As someone who knew a thing or two about festive stories once wrote, "it was the best of times, it was the worst of times".Green economy business leaders the world over can no doubt relate to this.
The past 12 months has been characterised by a dramatic mix of ups and downs for the green economy. The global energy industry is currently rushing headlong in two different directions, delivering record levels of low carbon investment at the same time as ploughing cash into Canadian tar sands and Arctic oil exploration.
This tension between the competing visions of a low- and high-carbon future (or to put it another way, the fight between green growth and environmental catastrophe) was ratcheted up throughout 2012, the coalition government's high-profile internal battle over environmental issues providing a neat encapsulation of the debate going on in cabinets and boardrooms the world over.
It is a debate that in the UK has given us a policy landscape that promises a surge in low-carbon energy investment and then a few days later sets out a gas strategy that by its own admission could result in the breach of binding emissions targets; pledges to raise the share of green taxes and then hands out tax breaks to the fossil fuel industry; commits to being the "greenest government ever" and then appoints an Environment Secretary who regards climate change with a hearty scepticism. The contradictions and U-turns started last spring with scrapped forest sell-offs and farcical cuts to solar incentives that the industry is still yet to recover from. They are now still going strong as the shortest day approaches with yet another row brewing over the content of the Energy Bill.
THE BEST OF TIMES.
Thankfully, these endless contradictions – both in the UK and further afield – have failed to derail what has still been a very good year for the green economy.
Policy uncertainty has undoubtedly driven up the cost of capital for low-carbon projects, but I would be amazed if official figures for 2012 do not confirm that the green economy is continuing to grow strongly, outstripping the performance of the wider economy. Barely a week has passed without a clean tech or renewable energy record being broken or a major multinational committing to significant sustainability investments. As energy costs rise and the cost of low-carbon and energy efficient technologies fall, the commercial case for green investment and business models becomes ever more compelling. One of the most interesting events I attended this year was a debate hosted by PwC, where senior partners revealed that following the work the company undertook with Puma to develop the world's first environmental profit and loss accounts, plenty of other unnamed firms are carrying out similar work. Sustainability's march into the corporate mainstream has continued, despite the many obstacles placed in its way.
Again, taking the UK as a case study, we can see David Cameron is right to argue that we are entering a mobilisation phase for the green economy. The Energy Bill should drive billions of pounds of investment in renewables, nuclear and CCS, the Green Deal promises to revolutionise the energy efficiency of our building stock, the Renewable Heat Incentive and feed-in tariff are gaining momentum as small-scale clean energy technologies become ever more attractive, rising fuel prices make low-carbon vehicles compelling, and mandatory carbon reporting rules are making laggard businesses take sustainability more seriously. All of these policies have their flaws, but the direction of travel remains clear, regardless of how many Tory backbenchers take to the pages of the Telegraph to proselytise about fracking or bemoan the cost of decarbonisation. Looking back at the countless green business developments we have reported on over the past 12 months, it is increasingly apparent that genuine action to curb emissions, environmental impacts, and running costs is now completely normal for many high-profile firms.
THE WORST OF TIMES.
This good news has undoubtedly been diluted by the decision by many on the right of British life to declare all-out war on the green economy, shattering the political consensus that enabled the passage of the Climate Change Act and helped underpin recent green growth. The coalition in-fighting has done significant damage, both through the short-term increase in political risk and associated increase in the cost of capital and through the long-term fear that some within the Conservative Party are trying to turn opposition to the green economy into part of its DNA. It is a damaging scenario that has been allowed to fester by a prime minister who appears to instinctively want to address climate change, but is too weak to challenge his Tea Party-lite backbenchers.
It has also been aided and abetted by the heads-in-the-sand incompetence of those carbon intensive businesses who accept change has to come to their unsustainable business models, but insist these changes should not come just yet. As the admirable Carbon Tracker initiative has argued throughout this year they risk driving the entire global economy off a cliff through their reckless over-valuation of carbon assets that simply can not be burnt.
However, there has been a substantial silver lining to this kick back against the green economy that has become apparent during the second half of the year. In breaking the political consensus on climate change, right wing politicians and commentators have actually forced the issue back up the corporate and public agenda. The recklessness and weakness of the arguments put forward by those opposing green action have finally become painfully clear, and in calling for a "debate" on environmental policy they have simply invited an argument they cannot win.
The CBI and many other big businesses have taken to the barricades to make the case that the only form of sustainable economic growth is green growth. Green NGOs, for all their flaws, have become relevant again, mobilising public support for the green economy. Poll after poll has shown significant and stable majorities of people like wind farms and solar panels, want to see the UK weaned off fossil fuels, and do not accept the old canard that green policies are the main cause of rising energy prices. Meanwhile, Labour and the Lib Dems have become ever more vocal in their support for the green economy, and while Cameron has remained frustratingly silent he has, as yet, failed to cave in to the anti-greens' demands.
The past year may have been dominated by a row over the future of the green economy, but only one side is winning the argument, and it is not the anti-green dinosaurs. Meanwhile, green businesses the world over have continued to normalise the deployment and use of clean technologies, as they rush to prove that a genuinely green economy is both feasible and attractive before it is too late.
For green business leaders, 2012 has been a remarkably busy, dramatic and at times infuriating year. But despite plenty of setbacks they remain representatives of the greatest under-reported success story in the world. They can look forward to 2013 with great expectations.
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