Some days it is hard to think of topics harder to fathom than the logic behind the government's increasingly confused environmental policy. The theory of relativity in Esperanto perhaps, or maybe a three hour lecture on James Joyce's use of the semicolon.

Yesterday was one of those days.

It started with the Treasury Select Committee expressing its disappointment at the government's "timid" approach to green taxes and failure to deliver a joined up approach to climate change.

Much has already been written about the fact that this government has overseen a decrease in the proportion of revenue coming from green taxes at a time when the exact opposite was required. But it is worth noting again that a supposed centre left government has completely turned its back on a progressive means of taxation (low income groups emit less carbon) that provides the simplest means of correcting the market failures that have allowed individuals and businesses to pollute without consequence.

It is hard to overstate the extent to which the fuel protests of 2000 screwed up this government's thinking on the environment and it is a damning indictment of its meekness that eight years on there are still few signs it is willing to take tough decisions on green taxation. And this despite the growing number of businesses who accept they have a role to play.

A quick call to the Treasury prompted a government statement that is now so well worn most green business execs could write it themselves.

We have introduced green taxes such as the climate change and aggregates levy, said the Treasury, adding that these taxes had helped ensure the UK will emerge as one of the few countries that will meet its Kyoto targets. Well, yes they had, but almost certainly not as much as the shift in the UK's energy mix from coal to gas that countless independent observers have identified as the primary cause of the UK's relatively impressive emissions performance.

Moreover, referencing a couple of new green taxes does nothing to counter Committee chairman John McFall's conclusion that these taxes are "minuscule in the grand scheme of things".

Of course, there was some optimism to be gained in the Treasury Committee's report. Most noticeably in the fact that a cross party committee of MPs is reaching these (admittedly blindingly obviously) conclusions. The call for the appointment of a climate change minister is also a welcome idea that many green business execs would support. Although it is worth noting that the only way a dedicated climate change minister would help deliver the cross-departmental joined-up thinking that is so desperately required is if the new minister is given real authority pretty much on a par with the four great offices of state.

A junior minister knocking meekly on the door of the Treasury or Home Office asking for more action on climate change would be at best an outrider for the environment minister and at worst a glorified fig leaf for the government's decidedly ropey environmental record.

The day then took a more optimistic turn when I met with Adam Bruce, UK CEO of Airtricity and chair of the BWEA, to record BusinessGreen's EcoEntrepreneur Podcast, which should be up online next week.

Adam had just hot-footed it over from Downing Street, where he been meeting one of the prime ministers top energy advisors, and was set to spend the afternoon back in Whitehall meeting officials at the Department of Business, Enterprise and Regulatory Reform (BERR). Rather than despairing at the prospect of a day in the company of mandarins who have in the past been less than supportive of the renewables sector he was surprisingly upbeat.

According to Bruce there has been a detectable shift in the government's attitude to climate change in the last six months and there is finally a genuine appetite to get things done. This is particularly apparent at BERR, where Bruce reckons the word has come down from the "impressive" and "lucid" minister John Hutton that targets must be hit and the renewables industry supported. If true it is a remarkable turn around for a department that only a few short months ago was reportedly investigating ways to wriggle out of the UK's renewable energy targets.

Bruce's confidence is also good news for all other businesses with a green agenda, because if Ministers are finally leaning on civil servants to treat the EU's carbon targets as priorities then it is inevitable that the support, incentives and regulations required to assist firms' carbon cutting initiatives will materialise.

Or so I thought for the five minutes before I returned to my desk to find that Defra is apparently in the throes of crisis meetings to identify £1bn of budget cuts for the next three years.

Defra is insistent no decisions have yet been made, but the scale of the cuts are little short of a "disaster" and it is inevitable business support functions will be impacted.

What we do know is that 31 people have already been made redundant by WRAP, the main agency for promoting recycling, and the organisation is developing a new plan to refocus its priorities, which is PR speak for ditch some of its activities.

Defra appears to be trying to protect its climate change activities from the axe, mindful of how any big cuts would undermine the government's rhetoric. In fact, flood defences have been earmarked more money. But this only means conservation agencies and waste management activities are firmly in the firing line. Meanwhile, sources are convinced a number of smaller funds designed to support many non-government organisations, including plenty that provide business advisory services, are facing the chop.

It is a genuine travesty and regardless of how the government tries to spin it there is no way a budget shortfall of £300m a year will not jeopardise the UK's climate change efforts.

Moreover, it is just the latest in a series of incidents that characterises a government appears increasingly torn between taking the measures needed to drive the low carbon economy and sticking with the budget allocations, tax policies, and ministerial structures that will make such a transition nigh on impossible.

On days like yesterday it is hard to get away from the impression that the government's climate change policy really is a back of an envelope stream of consciousness job of which James Joyce would be proud.

Posted by James Murray on February 6, 2008 | Permalink | Comments (4)

Earlier this week, before his government lurched into its now weekly crisis, Gordon Brown gave a speech to the CBI in which he declared his support for a third runway at Heathrow, claiming "we have to respond to a clear business imperative and increase capacity at our airports".

Cue much wailing and gnashing of teeth from environmentalists arguing that Brown can’t make an impressive speech on climate change one week and commit to expanding airports the next and expect to be taken seriously.

The CBI, meanwhile, welcomed the move, but those members of its climate change task force who have looked at the various reports on the aviation industry's rapid expansion would be forgiven some private doubts, despite the conclusion in their new report that "air travel can be part of a low carbon economy".

Of course, even with its new commitment to "do what it takes" on climate change keeping the CBI and the treehuggers happy is never going to be easy, but Brown could have done a far better job. Here's what he could of, or, if I may be so bold, should have said:

"You have rightly called for action at Heathrow. Our prosperity depends on it: Britain as a world financial centre must be readily accessible from around the world. And this week we demonstrated our determination not to shirk the long term decisions but to press ahead with a third runway.

