THE SMITH INSTITUTE

THE GREEN SHIFT:

ENVIRONMENTAL POLICIES TO MATCH A CHANGING PUBLIC CLIMATE

Can humanity slow or reverse global warming? That remains an open question. What is not open to question is how society is becoming unnerved at how climate change is being triggered by excess carbon dioxide in the atmosphere. Rising temperatures are being matched by rising public expectation for effective governmental action at national and international level. Thus the “green” agenda over the next decade will be informed and so shaped by public demand for ever more stringent policies to ameliorate the effects of greenhouse gas emissions.

There is now a broad consensus at the international level that the world faces some form of “planetary emergency,” in the words of former US presidential candidate Al Gore. The Kyoto Accord, which came into full effect in February 2005, now has 163 countries committed to reducing harmful greenhouse gasses. Public opinion in the US and other dissenting nations is likely to force a “green shift” in policy in these countries. Meanwhile a climactic change in public opinion is underway within most other post-industrial nations.

This recent “green shift” is starting to influence party political agendas. Yet detailed policy formulation has yet to think much beyond the original ideals of conservation, sustainability and recycling formulated over the past 20 years. There is now a need to look ahead 20 years. The Smith Institute’s guidance principle is to examine “the issues which flow from the changing relationships between social values and economic imperatives.” In terms of this “green shift” that suggests four broad areas of question:

• Where can Britain make a real difference in the shaping global climate change policy?

• Can the threat of climate change become an economic opportunity for Britain?

• What “next stage” policy options will be truly effective in stimulating the green shift without harming the economy?

• How can the structures of government best shaped to ensure deliver of these “next stage” policies?

The key challenge is to ensure that action to tackle climate change is not at the expense of economic growth. The centrality of the environment to economic growth has been symbolised by the Treasury adding responsibility for protecting and improving the environment to its objectives and performance targets. Objective 8 now reads: “to protect and improve the environment by using instruments that will deliver efficient and sustainable outcomes through evidence based policies”.

SEMINAR 1: CLIMATE CHANGE: SHAPING GLOBAL POLICY

In order to make sensible choices in building international agreement, all countries will need to understand the implications for them of adaptation to and mitigation of climate change in terms of their growth, competitiveness, security, public finances and environment. What are the implications of action to mitigate climate change on the growth, competitiveness, security, public finances and investment of nations? How can the UK help forge a consensus in this area?

A recent Smith Institute publication documented how in the 10 years between 100%, natural gas by 92%, steel by 143%, copper by 189% and aluminium by 380%. The projected impact of economic growth and urbanization in China is that its share of world carbon emissions is expected to increase to almost 20% by 2025, second only to the USA. While reversing these trends to ensure that economic growth is accompanied by falling emissions is a major challenge, there is also a real opportunity for UK government and business to help China develop sustainable economies and patterns of production. What is being done already?

How can the UK make a difference? What are the barriers preventing this from happening?

SEMINAR 2: CLIMATE CHANGE: THE ECONOMIC OPPORTUNITY

The UK has already shown that it can have a strongly growing economy while addressing environmental issues. Between 1990 and 2002 the UK economy grew by 36%, while greenhouse gas emissions fell by around 15%. But more could and should be done to ensure that business seizes the opportunities arising from the challenges of climate change.

The potential for innovation, scientific discovery and for business investment and job growth is enormous. Measures to promote a low carbon environment can provide significant business opportunities, technology, spin-offs and most significantly, large numbers of new jobs. For example, the Danes pioneered the development of commercial wind power. Today almost half of the wind turbines in the world are of Danish manufacture. The “wind industry” in Denmark employs 20 000 people and is contributes 3 billion Euros a year to the Danish economy.

How well is the UK placed to maximise the economic benefits of action on climate change? What needs to be done?

SEMINAR 3: CLIMATE CHANGE: “NEXT STAGE” POLICIES

British policymakers are increasingly aware that despite progress in synchronising economic growth with falling emissions, more needs to be done to reduce emissions at the national level. The 2006 Budget set out the next stage in the Government’s thinking for tackling the challenge of climate change and included: an increase in the climate change levy; further measures to improve household efficiency; the development of a National institute of Energy Technologies in partnership with the private sector; and, further support for the development of alternative energy sources. While these measures are welcome, there have been calls for a far more ambitious cross-Government strategy in which sustainability is at the heart of the Government’s agenda. The Town and Country Planning Association have called for a long-term programme of action, encompassing:

• A medium-term target (20 years) for the country as a whole for reducing energy consumption and emissions of all greenhouses gases;
• Short-term targets for each sector of the economy to maximize its contribution to the overall national target for reducing emissions;
• An implementation strategy which identifies priorities for action, distinguishing between those sectors where results cannot be achieved quickly (e.g. transport) and others where quicker results are possible through modest investments; and
• A concerted programme of publicity about the objectives and technical help for achieving them.

These suggestions imply significant reforms to ensure that the reduction of carbon emissions is at the very heart of Government action and coordinated action that will cross-cut across all government departments.

What further changes to tax, fiscal and planning policies can bring about a step change in carbon emission reductions. Can these new policies also stimulate “green” growth in economic activity?

SEMINAR 4: CLIMATE CHANGE: ORGANISING DELIVERY

The Government is clearly committed to delivering sustainable development to ensure a better quality of life for everyone, today and for generations to come. But while the ends may be clear, the means are less so. After all, which body is responsible for delivering sustainable development in the UK? The cross-cutting nature of climate change – driven by a range social, economic and demographic pressures – means that identifying where the responsibility and accountability lies for delivering a low carbon future is extremely complex.

The Government’s Sustainable Communities agenda highlights the difficulty. Based over five years, this plan sets out the Government’s ambition not just to provide new housing, but to revitalise neighbourhoods and develop communities that have the jobs, homes, schools, healthcare, transport and other services people need. While developers of new homes, schools, transport and other services are increasingly aware of their environmental obligations, the danger is that a silo-mentality begins to inform approaches to environmental regulation leading to a lack of accountability. Instead, thinking is required on how we can develop an integrated, holistic approach to environmental management.

Which institutions should be responsible and accountable for minimising the damage to our environment arising from new developments ?