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Green Or Growth Is A False Choice, Says CBI Chief
11th July 2012
The Confederation of British Industry (CBI) has published a report, entitled "The Colour of Growth: Maximising the Potential of Green Business", which calls upon HM Government to adopt a smarter, more consistent approach to energy and climate change policy.
New research by the UK's leading business group shows that the UK has the ability to become a global front-runner in low carbon products and services, which could be adding £20bn. extra in annual GDP by 2015. But the CBI warns that the Government needs to take the right action to grasp this potential and avoid damaging the competitiveness of key industries.
John Cridland, CBI Director-General, says, "The so-called "choice" between going green or going for growth is a false one. We are increasingly hearing that politicians are for one or the other, when in reality, with the right policies in place, green business will be a major pillar of our future growth.
"With something like a third of all our growth accounted for by green business last year, the UK could be a global front-runner in the shift to low-carbon. In the search for growth, we're digging for goldmines - and one of them is green.
"Get our energy and climate change policies right, and we can add £20bn extra to our economy and knock £0.8bn off the trade gap, all within the lifetime of this Parliament."
The UK grew its share of the £3.3 trillion global green market by 2.3% in real terms in 2010/11, reaching £122 billion and accounting for around 8% of GDP, and CBI analysis suggests that green business may have accounted for over a third of all UK growth in 2011/12. Across every sector and region, green business activity now employs around 940,000 people in the UK, with two thirds of these jobs located outside London and the South East.
Green goods and services are also a strong contributor to UK trade, and the biggest links are to fast-growing economies like China, which buys 7% of UK green exports. By the end of this Parliament the contribution from green business could potentially cut the UK's trade deficit by half. Investing in a balanced mix of low-carbon energy sources should also help to ensure the UK's long-term energy security and affordability by reducing exposure to global energy price rises and fluctuations.
Mr Cridland said, "The UK has made a great start tapping into green economic opportunities but mixed signals from the Government are setting the UK back. If we can't be sure that the policies of today will still be the policies of tomorrow, we simply won't build business and consumer confidence or secure the investment we need.
"We must cut green tape and pay attention to competitiveness. There is no need to create losers in the low-carbon transition, but at the moment we are endangering our energy-intensive businesses. If we don't take a smarter policy approach, not only will we miss out on growth opportunities, we could also undermine the very industries that should be at the heart of our low-carbon economy."
The CBI's report warns that the Government's current approach risks the UK missing out on reaching its potential. A green business slowdown could cost the UK £400m in net exports in 2014/15, and poor policy choices could further undermine sectors which are crucial to any low-carbon transition, such as energy-intensive industries.
The CBI is calling for strong political leadership and a more coherent, strategic policy framework that focuses on building confidence, reducing complexity, and strengthening competitiveness. The confederation wants the Government to build green business into any future industrial strategy. It is calling for a new approach and attitude from government which is more strategic about identifying UK strengths and maximising value from low-carbon supply chains in order to ensure sustainable growth over the longer-term.
Mr Cridland added, "Good green policy has to be good industrial policy too. We should work out where we can be world leaders, and focus on building our competitiveness and getting into those supply chains.
"There is a role for the Government to directly leverage investment in priority areas. The Green Investment Bank is a great idea, and we should get it borrowing as soon as public finances allow. But it's not the only show in town, and green investments should also be good candidates for Treasury tools, such as credit enhancement."