The power of the Great Green British Consumer

 By Megan Trethewey

By Megan Trethewey

‘A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created’. The Prime Minister has repeated this mantra many times since she entered Number 10, but the balance between the invisible hand of the market and the ‘right rules and regulations’ can be a tricky one. This is particularly true in environmental policy – but more rules and regulations aren’t always the answer when consumers can exercise their power over the market. With more eco-brands out there – and more climate warnings from scientists – individuals should be taking responsibility, and using their power to make cleaner, greener choices.

The Government of course plays an important role in nudging consumers in the right direction. The 5p levy on plastic bags was criticised as a tax from a ‘nanny state’ by some MPs (Philip Davies), but small policies like this can have an important impact. According to some scientists, there has been a 30 per cent reduction in plastic bags in the ocean off the UK’s coastline and around some European countries since these charges were introduced.

Plans to end the sale of new petrol and diesel cars from 2040 signal both to consumers, and investors, which way the market is going. However, demand for EVs will come from consumers and can’t be artificially created by Government policy. If buyers areskeptical about something then they’re simply less likely to buy it, which is where the Government should focus its efforts.

This gets to the heart of conservative environmentalism, providing conservative answers to green issues. Brexit offers new opportunities for increased environmental protections, yet these new regulations must work with green consumers and utilise their sense of personal responsibility over their purchases.

The Great British Consumer significantly underestimates their influence on businesses, and how much change their buying power can influence. Unilever published a report in 2017 showing that a third of consumers internationally are now choosing to ‘buy from brands they believe are doing social or environmental good’. They estimate there is a market worth €966 billion (£865 billion) for brands with clear sustainability credentials. So it’s no surprise that Unilever recently launched its first personal care brand in 20 years, targeting the green consumer with recyclable packaging and vegan ingredients.

Just as voters can influence their politicians, consumers can influence businesses to change their practices. Blue Planet 2 was the most watched show of 2017, influencing many of us to reduce our plastic use after we saw the impact it was having on our oceans. According to a survey commissioned by channelmum.com, 64 per cent said they were using reusable water bottles, and nearly all (98 per cent) said they were likely to buy a brand that was cutting down on plastic. It’s even led to the revival of the milkman in some parts of the country as consumers go for refillable glass bottles instead of the plastic alternatives, and many big brands are following their reusable example.

While some on the Left caricature big businesses as resource-gobbling polluters, there are an increasing number of businesses innovating and voluntarily holding themselves to high environmental standards. For instance, Unilever’s new brand will be subject to an internal carbon tax to support programmes to reduce emissions and landfill waste.

There is, of course, something to be said for the affordability of these green products. The same survey referenced above found that only 17 per cent could afford the non-plastic alternatives if they were more expensive, but there are some sectors where eco-businesses can be cheaper than non-green alternatives. Some renewable electricity providers (Octopus/Bulb) are now cheaper than the Big 6. This is in part due to the reducing costs of renewables, but also because they have broad consumer support helping them to drive down prices.

It is not blasphemy for conservatives – indeed it is common sense – to say that that all markets need some regulation to work properly. In some circumstances where there is a clear need for them the Government should still step in. Yet in most cases the Government should simply nudge consumers to exercise their power to make purchasing choices that reflect their values, and the markets will react.

The Government can also help consumers to make smart green choices by better informing them of what to look for. Many people now check the energy efficiency standards for buildings before they choose to rent or buy, knowing how it will impact their bills. Information like this doesn’t always come from the Government – Blue Planet was from the BBC – but they can play a role too.

Personal responsibility is at the heart of what it is to be a conservative. We’re all learning to bring reusable coffee cups and bottles with us to reduce our waste, the next steps for the environmentally conscious consumer should be checking the sustainability credentials of their day-to-day purchases. The Government can therefore create the ‘right rules and regulations’ to complement the consumer’s choices, with both working in tandem.

Instead of assuming that the Government should always ban something, consumers should take responsibility for their purchases where they can afford to do so. For those on the centre right, regulations and taxes aren’t inherently bad, but consumers have to do their part too. After all, if there is no one to buy it, then there is no point in selling it, and this is where the green conservatives can find their balance.

