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?

France, Germany, and the United Kingdom have simultaneously launched a call for the European Union (EU) to commit to a larger reduction of greenhouse gas emissions by 2020. In recent months, the EU has weathered economic troubles. But the current plan for increased energy cuts is being billed as a bid to help economic recovery and to shore up energy security.

Currently, the agreed EU target is to reduce energy use by 20% from 1990 levels by 2020. In scientific terms, the current 20% reduction target is not likely to restrict global temperature rise to the 2°C – the key climate danger threshold identified by the IPCC.

The main line of argument being repeated across the three major EU powers is that Europe’s current focus on recovery from recession must not distract from the type of economy that is appropriate in the medium and long-term. Thus, Jean-Louis Borloo, France’s Energy and Climate Change Secretary, states that “without a path to a sustainable low-carbon future, we will face continued uncertainty and significant costs from energy price volatility and a destabilizing climate.” His counterparts, in the UK and Germany respectively, Chris Huhne and Norbert Roettegen, agree. “We’re determined to make the economic case for the EU to cut its emissions by 30% by 2020 as quickly as possible,” Huhne said.

The current argument is that the recession itself has cut emissions in the EU’s traded sector by 11% from pre-crisis levels. Thus, the current carbon price is too low to stimulate significant investment in “green jobs” and “green technology.” Thus, Borloo, Huhne and Roettegen contest that if the EU sticks to 20% reduction targets, Europe is likely to lose the race to compete in the low-carbon world to countries such as China or the USA—which, following from the Copenhagen COP, they are looking to create attractive environments for low-carbon investments.

Though, reduced emissions during the recession has brought projected annual costs in 2020 of meeting the existing 20% target down a projected third from €70bn ($89bn, £59bn) to €48bn. A move up to 30% is now estimated to cost only €11bn more than the original cost of achieving a 20% reduction. To put this into perspective, according to the International Energy Agency, every year of delayed investment on low-carbon energy sources costs €300bn to €400bn at the global level into the future.

But it remains to be seen what the tangible motivation will be for increasing thresholds on carbon reductions to 30%. In the past, feed-in tariffs have been successful; but with a declared reduction target, perhaps even written into law formally, there will be issue with anxiety related to the current recession. Also, competition is key to motivate changes and the USA Congress just dropped the proposed comprehensive climate change package.

The Environment Ministers in the UK, Germany, and France have addressed general public in their call for increased reduction targets. In recent months there has been a surge in popular press discussion of extreme temperatures. The first six months of 2010 brought a string of warmest-ever global temperatures. Connecting these extreme weather months to long-term climate change patterns remains difficult, according to experts. “When we are looking at the scale of a season or a few months, we can’t talk about trends related to climate change,” Herve Le Treut, head of France’s Laboratory of Dynamical Meteorology. But, for the general public these extreme temperatures reflect the concept of climate change.

Between the extreme temperatures recently and potential business-case outlines, 30% reduction targets seem to have some potential. But only time and changing circumstances will tell…

As of July 22^nd , the second effort to enact a Climate Change bill in this congress failed. Democratic Senate Majority leader Harry Reid announced that the ‘We know that we don’t have the votes’ for a comprehensive reform. Instead, the focus will be on a slimmer package focusing on household efficiency and the gulf oil spill.

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On 21 July, Ministry of Economy, Trade and Industry (METI) announced a summary of Japanese Feed in Tariffs (FITs), in which electric power companies are required to buy the electricity generated by all types of renewable sources of energy by households and businesses. FITs seek to promote the adoption of renewable energy sources by offering long-term contracts for the ‘green’ electricity produced by them at fixed purchase prices.

Purchase prices are to be 48 yen/kWh for solar power, which will be gradually decreased, and 15 to 20 yen/kWh for the other types of the ‘green’ electricity. The contract periods are to be 10 years for solar power and 15 to 20 years for the others. In FITs, electricity users  have to bear costs of purchasing the ‘green’ electricity and, according to the summary, the maximum monthly burdens for standard households and for large-scale factories in ten years after Japanese Feed in Tariff (FIT) is to be introduced will be approximately 150 to 200 yen and 1.2 million to 1.63 million yen, respectively.

METI expects that FITs would contribute to CO2 emission reduction by 2% (approximately 24 million to 29 million tons) in ten years after its introduction because FITs would accelerate technological development and promotion of renewable energy. Masayuki Naoshima, Minister for Economy, Trade and Industry, emphasized ‘total national benefits from FITs will be greater than total national burdens’ because they would expand the environment-related market. METI sought to start FIT in 2012 after working out its details within this year.

