Osborne under pressure to reduce UK's reliance on gas

The Chancellor, George Osborne, is under mounting pressure to cut dramatically Britain's reliance on gas after a coalition of the world's biggest investment fund managers made an unprecedented call on the Government to step up its commitment to low carbon energy.

The alliance of 200 investment institutions includes Scottish Widows, Aviva and HSBC and controls $21trn (£13trn) of assets worldwide. Its lobbying of the UK Government is part of a broader campaign to persuade the world's biggest economies to escalate their actions against climate change.

The alliance's call, which extends to countries such as the US, China and India, represents by far the biggest political intervention staged by financial investors over climate change, and underlines just how concerned they have become about the damage it could inflict on the global economy.

"Hurricane Sandy, which caused more than $50bn in economic losses, is typical of what we can expect if no action is taken and warming trends continue," said Chris Davis, a member of the alliance who advises institutions controlling $11trn on climate change issues.

"Investors are rightly concerned about the short and long-term economic risks of climate change and understand that ambitious climate and clean energy policies are urgently needed to avoid catastrophic impact," Mr Davis added.

In a letter to the governments, ahead of the international climate negotiations that kick off in Doha on Monday, the alliance urges the world's largest economies to engage in "a new dialogue on climate change policy". In particular, it calls for "clear, consistent and predictable policies that encourage low carbon investment".

This will come as an embarrassment to MrOsborne, who is fighting to scrap a proposal by Liberal Democrat Energy Secretary Ed Davey to include in the forthcoming Energy Bill a legally binding target to make electricity generation almost entirely green by 2030.

Instead, Mr Osborne is proposing to champion gas in the bill, which is more environmentally friendly than coal and oil, but produces more emissions than nuclear, wind and solar power.

MPs on the Environmental Audit Committee will cast further doubt on the dash for gas today, calling for clear targets to clean up the power sector by 2030 in the imminent Energy Bill.

Comments