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Decarbonising – the case for regulation

FSB Area Lead for Greater Manchester, Chris Manka, talks about energy and the future of the GM economy…

Last week I attended the International Business Festival in Liverpool as a guest of the North West Business Leadership Team. They were using the event to launch their new report, Essential Resources, that looks at the region’s green economy: its strengths, the potential that exists, and how business can help to deliver the carbon reduction ambitions of our leaders across the North West. 

Among the panel were several of the North’s most significant companies, including Siemen’s UK boss, Jurgen Maier, and the CEO of boiler maker Baxi, David Pinder. Representation from the public sector included Todd Holden, Director of Manchester's Low Carbon Hub, and Mark Atherton, Director of Environment at the Combined Authority, who both delivered an excellent and sobering assessment of the facts surrounding the need for decarbonisation.

The report looks at how a successful and balanced economy should work for all businesses, big or small, and at the same time be sustainable and resilient. The North West has an essential role to play in this space. It is rich in potential for generating additional energy, predominantly from renewable resources, as well as in the provision of clean water, the processing of waste water and in the production and processing of food. There is also the view that the industrial revolution started here, so it would make sense we also lead on the drive to decarbonising the economy.

However, these vital resources are not yet being tapped to the extent necessary to meet targets. There is significant business advantage to be gained by focusing on these opportunities.

Obviously, we’re talking big projects here, and big projects have big delivery times. I propose that there are other ‘quick win’ projects that we should focus on in the short term. The housing sector is one particular area I think could do a lot more, driven by changes to building regulations. We are at a crucial moment, where there is significant demand for new housing, but in the context of the Carbon targets being set for 2038, we have an opportunity to deliver a much greener solution. Houses can have a working life of over 100 years, so it is important to build-in as much efficiency as possible, the benefits being realised over the lifetime of the property.

Devolved councils, like we have here in GM, have new powers and therefore the opportunity to create some meaningful minimum requirements for housing design, to force developers to raise their game to the point councils can genuinely visualise reaching the green targets they have signed up to. We must look for inspiration in places like Scandinavia, where their house building is far ahead of ours and use much less power to heat – even in their distinctly colder, longer winters than we get here. We should be asking whether we actually we need to heat our houses for nine months of the year, as our climate is temperate. Even simple measures, such as making sure domestic garages can actually fit a car in, would reduce on-street parking with a knock on effect of reducing congestion, promoting cleaner air and fewer blocked cycle lanes.

I shared these sentiments with the roundtable, and they were roundly welcomed. However, I think it was apparent from those taking part, that there is some confusion around who should be taking the lead in such areas. Those representing the public sector thought business should be leading, and I disagreed. I believe it is up to councils to show a responsible lead. David Pinder of Baxi also saw this as a business opportunity to ‘bring it on’, because if we can prove it in the UK, it will sell worldwide, and that is the prize Baxi, and other commercial organisations, have their eye on.

All governments understand the need for decarbonising, and sensible application of regulation will force commercial organisations to rise to the challenge. The UK, and the North in particular, has the skills, structures and opportunity to make this happen first.

The concluding message I think most of the meeting agreed with, in a nutshell, was that the answer required high quality, long range consistent regulation, applied uniformly across the north, or, even better, the UK. The Devolved cities have the power to drive this agenda forward.

That businesses are starting to wake up and take notice of this type of subject matter is cause for celebration. Already this year we’ve had the Mayor’s green summit in March, which has focussed minds, and we must build on this forward momentum.

The future success and growth of the UK economy will be built on the back of decarbonisation, and the countries that get there first will race ahead, not just in the UK but in international markets. We have an opportunity to make sure the UK is at the head of monetising a decarbonised economy.