Speech on Climate Change

1 May 2008

The Prime Minister has told business leaders to prepare for a technological revolution and embrace the opportunities available in tackling climate change.

• PM calls for technological revolution
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Prime Minister:

Your Royal Highness, Ladies and Gentlemen. Can I say first of all I am privileged to have been invited by the Prince of Wales to address this conference today. And let me start by praising on behalf of everyone attending this event and the events in all parts of the country, and indeed on behalf of the country, the Prince of Wales for the immense contribution he has made to raising public awareness about the need to look after the planet that we all share. And let me congratulate him, because there is no-one who has done more throughout our country and indeed throughout the world to stimulate action on sustainability by both businesses and by the public sector. We are deeply in your debt.

And I am very pleased to be here with so many distinguished business leaders from all over the country, and let me thank you also for the innovative ways that you are approaching the climate change challenge. I think all of you understand that even in these uncertain economic times that your reputation and success depends on the investments you make, not just in new products but in the communities that you serve and in the environment that surrounds these communities.

And I am very pleased also that Senator George Mitchell is here from America today, because during my recent visit to the United States of America I became convinced from my conversations with President Bush, and with all three candidates for the Presidency next year, that America and Europe have this unique opportunity to work together more closely in the years to come, not only to secure a climate change agreement, but to make huge improvements that will aid particularly the developing and emerging countries make their contribution to climate change.

Winston Churchill, who said that politicians usually get things right, after trying everything else, said that those who build the present in the image of the past will miss out entirely on the challenges of the future. And I think that is entirely relevant to this great environmental debate which forces us to think anew about how we do things. He also warned of world policy makers, that he said were resolved to be irresolute, adamant for drift, solid for fluidity, all powerful for impotence. And I think there is a danger that unless we collectively act together, that will be the criticism of this generation.

And that is why it was so important that a year ago a thousand business leaders gathered together across ten locations in Britain to pledge to take action on climate change. And the event stimulated the May-Day network, a national movement. And today you have come together to report back on progress that you have made and I have heard that as many as half of the businesses that are present provide information now about your carbon footprint. 40% of you have already set out and reported carbon reduction targets; many others have, by changing working practices, already made substantial energy efficiency savings. And these are all great achievements which the Prince of Wales has already congratulated you on.

But despite these advances you are here today, and so am I, because we know that it is not what we have already done that matters, but what we have still to do and we want many others to see the benefits of joining with us in this common endeavour.

So I want to talk this morning in the remarks that I have, not just about the challenge of climate change, but about its opportunities for business, the opportunity to create jobs, to build businesses, to grow exports, to drive productivity, and the opportunity to liberate the creativity and innovative strength of British companies and British people - for nothing less than doing this will enable us to meet the scale of the challenge the Prince of Wales has outlined.

The Stern Report that he has just mentioned, that I commissioned and then published 18 months ago, shows, as he said, that the economic cost of the kind of climate change which the world is currently heading for would be comparable to the economic effects of the Great Depression and world war put together. And what the report also demonstrated is, momentous as the challenge is, the costs of urgent action are far less than the costs of delay. And the earlier we act, the easier and less expensive our task will be.

And so the issue is not, as some would have it, can we afford to do more, the now undeniable reality is we cannot afford to accept any less. And that is why we are committed to building nothing less than a low carbon economy, both here in the United Kingdom and round the world, and that means doing all that we can to ensure an ambitious post-2012 global agreement for reducing greenhouse gas emissions where every country will have to play its part. And we are leading the effort to promote the building blocks of that agreement.

On financing, to help developing countries and emerging market countries, we are proposing a new global fund and a major reform of the World Bank itself to help developing countries reduce their emissions and have the finance they need to adapt to climate change, which will not happen otherwise.

On deforestation, which the Prince has rightly identified as a key priority, we are determined to fund major sustainable forestry projects round the world, and particularly a 12 country initiative in the Congo Basin, led by the inspiration of the Nobel Peace Prize Winner, Wangari Maathai. And on technology, as many of you here know, we are pioneering carbon capture and storage and other vital energy technologies round the world.

