climate change and the environment: meeting the challenge 

Speech by Chancellor of the Exchequer, the Rt Hon Gordon Brown MP to Green Alliance, 12 March 2007

 

 

 

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Let me say how pleased I am to be here. 

• with business leaders who are breaking new ground in environmental technology;
• with long standing environmental champions who have changed the way we think about our planet; and
• with committed members of the Green Alliance and other environmental organisations who lit the flame of modern environmentalism over thirty years ago, and whose inexhaustible campaigning and practical action is a major reason why that flame now lights up not just the national but the global stage. 

Starting from modest beginnings and just a few far-sighted pioneers, building new scientific understanding on long-standing conviction, the environmental movement stands today as a mighty and determined force of people and ideas. Ideas which I recognise are not just about the use of resources but about justice; not just about economics but about quality of life; not just about the kind of world we live but the kind of people we are. 

When Make Poverty History started, I said to them we would not always agree but would always champion your right to disagree.

So let me say that I appreciate the role this movement now plays: at all times challenging us to do more, but ready too to play your part in helping Britain shape a progressive global consensus - showing that as with action on debt, poverty eradication and peacekeeping, it is when the mobilisation of moral concern in civil society is allied to the power of the people to act through government that change happens.

And we know that change must occur. When, nearly two years ago I commissioned Nick Stern to conduct a review of the economics of climate change, I wanted to build a new consensus: that we had to go beyond the traditional alliance of economic growth and social justice as the central concerns of policy, and put growth, justice and environmental care together as our trinity of objectives.

But perhaps I did not realise, and - possibly outside some people in this room, I don't think many people did - quite the scale of the challenge that would be revealed by Nick Stern's work, now reinforced by the latest report of the Intergovernmental Panel on Climate Change. We are facing a world at risk of an increase in temperature equivalent to that between the last Ice Age and now. But, as Stern shows, this is also a world of great new opportunity - for business, commerce and science, to ensure that a green economy will also be a growing economy.

And the last few months have seen change. 

• From the strong decisions of the European Commission on the EU Emissions Trading Scheme last autumn to a new American emphasis on reducing oil dependence;
• from the announcement last month that thirteen US states on both west and east coasts were now committed to joining cap and trade schemes to the focus on environmental protection in the Chinese Prime Minister's address to the Chinese parliament only last week;
• from the setting up of a commission on emissions trading in Australia to the announcement almost every week of a major glob al company's new environmental commitments; and
• most of all, from last week's historic EU decisions to cut its emissions and to adopt new commitments on energy efficiency, renewable energy, carbon capture and storage and biofuels it is becoming clear that we have entered a new era.

 And this goes beyond climate change. At about the same time I commissioned the Stern report, I asked the Treasury to conduct a review of the long-term challenges facing the UK economy which would need to inform our forthcoming Spending Review. This showed the importance too of issues of water scarcity, waste generation, marine protection and biodiversity protection, in the UK and globally. We face an unprecedented series of global challenges which I recognise will profoundly affect our economic wellbeing, our quality of life and our cultural values, and will require societies, governments and the international community to make some far-reaching decisions.

So this era requires a new approach, both internationally and at home in Britain.

A famous British Foreign Secretary said two centuries ago that he had called the new world into existence to redress the balance of the old. In 1990 another old world order - the world dominated by the Cold War - came to an end. What was not foreseen then but is obvious now, is the seismic shift in social and economic power brought forward by globalisation. And what is now glaringly obvious too, is that facing climate change, the new world order cannot be like the old but must be founded upon a recognition of our essential interdependence.

Such challenges cannot be met by a few countries meeting and deciding together in isolation from the rest. If we are to secure the global public goods on which we depend - energy, a stable climate, and sustainable natural resources, as well as public health and the fight against terrorism - we require the engagement of all countries, rich and poor, developed and developing, in a global alliance for progress.

We need cooperation across borders, new multilateral networks, and reformed international institutions. And the post-1945 system of international institutions - built for a world of sheltered economies and just 50 states - is urgently in need of reform for a world of 200 states and a global economy which must also now provide global environmental stewardship.

The G7 used to be exclusive. Now I cannot foresee it meeting to discuss economy or environment without the involvement not just of Russia but of China, India, Brazil, South Africa and Mexico, and outreach to Africa, Asia and Latin America.

The World Bank, once a bank only for economic development, must become a bank for the environment as well.

And the UN must place environment at centre stage. I believe the UN Environment Programme should be upgraded into the environmental policy pillar of the UN system. Next month the UK is seeking to place climate change on the agenda of the Security Council, and I strongly welcome the priority given to climate change by the new UN Secretary General Ban Ki-moon.

