The demise of DECC: What next for the UK’s green business prospects?

As the dust settles on the shock announcement that DECC has been axed and merged into an expanded business department, attentions have inevitably turned to what the transfer of power means for the green economy and what opportunities and challenges will arise from the new regime.

The untimely demise of DECC was met with consternation from senior politicians and environmental groups, with concerns raised that climate change could be slipping down the agenda under the new government. Many triumphs were achieved during its brief lifespan as a Government ministry – UK carbon emissions tumbled and investment into renewable and low-carbon generation reached new peaks, albeit before tailing off slightly in the past couple of years.

But despite initial fears and anxieties, the formation of the Department of Business Energy and Industrial Strategy can be seen as positive move for climate policy. Moving energy and climate change issues into the business sphere could help align business strategies to low-carbon operations; as a chance presents itself to embrace these issues within a powerful department that’s developing an industry strategy to forge a genuine low-carbon business sphere.

A host of well-respected organisations have already aired their views over the abolishment of DECC, and while reactions from the likes of Ed Miliband reached a state of fevered-anger, businesses are aware that opportunity can be carved from chaos and disappointment.

The Solar Trade Association’s chief executive Paul Barwell noted that the new “joined-up” department could “provide huge opportunities for solar in the UK, as can be seen in many countries across the world”. Elsewhere, WWF UK’s chief executive David Nussbaum claimed that the merger could create a “real powerhouse for change” by embedding low-carbon infrastructure and climate change action into the business sphere.

A more detailed round-up of industry reaction is available here.

New Leadership

However, it remains clear that in order to pave this opportunistic path, the political figures in charge of both the merged department and Defra will need to remain committed within a Government that’s main aim is to create a springboard to depart the EU.

So, what of the environmental records of the new ‘leaders’ of the green departments? Former Communities Secretary Greg Clark was warmly received as an “excellent appointment” as chief of the newly merged BEIS department, having arrived into the role with a strong environmental pedigree behind him. Between 2008 and 2010, he was Shadow Secretary for Energy and Climate Change and showed strong views on green issues throughout his tenure. 

Meet the ministers tasked with driving Britain’s green economy

During this period, Clark recognised the fantastic opportunities of the low-carbon economy transition, along with the emissions saving potential of technologies such as Carbon Capture and Storage and energy efficiency measures. Furthermore, Clark has on a number of occasions made reassuring remarks about UK energy policy, frequently insisting that proposals to decarbonise the UK economy should never “been seen as an irrelevance” or treated as “some sort of sideshow or distraction.”

In his opening statement, Clark appeared keen to calm concerns about the priority given to tackling global warming. He said: “I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading government’s relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change.”

Meanwhile, the appointment of former Energy Minister Andrea Leadsom to the role of Defra Secretary will undoubtedly be met with mixed reaction from the green community. Having gained vast experience in a ministerial climate change capacity, the failed Conservative leadership candidate could be witnessed as a figure already in tune with environmental concerns.

Indeed, she has already spoken of a “shift in direction” for future electricity generation and storage and re-iterated that there will be no deviation from long-term targets regardless of the Brexit vote.

However, concerns will remain over Leadsom’s genuine commitment to the green agenda – having reportedly questioned existence of climate change before accepting the energy minister role, and showing positivity towards hydraulic fracturing while calling for the abolishment of farming subsidies.

Additionally, she has given “no apology” for the recent raft of highly controversial changes to energy policy – including the slashing of subsidies and scrapping of key energy efficiency schemes – in an apparent effort to reduce costs.

Green outlook

No matter how divided opinions may lie over the credentials of the new appointments, it remains abundantly clear that both ministers face a monumental task in the upcoming months and years.

In a week that began with stark official climate change risk assessment report that revealed that the UK is ill-prepared to deal with climate-related consequences, committed action will be necessary to protect the UK from worsening flooding and heatwaves.

Moreover, the magnitude of climate change risks and opportunities could be affected if legislation and funding from the EU is cast aside or altered, with the matter becoming increasingly challenging as spending budgets for both DECC and Defra have been cut during recent Spending Reviews.

The new BIES department also faces formidable problems getting the UK on track with its long-term heat and transition emissions reductions ambitions.

Thankfully, a number of already ingrained policy commitments will force the Government to take serious action on climate change. One of the most pressing items on the environment agenda is the ratification of the Paris climate deal, which was signed earlier this year. Government action will be held accountable to the Sustainable Development Goals goals announced in September 2015, while the 2008 Climate Change Act obliges the Government to cut greenhouse emissions by 80% by 2050.

With the 5th Carbon Budget now in place, the UK Government and department leaders must now reinforce the commitment with a clear, post-Brexit strategy in order to keep the green economy high on the national agenda.

George Ogleby

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