The UK Government has claimed to become the ‘Greenest Ever Government’ since the previous Labour and Conservative leadership.

Following the announcement of the Energy Security and Green Economy Bill during the Queen’s Speech on 25 May 2010, David Cameron (Prime Minister) promised the country that he would lead the UK to become a low carbon economy through enhanced energy efficiency and low-carbon energy production, both of which remains to be seen.

The previous labour government had committed a total of £405 million towards promoting a green economy, of which the Sustainable Development Commission (SDC) was a large arm of this delivery.  The SDC has made £70m savings every year through implementing a number of Green Initiatives.  The SDC also claims that additional savings of £350m per year through improvements in energy, water, waste, recycling and transport will also be met, regardless of funding, over the next five years.

However, recent announcements of funding cuts have led to the SDC to be axed.  The Secretary of State for the Department of Environment, Food and Rural Affairs (DEFRA) Caroline Spelman has led the cuts, whilst at the same time calling for the Government to ‘step up’ its green ambitions and drive further energy savings.  This contradictory view was not shared by the Chair of the SDC, who is simply disappointed at the announcement.

Many more cuts are on the way.  The budget led by George Osborne on 22 June had created a sense of hope and expectation that concrete energy policies were on the way, but these hopes were simply not met.  Instead, Osborne made slight references to climate change policies, but the lack of detail on policies, financial plans and commitments were heavily noted.

The government’s commitment to renewables has also come under question, with the Micropower Council saying that it is stalling on the introduction of the Renewable Heat incentive (RHI), which would pay householders for generating low carbon heat.

Price Waterhouse Coopers (PWC) issued a report yesterday suggesting that a commitment of £10 billion is needed, for investments in pre-construction off-shore wind farm technology if the UK is to meet its renewables electricity target of 30% by 2020. Capital funding for projects is critical to ensure that the UK invests in renewable projects.  The budget announcement was Osborne’s golden opportunity to make the Energy savings the government has promised to deliver.

To add to the frustration, the delay of implementing existing energy policies are being felt in most areas of the UK, particularly in terms of cost and uncertainty for business.

The six month delays to the October introduction date for the Part L changes, which are designed to make homes 25% more energy efficient, are causing losses in both carbon and heating bill savings.  It has emerged that the programme is still subject to approval by the government.

Perhaps more pressing are the delays to the most radical policy which involves defining a replacement for the electricity component of the Climate Change Levy (CCL) by adding a ‘top up carbon tax’ on power generators. This would be a way to establish a carbon ‘floor price’ which is needed to support carbon trading in the EU ETS scheme, which is a major part of the Energy Security and Green Economy Bill commitment.

MP Caroline Lucas has published a statement today arguing that ‘now is the time to invest’, but lack of government financial commitment and delays to current programmes is painting a gloomy outlook at the moment.  Is the UK really committed to becoming the ‘greenest ever government’ as promised at the start of the Coalition?

As the Coalition Government attempts to reform the UK’s finances, fatal spending cuts have continued to penetrate the environmental sector. Despite boasting plentiful resources in marine, offshore wind, solar and other forms of renewable energy, significant cuts announced by the Government this week risk the UK loosing out to countries with poorer natural resources, but an increased willingness to invest in renewable energy.

Plans to cut the energy R&D budget by £34m, announced last week, delivered a massive blow to the low carbon technologies sector, particularly for technologies including offshore wind, geothermal energy, wood fuels and building insulation. Ironically, the announcement came just days before the Government’s independent Committee on Climate Change publically stressed the continued need for public support to develop emerging renewable energy technologies – suggesting a minimum of £50m of public money each year.

Chris Goodall highlights that these cuts to the R&D budget represent a reduction of total public expenditure on low carbon technologies by almost 20%. He adds that “this figure is on top of the cancellation of the £80m loan to Sheffield Forgemasters that would have paid for much of the installation of a new press to make the huge parts necessary for new nuclear power stations.”

Goodall suggests that the Government’s plans will diminish Britain’s ability to compete in the global energy race. The cuts also bring the UK’s spending on emerging technologies to an internationally low 0.01% of GDP – 3 times less than the US and 9 times less than Japan (as a %age of GDP).

