City tells George Osborne: we can’t afford to ignore climate risk

 

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

The alliance of 200 investment institutions includes Scottish Widows, Aviva and HSBC and controls $21 trillion (£13trn) of assets worldwide and 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 (£31bn) 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 $11trillion (£6.9 trn) 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 the Chancellor, George Osborne, who is fighting to scrap a proposal by the 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 the use of gas in the bill, which is a more environmentally friendly way of generating energy than coal and oil, but produces far more emissions than nuclear, wind and solar power.

In a separate embarrassment for the Chancellor, the Environmental Audit Committee of MPs will cast doubt on Mr Osborne's reliance on gas today, arguing that "a Treasury-led 'dash for gas' could make the UK's carbon targets under the Climate Change Act unachievable."

Mr Osborne's commitment to fighting climate change has been increasingly questioned in recent weeks. A secret recording revealed in The Independent last week showed Mr Osborne's father-in-law, Lord Howell, who also advises the Government on energy, claiming that the Chancellor is hostile to building more onshore wind-turbines.

Britain has signed up to legally binding targets to cut emissions by 34 per cent by 2020 and by 80 per cent by 2050, compared to 1990 levels.

Joan Walley, the Labour MP for Stoke-on-Trent North who leads the committee, said: "The Government needs to reassure investors by setting a clear target in the Energy Bill to clean up the power sector by 2030. The Treasury must end the uncertainty on energy policy and give investors the confidence to seize the enormous opportunities presented by new clean technologies." Britain's energy infrastructure needs an estimated £200bn worth of investment by 2020 – and £330bn by 2030 – as ageing coal and oil plants prepare to close over the next few years. Much of the investment is needed to build wind, nuclear, solar and other low-carbon power plants.

Potential investors will not commit cash to infrastructure projects until they know new legislation on key issues such as subsidies.

The Bill has already been postponed several times and last week was pushed back again as disagreements persisted between Mr Osborne and Mr Davey.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech

Board creates magnetic field to achieve lift

News
There have been various incidents of social media users inadvertently flouting the law
news

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

**Primary Teachers Needed Urgently in Southport**

£80 - £120 per day: Randstad Education Liverpool: **Due to an increase in dema...

SEN Teaching Assistant Runcorn

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...

Nursery Assistant/Nurse all cheshire areas

£7 per hour: Randstad Education Cheshire: We are a large and successful recrui...

SEN Teaching Assistant

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant We are curr...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London