UK Govt’s “Clean Growth Strategy”

By Paul Homewood


h/t Philip Bratby


Just issued today:




An ambitious strategy setting out how the UK is leading the world in cutting carbon emissions to combat climate change while driving economic growth, has been published today (12 October 2017) by Business and Energy Secretary Greg Clark.

‘The Clean Growth Strategy: Leading the way to a low carbon future’ builds on the UK’s strong progress to date. Carbon emissions in the UK have fallen and national income risen faster and further than any other nation in the G7 – since 1990, emissions are down by 42% while the economy has grown by 67%.


The government’s strategy sets out how the whole country can benefit from low carbon economic opportunities through the creation of new technologies and new businesses, which creates jobs and prosperity across the UK, while meeting our ambitious national targets to tackle climate change.

Business and Energy Secretary Greg Clark said:

This government has put clean growth at the heart of its Industrial Strategy to increase productivity, boost people’s earning power and ensure Britain continues to lead the world in efforts to tackle climate change.

For the first time in a generation, the British government is leading the way on taking decisions on new nuclear, rolling out smart meters and investing in low carbon innovation. The world is moving from being powered by polluting fossil fuels to clean energy. It’s as big a change as the move from the age of steam to the age of oil and Britain is showing the way.

Climate Change and Industry Minister Claire Perry said:

The impact of the Paris agreement and the unstoppable global shift towards low carbon technologies gives the UK an unparalleled opportunity.

By focusing on Clean Growth, we can cut the cost of energy, drive economic prosperity, create high value jobs and improve our quality of life.

Every action that the government takes to cut emissions must be done while ensuring our economy remains competitive. The government’s actions to reduce carbon emissions, through support for renewable energy and energy efficiency measures, have helped to reduce average consumer energy bills and more than offset the cost of government support for low carbon technologies, and the costs of key technologies such as offshore wind is plummeting.

For the first time the government is setting out in today’s Strategy how over £2.5 billion will be invested to support low carbon innovation from 2015 to 2021, as part of the largest increase in public spending on science, research and innovation in over three decades. This funding covers programmes delivering low carbon energy, transport, agriculture and waste.

That £2.5 billion of existing government spending includes up to £505 million from the Department for Business, Energy and Industrial Strategy’s Energy Innovation Programme, which aims to accelerate the commercialisation of innovative clean energy technologies and processes.

There are already more than 430,000 jobs in low carbon businesses and their supply chains. Today’s policies will provide further opportunities right across the country for more jobs, higher earning power and increased productivity. The low carbon economy could grow 11% per year between 2015 and 2030 – faster than the rest of the economy.

There is a lot of nonsense to follow about how we are going to drive the economy forward by investing more in offshore wind, electric cars, climate friendly agriculture, CCS and a zero waste strategy. I fail to see how the public at large will actually be financially better off as a result of any of these.

Instead, most of the proposed actions will simply act to transfer money away from more productive parts of the economy.


But the thing I really wanted to concentrate on is this statement:

Carbon emissions in the UK have fallen and national income risen faster and further than any other nation in the G7 – since 1990, emissions are down by 42% while the economy has grown by 67%.

I have noticed this sort of statement made a few times lately. It implies that the two things are actually interconnected, that economic growth is not only possible despite decarbonisation but is the result of it.

Worse still, it suggests that decarbonisation will drive growth in future.

So let’s look at a few facts.

Below is the chart from the CCC, showing GHG emissions v GDP



If we home in on the split of CO2 emissions, we see this. (Note – this does not include non CO2 GHGs):



In total, emissions have dropped by 210 MtCO2 since 1990, from 594 to 384 MtCO2.

Most of this fall has come from power production, but much of this, 57 Mt, came in the 1990s as a result of the dash to gas, which replaced coal and had nothing to do with climate policies but instead was driven by economics.

Since 2009, another 74Mt has been saved from power production. This splits roughly 50/50 between reduced consumption and the rise of renewables. Whilst some of this reduced usage may be due to energy efficiency, more than half has come from industrial consumption.



By contrast, there has been virtually no drop in domestic consumption since 2014, despite the government’s much vaunted energy saving programmes.

As the first graph showed, there has also been a drop in direct emissions by industry. These began to drop quite sharply around 2000, and are now 56Mt lower.

Both the drop in direct emissions and electricity consumption by industry likely reflect a reduction in industrial activity, particularly heavy energy users. This is borne out by figures from the ONS for Industrial Production, which are down by 11% since 2000.



I am certainly not saying that this fall in output has been caused by energy prices, but it is abundantly clear that it has been responsible for much of the reduction in CO2 emissions.


But what about overall GDP? As the CCC shows, it has risen steadily since 1990, with the exception of the 2008 blip.

Is the economy simply moving from being a manufacturing to a service economy?

The answer lies in this next graph:



Real GDP per capita has virtually flatlined since 2007, rising by just 2.1%. The headline GDP increase as presented by the government is largely the result of population increase, and not of increased productivity.

There are many reasons for this, and it would be naive to blame it all on climate policies. However, it offers little confidence that the government’s new strategy will bring about the economic growth it claims.


October 12, 2017 at 11:00AM

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