But it also means a significant change in our energy economy here in Britain and I believe it requires no less than a fourth technological revolution. In the past, the steam engine, the internal combustion engine, the microprocessor transformed not just technology, but the way society was organised and the way people live. Now we are about to embark on a comparable technological transformation to low carbon energy, with energy efficiency. And because energy use pervades every aspect of our lives, this in turn will imply an economic and social transformation in the way our businesses operate and the way we live our lives.

And no-one should under-estimate the long term scale of the challenge this represents, but if we do it successfully the benefits will be immense, greater energy efficiency will improve economic productivity, the demand for environmental goods and services will create new jobs and new business opportunities, the development of green technologies will open up new export markets for all of us throughout the world and the nations that seize these opportunities will reap the largest rewards.

Globally it is estimated that industries such as renewable energy, waste management and water treatment will themselves be worth $700 billion by 2010 - equal to the value of the global aerospace industry. And the overall added value of the low carbon energy sector by 2050 could be as high as $3 trillion per year worldwide and employ more than 25 million people. And if Britain maintains its share of this growth there could be over a million people in Britain employed in our environmental industries within the next two decades.

So building this low carbon economy offers us the chance to create thousands of new British businesses and hundreds of thousands of new British jobs. Estimates suggest our environmental sector is worth at the moment £25 billion, it employs nearly 400,000 people, but that could more than double in the next few years. And the City of London has become a global hub for carbon trading and we are poised to become the world leader in installed capacity of offshore wind.

We have of course also a strong history of innovation, we are world leaders in scientific research and with a stable macro-economic climate, an improving skills base and flexible products and labour markets, which are the pre-condition of everything, we can achieve a great deal more.

I believe we are ideally placed to help minimise the costs of the move towards a low carbon, resource-efficient economy while maximising the opportunities. But to do this, again we have got to unlock the talent and the potential of our economy.

The fact is, a low carbon society will not emerge from business as usual. It will require new thinking and new technologies, new forms of economic activity and social organisation, new forms of consumer behaviour and lifestyles, and of course the creativity, innovation and entrepreneurialism to drive and unlock the talents and skills of our companies.

Now this is an exciting opportunity. I have seen a transformation in recent years in the priority that is being given to environmental sustainability by companies, big and small, in every sector. And as we have heard today many firms have recognised that operating in a more sustainable way is good for them and that is what the customers want.

At the same time, every firm can now see the value of investing in energy and resource efficiency measures, giving a net profit, not a cost, with earlier pay-back times than anticipated, and for larger firms the opportunity to influence not only their resource consumption but to green the supply chain, as has been talked about this morning, is becoming clear.

Now businesses will rightly ask, what in turn will government do to support them as they make these efforts? Last year our Commission on Environmental Markets and Economic Performance published a report on what the government could do, and today we are setting out in the publications that you will have later our response and our recommendations. And let me highlight the four areas where we are now able to focus our efforts, set out in more detail in the publication today.

First, a clear, credible, long-term policy framework. We know that only a clear framework will encourage business to invest and ensure the timely development of innovative products and services. The Climate Change Bill makes us the first country in the world to put into legislation a statutory cap on our emissions, five year carbon budgets, an independent climate change committee, certainty therefore for investors, business and consumers.

And every new policy will therefore be examined for its impact on carbon emissions, not just those which reduce emissions but those which increase them. Where emissions rise in one sector we will have to achieve corresponding falls in another. And this UK framework is now set within a clear set of European goals, tough targets for a 20% reduction in overall greenhouse gas emissions by 2020, or 30% if we can do it as part of an international agreement, and a strengthening of the new carbon market by the EU Emissions Trading Scheme, which is now covering 50% of Britain's emissions.

