Gordon Brown Points To A Low Carbon UK Future

PM points to low carbon future

A massive investment in renewable energies to reduce the UK's reliance on fossil fuels was unveiled by the Prime Minister this morning.

Speaking at the Government's Low Carbon Economy Summit, Mr Brown outlined a new strategy to reduce the demand for energy, and to develop and deploy more renewable technologies.

The Government plans to invest £100 billlion over the next twelve years to meet the "immense challenge". Tidal, solar and wind power will all have a part to play in the future.

Investment in renewables would bring an improvement in energy security due to more diverse supplies, a reduction in projected energy bills, and the creation of hundreds of thousands of new jobs and business opportunities, the PM said.

"And this is the biggest prize of all: the chance to seize the economic future - securing our prosperity as a nation by reaping the benefits of the global transition to a low carbon economy.

"For the fact is that, in the 21st century, the global low carbon economy will be a key driver of our economic prosperity."

Under today's proposals, the UK will extend and raise the renewable energy to encourage 30-35 per cent of electricity to come from renewable sources by 2020.

Achieving this target will mean new kinds of consumer behaviour and lifestyles, and "creativity, innovation and entrepreneurialism" throughout the economy and society, he added.

"It is an immense challenge. And all of us - government, business, civil society and individuals - have a part to play."

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SPEECH ON CREATING A LOW CARBON ECONOMY - 26 JUNE 2008

Gordon Brown has outlined the changes and opportunities a low carbon economy would bring to the UK in a speech to the Government's Low Carbon Economy Summit on London's South Bank.

PM points to low carbon future

Sir Tom, Ladies and Gentlemen. Can I start by thanking on behalf of our Ministers here - Hilary Benn, John Hutton and Malcolm Wicks our Energy Minister - Tom McKillop and the Royal Bank of Scotland for organising this conference today and co-hosting it. The Royal Bank of Scotland is having a very busy week because it is not only sponsoring Andy Murray, our tennis champion at Wimbledon, but it is sponsoring this important conference about investments in our future. And I acknowledge that the Royal Bank of Scotland is doing more than any other financial company to invest in new technologies, and particularly in renewables, and all of the companies represented here I believe are a testament to the ways in which business can be energised by the imperative of creating a low carbon economy.

And as Tom said, there is no more appropriate time to have this conference than now. Winston Churchill, who said that politicians usually get things right after trying everything else, once said that those who build the present only in the image of the past will miss out entirely on the challenges of the future. And he spoke of people who were in the 1930s resolved to be irresolute, adamant for drift, solid for fluidity, all powerful for impotence. I think what his relevance to today is, we have got to be resolved, determined, adamant and clear that we will have to change strategy in the years to come, and that is what I want to talk about today.

When I first proposed holding this conference last November the price of oil was $90 a barrel, up from just $60 a barrel the year before. Today it is over $130 a barrel and the resulting energy and fuel price rises, as all of us know, are hurting families and hurting businesses everywhere, and they pose a real risk to the stability and a real risk of imposing damage on the global economy for every country in the world is now having to face up to the consequences of this global change. I want to tell you today what I believe this means for Britain and why what we are discussing later this morning is so important.

I believe our response to the oil shock, which is a bigger oil shock than the two previous oil shocks of the 1970s, must have two elements: first, we need to facilitate a reduction in short term global oil prices through commitments to greater investment, and indeed to greater transparency in the market place; but secondly, for the longer term we must set out a clear strategy to reduce progressively over time our dependence on oil. And these elements are importantly linked. By reducing demand in the future and hence giving greater stability and certainty and creating a more stable oil market, we can actually help reduce prices today.

That is why I went to Jeddah last week with John Hutton to speak to the oil producers and to urge a new deal between oil producing and oil consuming nations, based firstly on greater transparency about medium and long term trends in supply and demand. And we agreed - consumers and producers - to work together to ensure that not only is there greater transparency, but there is greater access to capital and technology to bring new supplies on-stream, often in increasingly difficult physical conditions round the world. We also agreed that we had to improve energy efficiency and we are now taking this work forward. There will be a major follow-up conference that will take place in London between producers and consumers in a few months time.

