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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)The Environment Forum: An ERM-Green Alliance Event |
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TOWARDS A SUSTAINABLE ECONOMY Especially pleased to be making first major speech by a Trade and Industry Secretary on the wider green agenda in recent years. The lasting message I wish to leave you with is that the environment matters to this Government. That it matters to DTI. And that it matters to me. Modernising the economy is also about an environmentally responsible economy. It is therefore also very much a business issue. New Labour and the Environment Just after my appointment as Secretary of State for Trade and Industry, one commentator referred to me as ?an outrider for the Blair project?. As someone who is a strong supporter of the Government governing as New Labour, I welcome the opportunity of putting the green agenda in a wider political context and then applying that to the work of the DTI. In Government for 2½ years, we have already shown that we can do things differently. Not the approach of the old Left with the command economy, tax and spend and under the control of vested interests. Wedded to the outmoded perception that caring for the environment meant the loss of jobs. Nor the new Right with their slavish belief in the market, that the individual was paramount and that there was no such thing as society. No regard being paid to the consequent environmental destruction or wasted lives and communities. Our approach is one which is principled but also pragmatic and practical. We will put national interest first and not allow our policies to be determined by dogma. This means we have a difficulty with some in the Green movement who elevate almost every issue as the acid test of the Government?s commitment to the environment. And for those who adopt a fundamentalist position. Rejecting a forward looking approach often appearing to wish we could in some way have a future made up of all our yesterdays. The reality is that we are living through a period of change. We must ensure that people are partners in change and not the victims of it. That change is a bringer of opportunity and not a threat. In Government, we have begun to demonstrate how we can deliver on the environment agenda. The Deputy Prime Minister played a key role in securing the Kyoto Climate Change treaty in 1997. This established for the first time international, legally binding limits on greenhouse gas emissions. In the March Budget, Gordon Brown announced that a climate change levy would be introduced. Two weeks ago in his pre-Budget Report, he proposed changes to his original scheme which will increase its environmental impact. Renewable energy and combined heat and power will be exempt. Giving them a major boost. The amount of money available from the levy for energy saving measures has increased by £100 million from £50 million to £150 million. Major energy users will be able to get a reduction of 80% in the rate they pay but only if they sign up to a negotiated agreement which secures cost effective energy savings. The levy provides an incentive to employ people rather than invest in energy wasting machines. As such, it is a course of action that all on the progressive wing of politics should applaud. Modern, sustainable economy DTI?s role in encouraging high and stable economic growth is well known. It is also increasingly understood that the DTI policies on small firms, on corporate responsibility, on regional economic balance, on science and technology are absolutely essential to the issues of social cohesion. That enterprise and fairness go together. And that social justice and wealth creation are two sides of the same coin. What is far less understood, is our role with respect to sustainable development and especially the environment which I will focus on tonight. To some, sustainable development only matters to departments with environment in their name. If that was true in the past it is not with this government. I am determined that sustainable development will matter to everything DTI does. This Government recognises that we must bring economic, environmental and social goals together into one set of coherent policies, not a series of separate initiatives. That is the only way to achieve lasting, sustained growth. Of course, DTI?s job is to help ensure that British businesses are competitive. But that must not be at the expense of the environment. Indeed it should and can be in a way that enhances our environment. That is not just because it is another government objective that we have to take on board. It is because being competitive in the next century means being frugal with natural resources, creating not wasting value. Getting more from less. Yes, government needs to set a framework under which firms can go out and maximise profit. But that framework must be set so that activities which damage the environment are discouraged and those that promote jobs, enterprise and innovation encouraged. This means being flexible about how companies achieve their goals - underpinned by minimum standards. It means working with the grain of the market-place, regulating only when essential. The future lies in a mixture of measures - voluntary, economic and where necessary through regulation. It also means giving scope for solutions to come from new knowledge, new technologies, and new ways of working. Being more innovative, more enterprising are not the enemy of sustainable development, they are what will deliver the radical change needed to achieve the cleaner, fairer, more prosperous world we all want. The challenge for us in Government is to work in partnership with business and civil society in a way that delivers progress. And securing the confidence and trust of the general public in doing so. The climate change levy which I discussed earlier is a good example of what I have in mind. Another example of business showing foresight is emissions trading. The Emissions Trading Group made very significant progress during the summer. The Government has warmly welcomed this initiative, as reflected in the Pre-Budget Report. We are now working with business to turn the proposals into a workable scheme. One that will give added impetus to emission reductions. One that should help pave the way for an international scheme, with Britain in the vanguard. One that will open up new business opportunities by creating an emissions trading market. Business at the forefront None of this should be seen as a world in which government tells business what to do. Much of business knows exactly what is going on. Some companies are ahead