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UK government's quarrels are hitting climate change investment

Alex Stevenson

November 5th, 2013

The coalition government's disputes over climate change policy are undermining investor confidence, Lord Stern has warned.

The author of the influential 2006 Stern Report told MPs he believed ministers were not moving fast enough in their efforts to switch to a low-carbon economy.

He suggested the coalition government's equivocal approach to green policies was damaging investor confidence in the UK.

Stern's bid to introduce a 2030 decarbonisation target to the energy bill, currently working its way through the Lords, was narrowly defeated last month.

Now he has spoken out against the coalition's approach to climate change policy, saying ministers are "the most serious obstacle to investment".

"My concern is government-induced policy risk," he told backbenchers on the Commons' energy and climate change select committee.

"We've seen quarrelling in the coalition, suggestions of a review of the fourth carbon budget and suggestions of a review of green levies.

"What that does is undermine confidence... I think there's a risk of going backwards, but that risk is itself damaging in choking off investment."

His comments came just one day after a newspaper report that Centrica is set to scrap a wind farm project powering 450,000 homes because of insufficient subsidies from the government.

The £2 billion Race Bank project, located off the Norfolk coast, is reportedly endangered because draft prices proposed by the Department for Energy and Climate Change (DECC) are likely to fall short of Centrica's demands.

Energy firms have proposed slashing the green levies which pay for renewable subsidies, in a bid to reduce the political pressure on ministers because of high energy bills.

Such a move could result in a cut in the government's support for the development of offshore wind farms, imperilling other proposed projects.

Deputy prime minister Nick Clegg defended the coalition's ambition to be the "greenest government ever" in his monthly press conference last week.

He said the Green Investment Bank, the energy efficiency Green Deal programme and energy market reforms showed ministers were committed to fundamental reform.

"We're now world-beaters on offshore wind technology; per head we now have more installed offshore wind capacity than any other country in the world," he told The Ecologist.

"I have absolutely no doubt in my own mind that you can go green without costing the earth. The balance is how you get from A to B and how you make sure at a time when people are quite rightly anxious about these sky-high bills that you identify what the problem is and you try and do something about it."

The energy bill currently working its way through the Lords is another key part of the government's reforms, with DECC hoping it will "incentivise record levels of investment in new energy infrastructure".

A spokesperson said: "Already, since 2010, we have seen over £30 billion of investment in renewable energy which is supporting growth and jobs around the country."

Alex Stevenson is the parliamentary editor of Politics.co.uk

 

 

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