Low carbon is not an instant fix

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It seems like a knight on a white charger. The low-carbon sector appearing out of a fog of economic woe and extricating us from the grim economic realities.

But if the sector is to be touted as a panacea for the UK’s ailing economy there may be disappointment in store – in the short to medium-term at least.

After years of dragging its feet, the government now seems to be making the right noises.

The Climate Change Bill, which sets out an ambitious target of reducing emissions by 80 per cent by 2050, makes the UK the first country to commit to legally-binding national targets.

And the recent Energy Bill included the introduction of the distinctively unglamorous-sounding feed-in tariffs which aim to encourage homes, businesses and communities to install green energy systems.

A feed-in tariff is a mechanism which obliges energy companies to pay small-scale producers of electricity generated from renewable sources above-market prices for the energy they produce.

In places like Germany, where feed-in tariffs were introduced in 2000, they have led to widespread photovoltaics in homes, schools and businesses and stimulated the cleantech sector.

Germany is a world leader in renewable energy technology and recently took top spot in terms of attractiveness for investment in renewable energy according to Ernst & Young’s latest renewable energy country attractiveness indices.

But this has not been enough to protect it from the downturn – Germany, like the rest of Europe, has been hit hard by the credit crisis and a drop in exports.

The country fell into recession last year and its political leaders are hammering out an economic stimulus package which could total €50billion.

But when growth does return, Germany will be well-placed to take advantage of the economic opportunities a low-carbon future offers.

As Professor Kevin Kendall, of the School of Chemical Engineering at the University of Birmingham, points out, the Midlands is home to exciting developments in low-carbon technology such as the hydrogen energy project being pioneered at the universities of Birmingham and Warwick.

But he concedes we are lagging behind countries such as Germany, where our second-city equivalent Hamburg has “nine hydrogen buses, several hydrogen filling stations, wind turbines, and ambition for expansion of green technologies.”

Advantage West Midlands points out that the Midland economy is well-placed on a national level in terms of new technologies being developed here as well as the existing powerbase of engineering firms that are diversifiying into the low carbon economy.

But the region’s green sector has some really strong headwinds to contend with, not only the current economic crisis but also the residual effects of a national failure to not embrace German-style policies sooner.