Thank you Robin
Very glad to be here today, and would like to pay tribute to the work
that the Green Alliance and ERM have put into bringing this group of
people here today. I would also like to say a special thank you to Becky
Willis for the constructive, and highly effective, way she has acted as
a bridge between government and environmental NGOs.
I certainly value the dialogue that we have. We may not always agree
on everything but I think we all benefit from being able to come
together to discuss the practical measures that need to be taken to
solve the problems of our common concern. And I am delighted to be
sharing a platform with SERA, who have a long and proud record of advice
to this government as well as influence within the wider Labour movement
over many years.
This is a useful moment to take stock of where we are. Sustainable
consumption and production.
The DTI has come a long way. Four years ago my predecessor Stephen
Byers was the first Trade and Industry Secretary to make a major speech
on sustainable development on this platform. Now, we have mainstreamed
the concept within our department. For example:
- The review of innovation policy, that we are currently conducting,
incorporates at its heart the need to raise not just productivity
but resource productivity.
- Our far-reaching proposals for modernising company law will help
to mainstream sustainability concerns in the boardroom.
- And when I go to Cancun in September, as the leader of the UK
delegation to the WTO, I will be putting the sustainable development
needs of poorer countries first.
The reason we do all of this is because we recognise as a government
that future prosperity, home and abroad, depends on decoupling
environmental pollution from economic growth. Margaret Beckett and I
will soon be publishing our Sustainable Consumption and Production
Strategy to see where government can make a difference to this end.
We do not think that in order to protect our environment we need to
move our economy backwards.
Yes, we need to change consumption patterns fundamentally, as world
leaders at the WSSD confirmed last year. But that doesn’t mean
consuming less, just consuming differently. Because with innovation, new
technology and incentive-based policies, consumption no longer has to
cost the earth.
There is nothing wrong with rising consumption, indeed it is to be
welcomed as symptomatic of rising living standards in our communities.
And it is quite right that the poorest in the world aspire to escape
poverty and enjoy those standards. But we need to make sure the products
and services we consume are designed not to harm our environment. We can
enjoy more comfort, more enjoyment and more security without
automatically increasing harmful and costly impacts on the environment.
But it requires a re-thinking of business models to make more productive
use of natural resources.
Take the example of the Carrier Corporation in the US, the world’s
largest manufacturer of air conditioners and a subsidiary of United
Technologies. It shifted its mission from selling air conditioners to
selling a certain level of comfort, however it was delivered. So they
started to team up with other companies to make buildings more efficient
so that they need less air conditioning or even none at all, to yield
the same results. As a result, in the last four years, United
Technologies have reduced energy use as a proportion of sales by 25 per
cent. An experience that we will bear in mind at the Better Buildings
Summit that John Prescott, Margaret Beckett and I will host later this
year
By looking at the whole system and focussing on fulfilling the
consumers’ needs, this business model rewards for doing more with
less, improving customer value and the bottom line. Higher profits will
come from providing better solutions rather than selling more equipment.
It’s a good private sector example of how higher resource
productivity and high profitability can be two sides of the same coin.
But unfortunately examples like this are all too scarce. The market by
itself rarely provides the incentives needed for environmental
innovation, finding new, less environmentally damaging ways of doing
things. Neither does it send a price signal to alert us to damaging
over-consumption. And that is why we in government need to take action
to shape and create the markets we need to get the outcomes we want.
We must use market-based policy tools wherever possible, for the
simple reason that they are more likely to work. But our aim must be to
put in place the right mix of incentives, and disincentives, to
stimulate private sector innovative solutions and investment in cleaner
technologies. This way we get an innovative, competitive and dynamic
knowledge-based economy whose environmental costs and opportunities are
effectively signalled.
That’s the approach we took in drawing up the Energy White Paper,
published in February this year. And can I just use this opportunity to
say thank you to the many people in this room who made a point of
welcoming it. We value your input, and welcome the help and
encouragement that you are giving us as we move forward. Because it is
as simple as this. I see the publication of our white paper in February
as a fundamental turning point. We are the first British government to
put climate change at the heart of energy policy.
We accepted the recommendation of the Royal Commission on
Environmental Pollution that the UK should put itself on a path towards
a reduction in carbon dioxide emissions of some 60% from current levels
by about 2050 with real progress by 2020. And we have included this
target as one of the overriding goals of our energy policy, alongside:
- maintaining the reliability of energy supplies
- promoting competitive markets
- ensuring every home is adequately and affordably heated
By adopting a target for 2050 publicly we make it easier for other
developed countries to do the same. Because we need all countries to act
in order to make a difference. So we are to moving to a low carbon
economy, and there are various ways in which this can be done.
