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Brown calls for a Marshall Plan to build a low carbon economy 21.11.07

Original Marshal Plan poster

Gordon Brown in his first major speech on the environment looked to toughen the Climate Change Bill targets, committed to the 20% renewable targets by 2020 and then dodged the hard decisions necessary to make it all happen.

With the Climate Change Bill now published which commits the present and future governments to reach a 60% reduction in carbon emissions by 2050 along with the rolling five year targets, the British Government has outlined the strongest binding targets on carbon emissions ever proposed. Over seen by an independent Climate Change Committee the objective is to ensure that targets are met and a full accountability by the Government of the day to Parliament through an annual report is achieved.

Crucially Gordon Brown acknowledged that since the bills inception the science has moved on and reaffirmed his commitment to looking at a higher 80% target.

“The legislation will enact our target of achieving a reduction in carbon dioxide emissions of at least 60 per cent by 2050 through domestic and international action, but the evidence now suggests that, as part of an international agreement, developed countries may have to reduce their emissions by up to 80 per cent. So we will put this evidence to the committee on climate change and ask it to advise us, as it begins to consider the first three five-year budgets, on whether our own domestic target should be tightened up to 80 per cent.”

Equally importantly after the backsliding on renewable energy that has been going on in the corridors of Whitehall he strongly reaffirmed the Government’s commitment to attaining the 20% renewable energy target by 2020 laid down by the European Union.

With the Bali conference on the environment coming up in two weeks time Brown laid out his store for a new global accord on climate change. At the heart of his proposals to creat a global low carbon economy is a Global Carbon Market:

“Built on the foundation of the EU Emissions Trading Scheme, with the City of London its centre, the global carbon market is already worth 20 billion euros a year and could be worth twenty times that by 2030. And that is why we want the post-2012 international agreement to include binding emissions caps for all developed countries - for only hard caps can create the framework necessary for a global carbon market to flourish. A global carbon market will also facilitate a transfer of technology and resources so that developing countries can bypass the polluting 20th century path to industrialisation and move straight to the clean energy technologies of a new era. Through the Clean Development Mechanism, significant finance is already being provided to these countries - and the flows could be much larger in the future.”

Fixed targets for the developed nations, large scale investment, via the offsetting Carbon market into low carbon energy in developing markets and protection of the remaining key carbon sinks such as the Indonesian tropical forest and peak bog as well as setting an example in the UK on how a low carbon economy can thrive and prosper. The plan all sounds very strong, and with the Democrats turning up the heat on Bush the chances are higher now for a US buy in than ever before.

One aspect of a carbon market is the shift in resources from polluting companies who need to buy carbon credits to developing countries. The other aspect pf course is that by putting a price on pollution what in effect is being done is the environment is being turned into yet another market to be bought and sold. In essence a company, or country fro that matter, can make a choices- whether to cut its emissions or whether to buy carbon credits. In effect of course what companies and Government will do, and indeed did very successfully at the first stage of the EU Emission Trading scheme is massively over estimate their emissions get much larger quotas than they needed and then sold them off cheap while boasting how they had cut emissions.

By putting a price on pollution what in effect is being done is saying that those who can pay can pollute. In an ideal world then absolute reduction targets should be set without the option of companies and countries buying their way out of it. But we don’t live in an ideal world, we live in one where even the modest targets of the Kyoto Protocol were resisted by the US and Australia.

The key issue however is not in Bali, it lies at home. On the day that Brown was delivering his speech the Government announced its intention of fighting environmental groups by pushing through the third runway at Heathrow. Ruth Kelly, Minster for more roads, bigger airports, and tax free air travel argued “If Heathrow is allowed to become uncompetitive, the flights and routes it operates will simply move elsewhere. All it will do is shift capacity over the Channel. It will make us feel pure, but with no benefit to the rest of the planet.”

Alistair Darling’s pre-budget was also at total odds with the expressed intent of the Climate Change Bill, Friends of the Earth summed it up “Overall, there was not sufficient action on either spending or taxation to adequately address the challenge laid down by Stern, and endorsed by the Prime Minister, to start to turn the UK into a low-carbon economy.”

The Energy Bill, with its reliance on nuclear and coal and little extra resource for renewable energy- no new funding for technology research, the funding announced essentially has to come from within existing department budgets, takes the Government down a road that leads away from the Climate Change Bill.

The Transport White Paper makes the absurd claim that more motorways, more airport and larger ports will actually result in less CO2 through some strange, as yet untested technology advances.

There in lies the problem, the only policy link up between the expressed pro-environment claims of the Government, and expressed policy of the Climate Change Bill and the rest of its policy is the word sustainable- by nailing the word sustainable on a white paper, laying out the case for sustainability in the explanation, and then coming to conclusions and policy outputs that explicitly are unsustainable the Government has shown that all that ahs really changed is its rhetoric and not its actions.

But why has this business as usual approach survived the increasing concern about the environment and climate change? Hilary Benn has not had an easy time since becoming Environment Secretary, first came the floods, then foot and mouth and now blue tongue and he hasn’t had the time to develop further the long term effects of the Climate Change Bill for sure, but there is no doubting his commitment to the Bill, nor for that matter his predecessor David Miliband who did the heavy lifting to get the Bill into shape.

The problem lies deeper than the individual ministers at the DEFRA, it lies in the Governments approach to business and business regulation. Ever since New Labour has been in power it has sought to work with business through voluntary targets, joint expressed wills of intent and individual company initiative. Time and time again we have seen voluntary codes and objectives fail to achieve their much trumpeted targets. Whether it be the car industry’s voluntary targets on emissions, the voluntary phasing out of the sales of low energy light bulbs, the voluntary support for renewable energy. You name it and the business community has found a way to wriggle out of its commitments.

Equally the voice closest to the Government’s ear when it has been drafting up policy is not the environmental groups but the industrial lobbies, every interventionist policy that would put into law tougher targets on the environment has been softened, the targets decreased, the time table extended, and of course the code made voluntary.

If the Government is to actually create a low carbon economy then it has to grasp the bull by the horns reverse it laissez-faire approach, the environment is a classic failure of market to put longer term objectives ahead of short term profit. It is therefore irrational to expect the market by itself sort out the problems it has created, it will not and it cannot.

Gordon Brown himself by invoking the Marshall Plan as a model for creating a low carbon economy pointed the way to how it can be achieved. The Marshall Plan involved re-building the European economy from the ashes of the Second World War. Through massive investment driven by Christian and Social Democrat interventionist governments, who through a combination of nationalization, state drawn up plans for each industrial sector and public investment in infrastructure built a new economy for Western Europe. Yes they listened to business, but business also listened to the Government, and it was the Government who controlled the direction of the development not individual profit maximizing CEOs nor their lobbies.

So yes Gordon we do need a Marshall Plan for a low carbon economy, and like the last Marshal Plan it needs a visionary political leadership to push it through. A national plan needs to be drawn up showing what a low carbon economy really means and every department needs to work towards that goal. A super Minster needs to be responsible for not just drawing up the plans but by forcing them through reluctant Whitehall corridors. Business needs to be involved, not as a way to put obstacles in the way but by producing solutions to a prosperous low carbon economy. As much as the business civil society needs to be engaged with and listened to, be want local solutions, they want safe streets, they want affordable healthy food, they want secure energy prices, and cheap affordable transport.

A low carbon economy is not a just question of a fourth technology revolution it is a cultural and social revolution as well, and unless that is embraced and communities re-built then the target cab be 60% or 80% it is not important because the only thing that is certain is that the targets will be missed no matter at what levels you set them.

Peter Shield

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