But although our aim must be to get the current high oil price down, we need also to recognise that we have to take a new course. Our economic and social prosperity, today and in the next generation, requires us to reduce progressively our dependence on oil. All our needs of the country, all our goals as an economy point in exactly the same direction - to tackle climate change, to improve energy security, to create jobs and to stimulate business to growth. To achieve all of these we need to reduce our demand for energy and to develop and deploy alternatives to fossil fuels.

And of course this is not just true for Britain and this is an opportunity therefore for Britain serving the rest of the global economy. Every economy in the world, the developed world, the emerging economies like China and India, and yes the oil producing nations too, now share a common interest in this transition to a low carbon global economy. For the threat of climate change, the prospect, as the Stern Report put it, of the global economy suffering damage in this century equivalent to the two World Wars and the great depression of the last century, is a threat to the prosperity and security of the whole world.

No-one should therefore under-estimate the scale of this endeavour and the importance of what we are talking about today. Meeting our climate change goals requires Britain to become a clean economy, that is to replace many traditional fossil fuels with low carbon sources of energy right across this country, and to do so at much lower levels of energy demand than currently projected.

And we must start now. To have a chance of stabilising the global climate at 2 degrees Celsius above pre-industrial times, that is to avoid what everybody recognises would cause dangerous climate change, the international climate panel - the panel on climate change - has shown that global emissions need to be at least halved by 2050 and to achieve that emissions would have to peak in the next 10 - 15 years. And this is an enormous challenge. It is a challenge that will require courage and leadership, but it is a challenge which does not daunt our government - on the contrary it inspires us.

For I believe that the benefits to British families and to businesses of reducing oil dependence and tackling climate change will be immense. It will mean an improvement in our energy security because we will have more diversity of supply. It will mean a reduction in projected energy bills for consumers and businesses over time. It will mean the creation of hundreds, indeed thousands of new jobs and business opportunities to meet the new demand for environmental goods and services. And this is the biggest prize of all - the chance to seize an economic future, securing our prosperity as a nation by reaping the benefits of the global transition to a low carbon clean economy.

The fact is that in the 21st century the global low carbon economy will be a key driver of our economic prosperity. Look at the way things have happened in the past when the steam engine, the internal combustion engine and the micro-processors transformed not just technology but the whole economy, the way society was organised, the way people lived. And now you should look at it this way, we are about to embark on a fourth technological transformation to low carbon energy and energy efficiency.

And in their wake - as before - will come a myriad of changes in the way we live, the way we move around, the way we will run our businesses, the things we produce and consume which will make the low carbon economy a new engine of productivity and economic growth.

Now globally it is already estimated that environmental industries, including renewable and nuclear energy, waste management, pollution control, energy efficient products and so on will be worth $700 billion by 2010, and that is equal to the size of the global aerospace industry. By 2050 the overall added value of the low carbon energy sector could be as high as $3 trillion per year worldwide and it could employ more than 25 million people.

So my goal is simple: I want Britain to achieve a disproportionately large share of these new global jobs.

Today our environment sector is flourishing, over 400,000 people employed, 17,000 companies, an annual turnover of £25 billion. We are already leading, as many of the companies here today will be testament to, in offshore wind, integrated pollution control, we are world leaders in energy control systems, carbon trading, water and waste management and environmental instruments and monitoring.

But the opportunities for the future are in my view even larger. If Britain simply maintains its share of global growth we could have over a million people employed in environmental industries within the next two decades. So building our own low carbon economy, and helping one to be built worldwide by achieving an international climate change agreement, vital to this, next year, offers us the chance to create thousands of new British jobs and hundreds of thousands of people will benefit.

As Britain was to the age of steam, California was to the age of silicon, so in the clean energy age I want Britain again to be a beacon of innovation and wealth creation.