I know this commitment will attract the ire of environmentalists and may not even win full approval from yourselves, committed as you now are to transitioning to a low carbon economy, but this third runway will help secure London's position as the world's financial capital and drive the economic growth that is essential if we are to make the investments required to decarbonise the UK's economy.

However, while I will not make this government a hostage to fortune and say this type of airport expansion will never happen again it will become rare to the point of extinction over the next few decades.

In a speech to the WWF last week I pledged that every new policy will be examined for its impact on carbon emissions, and while this does not mean we will cease carbon intensive projects altogether it does mean that where such projects are authorised we will have to deliver a greater cut in emissions in other sectors.

This is a hard truth to face, but the rate of growth within the aviation industry is now so rapid that it threatens to cancel out all the carbon savings we make in other sectors of the economy.

We have attempted to sidestep this truth by excluding aviation and shipping from inclusion in the climate change bill, but to continue to do so will undermine the credibility of this important and groundbreaking piece of legislation. More importantly it will also make it nigh on impossible for us to avert dangerous climate change – sadly the atmosphere does not care whether the emissions come from a UK power station or a plane midway over the Atlantic and the legislation should account for that.

Ignoring this truth any longer would be foolish in the extreme and so I have instructed the new climate change committee to assess whether aviation and shipping should be included in our emission targets as its first duty of business.

Far be it from me to second guess the committee's conclusions, but any sensible observer would accept that ultimately these emissions will have to be accounted for in some way.

Once the emissions associated with any new runaway have to be subjected to a carbon impact assessment it will become extremely difficult, if not impossible to authorise further projects and still hit our emission reduction projects.

I am loath to criticise the report this morning from the CBI's Climate Change Taskforce, because I truly believe that it is one of the most important documents on the challenges we face ever produced. But in my opinion it fails to take the issue of aviation sufficiently seriously.

The report accepts "that continuing growth in demand means that aviation will account for a bigger share of emissions over time" but fails to quantify how much it will grow or how big a share of emissions it will eat up. Let me fill you in.

The Department for Transport has estimated that the number of passengers passing through our airports will rise from around 200m a year now to between 400m and 600m by 2030. Without a miraculous revolution in aircraft design improvements in fuel efficiency will not be able to cancel out this increase in demand and emissions will soar. According to research from the Tyndall Centre, if we are to stabilise emissions at a level we have deemed safe while continuing to allow aviation to grow at its projected rate then the airline industry will account for half of the UK's emissions by 2050.

Such a share for aviation would make it all but impossible to hit our carbon targets and dangerous climate change and economic catastrophe will become increasingly inevitable.

This means that based on current trends we have no choice but to cap, or even scale back, airport capacity at some point in the future.

So, how can this be done without damaging the economic growth that as I explained earlier is essential to low carbon investments and is the justification for Heathrow's third runway?

If we are to mitigate the risk of climate change two things must happen: firstly, we must engineer the biggest technical revolution the aviation industry has seen since its birth as we attempt to move as far as possible towards decarbonising flight. And secondly, we must fly less.

I would argue that both of these things can be done without damaging UK plc, and if done properly they should even stimulate growth.

The aviation industry has made good progress in enhancing fuel efficiency and limiting carbon emissions, but it must go much, much further.

In order to drive this progress we have corrected the mistake we made in taxing air passengers - a move I now accept had little impact on emissions - and instead plan to begin taxing flights from November 2009. The level of the tax has not been agreed yet, but let me warn you now - it will be significant.

I understand your mutterings, but when introduced this tax will be accompanied by major tax cuts on energy efficient products and vehicles that will make the move revenue neutral. It will also provide a clear financial incentive for airlines to operate fuller planes and send a clear price signal to passengers that they should look to avoid flights wherever possible.

We are also committed to bringing aviation into the European emissions trading scheme – a move that will provide airlines with a financial incentive to cut emissions and only operate the most fuel efficient aircraft. Many within the aviation industry have signalled their support for this scheme, but many others in resisting these plans are displaying a short sightedness and irresponsibility that I find astounding. I implore you as some of their most influential customers to join with both the government and the CBI Climate Change Task Force in calling for them to drop their opposition to the proposals and join a scheme that already impacts many other sectors of the economy.

This will lead to an increase in ticket prices, but if it makes you as business leaders think more carefully about whether or not a flight is necessary then it is a price worth paying.

However, the stick alone will not be enough.

I will not hypothecate the taxes raised from flights because, as the Northern Rock episode has painfully proved, a government needs a certain flexibility in its spending decisions. However, I will pledge that we will dramatically increase our investment in R&D projects working to deliver lower carbon aviation.

The CBI's task force report notes that the Society of British Aerospace Companies has called for government investment in civil aviation technology of £130m to £150m per year. I will go far further than that and invest £300m in aviation R&D on the understanding that the focus of the research will be on limiting carbon emissions.

There are many exciting technology avenues open to the aviation industry, ranging from biofuels to new engine designs and lighter planes, and if the UK can deliver these innovations first then it will be able to tap into a global market desperate for more energy efficient technologies.

Furthermore, the CBI report outlines how 73m tonnes of carbon dioxide are wasted every year around the world due to inefficient use of airspace and infrastructure, such as the stacking of aircraft in the skies around Heathrow. Streamlining air traffic management systems in Europe alone could cut fuel consumption by 12 per cent and the case for our bringing airlines into the ETS is undermined by the EU's failure to deliver these reforms. I will make it a priority for our negotiations in Europe that these reforms are achieved.

However, with these legislative and technical improvements years away we must also act now to limit aviation's emissions and that is why I am asking you not to fly where possible.

I am not saying don't fly at all – because, as I said, I understand aviation's importance to business.