Furthermore, there is increased speculation about plans to axe the Government’s independent sustainability watchdog, the Sustainable Development Commission. Whilst no official decision has been made, an announcement is expected to be made – ironically – on the day the agency plans to unveil its annual report detailing green improvements to government operations, which would deliver savings of tens of millions of pounds.

Whitehall has announced some significant spending cuts over the last few weeks, and the cuts to low carbon and renewable technologies are likey to have particularly riled environmental stakeholders. Prime Minister David Cameron is going to have a big task on his hand if he wants to prove to UK taxpayers that his Government will be the “greenest government ever.”

It’s been almost a month since the UK’s newly elected, and historic, Coalition Government was formed, introducing an interesting partnership between the Liberal Democrat and Conservative parties. With over 22 bills announced in last week’s Queen’s speech, the Coalition certainly has its work cut out over the next 18 months.

Without doubt, the biggest concern of this Government is the reduction of the national deficit, which stands at a colossal 12% of GDP. However, the newly elected PM, David Cameron, and his Liberal Democrat deputy, Nick Clegg, have pledged that the urgent need to develop a low-carbon economy will remain a key issue and focus amidst deficit reduction plans. To affirm his commitment, one of Cameron’s earliest announcements included a target to reduce central government carbon emissions by 10% within next 12 months. In the same vein, the PM has also committed to push the EU to demonstrate leadership in tackling international climate change, including by supporting an increase in the EU emission reduction target to 30% by 2020.

The Energy Security and Green Economy bill announced in the Queen’s speech last week is expected to deliver some of the pledges made in the Coalition Government’s manifesto (see below). The Bill will focus on maximising energy efficiencies and renewable energy generation through a range of innovative policy measures, including ‘green loans’ for buildings and businesses, designed to increase investment in green technologies and efficiency measures across the UK. Importantly the loans are associated with the building or business and not the individual, enabling owners to transfer payments to new owners if the property/businesses are sold.

However, this Green Deal is the only part of the government’s low-carbon agenda that is currently certain to make it into the final version of the Bill after DECC announced that a host of other legislative measures “may” be included in the legislation. The Department is still finalising proposals for legislation to regulate emissions from coal-fired power stations (with uncertainty around the baseline for performance), provide a framework to govern the rollout of smart grid technologies, lay the foundations for a green investment bank, reform energy markets to enhance security of supply and competition between operators and ensure North Sea infrastructure is open to companies operating in smaller oil and gas fields. Whilst the latter option remains controversial, the Government has made suggestions that it will seek to maximise opportunities for the continued extraction of fossil fuels and opencast mining, ironically exhausting carbon intensive energy resources to build the ‘foundations’ of a renewable and low carbon economy. This has dismayed some environmentalists, who remain skeptical about how this Coalition will set itself apart from the previous Labour Government.

However, the proposals put forward will have to contend with the £6.25bn of public spending cuts also announced last week by George Osborne. Whilst the Department for Energy & Climate Change (DECC) won’t suffer as much as some other Government departments, it is set to lose £85M from its budget, with DEFRA losing as much as £162M. In what he has described as the “fastest and most collegiate spending review in recent history” Osbourne plans to recover the remaining savings in £20.2M cuts to the department’s delivery bodies and a further £26m from other efficiencies, including £6M by targeting lower impact spend in the Regional Development Agencies. In addition, £34M will be cut from business support programmes including moving forward the closure of the Low Carbon Buildings Programme (LCBP), which provides grants to households and businesses installing renewable energy technologies. A new feed in tariff incentive, launched in April 2010 is expected to replace the LCBP and provide incentives for microgeneration of renewable technologies, however with the launch of the Renewable Heat Incentive (RHI) not expected until next year, there are concerns that some parts of the market are exposed to a lack of policy clarity or incentive.

Leonnie Greene of the Renewable Energy Association said producers of biomass systems, ground source heat pumps and other renewable heat technologies now urgently needed clarity on when the proposed Renewable Heat Incentive (RHI) scheme will be introduced.

