What is the EU proposing in the way of targets for 2020 and 2030 and how will that affect the UK?
Better known as the 20-20-20 targets, the EU initially requested that EU greenhouse gas emissions needed to be reduced by 20 percent from their 1990 levels, likewise they aimed for a renewable resource use to rise to 20 percent of EU energy consumption and a 20 percent overall improvement in the EU’s energy efficiency. These targets were set in March 2007 and since then have been revised and added to. The bottom line is that the EU 2020 strategy wanted to promote smart, sustainable and inclusive growth, tackling the challenge of climate change head on. It was estimated that the ‘green growth’ initiative would create around 417,000 additional jobs alongside achieving the 20 percent energy efficiency improvement target. However, UKIP leader Nigel Farage has come out and said that for every one ‘green’ job gained, 3 will be lost elsewhere and so it remains to be seen how this will affect the job market.
More recently, in 2014, EU Heads of State and Government agreed to revise the headline targets. It has now been agreed that by 2030 the EU aims to cut greenhouse gas emissions by at least 40 percent, doubling the 2020 target. The target has been labelled as ‘ambitious’ but not unachievable, showing that the EU is committed to combatting climate change. However, with regards to what this will mean for the UK? Scientists have said that 40 percent reduction is the absolute minimum that the EU should be aiming for and it is down to larger nation states like the UK, Germany and France to lead the way, aiming to exceed this target. The difficulty that comes with this is that the power heavy industries in the UK may struggle when it comes to cutting emissions further, and with the construction industry already experiencing an unexplainable slump, this will only harm the market further. With ambitious housing plans being proposed by government it is unlikely that both can occur concurrently.
When the targets were announced, David Cameron committed the UK to an emissions cut of 80 percent by 2050 and to donate 0.7 percent of GDI to climate aid projects. However, is this still achievable given that there are, arguable more pressing issues on the agenda? With money tight, savings and economic growth seem to be the order of the day and it is hard to see where cutting carbon emissions and increasing use of renewables con comfortably fit into this.
How are the various parties intending to address these challenges?
The various parties have very different views when it comes to climate change and energy policies.
As the incumbent party, the Conservatives stand by the support they gave to the EU 2030 targets that were set out last year and continue to support the UK Climate Change Act, However they have come out and said that they will not support distorting or expensive power targets which may affect the UK heavy industry sector. They have also promised to halt the spread of onshore windfarms and continue to support fracking exploration. However, the most dramatic policy which may affect how the UK respond to challenges posed by the EU’s ambitious targets is the in-out referendum Cameron has promised will take place in 2017.
Labour agree that tackling climate change is a necessity and an important long-term consideration. Labour have gone as far as to say that they propose a zero-emissions target to be achieved over the next 50 years. Unlike the Conservative party, Labour want to establish ‘robust regulations’ before fracking takes place and have promised to ‘build alliances’ in Europe to tackle climate change.
Research by the UK government’s Committee on Climate Change (CCC) estimated that for the de-carbonisation strategy Miliband proposes to work, there would have to be an investment of £7.5 billion a year which, given the current state of the UK’s finances, is unlikely. Labour have already noted in their manifesto that they will be committed to achieving the de-carbonization targets set out by Brussels and will endeavour to give more powers to the Green Investment Bank. However, the Conservatives have responded by claiming that the de-carbonisation policy would result in increased energy bill costs for businesses
The Liberal Democrats are also in support of the EU target but claims the UK is wasting money and leaking energy due to the slow pace of change currently taking place. In opposition to the Conservatives, the Lib Dems have claimed that by leaving Europe we would be sacrificing our voice in climate change negotiations which could mean we have no control moving forward. The Lib Dems have also set targets for 60 percent of UK electricity to be generated by renewable sources by 2030 which would more than satisfy EU targets. More controversially however, they have acknowledged that nuclear power could be a necessity if we are to reach low carbon targets.
The Greens are even more ambitious that the Lib Dems when it comes to renewables claiming that renewable sources can supply all the UK’s energy if we just manage demand and cut it by a third by 2020. They fully oppose nuclear power and want to close all coal power stations by 2023. This would obviously satisfy EU targets but the possibility of it being achieved and accepted by heavy industry is unlikely. However, they do support the Conservatives plans for an in-out referendum claiming they would vote yes to staying in the EU but also Yes to reform. The Green Party’s ambitious plans to set out clear timetables for improvements and carbon emission reductions will place additional pressures on businesses to comply and may not work in the economies favour.