However, I am asking you to think back to the last time you flew to an international conference or business meeting and found yourself thinking it was a waste of your time. If you are anything like me you will not have to think back too far.

We all now have a responsibility to accept that flights are one of the biggest contributions we make as individuals to climate change and should think more carefully about when we take them.

Again, the government will move to help you change your company's approach to corporate flights. The latest video conferencing technologies are a wonder to behold and can genuinely cut the need for business people to fly and improve productivity. So to help drive their adoption we will offer both 100 per cent tax breaks on the technology and interest free loans to all firms installing them.

I also accept that our rail system is the laughing stock of Europe. With the high speed link to Europe now open the poverty of the rest of our network becomes even more apparent and it is an issue that must be resolved. That is why I am today launching an investigation into how we can deliver a genuinely world class high speed rail network that will make domestic flights completely unnecessary.

It will take a huge effort from everyone in this room as well as the fourth technology revolution that I spoke of in last week's speech to maintain economic growth while cutting emissions across the economy, including in aviation. But it is my belief that these measures, coupled with your ingenuity and entrepreneurial spirit, can help us increase prosperity while cutting aviations emissions."

Posted by James Murray on November 28, 2007 | Permalink | Comments (1)

Apparently this time it's for real.

According to those shadowy figures who give political journalists their seemingly psychic understanding of ministers' thoughts Gordon Brown has really gone green this time.

The spin doctors insist that if the prime minister's attitude to climate change has in the past been somewhat equivocal, yesterday's speech marks a very real and very important shift in attitude that once and for all brings him down on the side of the environmentalists and green businesses.

According to The Guardian's chief sage, Polly Toynbee, recent reports that ministers were planning to wriggle out of EU targets to source 20 per cent of energy from renewable sources by 2020 finally brought the long-running battle between Defra and BERR to the boil. An argument ensued at a "stocktaking" meeting to discuss the targets and Defra carried the day. Brown ruled that the target must stay and must be met – end of.

The question now is how to hit targets that only a couple of weeks ago were deemed so demanding by ministers at BERR that they had to be watered down?

The signs from Brown's speech were heartening. There was very little in the way of new announcements - besides the eye catching commitments to phase out single use carrier bags and toughen car fuel efficiency rules further - but when all the government's various initiatives and targets were set out in one speech you began to get the sense that maybe this time the rhetoric will be followed by action.

For example, the plans for expanded carbon trading mean a price signal on emissions will impact almost every sector of the economy within the next few years; the launch of the tendering process for a carbon capture and storage project will make the UK one of the first countries to adopt the technology; the commitment to remove planning barriers and improve subsidies for offshore wind, wave and tidal power projects will help the UK finally tap into its massive renewable energy potential; and Brown's focus on green jobs and opportunities rather than costs should help get businesses and the public onside.

And yet despite these initiatives it is hard to avoid the impression that the government's carbon emission reduction programme looks more than a little lopsided.

The commitment to necessary regulation is there in abundance, while Brown's evoking of the Post-War Marshall Plan suggests there is a willingness to raid the public purse to help build the low carbon infrastructure required, but where government policy remains a good deal less clear is in the support and incentives it will offer businesses to help them make the low carb transition.

As Toynbee observed today, "Brown resists intervention in markets, but industry needs a kickstart".

Where the government does intervene in markets its record is mixed. For example, only the most loyal Whitehall apparatchik can continue to argue that the Renewables Obligation subsidy mechanism is as successful as the far simpler feed in tariff that has made Germany a world leader in green energy.

Meanwhile, plans to expand carbon trading will help drive adoption of low carbon products and processes, but without a concurrent attempt to incentivise greener business models many firms will argue that they are being hit with extortionate new costs while the government does little to help them change their operations.

One of the key challenges for the government's low carbon strategy will be to keep businesses onside, particularly over the next five to ten years when European firms look like they will inevitably face higher costs and tighter regulations than many of their competitors in China, India and possibly even the US.

To do this there has to be an indication that government is willing to help with the low carbon transition, and if that means titling the market in favour of the green market leaders while continuing to hammer away at the laggards then so be it.

Initiatives like the £1bn public-private Energy Technologies Institute to help bolster clean tech R&D are a step in the right direction, but when you consider Brown's speech came on the same day that German chemical giant Bayer pledged to spend not that much less on green R&D you realise that the government's fund is an order of magnitude too small.

What is needed is a real helping hand for all green business products and practices in the form of massive tax breaks. If the government must make the lost tax revenue up from somewhere it can do so by increasing tax on the polluting activities all businesses now know they must wean themselves off.

Only yesterday, I was speaking to an IT exec who bemoaned the lack of government support for green technologies such as video conferencing that are just on the edge of commercial viability and simply need a little push. He added that even where there were tax breaks for products such as energy efficient cooling systems most firms had little idea of how to access them.

If the government was to impose and, just as importantly properly promote, a wide ranging tax incentive programme incorporating everything from solar panels to hybrid cars and triple glazing to LCD lighting then not only would businesses find it easier to justify green investments, but they would also get the impression that the government was on their side and willing to help with the technological revolution Brown demands.

Economists of the Brown School might argue that market forces can and will drive this revolution without intervention, just as they did the IT revolution twenty years ago – and they'd be right. But the fact is that without intervention this revolution will take years and decades that the scientists insist we don't have.

If Brown is as serious about climate change as his speech suggests then it is time to break with his convictions and give the invisible hand of the market a sizable shove in the right direction.

Posted by James Murray on November 20, 2007 | Permalink | Comments (3)

I'm not sure when it happened exactly but at some point over the last five years China became the world's favourite excuse. It has become the dog that ate the homework, the leaves on the line, and the dodgy pint all rolled into one.

For any politician or business leader looking for a reason not to act on climate change China has emerged as the "yeah, but" option of choice.