METI’s summary for FITs is unpopular not only for businesses but citizens. Regarding businesses, as mentioned above, as FITs would increase the electricity prices, they are basically against FITs. For instance, the Japan Iron and Steal Federation suggested in a hearing held by METI that FITs would put Japanese iron and steal industries in a disadvantageous position in a global competition with China.

Finally and most seriously, citizens are seemingly not for FITs suggested by METI. For an article on this news released by Jiji Tsushin, 84 visitors (Yahoo!Japan News) left 113 comments. Then, among the top 100 comments sorted by the number of  ’agrees’,  there were only 3 comments that clearly supported FITs though the most agreed comment among them was ranked 38th.  According to a brief discourse analysis of mine, citizens (or the visitors) are against FITs mainly because (1) FITs would worsen the income difference between the rich and the poor, (2) households would have to suffer more burdens while businesses would be able to reduce their burdens, and (3) METI’s FIT plan had flaws. Further, many of them did not support FITs because they were unsatisfied with climate change policies of Democratic Party of Japan (DPJ), a ruling party, especially on the ’25%’ target and a large amount of money spent to buy credits from China, one of the world largest emitters.

The summary of Japanese FITs proposed by METI might be a great first step for Japanese renewable policies. However, it is not sufficiently supported by businesses, environmental groups and citizens. Thus, though it might be difficult to create FITs in which everybody agrees, it is necessary to improve the current ‘everybody is unhappy’ situation.  Especially, it is very much problematic that FITs lacks citizens’ support as they have been recently frustrated with climate change policies of DPJ and DPJ itself. Details of FITs should be carefully examined so that renewable energy can be widely promoted, contributing to the energy security and CO2 emission reduction in Japan. However, successes of FITs or renewable energy policies and climate change policies in Japan depend more on whether public support for them can be increased.

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.

In January 2010, California passed regulation over Green House gases by determining the pollution of fuels coming into California: LA times has coverage here:

“The Air Resources Board voted 9 to 1 in favor of the complex new rule, which is expected to slash the state’s gasoline consumption by a quarter in the next decade”

The move was historic with California, evidently not unnerved enough by the state’s precarious financial position to press on with passing a remarkably progressive piece of Climate legislation.

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The past week has marked Barack Obama’s first State of the Union address, where the president traditionally outlines his agenda and priorities for the coming year, as well as reporting on the condition of the United States. As far as climate change is concerned, Obama seems to be continuing the approach we have seen him taking in the past months – while it is probably important to him, there are apparently many other issues that are more pressing and deserve a larger share of his attention.

In fact, he did not even mention climate change per se, other than referring to the (energy and) climate bill that was passed in the House over the summer, and even that, only as it relates to clean energy. Clean energy by the way – as far as Obama is concerned – is apparently nuclear (Obama’s proposed budget for 2011, to be sent to Congress on Monday, contains a tripling of government loan guarantees for nuclear power), offshore oil and gas, biofuels and clean coal. There was no mention of solar nor of wind, and the word ‘renewable’ was never used throughout the 71 minutes speech.

Once again, Obama skirts around the issue of climate change, referring only to clean energy, energy security and jobs. High speed rail is not a matter of moving away from dirty fuels used in planes and cars, but rather a way to create jobs. And it does not seem to take higher priority than building new highways. Apparently the Recovery Act should be enough to prevent “Europe or China [from] hav[ing] the fastest trains” (it’s not), as there was no mention of continuing investing in rail infrastructure beyond the one off investment in the Act.

Obama continues not to show strong leadership when it comes to climate change. He says he is grateful to the House for passing its bill last summer and that he is eager to help advance the bipartisan effort in the Senate, yet he does not mention what he would like to see in such a bill, he does not use this rare platform to move the discussion forward.

This was not the case in other issues – he used the SOTU to give quite a talking to to Republicans, especially in the Senate, for being continually obstructive and for focusing only on the next election rather than on governing the country. He made a gentle veto threat “if the [financial reform] bill that ends up on my desk does not meet the test of real reform”. Why then didn’t Obama even mention what a good climate bill should contain in his opinion? Why is there no mention of cap-and-trade or some other mechanism to reduce carbon emissions? Pandering to wavering Democrats and potential Republican allies is all very well, but what about showing the way? What about using this opportunity to outline his plans and his vision, as he has done with financial reform or Afghanistan?

Already, in the aftermath of the SOTU, business leaders such as Tom Donahue, President of the U.S. Chamber of Commerce and a well known antagonist to the House climate bill, and John Rice, a vice chairman of General Electric Co. pointed to the fact that America has a lot on its plate, and therefore a cap and trade bill is not likely to be passed in the coming year.

This is how momentum is brought to a halt…