of the game. Pressures on business to meet people?s higher expectations are growing relentlessly both in the UK and internationally. And will intensify. Consumers are becoming more discerning and demanding. One of the aims of our consumer policy set out in the White Paper I published earlier in the year is to help consumers become better informed and influential. The successful companies produce what customers want - goods and services that are continuously being improved. And increasingly customers want reassurance about environmental impacts. The choice for business is stark. Environmental concern is not going to go away. Business must grasp this new agenda - the sustainable development agenda - in its own interests. Many businesses of all sizes already recognise the importance of being pro-active, taking the lead. They are enjoying both reputation and financial benefits as a result. Yet for far too many sustainable development is just another piece of rhetoric. An abstract term which has little apparent connection with reality. A major challenge we face is overcoming such perceptions. Vision is important but it is all too often the effect on the level of profit (or loss) which will have the greatest impact. Resource productivity Raising our productivity in Britain is not just about human skills. It is also about financial and physical capital - doing more with less. Prudent and effective use of resources is one of our sustainable development objectives. Easy words to say but they risk hiding the scale of necessary change. We cannot continue to consume resources at current rates. This is not a question of some resources simply running out - we always find alternatives. The big issues are the cumulative impact of waste products on the environment. Too little value is being extracted from the resources we use and too much waste is being produced - whether this be in the form of polluting emissions or material going to landfill. According to the Harvard Business Review only about 1% of what goes into making products is still in use six months after sale. This clearly does not make economic or environmental sense. The United Nations have also estimated that energy consumption can be cut by 50 per cent in existing industrial plants, and by up to 90 per cent in new ones - using today?s technologies. DTI?s task is to raise awareness of possibilities, and provide practical help to overcome barriers. For example, we are extending for a further five years the joint DETR/DTI Environmental Technology Best Practice Programme. Many businesses are already doing more with less by adopting environmental best practice, redesigning products or developing closed-loop production where waste becomes the feedstock for new products. But in global terms the potential scale of the challenge is daunting. Some say, we will need a 10 fold improvement in resource efficiency by 2050. The precise number or date may not be right. But they provide an indication of the step-change required. I am confident that the radical change needed can be achieved. New ideas can be exploited, provided they are not trapped by today?s assumptions and knowledge. Some companies have adopted waste free operation as the aspiration to aim for. For example, one major company?s latest paint plants in India are virtually material waste free. We all need to set aspirational goals to help drive the big changes needed to develop the new products, new processes and new ways of doing business that will secure a future sustainable economy. Corporate responsibility To be competitive longer term in today?s more demanding marketplace, businesses have to be responsible - environmentally, in their use of resources, and socially. Corporate responsibility and citizenship should be a business driven agenda. Local communities and employees of companies expect nothing less. Also, putting not too fine a point on it, increasing transparency means companies have nowhere to hide. This is another way the Internet is changing ways of working. Company reputation and brand value no longer depend just on quality and price. How goods are produced and sourced are now all part of the equation. It can take many years to build reputation. But as some companies know to their cost, reputation can be lost overnight. Company Law has a contribution to make on some of these issues. I am pleased that the independent Company Law Review is considering these questions both in the context of the duties of company directors and in terms of the information which companies should be required to disclose in their annual reports. I look forward to seeing the Review?s final report in 2001. The Government is committed to modernising the framework of company law to fully reflect the needs of a modern sustainable economy. We still too often hear the view that when the chips are down investors will insist on preserving the bottom line, maintaining dividends. Happily, this short term view is being challenged as bad for the long term sustainability of business. I therefore welcome the fact that some financial institutions and fund managers are recognising this. Not just the ethical funds but mainstream investments portfolios as well. Of course none of this is a substitute for enlightened, innovative, entrepreneurial management. Such managers will always attract investors and often these are the ones who are leading the way on sustainable development. Seattle Sustainable development is becoming an integral part of my Department?s policy development and implementation across the board, from energy through consumer affairs to international trade. In 7 days time, the WTO Ministerial meeting will begin in Seattle. I am clear that the WTO must not stand in the way of the highest standards of corporate behaviour; the efforts of governments to care for the environment, to improve labour conditions to take measures to protect the environment. Trade liberalisation should be seen as an opportunity for sustainable development, not a threat to it. It can make a major contribution to generating the wealth needed to pay for raising environmental standards. And there are the so-called "win-wins": where the removal of trade distortions brings direct environmental gains. We will be looking for opportunities of this kind throughout the Round. There are of course legitimate concerns in particular cases about the extent to which trade liberalisation or WTO rules help or hinder sustainable development. I have little doubt that, overall, their impact is benign. Just look at the different environmental legacies of the closed economies of Eastern Europe and of the open economies of the West. And in the rare cases where trade amplifies the