Sadly, the fact that the "But Sir, China's doing far worst" line of reasoning wouldn't look out of place in a primary school classroom has not proved enough to stop people who should know far better (you know who you are Blair) from using it.

The net result is that the statistic about the country building a new coal fired power station every week (or is it every two weeks, no one seems quite sure) has been repeated so many times it has become meaningless and western governments have managed to conceal their often embarrassing climate change policies behind a Chinese fig leaf.

Increasingly however there are signs emerging that this line of reasoning is not just intellectually and morally bankrupt – the atmosphere does not care where emissions come from and nor should we - it is also just plain wrong.

According to a new report from the Worldwatch Institute, far from being an eco-villain China is ready to leapfrog the very countries that cite it as the main reason for their inaction.

As with everything to do with China the numbers are impressive: $10bn will be invested in renewable energy this year, placing China second only to Germany in the world rankings; production of wind turbines and solar cells doubled in 2006 and should overtake the West within three years; solar PV production capacity jumped from 350MW in 2005 to over 1,000 MW in 2006, with 1,500 MW expected in 2007; 100 million square metres of solar hot water panels were operational by the end of 2006; and wastes from agricultural facilities in China could yield 80 billion cubic metres of biogas annually.

This revolution should not be a surprise to any one. It stands to reason that China will, in theory at least, find it easier to transition to a low carbon economy than more developed economies.

It is far easier to build an energy grid powered by renewable energy from scratch than it is to slowly dismantle your fossil fuel based infrastructure and replace it with a newer, greener version. Equally, it should be far simpler to give a city a green overhaul if that city is growing and you can incorporate sustainable design into new buildings and neighbourhoods as they are constructed rather than once they are already up. All it takes is a willingness to plan properly and enforce green standards – something the Chinese government claims to have in spades. Meanwhile, low costs should make China the ideal location for multinationals to site their clean tech projects.

Of course, it would be wrong to suggest everything in the Chinese garden is rosy. The country still faces numerous environmental problems, but in many ways it is these problems that are the driving force behind the current green investment.

According to Worldwatch, China's reliance on coal for 80 per cent of its power coupled with a boom in car ownership means that only one per cent of urban Chinese breathe air that meets European air quality standards. But it is this tragic statistic that at least partly explains why a recent BBC survey found that Chinese consumers are more interested in green products and initiatives than their western counterparts - pollution effects them directly and they want something done about it.

This popular pressure is combining with economic realities to ensure that Chinese investment in renewables will only accelerate. The country's political elite know that its economic revolution is unsustainable without a major diversification of its energy supplies. Power shortages are already hampering growth and with the country poised to take over from the US as the world's biggest polluter international calls for action are only going to increase.

The net result is that like any green investment trend China's renewables revolution is driven more by self interest than any love of nature. But either way the oft-quoted myth - let's call it the Bush folly - that China is not doing much to address climate change so the West can't be expected to do much either is now as far from reality as it is detached from logic.

Perhaps Western leaders are going to have to find some new excuses. It shouldn't be too hard; after all they have had years of practice.

Posted by James Murray on November 16, 2007 | Permalink | Comments (1)

The first time I stumbled across the term hypothecated taxation was in an article late last year about an interview the pop group Girls Aloud had given with the New Statesman.

Now there's a sentence you don't get to write too often.

In the interview the UK's finest purveyors of innovative power pop and lad mag photo shoots revealed that they are broadly in favour of higher taxes, but only if you get an indication where the money is being spent.

As band member Kimberly Walsh observed in a comment that revealed the group to be a bit more politically astute than you'd expect given the majority of their public pronouncements are reserved for the slagging off of Charlotte Church: "You'd happily pay taxes if you thought, I'm paying them so a fireman or a nurse can have a decent wage. People just want to know it's going to the right people."

I only mention this little vignette, because up to that point I had never before stumbled across the term hypothecated taxation and a quick straw poll of the office revealed that I was not alone.

Since then however the concept, if not the term itself, has emerged as one of the defining debates for the whole environmental movement as report after report has suggested that such a taxation model represents the best means of garnering public and business support for taxes on carbon emissions and waste.

Just yesterday we saw two further studies suggesting the appetite for green taxes where the revenue is immediately diverted into environmental projects is substantial.

According to a major BBC survey of 22,000 people worldwide half of respondents are in favour of increased green taxes on fossil fuels, but that figure soars when asked if they would support green taxes where the revenue raised was used for green purposes.

Similarly, a new survey from accountants Hacker Young found a whopping 90 per cent of businesses felt cash raised from green fences should be ringfenced for environmental purposes.

It is easy to understand this widespread support for hypothecated taxation. As Doug Miller of research firm GlobeScan, which carried out the BBC poll, observed most people instinctively dislike taxes because they feel tax revenue is not spent in the right areas. Give them an insight that green tax revenue is being spent directly on tackling the environmental issues that they are increasingly concerned about then they are far more likely to support the taxes in the first place. He pointed to China as a prime example where support for green taxes is far higher than in other countries, because people are "literally dying" because of high levels of pollution and they see how green taxes can work.

It seems that at best people will be happy to pay hypothecated green taxes, telling themselves they are contributing to the fight against climate change, while at worst they will see them as a necessary and understandable evil.

For businesses the appeal of such ring fencing is even more pronounced. They understand that green taxes will likely lead to increased costs and that passing these costs onto customers will be far easier if they can point to widely supported green taxes as the cause. They also know that government is currently not investing nearly enough in the large public works and mitigation measures required to limit and adapt to climate change and that ring fencing a major revenue stream to spend in this area will finally force them to throw serious cash at the defining problem of the age.

So given all this support why is the government so reluctant to even consider the idea? Gordon Brown could urgently do with a populist tax idea – or at least one he didn't have to nick from the Tories - and yet when I last asked the Treasury about their position on hypothecated green taxes I was told in no uncertain terms that it was simply not on the agenda.

