James Murray

We might have been forced to listen to nearly two years of the manure of political rhetoric to reach this point, but if the last few weeks are anything to go by the UK could soon see the green shoots of serious political action on climate change.

The first hint that the tenor of the political debate was changing came last month with the Lib Dem's publication of their strategy for a zero carbon Britain. It might have got somewhat lost in the midst of the media silly season, but for those that read it the report left quite an impression.

It is not hyperbole to describe it as the clearest and most serious-minded strategy for mitigating the risk of climate change yet published by one of the UK's major political parties.

This was not some vague commitment to the environment a la Cameron, an overly complex policy document no one outside Whitehall will ever understand a la the bulk of the civil service, or a bill that sets carbon emission reduction targets but provides no details on how they will be attained a la Brown's government.

Instead the Lib Dems outlined a series of clear policy recommendations purposefully designed to deliver a zero carbon economy with 100 percent of the UK's electricity generation coming from non-nuclear renewable sources by 2050.

What headlines there were may have gone to plans to ban petrol cars by 2040, but the document went much further, covering all sectors of the economy and detailing how low carbon technologies can be incentivised and polluting behaviour discouraged.

Moreover, the strategy has embraced that all too rare political skill of looking at what works – namely in the zero carbon strategies of Sweden, Norway and New Zealand - and copying it.

So, out would go the current government's aversion to green taxes and in would come a major overhaul of the tax system that would see basic income tax slashed to 16 pence in the pound with major taxes on polluting behaviour making up for the lost revenue and creating a clear price signal for people and businesses to limit carbon intensive activities.

To avoid accusations they are fixated on green taxes the Lib Dems also talked in detail about a series of incentives designed to spark green behaviour. So, out would go the over complicated renewable obligation subsidy mechanism, to be replaced by the kind of simple feed-in tariff that has proved to work so successfully in Germany. Meanwhile, a green mortgage scheme would incentivise people to improve the energy efficiency of their homes, while a major investment programme would seek to overhaul the creaking railways.

Even that proposed ban on petrol cars isn't as daft as it first sounds when you consider that the aim of such legislation would be to incentivise car manufacturers to accelerate development of fuel cell technologies. As shadow environment secretary Chris Huhne observed in The Guardian there are major strides being made in new forms of carbon free propulsion "but the [car] industry needs certainty that one of the biggest world markets - in the EU - will insist on green vehicles".

For the first time it looked if a UK political party had really grasped the scale of the changes that are required to tackle climate change and developed a balanced strategy for achieving those changes that should ensure the UK economy remains competitive.

However, it looks as if the Lib Dems time in the sun could prove short-lived with the publication this Thursday of the Conservative's long anticipated Quality of Life report.

Heavily leaked in advance it looks as if the doorstep-sized, 800 page report will also offer a wide-reaching and comprehensive set of recommendations for creating a low carbon Britain.

Despite the risk of a schism with the right wing of the party and its tax-cutting anti-regulation agenda the report's authors Zac Goldsmith and John Gummer have apparently reached similar conclusions to the Lib Dems, backing carbon taxes and stricter environmental legislation as the best means of stimulating low carbon behaviours.

Policies that would previously been shunned by the Tories, such as taxes on short haul flights, a doubling of landfill tax for businesses, a tax on aircraft fuel, a cut in the proposed EU requirements for carbon emissions from cars to 100g/km, and new regulations limiting supermarket packaging, are all recommended by the report.

But as with the Lib Dem plans, the green taxes are balanced by a series of eye-catching incentives, which have been cleverly pitched as tax cuts. The Gummer-Goldsmith report also calls for the adoption of a feed-in tariff for green energy generation and perhaps most intriguingly proposes a scheme that would see home buyers recover much of the stamp duty on their new home if they commit to improving its energy efficiency.

What is so encouraging to green business leaders about both these reports is not just the fact that for the first time they have taken as their defining concern the need to genuinely transition towards a low carbon economy – Goldsmith is amongst the first high profile political figure I have heard talk openly about the threat posed by peak oil - but also the fact that their recommendations are both feasible and in many cases desirable. As Goldsmith told The Sunday Times, "We have not imagined policy ideas that are going to be repugnant to people".

It is, of course, easy to argue that I am overstating the implications of these reports. They are, after all, both the work of opposition parties and Tory leader David Cameron has reserved the right to ditch any recommendations he doesn't like.
The government will also be quick to point out that it is much easier to draw up revolutionary low carbon strategies when you don't have to face up to the challenge of implementing them and the inevitable short term job losses and protests that would result.

However, with an election expected in the not too distant future the government is likely to find it increasingly difficult to ignore many of the recommendations included in these reports.

The Lib Dems have already gone on the attack, blasting Brown's record for cutting green taxes, reducing spending on flood defences and climate research, and halting proposed environmental legislation. The government may continue to respond with its strategy of criticising such opposition strategies as a move to increase taxes, but such counter attacks are likely to find it harder to win voter sympathy given they are also attacking proposals that include ample green incentives.

In fact, the criticism of the government's all stick and no carrot approach to environmental legislation, refusal to introduce a feed in tariff and support for the completely ineffective air passenger duty are beginning to reach a crescendo. Pointing to a climate change bill that includes little beyond emission reduction targets, admirable though these are, is no longer good enough particularly when so many of the recommendations put forward by the opposition parties - such as the feed in tariff and increased investment in public transport - smack of little other than common sense and would benefit the economy.

It is hard to imagine that Brown can ignore this criticism indefinitely, particularly with environmental issues playing so well with the politically indispensable voters of Middle England and many of the attacks focusing on his personal lack of green credentials.

More important still is the way these reports fit with a global political realisation that climate change rhetoric without action just isn't good enough anymore (anyone still doubting this should look to Canada, where opposition leaders have threatened to trigger an election over the weakness of the minority government's climate change plan, and Australia, where a major drought means climate change will for the first time be a major policy issue at the imminent election).

What we are now seeing is that governments have had long enough to experiment with climate change policy and are slowly settling on a consensus over what works – ie. an emphasis on green incentives, a clear price on carbon emissions through the tax system, ample subsidies for clean technologies, a feed-in tariff for green energy, a healthy cynicism over the role of current biofuel technologies and massive investment in public transport. Against this backdrop it is easy to see why the Tory and Lib Dem policy documents share so many similarities; these are the approaches that have been shown to successfully support the transition towards a low carbon economy.

For business leaders these reports provide further evidence that strategies for mitigating the risk of increased climate change legislation are now essential. Regardless of who wins the next election many of these policies will have to be adopted if the next government is to meet the targets set out under the proposed climate change bill and the businesses that prepare for them now will suffer the least disruption when they do hit the statute book.

All commercial investment decisions must now be informed by the probability that there will soon be a much higher price on carbon emissions, as well as tax breaks on greener investments and bans on the most polluting technologies and behaviours.

Account for these risks now by ramping up investments in low carbon technologies and business models and not only will your business be largely future-proofed against the new legislative framework that is surely coming, but it will also be in a better position to exploit the opportunities provided by a low carbon economy.