environment magazine

The Red Tape Challenge “Greenest Government Ever”

By Adrian Wilkes (Executive Chair) and Sam Ibbott (Public Affairs Manager) Environmental Industries Commission

Greenest government ever. It’s quite the statement. And one which David Cameron probably now regrets making whilst in opposition. He could have made anything his soundbite: ‘aspirations for the environment’, ‘greener Britain’, ‘a really, really, very green Government indeed’, even the official ‘vote blue, go green’ wasn’t so bad – and was vague enough to leave a substantial amount of wriggle room. But the now Prime Minister went in big guns. Greenest government ever.   

The problem with achieving this most lofty of goals is that it will require a hefty amount of Government intervention in the economy and this runs contrary to much of the Coalition’s rhetoric. Our current environmental woes are the result of an acute market failure. Nobody ‘owns’ the environment, and its protection has invariably relied on the whim of Governments rather than the good will of industry – the cost of polluting has, for too long, simply not been necessary to factor into a business’s budget. In reality, this means legislation and regulation. Only a strong regulatory and legislative framework can provide the protection of our environment, our natural resources, our energy security, the future effects of climate change and, ultimately, our wellbeing. This approach seems, on the surface, very much at odds with much of the Coalition Government’s rhetoric on the role of regulation in the economy.   Such are the perils of power within a democracy, however, that once you’ve promised something you have to deliver on it. Or, if not deliver on it, at least pay lip-service and hope that no one catches you out or that the focus groups don’t pick up on it. And so, with this in mind, the Government has published a new Green Economy Roadmap - ‘Enabling the Transition to a Green Economy: Government and business working together’ – which it hopes will set the necessary framework for a transformation in the UK’s economy, and the principles upon which it is based.

It’s short. Very short. As maps go, it’s more like one of those ‘Rough Guides’ you might pick up in WH Smith’s before a weekend in Paris than something produced by Ordnance Survey. But despite this, it is a useful document in setting out a general framework, and a timetable, for the UK’s transition to a low-carbon, resource-efficient economy.

Its success, however, must be judged by outcomes, and the lack of clear policy detail within the document is a key concern. Neither the Environmental Industries Commission (EIC), nor the 200 plus companies it represents within the environmental technology and services sector (ETS), are rabid, unrestrained regulators, but without clear, long-term policy detail there is genuine worry that the ETS industry will not see the financial investment required to see a surge in fortunes – nor will it help the Government achieve its many legally-binding environmental targets.  

Early drafts of the Roadmap (in which EIC was involved) contained analysis of defined sectors of the economy, and how they might relate to the greening economy, but this work has been disappointingly foregone in the published document. We simply cannot accept that the Roadmap represents the sum total of the Government’s thinking on these matters, or that it is the framework that will see the UK’s transformation of the economy. 

The lack of detail in the Green Economy Roadmap is exacerbated by the Government’s aforementioned approach to regulation: the ‘one in one out’ approach to new regulations, the current ‘Red Tape Challenge’, and the chopping and changing of flagship policies such as the CRC Energy Efficiency Scheme. Combined, this sets a dangerous precedent for the ETS industry, and one which is likely to leave investors cold. Whole sectors, hundreds of companies and thousands of jobs can be created through one regulation. But upfront capital is also a necessity. If there is concern that a particular regulation on which a whole sector of the green economy relies is constantly under threat, this could quite easily lead to a crisis in confidence. No confidence, no investment – no investment, no greenest government ever. Indeed, this problem is likely to become even more acute and when the Green Investment Bank is up and running.

This is not to imply that the Government is doing nothing toward achieving their goal. There is no doubt a raft of flagship work going on that shows great potential to boost the Green Economy: the Green Deal, the Renewable Heat Incentive, Electricity Market Reform, Feed-in Tariffs, the Waste Review, the Water White Paper, GHG reporting, zero carbon homes and non-domestic buildings, the aforementioned CRC, among others. The list is long, and the opportunities huge; but what they will all require to be truly successful, and to truly see a step-change in the way we think about our natural resources and our environment is leadership. Strong leadership. 

 It is hard however not to notice the lack of engagement in this area by the Government’s two key decision makers: the Prime Minister and the Chancellor of the Exchequer. Tellingly, neither has made a keynote speech on the environment since coming to power – but perhaps this concern is best summed up by the introduction to the Green Economy Roadmap. Despite being signed off by the Secretaries of State of three government departments, the Treasury isn’t one of them. You would have thought the clue was in the name.

It is important to remember what is at stake. The UK’s environmental industry in 2009/10 had a turnover of some £112 billion, with environmental exports being worth £10 billion. Total employment in the UK’s environmental industry now exceeds 900,000 jobs. And all of this feeds into a global environmental marketplace worth £3.2 trillion.  These figures are by no means insubstantial, but they can be much larger still.

In 2009, when the current Chancellor of the Exchequer was on the Opposition benches, he argued of the need to “bring to an end the stale argument that we have to choose between economic growth and the environment.” This was a most welcome sentiment, and one that needs to be put into practice now that he sits on the other side of the House. There is too much to lose by not doing so.