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Dear Prime Minister – growth and green energy go hand-in-hand

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Concerned by the release of a letter from George Osborne to energy secretary Ed Davey in which the chancellor got rather close to dictating energy policy, I wrote to the prime minister on Tuesday to express my concerns:

“Dear Prime Minister

We welcomed your words earlier this year where you reaffirmed your support for the green economy. You stated that Britain is “one of the best places for green energy, for green electricity, for green investment and crucially for green jobs anywhere in the world.” We share with you this sense of pride and opportunity for Britain.

Wind farm at seaIs the government still aiming for Britain to be, as David Cameron says, "one of the best places for green energy"? © National Geographic Stock / Sarah Leen / WWF

Business activity in low carbon goods and services provided a third of the UK’s growth last year. The CBI estimates that green exports could halve the UK trade deficit by the end of this Parliament. There are over 50,000 businesses and 1 million people working in the sector, and it is growing at 4% per annum, despite the downturn. The CBI is clear that the choice between ‘going for green’ and ‘going for growth’ is a false one.

Four years ago, the UK passed the Climate Change Act which is designed to guide the country towards a low-carbon economy, and which is now seen as an exemplar by other countries. The consensus across the political divide, which you personally facilitated through supporting the Bill in opposition, was crucial to the adoption of this ground-breaking legislation. But your leadership on the issue also gave hope that there was recognition that climate change, and the policies required to deliver a clean energy future, are too important to be used as a political football.

However, investor confidence in the renewable energy sector is being severely damaged by indecision over the level of support for wind power under the Renewables Obligation. The Treasury has been pushing for a much steeper reduction in support than is borne out by analysis for DECC. As you will be aware, the Energy and Climate Change Committee this week made clear that interference by the Treasury threatens to make the vitally important reform of the electricity market “unworkable”.

When in opposition, the Chancellor expressed his conviction that “we cannot afford not to go green” and suggesting he wanted a Conservative Treasury “to be in the lead of developing the low carbon economy and financing a green recovery”.

We have therefore been perplexed by Mr Osborne’s more recent repeated questioning of whether high environmental standards are compatible with business growth, in contrast to his earlier assertions.

Statements that suggest “we won’t save the planet by putting our country out of business”, portraying environmental regulations only as a costly burden, fuel business concerns that the Chancellor is undermining investor confidence. This puts at risk your Government’s progressive initiatives aimed at building a green UK economy.

Correspondence between the Chancellor and the Secretary of State for Energy and Climate Change, as released in the media, demonstrates a clear bias on the part of Mr Osborne towards investment in new gas-fired power stations. This runs contrary to the Committee on Climate Change’s warnings that a second ‘dash for gas’ would fatally undermine the UK’s carbon targets. Moreover, there is no compelling evidence that greater reliance on gas will reduce consumer bills or improve the UK’s energy security. In the same correspondence, the Chancellor suggests that your Government should ignore an important recommendation by the Committee on Climate Change that the UK should decarbonise the power sector by 2030.

We urge you to make clear that your Government understands that a strong, resilient green economy is essential for growth, job creation and innovation. We would welcome seeing your Chancellor becoming an active champion for one of the few sectors to have shown resilience through the recession.

Continued attacks on the green economy not only undermine your own ambition to lead the “greenest government ever” : they are increasingly seen as serving narrow political ends at the expense of the national interest.

Yours sincerely
David Nussbaum
David Nussbaum
Chief Executive, WWF-UK ”

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