Published in Conservative Home

Gove is doing good work for our planet and our Party, but it’s just the beginning

 By Sam Richards

By Sam Richards

Last December, Conservative MPs were briefed on Number 10’s strategy for the coming year. Beneath the roof of Brexit and the economy would sit three supporting pillars: housing, education, and the environment.

Conservative environmentalism is a well-established tradition built on solid philosophical principles: just as we balance the books to avoid saddling our children with debt, so too we have a duty to future generations to leave our country and our planet in a better state than we found it. As Lady Thatcher put it: “No generation has a freehold on this earth. All we have is a life tenancy — with full repairing lease.” Yet the idea gained new traction after polling showed that the top issue younger voters – who deserted the party at the 2017 General Election – wanted to hear more about from politicians was climate change. Suddenly, following in the Iron Lady’s footsteps on green issues was no longer simply virtuous; it became politically expedient.

Green issues have of course also been driven up the agenda by a determined new Secretary of State. Soon after returning to Cabinet, Michael Gove produced first a trickle, then a torrent, of policy announcements. Plastic microbeads, harmful to marine life, were banned – with cotton buds and plastic straws soon to follow. A plastic bottle deposit return scheme is to be established, and CCTV to be installed in slaughterhouses across England. A bill banning the sale of ivory has just this week landed in Parliament.

These small but meaningful policy changes are sometimes wrongly derided as pure headline fodder. To pick just one example: the introduction of CCTV to our abattoirs will ensure that even at the very end of their lives, animals are treated with respect. And beyond these smaller policies, there is the potential for a genuine transformation of the British countryside.

The Government’s planned reforms to rural payments – linking public money to public goods and prioritising the enhancement of nature – could put British farming on a sustainable footing for the long run, while delivering cleaner air, clearer water and healthier habitats. They would also boost carbon sequestration – needed if we are to meet the Government’s ambition of bringing our climate targets in line with the Paris Agreement, and enshrining into law a net zero target (as supported by over 100 Parliamentarians, including former party leader Lord Howard).

This new net zero target would mean Britain no longer contributing to climate change – a remarkable achievement for the home of the industrial revolution. It will also send the clearest signal to younger voters that the party cares about the planet they will inherit.

Yet there is more to do if the Government is serious about securing the “win” on the environment. The Government has promised a new Principles and Governance Bill to set up a new environmental watchdog and green principles policy after Brexit, but Conservatives with an eye to genuine green growth can aim so much higher. The Prime Minister and Gove aim, like Thatcher, to pass on our environment in a better condition than they found it. That will require a new Environment Act, setting a clear legal path towards breathable air and greater biodiversity.

Investing in our environment can head off some of the biggest risks to businesses and communities like flooding, pollinator decline and polluted air. These add up to billions of pounds of environmental liabilities that can be reduced at a fraction of the cost through environmental action. But the real prize is the growth agenda. We’re on the cusp of a green economic revolution that could see large-scale capital investment in environmental projects that, as discussed, will help diversify farm income and create more competitive businesses from housing development to financial services.

Conservatives have always been pioneers in environmental legislation – we should have the confidence to not simply replicate EU structures but to be world-leading; the gold standard.

The guns of the sceptics are increasingly silent – not just because they have been faced down by particularly effective ministers, but because the evidence is now overwhelming. We know that the last three years have been the hottest three years in recorded human history. We know the impact that pollution is having on our children’s lungs. We know that the costs of renewable energy and electric cars are falling, while the costs of inaction on climate change are rising. The economic calculation has shifted.

We know, too, the political calculation. There are no votes in being seen as Trump-lite figures who reject advanced technologies and basic science. The Government has delivered a host of small but positive measures; now for the transformative legislation that would be good news for both the Party and the planet.

Published in Conservative Home

Going green doesn't have to mean socialism. Britain can lead the capitalist way

 By Sam Richards

By Sam Richards

We balance the books today so that our children are not burdened with debt tomorrow. The case for protecting our environment is the same: we have a duty to future generations to leave our country and our planet in a better state than we found it.

