The low-carbon economy: In need of a fresh approach?

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Can the Clean Growth Plan galvanise fresh interest in the low-carbon economy?

When the UK committed the Climate Change Act to law nearly ten years ago, there was considerable talk of the first-mover advantage this would bring. We would become a world leader in clean technologies, able to market our products and expertise globally as the rest of the world caught up.

Working out whether this has genuinely been the case is complicated by a lack of comparable data sets, but it's hard not to feel that initial enthusiasm has stalled.

Certainly use of the phrase ‘low carbon economy' itself has flatlined in the UK as a quick comparison on Google Trends of that, ‘circular economy' and, just to be provocative, ‘energy bills' shows.

In terms of hard facts, Government research on the low-carbon and environmental goods and services market in 2011 and 2012 put us sixth internationally with 3.7 per cent of the total global market. This is well behind the US, China, Japan and India, which were taking a more cautious approach to decarbonisation. Between those two years, there was nonetheless an impressive 4.8 per cent increase in UK sales.

Unfortunately, that helpful work hasn't been repeated, nor has another similar survey for EU statisticians, but we do have data from the Office of National Statistics on the low-carbon and renewable energy economy in 2014 and 2015. That's less optimistic, showing a fall in economic activity and employment between the two years.

What we can say with a bit more certainty is that EEF's manufacturing sector members are more likely to think climate change adds to their regulatory burden and pushes up energy costs, rather than see it as an opportunity to make and sell new products.

Similarly conversations on innovation show the development of low-carbon products and services to be only a minor driver, well behind more general desires to satisfy existing clients and markets, or even improving compliance with environmental regulation. This chimes with a recent analysis of patents by the Grantham Institute that suggests 13 of the UK's 15 largest industrial sectors are less effective than global competitors at low-carbon innovation.

If this is all too depressing, there may be hope on the horizon in the form of the Clean Growth Plan. We know Claire Perry has been reviewing BEIS's proposals for the plan over the summer with a view to making sure they maximise opportunities for the UK economy. While, disappointingly, we've not seen any hint of what that might actually involve, there's a whole swathe of policy levers that could be reviewed in light of the wider aims of the Industrial Strategy to make sure they're working to best effect, from R&D policy to product standards and export support.

There might also be a case for a rebrand of the low-carbon economy to galvanise interest and make sure those outside the renewable energy sector feel included.

Hopefully in another ten years, manufacturers will have a more positive view of the low-carbon economy. At the very least, let's hope we have some consistent statistics to review.

This blog first appeared on Business Green

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Head of Climate, Energy and Environment Policy

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