Tackling climate change and building a green economy with clean energy. How would the Lib Dems do it?

Liberal Democrats talk about tackling climate change, investing in clean renewable energy and investing in green economic growth and green infrastructure. But how would we do it?

The scientific consensus is clear - the world must keep the rise in global temperature to 2 degrees Celsius above pre industrial levels, or we will face an apocalyptic situation where climate change is out of our control.

The science is becoming more pessimistic. Last year, for instance, climate scientists from the Tyndall Centre for Climate Change Research found that cumulative CO2 emissions, along with carbon cycle feedbacks and the omission of emissions from international transport, mean that action to reduce emissions is needed much more urgently that previously thought. Global greenhouse gas emissions need to start falling by 2015. Their analysis also suggests that the UK needs to aim at the upper end of the IPCC’s recommendations, for industrialised countries to cut their greenhouse gas emissions between 25 and 40 per cent from a 1990 baseline; in part to encourage other countries to aim for a stronger deal at Copenhagen. [click here].

The independent Committee on Climate Change favours strong domestic action, with little or no dependence on offsets purchased from abroad to achieve its suggested emissions reduction targets.

So the Liberal Democrats are correct to commit to cutting UK emissions by 40 percent by 2020; and to supporting an international agreement to do the same.(1)

We have also adopted targets for 40% clean electricity -- wind, hydroelectric, tidal, biomass, wave and tidal, solar power -- by 2020; and for making a major improvement in our energy efficiency -- the most cost-effective way of cutting carbon emissions. This is the key to reducing our carbon emissions. Research by the Carbon Trust and Imperial College proves it.

Liberal Democrats want to take carbon out of the electricity we use, the heat we need, the vehicles we use to get around by 2050. We want to create a new, green economy.

Let’s be clear. This is a transformation the like of which has never seen before. It will need the fastest acceleration of technological development and innovation in our history. And 40% clean electricity is eight times the UK’s current level.

The transformation to a zero carbon Britain will need investment in, for example: renewables generation; robust energy efficiency solutions; offshore wind power grids; electricity transmission and gas distribution grid reinforcement and interconnectors; and smart meters.

Last year, the Renewables Advisory Board estimated that to reach the government’s existing energy targets the private sector will need to invest £100bn by 2020.

In July 2009, new work by Ernst and Young, covering investment needs for all the government’s energy policy goals, put the figure at £90 billion by 2015 (though that includes new nuclear generation).

But market failures mean that private sector involvement alone will not generate enough investment to fully commercialise some new green technologies quickly enough.

In some cases, the lead times are too long. Some supply chains are too weak – in onshore wind, for example, we have to compete in a global supply chain with Spain, Denmark. And in offshore wind there are very few turbine manufacturers.

The Liberal Democrats’ general election manifesto should set out a green industrial strategy, to make sure that the technologies where this country has an advantage can come to market. This includes:

• providing capital grants for clean energy sources;
• creating a Green Infrastructure Bank to act as the catalyst for private sector investment; with public finance acting in partnership to carry forward low carbon infrastructure investment; and
• using green bonds to raise new finance for green infrastructure and energy efficiency solutions; boosting confidence in low carbon markets without making the public debt worse.

Liberal Democrats talk about “using guaranteed prices to drive investment in renewable energy sources such as wind, wave and solar.” But so do Labour (now) and the Conservatives. We need to be committed to guaranteed prices that do the job – by being structured simply enough and set sufficiently high to promote investment in as many viable clean energy solutions as possible.

(1) Note that earlier this year, new research from the Tyndall Centre supported a 42 per cent UK emissions reduction target by 2020 (without using carbon offsets purchased from abroad.

[This is an edited version of the speech I would have given in the energy and climate change debate at the Liberal Democrat conference, had I been called.]