Sunday, 18 December 2011


Oh dear, we’re back to the 80s. And I don’t mean Thatcherism.

In his autumn statement, George Osborne announced a number of measures that betrayed a clear line of thinking: the environment is a luxury issue that’s all well and good but mustn’t be allowed to get in the way of the interests of business. Such as giving energy-intensive industries £250 million to offset carbon costs, and softening EU nature protection laws.

This was very much the line of thinking that made Labour such a slow convert to ‘green’ issues. As the party that had grown up representing the industrial proletariat, it took the view that the environment was a middle class conscience issue that was fine up to a point, but there were more important things to worry about, like the wages and living conditions of workers. This was Labour’s attitude throughout the 1980s, and only changed when the party realised it was alienating environmentally motivated voters.

In the intervening two decades, all the scientific evidence has made it abundantly clear that what is not good for the environment is not good for the economy. The clearest piece of evidence was Nicholas Stern’s report in 2006 that bluntly stated that failure to take the environment seriously would strangle the economy, but there’s plenty of other evidence that makes the same point.

Anyone with a positive mindset would see this as a challenge. The economy isn’t doomed, but it will be if we don’t embrace the environmental opportunities in it. This should be the meeting ground of the Conservatives and Liberal Democrats – the environmental awareness of the Lib Dems married up to the business sense of the Tories. It could genuinely be the ‘greenest’ British government ever.

But instead we’re going the wrong way. Business leaders with vested interests (you may wish to call them ‘fat cats’; I’m trying not to make it unnecessary personal) lobby the government for relaxations from environmental rules. In many cases, these business leaders have seen the writing on the wall for years but have decided their short-term profits are more important than investing in environmental research and development, so now find themselves lagging behind and begging for permission to go on polluting.

The car industry is a classic example of this, but by no means the only one.

In 1995, the European Commission said it wanted to set a maximum carbon dioxide emissions limit for the average new car. Very sensible. Its proposal was for 120 grams of CO2 per kilometre by 2005. The car industry screamed that this was entirely unrealistic and unfair. So in 1998 the Commission caved in and allowed a ‘voluntary agreement’ whereby the average new car sold by 2008 would emit no more than 140 g/km.

Guess what? Yup, the car industry as a whole failed to meet its target, despite the fact that some car makers (Fiat, Renault, Peugeot-Citro├źn) had hit the 120 g/km target. In other words, it could be done! Annoyed that the car industry had asked to be trusted and then failed to deliver, the Commission proposed a mandatory emissions limit of 120 g/km by 2012. At first the automotive industry just said no-one was going to boss it around and pretended nothing would happen, but on this occasion, the politicians did stand up for a binding limit. Once again it was heavily watered down by automotive lobbying, so the new mark is a rather pathetic 130 g/km by 2015, but at least a binding limit now exists.

And guess what? Emissions from new cars are coming down. Why? Not just because they have to, but because Europe’s car makers know that if they don’t reduce their emissions, they’ll find their cars won’t be sellable outside the EU as well as inside. With China and California both introducing emissions limits for new vehicles, any car maker that doesn’t embrace environmental technology will be disadvantaged in the global market place.

Unfortunately, today's owners of second-hand cars are paying excessive fuel and road tax bills, because the car makers were too slow to embrace lower fuel consumption 15 years ago.

This is just one example, but one of many in which industry screams ‘You’ll be putting masses of people out of work’, and then when the politicians stand firm, it becomes clear industry has been crying wolf. It’s happening now with the EU’s decision to subject air transport to emissions trading – you’d think it was limiting airlines to one plane each by the hysterical screaming coming from the aviation industry, when in reality this will add just a few cents to the price of the average flight.

This is why George Osborne should be standing up for environmental safeguards, not capitulating to industry's opposition to them. Even in a recession. In fact especially in a recession. The old saying ‘necessity is the mother of invention’ is especially applicable in a recession, so anything that stimulates reducing polluting and climate-changing emissions is to be welcomed. But how are we going to have a climate of incentives if the Chancellor bails out industries that have refused to see the writing on the wall for two decades?

This is the kind of issue on which the coalition could crack. With the Greens threatening traditional Lib Dem support, the Lib Dems know they have to use their time in government to establish some meaningful environmental achievements, indeed many Lib Dems will insist on that through conviction rather than electoral advantage. It’s something the Conservatives should be able to deliver without any concessions in their own ideology, as a ‘green’ economy will be good for business. It’s a test of whether the Tories really are interested in helping business in the long term or merely helping today’s big industry protect what it has.