Businesses and investors urge MPs to vote for 2030 decarbonisation target
Two of the UK's leading business and investor associations have stated that a 2030 decarbonisation target for the power sector is essential to stimulate new growth in the economy on the eve of a crucial vote in Parliament.
The Aldersgate Group and the UK Sustainable Investment and Finance Association (UKSIF) have said the current lack of certainty is damaging critical investment in the UK's energy infrastructure.
Both associations have called on MPs to vote in favour of a target in the Energy Bill that would commit the UK to a near-carbon free power sector by 2030.
MPs will vote tomorrow on an amendment to the Energy Bill tabled by Tim Yeo MP and Barry Gardiner MP to ensure a target to decarbonise electricity, and a framework to deliver it, are in place by 2014.
According to Aldersgate and UKSIF, greater clarity from the Government could unleash the £110bn investment required to transform the UK's electricity infrastructure and drive wider economic benefits.
Both organisations view this as a good opportunity to put the UK firmly on track to becoming a world leading low carbon economy, boosting employment and stimulating new growth in the economy.
Executive director of the Aldersgate Group, Andrew Raingold, said: "MPs with an interest in promoting investment and jobs in their constituencies must vote in favour of the 2030 decarbonisation target.
"Businesses and investors have been loud and clear that such a target would not only reduce costs, but provide greater certainty for companies to invest in the development of UK supply chains and jobs. It's a pro-growth and pro-deficit reduction strategy."
Chief executive of UKSIF, Simon Howard, said: "A decarbonisation target would support the creation of a clear and stable framework for the long-term investment decisions which are vital for sustainable economic growth.
"There is significant investor appetite for the UK to be a global leader in profitable low-carbon energy solutions, providing the high-quality innovation and jobs that the country needs to ensure a future economic recovery. We call on MPs to recognise this and vote in favour of enshrining the 2030 decarbonisation target in the Energy Bill," he added.
In a joint statement the two organisations say that the Government's perceived support for the low carbon transition is being undermined by the possibility of a commitment to unabated gas in the power sector beyond 2030 and the absence of a specific decarbonisation target.
The Committee on Climate Change has warned that uncertainty is already damaging low carbon business development, capital allocation, infrastructure investment and innovation.
In addition, analysis by the CBI has found that although a third of the UK's economic growth in 2011/12 is likely to have come from green businesses, current policy uncertainty could result in the UK losing almost £400m in net exports in 2014/15 alone.
However, backing the Government's position, Secretary of State, Edward Davey said: "Everything in this Bill is based on the premise that we need to significantly decarbonise our power sector in order to meet climate targets.
"We secured a landmark agreement across the Coalition to treble support for low-carbon investment to £7.6bn in 2020, and we are reforming the market to provide the certainty required to attract investment in renewables, new nuclear, CCS and demand reduction.
"We have listened to views and added a clause to enable us to set a decarbonisation target for the power sector in 2016. No political party had this issue in their manifesto, and this will be a world first, an issue that this Coalition Government has addressed head on."