We could do it by building a whole new fleet of nuclear power
stations. Nuclear generation is, after all, carbon free. But my
deliberate policy choice, and the government’s, was to strengthen the
contribution from energy efficiency and renewable energy sources. For
that reason the White Paper does not contain any proposals for building
new nuclear power stations.
We believe that achieving a big reduction in carbon dioxide emissions
is possible, although there are risks. We will not prescribe the precise
routemap, rather we want to create the market that delivers the result
we want. We think we’ll need to deliver cuts of between 15-25 million
tonnes of carbon by 2020 to be on track for our 2050 target. Carbon cuts
of this magnitude are consistent with our aspiration to double the share
of electricity generation from renewable energy to 20% by 2020. But this
on its own will not be enough for us to meet our carbon targets.
In fact the potential gains from energy efficiency are over twice as
great as those from renewables, important though those are. So we also
want to double the rate of energy efficiency improvements seen over the
last 30 years. But to capture these gains we need to take action, and
fast, on the key priorities. So that’s what we’re doing, and I’d
like to highlight three areas in particular.
First, we need to create a market that makes it worthwhile for
companies to offer low energy products when they sell electricity and
gas to our homes. So last month, with DEFRA, we brought together Ofgem,
energy suppliers and others to work out how to create an effective
market in energy services. They will report in December with an interim
report in September.
Second, we need to get the carbon emissions trading system up and
running. In under eighteen months time, the first phase of the European
Union emissions trading scheme will start to operate, the world’s
largest market for carbon emissions.
Third, we need to accelerate the amount of electricity generation
that comes from renewable sources. As you may have seen, today we
announced the launch of a competition to allocate the second round of
site leases for offshore wind farms.
The response from the wind energy industry to the first round,
launched in December 2000, was excellent. The first 30-turbine wind farm
from that round will start generating electricity later this year.
Preparatory work on six other projects of similar size is underway.
If all the projects from the first round go ahead their combined
output would be sufficient to meet the domestic electricity needs of a
city the size of Greater Manchester. This is a terrific start. But we
are keen to go further and so is the industry. The indications are that
developers want to build much larger projects. Not 30 turbines but as
many as 300 or more. This is why the launch today of the competition for
the second round of site leases is so exciting. We estimate that it
could deliver between 4 and 6 GW of new capacity. This amount of
development would provide as much as 5.5% of the UK's electricity
requirement for 2010. A very substantial contribution to meeting our 10%
renewables target.
So, to those who doubted our commitment, I say to you today, this
government is committed to greener, cleaner energy. And I’m pleased so
many of you have welcomed our announcement this morning.
As we move forward on delivering our white paper aims, our
relationship with the regulator will be crucial. We cannot have a
situation where government is pulling in one direction, and the
regulator another. That’s why we issued for consultation last month
new draft social and environmental guidance that places responsibility
on the regulator to:
- remove any barriers that might prevent progress towards our white
paper targets; and
- provide a framework within which business is encouraged to work
towards these objectives.
The guidance is a tool to ensure that regulator and government are
working to the same ends. We will not be prescriptive about the means.
But there is no doubt about our ends.
And we’ve set up a mechanism in government to make sure that we are
working across traditional Government Departmental boundaries. A new
network, the Sustainable Energy Policy Network, of all relevant parts of
government: Ofgem, the Carbon Trust, the Energy Saving Trusts and the
Environment Agency, to deliver the White Paper’s commitments.
The network reports to a new Ministerial Implementation Group,
jointly chaired by Margaret Beckett and myself. We met for the first
time last Thursday to drive forward a cross-Whitehall consensus on the
need for change and the means to bring it about. And it will receive
advice from a new Sustainable Energy Policy Advisory Board, made up of
senior, independent experts and stakeholders: we’ll shortly be seeking
nominations for this body.
Today I have highlighted some of the key areas where we are making
progress in delivering our white paper commitments. But there are 135
commitments in the White Paper and tempting though it is to demonstrate
to you our progress on all of them, I don’t propose to go through them
all now, although we can return to them in questions. I have made sure
that the civil servant responsible for each of these is named on our
website, and today we’re publishing the top 100 key milestones in each
area against which our progress will be judged. I want you to monitor if
we are delivering to target and challenge us if you think further work
is needed.
Because we’ll need to work together at home and abroad if we are to
deliver on our shared vision of a low carbon economy. There is no doubt
of the scale of the task ahead of us. To really make a difference we
must forge a shared consensus and home and abroad for the need for
change.
As the Prime Minister said last year at Johannesburg, “we know the
problems, we know the solutions. Let us together find the political will
to deliver them”
It is in that spirit I am here with you today, and I’d be delighted
to take your questions.
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