UK needs step change to become premier location for low carbon revolution – report

The report, 'Under the Microscope – Is UK PLC ready for Low Carbon?' from the manufacturers' organization EEF shows that the UK risks falling behind other countries around the world who are setting out ambitious plans to develop their own low carbon industries. South Korea is a striking example, it says, with Seoul having set out a five-year plan to invest 2% of GDP a year on developing low carbon industries. Commenting on the findings, EEF energy adviser Roger Salomone said: "The last two years has seen more progress towards a low carbon economy than in the previous ten, but we cannot afford to rest on our laurels. Whilst the UK now has a low carbon industrial strategy that has laid the foundations, we cannot ignore the fact the UK is behind the curve and playing catch up in this area. "Locating in the UK offers cleantech companies some real advantages, but major weaknesses remain. To position the country as a premier location for the low carbon industrial revolution we urgently need more strategic and joined up thinking from government together with active engagement from industry." According to the report the market for climate-friendly 'cleantech' goods and services was already worth £3 trillion in 2008 and is projected to reach £4.5 trillion by 2015. This is driven by powerful long-term trends such as accelerating resource depletion, growing environmental awareness and increasingly aggressive climate policy. Manufacturing accounts for a significant share of this market, especially in some of the fastest-growing sectors such as renewable energy. However taking advantage of this growing market could not be taken for granted - there were significant disadvantages as well as advantages to the UK as a location for low-carbon manufacturing. The positives included a good pool of STEM (Science, Technology, Engineering and Maths) graduates, clusters of essential skills such as offshore and automotive engineering, and increasing government support for low-carbon technology. In contrast, major weaknesses also existed, most notably question marks over the long-term supply of core skills, a tax system that failed to encourage the capital investment on which manufacturing depends and a low-carbon industrial strategy that lacked sufficient focus. The UK also still had the lowest level of government funded energy related R&D in the OECD, it said. In response, the report makes a number of recommendations for government to improve the policy framework for low carbon technologies: Government should: • enhance the effectiveness of low-carbon industrial policy by focusing on a smaller number of industries and making a long-term commitment to support them. Nuclear power, carbon capture and storage, offshore renewables and low-carbon vehicles are prime candidates • raise public support for clean energy research, development and demonstration from its current low level to the OECD average and make greater use of public procurement to stimulate the development of low-carbon technologies • introduce a 'green bond' scheme that allows manufacturers to use future tax benefits to finance low-carbon technologies at the critical stage of their development • avoid attempting to plan in detail or micromanage the supply of skills for a low-carbon economy. Policy should focus on creating a strong supply of core skills and a genuinely demand-led vocational training system • work together with all stakeholders and use the issue of climate change to inspire young people to study for and pursue careers in the STEM professions