Major investors across the UK are joining forces in an effort to implement a mid-term decarbonisation target. Executives at Merrill Lynch, Aviva, Hermes, Climate Change Capital, Schroders and Triodos Bank are among the names on the signature of a letter addressed to George Osborne.
While Ed Miliband used his party conference address last week to promise legislation for a 2030 carbon target if Labour wins the 2015 election, businesses are encouraging the government to act sooner rather than later.
Miliband has suggested the mid-term goal would create one million new green jobs. This estimate comes amidst reports from studies by PwC, EY, the Renewable Energy Association and UK Energy Research Centre. Their evidence suggests that investors lack sufficient certainty to commit to the £110bn in capital Britain’s green businesses need to develop new, low carbon power sources.
The UK is currently striving to cut emissions by 80% compared to 1990 levels by 2050. Recommendations from the Committee on Climate Change suggest an intermediary goal would make this target more realistic and trigger substantial economic growth.
The letter to the Chancellor states that further delay in setting a green goal for 2013 is “detrimental to this objective – exacerbating policy risk and investor uncertainty. In many cases, this increases the cost of capital and deters major investors, manufacturers and project developers from investing in the UK and creating jobs.”
The letter follows a 2012 petition for a detailed 2030 carbon target for the power sector, which was signed by more than 50 of the UK’s largest businesses.
With the UK’s most influential investors and executives making more noise about the growth potential for green companies, it can only be a matter of time before the government takes action. And when it does, it could be the key to a full economic recovery.