Joint statement by Environment Secretary Margaret Beckett and CBI Director General Digby Jones on climate change
Climate change is one of the most important challenges facing the world today.The UK government and the CBI are at one on the need globally for effective environmental and economic solutions. We are united in our support for emissions trading, which gives firms the flexibility to meet CO2 reduction targets by trading emissions permits.
But with the European Commission putting the finishing touches on an EU emissions trading scheme, it is critical that our neighbours in Europe show similar commitment.
The Commission must use its legal powers to ensure that Member States take a consistent approach to get the best results for the environment and balance environmental and competitiveness concerns.
It is impossible to underestimate the importance of climate change.
There is broad scientific consensus that man-made greenhouse gas emissions are contributing to global warming. The ten warmest years on record have occurred since 1990 and experts predict further rises if no action is taken.
In the developing world, famine, drought, disease and mass migration will hardest hit the poorest and most vulnerable people. The prospect of conflicts over scarcer resources such as water will add further to global economic uncertainty.
In the UK, we in future can expect more extreme weather conditions such as intense rainfall, widespread flooding and prolonged droughts. In the last five years, we have already seen the Thames Barrier closed 55 times compared with 12 times in the previous five years.
The potential impact on society and on business of adapting to such change is large. Swiss Re, the world’s second largest insurer, estimates that the economic costs of global warming could double to $150 billion each year in the next ten years.
To reduce these impacts, we must limit the concentration of carbon in the atmosphere. Time is not on our side because this means that global emissions will have to peak and start to decline over the next couple of decades.
But no one should be under any illusions that action to reduce greenhouse gas emissions presents challenges for companies.
The emissions trading scheme has triggered EU-wide company worries about the combined impact of industrial measures to cut emissions and increased energy prices.
The UK government acknowledges such concerns, but it believes we are making strides towards a carbon-constrained future without damaging the economy. Indeed, between 1990 and 2002, our emissions fell by nearly 15 per cent at the same time as the economy grew by 30 per cent.
As well as delivering environmental benefits, energy efficiency actually saves money for companies and consumers. There are also business opportunities in the emerging markets for low carbon technologies.
So both the CBI and the government recognise that business must continue to play its part in delivering carbon reductions. The challenge is to find a way of balancing competitiveness with UK and EU level political commitments to show leadership on climate change.
This will inevitably mean a continuing lively debate about targets and the package of measures designed to achieve them. The government remains committed to its domestic goal of moving towards reducing carbon dioxide emissions to 20 per cent below 1990 levels by 2010.
But the government and business strongly believe that market-based measures must be part of any cost-effective response to climate change.
That is why the government and the CBI have been working so hard on devising the right policies for the UK and Europe. The UK emissions trading scheme has, for instance, been instrumental in shaping the way the EU is attempting to reduce CO2 output.
Of course, there is important detail to get right because the rules by which the carbon market will operate will affect firms in different ways. UK companies affected by the scheme have been talking to the government about their allocation of permits and will continue to do so.
But strategically it is essential for key departments in the European Commission - not just environment, but others such as enterprise and internal market - to ensure that the combination of all national plans across the EU adds up to a coherent whole.
At stake is the credibility of emissions trading as a mechanism for engaging other key countries, including the United States. The UK national plan, recently submitted to Brussels, involves real effort by business that will help ensure we not only meet our Kyoto target, but go beyond it.
Many other EU countries face a stiffer challenge simply to meet their Kyoto targets. The Commission must see to it that their plans at the very least deliver on these commitments. British business sees it as vital that they are operating on level ground.
The European Commission has an important job to do. The British government and British business will be watching to make sure it does the job properly.
Margaret Beckett is Secretary of State for Environment, Food and Rural Affairs and Digby Jones is Director-General of the CBI.
Page published: 9 June 2004