Steps to a greener future
The proposed ‘Green New Deal’ for Northern Ireland is long overdue, so what needs to be done to make it achievable?
Northern Ireland urgently needs to put a ‘green’ constraint on local economic and social policies. The imperative comes from the international evidence and our climate change obligations.
If the application of ‘green’ policies also happens to offer extra employment to work away from the recession or also stabilises local energy prices when international prices are increasing, then there is a constructive co-incidence of benefits.
Nigel Smyth, director of the CBI in Northern Ireland, acted as spokesman for an impressive high level partnership of business, trade union, community and some key public sector officials (acting in a personal capacity) which has published a draft Green New Deal for Northern Ireland.
It offers a complex mixture of aspirations and proposals without a clear sequenced implementation plan.
Ironically, although one of the concerns is the forecast of rising energy prices for fossil fuels, the Green New Deal would itself imply acceptance of higher energy prices to pay for investment in large scale renewable energy.
The compliment owed to the New Deal is that it represents the first steps in a desirable strategy. The criticism is that it is written with little regard to the methods of influencing market behaviour, inadequate recognition of consumer motivation, poor linkage with the development of Government policy, and posits unresolved ideas on funding.
This Green New Deal is overdue but it must be more than a series of attractive headlines. The New Deal must be written so that the Ministerial Executive can offer endorsement and funding.
Two issues illustrate the unfinished nature of the New Deal. First, how to encourage full insulation and offer renewable energy to ‘tens of thousands of existing homes’ and improve the energy efficiency of 137,000 homes that fail to meet the Standard? Second, how to raise extra funds for Green projects that offer an uncertain return for investors?
Retro-fitting existing homes to higher energy efficiency standards would affect 90% of existing houses.
The Green New Deal suggests an initial £230m per annum programme, including £75m assembled from Government and other sources. If the targets were achieved, energy consumption would be lower (but not necessarily cheaper).
The dilemma lies in the scale of the incentives (or compulsory responses) that would be needed to persuade house owners to make the investment.
Does the Green New Deal offer a proposed scale of incentives that will be immediately attractive to home owners?
Also, is the Minister in the department of Social Development able to allocate a large part of the £75m needed each year?
The proposed Green New Deal has identified a number of other energy innovations.
Some would call for Government funding; some would call for better energy policy planning and implementation.
The implicit criticism is that current delivery mechanisms are inadequate. Why avoid explicit criticism if that is what lies behind the fine words?
Some of the New Deal ideas rely on skills and enterprise exploiting market forces to sell low carbon goods and services round the world.
Nevertheless, the Green New Deal comes with a price tag: investment of £900m per annum. This is more than a marginal variation to the NI Executive budget and implies major changes.
Some of the cost would be paid by individuals and businesses or in a surcharge on the regional rates. Much would fall on Government, particularly in capital spending.
The proposed funding mechanisms are novel.
It is optimistic to think that the proposals are viable enough to be financed through the issue of long-term bonds, even with some form of Government guarantee.
In its present form the New Deal would have a problem in gaining public spending approval from the Treasury.
This Green New Deal needs to become a realistic, acceptable and achievable programme.