damage caused by environmentally harmful activity, trade itself is rarely the root of the problem. What is needed is better environmental regulation. The best solution must be to fix the problem at source, by the right national, or if necessary international, measures. I am clear that the WTO must not stand in the way of measures to protect the environment. I am equally clear that measures to protect the environment must not be used as a pretext for trade protection. My underlying principle is that trade and environmental policies can and must be mutually compatible and, where possible, mutually supportive. There can be no subordination of one to the other. It is vital that we clarify the relationship between trade measures stemming from Multilateral Environment Agreements and the rules of the WTO. And yet many insist, in the face of the evidence, that existing WTO rules are entirely clear and need no clarification or change. I don?t believe it. I believe their real concern is to avoid a change in the rules which might make it too easy to put in place restrictive trade measures for protectionist purposes while passing them off as measures to implement a Multilateral Environment Agreement. I understand that concern, though I believe it is misplaced. We must find a way through which provides the necessary reassurance. I don?t believe there is any insurmountable technical difficulty in this. What is needed is political will and political persuasion. Above all, we must make sure the issue gets on to the agenda for the Round. Even this will be a political achievement. There will be opposition at Seattle because there are legitimate fears the other way round - fears that environmental measures can be used for protectionist purposes. We occasionally see this fear surfacing even within the European Union. We should therefore take extremely seriously the similar fears that non-Europeans - particularly from the developing world - feel when Europeans talk about the need for greater freedom to create environmentally motivated trade barriers. But this does not mean lowering our environmental ambitions. It means that we need to move carefully, sensitively and transparently to articulate a relationship between trade and environmental regulation giving both their full and proper place. This will not be easy but it must happen. This is why we shall argue for environmental concerns to be part of a comprehensive Round. ECGD Before leaving the international scene, I wish to make an announcement concerning the Export Credit Guarantee Department. From January, applications for export credits will be subject to environmental screening. It is clearly only right that environmental concerns are taken into account in deciding whether to offer support from British taxpayers. DTI approach for the future As many of you will know the High Court recently ruled that the correct interpretation of the Habitats Directive is that it applies beyond the traditional territorial seas of EU States extending up to a limit of perhaps 200 nautical miles. The government has been given leave to appeal against the judgement in the High Court in favour of the case from Greenpeace concerning the application of the Habitats Directive. I have considered this matter and I have decided we will not appeal against the decision unless the detailed judgement, once we have received it, raises unforeseen implications. Ensuring that offshore oil and gas activities are conducted sustainably and without harm to the marine environment has been, and will continue to be, a fundamental objective of the DTI?s oil and gas activity. The Habitats Directive is not an easy directive to implement in the marine environment, but I am committed to ensuring that the DTI?s oil and gas licensing activities are compatible with its requirements. I have instructed my officials to undertake this task as quickly as possible. During the summer we undertook a one and a half million pound survey of the seabed to the west of Shetland. I believe this could prove extremely useful in identifying candidate sites for protection under the Directive. More generally, it is vital for our future that we make sure we are underpinning businesses and new sectors which are more environmentally sound. That does not mean I am giving up on the old industries, many of which need help to reinvent themselves, not close down. But it does mean I am determined that DTI gives as much support to industries emerging in the new environmental technologies areas as it does to our traditional industries - to working with the chemical industries on how it could be more environmentally sound, to thinking about renewables as well as fossil fuels. That balance has not been right in the past. It will be in the future. And it will be because these are the industries that will employ so many of our children and will produce so much of the wealth that we will need to create a Modern Britain. I will therefore publish a DTI Sustainable Development Strategy early in the new year. This will bring added impetus and greater coherence to the way we conduct our own business in creating a sustainable economy. And I want to get it right with input from business, the NGOs and others. The strategy will be a public document setting out key priorities and targets. We will report progress annually. Conclusion I began by referring to the wider political scene. By way of conclusion, I want to return to it. Our vision of a knowledge driven economy for the 21st Century fits well with the agenda of environmental modernisation. An economy based on knowledge, skills, innovation and high tech is exactly the environmentally friendly approach to economic and industrial policy that many would like to see. The questions we face in Government are difficult, complex and technical. But we must never forget that they are also human questions. The answers to which will affect the lives of individuals, their families and communities. When we talk about values, it is not just the value of the pound, or euro, or dollar. It is the values that lie at the very heart of our society that really count. In the dying days of the 20th Century, it is right that the environment is coming to the top of our political agenda. As we face the 21st Century, we need to recognise that environmental concerns cannot and should not be ignored. Those of us in Government have a responsibility to ensure that green issues are part of all we do. It is a responsibility I intend to discharge. |
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Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)
(the following are available from the archive) |
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