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.”

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.

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.

The UK’s Department for Energy & Climate Change (DECC) this week announced a £20m injection of government-backed venture capital support, for the deployment of recent advances in innovative, low carbon technologies.

Whilst private funds for early stage commercialisation and technology development have fallen significantly as a result of the economic downturn, this investment demonstrates the rising priority and commitment of the UK government to the climate change agenda. The funds will level the playing field for new and emerging technologies, to support capacity building, develop skills and demonstrate capabilities of renewable energy sources to meet the insatiable needs of the global economy.

This announcement complements initiatives announced in the UK’s Low Carbon Transition Plan in July 2009, aimed at reducing the UK’s emissions by 34% by 2020 (18% of 2008 levels); and ultimately 80% by 2050, as set out in the Climate Change Act 2008. At the heart of the Act and the Low Carbon Transition Plan lies the carbon budgets, which have been assigned to all Government departments responsible for regulating different sections of the UK economy; with a requirement to produce a plan to demonstrate how they intend to stay within the assigned budget. If the Government fails to ensure that the UK can live within its carbon budgets, it will have to purchase carbon credits from international emissions trading schemes.

The UK has committed to procure 40% of energy needs from low carbon sources by 2020; an extension to the legally binding commitment in the EU Renewables Directive, which obligates the UK to generate 15% of total energy (electricity, heat and transport) from renewable sources by 2020.

The Low Carbon Transition Plan introduces a range of efficiency measures, including the ‘pay as you save’ insulation scheme, as well as a Clean Energy Cash-back Scheme, which aims to incentivise the generation of green power by individuals and organizations by providing a fair structure to sell green energy back to the National Grid. Ed Milliband, has talked about the inspiring communities by encouraging the UK’s top 15-20 cities, towns and villages to compete at the forefront of green innovation, to initiate the UK’s green revolution. Whilst climate change is a driving force, significant policy drivers include resource and national security, as the race to limit dependencies on finite resources begins.

The UK is keen to cement its position as a leader in the run up to the 15^th Conference of Parties (CoP-15) in Copenhagen in December, and Ed Milliband has called for the same decisive approach to climate change as the G20 demonstrated earlier this year on the global economic downturn (McLachlan, 2009).

Discussions held at the UN’s climate change summit last week, and the Pittsburgh G20 summit; provide a broad practical framework of what may constitute a succinct ‘Copenhagen treaty’, but Jeffery Sachs argues that the climate change issue may be too complex to solve in a ‘Kyoto II’ type agreement in December. Instead climate negotiations should aim for an interim agreement on general principles, financing and technology transfer, with practical programmes and steps, which can be introduced and further developed for immediate action. Sachs (2009) adds

“There is still time for a three-part package: a political framework, a financing package, and a series of practical steps announced by all major regions to tilt the trajectory on emissions.”

The political framework would outline the fundamental agreement – that all countries have “common but differentiated responsibilities”, and that drastic quantifiable emissions cuts are required to stay under a 2C rise. A financial package from the most developed nations should support the least developed countries to invest in clean technologies, and adapt to the disastrous impacts, especially since the majority of poor populations reside in tropical regions vulnerable to the major effects of climate change.

In addition to all the negotiations, Sachs adds that governments should announce a meaningful set of immediate practical programmes to reduce emissions on a large scale. The initiatives introduced by the UK Government in its Low Carbon Transition Plan do just that, but the bigger challenge remains to encourage the fundamental participation of the US, Europe, China, and India to do the same.

Bangladesh Floods (source: oneworld.net)

Last year the UK pledged £75 million to Bangladesh, often cited as one of the countries that will be hit very hard by climate change. Even modest sea level rises could flood 20% of land. The cash will be used for things like raising homes in high-risk flood areas, provide flood-resilient crops, and a national early warning system for cyclones.

Gordon Brown made a widely praised speech a few weeks ago promising that the $100bn needed every year for adaptation would come “separately from and additional to our promises on aid”. He did leave a small loophole in there though, saying that 10% could come from existing budgets.

It turns out however that the £75m for Bangladesh was announced previously under existing DFID budgets, so has already been accounted for and doesn’t therefore qualify under the additionality principle, which I suppose is fair enough. A little confusing though…

This additionality principle is something which NGOs have been calling for ever since financing for adaptation was set to become a reality. The argument runs as follows: since rich countries bear the bulk or responsibility for causing climate change, adaptation finance for poor countries should be over and above what has already been promised to them in terms of aid that is not related to climate.

Meanwhile, the Tories have not explicitly committed to Brown’s pledge that adaptation financing will be additional to ODA. It is perhaps telling that in their Green Paper on development (launched last week), they say they will “mainstream” adaptation, but makes no mention of a cap, like the 10% proposed by Brown.

Copenhagen's famous mermaid (source: about.com)

The leading think-tank Chatham House held a conference on Monday and Tuesday this week, entitled “The Politics of Climate Change Agreement”.  There were some high-level speakers, including Joan Ruddock (DECC minister), the head of UNEP, and the chief negotiator of Papua New Guinea (he who told the USA to “show some leadership or get out of the way” at Bali).There was a vein of optimism running through the discussions – after all, who would have thought three years ago that the US would (almost) have a cap-and-trade bill, that India and China would have mitigation plans, and in 2008 investment in renewable energy would exceed investment in both nuclear and fossil fuels.

The main focus of the conference was what needed to happen politically to get a good deal at Copenhagen. The position of most developing countries is that annex 1 countries must provide binding targets for emissions reductions by 2020, consistent with keeping us on a 450ppm pathway or below. Secondly, there will be no deal without clear commitments by rich countries on adaptation financing. There was general agreement that Gordon Brown has broken the logjam on this with his speech last week finally putting a price tag of $100bn a year.

These are both likely to be forthcoming, but the extent of rich country cuts are still unclear – the Waxman-Markey bill in the US is unambitious, and recent figures put out by Russia and Japan were also disappointing. An aggregation of commitments so far gives a 16-26% reduction on 1990 levels by 2020. This is not good enough, as the IPCC says we need 25-40% cuts by 2020 to stay on the 450ppm pathway.

On the rich country side, the US in particular wants developing countries to commit to binding emissions cuts (cf. previous stand-offs with India), which many of them see as unjustifiable. This will probably be the major sticking point at Copenhagen. The piece of UNFCCC jargon for developing country emissions cuts is “Nationally Appropriate Mitigation Actions” (NAMA) by poor countries, which implicitly mean a move away from business as usual. This move is critical, because even if OECD emissions were zero, developing country emissions would still need to fall in order to meet 450ppm.

It is clear that we need a political deal at Copenhagen, even if the technical aspects take another year to hammer out. Regional or national negotiations targets around CCS and industry will be important, but a global political agreement is needed to hold it all together. The worst outcome would be a deal with vague or insufficient emissions reductions, including lots of greenwash around REDD. In conclusion, four essential elements for a good deal probably include (i) emissions targets for rich countries consistent with staying below 2 degrees warming, (ii) NAMAs for developing countries, (iii) a decent institutional framework, (iv) financing for adaptation.