The Challenges of creating a Renewable Economy

Written by Andrew Stunnell MP, Shadow Energy Spokesman and published in Parliamentary Monitor on Mon 1st Dec 2003

The world's population is three times what it was when I was born, the average energy consumption per person is far higher now than then, and humankind's footprint (or more likely tyre-mark) is ravaging the planet. With finite natural resources there is a clear threat to our future, where food, drinking water, raw materials and energy sources would all be at risk. Of course for around a billion of the world's poorest people they already are.

But the most urgent threat for the developed world comes not from resource shortages or exhaustion, so much as from the consequences of using those resources in the first place. The most high profile of these is the excess of greenhouse gases created by the use of fossil fuels. Rising sea levels, changing climate and ruined ecosystems are predicted, and are now indeed measurable.

The first challenge is to recognise that from now on the search for prosperity has to be linked to the search for sustainability. Our society has to develop in ways that reduce our use of non-renewable resources, conserve and re-use those that are scarce, and avoid co-lateral damage when we use the rest. There have been some successes, such as the international ban on ozone-destroying CFCs. And after a slow start the Kyoto agreement aimed to slow down growth of CO2 emissions. However, first the USA and now Russia have pulled out, even the UK's emissions are rising again, and the Treaty looks to be almost a dead letter.

The second challenge is to recognise that environmental sustainability is the gateway to economic sustainability, and not a barrier to it. Genuinely sustainable growth has both an economic and an environmental dimension. There is money to be made from an improved environment, and conversely it is wealthy nations that can afford to develop the innovation and technology that will enhance sustainability.

No-one has to wear a hair shirt, and a return to the stone-age is certainly not required. In fact there has been a 33% rise in the UK's GDP since 1992, and a 21% rise in real earnings, but only a 2.7% rise in our gross energy use, so we are close to de-coupling prosperity from energy use altogether.

The third challenge is to find the right incentives to promote those cost-effective investments which save both money and natural resources. There is a classic dilemma here. For more than 30 years we have known that for the price of a power station you could insulate enough homes to save all the energy it would produce. But there is a 'profit' to be had from selling (and wasting) the energy, and there isn't from saving it. So we go on building generating capacity, wasting resources, worsening CO2 emissions, and failing to optimise our expenditure.

The fourth challenge is to plan for the long term. Since 1945 parliaments have averaged less than 4 years and governments around eight. But we need policies with consistent direction and support for several decades. The Royal Commission on the Environment set key targets as far ahead as 2050. At least nominally these have been accepted by the Government, but success is dependent on ownership of them being adopted by civil society at large. That can happen - an idea or an institution can outgrow and survive its originators. There are plenty of examples, from the Liberals' state pension, through Labour's NHS, to the Conservatives' commercialisation of British Gas. All are practically irreversible 'givens' on the political stage. Can we do the same with sustainability? It has happened in Scandinavia, and it can happen here. That has to be the foundation for cross-party commitment and long term results.

Then the challenge will be to tackle the right problems. Politicians often get it wrong. Much energy goes into trying to stop people using their cars, for instance, but almost none into helping them use their homes efficiently. In fact the average house has higher carbon emissions per year than the average car, and there is far more scope for low cost improvement. But so far the Government has even shied away from requiring the 'fuel consumption' figures to be available at point of sale, let alone encourage or require better performance.

And the final challenge is to think small! Most of the kit we need to develop a low carbon economy has already been invented. With micro-chp central heating boilers we can all get 90% fuel efficiency and generate home electricity. One million boilers are replaced each year, so what are we waiting for? The energy efficiency of UK homes is less than half that of Sweden, and our excess winter deaths are a scandal.

The reality is that most of the solutions exist. We just need to have the mind-set and the incentives to apply them. Now that really is a challenge.