Community dividend: Changing our relationship with energy

Earlier this week I was asked to write an article about Labour’s Energy policy should look like in 2015.  I’ll post my thoughts on that when the article is published.  But in the course of my research, I revisited an article I wrote a couple of years ago for a collection of essays on the priorities for a low carbon transition on the Policy Network’s Politics of Climate Change blog.

In my contribution, I argued that we need to change the relationship citizens have with energy by giving communities a stake in energy generation. The analogy I drew was with the way in which changes to home ownership in the 1970s and 1980s improved our housing stock.

“Taking housing as an analogy, changing the ownership of our housing stock during the 1970s and 80s, increasing the number of owner-occupiers, was the solution to modernising our homes. As we move towards more renewables, a similar change in the ownership of our energy system could help modernise our energy system – introducing  a ‘community dividend’ so that communities can ‘own’ a stake in energy production, perhaps in return for a fast track planning process or as a new version of planning gain agreements. Owning such a stake could enable communities to share in the profits and help tackle fuel poverty. But, more importantly, just as home owners make decisions about their homes for reasons not just financial, a community stake could also help change the role and perspective of energy companies – taking their long-term responsibilities for the energy infrastructure, their charging structures and their impact on the environment more seriously.”

It still makes sense to me.  The original article is here.


Carbon budget compromises put the economy as well as the environment at risk

After many weeks’ pressure from environmental groups and amidst much fanfare from Downing Street, the Tory-led Coalition Government is now expected to sign up to a compromised version of the Committee on Climate Change’s recommendations for a fourth carbon budget. The last minute caveats that have been introduced give the UK a get-out clause that allows targets to be abandoned if other European Countries backslide on their emission reduction targets and promise support for carbon intensive industries in the meantime. This might seem a reasonable compromise in order to heal the rift in the cabinet and get the carbon budget agreed, unfortunately it offers little help to the people of Britain facing escalating oil prices, fails to give the right signals to low-carbon investors and risks us loosing the main benefits of pressing ahead with this green industrial revolution.  Most worryingly of all, it demonstrates how little this government really understands about the importance of a low-carbon future for the UK’s economy.

The idea behind the caveats is easy to understand – at a time when growth is the priority and cutting red-tape is your focus, why would you want to burden UK businesses with additional regulation?  Making sure that our economy remains on a level playing field with the rest of Europe is a reasonable thing to do, right?  Well only if you think that legislation that helps move us to a low carbon economy before others is a burden or competitive disadvantage.  But the evidence suggests otherwise. DECC Minister Greg Barker pointed out, shortly after the election last year, that the global market for low carbon goods and services is currently valued at £3.2 trillion and estimated to grow to over £4 trillion by 2015.  But we will be competing with the rest of the world to get these industries and jobs. Recent research by Defra has also found that when the food and drink industry operate more sustainably – using resources more efficiently and creating less waste – costs can be driven down, allowing UK businesses to compete more effectively in the global market.  While this is unlikely to be true across all sectors and there will undoubtedly be some losers in the move to a low carbon economy, the Global Climate Network have assessed that the move will result in a net gain in jobs.  Far from being a burden that makes us less competitive with the rest of Europe, surely legislation that encourages us to be ready earlier will give us a competitive advantage when it comes to winning these jobs? Wind Turbine manufacturer Vestas seemed to think so earlier this week, when they told the government that the 2000 jobs they hoped to bring to the UK would only come through if they could see a genuine commitment to low carbon industries.

The caveats also suggests that the government still hasn’t understood that a low carbon economy is also the most resilient future economy for the UK.  There is growing evidence that thankfully the markets have got it though.  For instance, the recent research by A.T. Kearney which has found that greener businesses are currently able to access capital at much more favourable rates precisely because they are assessed as being exposed to fewer risks.  A perfect if surprising example of this in action is the way in which the organic food market has survived the economic downturn so successfully because the industry has been more insulated against fluctuating oil and food prices. And the Government’s own research has found that the UK’s low Carbon market defied wider market trends in 2009, to grow by an average of 4.3% while other sectors were contracting.  The Committee for Climate Change’s recommendations are trying to steer us on a clear path towards these calmer waters but the government’s caveat risks the economy running adrift again and again in the future.

