Opportunities across the economy
Opportunities will exist in sectors right across the UK and global economy
For businesses, the transition to low carbon offers both commercial opportunities and the chance to save money and release productive resources through greater energy efficiency. At the heart of the Low Carbon Industrial Strategy are drivers of fundamental change in four key areas:
- Energy efficiency to save businesses, consumers and the public services money
- Putting in place the energy infrastructure for the UK’s low carbon future – in renewables, nuclear, Carbon Capture and Storage and a ‘smart’ grid
- Making the UK a global leader in the development and production of low carbon vehicles
- Ensuring our skills, infrastructure, procurement, research and development, demonstration and deployment policies make the UK the best place to locate and develop a low carbon business and make sure international business recognises that.
The global shift to a low carbon economy could help to drive renewed growth that will lift us out of the economic downturn. It will be key to the UK’s long term industrial future.
Set out here are the areas in which the Government believes we can build on existing work to create a comprehensive and ambitious step change that ensures UK businesses can benefit fully from global moves to a low carbon economy. In close consultation with businesses, unions, environmental experts and other stakeholders we will now develop our approach for ensuring UK businesses can benefit from the transformative change to a low carbon economy. The resulting Low Carbon Industrial Strategy will be published in the summer.
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Whilst I welcome the broad thrust of this Low Carbon Industrial Strategy I think that it appears to be missing some significant areas which need more development. Energy generation, distribution and use is a major component of the carbon footprint of the UK, but only addressing energy is not enough.
Much of the carbon footprint of the UK is related to the products we consume daily (some carbon trust estimates suggest in excess of 40%). Many of these products are really only expensively packaged oil or gas derivatives. For most products there are alternatives made from plants or other renewable sources. Investing in these technologies would reduce our dependence on fossil resources and reduce the carbon footprint of production as many of these products use atmospheric carbon when growing, which with careful design of the life cycle costs can create products with lower carbon footprints. In long life products such as building materials, you would also be sequestering carbon for long periods of time and thus creating a long term reduction in atmospheric carbon levels.
A Low Carbon Industrial Strategy must in my opinion push both the energy and embedded carbon messages which are needed to truly create a low carbon economy.
Until UK labour costs fall (which they are not going to) ‘making the UK a global leader in the… production of low carbon vehicles’ is not going to happen. It is not attractive to car businesses to locate here. In order to make it so, the government should be lobbying countries with cheap labour to set minimum wages to make them less attractive to manufacturing and simultaneously raising living standards. Secondly, the government should refocus on making the UK a global leader in other types of renewable energy generation, which we can export. Wind turnbines and tidal technology as well as carbon capture technology seem like the obvious ones to me.
The low carbon economy is about the transformation of the whole economy to meet 80% reductions in GHG emissions. There are specific comments on vehicles and energy generation, but the rest of the economy is limited to “becoming more energy/resource efficient”. This is too limited a vision. A transformation to a low carbon economy has to be more ambitious than simply making the same things more effiicently. It has to change in other more profound ways - for example changing the business model to align environmental and economic incentives, and taking a more systems-orentated approach. Typically, energy and waste minimisation may improve performance by 5-10%. The Toyota system of lean production is claimed to improve general efficiency by around 50%. If we require an 80% reduction in GHG emissions we will obviously need to move beyond both of these to more fundamental changes to product design/use, and business models / systems.
We should also take account of the embedded carbon of products, of how they are produced and used. Including this measure (as Dieter Helm has showed) the UK has been “offshoring” its carbon emissions, largely to China. Although this may not be required strictly under Kyoto Protocol rules, it is irresponsible if we believe we can ignore this contribution. Focusing on embedded carbon as well as energy generation will help in creating the low carbon innovation in products and services that is required.
The low carbon economy is about the transformation of the whole economy to meet 80% reductions in GHG emissions. There are specific comments on vehicles and energy generation, but the rest of the economy is limited to “becoming more energy/resource efficient”. This is too limited a vision. A transformation to a low carbon economy has to be more ambitious than simply making the same things more effiicently. It has to change in other more profound ways - for example changing the business model to align environmental and economic incentives, and taking a more systems-orentated approach. Typically, energy and waste minimisation may improve performance by 5-10%. Methods of lean production is claimed to improve general efficiency by around 50%. If we require an 80% reduction in GHG emissions we will obviously need to move beyond both of these to more fundamental changes to product design/use, and business models / systems.
We should also take account of the embedded carbon of products, of how they are produced and used. Including this measure (as Dieter Helm has showed) the UK has been “offshoring” its carbon emissions, largely to China. Although this may not be required strictly under Kyoto Protocol rules, it is irresponsible if we believe we can ignore this contribution. Focusing on embedded carbon as well as energy generation will help in creating the low carbon innovation in products and services that is required.
The main contributors to the UK’s environmental footprint are buildings, transport and food. Emphasis must e placed on technologies to reduce the impact of all of these through resource and energy efficiency. Identification and clear communication of the challenges within these industries along with targeted support such as technology funding and public procurement policies is important in fostering an innovation climate. Manufacture of chemicals, fuels and materials from waste is excellent opportunity for small local businesses (low transport and storage requirements, tailored solutions)