Transition to a low carbon economy

While FMs across the world were celebrating World FM Day yesterday, I was at a parliamentary reception in London, hosted by the Aldersgate Group. In its own words this is a “high level coalition of progressive businesses, environmental groups and MPs” which argues for high environmental standards as part of economic growth and international competitiveness.

Held on the back of the group’s ‘Accelerating the transition: priorities for the first 100 days of the new government’ report, launched just before the election, last night’s reception focused on the emergency budget and what it offered those wanting to see a more rapid move to a low carbon economy.

It also came the day after the revised directive on the energy performance of buildings (EPBD) was published in OJEU. The directive requires member states to ensure that all new buildings are nearly zero- energy buildings by the end of 2020, with a deadline two years earlier for all public buildings. The directive must be transposed intoUKlaw by July 2012.

With so many detailed spending decisions deferred to the autumn spending review, it was unlikely we were going to hear any surprise announcements but the mood music was certainly encouraging.

Former Labour Cabinet Minister Lord Smith of Finsbury, now Chair of the Environment Agency, said business understands that theUKneeds to move to a low carbon economy; it wants Government to lead the way but it also wants clarity and certainty – two commodities currently in short supply.

Chris Huhne, Secretary of State for Energy and Climate Change, said the budget had reaffirmed the commitment to a carbon price floor and the government’s first flagship bill (due by the end of the year) would offer a “green deal” for housing, including a major retrofitting programme.

The Aldersgate Group is an eclectic mix – any organisation which counts Friends of the Earth, Biffa, John Edmonds, Willmott Dixon and the RSPB amongst its members is bound to have a wide perspective.

Tom Burke, founder of E3G and environmental policy advisor to Rio Tinto, raised the stakes. “We won’t wreck the economy making the transition,” he said “but we will wreck some business models.”

If all the revenue raised by “green taxes” goes to reduce the deficit, said Burke, then we won’t invest in the infrastructure of a low carbon economy – including CC&S and electric vehicle recharging networks – that the private sector is unlikely to provide.

It was heartening to know that the new government will be held to account by a non-party political “coalition” with a clear aim and the expertise to pursue it.

Budget reaction

It is almost certainly too early to assess the effect of the budget on the FM sector, the real impact is likely to be clearer when departmental spending is reviewed in the autumn. However, the 25% real terms cut across all departments, except health and international aid, over four years announced today cannot fail to squeeze FM activity in both public and private sectors. By 2014/15 an additional £40bn, over and above the £50bn already planned by the previous government, will be cut from public expenditure.

Infrastructure investment

At last week’s launch of the Institution of Civil Engineer’s State of the Nation* report, an assessment of theUK’s infrastructure, ICE President Paul Jowitt said: “You can postpone the investment, you can’t postpone the risk.”

The ICE report graded six components of our infrastructure (energy, strategic and local transport, water & wastewater, flood risk management and waste management) from A, fit for the future; to E, unfit for purpose. No category scored at the extremes but only two rated B, adequate for now. In many areas we are living on a “wasting asset”.

The budget this week will be an early indication of whether the UK is able to slow and then reverse the deterioration in our vital infrastructure.