The UK is in danger of throwing away its chance to be a world leader in low-carbon technologies, manufacturers warn today.
Recent data shows a decline in Britain’s low-carbon and environmental manufacturing sector while the government’s research budget in this area is among the lowest in the developed world as a proportion of R&D spending, according to a new report from manufacturers’ organisation EEF.
The report, entitled Tech for growth: Delivering green growth through technology, argues that the government needs to increase spending on energy and environmental research and more clearly identify and focus on low-carbon technologies that could increase UK export opportunities.
It also calls on the government to give a clearer picture of how it expects manufacturers, particularly in carbon-intensive industries, to play a role in cutting emissions, in order to improve regulation and increase investor confidence.
Susanne Baker, EEF’s senior climate and environment policy adviser and author of the report, told The Engineer that the government needed to address the market failures around low-carbon technologies, arising from uncertain demand and infrastructure needs.
‘We had a real opportunity – we were the first country in the world to have a Climate Change Act – so we should be market leaders, we should have first mover advantage, but we see that slipping away,’ she said.
‘There’s still a massive opportunity for UK plc but we need to be focused. Speaking to our members, there’s a lot of different activity in different areas but it seems very uncoordinated, very fragmented and there’s a feeling that people aren’t sure where government is going to focus.’
Government figures show the UK’s low-carbon and environmental manufacturing sector actually contracted by one per cent in 2010/11 compared to the previous year, while there was significant growth in the sector in China (29 per cent), the US (17 per cent ) and South Korea (19 per cent).
The UK government allocated 3.71 per cent of its R&D budget to energy and environmental research in 2010, one of the lowest figures in the OECD (although ahead of the US).
EEF’s report calls on the UK to match the OECD average for research spend in this area, to make clearer the roles and activities of its various low-carbon innovation bodies and funding schemes, and to improve the pipeline of skilled workers into the research sector.
The government also needs to produce a clearer vision of how it wants the manufacturing sector to decarbonise, the report said, in order to reassure investors that Britain’s industries will be supported as the country decarbonises, thereby helping companies prepare to invest in new technology and navigate regulation.
Baker said this was most important for industries that emitted greenhouse gases as part of their manufacturing process, because decarbonising electricity production had already to a large degree been addressed.
‘We want a long-term vision that will drive action in terms of how we regulate those sectors, and what activity to encourage and stimulate,’ she said.
‘2050 seems a long way off but for some of these sectors it’s only one or two investment cycles, so we need to trial and demonstrate and deploy technologies for those sectors and some of them will need bespoke sectors.’
The report also called for a review of climate policy as part of this year’s spending review in order to create a single regulatory framework for manufacturing, and greater focus on how companies would fund decarbonisation through initiatives like the Green Investment Bank.