2012: What lies ahead

17th January 2012


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  • Business & Industry ,
  • Ecosystems ,
  • Biodiversity ,
  • Natural resources ,
  • Supply chain



Environment secretary Caroline Spelman and EU comissioner Janez Potocnik join policymakers, regulators and business leaders in sharing their priorities for 2012

Caroline Spelman – secretary of state for environment

My ambition for Defra for 2012 is to continue to stimulate a move to green growth in the economy, while setting out a clear and credible long-term vision for the environment. Business leaders can help spread the green growth message, nationally and locally, along supply chains and to customers, to make sure the transition to a green economy is embraced, and that the UK is ready to grasp the opportunities emerging in both the developed and developing world.

The role that businesses will play in this vision is critical – some of the key big retailers have embraced sustainability and are reaping the rewards. We need to work with businesses, support them and ensure they have the right frameworks to take the opportunities available to them. Defra will be launching the resource security action plan early in the year. This will help businesses manage supply chain risks and encourage better use of materials.

This financial crisis must be weathered. But we all need to recognise the opportunity it offers: the opportunity to rethink our economy, and win the argument for making growth green.

Janez Potocnik – European commissioner for environment

Many of the challenges facing the environment in 2012 are also opportunities to respond to the financial and economic crisis. After decades of carefree – and careless – growth, we need to pay more attention to the limits imposed by the Earth’s natural resources and to the needs of future generations. An economy that derives more value from fewer materials, through smarter consumption, will help us move towards sustainable growth, bringing new jobs in areas such as ecodesign and eco-innovation, recycling and recovery of materials. Forward-thinking businesses are already moving in this direction, enjoying the first-mover advantages familiar to early adopters.

More sustainable consumption and production patterns and improved waste management will be essential to make Europe more resource efficient. Environmental concerns must also be integrated into other policy areas such as industry, energy, agriculture, fisheries and transport. Water is our next priority and will be the subject of Green Week 2012.

2012 also marks the fifth anniversary of REACH, our powerful chemicals legislation, and will mean that all of its mechanisms to control the use of dangerous chemicals will be fully operational. As well as improving public health, this will also make materials easier to use and recycle. The cooperation of industry has been much appreciated.

Finally, we shall be working intensively to improve the implementation of all EU environment legislation in key areas such as air, waste, water, chemicals, and nature. This is essential both for a greener economy and a healthy environment.

Dr Paul Leinster – chief executive, Environment Agency

The past 12 months have seen major changes across the private and public sectors, driven by the difficult economic situation. These changes will continue in 2012 and beyond.

However, the Environment Agency moves into the new year confident that we will deliver across all areas of our work. We continue to develop new and innovative ways of working, ensuring we deliver more for people and the environment for every pound of funding we receive. By saying “yes, if” whenever possible, we will explore new ways of working in partnership with other organisations, communities and businesses. We will focus on outcomes not processes.

Climate change remains a considerable challenge. In 2012 the agency will work with businesses, local authorities and other organisations to help them assess and adapt to the impacts of climate change, including flood risk, water supply, water quality and biodiversity.

The Environment Agency will also continue to reduce unnecessary regulatory burdens on industry and tailor our approach to specific industries. We will have a particular focus on stopping illegal activities, to ensure there is a level playing field for legitimate businesses. We will be firm and fair, ensuring people and the environment are properly protected, including prosecuting when required.

Improving water environments also remains a priority. We will continue our extensive programme of investigations and will target measures to improve the ecological condition of the UK’s water bodies. These are just a few of our priorities for 2012.

Martin Baxter – executive director of policy, IEMA

The coming year will present a number of policy developments and challenges for businesses and organisations. The Rio+20 Earth summit will be a welcome reminder that international efforts to protect the environment aren’t solely concerned with global climate change. There is a real opportunity for countries to set a path towards greening their economies, ensuring that they don’t destroy natural capital and undermine social wellbeing.

The adoption of the Roadmap to a resource efficient Europe last September will be followed by a more detailed sustainable production and consumption action plan. The plan will have longer-term consequences for businesses as it filters down into national policies.

Closer to home, the government will launch a resource security action plan in February, an important step in ensuring that the UK is able to access the resources it needs to support a rebalancing of the economy. One decision expected in early 2012 is whether the government will introduce mandatory greenhouse-gas (GHG) reporting for companies. This will, in part, be linked to proposals to restructure corporate reporting from October 2012 under the Companies Act 2006. The development of the government environmental reporting guidelines, due to be published at the end of 2012, will help to maintain a focus on corporate disclosure and transparency over the coming year.

There is also the potential for broader GHG reporting to be linked to proposals to simplify the Carbon Reduction Commitment Energy Efficiency scheme (CRC). Planning reform and publication of the National Planning Policy Framework will provide a key test of how well the government really understands sustainable development.

Finally, the March 2012 Budget will, as ever, give the clearest indication of how well we’re progressing towards a green economy.

