The government's knee jerk support for high carbon infrastructure risks derailing long term plans to build a genuinely green economy - business groups must lead a fight back
For much of the past four years I have been part of that vanishingly small group of environmental commentators who think the government has not got the credit it deserves for its green efforts. Yes, numerous mistakes have been made, and yes, the government's low carbon policies have rarely been commensurate with the scale of the climate crisis; but on balance I'd argue the coalition has just about honoured David Cameron's pledge to lead the greenest government ever.
The extent to which this is a minority viewpoint was hammered home last week when I chaired the Environmental Industries Commission's Annual Conference. Charles Perry of green consultancy Anthesis Group asked how many people in the room would score the government more than five out of 10 against its stated goal of becoming the "greenest ever". Around 180 green executives sat on their hands - as I raised mine. I gave the government 5.5 out of 10.
The argument, which is not quite as incredible as many environmental campaigners would have you believe, goes something like this: any government of a modern industrial nation in 2014 is by default likely to be the greenest ever, as international climate change commitments, the drastic fall in the cost of clean technologies, and public and scientific pressure to take climate change seriously force ministers to deliver green policies that are ambitious by historic standards. Consequently, the passage of an Energy Act designed to deliver a surge in clean energy investment, the formation of the Green Investment Bank, the launch of an albeit flawed energy efficiency financing scheme, the introduction of the Carbon Reduction Commitment tax, the retention of the fourth carbon budget, and, most importantly, the compliance with the current carbon budget, the record levels of renewables investment and the continued growth of the green economy mean it is possible to argue this government is the greenest ever. It has been consistently greener than Gordon Brown with his Climate Change Act, Margaret Thatcher with her warnings about climate change, or even Clement Attlee and Anthony Eden with their National Parks and Clean Air Acts.
This government has failed to adequately address many environmental challenges and risks leaving the UK lagging far behind the US, Germany, and China in the global clean tech race, but it has also laid some of the foundations necessary for the next phase of decarbonisation.
However, this rose-tinted assessment took an almighty battering this weekend with the publication of Green Alliance's latest analysis of the Treasury's infrastructure pipeline. It showed for the first time since these figures were released in 2012 investment in fossil fuel infrastructure will outstrip clean energy spending this year. For anyone who cares about clean energy (which according to separate government polls constitutes about two thirds of the population), the data makes for depressing reading: the share of expected infrastructure spending on fossil fuel energy this year has increased from the eight per cent that was originally expected to 61 per cent; spending on low carbon energy has been revised down from £24.9bn to £9.8bn; projected spending on renewables for the period from 2015 to 2020 has been revised down by £9.3bn; projected spending on roads for the same period has soared from £1.6bn to £32.7bn, pushing the share of transport spending on roads and airports up from eight per cent to 36 per cent.
As Green Alliance's Matthew Spencer observed yesterday, "a series of short term decisions is unpicking long term plans to modernise our economy". "We find ourselves with an National Infrastructure Plan seriously at odds with our national interest, one that could reverse the modernisation of our economy," he added.
There are still some silver linings to this grey cloud of noxious pollution. The figures suggest that as the government's electricity market reform programme starts to take effect low carbon infrastructure spending will once again start to dominate the pipeline throughout the second half of the decade. Meanwhile, our continued adherence to EU and domestic emissions targets mean clean technology will become ever more dominant through the 2020s. It is also important to remember climate change and decarbonisation are not parochial issues, the harm done to low carbon investment by the changing nature of the UK's infrastructure pipeline is massively outweighed by the benefits arising from Germany's new green strategy and the US-China climate pact, not to mention the growing confidence a global climate agreement could be finalised next year.
However, the drastic recovery in high carbon infrastructure spending orchestrated by the government provides a timely reminder that simply setting carbon budgets does not magically mean they will be met. Instead, faced with the chronic and yet under-reported failure of his growth and deficit reduction plans, Chancellor George Osborne released the high carbon spending tap and through North Sea tax breaks and road building turned a carefully calibrated infrastructure plan that was designed to be compatible with the UK's long term climate change goals into a polluters' bonanza. He didn't have to tear up the Climate Change Act or the government's clean energy plans, and nor would he have wanted to, but a handful of relatively minor infrastructure and tax decisions risk having much the same result.
