Environment industry suffers as UK science goes underfunded

An integrated approach to sustainable business is required to prevent the UK environment industry slipping behind its overseas rivals, according to research from the Economic and Social Research Council’s (ESRC) £15 million Global Environmental Change Programme (GECP).

The Programme claims that ignorance of the role of R&D is preventing the introduction of environmental policies that could encourage innovation, particularly in sustainable energy technology and hybrid vehicle sectors. It also urges the UK Government to introduce more green taxes in order to encourage the development of new technologies.

“Greening has not yet reached the heart of the innovation process in British companies,” said Dr Frans Berkhout, Director of the GECP. There are tremendous untapped opportunities in a period of rapid technological change. Here, there is a strong role for Government. Businesses respond to market signals and incentives. At the moment, there are few economic incentives to encourage businesses to treat environmental costs seriously. Government should be setting tough strategic goals backed up by strong regulation and an integrated set of incentives. Despite globalisation and liberalisation, Government can still have a big influence in guiding and enabling innovation’.

Central role for R&D

The report claims that ignorance of the role of R&D leads many studies of the costs of addressing environmental problems to over-estimate those costs, under-estimate the value of R&D and provide excuses for delays in implementing environmental policies that could help drive the innovation process.

The sectors suffering from this lack of investment in R&D include, the report says, sustainable energy technologies, hybrid and electric vehicles and efficient technologies for established industries, such as the paper production industry.

“Public and commercial investment in R&D in the UK is very low by comparison to other OECD countries,” said Professor Dennis Anderson, former chief economist of Shell and Fellow of the GECP. “This means, for example, that despite its commitment to tackling climate change, the UK spends less per person on energy-related research than any of our competitors. We have already lost our leading role in wind power technology, and we are now set to lose out on vital new sustainable technologies such as fuel cells and solar power.”

The role of green taxation

Government has a major role in encouraging the development of new technologies by the introduction of green taxes, the report says.

The research claims that the UK could reduce its emissions by 60% by 2040 without great economic disruption while creating up to one million more jobs. “There is strong evidence to show that environmental taxes can produce benefits well beyond their primary aim,” said Professor David Pearce, Director of the ESRC Centre for Social and Economic Research on the Global Environment. “While the main aim may be to reduce pollution or to encourage new technologies, other unintended benefits can be just as important. Reducing CO2 from road traffic, for example, also reduces traffic noise, social severance, air pollution, accidents and congestion. If governments could appreciate the multiple benefits to be obtained, perhaps they would be less inhibited about using these measures.”

Environment and work

GECP research shows that despite public goodwill towards the environment, most people feel constrained in their ability to address environmental issues at work.

Surveys of hundreds of managers and shop floor staff in small businesses in the Midlands showed that a few businesses are actively pursuing a sustainable agenda, usually because of commitment from the owner or senior management. But in the main, an absence of economic incentives, the rarity of full management commitment to ‘greening’, and weak environmental regulation means people do not put their beliefs and knowledge into practice.

An integrated approach

The research concludes by calling for an integrated approach to sustainable business, with environmental taxes, such as the now-abandoned fuel tax escalator, being used by the UK Government to stimulate innovation, such as fuel efficient cars.

The report criticises the fact that the annual increases in spending on the NHS announced in the Budget last week are more than the total annual expenditure on science in the UK. Investments in science and innovation can be one of the cheapest ways of protecting the environment and of competing in global markets, the report claims.

“We are now at a critical moment’ Dr Berkhout said. ‘Having made a good start, there is a huge opportunity for the Government to reduce pollution, spur business innovation and create jobs. With clean technologies presenting one of the fastest growing global markets, the UK must not miss the green wave. Bringing the environment to the heart of science policy will be good for British science and good for UK plc.”