Yet far too often environmentalists have offered little more than a thinly-veiled assault on the free markets that sustain our modern way of life, and protecting our planet is seen as a chance to sneak socialist dogma in through the back door.

Our policy responses to the real and immediate environmental challenges we face must be pragmatic and market-driven: climate change is too important to be left to Corbynistas demanding we all eat tofu at Christmas.

Keeping our air clean and our water clear is of course more than just our duty as responsible stewards of the environment – there are huge economic opportunities as the world shifts to a new economy. Last year China invested $132.6 billion in clean tech. India will ban all non-electric cars by 2030.

Going green is a good investment – but it’s also smart politics. Younger voters are unsurprisingly keen on the idea of intergenerational fairness, which is perhaps why climate change is the number one issue they want to hear more about from politicians.

So what sensible centre-right policies can we deploy that enhance our environment, grow our economy, and demonstrate our commitment to protecting the planet for generations to come?

First, leaving the European Union offers an historic opportunity to make Britain an even greener, more pleasant land.

The current EU set-up for rural payments is predictably poorly coordinated and overly complex. Large subsidies are payed to landowners purely on the basis of the amount of land they farm, while a smaller pot goes towards environmental enhancement, yet is ineffectively administered.

A new market-based commissioning scheme for rural payments after Brexit that prioritised environmental enhancement (tree planting or crop rotation, for example) would see farmers and landowners bidding against one another in auctions to protect our natural heritage at the lowest cost to taxpayers.

Preserving and enhancing our beautiful countryside is a huge job, and it would be a fantasy to think that this could be done on the cheap. The reformed system would mean much better value for money, but public funding for rural payments should be retained at its current levels, at least in the medium term, to put British farming on a sustainable footing for the long run.

Secondly, reforms to energy policy could make British businesses more competitive and cut household bills.

Wind technology has improved beyond recognition in the last 10 years – it is now the cheapest source of new electricity generation. New onshore wind turbines are hugely efficient and require no subsidy – they are also, contrary to the received wisdom, immensely popular.

According to the Government’s own figures 76 per cent of Brits support onshore wind – with just 8 per cent opposed. It’s hard to think of a policy with a greater democratic mandate that is currently blocked by Whitehall.

Wind farms should only ever be built where there is strong local support, yet opaque planning laws currently rob communities of a real choice – when surveyed in 2016, more than 50 per cent of local planning policy teams said they felt either unsure or not confident about how the rules governing new turbines work.

At a national level, without a clear route to market, British businesses are effectively blocked from investing in a sector with immense export potential. Onshore wind should be included in the next Contract for Difference auction, the market mechanism Government uses to procure new power supply at the lowest cost, and where communities wish to host them, they should be built.

Finally, protecting the planet offers Britain the chance to lead on the global stage.

At the recent Commonwealth Heads of Government Meeting, the Government made a welcome commitment to tackle ocean plastics. Every year one million birds and over 100,000 sea mammals die from eating and getting tangled in plastic waste.

Further action such as the proposed ban on cotton buds and plastic straws, to accompany the planned deposit return scheme, is vital.

The Government also announced that they would soon ask the Committee on Climate Change for advice on how to strengthen our emissions reduction targets to bring them in line with the Paris Agreement. The world is committed to ratcheting up ambition in the next two years – the prize for the UK lies in moving quickly and becoming the first G7 nation to set a 2050 zero emissions target into law.

Doing so would demonstrate to our allies, and those potential trading partners who are vulnerable to the worst effects of climate change, that we take our responsibility to tackle this existential threat seriously. It would also give clarity to business over the trajectory for coming decades, giving them time to adjust, and send a clear signal to the next generation of Elon Musks that the UK is the place to invest in new clean tech.

Despite the doom and gloom from those on the left, going green doesn’t have to mean abandoning your iPhone and restarting life in a clearing in the New Forest.

The cutting-edge technology that capitalism provides – from new efficient wind turbines to electric cars – combined with sensible, market driven policies, can cut costs for businesses and consumers while protecting and enhancing our environment for future generations.