It is at this point that most environmentalists lay the blame for this reversion to 1980s infrastructure policies solely at the door of Osborne's Treasury, but sadly it is not as simple as boot out the Chancellor and his fracking obsession and watch the infrastructure pipeline revert to the shiny green state of 2012.
Firstly, the fossil fuel investments the government has enabled this year and is planning for the next five years lock in infrastructure that will make it ever harder to decarbonise through the 2020s. Once roads are built, they will be used. Once North Sea oil and gas fields and fracking wells are opened up, the fossil fuels they produce will be burnt.
Secondly, the coalition's quiet U-turn on the content of the infrastructure pipeline is as much the result of structural decision-making in Whitehall as political choices at Conservative HQ.
The most vocal cheerleader for North Sea oil and gas tax breaks in the past year has been not Osborne, but his supposedly green Lib Dem colleague Danny Alexander, who now fully deserves his share of the blame for failing to impose the junior coalition party's green ethos on the UK's infrastructure priorities. For all Labour's increasingly encouraging commitment to decarbonisation and Ed Miliband's prioritising of climate action, does anyone seriously think Ed Balls would not have dusted off the road-building and North Sea tax breaks himself? A Labour government may well create a more encouraging investment climate for renewables and tighten shale gas regulations, but there are few signs Balls would revoke Osborne's oil and gas tax breaks, shelve his new roads, or be any less conflicted about new runways?
The blow to green infrastructure detailed by Green Alliance is as much a function of the political class' default position of reverting to the infrastructure of the 20th century when times are tough as it is a function of Osborne's particular enthusiasm for pollutocrats.
The key question, as always, is what can be done to get the UK's infrastructure plans back on track? The current strategy is not yet catastrophic, but to adopt the Prime Minister's recent turn of phrase, the lights are flashing on the dashboard for the UK's green economy.
The answer is that those modern businesses who want to drive the development of a low carbon economy (and this includes the membership of the CBI) need to join with those politicians and NGOs who are increasingly frustrated by the primacy of short term tactics over long term strategy and decry each and every one of those relatively small policy decisions that run counter to the UK's long term decarbonisation strategy.
That does not mean opposing each and every high carbon project, after all we will still need oil and gas for several decades to come, while not every new road project is inherently unjustified, particularly at a time when low emission vehicles are proving their viability.
However, it is essential these projects fit into a credible infrastructure pipeline that avoids locking in technologies we need to be phasing out and prioritises cleaner alternatives wherever possible. Consequently, it is not credible to dish out tax breaks to North Sea oil and gas or green light fracking projects without a coherent strategy to deliver carbon capture and storage and boost national energy efficiency. It is not credible for Ed Davey to warn about a carbon bubble at a time when his colleague, Danny Alexander, is praising policies to get every drop of oil out of the North Sea and failing to even mention climate change. It is not credible to drastically change the nature of the UK's infrastructure pipeline without having a public debate about why this has been done and what the implications are for decarbonisation efforts throughout the 2020s - decarbonisation efforts, remember, that all three main parties are signed up to and which an international climate change agreement may soon make essential.
This government has been greener than it has been given credit for. But in the final months of its term in office it now risks torching its green credentials through a short term reversion to 1980s infrastructure thinking that threatens to reverse much of the encouraging progress the green economy has made in recent years.
The business community needs to remind all politicians once again that the opportunities presented by clean technology and the challenge presented by climate change means there is now a new way of doing infrastructure. A way of doing infrastructure that still boosts the economy and the UK's productivity, but does it in a way that does not do immense damage to the environment and our clean tech competitiveness. Realise that, and this government will be the greenest ever. And the one that succeeds it will be greener still - just as it should be.
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