Thank you for the kind introduction.
And thank you also to GovNet for inviting me here today.
I would like to begin by saying a little bit about the most recent developments in the science of climate change and the implications, not just for the world, but closer to home, here in the UK.
There is robust evidence, from the IPCC’s fourth assessment report - as well as more recent findings - that warming of the climate system is unequivocal and the role of human activities in the observed changes is now clearer than ever.
This is now evident from a number of sources:
- observed increases in global average air and ocean temperatures,
- widespread melting of snow and ice; and
- rising global average sea level.
Climate change has major implications all around the world and, quite rightly it is often the plight of developing countries that is highlighted. However, we must also face up to the impact of climate change at home because there will be significant impacts here in the UK.
This summer Defra launched the UK Climate Projections 2009, which provide the UK with its most comprehensive set of regional climate projections to date. This is cutting edge science, expertly provided by the Met Office Hadley Centre, which helps us to understand how the UK’s climate may change over this century.
For the first time, the Projections have used a methodology that gives a measure of the uncertainty in the range of possible outcomes; this is a major advance beyond previous national scenarios, providing probabilistic projections of climate variables such as temperature and rainfall.
Overall, the Projections indicate that we face warmer, wetter winters and hotter, drier summers, with more drought, heat waves, flooding and sea level rise.
These projected changes in the UK’s climate will have very serious consequences – for environmental, economic and social reasons.
The ‘business as usual’ emissions scenario suggests that by the 2080s – so that is within our children’s lifetimes – the average summer temperature across most of the UK will be up to 4 degrees hotter than today.
To put that into perspective, summer 2003 saw temperatures in Europe equivalent to a 2 degree rise in the UK compared to temperatures today. That summer’s heat wave resulted in 35,000 excess deaths across Europe (including 2,000 in the UK).
So we face very real and very serious threats.
Our Government, together with the rest of the EU, has proposed that the rise in global average temperature must be kept within 2°C, relative to pre-industrial temperatures, in order to avoid ‘runaway’ climate change.
And we think this is feasible in terms of the rate at which the global economy can be decarbonised.
Stalling or putting off action to tackle climate change would be the wrong thing to do – the impacts here in the UK and across the world will worsen, the economic consequences will be more severe, and the costs, human and financial, of eventually acting to solve the problem will be much greater.
So what has the UK government been doing recently to respond?
In July, we launched the UK Low Carbon Transition Plan, which for the first time sets out a strategic approach to decarbonise the UK across several sectors including energy generation, homes and businesses. The Plan set out measures that our country must adopt to meet our targets, including:
- Initiatives to improve the energy efficiency of our homes and workplaces;
- Innovation to make the transition to a low carbon economy.
On energy efficiency we must act to improve energy use right across our economy, both in order to cut emissions and save UK businesses money.
And Government has taken action; the Enhanced Capital Allowance scheme for example has provided businesses with tax relief on over 14,000 energy saving products, spanning 15 technologies.
The Carbon Trust Energy Efficiency Loans Scheme has (as of October 1st) committed £15.4m to small and medium sized businesses to invest in energy efficient equipment, saving 39ktCO2 annually.
And the CRC Energy Efficiency Scheme starting next April is expected to benefit participants to the tune of £1billion per year by 2020 in reduced energy bills.
But I would like to say a more today about what we’re doing on innovation. It’s not just Government investment to support innovation - £450million over 2 years to develop key low carbon technologies, for example innovative marine, wind and bio-energy technologies. The Government is also working closely with its funding partners, like the Carbon Trust, to identify technology families which show potential for both carbon abatement and UK economic advantage.
Families like offshore wind, CCS, marine and bio-energy. These are areas where the UK has expertise and an innovative edge which gives us a great opportunity to be highly competitive in global markets.
For sectors like these we are working towards developing Action Plans to set out how industry and the public sector can facilitate the development of key low carbon technologies.
In the marine sector, for example, we have started the process of developing an Action Plan which will provide a shared vision up to 2030.
Another key process that we are beginning is to form stronger working arrangements between the main public funders of low carbon energy technology development. This will help coordinate public funding and accelerate the development of new technologies. We must ensure that public funding for innovative devices that show potential are funded through their innovation life-cycle – from research to commercial viability.
