Energy challenge: Oliver Letwin, Cabinet Office Minister

The Daily Telegraph March 19th 2011 – Oliver Letwin

We need a wider range of energy sources to ensure security of supply and sustainable growth. The answer is a green economy.

It is surprising that people are still asking whether we can move to a low-carbon economy. The answer to that question is obvious and certain. Of course we can. The real question is whether Britain should make that choice and become the world’s first true low-carbon economy. I believe we should. Why? There are two compelling reasons – each as important as the other.

First, this is an issue of moral leadership – we absolutely have to establish moral leadership on the issue of climate change, just as we have established moral leadership on the question of international aid.
Those of us who made the case at Copenhagen for a carbon cap now have a moral obligation to show that we are true to our word by delivering green changes in our own countries. Doing so will send a signal to more reluctant countries that we are serious, and will help build the conditions necessary to reach a global agreement to act.

But the second argument for turning Britain into a low-carbon economy has nothing to do with global climate change. It has to do with our own energy security and the long-term stability of our own economy.

There is now an unanswerable strategic case for building a diverse portfolio of sources of energy that substantially reduces our dependence on imported oil and gas. Anybody watching events in the Middle East and North Africa cannot fail to see just how fragile the world’s fossil fuel supplies can be, in terms of security of supply and price volatility.

Not only have oil prices increased dramatically in the past two months, but the two epicentres of political instability – Libya and Egypt – play an important role in energy supply. Libya has the largest oil reserves in Africa, around 45 billion barrels, while around 1.8 million barrels are shipped through Egypt’s Suez Canal every day.

Given the energy security challenges we have faced throughout the past decade – in Russia, Central Asia and elsewhere in the Middle East – it would be simply irrational just to carry on as we are and continue to expose our economy to unknown and unknowable risks. Long-term British security and British prosperity depend on achieving much more diverse sources of energy supply.

Once we accept – as the Coalition Government does – that, for both of these reasons, we must move to a low-carbon economy, the next question is: are we doing it?

A few months ago, the Public Accounts Committee looked into the last Government’s record at the Department for Energy and Climate Change. Its verdict was decidedly cool: under previous management, the department lacked urgency, drive and purpose. There was a lack of long-term planning. And when it came to meeting the 2020 emissions target, the department “had not… started preparing a detailed delivery plan”.

This Government is doing things differently. Earlier this week, our Carbon Plan committed the Coalition to a series of radical changes. We will establish a Green Investment Bank, set a floor price for carbon, and cut central government emissions by 10 per cent.

We are establishing a ‘‘smart grid’’, rolling out ‘‘smart meters’’ to every home, using incentives to bring forward renewable energy, promoting the use of waste to produce gas and our vast offshore wind resources to produce electricity, enabling nuclear plants to be built, starting the process of electrifying the car fleet, and working to establish electricity interconnections with our northern European neighbours.

Some people will think that making these changes will require huge short-term sacrifices. Where there are unavoidable transition costs, we will minimise them by focusing on the most efficient low-carbon technologies. But the main point is that this is not a short-term threat so much as a short-term opportunity – for green jobs and green growth.

Our Green Deal alone – which allows households to become more energy efficient without upfront costs – has the potential to support 100,000 green industry jobs within five years. And the other low-carbon transformations I have described will bring huge new investment and jobs.

Going green can mean more security, and it can mean more growth.

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