Rhian Kelly – director of business environment, CBI

2012 will be the year we see if we’re going to take advantage of the growth, investment and jobs offered by the low-carbon transition. Decarbonisation survived the recession but it remains to be seen if it will survive the sequel that could be coming in the wake of the eurozone crisis. We know all the economic arguments for decarbonising, but will that matter if the political will evaporates?

To ensure it remains part of the political narrative, next year will need to be about three things – investment, growth and jobs. Make the green policies solely about decarbonising and people aren’t going to bite. Show how policies such as the Green Deal and the Green Investment Bank will grow the economy today and things can happen.

Following the mess made of changing the solar feed-in tariff (FIT) – which joins the previous year’s blunder over the CRC scheme – there’s a lot of ground to be made up in persuading businesses that the government is going to deliver a steady, predictable policy landscape in which they can plan their investments. We will need to see policies that manage the cost of decarbonising sensibly while at the same time making sure we start getting the most out of the economic benefits on offer.

Gareth Stace – head of climate and environment policy, EEF

2011’s myriad consultations on potential climate change and environment policies will shape the policy landscape of 2012. At the same time, COP 17 has set the pace for post-Kyoto negotiations, which will be a central theme for 2012 ahead of the end of the commitment period on 31 December.

The next 12 months will therefore see a very different policy landscape to that of the preceding years. We are expecting the results of consultations on: GHG reporting and whether this will be made mandatory; whether climate change agreements will be still be administered by sectors or by the Environment Agency; what Defra will deliver from the waste policy review; and what the package of measures aimed at addressing competitive concerns for energy-intensive industries will include.

In the government’s drive to be the “greenest government ever”, these consultations have promised to streamline policy while also reducing the burden for business. However, this hangs in the balance as we wait for the results. One thing is certain – the more consultations delivered, the less certainty business enjoys.

Sally Uren – deputy chief executive, Forum for the Future

The last year has been rich in new conversations, concept and practice. My prediction is that 2012 will see one of each of these break through into the mainstream. The conversation to break through will be the one around sustainable capitalism. Increasing numbers of business leaders will question whether the current form of capitalism is fit for purpose. Enter the notion of sustainable capitalism – where we factor in environmental assets, and recognise their true value.

The concept to break through is that of collaborative consumption – the rapid explosion in swapping and renting goods and services, often through peer-to-peer (P2P) businesses, such as AirBnB, a website where you can rent out your spare room. Collaborative consumption could mainstream in 2012 for two reasons: first, economic austerity will force people to cut costs, and look for cheaper ways of accessing goods and services; second, the ongoing digital revolution will increase people’s ability to access these new P2P business models.

And finally, the practice of taking sustainability to consumers, rather than waiting for them to demand it, will mainstream. Pioneering companies, such as M&S and Unilever, are already saying they will try to shift what people buy and how they use their products in the home.

The realisation that it is possible to drive brand loyalty through sustainability issues (as long as these issues are linked to other benefits), and that it will be increasingly impossible to be credible on sustainability issues without addressing the use phase (accounting for up to 80% of a product’s impact), will mean many more brands will take sustainability to their consumers.

If we see these breakthroughs, then we stand a much better chance of seeing a sustainable future.

David Kennedy – chief executive, Committee on Climate Change

We have made good progress recently in developing policies to support reductions in emissions. Particular highlights are the acceptance by the government and parliament of our advice on the fourth carbon budget and electricity market reform (EMR).

But there still remains much to do in order to make the step change from a broadly flat emissions trend to the 3% annual emissions reduction required over the next decade – and the actions that we take over the coming months will be crucial in determining whether we will meet carbon budgets or not.

The key areas we need to get right are: the detailed arrangements for implementing the EMR; the urgent demonstration of carbon capture and storage; the introduction of strong incentives for residential energy-efficiency improvement; the deployment of renewable heat; and the development of electric vehicle markets.

We also need to set out the facts about energy bills, both as regards recent increases – due to gas-price movements – and projected increases due to financing of low-carbon investments. Where there are groups with legitimate concerns – the fuel poor and electricity-intensive industries operating in global markets – mechanisms should be introduced to ensure that adverse impacts are addressed.

With new policies in place, continued funding, and a positive public narrative on the benefits of building a low-carbon economy, the stage will be set for people and companies to respond, taking actions and investments to reduce emissions which will benefit us all.

Peter Young – strategy director, SKM Enviros; chair of the Aldersgate Group

I do not think history will look kindly on the environmental achievements of 2012. The growth of developed economies will be at best flaccid. At worst, failure to act on sovereign debt or resource price shocks, caused by political or weather events, could bring back the gloom of recession to much of the developed world. The almost total eclipse of the COP 17 negotiations at Durban by the efforts to save the euro show the environment is no longer front of mind.

