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Is technology pulling its weight in the fight against climate change? 9 Feb 2009  

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Dr Neil Bentley, CBI director of business environment spoke at Intellect’s High Tech: Low Carbon week on the 9th February discussing whether technology is pulling its weight in the fight against climate change - read the full speech below:

"I would just like to say thank you to Intellect for inviting me to speak here today, and also for their commitment to positioning the technology industry as a key driver in tackling climate change.

Climate change represents perhaps the biggest social and economic challenge of our time.

The economic consequences are uncertain, but we know that the risks exist, and that they are substantial.

In 2007, the CBI brought together a task force of 18 senior industrialists. Its conclusion was that climate change was a global challenge, and that the UK should not wait for others before taking action.

The Government agrees. Its climate change legislation has been truly ground-breaking. The Government has lifted our carbon reduction target to 80 per cent by 2050. That in itself marks a fundamental shift in the landscape.

We now know that the Government and main opposition parties are fully committed to building a low-carbon economy. And we know that it won’t be achievable without large-scale technological innovation.

The main focus must be this: How can we ensure that UK businesses benefit fully from the transition to a low-carbon economy?

We have launched an ambitious programme of work to help answer this question. And technology is right at its heart.

Recent events have sent expectations soaring. Just as we expect low-carbon innovation to carry us to our climate change targets, so politicians everywhere now hope that it will lay the foundations of economic recovery.

One of President Obama’s priorities is the development of a "smart grid" which uses digital technology to allow two-way communication between electricity generators and customers, thus achieving a huge advance in energy efficiency.

The Conservatives in their recent low-carbon plan are also interested in the ‘smart grid’ and the Government is developing its proposals for a low-carbon strategy.

This means that the race is on to develop the technology behind this and the global marketplace for low-carbon investment is about to get much more competitive. There is also real risk we will fall behind a re-engaged United States, and we need to get going if British business is to be in with a shout.

So, where have we got to?

There’s been strong progress across the board.

Within the ICT industry, one of our climate change board members, Sun Microsystems has, for example, managed some big carbon emissions reductions. By greening its data centre, it has reduced its number of servers by 44%, and cut down on power usage by more than three-quarters.

ICT is making a big contribution in construction. NG Bailey’s new Central Scotland Headquarters is a great example. At a cost of £5.5 million, it is a substantial investment in environmentally friendly construction. ICT is behind the thermal modelling and intelligent building management systems. The building will cut water and energy use by over 40%, saving £50,000 a year in running costs.

The evidence is stacking up that technology is already making a real difference.

In working with industry to produce a detailed report on how ICT can enable the carbon-effective organisation, the Government has also moved forwards.

But inevitably the recession is slowing the pace of investment in low-carbon technology. As such, it threatens all our aspirations.

In December, we published our first climate change tracker, which measures the UK’s progress on tackling climate change, since the launch of our Taskforce report a year ago.

The tracker shows that the momentum of the climate change agenda is at risk, and that delivery is now critical for both Government and business.

So, where do we go from here?

At the very least, we must implement the right policy framework as a matter of urgency. And I’d like to pick out three essential elements.

First, in the depths of recession, we need a robust route-map for energy efficiency - one of the issues Intellect’s ‘High Tech: Low Carbon’ report focuses on.

Lord Stern has said that the coincidence of the global economic downturn and climate change gives “a fundamental opportunity, and it is only confused and muddled thinking that sets one against the other.”

As cost pressures mount, information technology can support a sea-change in behaviour. Businesses must continue to sniff out opportunities for emissions reduction in their supply chains and buildings.

There is much untapped potential here. In the long-distance cargo haulage sector, for example, some 25% of vehicles driving around Europe are empty. Other sectors are equally ripe for plucking.

We are reminding our members that foot-dragging on energy efficiency will prove a costly mistake. In all probability, the recovery will see another surge in oil prices and another spike in the cost of energy.

There’s also a job of work for the Government. The pre-Budget Report contained welcome incentives for improving energy efficiency. But further progress in the built environment and transport will be difficult without an overall Government strategy here.

A second priority concerns innovation.

Intelligent transport systems, Tele-presence and Intelligent Utility Networks are all highly complex applications. We must do what we can to smooth the path of their development.

Much depends on R&D. Our funding of energy related R&D is still among the lowest in Europe.

That’s why retaining and extending the R&D tax credit is one of our main lobbying priorities. The credit is an important factor for companies when deciding where to base their R&D operations, and improving the attractiveness of the UK as a destination for high value investment and jobs.

We would like the Government to extend the rate and range of the credit, allowing more companies to apply and covering more of their associated overheads.

The recession must not become an excuse for letting the R&D tax credit wither on the vine.

The new department for Energy and Climate Change must also step up to the plate here.

Improved co-ordination of Government strategies on climate change and innovation would, at least, drive a bigger share of the budget into energy related research. This must become a national priority. Expenditure on low-carbon technologies ought to be increased to around 30% of the Government’s total R&D budget. That would bring it in line with the proportion spent on defence.

But R&D alone will not, however, stimulate innovation in the service sector on the scale required.

My third and final point is this: a flourishing low-carbon economy will only be possible with the right skills.

And to make advances in ICT, we must raise the quality and quantity of secondary school and university education in science, technology, engineering and maths.

More pupils need to study triple-science at GCSE, and facilities must be brought up to scratch. We must also do more to sell careers in engineering to young people; employers have a role to play here.

Last year’s increase in the number of young people sitting GCSEs in physics, chemistry and biology was very welcome. And the number of pupils taking chemistry and maths at A-level has stabilised after two decades of decline. But we’ve yet to arrest the downward trend in A-level physics. There’s a lot to be done.

So where does that take us?

A low-carbon economy will not be possible without the right ICT. And many of our members are pulling their weight in producing it.

But to get where we need to be will be a long, hard slog. And the recession has made the task tougher and more urgent.

If we are to be successful, and if low-carbon technology is indeed to lead us to recovery, we need the right policy framework to encourage energy efficiency, make low-carbon technology a national priority, and develop a skilled workforce, as a matter of urgency. Securing these will be the focus of our lobbying efforts in 2009.

It is not a question of whether technology is pulling its weight – it has to pull its weight in the fight again climate change.

Green innovation is the key to pulling us out of the downturn, meeting our climate change commitments, securing our energy supply and leading us to a low-carbon economy".

Dr Neil Bentley, CBI director of business environment speaking at Intellect’s High Tech: Low Carbon week

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Source: CBI