George Osborne has made no secret of his environmental scepticism and claims that emissions targets and environmental measures could damage British industry. He’ll find it more difficult to maintain this position in the face of today’s call from the world's largest investors for more decisive action by governments on climate change.
The letter from global investor networks representing institutional investors responsible for over $22.5 trillion in assets calls for a new dialogue between investors and governments on climate policy.
They set out seven key tasks, including the need to favour low-carbon investment over high-carbon investment and to stop subsidising fossil fuels. This does not fit well with Osborne’s plan to redevelop Britain’s power stations with a new dash for gas!
The investors conclude that “governments are key in reducing the serious risks, losses and damage that climate change will cause, and the risks to the investments and retirement savings of millions of people. While we commend governments that have implemented supportive policy, much further work is needed to decarbonise economies and portfolios and to stimulate private investment in low-carbon solutions.”
At the same time, the influential Environmental Audit Committee (EAC) is urging the Chancellor to “restore investor confidence” in the government’s energy policy with a clear decarbonisation target.
Joining the growing chorus of calls for a 2030 decarbonisation goal for the power sector in the forthcoming Energy Bill, Committee chair Joan Walley MP says:
“The government needs to reassure investors by setting a clear target in the Energy Bill to clean up the power sector by 2030. A second ‘dash for gas’ could lock the UK into a high-carbon energy system that leaves us vulnerable to rising gas prices.”
The Committee wants the Treasury to explain how new incentives for gas-powered energy generation can be compatible with the UK’s legally binding carbon reduction targets.
Walley also alludes to the much-reported rift between the Treasury and the Department for Energy and Climate Change.
“The Treasury must end the uncertainty on energy policy and give investors and businesses the confidence to seize the enormous opportunities presented by new clean technologies,” she adds.
So what future for the “greenest government ever”?
And what future for us?