Indeed just as America led the way in the industrial age, creating a mass of high paying blue collar jobs, I want Britain to lead the way in the environmental age creating new green collar jobs.

Now already many British companies are succeeding and they are growing in this field and I know many of you are here today. And I want to help more companies to grow, like yours have, to help them grow bigger and faster, developing and commercialising new technologies, creating jobs, reaping the rewards of export markets.

So let me set out the strategy that we propose to build low carbon Britain.

Our first priority is of course to provide the fundamental economic conditions for jobs and business success, economic stability, low inflation, competitive markets, an entrepreneurial pro-business culture. This government has built the foundations on which our prosperity over the last decade has been built. We will never put the foundations of stability at risk.

Secondly, we are setting a clear credible long term policy framework because we know that only a clear long term consistent policy framework will encourage businesses to make the investments we need and to accelerate the development of low carbon products and services.

Through the Climate Change Bill, that was piloted by Hillary Benn, who is here today, we are the first country to put into legislation a statutory cap on our emissions, five year carbon budgets set on the advice of an independent climate change committee providing the certainty we need long term for investors, business and consumers.
And under the Bill every new policy will be examined for its impact on carbon emissions, not just those which reduce emissions, but those which increase them. Where emissions rise in one sector we will have to achieve corresponding falls in another.

And within this overall framework we are also establishing long term low carbon policies across our economy. In energy we have committed to meeting our share of the European target for 20% of energy supply to come from renewable sources by 2020; in transport we are proposing that the EU adopt an ambitious target of reducing by 2020 average CO2 emissions of new cars to 100 grammes per kilometre, providing real new incentives for the development of the new low carbon engine technologies; in housing we have agreed a timetable for all new homes in Britain to be zero carbon from 2016 with new commercial buildings to meet this target in 2019. And it is by setting and holding on to these long term policies that we will drive investment and innovation in energy efficiency and in alternatives to fossil fuels.

But third, we want of course to reduce energy demand. We need to see a step change in the efficiency with which this country uses energy, not just to reduce carbon emissions, but because it can cut the bills of every household and business that is now feeling the squeeze of the higher energy prices. So our aim within a decade is that every household, able to do so, fits loft or cavity wall insulation, installs low energy light bulbs, uses low energy consumer goods, and every business is able to manage its energy bill through efficiency measures.

And building on our new one-stop shop for consumer advice and information on greener consumer behaviour, which started only a few weeks ago, I can announce that the government will shortly begin a new advertising campaign showing people what they can do today to reduce their energy and fuel bills - simple things like turning off standby and fitting new shower heads.

Over the next three years, 5 million more homes will benefit from discounted or free loft and cavity wall insulation, and another 3 million homes will get discounted or free energy efficient appliances. And we have now agreed with the main energy companies that by 2010 they will spend a total of £150 million a year to help their most vulnerable customers, including through social tariffs, trust funds, rebates and debt advice.

I think it is important to emphasise the importance of these measures. Making our homes energy efficient is not some green policy of interest only to enthusiasts for cavity wall insulation, it is the simplest most effective way in which families and business can now reduce their energy bills. And governments can help them. Altogether households that install insulation, have more efficient electrical appliances and use energy efficient light bulbs can save up to 20% of their fuel bills, an average of £170 a year.

So later this summer we will announce new incentives to help households reduce these energy bills still further. And in the autumn we will consult on a new suppliers obligation aimed at changing the way in which energy companies operate, incentivising them not to supply ever more units of electricity and gas, but to make profits from reducing and not just increasing demand.

The fourth element of our approach is a major drive to move to clean energy supply. For 200 years oil, gas and coal have supplied the British economy with a plentiful and secure energy that has powered our progress and our prosperity But over the coming decades we must move from this largely fossil fuel based economy to one primarily powered by low carbon energy, particularly of course renewables and nuclear and, when it can work commercially, carbon capture and storage.

