UK firms want EU climate policy retained, says Committee on Climate Change
The Government has been presented with a "very strong message" from the private sector, calling for European Union (EU) climate legislation to be retained post-Brexit, with the promised Industrial Strategy acting as an ideal vehicle to align policies to the low-carbon agenda.
That is the view of the Committee on Climate Change’s vice chair Julia King – the Baroness Brown of Cambridge – who suggested that low-carbon growth should act as a “thread” in the Government’s Industrial Strategy rather than a separate entity.
Speaking at a Financial Times Big Picture Summit in London on Tuesday (29 November), King said: “The very strong message from businesses is that they don’t want Government to start choosing what gets put into UK legislation from the EU, they want all of the climate change regulation, because they are familiar with it. They want it in our legislation and how they can maintain consistency.
“That message going into Government is very important and it needs to come in loud and clear from businesses. I think this is a really good opportunity for the UK, and make sure that [low-carbon] is a thread that runs through the new Industrial Strategy. Greg Clark doesn’t see low-carbon goods and services as a sector but rather as a cross cutting theme, but we do need that joined-up government.”
While King admitted that very few businesses were calling on the Government to “set the bar higher” in regards to climate action post-Brexit, the UK’s low-carbon business ambassador noted that the nation’s “very clear” climate legislation would direct businesses towards low-carbon action.
Alluding to the UK Climate Change Act and the recent approval of the fifth carbon budget – which will limit annual emissions to 57% below 1990 levels by the year 2032 – King suggested that UK policy would set the course for business action post-Brexit.
However, ongoing wrangles over the efficiency of the EU’s Emission Trading System (ETS) would lead some carbon intensive industries to face a “more complicated” path once the UK has officially left the EU, according to King.
Business and Energy Secretary Greg Clark has suggested that Britain's industrial strategy will seek to provide easier routes to market for new business models and tap into the benefits of innovation and competition to allow for the creation of more sustainable products and services.
Mood in the room
Speaking alongside Ikea chief Steve Howard and United Nations special representative Rachel Kyte – both of whom had called on businesses to be vocal with their political needs - King was joined on a panel by the global law firm DLA Piper’s UK head of environment Teresa Hitchcock.
With clients ranging from Fortune 500 enterprises to emerging companies, Hitchcock claimed that all companies are asking for at this stage of the procedure is a sense of political clarity as the nation leaves the EU, although she did suggest that stronger regulation would be key to pacifying these concerns.
“A lot of my clients are slightly nervous,” Hitchcock said. “They understand there are going to be changes and the uncertainty is going to be in something like the Habitats Directive and other areas that can’t be as easily championed by developers and construction companies. Clients are lobbying for clarity, you’d be a very brave corporate who lobbies directly for relaxation, it’s just not the mood in the room, but certainly they are wanting clarity – but there isn’t any yet.
“It’s a long time since we’ve been given the opportunity to shape some of these controlled measures, and whether we want to be in this position or not, we have to embrace the opportunity. I think regulation can be stronger to give more certainty and it must be matched by enforcement. Enforcement is creating an unnatural, rather than a level, playing field at the moment and this should be looked at.”
The insight provided from both King and Hitchcock matches the calls from business energy consultancy Inenco, which has pooled together businesses voices from a variety of sectors, all of which are calling on the Government to provide clarity on energy policy.
Inenco sent an open letter to Clark this week, calling for some indication as to how the energy landscape will shift over the coming years, with business energy costs set to rise by up to 25% by 2020 thanks to rising network charges and low-carbon subsidies.
“Businesses were hopeful that the Autumn Statement would deliver more clarity, from the future of the Carbon Price Support, to the cost of supporting low carbon technology beyond 2020, and were left disappointed at the lack of focus on energy,” the letter stated.
“There remains a strong sentiment of confusion amongst the community of business energy professionals. Ahead of the spring 2017 Budget, we ask you to consider the concerns of businesses and deliver a long term vision for energy policy with a clear framework of delivery, rather than more changes that businesses must respond to and implement.”
The panel at the Financial Times event was also quizzed on the role of carbon intensive manufacturing sectors in a low-carbon economy. With the struggles of Tata Steel still evident, some in the audience were worried that the low-carbon transition would slash at job opportunities in the UK.
Research released by the Scottish Government this week has found that low-carbon industries in the country generated around £11bn in turnover and supported 43,500 jobs in 2014. King suggested that the “fourth industrial revolution” of digitalisation was more likely to disrupt the job market than low-carbon growth, while Ikea’s chief sustainability officer Steve Howard believed that reframing the transition from a carbon reduction necessity to a growth opportunity would get all sectors on board.
"There’s no jobs on a dead planet and even the unions are on board with climate now because they see it as a net-job creator, there’s money to be made and it is job intensive,” Howard said.
“The challenge is, there will be different jobs and there’s a role for Government and long-term planning to create those jobs and develop skilled people in the new green economy. If you frame [the conversation] to consider what the future of products and services will look like as a result, alongside the regulations rhetoric, then you can get businesses much more excited.”