The problem is that hypothecated taxation is anathema to many at the Treasury. They fear, with some justification, that to introduce just one hypothecated tax would prove the thin end of the wedge and once tax payers were empowered in such a way they would demand that more and more of their taxes were assigned to certain sectors and causes before they are even paid.

Such a scenario, while looking appealing and democratic at first glance, would prove an unmitigated disaster.

Dostoevsky once said that "the degree of civilization in a society can be judged by entering its prisons", but can you imagine how loudly some people (and newspaper proprietors) would vehemently object to seeing a hypothecated tax diverted into improving our prisons.

Many people, like the aforementioned Walsh, would love to see how much of their taxes went to nurses and firemen, but how many would want to know the amount being spent on traffic wardens and health and safety inspectors?

Widespread hypothecation would be a recipe for regular and vigorous protests and anti-tax camapaigns and as such it is easy to see why the Treasury would is so twitchy about the concept.

Moreover, the model also denies government the flexibility it requires to respond to unexpected crises. Passing a law demanding that all revenue from fuel duty goes into improving public transport and flood defences for example would be widely welcomed by environmentalists and businesses, but you know mandarins at the Treasury would be thinking "what happens when there's a recession and we need that money to invest elsewhere".

And yet, while this reasoning explains why the government dismisses the idea of hypothecated green taxes it is hard to imagine it can continue to ignore a concept that has such widespread support.

There are hypothecated taxes that work - the TV licence is probably the best example – and the fact remains that the government will have to invest vastly more in the next couple of decades to drive the transition to the low carbon economy and adapt the UK's infrastructure to the risks posed by climate change.

To do this tax revenues will have to increase. The idea, as the Tories claim, that green taxes can be made revenue neutral by cutting other taxes sadly won't wash – driving efficiencies in other areas of government simply won't free up enough funds to divert into essential environmental projects and overall government spending will have to increase if we want the public transport and flood proof rivers that will be increasingly essential to UK business and growth.

As Gordon Brown learnt during the fuel protests increasing taxes on fossil fuels is a dangerous game to play.  But the only way to do it is to convince people that such taxes are not a revenue grab but an essential means of discouraging polluting activities and raising revenue for essential climate change projects.

Hypothecated green taxes are the only option and if it means less flexibility for the Treasury and more pressure on politicians to reveal how our taxes are spent then that is a price they will have to pay.

In short, if it's good enough for Girls Aloud, it should be good enough for Gordon Brown.

Posted by James Murray on November 6, 2007 | Permalink | Comments (0)

Yesterday the government delivered its long awaited response to the consultation period on the draft climate change bill.

It may have disappointed some environmentalists, but business leaders were on the most part welcoming towards the new proposals, despite environment secretary Hilary Benn's clear indication that the bill is to be toughened up.

Under the latest proposals, the bill the independent committee on climate change will be given the power to publish its recommendations to government and force it to adhere to its guidance or publicly explain why it has been rejected. It is one of those rare pieces of legislation that brings with it almost inevitable embarrassment and condemnation, not to mention potential legal action, for politicians.

Moreover, it now seems increasingly likely that the bill will include more stringent targets of 80 per cent emission cuts by 2050 and could even spark one almighty international legal conflagration by forcing the aviation and shipping industries to be included in the targets.

As if that wasn't enough the government also hinted it would toughen up its biofuel legislation to ensure biofuels are coming from sustainable sources and confirmed that thousands of organisations, including banks, hotels, supermarkets, government departments and local authority buildings, will be included in a new emissions trading scheme, potentially increasing their costs but also providing them with the opportunity to generate income by cutting emissions.

So what did BBC Breakfast News lead on this morning?

That councils have been given the power to pilot pay-as-you-throw waste management schemes.

Cue countless emails from outraged of Tunbridge Wells about rotting rubbish and council tax bills, not to mention Kate Silverton asking a slightly bemused Tony Juniper of Friends of the Earth why the government kept changing its position on pay-as-you-throw, when there were reports last week that while the government was to shelve national plans it was considering still giving councils the chance to pursue the strategy.

There is, of course, a legitimate debate to be had about the merits or otherwise of pay-as-you-throw, as well as polluter pays schemes in general (although it is a debate not helped by the government's failure to reassure people that such schemes could and should save most people money). But how on earth can this be the biggest piece of news to come out of the revised climate change bill?

As regular readers will know I am no fan of the government's climate change policy, or complete lack thereof, but you still have to feel a little sorry for them when they do announce something genuinely world-leading and innovative, show willing to toughen up legislation in line with the latest science, and then see the whole thing overshadowed by some nimbys moaning about their bins.

Given the BBC News seems to spend every week reporting on either the government's lack of action on climate change or how people aren't really aware of the bigger issues surrounding global warming, it really should be taking a more detailed look at a piece of major legislation that has the potential to dominate the way we live and do business for years to come.

Posted by James Murray on October 30, 2007 | Permalink | Comments (0)

So it looks like the rumours were true. If The Guardian's leaked documents are to be believed several Ministers are genuinely committed to watering down renewable energy targets to the point at which they are effectively abolished.

Senior officials within the Department for Business, Enterprise and Regulatory Reform (BERR) have apparently made their mind up that nuclear power with its massive subsidies, fears over waste disposal and concerns about the carbon footprint of related mining activities still represents the best means of developing a low carbon economy and are advising Gordon Brown to lobby against proposed EU targets that 20 per cent of energy must come from renewable sources by 2020 on the grounds that meeting them would prove too costly. It really is as if the Stern Review never happened.

