UK announces solo energy programme

It surely cannot have been intended to take the globally warmed wind out of the Commission’s sails, but three days before Brussels unveiled its Strategic Energy Technology Policy the UK Prime Minister set out his vision for applying technology to create a low carbon economy and launched competition to build one of the world's first carbon capture and storage plants.

Gordon Brown said, "Our mission is, in truth, historic and world changing – to build, over the next fifty years and beyond, a global low-carbon economy.”

At the same time the UK government published a report setting out the steps needed to “unlock the business opportunities that exist in tackling climate change”. This describes how the threat of climate change will stimulate investment in new technologies and innovations and help transform existing sectors of the economy, creating entirely new industries.

Among its conclusions:

• The overall added value in the low carbon energy industry could be as high as $3 trillion per year worldwide by 2050, employing more than 25 million people. The opportunities could be even greater as low-carbon technologies become pervasive across the economy;
  
  
• Action is needed to create a clear and credible environmental policy framework and to provide increased support for innovation. In particular there should be greater use of the public sector's £150 billion spending power to create 'lead markets' for new products.  

The report notes that on one hand, climate change and other environmental challenges can be seen as a cost, with policies determined solely on their cost effectiveness based on what is possible now. “Taking this short-term perspective results in policies that lack ambition and leaves the costs of developing new environmental technologies to others.”

On the other hand, they can be seen as an investment opportunity, with the future value of innovation explicitly taken into account in the decision-making process.

According to this view, companies will respond to the early adoption of demanding, flexible environmental policies by innovating to reduce environmental impacts at less cost, in order to gain competitive advantage.

This in turn will feed through to the economy in the form of growth and job creation in the future, and will also leave it more resilient to risks arising from environmental uncertainties.