best way of insulating yourself against future energy price increases.
It is impossible to boil down complex arguments about energy policies and costs to one simple message. There are valid and important debates to be had about green levies or carbon taxes, the financial cost of renewable energy versus the environmental cost of carbon emissions, the impact of green taxes on the fuel poor and the necessity of clean investor certainty, the high capital cost of clean energy against the high and volatile running costs of fossil fuels. But while these debates will no doubt continue, one thing is clear: whether you believe the energy bill projections put forward by the Taxpayers Alliance, npower, or the government is largely irrelevant, energy efficiency is still one of the best investments you can make for your home or business.
We can never know the future, but we do know using less energy is the best way to insulate ourselves against the costs of decarbonisation. It is here that businesses and households should focus their efforts if they want to place a winning bet on future energy prices.
The lobby hacks have agreed on their narrative and they are doing everything in their power to stick to it - Labour is divided, lacking strong leadership, without policies, and failing to cut through with the public. The right-wing press and much of the coalition will now run this narrative into the ground all the way through to 2015 in a transparent and at times desperate attempt to stop a Miliband premiership. The problem is that this narrative, like all political narratives, may be grounded in a degree of truth, but it is also grossly simplistic and in some cases downright misleading - as Ed Miliband's ambitious proposed reforms of the political system and union link today demonstrated.
Labour's poll lead may not be as impressive as its supporters would hope and it is still a long way from convincing the country it is ready to form the next government. But the opposition appears far more comfortable with its current direction than the media narrative suggests, while it also boasts a growing number of policies that draw clear dividing lines between itself and the coalition. Nowhere is this more obvious than in Labour's fast evolving stance on the green economy.
Let's take each charge in turn. Firstly, Labour may have done a good impression of a party divided over its union links in recent days, but on the question of climate change it is united. From trade union firebrands to New Labour survivors, the Party instinctively understands you can't have social justice without environmental justice. From Miliband down there is an acknowledgement that climate change is a serious threat and an awareness that green growth can help drive economic recovery.
The Lib Dems may remain the party most closely associated with environmentalism, but many of its members are furious at the leadership's failure to deliver more green policy progress while in government. Meanwhile, the green and climate sceptic wings of the Conservative Party are engaged in open warfare, meaning David Cameron is unwilling or unable to drive forward the green agenda that he once proudly supported. In contrast, the only aspect of environmental thinking that divides Labour is whether or not the green economy should represent a central part of the Party's pitch to the country or act as more of a second tier issue.
Secondly, the Labour leadership position on the green agenda is strengthening fast. Having cut his front bench teeth as the UK's first Energy and Climate Change Secretary Miliband fully understands the scale of the environmental threats we face and the urgent need to deliver a greener economy, even if he does not talk about the issues as much as some green groups would like. He appointed a Shadow Energy and Climate Change and Environment Secretaries with genuine political clout in Caroline Flint and Mary Creagh, and backed them with strong teams packed with ambitious MPs. Meanwhile, Shadow Chancellor Ed Balls has recently stepped up attacks on the government for failing to do enough to accelerate green investment and will tomorrow set out his thinking on the growing importance of low carbon infrastructure in a speech hosted by the Green Alliance. There is optimism both inside and outside the party that the Labour leadership will make the green economy a key part of its proposition.
Which brings us neatly to the third myth - policy. The coalition is right to argue Labour does not have a fully costed manifesto in place just yet, but then again who does two years out from an election? Labour still has lots of work to do explaining how it would accelerate the pace of decarbonisation, but that does not mean there aren't green policy differences between the government and the opposition. Labour has already committed to introducing a decarbonisation target for the power sector if it wins the next election, while Flint has presented plans for a pool system in the energy market in an attempt to increase competition. There have also been strong hints the opposition would like to see more done to promote the Green Deal and other energy efficiency schemes, close the loophole that may allow coal power plants to keep operating deep into the 2020s, and invest more in flood protection and climate adaptation. Flint and others acknowledge there is work still to do, but it is clear the basis of a green economic industrial strategy is being forged.
