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Sustainable New Deal essential for low carbon recovery

7 April 2009

- Investment in infrastructure, energy and skills will pay speedy dividends, including 800,000 jobs

A report published by the Sustainable Development Commission today (Tuesday 7 April) calls on the government to match the scale of its green ambitions with an appropriate sustainable stimulus package to enable £30bn/year of investment to flow into low carbon recovery measures.

Authored by Economics Commissioner Tim Jackson and Chair Jonathon Porritt, the report argues that this level of investment – around 50% of a total recovery package of 4% of GDP - could be achieved by a careful combination of deficit spending; climate bonds and other “invest to save” measures; environmental taxation, and equity stakes. More than 50% of the package would generate significant financial returns within two to three years, and could create at least 800,000 jobs.

The Commission proposes a targeted stimulus package for maximum impact, focusing on six priority areas:

  • Upgrading existing housing stock
  • Scaling up renewable energy supply
  • Redesigning the national grid
  • Promoting sustainable mobility
  • Low-carbon investments in the public sector
  • Skills for a low-carbon, sustainable economy

It warns that failure to commit to an appropriate recovery strategy would not only increase the gap between the UK and other OECD competitors, but would pitch the UK back into a cycle of unsustainable high-carbon growth. The report notes that new investment will be needed by Government and employers in developing the skills for a sustainable, low-carbon economy.

Economics Commissioner Tim Jackson said:
"The Government itself has made it clear that there is no high-carbon future, and that the transition to a low-carbon economy is an environmental and economic imperative. Only a commitment on this scale will ensure that the recovery will take the UK onto a globally-competitive low carbon pathway, rather than reverting to the unsustainable forms of growth which sowed the seeds of the current financial and climate crises in the first place."

The Commission’s Chair, Jonathon Porritt, said:
"Without a commitment on this scale, there is every likelihood that the Government’s current low-carbon measures will be totally overwhelmed by business-as-usual stimulus measures. An investment strategy of the kind proposed would put us on track to achieving the extremely ambitious targets in the Climate Change Act, would create appropriate incentives for both the private and public sector, and would demonstrate the kind of unequivocal leadership that UK citizens are now ready for."

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