Now it would be easy (and entirely justified) to join the environmentalists and the renewable energy industry in ranting long and loud about the crass stupidity and rank hypocrisy of a government that constantly brags about its leadership on climate change and then seriously countenances a move to undermine a central foundation of Europe's climate change policy. A move that would send out a clear signal that the government is not serious about renewables and force cleantech investment overseas into the arms of governments that understand the role clear and ambitious target play in driving the development of a low carbon economy.

It would be equally tempting to point out that Business Secretary John Hutton, the man reportedly poised to advise the prime minister to abandon any pretence that the government desires a genuinely rapid expansion of the UK's renewable energy industry, is the same John Hutton who earlier this month declared (with a straight face) that government policy meant the "UK is fast becoming a magnet for renewable energy investment".

However, what is interesting about the whole sorry saga is not so much that the government is considering watering down the targets, but how on earth it managed to get itself into such a hypocritical situation in the first place.

I've posted on this before, but almost every environmental policy announcement currently coming out of Whitehall bears the hallmarks of one almighty ministerial turf war.

According to The Guardian, one of the many sobering admissions in the leaked document is that there are "different priorities across government departments about how to get renewables to 20 per cent of the electricity mix". It is an assessment that could be applied to almost every environmental target the government has set.

The government's ever handy policy of not commenting on leaks means it is unclear what is being made of this morning's reports, but it is reasonable to speculate that many Defra and Foreign Office officials must be absolutely furious to see much of their hard work to establish the UK as a perceived leader in the fight against climate change being so carelessly thrown away by proposals from their counterparts at BERR.

But if they are furious they shouldn't be surprised.

The fact is that the preposterously-titled BERR (what is the difference between business and enterprise and what happens if, heaven forbid, the government gets one of its regulatory frameworks right? Does it keep reforming regulations because that is what it says above the door?) simply has a different remit than Defra and other departments and as a result it will inevitably propose a different environmental strategy that suits its goals.

BERR's job is to create a positive environment for UK business and given that core remit it is hardly surprising that it has decided that an expansion of a proven if controversial technology in the form of nuclear power combined with a continuation of fossil fuel-based power plants is a lower risk and more cost effective means of guaranteeing the nation's energy supply than massive investment in an embryonic renewable energy sector. It is quite right in its assessment that EU targets for renewables would prove costly and difficult to meet, and with its primary goal being the delivery of short term GDP growth it is within its rights to propose that investing to meet these targets is a risk the government should not take.

In contrast, those departments that see cutting carbon emissions and promoting international action on climate change as their top priorities will inevitably argue that while meeting these target will prove costly the long term benefits in terms of reducing emissions, stimulating clean tech investment and cementing European leadership in the development of the low carbon economy are well worth the short term costs.

Such conflicting prioirties are becoming an all too frequent challenge for Defra, which only this weekend was reported to be pushing a reluctant Treasury to exempt carbon offsetting from VAT. No decision has yet been made but it seems highly likely the Treasury, with its remit of maximising tax revenues, will rule that carbon offsetting represents a service and under EU law must face the VAT levy.

The government's climate change policy is fast becoming a case study on how not to run green corporate initiative. Admittedly it is far more complex to run a country than a business but the government has set up a management structure where each and every department appears to have conflicting goals and priorities.

In the business realm, the solution would be to develop an environmental strategy at board level that incorporates all major departments and makes all managers directly accountable to the chief executive for their environmental performance. It may need to happen on a much larger scale but exactly the same principles hold true for governments.

The only way for Gordon Brown to end the ministerial conflicts currently dogging environmental policy and develop a coherent climate change strategy is to make it abundantly clear that the transition to a low carbon economy is his top priority and that the finance (The Treasury), operations (BERR, Home Office and Foreign Office), and environment (Defra) departments must work together to deliver on his goals.

If ministers were sure that they were being judged as much on their ability to deliver a low carbon economy as on their traditional targets then John Hutton would not be grumbling about the cost of accelerating the development of renewable energy capacity and would instead be working out how best to hit the EU's targets.

Hopefully the climate change bill and its legally binding emission reduction targets will make this priority clear, but until it does we can expect much more ministerial wrangling over the government's environmental initiatives.

Posted by James Murray on October 23, 2007 | Permalink | Comments (0)

So Al Gore won the Nobel Peace Prize, and you've got to say he deserves it.

His fellow winners at the IPCC may have done much of the spade work, but it is Gore who has in eighteen short months done more than anyone to turn climate change from a fringe issue into the defining concern of the age.

His film may have contained a few minor errors, as helpfully pointed out by some mining industry-funded critics with too much time on their hands (BTW - in the interests of balance when we do we get a court case on The Great Global Warming Swindle? That I'd like to see). But the crux of his argument remained so strong that he was able to almost single-handedly shift global public opinion.

He has mobilised the global left around a threat that always had more to do with social justice than drowning polar bears and, perhaps more impressively, reached out to many of his erstwhile opponents on the right and made them realise there is an impregnable economic and security case for tackling global warming.

In short, Gore deserves all the plaudits currently heading his way and if any pedants wish to question whether campaigning against climate change is worthy of a peace prize they should assess the latest global warming predictions and ask if droughts in the subcontinent will do anything to ease tensions between nuclear India and Pakistan, if the US can ever secure the Mexican border as water shortages begin to bite, and if the European Union can hold itself together as people migrate North to avoid a sweltering Med.

If such imaginative feats remain beyond them, they could always get a firsthand glimpse of the future and parachute themselves into Darfur and the world's first climate change war.

And yet, just as Gore's profile and influence reaches yet another peak there are worrying signs that his strategy for addressing climate change is beginning to look both overly simplistic and almost alarmingly misguided.

Ever since the release of An Inconvenient Truth Gore has consistently argued that climate change is principally a moral issue; that we have an ethical responsibility to both future generations and the developing countries that will bear the brunt of the damage to tackle the problem.

