The Environmental Audit Committee (EAC) has published a report lambasting the Coalition Government over its shortcomings concerning the green economy. The EAC believes that Government is missing an opportunity to demonstrate global leadership on the low-carbon economy in the run-up to the Rio Summit. The main focus of EAC’s frustrations is the Coalition’s Enabling the Transition to a Green Economy report, which members feel is far too entrenched in short-term outputs, not delivering a clear, detailed ‘roadmap’ as Government promised.

As the document places no new requirements on business, its market-led approach is focused far too heavily on voluntary action. The EAC note that the recent financial crisis demonstrated that there are serious risks associated with such a market-based approach, particularly when markets do not reflect the value of nature. As a result, the committee believe that “relying on consumer demand to stimulate the green economy will not work.”

The EAC continues: “Enabling the Transition suggests things that businesses could, rather than should, do. However at a time when businesses need policy certainty, this is unlikely to provide the platform to deliver the billions of pounds of green investment needed.”

The committee recommends that Government introduce new, time-bound environmental targets for businesses to achieve, such as reduced emissions, waste, and resource use and a halt to activities harmful to the environment. The report also details the importance of informing consumers about the environmental impact of their decisions; this could be helped by requiring mandatory greenhouse gas reporting for all businesses.

The report is especially critical of the perceived lack of joined-up thinking between departments and the overall priority low-carbon policies have in the ‘greenest Government ever’. The paper states: “There appears to be little priority in Government attached to moving to a green economy, and it is not clear how all Government departments are taking this agenda forward. The current focus on growth must not be growth at all costs. In particular, we are concerned that the Treasury sees the environment as a cost or block to economic development. The Government needs to take the longer-term view. The whole economy needs to be green and traditional sectors of the economy will need to be transformed.

“Setting out a clear trajectory to a green economy with targets, and action required from business in key areas such as resource efficiency, emissions and waste reduction. Transparent reporting arrangements will be integral. Agreeing a basket of indicators and targets against which regular reporting should be completed and the success of the Government's approach gauged.”

The EAC argues that by putting the environment at the centre of the economy, Britain can achieve sustainable use of natural resources. A transition to a low-carbon economy will provide environmental, energy security and economic benefits. The committee argues that the cost of inaction will be far greater than acting now. Environmental action should not be viewed as a cost but as an investment, especially by the Treasury. “Investing in renewable sources of energy would increase our energy security by reducing our reliance on imported fossil fuels. Investment in a green economy could deliver more jobs overall than the same investment in the high-carbon economy, but there is little commonly agreed data on this. In order to build public support for a green economy, the Government needs to be clear with business and the public about how the costs of the transition, including the costs of inaction, compare with the benefits.”

Commenting on the report, Friends of the Earth's Economics Campaigner David Powell said: “MPs have exposed the Government's green economy promises as little more than a few vague ideas and wishful thinking. Our economy desperately needs fresh ideas – while the UK dithers our competitors are reaping huge financial benefits by developing green goods and services.

“The Chancellor's must end his hostility to the green economy – it's bad for jobs, bad for business and bad for Britain. This week's Energy Bill is an ideal opportunity to boost the economy by developing clean British energy and reducing the nation's reliance on expensive fossil fuels.”

Gaynor Hartnell, Chief Executive of the REA, echoed Powell's sentiments, adding: “The Government needs to enrich its understanding of the benefits of renewable energy investment. Currently this debate is being pushed forward on an ad hoc basis by various timely reports and well-informed politicians from all parties. There is frustration that Government leadership is missing in practice, despite notable speeches, for example by Nick Clegg, on the importance of prioritising investment in energy infrastructure.

“Several countries, from America to Japan to Germany, have realised that taking the long-term view and investing in renewables is a significant step on the route out of economic malaise. The UK renewables industry wants to work with the Coalition Government to realise the huge contribution our sector can make to jobs, growth and prosperity.”

Summarising the report, Joan Walley MP, Chair of the Environmental Audit Committee, said: “The Government promised a roadmap to a green economy, but two years in it seems to have stalled and we risk slipping back to business-as-usual.

“Rising global demand for commodities and fossil fuels mean that prices will continue to rise in future, so it is incredibly short-sighted of the Treasury not to give businesses clear incentives to use resources in a smarter way.

“Making businesses report their carbon emissions is one of the first steps we need to take on the road to a green economy, so it will be a key test of this Government's green credentials.”

The full EAC report, entitled ‘Government's deregulation agenda stalls green economy plan’, can be viewed here.