My diary last week was dominated by climate change and the measures Wales might take to respond to this issue which is towards the top of the political agenda and rapidly moving up the list of business priorities.
On Monday the Welsh Assembly Government published its proposals to increase renewable energy in Wales, and in the evening Jane Davidson, the Welsh Assembly Government’s Environment and Sustainability Minister, attended a small dinner with a group of CBI members. On Wednesday I gave evidence to the Assembly’s Sustainability Committee which is looking into the level of carbon emissions by business in Wales.
So a busy week with plenty of opportunities to understand how different groups think on this issue. While there is now broad consensus on the need to adopt policies and take actions that will address our level of carbon emissions, and hence start to tackle climate change, the debates last week also highlighted some of the pressure points between business and government.
Take the issue of Wales-specific targets. WAG wants to adopt stretching targets to reduce CO² emissions in Wales for understandable reasons.
It wants to show devolution at work and that Wales can take a lead on an important topic, and it genuinely believes urgent action is needed.
But if, as is likely to happen, an electricity producer decides to invest in efficient, low-carbon production in Wales, and at the same time closes inefficient, high-carbon generation capacity in England, what is the result? The UK overall has reduced its carbon emissions, there is a small net benefit to global climate change and the planet’s a bit happier. But Wales’ carbon production will have increased, and Assembly targets will become harder to hit.
A global company with a carbon efficient plant in Wales may decide to make its next investment in its less efficient facility in another country where it will gain the most climate benefit for its cash spend.
If aggressive binding targets in Wales divert that investment here then our figures will look good, but it will not be the optimal result, globally speaking.
This is a real quandary for the Assembly and will require the politically bold and aspirational targets to be delivered in ways which ensure we do all we can in Wales, but at the same time results in the most effective action to tackle what is a global problem.
Another debating point was turning talk into action. The CBI submission to the Sustainability Committee gave several case studies of investment by private companies with significant reduction in greenhouse gases.
There have been significant incentives to do so, from rising energy prices improving the investment case to the increasing priority given to the environmental performance of companies by customers, whether individual consumers or other businesses.
We have had tough targets (and getting tougher by the day) and tough strategies and proposed new laws, but not much tough action. While acting as an exemplar and stimulating supply markets is certainly a key role for government, adding 15% to the budget for a publicly funded eco-excellent building is not a tough decision to make.
There is much that government can do now to make a real difference.
The public sector employs around one-third of the workforce in Wales. A move to the type of agile flexible working which is improving BT’s carbon footprint (and saving costs) could make a real difference to commuting, office space and staff retention.
An overhaul of the business rates and council tax systems so companies and home owners have a real incentive to invest in improving the energy efficiency of their buildings will achieve more than arbitrarily imposing targets.
And the biggest barrier to a step change in renewable energy generation is the planning system. The rate at which we connect new wind turbines and wind farms needs to multiply ten-fold to meet government targets.
Tough decisions for the democratic process and elected members, but we are told that is what is needed.
by David Rosser, Western Mail
David Rosser is director of CBI Wales
27 February 2008
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