The ‘choice’ between going green or boosting economic growth is a false one, director-general of the CBI John Cridland said yesterday.
He made the statement on the launch of new research by the business lobby group showing that the UK could become a leader in low-carbon products and services adding some extra £20 billion a year in GDP to the British economy by 2015.
“We are increasingly hearing that politicians are for one or the other, when in reality, with the right policies in place, green business will be a major pillar of our future growth,” Cridland said.
The report, The colour of growth: maximising the potential of green business, indicates that green businesses will for around a third of all UK economic growth during 2011/12 and during the previous period increased its share of the global £3.3 trillion green market by 2.3%.
Green business reached £122 billion over the same period and now accounts for some 8% of the UK’s GDP and supports around 940,000 jobs.
Green goods and businesses could also bolster UK exports to fast growing economies like China and have the potential to cut the country’s trade deficit in half.
But the CBI warns that the government’s current approach could put this potential growth in jeopardy.
“The UK has made a great start tapping into green economic opportunities but mixed signals from the government are setting the UK back,” said Cridland. “We must cut green tape and pay attention to competitiveness.”
As well as missing out on potential growth, the CBI warns that a slowdown in the green business sector as a result of uncertainty over government policy could cost the UK £400 million in net exports in 2014/15.
“If we don’t take a smarter policy approach, not only will we miss out on growth opportunities, we could also undermine the very industries that should be at the heart of our low-carbon economy,” he cautioned.
The CBI wants to see the government take a strong and coherent line on building business confidence, improving competitiveness and reducing complexity.
The report praises the intentions behind the Green Investment Bank but urges the government to ensure that new market frameworks like those proposed under the electricity market reform will provide stability and longevity.
The CBI also calls for stimulation of new consumer markets, to drive demand in emerging areas such as the Green Deal.
But the recommendations also call for a reduction in the complexity of the current low-carbon regulation landscape and a long-term strategy for energy-intensive industries to enable them to take part in the transition to a low-carbon economy.
The report and the recommendations have been welcomed by financial consultants Ernst & Young.
Partner in sustainability and cleantech James Close commented:
“It is good news that the CBI has put a figure on the potential economic contribution of green business in the UK. To build on that we now need more commitment from business and coherent, consistent and stable policy support in this area from government.”
He adds that now is a perfect time to invest in long-term energy efficiency projects as energy prices continue to rise and renewable power becomes cheaper.
Environmental group Friends of the Earth agree that the CBI’s report is “bang on the money”.
“Developing a green economy is crucial for getting the UK out of the red,” says campaigner David Powell. “The government must clearly commit to a strong green economy to boost investor confidence, creating new jobs and business opportunities in the process.”
For further information:
UK reports 36% growth in renewables capacity in 12 months (2-Jul)
UK economy will benefit from offshore wind, says report (13-Jun)
Cutting environmental red tape stalling green economy, UK warned (21-May)
UK renewables sector could support 400,000 jobs by 2020 (24-Apr)
06 July 2012