James Cameron: If Britain is to survive economically, it must focus on low-carbon industry

Decisions that are being taken today to support investments that lock us into an old economic model will do little for future prosperity or growth.

Share
Related Topics

There are compelling strategic, economic and political reasons why we must transform the way we generate energy, ensure access to clean water and feed our growing populations. This is at the heart of the agenda at this year's World Economic Forum meeting in Davos.

The challenge is clear. There will be 3 billion new middle class consumers in the world within 20 years, according to the Organisation for Economic Co-operation and Development. There are only 1.8 billion today.

This unprecedented expansion - and the fact that the richer we become the more we consume - means that the pressure on resources we have witnessed over the last decade, which has seen a 147% real-terms rise in commodity prices since 2000, looks set to continue as emerging economies, such as China, India and Brazil, develop further.

Increasing resource scarcity and rising commodity prices pose significant strategic challenges for future prosperity that just can't be ignored, especially for an open, networked society such as Britain.  

But this permanent change in the global economy can also create opportunities, particularly for economic re-balancing and export generation. We can cement our emerging lead in resource efficiency and resource productivity and by doing so create a source of future growth, comparative advantage and economic strength. In fact, this may be the only way for developed economies like our own to grow in an increasingly resource-constrained global economy where we do not ourselves own or control access to commodities.

The transformation required to be competitive in the world we have entered will involve moving away from a 19th and 20th Century growth model that depends on heavily subsidised, finite fossil fuels that have an array of significant political, environmental and social consequences. The leaner, nimbler, and more prosperous societies we must create will be based on clean, renewable technologies, where lifetime costs are much lower because we can turn waste into the raw materials for growth and harness the fact that the wind blows and the sun shines for free.    

Being at the centre of this revolution by developing the technologies, building the infrastructure, and manufacturing the products required will create high value-added, complex and capital intensive economic output able to drive growth, employment and exports. At the heart of realising this opportunity will be harnessing Britain's genius for invention. We can combine our leadership in science and design to spark off new commercial innovations in materials science, advanced manufacturing and construction, amongst many other things.  

But, changes in the policy and rhetoric of government sometimes leads to increasing uncertainty for the private sector, which has further pushed up the cost of capital for investments in these areas. This is quite the opposite of what's needed.

Moreover, decisions that are being taken today to support investments that lock us into an old economic model will do little for future prosperity or growth and make achieving economic resilience in the future much more difficult. The UK's economic future must not lie in supporting industries where we have lost and will never regain a comparative advantage.

For example, while the UK as a whole remains the seventh largest economy in the world, for production we are now ranked only 18th for steel, 23rd for aluminium, and 29th for cement. This is a long-term downward trend that no amount of carbon price exemption or fuel-price subsidy is going to change.

Businesses in these polluting, incumbent, industries have already extracted considerable sums from the public purse, made hysterical claims about carbon pricing while profiting enormously from the over-allocation of carbon permits, and if there were no price for their pollution we would all be subsidising them long after they ceased to exist. These businesses know they can reduce their carbon emissions at relatively low cost, that even with a price for carbon the demand for their products will remain high for the next decade, and that there are alternatives emerging that are less wasteful and also have other attractive properties for their customers.

In complete contrast and despite its relative immaturity (and according to the Government's own figures), Britain now has the sixth largest low-carbon and environmental goods and services (LCEGS) sector in the world and this employs 910,000 people in the UK. It is also growing at over 4% a year – well above growth in the rest of the economy. In each LCEGS area the UK has a global share of between 3.2-3.8% and in carbon finance we have a share of 11.7%. These are going to be increasingly important areas for us to earn our way in an increasingly competitive global economy.

At the same time and just as importantly, this approach can help us make a significant contribution to preventing catastrophic climate change and the other serious environmental challenges we face. It takes courage not to trade off environmental imperatives against the financial crisis we are in. We must be much more determined to discover how to survive and prosper in the real world of resource competition and physical environmental risk. It's the only way we can have a growth strategy that actually delivers prosperity today, while also securing it for future generations tomorrow.

James Cameron is founder and vice chairman of Climate Change Capital and a member of the Prime Minister’s Business Advisory Group. Climate Change Capital is an environmental investment manager and adviser.

 

climatechangecapital.com

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Argyll Scott International: Senior Business Analyst- Insurance

Negotiable: Argyll Scott International: Senior Business Analyst - Insurance ...

Recruitment Genius: Property Manager

£25000 - £29000 per annum: Recruitment Genius: This independent, growing Sales...

Recruitment Genius: Graphic Designer

£16000 - £20000 per annum: Recruitment Genius: Multi-skilled graphic designer ...

Austen Lloyd: Court of Protection Solicitor

£30000 - £50000 per annum + EXCELLENT: Austen Lloyd: Court of Protection Solic...

Day In a Page

Read Next
 

i Editor's Letter: The demise of a Sixties monster

Oliver Duff Oliver Duff
A CCTV camera is seen in front of a large poster opposite in central London  

Home Office is creating more powers to turn everyone into suspects – but leave us no safer

Shami Chakrabarti
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?