What a let down

michal | 10 years ago

Markets and businesses – environmental or otherwise – work best when the rules of trade are clear; when the competitive playing field has been flattened out by the heavy rollers of executive decision, legislative and judicial clarification.

Some would say that one of the main purposes of effective Government, whether in tackling deficit reduction or climate change, is to plan for our collective futures and to do this by bringing the objectives of clarity, consistency and pragmatism to its policies.  If such time honoured principles are applied to policy objectives, then collective buy in should result and we should all know where we are heading so that we can plan for a better future. But when these principles are lacking, and when government policy swings like a pendulum, markets and investors and citizens get spooked.

One would have thought that at an economically depressed time such as the present – when growth is at an absolute premium and a ‘lost economic decade’ of stagnation may be upon us – the Government should be straining every fibre to bring clarity to its policies, to stimulate fresh opportunities for growth and to provide the optimum conditions for new businesses to thrive, particularly green businesses……and yet…… there is a growing sense of dismay that some within Government (not least at the Treasury) believe that protecting the environment is incompatible with sustainability and economic growth.

The Germans and anticipate their utter disbelief. They are steadily driving towards 40% of their energy from renewable (the UK is at 7%) creating 250,000 jobs per year in the renewable energy sector alone. The global green economy is growing and is at least as large as the pharmaceutical and aerospace sectors. According to BIS, the world market for environmental goods and services was worth US$500bn even back in 2006 and was estimated to exceed US$600 bn in 2010 (see: http://www.bis.gov.uk/files/file34688.pdf).

Just like the rest of us, Governments are prone to lapses and re-thinks. Most of us can remember instances where business opportunities did not materialise because the relevant Government department had a last minute rethink and put a halt to new laws and regulations which could have stimulated business opportunities such as cancelling the introduction of the HIP pack. The occasional volte face may be understandable. However, the Coalition is turning environmental policy misdemeanours into a habit.

There is a growing sense that the Coalition cannot be trusted with the environment or with environmental business and that is a source of enormous regret and disappointment.  So lets examine their record so far.

One of the most striking examples of the Coalition’s incompetence is in relation to renewables where the Government changed the goalposts on the feed in tariff for solar, setting the tariff too high in the first place and then cutting it at extreme short notice (and before its review into the matter was concluded – an oversight which shows that the decisions had already been made and which, unsurprisingly, is being challenged in the courts).

These errors are having real consequences for real people – destroying thousands of jobs in the UK green sector (with 4,500 job losses under consideration at Carillion due to the slashing of solar subsidies at a time when we most need these jobs.

Many are critical of the Coalition for introducing potentially conflicting goals such as localism – this was described at a recent Castle Debate on Waste Policy as ‘unhelpful’ because it could prevent the development of strategic regional waste management infrastructure (such as material reuse centres) in favour of small scale, uneconomic local facilities, which ultimately drive up the cost of recovering materials from waste because economies of scale cannot be achieved.

The fanfare that greeted David Cameron’s promises made just 18 months ago – that this would be the ‘greenest Government ever’ has faded to nothing. The evidence that all is not well with the Coalition’s green policies has been building for some time:

  • George Osbourne has been making increasingly sceptical and hostile statements about environmental protection.
  •  In his 2011 Autumn Statement Osbourne said: “If we burden [British businesses] with endless social and environmental goals – however worthy in their own right – then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer”. He added: “We will make sure that gold-plating of EU rules on things like habitats aren’t placing ridiculous costs on British businesses”.

These sorts of comments may seem convenient but are they intellectually defensible? They are certainly antagonistic statements, but they are not considered arguments. Do we ever gold plate our environmental laws? It is absolutely acceptable to consider the costs of environmental regulation in an age of austerity, but in all fairness and in the interests of consistency, the resulting benefits of a cleaner, safer environment and more sustainable economy have to be evaluated as well. Osbourne has little to say about this. If costs really are too high, which habitats, say, would Osbourne be prepared to sacrifice, and has he considered the consequences of what he is saying?

The Treasury’s hostile rhetoric about the environment is being heard in all quarters:

  • The Government has already clashed with the National Trust over the sale (aborted, thankfully) of the nation’s forests.
  • The Coalition was recently lambasted by green campaigners including Jonathon Porritt, in a letter this month to a Sunday newspaper which stated that: “Following the Chancellor’s Autumn Statement, we can say that the Coalition is on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born.” 
  • The wider green movement in the UK has many millions of supporters, particularly amongst young people inspired by groups such as the Ellen MacArthur Foundation and Think 2050. Many ordinary people who support policies which protect and enhance the environment and sustainability will be angered by inflammatory comments issuing from the Treasury.

In summary, the shortcomings of UK (make that English) environmental policy and regulation cannot be blamed on the economy, the deficit, Sarkozy or Merkel. Policy ultimately comes down to people of influence who either use their power benignly or malignly. The path that we are travelling down is due to people in power making the wrong choices.

Pressure will build on David Cameron to show leadership on the environment and to restore some faith. His first key statement on the environment since becoming PM is now overdue.

About the author

michal

mwc_michal@morganwalsh.co.uk'