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Technical approach

Following Gordon Brown’s promise to plot a green route to recovery in the recent Budget, which options will maximise carbon savings as well as employment opportunities? The answer lies in energy efficiency and support for technology innovation, argues Tom Delay, CEO of the Carbon Trust

As we lurch from banking crisis into economic recession, we desperately need some good news. Most countries have stimulus plans and they are all to some extent “green”. Why? Because there is a growing recognition that a sustainable future is attractive to taxpayers and voters and building one is a good use of their money - at least it is if we do the right things. The Carbon Trust has been studying different low carbon measures, looking for those that deliver the best carbon reduction and job creation opportunities, both now and in the future, on the greatest scale and at the lowest cost.

Building a low carbon economy is a game in two halves – in the first we drive efficiency into everything we do, at work, at home and in transport. Efficiency reduces costs so there is a strong business case for doing this now in a downturn so long as we have the confidence to look beyond survival today and out towards the future.

We need to think big so let’s start with public buildings. There are energy certificates on display today in public buildings across the UK that list energy efficiency recommendations. A mandate from government to implement these would create around 13,000 jobs by 2020, reduce its energy bills and offer a helping hand to the battered construction industry.

For business more broadly, we know that cash is tight right now and it is hard to finance an investment in new energy efficient equipment like lighting, boilers and control systems. We already provide interest-free loans to small businesses that they pay back through the savings they make. This scheme has huge scope to be extended to more organisations, creating a further 2,000 jobs in the first three years and reducing energy bills for UK business by £500 million every year.

The second half of building a low carbon economy should see us create the industries, and jobs, for our future with the UK as a global hub for low carbon innovation. With limited public funding we must invest in technology areas where we have real strengths and commit to support these over time.

We need innovative, often unproven, technologies and companies to flourish and make their case for focussed support. While US venture capital investment held up last year, European venture capital declined dramatically and we are in danger of losing out to the US in the long term. £250 million of government investment would leverage a billion in private investment, create 3,000 jobs by 2011 and, with a fair wind, generate returns that more than cover the cost.

Offshore wind is a great example of a proven technology worthy of focussed support. The winds blow hard around the UK, we’ve got experience of offshore engineering from the North Sea and, as the US and China focus on-shore across their plains, we can lead the world off-shore. It’s still expensive so support needs to quickly bring costs down by testing new foundation and turbine designs, co-investing in manufacturing and upgrading port infrastructure.

We’ve assessed over a dozen options but these four measures are the actions we believe will maximise both carbon savings and job creation, stimulating 200,000 jobs and saving 60 million tonnes of CO2 by 2020. At least half the £2 billion bill would be returned to the exchequer within seven years, having stimulated £3 billion in private sector investment and having reduced the UK’s energy bill by over £1.5 billion a year.

Now is the time for Britain to be bold – after all, it makes perfect business sense.