Now at present around 8% of total energy supply in Britain is from low carbon sources: 2% from renewables, 6% from nuclear. In order to meet our global climate change targets, by 2050 virtually all energy for electricity and most of the energy used for heating, cooling and transport in our country will have to come from low carbon sources. And because we need to replace a third of our electricity generating capacity in the next 20 years, and most of the new plants will still be operating in 2050, we must therefore start this technological transformation now.

After extensive public consultation the government confirmed its view earlier this year that it will be in Britain's long term interest both to secure a diverse range of energy supplies and to reduce emissions, to replace our ageing fleet of nuclear power stations with new ones. And now under John Hutton's leadership we are taking the steps needed to make sure these plants get built.

Despite opposition from some, we are reforming the planning system to reduce unnecessary delays. The Nuclear Inspectorate is getting extra resources to make sure new plants will be saved, we have come forward with a plan to work with local communities on safely disposing of nuclear waste, and the Department for Business that John leads will make sure that British businesses and workers benefit as the new stations get built.

And today of course we are launching the next major element in our low carbon energy plan, and that is the consultation on a new renewable energy strategy.

Last year I committed our country to fulfilling our share of the European Union renewables target. This means that by 2020, increasing the proportion of our energy coming from renewable sources to 15%. Now we are setting out how we will achieve this, and let me just tell you this is a green revolution in the making. It will be a tenfold increase in our current deployment of renewables, a 300% increase on existing plans. It is therefore the most dramatic change in our energy policy since the advent of nuclear power and it will require an investment programme - and this is the huge opportunity - of around £100 billion over the next 12 years.

It will mean by 2020 renewables accounting for over 30% of electricity supply, 14% of heat supply, up to 10% of transport fuels. It will save an additional 20 million tonnes of carbon dioxide a year, it will reduce our gas imports by up to 16%.

And what does it mean therefore in real terms? Well first it will turn the North Sea and our other coastal waters into the equivalent for wind power of what the Gulf of Arabia is for the oil industry. This year Britain will surpass Denmark as the country with the highest operating offshore wind capacity in the world at over 400 megawatts. By 2020 we will have installed around 14 gigawatts, that is around 3,000 offshore wind turbines, meeting up to 50% of our renewable electricity. The North Sea has of course passed its peak in oil and gas supply, but it will now embark on a new transformation into the global centre of the offshore wind industry.

And yes, there will have to be more wind farms onshore too and we are determined that they are sited in the right, and not the wrong, places and that local communities will benefit from them.

We will also need to increase substantially the energy that we derive from waste and biomass. We will build new systems of decentralised energy, including micro-generation technologies like solar, micro-chip and ground source heat pumps, again with the benefits flowing to local communities and households.

And in the longer term we will need more tidal and wave power. Our environmental and economic assessment of a tidal scheme in the Severn, which could in itself supply 5% of the country's electricity needs, is now well under way.

Of course it will be for the private sector to make the investments in these technologies, and we want to encourage them. Today the government is setting out how right across the board we will get rid of the obstacles that have in the past held renewables back.

John Hutton will be announcing more details later this morning, but some of the other key elements on which we will consult that will help break down these barriers that have held renewables back include: one, raising the level of the renewables obligation and extending it to 2040; two, introducing financial incentives such as feed-in tariffs or equivalent mechanisms to bring on renewable heat, decentralised energy and micro-generation; three, removing without delay the barriers that currently prevent renewable generators connecting to the National Grid; four, changing the planning system to speed up renewable applications, requiring regional and local authorities to plan for renewables and giving local communities a real stake in them; and five, reducing the delays and the objections that have come to new renewable installations from the Ministry of Defence, from civil aviation and from shipping.

And because I know that the achievement of these targets needs more than a strategy on paper, it needs practical delivery on the ground. We will examine, as we are doing for nuclear, how government across Whitehall works to facilitate investment and to overcome whatever operational obstacles exist.

