Just wanted to share a piece I wrote for a business audience at Business Green.
Where are Green Business’s Political Champions?
As Trump prepares to pull out of Paris Agreement, Green Party prospective parliamentary candidate Ed Targett asks “Where are green business’s political champions?
Once upon a time sustainability and the search for yield were seen as mutually exclusive. The battle lines seemed drawn: planet or profit; not both. How the times have changed. Environmentalists know it and investors know it.
Business Green’s readers will have seen the recent letter from institutional investors managing US$15 trillion to G7 leaders: “We believe that the mitigation of climate change is essential for the safeguarding of our investments,” they wrote.
Or look at Blackrock – with assets under management of $5.4 trillion across a range of markets and strategies. As the firm notes: “We believe climate factors have been underappreciated and underpriced… The world is rapidly using up its carbon budget.”
Investors globally are imploring political leaders to wake up and provide long term policy signals that allow them to re-allocate capital to the low carbon economy. So why is it taking so long for policy makers to smell the coffee?
Trump set to exit Paris Agreement
Donald Trump, depressingly, now looks set to join Syria and Nicaragua in rejecting the Paris Agreement – which sets a long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels.
This week, meanwhile, leaked documents showed that the UK attempted to water down EU policies designed to tackle climate change. (When Angela Merkel warned that Trump’s United States and a post-Brexit UK were no longer reliable partners, she wasn’t just talking about security issues; she was talking about leadership on the biggest issue of our time).
This is a huge opportunity lost: a much-needed pivot from monetary to fiscal stimulus could be led by green infrastructure investment – something Caroline Lucas has long advocated, as a “Green New Deal”. (It’s clear the jobs are desperately needed: Siemens’ wind turbine factory in Hull drew 22,000 job applications for 650 positions).
How would Britain taking the lead on this look in practice? For starters, it could involve a wholesale push on marine energy. Officials at the late DECC already acknowledged that tidal stream and wave energy alone could deliver up to 20% of the UK’s electricity needs.
Tidal Lagoon Power’s six proposed tidal lagoons alone though would contribute up to £27 billion to UK GDP over their 12-year construction period, according to a report commissioned by TLP from the Centre for Economics and Business Research, sustaining an annual average of 36,000 jobs and powering eight million homes.
As 20 industrial companies, which together employ 42,500 people, wrote in an earlier joint letter to the Financial Times: “We have at our fingertips a brand new sector that will create a multibillion-pound industry, provide tens of thousands of jobs across the country and create a significant local supply chain. All of this before we even think about the massive potential as a British export technology.”
(Tidal stream pioneer Atlantis Resources’ recently signed Strategic Partnership Agreement with South Korean offshore construction giant Hyundai Engineering and Construction gives a flavour of what first mover advantage looks like in this sector.)
What do we get instead?
What we get instead are poorly costed pledges and cheap, headline-grabbing offerings from every party. The PM’s energy bill price cap proposal took the biscuit. Price caps were a bad idea with a red rosette; they are an awful one with a blue rosette.
With a North Sea bonanza over, energy imports are rising even as the pound falls. With the single biggest cost item for both electricity and gas being the cost of wholesale energy, which accounts for up to 50% of the costs of supplying electricity and gas to domestic customers, the pain is only going to grow.
If we want to reform the energy sector, we need substantial and structural changes to the energy market, not short-sighted fiddling. Even Joe Public could get in on the action. How about letting us invest in government-backed bonds issued by a non-profit trust set up to commission low-carbon power sources like tidal energy (one can dream).
There are around 96,500 low-carbon and renewable energy businesses in the UK, generating a total annual turnover of £46.2bn for the economy, according to ONS data. They (you!) can help drive much needed growth and quality job creation in this country – leading the way in decarbonising energy, transport and buildings.
Instead, we face investment-killing uncertainty and policy vacillation. The Green Party needs to start taking the lead in giving Business Green’s readers a voice. We have a mutual interest in strong and stable policy signals that encourage green investment.
There are certainly plenty of opportunities for investment in North Thanet where I am standing – as well as excellent business facilities for any Business Green readers who might be looking to relocate. Sunny beaches, good schools, arts and recreational facilities and superb logistical connections to the continent and London.
Get in touch and I’ll show you around!