Transcript Incentives for Low Carbon Innovation

Role of Regulation, Incentives and Barriers to
Eco-Innovation (Low Carbon Innovation)
Dominic Scullard
Regulation, Incentives and Barriers to Greater Eco-Innovation
Environmental Policy – Benefit or Harm
to the Economy
Tackling Climate Change will:
- Have Costs to the Economy
+ Provide Opportunities for Business
Regulation, Incentives and Barriers to Greater Eco-Innovation
Some of the Costs to the Economy
•
Projected cost to the UK economy of the indicative EU renewables
energy target is estimated at £5/6bn a year (about €7bn 20-25bn
Zloty)
•
Existing environmental policies to tackle climate change in the UK
(Renewables Obligation / ETS / Carbon Emission Reduction Target)
form around 21% of medium sized industrial electricity bills and
around 4% of Gas Bills
•
But avoiding tackling climate change is not cost free either, as the
Stern Review showed failure to take early action will have bigger
costs later on, even as high, or higher as 20% of global GDP
•
But there are opportunities too from this investment
Regulation, Incentives and Barriers to Greater Eco-Innovation
Opportunities for the Economy
•
On-shore Wind generation market has been expanding by 30%
year on year driven by US and China. EU Targets will add to this.
•
In order to meet CO2 reduction targets the IEA estimates that CCS
will need to be installed on 630 coal-fired power plants by 2030.
This could represent €40bn a year spend on CCS. (From November 2007
G8 Workshop in Calgary)
•
Investment in Renewables in the UK to meet the indicative EU
target is projected to be around £100bn by 2020
•
Increased Energy Efficiency could save UK Industry £7.3bn
(€9.3bn / 30.6bn Zloty) a year
•
Waste currently costs UK Industry about 4% of turnover
•
Growing low carbon markets in areas of Power, Buildings,
Transport and Manufacturing Industry
Regulation, Incentives and Barriers to Greater Eco-Innovation
Developing Low Carbon
(Eco)
Industries
•
Markets for Low Carbon and wider environmental goods and
services are expanding – but in order to make the most of the
opportunities the UK Government has and is increasingly taking a
strategic approach
•
Started with the Commission for Environmental Markets and
Economic Performance
www.defra.gov.uk/environment/business/commission/index.htm
•
This enabled the UK Government to conclude that in order to best
develop eco-industries we should concentrate on:
- The Long-Term Policy Framework
- Support for Supply Chains
- Creating the Conditions for Innovation
- Developing Skills
- Information and Advice
Regulation, Incentives and Barriers to Greater Eco-Innovation
Regulation Driving Innovation
•
There are different views on whether regulation can drive
innovation and boost competitiveness. Some evidence suggests
however:
•
Automotive Industry - European Manufacturers have benefited
from tight environmental regulations driving energy efficiency and
emissions. USA automotive manufacturers are behind the curve
•
The EU 2020 Energy and Climate Package should help to drive
R&D and investment in low carbon technologies and deployment
•
An UN Post Kyoto Agreement would also help to drive market
demand
•
Emissions Trading drives the market demand for carbon abatement
technologies
•
In the UK The Climate Change Bill, once passed, will commit the
UK to making carbon reductions to 2050 – providing long-term
regulatory certainty
Regulation, Incentives and Barriers to Greater Eco-Innovation
Incentives for Low Carbon Innovation
•
Long-Term Policy Framework is key
to ensure that the private sector has
the certainty required to make longterm investment decisions, both in
purchasing low carbon technology and
in developing it.
•
Direct Public Support for Low
Carbon Supply of technology
– Environmental
Transformation Fund: To
assist the development of new low carbon
energy and energy efficiency technologies
in the UK. It has a budget of £400m for
2008-11
www.berr.gov.uk/whatwedo/energy/environment/etf/page41652.html
– Carbon Trust:
Main aim to
accelerate the move to a low carbon
economy by working with organisations
to reduce carbon emissions and develop
commercial low carbon technologies
www.carbontrust.co.uk
– Technology Strategy Board:
Chief role to stimulate technologyenabled innovation in areas that offer the
greatest scope for boosting UK growth
and productivity. The TSB promotes,
supports and invests in technology
research, development and
commercialisation. A proportion of this is
on low carbon or eco technologies,
specifically around vehicles, buildings and
lighting
www.innovateuk.org
– Energy Technology
Institute: The Energy Technologies
Institute is a public/private partnership
created to accelerate the development
and commercial deployment of a focused
portfolio of energy technologies which will
increase energy efficiency, reduce
greenhouse gas emissions and help to
achieve energy and climate change goals
www.energytechnologies.co.uk/
− Regional Development
Agencies: RDAs help a sustainable
economic development of their regions
and prepare for a low carbon future
www.englandsrdas.com
Regulation, Incentives and Barriers to Greater Eco-Innovation
Barriers to Low Carbon (eco) Innovation
•
Lack of Regulatory Certainty – deterring investment in new
products or services or reducing demand
•
Lack of Awareness or Information on the Growth of Low
Carbon Markets / Opportunities
•
Product Standards – ease of exporting goods
•
Evidence of a reliable track record – difficulties for new
companies to prove merits of their products
•
Lack of Business Clusters, or hubs for spin out industries from
universities
•
Access to Investment Capital, especially for more risky projects
•
Skills
Regulation, Incentives and Barriers to Greater Eco-Innovation
Current Action –
•
Government revised its Manufacturing Strategy to include Low Carbon
Manufacturing. A number of specific actions:
– Establishment of an Office of Nuclear Development (OND) work with supply
chain companies to create a globally competitive industry. Provide clarity and
knowledge about the needs of the industry and information on new and existing
programmes and future technology needs.
– Establishment of an Office for Renewable Energy Deployment (ORED) similar
to nuclear, it will address barriers in the supply chain and raise the profile of
manufacturers to the renewables industry and communicate the opportunities
available.
– Support for a Pilot Project for Electric Cars, exploring the role of electric cars in
a sustainable transport system and the anticipated market capacity.
– UK Government working with the Confederation of British Industry to
showcase British Low Carbon Technologies to a global marketplace
– Produce in 2009 a full Low Carbon Industrial Strategy which analyses:
+ Size of the Low Carbon Market
+ Potential Growth of the Low Carbon Market
+ Future Role of Government
Regulation, Incentives and Barriers to Greater Eco-Innovation
Current Action –
Current steps have helped to address
-
The Long-Term Policy Framework
Support for Supply Chains
Creating the Conditions for Innovation
Information and Advice
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Regulation, Incentives and Barriers to Greater Eco-Innovation
Example
• Market potential for wave energy
>2,000 TWh/year
World Energy Council
•
•
•
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Pelamis - founded in 1998
Raised almost £40million (including from the Carbon Trust)
Headquartered in Edinburgh. Employs over 70 people
Recently commissioned to install worlds first multi-unit wave farm
Regulation, Incentives and Barriers to Greater Eco-Innovation
Example
Kentish Flats Offshore Wind Farm
8-13 km off the coast
30 wind-powered turbines (3 MW ea)
• Since 2000 UK Capacity in offshore wind has
been growing by 86% a year.
• UK revenues from offshore wind could hit
£2bn a year by 2020.
• The Kentish Flats alone will displace an
estimated 4.4 million tonnes of carbon dioxide
over its 20-years, compared to conventional
fossil fuel generation.
Capital cost
Grant
£105m
£10m
Regulation, Incentives and Barriers to Greater Eco-Innovation
[email protected]
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