Understanding UK's approach
In the UK, we have achieved a greater than 20 percent reduction in greenhouse gas emissions since 1990 (we have legally committed ourselves to reduce emissions by 34 percent by 2020). At the same time, we have enjoyed economic and energy security gains. This has been possible because we took a science-based approach and created a clear legislative framework with incentives for and support from business.
The 2006 Stern Review on "The Economics of Climate Change" enhanced significantly public understanding of the issue. The key finding was that the economic costs of inaction were severely higher than the costs of action.
A broad consensus emerged on the need to follow the science to reduce the risk, which means investing heavily in more sustainable and lower carbon growth. Our largest business organization, the Confederation of British Industry, issued a report in 2007 saying that "as with all substantial risks, it is vital to mitigate the danger" of climate change.
There are a couple of specific policy approaches that have shaped the UK's pathway towards a low carbon economy.
Firstly, the European Union's emission trading system has facilitated investment decisions for business by pricing carbon. It has had no perceptible negative effect on industrial competitiveness. Indeed, across the EU there has been a net gain of 410,000 energy jobs. The EU ETS also provides a valuable lesson for others. Over-allocation of allowances in the early stages led to windfall profits for some capped industries. The phased approach of the ETS meant we were able to correct this quickly.
The UK is also moving to a radically different system that relies far less on carbon fossil fuels and includes nuclear, renewable and clean coal power. We are building 10 new nuclear power plants through legislation that streamlines the planning process, deals with safety concerns and minimises the costs by using existing sites. We have committed substantial funds to enable commercial scale deployment of carbon capture and storage for coal power. There will be no new coal plants without CCS. Clean coal must be part of the global solution. We are also investing substantially in renewable energy. The UK is already a global leader in offshore wind and tidal energy. In short, our experience has been that addressing climate change cannot be done piecemeal; rather it requires a cross-sector, comprehensive approach to be most effective.
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