Wales Faces Uncharted Economic Growth Territory

Morgan Parry says Welsh leadership on climate change is needed more than ever in the wake of the Copenhagen summit.

Last November, a couple of weeks before the United Nations summit in Copenhagen, the Welsh Assembly voted to call on our Government to reduce greenhouse gas emissions by 40 per cent by 2020, and to encourage other governments to do the same. The media focus in the run-up to Copenhagen was quite rightly on prospects for agreement between the US, China and the developing world, so the significance of the Welsh vote was lost. In agreeing to the target, Wales became one of only a small number of nations to recognise the urgency of the climate change challenge, and take appropriate first steps. Perhaps most significantly, the target has support from all parties, giving space to our Government to act. President Obama would be a happier man if he was in such a position.

At the start of January’s Climate Change Commission meeting, Minister Jane Davidson applauded the Assembly’s vote as she set out her reflections on the UN Summit. She had played an active part in Copenhagen, attended many meetings with official delegations and NGO groups, and chaired sessions of the Network of Regional Governments. In her view, a lack of agreement in Copenhagen is no reason to defer action, and leadership is needed now more than ever. There is a clear role for small nation governments like Wales to push ahead.  The Commission supported her view.

The Welsh Government’s Climate Change Strategy will be published in the spring, and it should be given the highest profile and status by all Ministers and Departments. If it reflects the responses to last years consultation, it will urge a re-think about the core assumptions behind current policies and priorities, and not look only for ‘add-on’ actions. It will recognise that climate change is caused by our unsustainable ways of living rather than simply by deficiencies in our technology or energy sources, and will call for a fundamental shift away from business as usual. The Welsh Government is also committed to quantify the contribution each proposed action makes to the 3 per cent per annum reductions that will begin in 2011, commensurate with a 40 per cent reduction by 2020.

The level of ambition throughout the strategy process has been high, and the articulation of the significance of climate change has set the right context and tone. Recognising the chasm between scientific projections and current political commitment, Minister Jane Davidson commissioned a scenario report by the Tyndall Centre at Manchester University, setting out proposals for how 6 per cent and 9 per ent per annum greenhouse gas reductions might be achieved. As well as being dramatically clear what is required if the scientific predictions are correct, the report goes into much more politically sensitive areas which the Welsh Government Strategy cannot do.

The Climate Change Commission has helped the Government draft its Strategy, and working groups have come up with proposals on transport, energy use, public and private sector contributions and land-use. Newly devolved powers over building regulations will encourage better building design, while other strategies and plans in the areas of transport, energy efficiency and waste will contribute to carbon savings. Land-use and agriculture are largely devolved responsibilities, and some radical options are available if the Government choses to take them.

If there are weakneses in the Government’s approach, they are the consequence of its limited powers, putting a burden of responsibility on everyone else to make change happen. The Strategy will rely heavily on encouraging more sustainable behaviours, supporting business initiatives and providing advice and guidance. It will not announce new legislation or regulation, it will have few powers of compulsion, and will not use taxation or price signals to drive behaviour change.

Because energy policy and taxation is a matter reserved to the UK Government, and the main legislative framework is that introduced at the UK level by the 2008 Climate Change Act, the Welsh Government’s hands are largely tied. It would be much easier for the Government to persuade us to behave differently it it had powers of legal enforcement and taxation. High fossil fuel prices will be essesntial if the Welsh Government’s big ideas, such as Sustainable Travel Towns, Low-Carbon Regions and a major expansion of renewable energy are to be achieved in practice.

The 3 per cent a year target is for all of us in Wales, not just the Government. But the strategy is likely to be clearer about the actions the Government itself will take. There will be bold proposals for the Government’s own estate, for example to make a 10 per cent cut in emissions during 2010. I think we will see more exemplar projects and evidence of commitment from the Government itself. But what the Government can do and what it is able to persuade/oblige/force others to do, reflects the degree to which our society and lifestyles have been privatised, and shows how we’ve allowed governments to give away control over our destiny to those who control the marketplace.

The CBI’s representatives play a constructive part on the Climate Change Commission for Wales, but their actions and opinions are contradictory elsewhere. Though never expressed in meetings, they complain (in a written submission to the Welsh Government) that the Commission is “failing to engage properly with the business community” and that the agenda is “dominated by issues other than those important to businesses”. And yet it is the success business has had in lobbying against taxation and regulation that has left governments powerless. The CBI prefers market-based mechanisms such as the EU carbon trading scheme, but this has failed to deliver any emissions reductions to date. It has of course stimulated the economy by provided lucrative work for hundreds of corporate lawyers and traders!

I hope the UK Carbon Reduction Commitment (a UK wide emissions cap and trade scheme which starts in April 2010) will fare better. However, in the current economic climate I can’t see a tight cap on emissions being enforced in the face of pressure from business. The Carbon Reduction Commitment will be debated by the National Assembly on 23rd February.

My view is that despite increasingly bold targets, few governments at any level in any country know how to make cuts in greenhouse gases in a cost-effective, politically acceptable way, while wedded to current economic growth model. In Wales as elsewhere, it’s economic and social transformation that’s needed for our environment policies to be achieved. Will we invest sufficiently in energy efficiency in homes? Can we redefine our social aspirations so that we travel less? Will we redirect our economies away from high-carbon infrastructures? Will we treat not the symptom of our malaise but its cause: our unsustainable levels of consumption?

There’s a real challenge for Economic Development Minister Ieuan Wyn Jones’ economic renewal programme to align itself with the climate change targets. This is uncharted territory – no other country has ever decoupled its environmental impact from its economic growth.  So the programme needs to have as its primary aim the achievement of a very low-carbon economy, and fit around that aim whatever economic development strategies that can guarantee jobs and prosperity. If we do this the other way round, or if we take a short-term approach, we will fail.  And the prospects for our future economy will be bleak.

Morgan Parry is Chair of Cynnal Cymru/Sustain Wales.

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