The UK government seems increasingly influenced by climate-change deniers and backers of past economies to deliver growth. Ironically, the policies delivered by the sponsors of the “green economy”, Defra, DECC and even BIS, are increasingly credible and helpful. I am hopeful of progress on the Green Investment Bank, mandatory carbon reporting, natural capital accounts and more investment in resource efficiency. But I fear more marginalisation, with the power of No.10 and the Treasury being directed towards support for the old economy and cutting as much regulation that benefits the economy as that which does not.

The environment agenda will win some important battles but continue losing the war, consigning future generations to greater impoverishment – in every sense of the word. When will we learn to stop spending and using more than we and the planet can afford? Not in 2012. Perhaps a jolting wake-up call for our leaders, such as a massive commodity shortage due to weather consistent with climate predictions, is the best to hope for.

Gaynor Hartnell – chief executive, Renewable Energy Association

I’ll confine myself to three “asks” for 2012. First, investor confidence in the sustainable energy sector must be rebuilt after the traumas of the first two years of the FIT scheme. The damage of retrospective action, which is how industry viewed the announcement in October 2011 to cut the tariff levels, has spread far and wide. The sooner we see regular and predictable adjustments, made in a timely manner, the better.

Second, we need to make sure the Renewable Heat Incentive does not repeat the same mistakes. This could entail pre-registering access to funding for the largest projects and having a capacity-triggered degression of tariffs for the smaller scale.

Finally, if the government wants UK companies to benefit from a renewable source of energy that needs minimal subsidy and no new infrastructure, it must get off the fence regarding biofuels. It insists on the 10% biofuel transport target, yet for years has held back from setting out a trajectory to achieve it. This is a sure-fire way of snatching defeat from the jaws of victory. Why see the UK dependent on imported biofuels, whose environmental benefits are less verifiable, when we could have domestic manufacture?

Liz Goodwin – chief executive, WRAP

WRAP recently published the first major study examining the environmental and economic benefits of reuse in the UK. Its findings make compelling reading. We hope that in 2012 more people will consider the benefits of reuse. Greater reuse could help reduce the UK’s GHG emissions by nearly four million tonnes of CO2e (tCO2e) each year, by 2020.

UK businesses and households could benefit annually by more than £1 billion as a direct result of sales through reuse exchanges, and by avoided purchase costs. Take televisions. About 1.3 million televisions are reused each year; that’s 13% of all TVs reaching end-of-life. At this rate of reuse, we are collectively cutting emissions by 160,000 tCO2e a year and saving £500 million as householders sell their old sets. The numbers represent a fraction of the potential and this is why WRAP is championing reuse.

Working with industry, WRAP created a methodology to examine reuse, along with an online tool to help users understand its impacts, and to act as a guide to the most appropriate way of dealing with products that have reached their “end-of-life”. We also manage the £1 million Waste Prevention Loan Fund.

This supports organisations that introduce business models and processes that make more efficient use of material resources. Examples include product reuse, repair and upgrading services, and materials recovery and reuse by the manufacturer. The fund will support organisations over the next four years. It is designed to help introduce solutions where commercial funding is otherwise unavailable, and is part of our focus on reducing waste through reuse.

David Nussbaum – chief executive, WWF-UK

As we move into 2012, the global environmental agenda is as congested and crucial as it has been for many years. Yet against the background and persistence of the global economic crisis, and the threat of recession in the UK and elsewhere, environmental issues struggle to get the political attention they urgently require.

The world is coming to London in 2012 for the Olympics, but shortly before this, Rio+20 takes place, 20 years after the 1992 Earth summit, which set in motion some of the most important intergovernmental bodies that have driven forward action on protecting the environment and biodiversity, and tackling climate change. But pressures on ecosystems due to our consumption of resources – from freshwater to food, forest products to fish – have increased in the past two decades, not diminished, as has the rate at which we pump climate-changing gases into the atmosphere.

Coming in the middle of the annual cycle of UN climate negotiations, Rio+20 could serve as a reminder of the genesis of multilateral efforts to address climate change and be a spur to action, or merely highlight how progress towards a comprehensive global agreement has stalled.

I anticipate that it will be a bit of both. But my main hope is that Rio injects some renewed political momentum – at both the international and national levels – towards a world where humans live in harmony with the natural world.

Alan Hearne – chief executive, RPS Group

When companies, countries and even currencies are fighting for their lives, priorities change. At the micro-policy level there are still many environmental initiatives moving forward in all parts of the world. Taken together, these could imply a growing commitment to environmental performance. I believe this would be a serious misreading of what politicians and those they represent really think.

In last year’s corresponding article in the environmentalist, the European commissioner for the environment wrote: “a healthy environment is the foundation we need for sustainable economic growth.” Few would sign up to that proposition today. It is clear that healthy public finances are necessary to enable economies to survive, let alone to grow; almost nothing else matters while the crisis continues.

The pain of the global financial crisis will continue into 2012 and beyond and can only mean reducing importance and expenditure on projects that might lead to environmental improvement, other than where money can be saved in the short term.

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