I feel strongly that we must also improve the customer journey for innovators. By this I mean that we must improve collaboration and knowledge sharing between developers, academics and investors who are in the business of low carbon energy generation.
Of course if we are to increase our energy generation from low carbon sources dramatically, we must support other crucial areas like infrastructure. Take our investment in the grid, for instance.
The grid we have today is reliable and copes with today’s changes in demand. But the way we produce and consume energy will change in the future. In the longer term we need a smarter more flexible grid that will be able to manage electricity generated from new technologies and respond to changes in energy demand.
But most of all, we need a bigger grid. Together with Ofgem we published in a report in March setting out the potential onshore transmission investments needed for 2020 and we are working with both Ofgem and the industry to deliver these strategic enhancements.
We estimate that this will involve investment of around £5bn and up to £15billion of new investment is likely to be needed in new offshore connections, with the result we will have a new offshore grid regime in place that delivers new connections quickly and cost effectively.
We are now irreversibly on the path to a low carbon economy; but in making the transition we must ensure that the UK prospers and is competitive in the growing global market for low carbon technologies.
And those opportunities are significant; the global market for low carbon environmental goods and services is estimated to be worth £4.3 trillion by the middle of the next decade.
It is therefore essential that Government fosters an environment conducive to innovation and growth in low carbon sectors and which encourages and supports low carbon entrepreneurs.
In short we want to make the UK best place in the world for innovative, low carbon businesses.
We have a good platform. Britain has one of the strongest science and research bases in the world – we have established the Technology Strategy Board (TSB) to drive technology enabled innovation and the Energy Technologies Institute (ETI), a public private partnership, to invest in the development and demonstration of low carbon energy technologies and solutions.
And Britain is also home to a large number of companies already involved in low carbon innovation.
However, there are areas where strategic action from government is still required to further strengthen this potential.
For example we must ensure that investment in R&D is sufficient to compete with other countries and that our expert knowledge is translated into commercially viable products and services.
These are a couple of the reasons why we announced at Budget 2009 £405 million of extra funding for low carbon industries and advanced green manufacturing.
In our Low Carbon Industrial Strategy, which we published in the summer, we identified key sectors - like offshore wind, marine, civil nuclear and low emission vehicles - where new money could help investment in areas such as R&D, demonstration and deployment of both existing and new low carbon technologies.
In addition to this funding, Budget 2009 allocated £50 million of additional funding to the Technology Strategy Board, enabling it to increase its support for business innovation in areas of high growth potential including low carbon vehicles and buildings. Budget 2009 also allocated £90 million to fund detailed design and development work (FEED studies) for the first CCS demonstration competition. We are working on up to 4 demonstration projects in total.
Finally, I believe that government also has a responsibility to ensure that British-based companies and people are equipped to compete for the new demand created by government climate change policies and a vital part of that commitment is skills.
This is why we are working closely with the skills network – including businesses, the Sector Skills Council for Science, Engineering and Manufacturing Technologies (SEMTA), and the National Skills Academy for Manufacturing – to ensure that the skills requirements essential to deliver low carbon technology advances are met.
Our National Skills Strategy was published earlier this month by the Department for Business, Innovation and Skills and one of things I look forward to is working across government to ensure that we have a skills system that does justice to the strong platform we have in terms of knowledge and expertise and that upholds our ambitions to be world leader in low carbon innovation.
Before I finish I want to recognise that Government isn’t the font of all knowledge...
...we need and welcome other people’s ideas from across the science and innovation community: businesses, investors, the research councils, skills bodies. We need others to tell us if we are on the right path and how we can do things better.
To take an example – we saw in the summer a report from the Royal Society on geo-engineering solutions, which included highly innovative ideas for carbon dioxide removal and solar radiation management. To me this goes to show that innovation is exciting and that we should push boundaries in developing new ways to fight climate change.
The UK has a great reputation for scientific discovery, for innovation and invention; we have a world class science base [second only to the US], 4 universities in the world’s top 6 and a talented workforce.
These qualities are precisely what the world needs now and I want us to work together to build on this platform and put the UK at the heart of this vital transition to a low carbon world.
Thank you.