Whilst many of these cuts are likely to deliver emissions reductions, the Government is faced with the risk of stifling long term green investments, which would inevitably deliver economy wide savings in the future.

Interestingly, two of the government’s most controversial environmental policies – its proposal to enforce a floor price for carbon and reform renewable energy incentives by extending the feed-in tariff – were noticeably absent from the list of measures to be included in the final bill. Whilst the Government has demonstrated some ‘fresh thinking’ on this agenda, there is a sense that there is much thinking still to be done. Inevitably the next 12 months will be critical, and comprehensive consultation, speedy implementation, and strong political direction will determine how well Cameron guides the UK through its worst debt crisis, and critical energy reforms to better position the nation in a future low carbon economy.

The Coalition Government’s vision for decarbonising the UK

1. The establishment of a smart grid and the roll-out of smart meters;
2. The full establishment of feed-in tariff systems in electricity – as well as the maintenance of banded ROCs;
3. We will instruct Ofgem to establish a security guarantee of energy supplies.
4. Measures to promote a huge increase in energy from waste through anaerobic digestion;
5. The creation of a green investment bank to support low carbon projects to transform the economy. As part of the creation of a green investment bank, the Government intends to create green financial products to provide individuals with opportunities to invest in the infrastructure needed to support the new green economy.
6. The provision of home energy improvement paid for by the savings from lower energy bills;
7. Retention of energy performance certificates while scrapping HIPs;
8. Measures to encourage marine energy;
9. The establishment of an emissions performance standard that will prevent coal-fired power stations being built unless they are equipped with sufficient CCS to meet the emissions performance standard;
10. The establishment of a high-speed rail network;
11. The cancellation of the third runway at Heathrow and the refusal of additional runways at Gatwick and Stansted;
12. The replacement of the air passenger duty with a per-flight duty;
13. The provision of a floor price for carbon, as well as efforts to persuade the EU to move towards full auctioning of ETS permits;
14. Measures to make the import or possession of illegal timber a criminal offence;
15. Measures to promote green spaces and wildlife corridors in order to halt the loss of habitats and restore biodiversity;
16. Mandating a national recharging network for electric and plug-in hybrid vehicles;
17. Continuation of the present government’s proposals for public sector investment in CCS technology for four coal-fired power stations; and a specific commitment to reduce central government carbon emissions by 10% within 12 months.
18. Intention to seek an increase in the target for energy from renewable sources, subject to the advice of the climate change committee.

Ministerial Arrangements in the new Coalition Government

Chris Huhne MP has been appointed Secretary of State for Energy and Climate Change in the new coalition government.

Charles Hendry MP and Gregory Barker MP have been appointed as Ministers of State for Energy and Climate Change.

Lord Marland has been appointed as Parliamentary Under Secretary of State for Energy and Climate Change.

As former Prime Minister, Gordon Brown and his family stepped down from service, the new Conservative leader, David Cameron has finally stepped in to Number 10 Downing Street. In the most exciting, yet controversial general election for decades, the UK has seen a Cameron and his next in command, Nick Clegg from the Liberal Democrats arrive yesterday to his new London office to discuss plans for the UK economy.

Despite signs of a stock market crisis as a result of the UK’s first hung parliament in 70 years, the value of the Sterling has risen slowly, and the FTSE 100 index has also risen modestly in yesterdays closing results. This is a positive sign that the financial markets are not too phased by the new coalition, and that we are not headed for a stock market crash.

However, not everyone shares this view. In an attempt to understand what does the coalition mean for future policy development, many UK voters and businesses believe that a coalition will slow down the decision making process. As stock markets opened for trade in the early hours of the election results morning (01:00), the general consensus of the traders was that a hung parliament would have a negative effect on trade and consequently devalue the pound. Slow decisions would also mean a loss of revenue for business, unable to make investment decisions due to lack of direction from the government. As a result, this may lead to the withdrawal of business from the UK market.

A major dispute already facing our new parliament in the first day of office is that of nuclear energy. Whilst the Tories are supportive of building nuclear power stations, the Liberal Democrats are against this. Simon Hughes, energy spokesperson for Liberal Democrats states that “A new generation of nuclear power stations will be a colossal mistake, regardless of where they are built. They are hugely expensive, dangerous and will take too long to build.”

