Citola Blog
The Economics of Climate Change
The UK Secretary of State for Energy and Climate Change, Chris Huhne, gave a speech today titled ‘The Economics of Climate Change’ where he set out the key points about the economics of climate change that he believes are crucial for the UK in the future.
In the speech he stated that the UK can’t afford another credit crisis and must move towards “a path that can deliver a dynamic, vibrant economy that is ready to compete in the next global growth sector.” Namely, the UK must move toward ‘green growth’.
“I believe that green growth – investing in low-carbon technologies, industries and infrastructures – is the best way to rebalance our economy and build a better future for Britain. Green growth boosts productivity, innovation and efficiency. It creates new markets, and builds investor confidence and stability. And it is in the UK’s direct economic interest to encourage it,” said Huhne.
The four compelling reasons Secretary Huhne outlined of why the UK needs to encourage ‘green’ growth include:
Opportunity
“A low-carbon economy presents an opportunity, not a cost.” Investment in a clean energy future should not be mistaken for a cost to the economy and can be strong driver of economic growth by increasing demand and creating new sustainable supply.
Resource Efficiency
A low-carbon economy is more resource efficient and uses less energy and fewer resources per unit of Gross Domestic Product (GDP).
As stated in the 2011 HM Treasury report, ‘The Plan for Growth’, Businesses in the UK can save up to £23 billion a year from using raw materials, energy and water more efficiently.
“Companies realise that locking in high-carbon technology is a risk for the future. Sticking with yesterday’s fuels could be tomorrow’s headache. With rising energy prices and finite supplies of fossil fuels, not many want to bet against low carbon,” Huhne stated.
Economic Resilence
Green growth can protect the UK economy from price shocks from global events that effect oil, gas, food and commodity prices.
“We should head off the challenge of price and supply insecurity by getting off the oil hook. That way we can protect our consumers from high prices, and our economy from price shocks - which can not only impede recovery, but trigger recessions,” said Huhne.
The Time to Act is Now
Green growth is in the direct national interest of the UK who cannot afford the risk of being left behind in the global marketplace.
“Profound technological shifts favour countries that are well prepared. Change first drives productivity growth in the innovating sector. Lower prices for low carbon equipment then drives greater investment, and production is increasingly re-organised around the new technology.”
In conclusion, Secretary Chris Huhne summaries his vision for the UK as becoming a global leader in green growth able to capitalise in the large and liquid environmental markets.
“We (the UK) need a vibrant, new economy. One that is resource-efficient. That saves money. That boosts productivity… With dynamic low-carbon markets driving the products and processes that will build the future.
Delinking carbon and growth is the biggest structural shift in the global economy for decades. The most important since the information revolution. And we are doing it.
In Britain, we have grown by 48% since 1990. But our carbon emissions have fallen by 28%. We are already showing the way. The future will be about green growth. We need resourcefulness, not resources. Respect for nature, not rapaciousness. Renewal, not retreat.
Our low-carbon economy will be more efficient, more competitive, and more resilient.
By getting off the oil hook, we can deliver clean, green growth. We can offset fiscal tightening and turbocharge jobs. And we can make our economy more secure.
We will face stiff competition: green growth is the hottest ticket in town. But no-one ever won a race by starting last or running slowest. Let’s get going.”
The vision is sound, now it is all about the execution and maintating the focus over-and-above any short-term political and economic agenda.
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