In direct opposition, UKIP want to leave the EU claiming that the ambitious targets set by Brussels are costing the UK extortionate amounts of money that are not proportional to our nation’s size in comparison to our larger EU partners. They want to repeal the Climate Change Act and fully support fracking as a way of meeting the UK’s energy demands and reducing prices. They also acknowledge that nuclear sources and coal are vital if we are to keep energy prices low. They want to abolish green taxes and levies, withdrawing full from the EU’s Emissions Trading Scheme therefore reducing fuel bills for those in the UK. The bottom line for UKIP is that the EU currently has a complete monopoly over the energy market and this is unacceptable.
Plaid Cymru actually want Wales to become an independent nation in the EU and have claimed that by doing so they will be able to supply all of Wales’s energy needs while prioritising renewable sources. They claim that, currently, those in Wales are experiencing the highest energy prices and so what to have more devolved power to manage their own energy supply, introducing a separate Climate Change Act for Wales and setting independent greenhouse gas reduction targets.
The SNP, by comparison want to stay in the EU as in 7 jobs in Scotland depend on the single market. They are omitted to ensuring jobs in the Oil and Gas industries remain safe but have also called on Westminster to ensure the UK matches Scotland’s ambitious commitments to carbon reductions. Unlike the Conservative party they are in full support of onshore wind expansion..
So how can businesses themselves future-proof themselves when it comes to Green demands?
Start-ups should be aware that new regulations will come into force as a result of the EU targets regardless of how the General Election turns out, and they may well place SMEs in hot water, with the potential for fines increasingly likely if one fails to comply.
What should businesses do to save money on their energy bills?
Invest in lighting - LED’s (light emitting diodes) are seen by many to be one of the quickest ways to slash energy usage in the workplace. Compared to traditional light bulbs, LEDs produce less heat which makes them far more effective. Installing LED lighting around the office could result in savings of over £30,000. By reducing the amount of energy businesses use, they will also be working towards reducing their respective business’ carbon footprints.
Invest in green transportation – Those businesses that rely on transportation will probably have been rejoicing at the plummeting oil prices, however in the future this will not be the case. Oil prices may soon begin to rise again but exciting developments in the US are refining the biofuel production process which will therefore make bio-fuels cheaper in the future. Electric vans are also now very affordable. Subsidies are now available from the government which could make going electric a bit more of an attractive proposition for businesses.
Look to the sun - Solar power can help businesses to [generate clean energy, thereby reducing their energy costs] [Businesses can now also sell surplus energy to the National Grid] Renewable technology is getting more and more advanced all the time so there has never have been a better time to invest. It is far cheaper to install solar panels nowadays and advances in technology have resulted in the efficiency of this equipment improving dramatically. It doesn’t matter if a business property is small, medium or large; solar power is definitely a worthwhile investment.
Get smart - A plethora of smart sensors and meters are now available which will allow for easier monitoring of energy use and could enable businesses to reduce their energy costs significantly. By being able to assess each individual appliance and even cut off the energy supply if there is a leak of some sort, these clever pieces of kit allow businesses to get the analytics of everything that is going on with gas and electricity. Massive brands in the US such as Walmart are already using devices like this so it is time SMEs followed suit.
Don’t forget the basics - With all the talk of biofuels and solar panels it is easy to forget the basics. Recycling waste paper and turning off computers at the end of the day are still great ways to make sure a business is as green and clean as it can possibly be. While this seems old-school and not very futuristic, it is worthwhile to reiterate how much the small changes can make a difference. The future doesn’t always have to be shiny metal and hover-cars. Sometimes the knowledge that the future will still be there is enough of an incentive. The best way to future-proof a business is to make sure there is a future to protect.
What is the Love Energy Award?
Love Energy Savings are currently looking to reward those businesses which are doing their bit to save energy and protect our world’s future. We want to learn about businesses that endeavour to curb their energy consumption on a consistent basis. We have established 7 different categories so that your energy-saving efforts certainly won’t go unnoticed, no matter what size your business is or which industry sector you operate in. Nominations close on the 31st May.
What do you think the UK business community will look like in 20 years’ time with regard to energy?
Over the next 20 years business will have to have become a lot more aware of their energy usage. With targets being imposed and energy prices increasingly unstable, due to failed regulation and fluctuating oil prices, businesses are going to have to become less apathetic and more aware. Currently over 40 percent of businesses have never questioned their energy tariff, in 20 years we expect this not to be the case. For a businesses to be successful over the coming decade’s energy use and efficiency will have to rise higher on the agenda. Fail to prepare, prepare to fail.
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