But perhaps most importantly, the caveats shows how little the Government understands about the scale of the change needed.  The caveats makes sense if you think that building an economy for Britain in the 21st Century is about gently balancing the advantages of the old oil-dependent economy with the opportunities of the low carbon future.  But as a net-importer of oil and with oil prices being predicted to reach as high as $195 a barrel by 2020, there is a very real prospect that if we keep our dependency on oil then food and transport will become unaffordable for many people in the UK.  Unless the government is committing to massive and long-term public subsidies for oil-guzzling industries or citizens, to keep the country fed and on the go, they need to wake up an realise that we are facing nothing short of an industrial revolution here.  Arguing that we can’t afford it in the current economy is like the business that stuck to typewriters because computers were so much more expensive. The Government’s caveats to the carbon budget might quieten down some loud screams from the industries that aren’t ready for this revolution, but they might as well be backing the slide-rule industry.  In enacting the compromise, the Government will be will be turning their back on the challenge of our generation and asking our children to compete in the 21st Century with an economy built for the 18th Century. The Cabinet might think that the Committee for Climate Change’s recommendations are all about caring for the environment.  In truth, they’re very much about the UK’s economic success.




Where did big red and green come from?

I’ve always been interested in the environment.  Having trained as a scientist, I’ve been conscious of the threat of climate change for a long time.  But it I’m being honest, I’ve never really found the environment movement, nor the ideas they’ve been pushing forwards, particularly appealing. Apart from the ‘hair shirt’ element of their ethos (I like my home comforts thank you), I’ve never really bought into the idea that a retreat to nature would help things.  Just as I’m pretty keen on the antibiotics and modern sanitation that mankind has invented to help us overcome nature (and premature death), I also tend to think that more not less human ingenuity will help us overcome the environmental problems ahead.  With this view in my head, two things happened that helped shape my thinking to come up with the concept of ‘big red and green’ ideas.

Firstly, I was at a meeting organised by Progress (a group that is part of the Labour Party) looking at what the environment means for the Labour Party.  I was struck very strongly by the realisation that although the in Labour Party we have our own distinct views and values on almost everything, when it came to talking about the environment, my comrades were using the same words and perspectives as the those in the environment movement.  When we talked about social justice in the context of climate change, our ambition was to making sure that the poorest people weren’t worse off than they are now.  But, as a party of change I couldn’t help but think that our ambitions had been curtailed somewhat if the best we can hope for out of environmental action was the status quo – why, when it came to the environment had we dropped our ambitions for social progress?  The environmentalists’ talk of safeguarding, protecting and conserving just didn’t make sense within a party motivated by fairness, justice and a better future.

Secondly, after a couple of years of writing blog pieces and asking questions that pushed this viewpoint, I was given a copy of a book called ‘Breakthrough – the death of environmentalism’ by Michael Shellenberger and Ted Nordhaus.  To be more precise, the book was passed to me in a brown envelope under the table with a naughty look from a colleague at a SERA executive meeting.  If you haven’t read it, an essay outlining the central themes of the book is here.  In short, Shellenberger and Nordhaus argue that the environmentalists’ narrative is wrong.  Far from climate change being a tale of man’s fall from grace, it’s a story of ignorance and inappropriate technology and that the solution will be found in more, cheaper, cleaner technology.  Suddenly, in this illicit book, I had found others who shared my perspective on the environment.

Put together, these two thoughts turned into the concept of ‘big red and green’ thinking. Green, because we have to be more sustainable; Red because only progressive ideas will deliver the better, fairer future we on the left want; Big because the challenges ahead are huge – tackling climate change is no mean feat, but doing it while still improving the quality of people’s lives is massive.

Some people say it can’t be done, that we have to accept that future generations will have a lower quality of life than we have.  I say I’m not ready to give up yet.