Yesterday (17 May) the UK government committed to a 50% reduction on 1990 greenhouse gas emission levels by 2025. This is very good for the development of the UK’s green economy and honours the recommendations of the Independent Committee on Climate Change. It represents another solid step towards the UK leading the third industrial revolution.
This outcome shows strong leadership because there appears to have been opposition in the cabinet from the Chancellor and Business Secretary claiming that this would hurt business. Certainly such a target will have implications for a handful of sectors in Britain’s post-industrial economy – and the Energy and Climate Change Minister has acknowledged the need to provide support for them. Such opposition from a vocal minority is inevitable and occurs around the world as part of the democratic process.
Instead of listening to the vocal minority, the Government has recognized the potential in jobs and wealth creation from the UK leading the world towards a low carbon economy. With today’s commitment the UK now leads all other nations by establishing legally binding targets beyond 2020. This creates “Long, Loud and Legal” certainty underpinning growth of the cleantech sector.
What all industry wants (and I have found this to be the case in discussions with leading companies around the world) is certainty. Companies are good at optimizing for whatever rules are set. Even though they may publicly oppose changes, what they really want is certainty. Why? Because with change comes opportunity that business is tuned to use for commercial advantage. What undermines this value creation process is uncertainty from politicians back-tracking and changing the rules – resulting in written off investments and destroyed shareholder value.
Today’s 2025 commitment is also a victory for process. The UK took the novel approach of appointing an Independent Climate Change Committee to make a considered and fact-based recommendation on future carbon budgets/targets. This is what they did and today their recommendation has been accepted and acted upon.
One concession that is worth watching, though, is the note that the government plan to review the progress of carbon reductions in early 2014 to see whether the UK is still aligned to goals set down by the EU's Emissions Trading Scheme, and may alter its trajectory should the country be off track with Brussels. Let us hope that this clause does not need to be enacted.
A good day of which the UK can be proud.