And in all this we want to ensure that the costs for families and for businesses remain affordable, with a clear focus on keeping prices down.

Now increasing our renewable energy sources in these ways, on this scale, will require national purpose and a shared sense of national endeavour. So today I want to launch a serious national debate about how we are to achieve our targets. And let me just say that the reforms that we passed in our Planning Bill yesterday in the House of Commons are absolutely essential to delivering them.

[Party political content]

Now the final element in our approach to building a low carbon Britain is to ensure that it is indeed British businesses and British jobs which can benefit best from the low carbon policies we put in place. We estimate that our renewables programme will on its own generate around 160,000 jobs, our new nuclear build programme will create approximately 100,000, and there will be many thousands more created from the energy efficiency measures I have just described. And the government is determined that as many of these as possible, and the millions of comparable jobs being created across Europe and the world, will be in Britain.

So we are going to work with our Regional Development Agencies and devolved administrations, but most of all with business itself, to identify key constraints in the supply chain and encourage British companies to overcome them. We will identify and correct the skills shortages that may impede the manufacture and deployment of low carbon technologies, we will work with industry on a new low carbon manufacturing strategy to ensure that we are equipped to be world leaders in securing value and jobs from the growth that we know comes in low carbon markets. This will include electric and hybrid cars, low carbon aerospace, low carbon construction along with the associated environmental services and finance.

And I can also tell you today that we will increase our commitment to supporting innovation in renewable and other low carbon technologies. Our aim is to make Britain one of the world's leading centres for alternative energy research and development.

Now that is why we are raising the Research Council's energy programme to £300 million over the next three years, we are creating up to £1 billion worth of R and D spending through the new private-public Energy Technologies Institute we have just created and is a world leader, we are incentivising new technologies through the tax system, for example with the R and D tax credit, lower rates of vehicle excise duty for cleaner cars, and the £400 million domestic environmental transformation fund will then help to bring new technologies to market.

We are also the first government in the European Union to launch a competition for a commercial scale demonstration of carbon capture and storage. Now that is essential, as you know, in a world in which coal and gas will continue to be burned. We are examining how we can accelerate the development and diffusion of electric and hydrogen cars, not only to provide low polluting alternatives for consumers, but to put the British automobile sector at the forefront of the global development of these technologies. And my talks with the car companies recently have proven to me that this is really possible.

And a key element of the proposals we made at the Jeddah oil summit last weekend was that Britain and other oil consuming countries should open our markets to new investment from oil producers, including sovereign wealth funds recycling oil revenues, so that they can invest in alternative forms of energy, including renewables and nuclear, giving oil producers what we need, which is a real stake in the future low carbon economy as well.

Now this is how across the economy, and across all the policies that government is responsible for, Britain is attempting to build a low carbon future. But let us be clear, building that low carbon future is not just something to do with climate change, it is not just an energy security issue, it is not just a part of our economic policy. It is all of these things and it is more. It is nothing less than the basis for our future prosperity as a country.

And let us also be clear, that if the British economy, British firms and the people of Britain are to reap the fuel benefits from this new low carbon future, we cannot ever rest on the laurels of past achievement. We will have to unlock the talents and the skills of our people, our companies, our workforces and our communities anew to lead the world.

The fact is that a low carbon society will not emerge from thinking of business as usual. It will require real leadership from government, being prepared to make the hard decisions I have talked about on planning or on tax rather than tacking and changing according to everyday polls. It will involve new forms of economic activity and social organisation and it will of course mean new kinds of consumer behaviour and lifestyles and it will demand the creativity, innovation and entrepreneurialism throughout our economy and our society which built us up as the first industrial power.

It is an immense challenge and all of us, government, business, civil society, individuals, all of us have a major part to play. But working together I have no doubt that this is a challenge to which the human spirit, the power of ingenuity and enterprise, these great qualities that have made Britain great and continue to make us great, I have no doubt that this is a challenge to which we can all rise.

Thank you very much.

ENDS

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