Commitments to policy specific investments may prove hard to back, if agreement at the leadership level is not joined up. In the case of nuclear, the coalition has managed the conflicting views and issued the following statement on nuclear:

“We have agreed a process that will allow Liberal Democrats to maintain their opposition to nuclear power while permitting the government to bring forward the national planning statement for ratification by parliament so that new nuclear construction becomes possible.”

Furthermore, although both parties agree to reduce CO2 by a minimum of 34%, to meet the targets set by the Labour party in the Climate Change Act (2008), it is not clear on how both parties can deliver this target. For instance, the Tories have stated that they will not support specific ‘low-carbon’ technologies with the aim to let the market decide which technologies to adopt, yet the liberal democrats are more explicit about backing wind-power.

Like Labour, the new coalition agrees to back the 10:10 targets, to reduce co2 by 10% by 2010) and also agree to support the Green investment back which is designed to fund new, low carbon developments. This financing also extends to supporting the ‘greener’ homes agenda, to meet the zero carbon homes target (for new builds) by 2016, as well as the continuation of the feed-in tariff for microgenerators for future clean energy.

What remains unclear is the finance allocated to achieve these aspirations, which is the job of the today’s appointed Environment and Climate Change Secretary, Chris Huhne to agree with his new peers, treasury and members of the public. As new environmental discussions approach in day two of the new coalition, the agenda for environmental policy will become clearer.

Author: Nyla Sarwar

"Big Heads" seek financing for climate change (Image by: Oxfam)

An ambitious and positive draft text presented at the UN climate summit has failed to impress developing countries, who argue that more finance is needed to support their low carbon development and adaptation in some of the most vulnerable nations.

The so-called “long-term action plan text” believed to be much more positive that the “Danish text” leaked earlier in the week, sets GHG reduction targets for developed countries of around 25-45% by 2020 against a 1990 baseline. These targets are expected to be extremely ambitious, and will require the sequestration of already emitted atmospheric carbon, potentially limiting worldwide temperature increases to 1.5C – 2C. The text is now up for negotiation, and demands much stronger commitments from the developed counties, compared to figures already laid out on the table.

UK PM Gordon Brown has been actively engaged in the negotiations to encourage the EU to confirm its more ambitious commitment to reduce GHG emissions by 30% by 2020 against a 1990 baseline. It is expected that this will require the UK to contribute 40% emissions reductions by 2020, instead of the 34% share previously committed.

Gordon Brown has also been pivotal in negotiations among EU leaders to provide immediate finance for developing countries to adapt to climate change. Announcing that the EU would commit 7.2bn euros (£6.5bn, $10bn) for adaptation in developing countries over the next three years, Swedish Prime Minister Fredrik Reinfeldt reaffirmed Europe’s commitment to moving the Copenhagen negotiations closer to a global deal.

The UK’s promise, at £500m ($800m; 553m euros) a year, was the highest. Reports from Brussels suggest the German contribution will be 480m euros per year from 2010 to 2012. Earlier, Mr Brown and France’s President Nicolas Sarkozy told a joint news conference their two nations would contribute at least £1.5bn (1.7bn euros; $2.4bn) spread over the three years.

The money pledged is for a “fast start” fund to help the world’s poorest nations tackle rising sea levels, deforestation, water shortages and other consequences of climate change between 2010 and 2012, and reduce their own emissions.

The promised EU contribution will make up a sizeable portion of a proposed global figure of $10bn (7bn euros) annually.

Financial discussions in Brussels saw EU leaders during the International Monetary Fund (IMF) to consider a global tax on financial transactions to reduce the risks of a further financial crisis and raise funding for tackling climate change.

“The European Council encourages the IMF to consider the full range of options including insurance fees, resolution funds, contingent capital arrangements and a global financial transaction levy in its review,” the summit’s final statement said.

