Power Generation | Fossil Fuels

UK Coalition actions undermining business confidence, warns committee

The UK Coalition received some of its stiffest criticism yet for its approach to climate change in a new report out today from a parliamentary select committee.

The Environmental Audit Committee (EAC), in its review of the country’s carbon budgets, warns that the government’s “schizophrenic” approach is undermining certainty on future climate change policy.

In particular, the report singles out the Coalition’s planned review of the country’s carbon budgets in 2014 – a concession secured by Chancellor George Osborne when signing off on the budgets earlier this year – as “politically motivated”.

The carbon budget, which was only agreed after the Prime Minister David Cameron intervened to end the deadlock between Energy Secretary Chris Huhne and Osborne, set a target of a 50% reduction in greenhouse gas emissions by 2025 compared with 1990 levels.

But it was conceded that the UK could revise the target if its progress reducing emissions exceeded the pace of reductions achieved under the EU Emissions Trading System (EU ETS).

While Huhne has repeatedly insisted that the targets will not be watered down, Osborne countered in his speech to the recent Conservative party conference that that he will not allow the competitiveness of the country’s businesses to be harmed by its environmental policies.

The EAC says that this vacillating and in-fighting could have a detrimental effect on the burgeoning low-carbon economy by damaging investor confidence.

“Green investment should be seen as a win-win solution to our economic problems, helping to stimulate growth and rebalance the economy, at the same time as reducing pollution,” says Committee chair Joan Walley.

But backtracking on those commitments “would be a big mistake”, she adds, accusing the Chancellor of still not getting climate change.

“The long-term carbon-cutting commitments set out in the Climate Change Act are supposed to provide certainty that Britain is determined to reduce emissions by 80% by 2050. Unfortunately, the government’s somewhat schizophrenic attitude to climate change seems to be undermining that confidence,” she said in a statement.

Green group Friends of the Earth welcomes the Committee’s report and its accusations that the Government is “playing it safe” and failing to show “bold and ambitious action”.

“This report will make embarrassing reading for David Cameron and his so-called ‘greenest Government ever’,” says executive director Andy Atkins. “Stalling over emissions cuts sends completely the wrong message to firms investing in low-carbon industries – jeopardising our chances of tackling climate change and risking disaster for the UK’s economic recovery.”

However, Energy and Climate Change Minister Greg Barker has defended the Coalition’s stance, saying:
“By legislating for clear targets up to 2027 through the fourth carbon budget we are doing more than any other country in providing long term certainty to those investing in the low carbon economy.”

He adds that it is right to review progress towards the EU emissions goal in 2014 “so that we’re not disadvantaging British industry, which would simply result in emissions being shipped overseas”.

For further information:
www.parliament.uk/eacom
www.decc.gov.uk
www.foe.co.uk/

11 October 2011

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