Aldersgate Group outlines key policies for a booming low-carbon economy

A coal-closure programme, new environmental taxes and natural resource stress-tests are among the ideas proposed by green NGO the Aldersgate Group to help decarbonise the UK economy while also boosting growth.

The solutions have been collated by the sustainability lobby group for its latest report – An Economy That Works.

Aldersgate Group chair Peter Young said: “This new report brings exciting new policy ideas from authoritative experts to deliver key benefits for our future economy, environment and society.

“If the UK economy is to prosper in the long run, the next Government needs to adopt synergistic policies like these to strengthen environmental and social drivers at the heart of a sound economic plan.”


1) Retiring sub-critical coal-fired power stations

– 100% of the UKs coal generation is from subcritical power stations – the least efficient and most polluting form of coal-fired generation.There are nine of these power-stations left in the UK providing19GW of capacity. 

– Ben Caldecott of Oxford University’s Smith School of Enterprise and the Environment argues that shutting these down is doable, and “would undoubtedly make a significant contribution to international climate change mitigation efforts.”

– It would also generate significant environmental and health benefits, and help induce new investment into the UK energy sector, helping to solidify and extend the economic recovery into the next parliament.


2) Reaching zero-waste with environmental tax reform

– Environmental tax reform (ETR) is the systematic changing of taxation, so that a greater proportion of revenues comes from pollution and the use of scarce resources, thereby giving a price signal for their reduction. 

– Prof Paul Ekins of the UCL Institute for Sustainable Resources argues that ETR, if efficiently implemented, can lead to increased employment, and sometimes small positive impacts on GDP, while reducing waste and pollution. It can also stimulate green innovation and new industries.

– The UK has had some success in this area with the landfill tax which has raised £10bn since 1998 and cut landfill waste by around 25%.


3) Stress test natural resource risks

– As has been highlighted by the UK’s Natural Capital Committee (NCC), accelerating declines in natural assets are increasingly threatening the resilience of the UK economy and businesses.

– To help with this, the government should initiate a new natural capital ‘stress testing’ exercise, to evaluate economic risks associated with natural capital depletion, mirroring the stress testing approach used in the UK banking system.

– This is the method of evaluating the ‘health’ of individual banks in terms of their capacity to maintain lending under a range of future adverse economic scenarios.

– Environmental versions could relate to changes in specific UK and international natural assets (e.g. fish stocks, water and forests) and relevant pressures (e.g. extreme weather events, global warming and population growth).  

Brad Allen

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