Whilst the text confirms the consensus between nations that halting forest protection is crucial, the details of measures to reduce deforestation are still al long way off. Developing countries are still demanding more funding from developed countries, and the details of a long term and fundamental financial package still remains hugely uncertain. The new text also requires developing countries to cut their carbon emissions by 15-30% by 2020 compared to BAU, and developing countries retired from the plenary requesting further time to digest the potential consequences of such commitments.

Additionally, reports suggest that the EU and US have finally agreed to a twin track deal which ensures that the Kyoto protocol – the only legally binding treaty that forces rich countries to cut emissions – continues at least until a new legal treaty is signed.

“This is very, very complicated. It’s tough because the world is trying to peak emissions. There is a long way to go. We are anxious and conscious of the scale of the challenge that remains,” said the UK climate and energy secretary, Ed Miliband.

The text will be negotiated in more detail next week, with details of a finance package and forest protection measures expected to dominate discussions. Developing countries will be calling for tougher commitments, and as Nasa scientist Jim Hansen recently commented – the climate agenda is not amenable to half measures. “It would be like saying, I’ll agree to cut 40% of slavery.”

The clock is ticking. The UNFCCC’s Copenhagen summit is just 7 days away, and recent reports have been encouraging. Shortly after China and the US made announcements on commitments to reduce their GHGS, Commonwealth leaders backed a $10bn Climate Change fund. Proposed by UK PM Gordon Brown, and French President Nicolas Sarkozy, the fund seeks to provide immediate financial support to those States most vulnerable to the impacts of climate change.

UK PM Gordon Brown said on Friday that half of the fund should be aimed at helping the most vulnerable states to adapt to climate change, whilst the other half should be targeted at measures to reduce GHGs in the least developed countries.

The first funding would be made available early next year, before any international agreement could take effect, whilst there are suggestions that funds for the most vulnerable small island states would be fast-tracked and made available immediately.

This agreement by the Commonwealth demonstrates how climate change can unite different countries – small/large, rich or poor to find a resolution; and delivers some promise for next week’s summit.

The Commonwealth leaders also agreed to seek a legally binding international agreement, though it is widely believed that “a full legally binding outcome” might have to wait to 2010.

The Indian Prime Minister Manmohan Singh, added that any commitments they would announce would be “ambitious”, though it is highly likely that will be subject to significant commitments by other influential nations too.  This prisoner’s dilemma characterises the negotiations, and also represents the biggest threat to a global deal.  However, the recent flurry of announcements for GHG reduction commitments from many of the key players has sparked hope that all is not lost yet.

The countdown begins. I will attend the final week of negotiations with a focus on proposals from the developed nations.

The UK’s energy security prospects are once again making the headlines, as Ed Milliband this week announced the top 10 suitable sites for the next generation of nuclear power plants, describing nuclear power as a “proven, reliable source of low carbon energy”.

The announcement comes amidst heightened concerns surrounding the peak oil debate, with the UK ERC claiming that conventionally extracted global oil production could ‘peak’ and go into terminal decline before 2020.

However, the environmentalists have criticised the decision, warning of the “deadly legacy” of radioactive waste, and argued that investment should be focused on renewables instead. Interestingly, one of the oldest and most efficient windfarms in Britain will be dismantled at Kirksanton to make way for the nuclear plant, to the dismay of some locals.

Faced with the prospect of depleting supplies from the North Sea, the UK is now paying the price for its ‘dash for gas’, following the closure of the coal mines in the 1980s. To support the development of this next generation of energy infrastructure, the UK Government has announced a host of measures to reduce the planning constraints that are likely to hamper such large infrastructure projects, and hopes to have the first new nuclear plant operating by 2018.

Professor Barry Brook at the University of Adelaide has welcomed the announcements from the UK government, and encouraged the Australian government to take heed. He highlights that unlike the situation for uranium power, the electricity price is strongly tied to the fuel price for gas and therefore fluctuations in gas prices lead to price spikes in power prices.

Cheap uranium energy, on the other hand, provides a much more secure proposition to meet both energy security and climate change goals; and he adds that

“…there is enough uranium to provide the whole world with zero-carbon power for millions of years.”

