The Energy and Climate Change Secretary has a full in-tray that needs tackling immediately
It is one of the toughest and most exciting jobs in government, combining long term existential issues about human nature and the kind of society we want to live in with complex short term policy considerations capable of confusing the most adept of policy wonks. As such few departments offer a more daunting in-tray than that faced by newly appointed Energy and Climate Change Secretary Ed Davey.
His predecessor, Chris Huhne, is widely held to have done a pretty good job, and yet the challenge presented by climate change and the transformation of the UK's energy infrastructure is so gargantuan that Davey still has a host of urgent questions that will need answering if the low carbon economy is to continue its recent success.
There are bound to be plenty more (please add your own questions in the comment box) but here are just 10 questions green business leaders will want answering over the next month:
What is going to happen to feed-in tariffs?
It is the issue that will be at the top of Davey's in-box and the issue that tarnished Huhne's otherwise broadly successful track record: what is to be done about feed-in tariffs?
Davey has to decide whether to proceed with the government's cynical Supreme Court appeal against the two legal defeats inflicted against its attempt to rush through cuts to solar feed-in tariff incentives before the consultation on the proposed changes was completed. It is highly unlikely he will drop the case, although doing so would immediately send out a signal that he is his own man and would win huge amounts of good will from the solar industry, green campaigners, and Lib Dem voters.
Regardless of whether the appeal proceeds or not, Davey needs to bring forward promised reforms to a scheme that has become a victim of its own success and is in serious danger of breaching its long term budget even with the latest rounds of proposed cuts. Can the new Secretary of State secure a higher budget for a scheme that promises to normalise onsite renewable energy in the UK, and, if not, how does he plan to divide the remaining budget between different technology types? As importantly, can he repair the damage done by the mishandling of the proposed cuts and convince green investors that future government policies will remain stable and predictable?
Can you make the Green Deal work?
There is near universal agreement that the Green Deal is a great policy on paper - an elegant means of overcoming the upfront cost barriers that block otherwise sensible energy efficiency improvements, while driving a new job-rich home and office improvement programme.
The only problem is that legitimate concerns about its effectiveness in practice are coming thick and fast. The interest rates attached to the scheme are not low enough, the financial returns will not be attractive enough, and without a degree of compulsion too many homeowners and landlords will ignore the scheme. Even DECC's own officials acknowledge that the rate of installation for some forms of insulation will fall.
Huhne's response to these concerns boiled down to the promise of £200m worth of incentives to drive adoption and a "don't worry, it'll get sorted" attitude. But the scheme is due to be launched in October and the businesses that are being asked to determine its success or failure still have no details on what the government is going to do to drive the market. They need answers, and fast.
And while we're talking about energy efficiency, the government's focus on domestic energy efficiency means the corporate sector is too often ignored. Will the new Energy and Climate Change Secretary correct this oversight and put in place a more coherent approach for helping businesses cope with rising energy prices.
When can we expect a decision on mandatory carbon reporting?
The decision was expected last autumn, and then before the end of the year, and then early in the New Year, and still we wait.
The question is what for? The CBI and plenty of big name blue chips are in favour or mandatory carbon reporting rules that benefit investors and help firms identify areas to make savings, while the initial impact assessment suggesting the rules would impose a significant bill on businesses has been shown to be badly flawed.
The rumour is that political battles are stalling the final decision, which is code for an almighty scrap between deregulatory Tories who are instinctively opposed to the rules, and Lib Dems and more progressive Conservatives who see carbon reporting as a prime example of smart regulation.
The final decision lies with Caroline Spelman at Defra, but it would be a significant win for the green wing of the coalition if the reporting rules are approved.
Will the Electricity Market Reforms see further reform?
Their complexity means they do not get much media coverage, but businesses understand that the government's proposed electricity market reforms (EMR) represent the biggest shake up to one of the most important sectors of the economy since privatisation.
There is broad support for the basic principles of clean energy subsidies, a carbon floor price, an emissions performance standard, and a system of payments for back-up power plants and efficiency schemes. But as time has passed opposition has grown to some elements of the package.
Most notably, the Energy and Climate Change committee of MPs recently added their voice to warnings that the carbon floor price will lead to carbon leakage without action to the increase the carbon price at an EU level, while right wing opposition to renewable energy subsidies might be based on myths and half-truths but it is still gathering momentum.
Will DECC stick with the proposed reforms as they stand or will we see further changes with all the implications such a move would have to energy investor confidence?
Where are the green taxes you promised?
It is right there in the Coalition Agreement, a commitment to "increase the proportion of tax revenue accounted for by environmental taxes".
