Report sets out recommendations to build investor confidence in green economy

The report, ‘The colour of growth: maximising the potential of green business’, calls on politicians to adopt a smarter approach to energy and climate change policy. Research by the business group revealed that £20 billion worth of annual GDP could be added to the UK economy by 2015. However, unless the government demonstrates strong political leadership and establishes a coherent, strategic policy framework that focuses on building confidence, the UK risks missing this opportunity, the report states.

“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,” said John Cridland, CBI Director-General in a press release. “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 recommendations

The ten recommendations of the report are:

Maintain the UK’s ambition. Ensure that the ambition of the 4th Carbon Budget is
maintained, underpinned by a smart UK policy framework, matched with consistent messaging from all parts of government.

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.

Establish clear and stable market frameworks. Ensure that market signals – particularly within the reformed electricity market – have stability and longevity.

Stimulate new consumer markets. Work collaboratively with business to ensure the right mix of incentives and regulation, together with clear and consistent information, to drive demand in emerging markets.

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.

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 fulfil their role in the low-carbon transition.

Build upon the UK’s strengths. Play a more proactive role in aligning policy and
investment with existing UK strengths, and promoting these abroad.

Capture greater value from green investments. Identify opportunities to develop domestic capabilities through targeted interventions and longer-term technology road-mapping.

Facilitate the flow of finance. Give the Green Investment Bank the power to raise funds from the capital markets as soon as is fiscally possible, while ensuring that priority projects are also eligible for direct government intervention in the short-term.

Develop our ‘intellectual infrastructure’. Continue to support the UK’s strong innovation
ecosystem, and address strategic skills shortages.

“The UK has made a great start tapping into green economic opportunities but mixed signals from the Government are setting the UK back,” said Cridland. “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.”