This argument was crystallised in Gore's response to his new award, which saw him proclaim that, "The climate crisis is not a political issue, it is a moral and spiritual challenge to all of humanity. It is also our greatest opportunity to lift global consciousness to a higher level."

Now maybe I'm being unfair; maybe I'm reading too much into what is meant to be little more than an oratorical flourish, but to me this sounds like a load of meaningless New Age nonsense.

There is undoubtedly a moral case for not destroying the planet but Gore's position sounds like the very embodiment of the treehugging school of thought that has done both him and the environmental movement so much harm.

If you just analyse the logic of Gore's statement for a moment it quickly falls apart.

First up it is easy to understand why Gore is a bit disillusioned with conventional politics, but to declare the "climate crisis is not a political issue" is still truly bizarre. My dictionary defines politics as "the complex or aggregate of relationships of people in society, especially those relationships involving authority or power", and if that hasn't got plenty to do with the climate crisis I'm not sure what has.

Of course, Gore is talking about politics in the narrower sense - "of or relating to the state, government, the body politic, public administration, policy making, etc" - but again this surely has everything to do with the climate crisis. It is after all governments, politicians and policy makers that for so long ignored the warnings about climate change and are even now failing to deliver the legislation and tax frameworks that would correct the economic externalities associated with carbon emissions and enable the transition to a low carbon economy.

But Gore ignores all this, ignores the capacity of governments and politicians to drive change and create the environment in which low carbon businesses, technologies and lifestyles can prosper (something he once must have believed in), and instead argues climate change is a "moral and spiritual" issue to be laid at the feet of everyone.

Like so many politicians' statements this idea, that climate change is a moral struggle for the individual to face, is partially true and apparently reassuring - until you try to work out what it means.

The premise that climate change can be tackled if we all do our bit, if we were all just the little bit more moral, is easy to succumb too as it implies that all is required is a slight shift in our internal ethical equations to solve the problem. But when you think about it the idea that all that is required for those in the developed world to live a low carbon lifestyle is a "moral" desire to be better people is simply absurd.

The other problem with Gore's analysis is that the flip side of his statement is that it would be immoral not to attempt to cut your carbon footprint, and as soon as you get into questions of immorality you are opening up a whole can of philosophical worms. 

How for instance do you work out the morality of working in the oil industry when you have a family to support? What about the morality of commuting to work, or the morality of keeping the heating on for an elderly relative? Is it good or evil to try and ensure your kids have the same foreign holidays as their classmates, or come to think of it is it right or wrong to fly around the world to raise awareness of climate change?

In a low carbon world all these things are wrong and arguably immoral, but in the current economic and social framework you could argue it is also immoral not to do these things.

There are moral issues surrounding climate change, but these are at the macro-economic level of whether it is right that the developed world's current prosperity will cause untold harm to developing world countries and future generations. To try and argue climate change is a moral issue at the individual level, to imply people are being immoral by doing the same things as everyone else does and failing to act, is only going to alienate everyone bar the hairshirt environmentalists.

Of course, everyone can and should do their bit to help tackle climate change, but without any of the enabling technologies, infrastructure and legislation in place individual action alone will never be enough.

Disaster can only be avoided with massive changes at the economic and infrastructure levels of society and these are things that can only be achieved by politicians and business leaders. They may make these decisions quicker under pressure from the rest of the population, but this pressure is unlikely to be felt until it is already too late - just witness Australians' attitude to climate change shifting only as drought bites. Consequently, climate change is, and will remain a political issue.

Climate change will not be defeated by us all being a bit nicer and more moral, it will only be curbed by the realisation that cutting carbon is an economic necessity, by people realising there is money to be made in providing the necessary products and infrastructure, and by politicians legislating to protect the long term national interest rather than their own political skins.

I don't mean to be pessimistic, but if as Gore suggests climate change can only be curbed if we are able to "lift global consciousness to a higher level", then history indicates that we are pretty much screwed.

Posted by James Murray on October 17, 2007 | Permalink | Comments (1)

So that's that then. The election campaign that never was has drawn to an embarrassing ramshackle halt after the prime minister declared a false start and called the race off before the competitors had even reached the first corner.

But if the whole sorry saga achieved anything besides giving the opposition parties enough political ammo to keep their armouries stocked up well into next year, it is that it has given the rest of us an insight into the key topics the next election will be fought over. Sadly for green business execs environmental policy looks set to be a long way behind the front lines.

For several months there have been indications that the environment might finally take the central position in political debates that environmentalists, scientists, and green business leaders have been demanding. Both the Tories and the Lib Dems delivered thorough, serious-minded reports on the kind of policies required to deliver a low carbon economy, while the government continued to busy itself with the proposed Climate Change Bill and even appeared to be making progress in improving the UK's currently miniscule renewable energy capacity.

It seemed that the rhetoric all the political parties had indulged in identifying climate change as one of the greatest threats to humanity would finally be followed with the bold policies required to mitigate that risk.

And yet as soon as Brown's lieutenants started laying the ground work for their abortive election campaign both the major parties resorted to their comfort zones.

Brown's conference speech delivered a few more Eco-towns and hinted that he would toughen up the climate change bill, but offered little detail on how the bill's emission reduction targets would be met. His stance on the climate change remained akin to that of a football manager who insists his target for the year is to win the league but offers little information on how this admirable ambition will ever be achieved.

Instead he focused on his traditional electoral strengths, focusing on the stability of the economy and Labour's increased investment in public sector services.

Yesterday's Pre Budget Review was no better, offering more money for flood defences and tweaking aviation taxes, but again offering no clear signal on how emission targets will be met.

Similarly, the Tory Conference and their subsequent poll bounce saw them push environmental issues to the sidelines. Sure, they announced plans to increase green taxes, reform the energy sector and introduce feed in tariffs for renewable energy, but the announcements were, if not exactly sneaked out, completely overshadowed by the focus on planned cuts in inheritance tax and a full blown assault on Brown's record.