And yet, as this week's report from the Environmental Audit Committee has confirmed, progress on green taxes has been woeful and the Treasury appears to be trying to duck the issue by delaying the release of a clear definition on what constitutes a green tax. Fears are mounting that mandarins are simply looking for a way to redefine environmental levies in a way that allows ministers to argue that they have increased.
Yes, green taxes can increase the tax burden on some firms, but they remain the most effective means of pricing externalities and can provide a huge boost to those companies providing greener goods and services. Davey campaigned personally for a shift towards green taxes, and yet in government the Lib Dems have hardly won a green tax concession from the Treasury worthy of the name.
It is time for Davey to right that wrong.
How do you plan to move forward with the UK's CCS and nuclear programme?
While the renewable energy sector commands the headlines, the other two pillars of the government's strategy are too often ignored.
Ambitions to become a world leader in carbon capture and storage (CCS) technology have stalled as the government has been forced to return to square one with its plan to provide up to £1bn of funding to a full scale demonstration plant. Meanwhile, the promised nuclear renaissance is moving forward at a snail's pace, hampered by safety concerns post-Fukushima and continued opposition from many green campaigners.
The UK should have the engineering expertise and stable policy environment necessary to lead the world in CCS and promising next generation nuclear technologies, but both sectors urgently need greater clarity on how the government wants them to develop.
What role can the UK play in international climate negotiations?
The UK is rightly proud of its track record at international climate change negotiations, repeatedly playing a progressive role in driving forward green policies and building links between industrialised and developing countries.
However, with the deal brokered in Durban setting a deadline of 2015 for a new international agreement there is a real risk that talks could now tread water for several years. What can the UK do to help ensure this does not happen, and at a regional level how can Britain play a role in convincing other EU member states to increase the bloc's carbon targets for 2020 and 2025?
On a more mercenary level how can the new Energy and Climate Change Secretary help the UK's green businesses punch above their weight in an increasingly competitive global market?
How will DECC work with other government departments?
Huhne was a very capable Secretary of State, but not even his biggest fan would describe him as a conciliatory politician. DECC has too often operated in a green ghetto, struggling to ensure that the progress it has made on green energy has been replicated in areas such as green transport, green buildings, green skills, and climate adaptation.
Can Davey improve relations with the Conservative-controlled Defra, Department for Transport, Department for Communities and Local Government, and most importantly the Treasury? Equally, can he work closely with his leader Nick Clegg and even the Prime Minister David Cameron to push the green economy higher up the agenda?
Can the government face down its green critics?
No sooner had Huhne cleared his desk than a group of around 100 Conservative MPs let it be known that they had written to the Prime Minister calling on him to drastically cut subsidies for onshore wind farms.
If he is not aware already, green NGOs will be lining up to inform Davey that the green economy has spent the past six months fending off a wave of orchestrated attacks from backbench MPs and right wing commentators. Some of these critics have asked legitimate and pertinent questions that the government must answer about the effectiveness of certain policies, but the vast majority have used dubious myths and half-truths to malign successful green policies, when their opposition really boils down to nimbyism, climate scepticism, and vested interest in the fossil fuel economy.
For various reasons the government has to date proved curiously ineffective at facing down these critics. Davey needs to quickly establish himself as fierce advocate of the green economy who is unafraid to repel the unjustified attacks the sector faces. He has made a good start with a commitment to "green growth", but green businesses cannot hear enough of this type of rhetoric if they are to deliver the long term investor confidence that is required.
Where does Davey stand on the big issues?
Policies are hugely important, but the challenges and opportunities that define the green economy demand that political and business leaders take a position on some pretty existential economic and social issues. They don't need to answer them exactly, no one can, but they need to demonstrate that they are willing to engage with them.
Is economic growth and genuine sustainability compatible or do we need a new circular economic settlement? How do you put a value on bio-diversity, and if you can should you do so? How do you make carbon emission reductions equitable? Do you really believe current emission reduction targets are sufficient? How do you make people aware of the urgent need to cut greenhouse gas emissions without succumbing to doom-mongering nihilism? At what point should governments step up their focus on climate adaptation? How should investors deal with the potential "carbon bubble"? How do we re-skill for a low carbon economy? Should countries try to address booming population growth? Are current trade and copyright rules compatible with the accelerated roll out of clean technologies? Should geo-engineering be part of global efforts to address climate change? Should we ban certain carbon intensive activities?
No one is expecting Davey to have answers to these questions, but if he is to work effectively to promote the green economy then green business leaders will need to know where he stands on many of these big issues.
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