Wednesday 19th January, A Fabian Environmental Policy Seminar

Sunder Katwala, General Secretary of the Fabian Society chaired the discussion that was led by Tim Yeo MP, Chair of the Energy and Climate Change Select Committee who was joined by Andrew Raingold, Executive Director, Aldersgate Group and Andrew Simms, Policy Director, New Economics Foundation. The event was under Chatham House Rule, and the following report gives an overview of the themes and opinions expressed.

With the Coalition’s pledge to be the ‘greenest government ever’ tempered by increased budgetary limitations for both state and individual, the seminar sought to look at the priorities and obstacles for the Government in this agenda and explored what measure of success, during this parliament, would support this claim.

The challenge:

The potential for catastrophe caused by climate change was something readily agreed by all participants: we have only 71 months before the chances of going over 2 degrees Celsius is less than 50-50 causing others to claim it was far more realistic to plan ahead for a 3-4 degree Celsius shift.  Despite this it was recognised that the UK is nearer to its Kyoto targets than many other nations, though to what degree this was due to ‘exporting’ its carbon footprint to developing countries was raised. With this in mind the 2030 target to reduce our carbon footprint by 90% was seen as theoretically possible but in practical terms extremely difficult, requiring massive investment and tough decisions by governments across the world. Indeed to avoid companies moving to countries with less legislation on climate change and emission targets it was agreed that any successful approach must be a global one.

Central to achieving an environmentally sustainable economy was the need to de-carbonise our energy supply, buildings and transportation while developing a viable forestry strategy. Addressing the first point, coal was seen as playing no part in any future energy mix: the £1Billion investment in carbon capture technology in Scotland was seen as a gamble at best. Gas too was largely rejected particularly in light of the recent surge in interest in shale gas deposits in the USA. Wind and solar power were reported to have mixed results, particularly dependent on climate and weather, and in some ways another gamble that required a consistent subsidy policy that so far is not in place. Around the table waste-to-energy and biomass were energy sources that were seen to be under exploited; both were posited as playing an important future role in any energy mix.

By far the most contentious area of future energy policy was that of nuclear power. There was a clear divide between those who saw it as essential to plugging the energy gap and those for whom it was a remnant of the fossil fuel era with the potential for further environmental damage. A parliamentary divide was spoken of on the issue, though it was claimed that a majority of cross-political support was for nuclear with the notable exception of the Liberal Democrats. All parties agreed that research was critical to the continued development of viable low carbon energy production.

How investment could be achieved for such a radical change in our energy supply was an area of much discussion. It was widely held that the free market alone could not provide adequate foresight or investment. For example the plan to build 12-13 privately funded nuclear power plants by 2025 was widely regarded as infeasible. While short-term higher energy prices were seen as one way to fund investment for long-term gain the discussion veered towards an onus on government to play a central role in setting up such infrastructure. Much was spoken of the reluctance of the civil service and treasury to administer taxes to fund these necessary changes though it was agreed that government is creating a framework that decides the cost and volume of energy procured moving us to a taxation rather than free-market system in this regard. The need for incentives and penalties in the tax system, both for the individual and companies, was stressed regularly and the credibility of such plans would rest on the affordability and delivery of the promised energy solutions.

Internationalism in tackling climate change:

There was some debate on the role of international law in legislating to prevent climate change. Some saw the rise of China and its investment in ‘clean energy’ as a sure sign that one day it could influence UN laws and treaties regarding climate change to punish the most polluting nations (and so preventing economic advantage to those countries that did not take action to de-carbonise.)  Others believed that the era of international legally binding targets was over and that such a likelihood was at best remote or far into the future.  It was also noted that the European Union can be a force for tremendous good despite incoherence amongst the member states. The setting up of an emissions trading platform (though currently ineffectual) was seen as a significant move particularly as China itself is considering adopting one. A potential convergence of the two would theoretically force the USA to join a similar scheme.

Furthermore it was recognised that in a globalised world it became more difficult to allot responsibility for climate change and fighting it. Any system would have to be fair and consistent with a heavy emphasis on investment from the ‘West’. Despite the projected $33 trillion required for a global response being footed by developed nations it was agreed around the table that early transition to a low or carbon-neutral economy would yield tremendous economic benefits for the countries and companies that did so. Indeed it was noted that in relative terms the start-up cost (though massive) would be outweighed by the early mover advantage of this transition. The right decision for the environment is also the right decision for business, it was claimed, and the example of how big business once so ‘anti-green’ is now at the forefront of promoting a green economy was given to show how a new model economy offers great opportunities for the free market. One speaker went so far as to say that, with regards to the US, big business is the only force for good when it comes to dealing with climate change.

With worldwide population set to reach 7 billion by the end of the year the impact of this was also discussed. Despite the tremendous strain put on resources and the increase in carbon caused by the growth of populations it was recognised that anything approaching China’s one child policy would be illiberal and far too controversial to implement. One speaker suggested that poverty and high birthrate were positively correlated so that a key to reducing the rate of growth would be to tackling the former and investing in education.

Labour’s legacy and the test of success for the Coalition:

With the role of government in mind, much of the discussion looked at the legacy of Labour’s progress on green issues as well as the plans of the Coalition. One speaker described the previous government as ‘pale green’ though another claimed that it was the greenest in history. The setting up of DECC, Europe’s largest wind-farm and leading position in Kyoto and Copenhagen were praised though this was tempered by a suggested emphasis on legislation and messaging rather than implementation with the green stimulus being seen as a wasted opportunity.

The coalition’s grand aims were supported though, as with Labour, questions were asked around the table about implementation. The scrapping of several environmentally orientated quangos was suggested to be a step backwards though another speaker believed that they had had little impact in their own right anyway. The green bank and green deal won praise around the table though many thought that this did not go far enough. It was argued by many that the green bank needs to be an actual bank with funding in the region of £4-6billion, a figure that one speaker noted was less than the bonus round for city banks this year. Questions were also raised over whether the coalition’s policy of localism could conflict with the need for a centralised plan for a greener economy. A speaker posited that a potential measure of whether the coalition’s policies were a success would be how many households took up the green deal. What was agreed by all was that a broad non-partisan consensus was needed in parliament and that continuity between governments was essential for a consistent approach to climate change.

The way government conveyed the message of climate change was also seen as important by panelists. Both Labour and the Conservative-led coalition were praised for using the right tonality to stress the seriousness of the threat we face and in so doing convincing the public of the necessity of action. It was noted however that more work must go into this to mitigate the financial pressures put on the tax payer to cover governmental investment by proving to them that this is the best option to meet our targets and avoid environmental catastrophe. The focus on the short-term strain for a long-term environmental and economic benefit was something that panelists believed government should say as often and as clearly as possible. It was also deemed important that a message of hope rather than guilt or apocalypse was conveyed.  However it was agreed that the process of de-carbonisation forces certain trade-offs and changes to lifestyle choices which are currently rarely discussed and avoided in public debates. 

The seminar closed with the recognition that much had to be done and that many questions remained. Nonetheless there was a feeling that progress was being made.