Going Green Could Add £20 Billion to UK Economy

New research conducted by the UK’s Confederation of British Industry has reported that the country has the opportunity to be a global front-runner in low-carbon products and services, while also adding £20 billion to the annual GDP by 2015.

However, the CBI was firm on the fact that the government needs to take the right sort of action to grasp the potential in the sector without damaging the competitiveness of key industries.

“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,” said John Cridland, CBI Director-General.

“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 CBI’s 10 recommendations to Government on green business are:

1. The UK must maintain its ambition: Ensure that the ambition of the 4^th Carbon Budget is maintained, if underpinned by a smart policy framework which follows the recommendations of this report, and matched with consistent messaging from all parts of government
2. Play a strong role in Europe and internationally: Be at the forefront of shaping the future of the EU Emissions Trading Scheme and global climate negotiations
3. Establish clear and stable market frameworks: Ensure that market signals – particularly within the reformed electricity market – have stability and longevity, with any adjustments made in a pre-defined way
4. Stimulate new consumer markets: Work collaboratively with business to ensure the right mix of incentives and regulation, together with clear and consistent information, are in place to drive demand in emerging markets such as the Green Deal
5.  Cut “green tape”: Reduce complexity in the existing low-carbon policy landscape, including immediate action on the Carbon Reduction Commitment, and take a more strategic approach when developing future policies
6. Reflect the value of all sectors in the economy: Develop a long-term strategy for Energy-Intensive Industries, including the further rollout of realistic sector-specific decarbonisation roadmaps, which will enable them to play their part in the low-carbon transition
7. Build upon the UK’s strengths: Play a more proactive role in aligning policy and investment with existing UK strengths, and promoting these abroad
8. Capture greater value from green investments: Identify strategic opportunities to develop domestic capabilities through targeted interventions and longer-term technology road-mapping
9. Facilitate the flow of finance: The Green Investment Bank should have the power to raise funds from the capital markets as soon as is fiscally possible. Priority projects should also be eligible for direct government intervention in the short-term
   
10. Develop our “intellectual infrastructure”: Continue to support the UK’s strong innovation ecosystem, and address strategic skills shortages

“We must cut green tape and pay attention to competitiveness,” said Cridland. “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.”

According to the CBI’s report, a green business slowdown could cost the UK £400m in net exports in 2014/15.

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.

Here is CBI Director-General talking about the report and the UK’s green growth potential:

You can download the full CBI report here.