Nuclear power is the only proven electricity generation technology that can simultaneously meet reliable baseload demand, anywhere, and yet emit no carbon dioxide when operating. Along with hydropower from dams, it is the only clean energy technology that has been shown to be scalable.

France is a case in point. It derives nearly 80% of its electricity from 59 nuclear plants and is the world’s biggest electricity exporter. It has the cheapest power rates in Europe, and has the lowest carbon footprint per person.

However, the significance of radioactive wastes and contamination threats should not be underestimated if we really want to promote sustainable development that considers the intergenerational impact and legacy of such technologies. In this vein, it might be argued that the significant funds for these large infrastructure projects would, in fact, be better targeted at scale-up and capacity building for renewable technologies such as wind, solar, tidal and others, which don’t generate such controversial by-products.  For now, the pressure is on in the UK to streamline the planning process to enable the speedy construction required to bridge the expected energy gap.

Speaking at the recent Conservative party Conference in Manchester, held on 5-8^th October, shadow energy and climate change secretary Greg Clark claimed that the UK needed an ‘emergency plan to rescue our energy policy’ within days of a general election.

The current UK energy policy from a glance appears to contain many strong ‘green’ policies, but in some cases, and a certain level of financial commitment to funding these policies.  But unfortunately the impact of these policies is simply too early to tell.   It may be argued that the Labour Party have made several large strides in leading the way forward to the global talks in Copenhagen, by being the first country to call a UN Security Council meeting on climate change, and by being the first country to introduce a Climate Change Bill with the aim to reduce CO2 emissions by at least 20% by 2020.

Despite the above strides, the Conservative’s argue that UK is in a ‘dire position’ and is in absolute need for a new ‘Green Deal’ which aims to; 

• Provide £6,500 to every household to upgrade the energy efficiency of their home
• Improve the carbon footprint of the least efficient homes and save 9.4 million tonnes of CO2
• Create around 70,000 jobs, including 3,500 apprenticeships
• Open up a market worth £2.5 billion a year
• Authorise five GW of clean coal capacity fitted with carbon capture and storage
• Immediate publication of the planning needed for new nuclear power stations
• Give the right for every community to host wind farms and keep the revenue from business rates generated for 6 years
• Make the national grid extend its network offshore
• Build Marine energy parks
• Lastly, scrap Labour centralised, target led approach to house building

Over the past 12 years the UK government has seen 15 Energy Ministers tackle the climate change agenda.  The most recent drive from government, led by Ed Milliband in concentrated in the delivery if the Low Carbon Transition Plan and more widely known, the UK’s Climate Change Action Plan.

Supported by the establishment of the Department of Climate Change, another Labour initiative, a number of policy commitments are designed to create a low carbon economy, these include;

• Introduction of the Renewables Obligation
• Climate Change Levy (see rates through the HMRC link)
• Carbon Reduction Commitment
• Implementation of long-term legal Frameworks e.g. Committee for Climate Change to measure these changes
• Zero carbon homes target setting by 2016
• Development of a £100m blueprint for renewable energy – to target supply
• Adoption of a Waste Strategy aimed to deliver 9.3 million tonnes of savings of CO2 per year by 2020
• Water and air is recordable cleaner than 1997 levels and waste recycling has quadrupled

So how much of these green pledges are just talk?  The government has pledged big targets to reduce CO2 in the UK, but many of the Party members are aware of the small details on how they will be delivered.  For example, according to a study carried out by ComRes research of 150 MPs, it revealed that 72% were unaware of the government’s target for all new housing to be zero carbon from 2016.  The study further identified that members of the All-Party Parliamentary Group were unaware that a quarter of MPs didn’t know that more than a quarter of UK emissions came from Housing. 

Perhaps the green campaigns from both parties need to target their members, as well as communicating plans to its voters.  There are many successes attributed to the policies employed by the Labour Party to date, however, it is also clear of the recent challenges in delivery, for example, the Part-L planning consultation, the nuclear debate, and the changes to the Carbon Reduction Commitment timescales for its implementation. 

Once a policy is made, does it stand up strongly to meet the realistic outcomes, to time and budget, or simply sound good to the voters in Britain – you can decide, its your vote!