It seemed that Cameron and co had listened to the economist Erwin Seltzer's warning that the green agenda would not play well with the majority of voters and begun gradually extricating themselves from their recent pro-green positions.

In fact, the most memorable declaration on the environment from the whole conference season came when Shadow Chancellor George Osborne openly mocked the work of his colleagues in the Tories' Quality of Life Group, John Gummer and Zac Goldsmith, by declaring he'd be "off his trolley" to back their calls for parking charges at supermarkets.

Observers of the election that wasn't were left in little doubt that when the race proper begins, most likely next year, the campaigns will remain focused on the traditional topics of tax, security, public services, immigration and the economy, stupid.

But in sidelining the green debate and returning to their familiar hunting grounds the leading political parties have again illustrated their utter failure to comprehend the truly pervasive nature of climate change and the low carbon economy.

Labour may wish to fight the election on the economy, but in that case where is the understanding that low carbon technologies could provide perhaps the biggest driver for economic growth in recent history?  Where are the clear and generous subsidies and tax cuts required to stimulate these embryonic clean tech sectors, help make them globally competitive and ensure the government's carbon emission targets are met? Where is the explanation to voters that while some industries will suffer as a result of the legislation needed to deliver a low carbon economy, new globally competitive sectors will take their place; that ultimately a technology transition fuels rather than stifles economic growth and opportunity?

Equally, the Conservatives have set out a tax-cutting stall, but again they are failing to explain how emission reduction targets will only be achieved when green taxes become a critical component of the tax system. They could make the case that green taxes, when offset against cuts in areas such as income and inheritance taxes, are not only fair but would also deliver major tax cuts for those who make an effort to reduce their carbon emissions. They could, but with a few notably exceptions they have failed to do so.

This dynamic plays itself out across almost every sector of government. In terms of defence, the military are already undertaking threat studies and identifying climate change as not just one of the largest security threats we will face but also one of the major contributors to global conflicts today. In terms of public services, all of the reforms and increased spending planned by Labour must be informed by the urgent need to slash emissions and climate proof essential infrastructure and services. In terms of immigration, some of the Daily Mail's worst nightmares will become inevitable as people attempt to flee climate change droughts and conflicts for more temperate climates.

But instead of explaining and planning for climate change's pervasive impacts the political parties continue to siphon environmental debates and policies off to an individual department, while similarly keeping economic, security and public service policies largely separate from one another.

Once again the politicians could learn a lot from the best green businesses. Those taking climate change seriously have realised a fragmented approach to the environment simply doesn't work – in the case of government it is a recipe for announcing emission reduction targets while expanding roads and airports – and are attempting to drive environmental sustainability into every aspect of their organisations. They understand that if you want to cut emissions it needs to be the responsibility of not just the facilities manager, but also the financial manager, the operational manager, the supply chain manager, and pretty much everyone from the CEO down. Meanwhile, almost every business decision and new strategy needs to include carbon impact assessments to ensure it fits in with the overarching goal of cutting emissions.

But sadly our political leaders seem unwilling or unable to grasp this principle of interconnected environmental management. Unfortunately, until they accept that the demands of the low carbon economy must inform and dominate almost everything they do the chance of attaining that low impact economic model, deemed little short of essential by climate scientists, remains negligible.

Now there is something for Gordon Brown to chew on next time he thinks about calling an election.

Posted by James Murray on October 10, 2007 | Permalink | Comments (1)

Tory proposals for an increase in green taxation have secured significant public support, according to a survey this week from Ipsos MORI undertaken ahead of the Party's annual conference in Blackpool.

The survey of over 2,000 people found widespread backing for several of the green taxation proposals included in the recent Quality of Life report developed by John Gummer and Zac Goldsmith.

The poll found that 64 percent were in favour of higher taxes for gas guzzling vehicles, while 62 percent backed Tory plans for financial incentives for people who cut the carbon footprint of their homes. Meanwhile, supporters of a freeze on airport expansion outnumber detractors with 49 percent supporting a moratorium and only 20 percent opposing the move.

However, shadow chancellor George Osborne's speech confirming that he would not endorse the Quality of Life report's calls for parking charges at out of town shopping centres and a significant increase in air taxes is likely to be welcomed with the survey finding limited support for both ideas.

Phil Downing, Head of Environmental Research at Ipsos MORI, said the poll suggested that the public is broadly in favour of the concept of green taxation.

"Not everything is palatable to the public, and out of town parking charges in particular face widespread opposition," he said. "However, they back, in principle, Polluter Pays and the idea that the environmental agenda is more than just pain free, easy wins."

Speaking at the conference, shadow environment secretary Peter Ainsworth confirmed that alongside support for some of the report's green taxation proposals the Tories would also endorse its plans for major reforms in the energy sector designed to deliver "a revolution in the way that our energy is generated and supplied".

He said that the party would back the review's proposals for a waste heat levy on power stations designed to encourage them to invest in systems for capturing and reusing waste heat and would also undertake an overhaul of the government's controversial Renewables Obligation legislation in order to "adjust distorting subsidies for on-shore wind farms and ensure proper competitive tariffs for emerging renewable technologies".

Ainsworth added that feed-in tariff that guarantee that householders generating energy using on-site renewable technologies can sell it back to the grid at attractive rates, may be "a terrible bit of jargon", but would also prove hugely successful in increasing adoption of on-site renewable energy technologies.

He also insisted that many of the reviews recommendations could be embraced without the need for reams red tape and an overall increase in taxation. "It is absolutely not, as some commentators suggested, all about increasing bureaucracy and taxation," he said. "Far from it. Bureaucracy and taxation are the last things we need in the fight to improve Quality of Life."

Posted by James Murray on October 4, 2007 | Permalink | Comments (0)