And within this overall framework, Britain is establishing long term low carbon policies across our economy: in energy, meeting our share of the EU targets from renewable sources by 2020; in transport, adopting an ambitious target in the EU for reducing average CO2 emissions of new cars to 100 grams per kilometre; in aviation, we are pressing for emissions from flights to be included as soon as possible inside the EU Emissions Trading Scheme; in housing, we have agreed to a timetable for all new homes to be zero carbon from 2016 - with non-domestic buildings meeting this target by 2019. And it is these long term policies that can drive the creation of new markets for the environmental goods and services.

Now the second is our support for creating the conditions for innovation through our approach to regulation, to procurement and to research and development. We will work with the Business Council for Britain and the industry and their regulators to ensure that regulation promotes innovation. And we will give priority to low carbon and sustainable products in procurement policies of Government, helping give industry confidence to invest in the development of these products.

We are of course increasing support for research and development in sustainable energy technologies. Offshore wind and marine energy are part of that through the new £1 billion Energy Technologies Institute which is leading the world, and I believe other countries will soon follow to make for a global network of energy technology institutes.

And our third priority is to ensure that our workforce has the skills and expertise for these environmental industries and occupations of the future. So we want to work with employers to create apprenticeships and Train to Gain places in all the environmental sectors of our economy. And we want a national skills academy for the environmental industries.

But we are also seeking, fourthly, to encourage changes in consumer behaviour. We know we will only succeed if individuals and communities, as well as government and business, feel part of the solution. That is why we launched our Act on CO2 Advice Line, and that is a one-stop shop for consumer advice and information on energy and water efficiency, waste and recycling and green transport.

Later this month we will begin an advertising campaign highlighting what consumers and individual citizens can themselves do to reduce their carbon footprint. And more than one million people, interestingly enough, have already used our web-based carbon calculator.

The government's approach is based on "I will if you will" as a principle. We can only ask consumers to make green choices if we make it easy for them to do so, and we will ask businesses to be part of this too.

So we want people to install loft and cavity wall insulation and we are providing discounts. We expect 5 million more homes to be insulated over the next three years. We want to see the elimination of single use carrier bags, so we have asked, and I am pleased that there has been a huge response from retailers to come up with a voluntary solution, but if necessary we will take a statutory power to require it if we have to.

And let me say also that I know that in the end consumers will not change their behaviour just because government asks them to do. Green consumption needs to become part of the culture and part of people's lifestyles and for that we need to find new ways of engaging people.

So what I would like to see, and perhaps some discussion on this today might happen, is a different kind of consumer campaign, led by consumer facing businesses and organisations that are consumer-based organisations which can help embed greener choices in people's lives. And I have asked Fiona Reynolds of the National Trust, and Ian Cheshire of B & Q to see what examples they can give of how, by people as individuals taking action and millions working with them to do so, we can see a step change in the way people approach the environment and their responsibilities to it.

There is a great story told about Field Marshal Montgomery during the Second World War, just before the Battle of El-Alamein. And you may know that Field Marshall Montgomery was not a modest man. When he was asked who were the three greatest Generals in history he said the other two were Alexander the Great and Napoleon. But he was speaking to his troops before the battle of El-Alamein, and he asked them, what is the most important thing that you have? And he was going round the troops and some were saying their kit, and some were saying their guns, and some were saying the tanks, and some were saying the equipment, and he said: No, the most important thing you have is you.

And when we think of the environmental debate and the challenges we have got to meet, the most important thing that we will have is people themselves making the decision, persuaded that it is the right thing to do.

And so our vision is of people power that is part of a green economy, that provides new jobs and opportunities, powered by the innovation of our firms and the skills of our workforce, driven not just by long term public policy but by green behaviour as an integral part of people's lives. Each of us therefore - businesses, consumers and government - playing their part and working together.

And with the inspired leadership of the Prince of Wales I have no doubt that this is a challenge to which the human spirit, and all the powers of ingenuity and enterprise in our country will not only rise to, but surmount in the years to come.

Thank you very much.