CBI slams UK climate change policy

The CBI will today launch a blistering attack on the government's climate change policy, arguing that it, rather than the economic crisis, is to blame for the slowdown in low carbon investment.

The employers' group will this afternoon launch four "road maps" to a low carbon economy, which will claim that while the government's climate change policy is moving in the right direction, not enough is being done to promote low carbon investment and address the impending energy gap.

According to reports in The Guardian, CBI director general Richard Lambert will argue that it is "politics and policy", and not the recession that has led to delays in green investment.

The CBI's energy road map is expected to cite the flawed planning system, insufficient support for low carbon technologies, and uncertainty over the long-term price of carbon in the EU emissions trading scheme as the main factors behind recent delays to renewable energy projects. These have led to high-profile investors, such as Shell, BP, Centrica and Iberdrola, scale back or reconsider their investments in UK projects.

Lambert said that while the government had put forward proposals to address most of these issues it needed to "get on with it" or risk the investment required to build a low carbon economy moving overseas.

The CBI road map will call for "urgent action" from the government, demanding that it move swiftly to introduce clearer guidance on how investment in offshore wind and nuclear power will be fast-tracked, step up efforts to upgrade the national grid, and bring forward the decision on its promised £1bn carbon capture and storage trial, as well as authorise a second trial.

The criticisms echo that of the Renewable Energy Association (REA) which has been campaigning for the government to increase support for its members. It will today release the results of a poll showing that large numbers of companies are suffering cashflow problems as a result of the recession.

The survey of REA members will show that 32 of the 39 companies that responded to the survey said they faced a cashflow shortage. The results follow warnings that the government's phasing out of the Low Carbon Building Programme, which provided grants to households and businesses installing small-scale renewable energy technologies, would result in some firms going to the wall.

Speaking to BusinessGreen.com, Leonie Greene of the REA said that tightening credit conditions and the end to the grant scheme had left many firms facing cashflow issues. She added that there were numerous "horror stories out there" of banks refusing finance even for scaled-back projects, with a very uncertain future looming for a number of high-profile renewable energy companies and large renewable projects.

The Department of Energy and Climate Change insisted that there was still a healthy appetite for investment in UK low carbon projects, reflected by high levels of interest in its nuclear build programme. It has also recently increased financial support for offshore wind and marine energy projects.