Finally, critics may be justified in arguing that Labour is struggling to cut through with the public, and the party leadership is well aware that the next election is likely to be nail-bitingly close. But if difficulty getting your message through to the public is a cross that all oppositions have to bear, there is an expanding body of polling work showing that support for the green economy is a vote winner. Significant majorities of people want to see action on climate change, like and support clean technologies such as solar panels, electric cars, and even wind turbines, and most of all want to find ways that they can use less energy and cut their energy bills. Labour is aware the urgent need for new infrastructure makes it near impossible to promise lower energy costs, but serious thinkers near the top of the party are starting to see how a green economy narrative based on job creating investment, energy efficiency, and sweeping reform of the energy market could resonate with voters.
Of course, none of this is to suggest Labour has the green vote sewn up. The Party's green agenda faces two significant challenges, which neatly mirror the broader electoral problems Labour has to overcome - credibility and costs. Both sides of the coalition already have these green attack lines in place. It has been notable how DECC and Defra Ministers now rarely waste an opportunity to point out that the current urgent need for energy infrastructure investment is the direct result of underinvestment during Labour's 13 years in power or ask how Labour would fund a lower interest rate for the Green Deal, for example, without pushing up the deficit. These attack lines will resonate, not least because they raise entirely legitimate questions.
Moreover, as I have argued before, the government's green track record is in many ways better than it is given credit for. Yes, it is a long way short of what is required, but the Lib Dems and the green wing of the Conservative Party will go to the country in 2015 touting the formation of the Green Investment Bank and if all goes well over the next two years the mobilisation of investment through the Energy Bill, the Green Deal, and the Renewable Heat Incentive.
However, these challenges are anything but insurmountable for Labour. The last Labour government may have let energy policy drift during the first half of its stint in office, but during the second half it delivered the Climate Change Act, launched DECC, and kicked off the feed-in tariff. Equally, there are plenty of clever policies Labour could deliver that would help to boost the green economy without breaking the bank. It is my understanding loan guarantees, better product and building standards, measures to deliver still greater competitiveness in the energy market, and improved targeting of infrastructure spend at green projects are all being looked at closely as a means of driving low carbon investment without increasing the deficit. Throw in green ISAs, green quantative-easing, a major green home building programme, a green apprenticeship push, and a relaxation of borrowing rules for the Green Investment Bank and you'd have a pretty compelling economic strategy that would appeal to Labour's base and reach out to both disaffected Lib Dems and centre ground voters.
Because that is the big attraction of a green economic strategy for Labour - it is a no regrets move. Without being too cynical about the political landscape the only people such a strategy would irritate are never going to vote Labour. Miliband could promise free ice creams for all and a British winner of Wimbledon every year as part of his manifesto and he would still not win over those anti green voices who think climate change is a socialist plot. But in setting out a bolder green agenda he can excite his base, appeal to the centre, and position himself as leader willing to tackle big and important issues. He would also be able to integrate a new green industrial strategy with his "responsible capitalism" and "One Nation" tropes, while simultaneously using it to strengthen Labour's ties with a business community that is increasingly frustrated with the pace of progress on green policy and privately critical of Cameron's failure to stand up to the climate denying dinosaurs on his backbenches. As if that were not reason enough, there is also much political mischief to be had in touting an ambitious climate change strategy that would only serve to highlight the divisions in the Conservative Party on green issues.
Inevitably, none of this is yet guaranteed. Concerns remain that Labour could still duck this particular battle. Fears that the Tories will attack with accusations that Labour supports green technologies that push up energy bills could force the leadership to move climate change back down the agenda. Meanwhile, the Lib Dems, the green wing of the Conservative Party, and, of course, the Green Party are going to fight hard to position themselves as the real green leaders in British politics - and I'd argue each of them will be able to present a compelling case. Labour will have to put a lot more flesh on the bones of its low carbon strategy if it is to deliver a strong play for green business voters.
But my sense is that the party is increasingly willing to make that play. This is a fight Miliband will relish and one that he has long been committed to. I'd be very surprised if Labour does not use its evolving green economic strategy as a dividing line between itself and the Conservatives through to the next election. And regardless of where they sit on the political spectrum business leaders would be advised to keep a close eye on how Labour's green proposition is developing, not least because the polls continue to suggest they could be enacting their policies in less than two years. For that reason alone, Ed Balls addition tomorrow of another chapter in Labour's green economic narrative is worthy of close attention.
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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray