Economy | News & Views

FSB: Green improvements must be economically viable

The government must do more to help small businesses in the UK improve their energy efficiency, a new report by the Federation of Small Businesses (FSB) concludes.

Entitled Making Sense of Going Green – Small Businesses and Low Carbon Economy, the report claims that the coalition must provide incentives for small firms to make their buildings more eco friendly and expand the current system of loans to make going green economically viable.

As 44 percent of small businesses in the UK rent their premises, the FSB said steps must be taken to make energy efficient improvements beneficial to both the company and the landlord.

This could be done by encouraging private sector providers to pay for the upfront cost of works, linking pay-as-you-save repayments to the building – which would “overcome the landlord/tenant divide” – and waving increased fees for those who improve the rateable value of their property through green improvements.

John Walker, national chairman of the FSB, said: “If the correct policies are put in place now, then small businesses will have the potential to significantly reduce carbon emissions while also delivering the substantial economic growth that the UK economy desperately needs.”

There are currently around 4.8 million small businesses operating in the UK which provide around half of the annual UK turnover.

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Green investment ‘covers a wide range of techniques’

Green and ethical investments no longer centre around leaving some companies out of a stock portfolio, one expert has suggested.

Penny Shepherd, chief executive of UKSIF – the sustainable investment and finance association, said that sustainable investment now covers a wide range of investment techniques and is “fundamentally about making a positive choice”.

Ms Shepherd said that this could include choosing the most responsible company in the sector, working with fund managers that encourage companies to improve their performance or investing in new “sunrise industries rather than sunset industries”.

“We are in a situation where the new coalition government says it will be the greenest government ever [and] that should make a difference both to companies managing their social and environmental impact and those who provide them with the tools to do that better,” she added.

The comments come after figures from the Investment Management Association showed that net retail sales of ethical funds in the second quarter of 2010 were at their highest level since the final three months of 2007.

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Majority of UK businesses ‘not measuring carbon footprint’

The majority of UK companies do not measure their carbon footprint yet, the Carbon Trust has claimed.

Britain’s largest business and public organisations now have less than 50 days to sign up to the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which is intended to help the country meet its carbon reduction target.

However, a survey conducted by the trust revealed that just 26 per cent of firms make the effort to measure their emissions, Bloomberg reports.

Some 38 per cent of the 200 finance directors who took part in the poll said that they planned to begin monitoring their carbon footprint in the next five years.

Harry Morrison, general manager of the Carbon Trust, said that finance departments are playing a greater role in monitoring emissions. Earlier this year, Mr Morrison said that the key to implementing a successful CRC strategy lies within the internal audit and data collection processes.

“In many companies, the finance team in their internal audit function are best placed to have a robust view of carbon and environmental data than the energy and climate teams may have done in the past,” the news provider quoted him as saying.

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Green Investment Bank ‘must be created within year’

For the government’s Green Investment Bank to work three key details should be considered, according to Friends of the Earth.

The environmental charity identified that there was large potential for growth within the green economy and green technology sector, providing that the government continues to provide support.

Simon Bullock, economy campaigner at Friends of the Earth, welcomed the creation of the bank but said “it all comes down now to detail”.

According to Mr Bullock, for the bank to be a success it must be set up as an independent enterprise within one year, possess enough capital to gain millions of pounds of private sector investment and have a strict focus on renewables and energy efficiency.

“If the government were to do those three things…I think that would send an extremely strong signal to business that this new government is very serious about the low carbon economy,” he added.

The creation of a Green Investment Bank was one of the policies announced in George Osborne’s emergency Budget last week.

While Mr Bullock welcomed the creation of the investment bank, overall he said that the chancellor had “failed to take the bold decisions we so urgently need”.

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Boris to announce major green economy investment at BASELondon

Mayor of London Boris Johnson is to announce a major investment boost for London’s ‘green’ economy at BASELondon tomorrow May 27th, 9.30am at ExCeL. On the morning of the conference, the Mayor will be joined by Andreas J Goss, CEO of Siemens plc, and Sir Robin Wales, Mayor of Newham, in announcing major new plans to boost London’s share of the growing global low carbon economy.

Boris Johnson will then deliver BASELondon’s opening keynote speech, at 10am in the ExCeL conference centre, outlining his vision to make London the world’s leading low carbon centre, stimulating thousands of job opportunities in green goods and services, and creating innovative low carbon enterprise.

BASELondon is a day-long event where business and the public sector meet to crystalise the opportunities inherent in London’s transformation to a low carbon economy. Other keynote and panel speakers include Tim Smit, founder of The Eden Project, Lord Browne, formerly CEO of BP, Ian Marchant, CEO of Scottish and Southern Energy, President Jose Maria Figueres, chairman of the Carbon War Room and former president of Costa Rica, and, by video, Mayor Bloomberg of New York City.

To register as a delegate to BASE go to www.baselondonshow.co.uk.
The delegate rate is £350 and the local authority and public servant rate is £250 which provides access to all keynotes, breakour briefing sessions and the exhibition.

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What role does the IT industry have to play in a low carbon economy?

Virtually all modern businesses rely on a sophisticated system of IT for support. So much so that some organisations spend over 50 per cent of their IT budget on the energy to power it, a new book claims.

Green IT for Sustainable Business Practice calls on those responsible for the company’s IT systems to set carbon reduction targets for themselves and become better acquainted with the regulation surrounding the industry.

However, the issues relating to the carbon emissions of IT systems are extremely complex. While they are huge consumers of energy, they provide thousands of benefits to businesses of all sizes and will have a significant role to play in the transition to a low carbon economy.

Increasingly, businesses are using virtualisation technologies, such as cloud computing, as a way of reducing their outgoings on costly IT equipment. A report by Gartner earlier this year suggested that by the year 2020, 20 per cent of firms will not own any IT assets.

This is perhaps one of the best examples of how energy-efficient technologies can have a positive impact on the bottom line.

Gartner also claimed that personal computers use ten times their weight in fossil fuels over their lifetime and PC manufacture and transportation accounts for 80 per cent of a computer’s total energy consumption. It predicts this figure will reduce to 60 per cent in 2012, as more customers look for information on carbon dioxide emissions before purchasing a product.

Beyond this IT solutions like video conferencing can allow firms to reduce their reliance on road transport and aviation. As well as reducing carbon emissions, this helps boost efficiency, and again can lead to a positive effect on the bottom line.

Hi-tech IT systems installed in vehicles can also cut carbon emissions by enabling technology to operate more effectively and informing users of their energy usage.

With the book predicting that in the future the IT could fall under the same level of scrutiny as the aviation industry, is it time that companies begin to consider the role of technology in moving towards a low carbon economy? And, exactly how far should that role extend?

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What role will natural gas play in a low carbon economy?

One of the most fundamental changes which needs to be made if the world is to stop global warming and create a new low carbon economy is for its population to decrease its dependence on fossil fuels.

The fact that an alternative to fossil fuels would have to be discovered was an accepted truth before climate change even became an issue and alternative energy sources have been in development for many years.

Now solar power, wind power and hydroelectricity have become part the UK’s energy mix, however they need to play a much larger part.

But what role will natural gas have in the low carbon economy?

A study by the World Watch Institute concludes that natural gas will be a key player in the US’s transition to a low carbon economy. The move from coal to gas has already played a large part in the UK’s emission reductions over the past two decades.

The authors of the research stated that natural gas, particularly that which is now being uncovered from unconventional reserves, is far less “carbon intensive” than both oil and gas.

They added that natural gas can be used in conjunction with renewable energy sources to provide “flexible backup” when there is a large demand on power, which simply could not be done with coal.

However, if people come to see natural gas as a viable resource to perform this role it could have a negative impact on the development of energy storage technologies. This concern is heightened by the fact that using natural gas for this purpose is only a very short term solution, as the production of gas from the North Sea will be 80 per cent less than it was in 2004 by 2015.

And this could be where the real sticking point lies. Will presenting natural gas as part of the transition to a low carbon economy dissuade people from searching for alternatives?

The BBC reported last year that upgraded figures on the level of natural gas reserves in the US makes it more cost effective to extract and means it will support long term supply. This makes the use of natural gas a reality in the US’s plans for a low carbon economy.

New drilling techniques enabled the country to tap into reserves within tight sands and shale rock, however there have been concerns over the environmental impact of this drilling.

Rune Bjornson, head of the gas division at Statoil, claimed that if Europe was to convert its coal power stations to natural gas then carbon emissions would be reduced by 40 per cent.

The World Watch Institute study concludes by saying that replacing the use of oil and coal with natural gas will help reduce carbon emissions and improve air quality.

What needs to be done now is finding a way of using natural gas to its fullest advantage, while ensuring its impact on carbon emissions is as low as possible. The question is how will this be done?

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Has Australia missed its chance to showcase the benefits of a low carbon economy?

Earlier this month, the Carbon Reduction Commitment (CRC) was introduced in the UK. All larger organisations and companies are required to take part and purchase allowances from the government for each tonne of CO2 they emit.

Australia’s Carbon Pollution Reduction Scheme (CPRS), which is similar to the CRC, was one of the country’s major initiatives in its fight to cut carbon emissions by 2020. The scheme would have required businesses to purchase permits in order to emit the gas into the atmosphere.

However, it has been announced this week that prime minister Kevin Rudd has taken the decision to shelve the CPRS until 2013 at the earliest.

Initially plans were to put the programme into action by July 2011, with the aim of reducing carbon emissions by 25 per cent by 2020. This would have also provided a serious boost to Australia’s low carbon economy.

The reasons behind the delay were said to be twofold.

According to the government, not enough progress was being made on a new pact on climate change ahead of the expiration of the Kyoto Protocol in 2012.

In Mr Rudd’s own words this, “will provide the Australian government at the time with a better position to assess the level of global action on climate change.”

However, there was also opposition to the carbon trading scheme from the Upper Senate of the Australian government, which is not controlled by Mr Rudd’s ruling Australian Labor Party.

Before Mr Rudd took the decision to delay, the plans for the CPRS in Australia were rejected twice. The second time was just before the Copenhagen Summit in late 2009 after a supporter in an opposition party backtracked on his support.

Under the CPRS a cap would be placed on the emissions released by businesses in Australia which would be lowered over time. Businesses would be able to trade emissions permits between themselves, providing they never exceed the government’s cap, and potentially save vast sums of money on their energy bills.

Questions are now being asked as to whether the move is further confirmation that the lack of agreement which came out of Copenhagen will hinder the efforts of those determined to combat climate change.

And if this is the case, has the country missed out on a golden opportunity to show climate change skeptics and the international community the growing financial benefits of a low carbon economy?

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Who is performing best in the race towards a low carbon economy?

For many countries around the world the task they face in the coming years is how to create a more sustainable environment while still competing in the global economy.

This represents a significant challenge, as businesses have often been reluctant to change their practices for fear of them impacting on their bottom line.

However, the annual Climate Competitiveness Index, compiled by the United Nations Environment Programme (UNEP) and non-profit organisation AccountAbility, suggests that many nations are already making strides in this area.

Simply put, a country’s climate competitiveness is measured by its accountability, defined as the clarity and support for its policies, and its performance – whether its track record suggests it is able to implement the changes.

The report analysed the activities of 95 major countries across the world. Together, these nations account for 97 per cent of the world’s economic activity and 96 per cent of its carbon emissions.

Germany, Europe’s largest economy, was shown to be performing well in many areas. It was named as an “outstanding example” of a country which is making significant strides towards a low carbon economy.

The country was also said to have achieved “consistent progress” in combining climate accountability with performance, which UNEP said is the key to increasing Climate Competitiveness.

Sweden, Denmark, Japan and France were all shown to be performing well in this area. North Africa and the Middle East region were of the worst performers in both areas.

In terms of the performance index, the UK was shown to be the strongest nation in the world. However, it lagged behind a number of other European countries when it came to accountability.

The Low Carbon Economy Limited partnership with UNEP can be found by clicking here. It includes data and policy, country by country, which can be viewed and analysed.

UNEP suggested that the countries which performed well in the index had a strong record in reporting and managing carbon emissions, as well as developing their range of low carbon products and services.

It said that a network of organisations dedicated to the support of low carbon growth was present in those which performed best.

But in Bolivia, Ghana, Vietnam and Bangladesh, concern among members of the population was a key driver and in Scandinavia and Singapore businesses were playing a major role.

All signs point to the routes leading to a low carbon economy being varied, which begs the question, is the UK currently travelling down the right one?

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Google calls for price on carbon

Google has spoken in support of a price on carbon to tackle global warming, insisting it makes good business sense.

Dan Reicher, the organisation’s director of climate change and energy initiatives, told the Guardian that carbon pricing would provide the incentive companies need to invest in green technology.

This would in turn create a new market for environmental innovations that Google and others could exploit.

“Putting a serious price on carbon will both get us closer to the serious energy reductions we need to make but also accelerate the domestic development and adoption of these technologies,” he explained.

Mr Reicher said there are “various ways to get a carbon price” and insisted that it would not just be businesses that would benefit.

Households could save money by reducing their energy consumption and adopting energy efficiency technology, with carbon pricing encouraging them to do so.

Meanwhile, the Guardian has reported that the Aldersgate Group is putting together a report containing recommendations from a coalition of low carbon firms, which it would like to see implemented by the new UK government.

They include extending the role of carbon pricing in the country.

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