And at the heart of these new global institutions must be a global Europe working more closely together. I believe that in protecting the environment and tackling climate change the European Union is finding a new and unifying role. Last week's agreement by the 27 nations of Europe to a 20% emissions reduction by 2020, as a first step to an internationally negotiated reduction of 30%, marks an affirmatory moment of genuine global leadership. Made possible by the vision and determination of Chance l lor Merkel and President Barroso, it demonstrates to the rest of the world the seriousness of Europe's commitments on climate change and energy security. And it gives Europe the opportunity to take a lead in the low carbon technologies of the future. As I believe our Commission on Environmental Markets and Economic Performance will show, the UK is particularly well placed to reap the benefits of new industries, new jobs and new exports that will follow.

And let me say that the decisions made last week are testament to the UK's leadership in Europe, and I particularly praise for this Tony Blair, Margaret Beckett, David Miliband and Alistair Darling. It was the UK which proposed the 30% target in the Government's Vision Paper for the EU Emissions Trading Scheme in October.

But let us also be clear: only a government fully committed to the UK's role in Europe can show such leadership. Euroscepticism and continent-wide environmental action are at odds with each other. A government ambivalent about the UK's future in Europe and allied to the most reactionary forces in the European Parliament would have no credibility, no influence and no achievements.

And on the basis of these new multilateral institutions and networks, I believe we can forge new global partnerships to tackle the environmental challenge.

The foundation of this must of course be a new international agreement to reduce greenhouse gas emissions beyond 2012. From the G8 this summer I hope we can create the foundation for a serious resumption of the UN negotiations in Bali in December based on the five elements of a long-term stabilisation goal; emissions trading; technology development; and deployment; deforestation; and adaptation. And I promise that the British Government will remain unstinting in our efforts to secure a strong global agreement over the next few months and years.

But I believe there is much more we can do, not after 2012 but now, building on initiatives on which the UK has already led, and using many levers for change.

First, by creating new markets. As Nick Stern argued, emissions trading can achieve not only a more cost-effective reduction in global emissions but a more just one, enabling significant flows of investment into developing countries. My ambition is to build a global carbon market, founded on the EU Emissions Trading Scheme and centred in London. Today worth just $9 billion, emissions trading could grow to between $50 and $100 billion. So we will now advance this through an international conference hosted in London to discuss how we can link schemes in different countries and enhance trading with developing nations - to turn this growing system into a global force for change.

Second, harnessing science and technology. We are now creating in the UK a new £600m Environmental Technologies Institute to bring together public and private research and innovation into low carbon technologies. But with plans now under way to parallel the British centre with centres in Europe, America and Asia, I want to make this a global network of collaborative sustainable energy research centres and we in Britain are prepared to contribute to, and lead in the creation of a global research platform and hub.

Third, using public investment to foster global social responsibility. We are already working with China, Brazil, South Africa, India, Mexico and other countries to foster clean coal and carbon capture and storage, biofuels, renewable energy and sustainable forestry. The Deputy Prime Minister is leading the UK-China Task Force on a pathbreaking project to create a new sustainable city at Dongtan in Shanghai. I have called on the World Bank to create a $20bn investment facility for low carbon energy and energy efficiency. Shortly, I wi ll set out our government's detailed plans for fulfilling the developed countries' moral obligations to the poorest to help secure poverty reduction through new long term investment in low carbon energy, adaptation, sustainable forestry, water management and biodiversity protection; and our plans for mobilising the moral concern of the whole world in support of global action.

I believe that protecting the environment requires a new approach not only to international cooperation but to the role of government at home.

The lesson of recent years is that environmental protection needs the individual commitments of responsible citizens, but cannot be secured by individuals alone, however benevolent or ethical; and demands the active engagement of responsible business, but cannot be secured just by businesses and markets, however socially engaged or dynamic. But neither can governments do it alone. The environment depends on a partnership for the common good: a coming together of good, enabling government with responsible and empowered companies and citizens.

And I believe the new partnership must be founded on a clear set of objectives; a new contract between citizen and government; and a clear, long-term policy framework.

First, as we enter a new era of international obligations from 2008, and as we being to negotiate seriously for commitments beyond 2012, we need to ensure that the UK's emissions - including the emissions abroad for which the UK is responsible through emissions trading systems - are placed on a sustained downward path. For while the UK's record on greenhouse gas emissions is among the best in the developed world - we are on course for a 23% cut by 2010, nearly double our Kyoto commitment - we know this is not enough.

So we will adopt a new institutional framework to cap control and manage the UK's contribution to global carbon emissions.

