Could 2010 prove a lost year for the low carbon transition?


They always say that the first 100 days are the most important of any new administration. A 100 days should give the new leadership long enough to get its feet under the table, set out its priorities, and begin to deliver substantive change.

Well, earlier this week the coalition government quietly reached the halfway point of those crucial first 100 days and while its deficit slashing priorities could not be clearer, its green agenda remains swathed in the densest fog.

There have been occasional moments of clarity. The coalition programme, for example, gives a handy bullet point guide to what the government wants to do. We know that on the consumer front the Green Deal will kick off in late 2012 and offer households the opportunity to give their homes an energy efficient makeover. We know that a new green Investment Bank will provide a boost to the UK's low carbon infrastructure. And we know that a floor price on carbon, energy market reforms and tough new rules for fossil fuel plants should all serve to accelerate the shift towards greener sources of energy.

But anyone requesting further detail on these proposals and many others will get the same blunt response: "wait until October and the spending review, all will become clear then".

Even when evidence begins to emerge as to what green policies the government is working on, it often raises as many questions as answers.

Take this week's Green Investment Bank (GIB) Commission report, which is likely to provide large chunks of the government's final plans for a green bank, as an example.

At the start of the week the report was released detailing how the GIB should focus on de-risking green projects and should be part funded by the "rationalisation" of three green quangos and five funds, including the Carbon Trust. Energy and Climate Change minister Greg Barker welcomed the report, arguing that while there were some good green quangos out there the overall landscape was "extremely cluttered and confused".

Two days later and the GIB Commission's chairman Bob Wigley said suggestions the Carbon Trust and other green quangos were for the chop were "misleading and unhelpful".

In an impressive display of rhetorical gymnastics he explained that what the commission meant when it said the Carbon Trust et al should be rationalised was that they could be absorbed within the GIB, or partly integrated with the GIB, or work in partnership with GIB, or just go along on their own merry way. Besides, he added, the Carbon Trust and some of the other quangos are independent bodies with their own boards so they can decide their own future - although quite what that future would look like without government funding was not explained.

In a way this equivocation is understandable, given that no one wants to rush decisions that later prove to be costly and ineffective, particularly when public finances are so tight. But the net result is that while businesses have a rough idea of how the GIB will operate they have absolutely no idea what the future holds for the Carbon Trust and other green quangos and funds. Should companies interested in working with the Carbon Trust's footprinting project get involved or wait and see what will happen to the company? Should developers preparing to lodge grant applications with the Marine Renewable Deployment Fund go ahead or wait and see what the GIB will offer instead?

Similarly, the government this week wheeled out its stock "wait and see" response to inquiries about what will happen to the previous government's electric vehicle incentive scheme. While the government has decided to provide clarity to some low carbon projects - giving the thumbs up to Nissan's electric car manufacturing plant and the thumbs down to Sheffield Forgemasters' expansion plans - there is still no word on whether the promised £5,000 subsidy for new electric cars will be made available.

Again you can understand the Treasury's desire to take its time and weigh up the pros and cons. But Nissan will start taking UK pre-orders for its Leaf electric car in the next few months and would really like to be able to tell dealers what it will cost. Meanwhile, there are whispers those companies that have been tendering to manage the EV incentive scheme had been expecting a decision on who has won the contract within the next few weeks. They could end up having won the right to manage a scheme that no longer exists.

This uncertainty is being repeated across almost every aspect of the government's green agenda, and while businesses are largely understanding of the fact that it will take new ministers time to get a handle on their briefs and bring forward workable policies and legislation they are also likely to delay the low carbon investment decisions that urgently need to be taken while they wait for clarity.

As this week's second annual report from the Committee on Climate Change made plain, the problems with the UK's low carbon policy framework can be summed up in one word: urgency. The coalition has plenty of good policies in the pipeline, but they need to be enacted fast if the country is to have any hope of meeting its emission reduction targets and with everything playing second fiddle to the spending review there appears to be little chance of this happening.

Green business leaders endorse the Committee's findings, admitting that while ministers seem to "get" the low carbon economy some of them seem to lack an understanding of the urgency of the climate crisis.

There is a real danger that with the first half of the year dominated by the dog days of the Labour government and the second half defined by Cameron's deficit hawks and their fixation on cuts, 2010 could be the year when green investment plans get stuck in a policy bottle neck.

If the government makes good on its green economy promises things will be much better by 2011 and 2012, but by then it could be too late for the UK's dreams of becoming a low carbon leader. The coalition has 48 days and counting to deliver some green policy clarity, before the low carbon economy ceases to reserve its judgement.

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