Published in the Telegraph

Saving the planet requires economic growth

 By Sam Barker

By Sam Barker

Contrary to the Cassandras, this week wasn’t a bad week for the environment.

It was in fact particularly good: at least in its 1989 and 2015 vintages. And not bad in this year, either.

On the 8th November 1989 Margaret Thatcher gave the UN General Assembly both glorious barrels on the ‘threat to our global environment’. 

As always, she started with the scientific facts: 

“We are seeing a vast increase in the amount of carbon dioxide reaching the atmosphere…we are seeing the destruction on a vast scale of tropical forests which are uniquely able to remove carbon dioxide from the air… We now know, too, that great damage is being done to the Ozone Layer by the production of halons and chlorofluorocarbons”. 

Indeed, a whole section of the speech is dedicated to ‘the latest scientific research’. She peppered the speech with references to Charles Darwin, Fred Hoyle, the British Antarctic Survey, the Polar Institute, the British Meteorological Office – beautiful understating her country’s scientific dominance. It was she who set in train the climate modelling that has caused so much debate since.

Characteristically, Lady Thatcher then turned to the pragmatic economics, in a statement that made her, perhaps, the first major proponent of clean growth: 

“But as well as the science, we need to get the economics right. That means first we must have continued economic growth in order to generate the wealth required to pay for the protection of the environment. But it must be growth which does not plunder the planet today and leave our children to deal with the consequences tomorrow. And second, we must resist the simplistic tendency to blame modern multinational industry for the damage which is being done to the environment. Far from being the villains, it is on them that we rely to do the research and find the solutions.”

And finally, she did not shy away from the moral responsibility of mankind: 

“We are not the lords, we are the Lord’s creatures, the trustees of this planet, charged today with preserving life itself—preserving life with all its mystery and all its wonder.”

The speech was a tour de force, and much pain might have been avoided if its prescriptions had been followed.

In 2015, our current chancellor, Philip Hammond, spoke on a similar theme to the American Enterprise Institute, a conservative think tank in Washington. As with Lady T, he lashed out at a left wing who “believe we have to sacrifice economic growth and prosperity” to meet the threat of climate change. He concluded: 

“As conservatives, we know the responsible thing to do is tackle threats when we see them, and to do so in ways which preserve our future security and prosperity. And we know the smart thing to do is harness the power of the market to tackle the challenges of climate change.”

So what of the same week in 2016? 

Well in the UK Greg Clark set out plans to upgrade UK energy infrastructure and increase clean energy investment. This included plans to phase out unfiltered coal power from the UK grid, with the benefits to health and energy security (ConHome readers will recall this from Nick Hurd last year). In Marrakech, nations continued discussions on implementing the Paris agreement (a business for which the UK has considerable comparative advantage in governance, services and finance). In New Delhi, the Prime Minister’s deals with President Modi included strengthening the $1.1bn masala bond market (and the first dedicated green bonds); R&D collaboration on solar energy storage and energy efficient building materials (and joining India’s ‘International Solar Alliance’); and the promise of a UK/India energy conference in 2017.

Some readers might by now be clamouring about the GOP elephant in the room. And yes, The Donald has at best described himself as ‘somewhat of an environmentalist’. But if he wants the “clean air… and crystal clean water” he is committed to, he will have to make some accommodations with Richard Nixon’s Environmental Protection Agency. Indeed he may find, in office, that his room for manoeuvre is restricted. Under the terms of the Paris Agreement he wants to cancel, a country can only announce its withdrawal after it has been in force three years, and must give a year’s notice before withdrawal takes effect. This puts any withdrawal on the eve of the 2020 U.S. election. 

Most of all, he is a businessman, and you make money in business following the numbers not the rhetoric. Last year, Philip Hammond pointed out that low-carbon is a $6 trillion business, about nine per cent of the world economy, and growing at four to five per cent a year. The Chinese economy is de-smogging fast as they look to deliver quality of life and domestic energy security. 

As Lady Thatcher said 26 years ago: 

“We must have growth…to pay for the protection of the environment…which does not plunder the planet today.” 

This week was a good week for that.

Published in Conservative Home.