Will a shortage of green investment leave the U.K. behind in the race to develop clean tech?
With “green stimulus” all the rage this side of the Atlantic too, there’s a fair amount of interest in a) how much we’re going to spend and b) on what.
British Prime Minister Gordon Brown, savior of the world and (apparently) originator of the whole green-new-deal concept, would, you might think, be anxious to be sporting a particularly large package. Sadly, the money’s already been spent — and reprinted and spent again — stimulating a dead horse. Currently obsessing the nation are bankers’ bonuses and particularly the pension of “Fred the Shred” Goodwin of the Royal Bank of Scotland, who has become the main lightning rod for all public and government wrath about the banking fiasco. (Apparently a picture of Fred Goodwin “enjoying himself” would now be worth £30,000 [$43,000] to a paparazzo, easily trumping Britney and up there with Brangelina’s kids. This all seemed quite funny until a couple of days ago when vigilantes attacked his house. Security advisers are now advising all bankers to adopt a low profile. Strange days indeed.)
The other focus for rage is the upcoming G20 summit in London on April 1; protest group G20 Meltdown is leading the charge with a mixed anti-capitalism and sustainability message. They’re even paraphrasing Obama: “Can we make capitalism history? Yes we can!”
Anti-capitalist rage is a challenging context in which to launch a market stimulation package, and sure enough, Brown’s plans are wilting fast. With a failed auction of gilts last week, he is managing expectations in the run-up to the budget, and we are not to hope for anything beyond what was promised back in the autumn. Of the £3 billion [$4.3 billion] then announced to rescue Britain from the economic abyss, the official claim is that £535 million [$765 million] will go on green stuff. Sounds impressive, perhaps, but the government’s own environmental audit committee is not convinced it’s up to the job. Much of the money, they say, is not new, or is brought forward from 2010/2011 and will then be clawed back. The only big lumps of new wonga will go on 200 new train carriages, and £100 million [$143 million] for home energy efficiency.
And given the shockingly poor energy performance of the U.K. housing stock (source of 25 percent of our CO2 emissions), it’s questionable what difference it will make. By 2050, when we are to have achieved the 80 percent reduction in emissions set last year in the Climate Change Act, 80 percent of those homes will still be with us. So that’s about 20 million houses to tart up, with about £5 [$7.15] each. It’s a tiny sum compared to the £2.3 billion [$3.28 billion] to be spent bailing out the country’s car manufacturers, but at least that package has carbon reduction in the mix, largely because it’s part of a European scheme and they take the practicalities (like actually doing something) a bit more seriously.
So, sadly, the forecast is rather bleak for a green boom over here. By 2011, with the public finances falling off a cliff, whatever investment in infrastructure, skills, and R&D we’re able to squeeze out of the system will be largely over. Private investment seems to be pulling out too — witness Iberdrola’s recent decision to cut 40 percent of its investment in British wind farms, a state of affairs sufficiently worrying for ex-BP chair Lord John Browne to warn that the U.K. will not meet its green energy targets without state intervention. In all, it’s a fair bet that Britain will be — once again — left behind in the race to develop low-carbon energy and clean tech. And the winners? Europe and the U.S.
Of course, big money is not the only solution. No one ever said “massive government intervention is the mother of invention,” and clean tech doesn’t have to cost a fortune. One advantage of the current turmoil is that it opens up opportunities for new ways of thinking and doing to rise quickly to the surface. Lots of people are just getting on with it and coming up with the products and services that will both get us through this mess and be part of the life we’ll have to lead in the future.
At Forum for the Future, we’ve been working with HP and The Financial Times to surface a few of those products in the FT Climate Challenge. Chosen by the likes of Richard Branson and Eileen Claussen from over 300 entrants, a set of five innovations with the potential to make money and do some good in the world is currently up for a public vote and a $75,000 prize. Which do you fancy: A solar-powered cardboard stove? An energy-saving hub cap? A dietary additive to reduce the methane in cow farts? Who says tackling climate change can’t be fun, profitable, and inspiring? Vote now; the polls close on April 1.