2010 - a year lost for the UK's Low-Carbon Transition Plan?

07.07.2010

Earlier this week the coalition government reached the halfway point of the crucial first 100 days when the new leadership set out its priorities, and begin to deliver substantive change. And, while its deficit slashing priorities could not be clearer, its low-carbon agenda remains vague and undecided to bring  forward the low-carbon transition plan.

We know that on the consumer front the Green Deal will kick off in late 2012 and offer households the opportunity to give their homes an energy efficient makeover. We also know that a new Green Investment Bank (GIB) will provide a boost to the UK's low carbon infrastructure. And we know that a floor price on carbon, energy market reforms and tough new rules for fossil fuel plants should all serve to accelerate the shift towards the low-carbon transition plan.

But, anyone requesting further detail on these proposals and many others part of the low-carbon transition plan will get the same blunt response: "wait until October and the spending review, all will become clear then". Even when evidence begins to emerge as to what low-carbon policies the government is working on, it often raises as many questions as answers.

Take this week's Green Investment Bank (GIB) Commission report, which is likely to provide large chunks of the government's final plans for a green bank, as an example. At the start of the week the report was released detailing how the GIB should focus on de-risking green projects and should be part funded by the "rationalisation" of three green quangos and five funds, including the Carbon Trust. Energy and Climate Change minister, Greg Barker, welcomed the report arguing that while there were some good green quangos out there the overall landscape was "extremely cluttered and confused".

Two days later and the GIB Commission's chairman Bob Wigley explained that what the commission meant when it said the Carbon Trust et al should be rationalised was that they could be absorbed within the GIB, or partly integrated with the GIB, or work in partnership with GIB, or just go on their own. Besides, he added, the Carbon Trust and some of the other quangos are independent bodies with their own boards so they can decide their own future - although what that future would look like without government funding was not explained.

No one wants to rush decisions that later prove to be costly and ineffective, particularly when public finances are so tight. But, the net result is that while businesses have a rough idea of how the GIB will operate they have absolutely no idea what the future holds for the Carbon Trust and other green quangos and funds.

Some ministers seem to lack an understanding of the urgency of the low-carbon transition plan

This uncertainty is being repeated across almost every aspect of the government's low-carbon agenda, and while businesses are largely understanding of the fact that it will take new ministers time to bring forward workable policies and legislation for the low-carbon transition plan, they are also likely to delay the low-carbon investment decisions that urgently need to be taken while they wait for clarity.

As this week's second annual report from the Committee on Climate Change made clear, the problems with the UK's low-carbon policy framework can be summed up in one word: urgency. The coalition has plenty of good policies in the pipeline, but they need to be enacted fast if the country is to have any hope of meeting its carbon emission reduction targets and with everything playing second fiddle to the spending review there appears to be little chance of this happening.

Green business leaders endorse the Committee's findings, admitting that while ministers seem to "get" the low-carbon economy some of them seem to lack an understanding of the urgency of the low-carbon transition plan. There is a real danger that the year 2010, defined by Cameron's deficit hawks and their fixation on cuts, could be the year when low-carbon investment plans get stuck in a policy bottle neck.

If the government makes good on its low-carbon transition promises, things will be much better by 2011 and 2012, but by then it could be too late for the UK's dreams of becoming a low-carbon leader. The coalition has 48 days and counting to deliver some green policy clarity, before the low-carbon economy ceases to reserve its judgment.

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