I can tell you tonight that the draft Climate Change Bill published by David Miliband tomorrow will create for the first time a system of statutory carbon budgets which will place an overall limit on our cumulative emissions. They will be set following advice from an independent Committee on Climate Change and the Bill will require an annual Parliamentary report on progress by government: a wholly new way of managing the UK's climate change effort, sustained by proper public accountability. Just as we manage our financial budgets over the economic cycle with prudence and discipline, so we will have to manage our carbon budgets with the same prudence and discipline. Chancellors of the Exchequer will now count the carbon as they currently count the pounds.

Second, we need a new contract between empowered and responsible citizens and empowering and responsive governments.

Over the last few years, what Beveridge called the driving power of social conscience has been at the heart of the growth of environmental concern, as people have changed their own behaviour and consumption patterns and taken individual and community responsibility for protecting the environment. 

• From the growth of organic and fair trade food to the increase in household recycling rates;
• from the development of the voluntary carbon offset market to the upsurge in community environmental action;
• from the Women's Institute campaign to reduce packaging and their members' carbon footprint to that of the National Trust to encourage a sense of environmental history and identity;
• from the work of thousands of Wildlife Trust and RSPB volunteers in managing habitats to those of Groundwork regenerating neighbourhoods.

In 1 997 , I argued for a new citizenship of rights and responsibilities. Today, right across the board it has become clear that in the modern world public goods are best delivered when they are not just given passively to people but people actively give something of themselves. Our educational attainment goals need pupils who aspire and are inspired to learn and parents who will support them. If we are to improve health, we need prevention and people to care more about it. And indispensably to achieve our environmental goals we need individuals and communities who will take their own responsibilities seriously but are actively engaged in devising and delivering the solutions.

And it is our job, I believe, to help make it easier for people to make more sustainable choices, providing practical help with, wherever possible, incentives in preference to penalties. And changes must be considered, costed, credible and consumer friendly - not ill-conceived, short-termist, unworkable and unfair.

So let me show how we can put such a new environmental citizenship to work on the quarter of all emissions which come from our homes, saving 5 million tonnes of carbon by helping people reduce their own carbon footprint.

In the last Pre-Budget Report, I announced that within ten years all new homes would have to be zero carbon, and I provided a stamp duty exemption as an incentive to get there. But new homes are only a small percentage of the total. So today I want to extend our ambition to all homes. Over the next decade my aim is that every home for which it is practically possible will become low carbon.

A decade ago, by requiring energy efficiency labels on white goods - dishwashers, washing machines, fridges and freezers - we gave consumers the right to know and thereby drove consumer demand for efficient appliances which in just a few years ensured that there was no demand for the less efficient at all and they ceased to be sold.

Now I believe, much more radically, we can do the same for homes. By giving consumers the right to know we can create a market demand for energy efficient homes which will transform the way we use energy. 

• By ensuring that every householder has the best and simplest advice on the measures they can take, from insulation to microgeneration;
• by rolling out the use of smart meters and visual display units that enable consumers to see how much energy they are consuming and thereby take personal control of their own energy reduction; and
• by introducing Energy Performance Certificates which will give every home an energy efficiency rating.

We will help every householder see how by installing energy saving measures they can both save money and improve the value of their home. And I foresee new markets opening up: energy suppliers who will make more money from selling efficiency measures than by selling more electricity and gas; banks and building societies who will create special green mortgages and loans to help finance improvements in the energy rating of their customers' homes; firms innovating to design and sell new and cheaper low energy equipment.

And eventually, I expect the market to value an energy efficient home more highly than an inefficient one. Just as today no one wishes to purchase an inefficient fridge, so in the same way I believe people will be no longer wish to buy an energy efficient home.

And I can announce today the action we will take now to bring this transformation forward:

First, we will inc rease the number of homes cost-effectively insulated every year until every home has been done, with financial help available for all, and installations free for those on low incomes. By next year our Energy Efficiency Commitment and Warm Front Programmes will have insulated 2 million homes, and we are also now providing free central heating to pensioners on pension credit. Over the next ten years our aim is to ensure that the remaining 8 million are done, saving 2 million tonnes of carbon every year and an average of £160 off a household bill.

Second, I can announce that, while the EU agreed last week to establish new European legislation on light bulbs by 2009, we will already be taking action. After talks over recent weeks with leading manufacturers and retailers, the UK will be the first European country to phase out high energy GLS lightbulbs from almost all domestic use. We will complete this by 2011 - saving a further 1.2 million tonnes of carbon and around £30 off an average energy bill. And I will examine how we can provide special help to pensioners to enable this transformation.

