What’s the big idea?
A low carbon innovation fund
To create a new future energy innovation fund – a windfall tax on any new oil and shale gas projects – to finance a £3 billion expansion in innovation funding during the next parliament. Any public funding should be leveraged to ensure maximum impact by partnering with the private sector and other interested governments.
Who benefits?
Ultimately everyone: consumers, business and the government, through lower bills, more efficient industry and an expansion of new jobs and exports. An investment of £3 billion in innovation over the next parliament across 11 technology areas could reduce the cost of deploying each individual technology by £3-45 billion by 2050 and create an increase in gross value added to the UK economy of £1-18 billion per technology via exports.
Two areas to really focus on given the size of the economic and environmental prize are industrial energy efficiency and offshore wind:
- Offshore wind: There is an urgent need to test new offshore wind turbines on novel foundations so that they can be deployed in time to meet renewable energy targets, including unlocking sites in deeper waters through lower costs and innovation. The Carbon Trust’s Offshore Wind Accelerator, an industry-government collaboration, is already taking this forward. This could be accelerated by further investment and establish UK leadership in this area. Further innovation here could save up to £20 billion and contribute up to £35 billion by 2050. It will also drive down the cost of energy to consumers.
- Industrial energy efficiency accelerator: Industry produces a quarter of the UK’s carbon emissions. We know that almost 30 per cent of industrial energy use can be can saved through the introduction of innovation in industrial processes such as heat recovery and combustion efficiency. These savings can be realised across at least 15 sectors by working in collaboration with the leaders and innovators in each sector to identify innovative opportunities, demonstrate and then disseminate them across the rest of the sector. This innovation will also result in a more competitive industrial base for the UK.
What’s the catch?
No clear catch beyond an increase in DECC’s budget.
What has to change?
- Political parties have to commit to a new tax regime.
- Funding raised should be hypothecated to spend on low carbon innovation.
Why should it be in manifestos?
A step change in investment in innovation, focused on key low carbon technology options, would not only help the UK reach its carbon reduction targets in 2030 but also significantly reduce the cost of future energy and create leading industries, new jobs and boost UK exports.
This article was first published by Green Alliance as part of their
Big manifesto ideas: inspiration on innovation, planning and UK jobs series.