Third, I am calling on the EU today to speed up the setting of new energy efficiency standards for consumer electronic goods and to permit lower rates of VAT on energy efficient goods. But again by working with retailers we will do this first in Britain, designing out the use of wasteful standby facilities and raising energy efficiency. This will save a further 1.7 million tonnes of carbon, and £45 off a household bill.

Fourth, I expect microgeneration - such as solar water heating, micro wind turbines and ground source heat pumps - to take off in this new era. So in the Energy White Paper we will provide new incentives with the aim of raising eightfold the number of households which are producers as well as consumers of energy.

This package of measures will save not just 5 million tonnes of carbon, but up to £230 a year - £4.40 a week - from a typical household energy bill.

And we will adopt the same partnership model - this combination of information, incentives and standards - in other areas.

In transport, our reforms to VED have already given motorists a tax incentive to buy fuel efficient cars instead of than inefficient ones. We will champion higher regulatory standards at the European level. And we will ensure our planning and transport systems make alternatives to the car - walking, cycling and public transport - easier and more convenient.

In waste, our partnership with the retailers will reduce the environmental impact of plastic bags by 25% by the end of next year, with more to follow. Our landfill tax escalator and targets have driven the creation of much more convenient recycling systems, with kerbside collections and boxes for people to separate waste. From just 8% ten years ago recycling rates are now at 27%, and in our forthcoming Waste Strategy we will get them higher still.

And we need to provide such incentives across the board. Over the last ten years, I have reduced the rates of VAT on energy efficient goods which are professionally installed. But European law currently prohibits reduced rates of VAT for environmentally friendly products bought by individual consumers. So I am today writing to European Finance Ministers to follow up last week's EU decisions not just by speeding up new environmental standards for greener goods but allowing reduced VAT rates to encourage their use. And building on the tax changes we have already made - the Climate Change Levy, the Aggregates Levy, the Landfill Tax escalator, Enhanced Capital Allowances, VED and company car tax - we will continue to examine how the fiscal system can properly incentivise environmental behaviour.

So we will do what we can to enable people to live in a greener way. And we will ask others to join this effort too. Next month government will back the launch of a major new initiative by some of the UK's leading brands to help their customers go greener. We are supporting a campaign to reach millions of people through shopping centres. And we will set out our own contribution to this effort, including an individual "carbon calculator" which will enable individuals to measure their own carbon footprint, and simple practical advice on people can go green in their daily lives.

A clear policy framework

Citizen action needs to be backed by government action. For important though individual action is, it is not sufficient. The final element of the new partnership we need is a clear, long-term policy framework from government.

And let me say that you need more than a target: the key is the will to act on it. This is why our Climate Change Bill will be followed by an Energy White Paper, a Planning White Paper, a Waste Strategy and Marine Bill setting out the measures which will take carbon emissions out of the UK energy system over the coming decade, reduce greenhouse gas emissions from waste, and protect our natural resources. They will show how every department of government has become a department for the environment. We will: 

• improve our planning system to speed up the process for major infrastructure projects - including wind farms and waste disposal facilities - while maintaining the democratic accountability that is so important to the planning system;
• get rid of the delays in connecting to transmission networks;
• consult widely on the need for new nuclear investment, improve the pre-licensing of nuclear technology and set in train a serious negotiation to ensure that the private sector bears the costs of nuclear waste and decommissioning;
• change the regulatory system and incentives to encourage decentralised generation, including micro-generation;
• raise waste recycling targets and reduce emissions from landfill
• increase investment in transport innovation.

Through these and other ambitious measures we will put the UK on course to achieve real progress in emissions reductions by 2020, on a pathway to our goal of a 60% reduction by 2050.

And over the next two years we will be seeking Parliamentary support for these plans. So we will discover whether those who are now happy to proclaim their support for targets are also prepared to support the means to achieve them.

The Stern report has given us the economic evidence on which to act. The next stage is to reach out further to the public to build a new national shared consensus for action on climate change - not just to reduce our emissions but to address the impacts of climate change which we will now inevitably experience such as flood risk and coastal erosion, and internationally to play our part in protecting the planet.

The publication of the Climate Change Bill tomorrow, therefore, will mark the start of a new process of national consultation and country wide discussion. We will be going out to communities, to schools, to businesses, trade unions and voluntary groups of all kinds to engage them in both initiatives of their own and a nationwide effort for change.

So both at home and abroad we must build a partnership stronger, broader and deeper than ever before: that same mobilisation of social consc ience and moral force brought together to make poverty history now dedicated to making our environment sustainable. Each of us can make a difference. And all of us together can make the difference.