Cameron must intervene in carbon row, say businesses and campaigners | Fiona Harvey and Terry Macalister

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Without the right policies, the UK will lose green energy jobs, renewable energy industry warns warring ministers

A chorus of businesses, politicians and green campaigners have called on the prime minister, David Cameron, to intervene in a deepening row over the government’s climate change targets, as warring departments have put the UK’s future emissions cuts in jeopardy.

The call came as the renewable energy industry called on ministers to “put up or shut up”, after Vestas, the world’s leading wind turbine maker, dangled the possibility of creating more than 2,000 green energy manufacturing jobs in the UK – but only if the right policies were set up.

The worsening Whitehall row over whether to accept the recommendations of the Committee on Climate Change – which would entail a 50% emissions cut by 2027, based on 1990 levels – threatens to derail the government’s promise to be “the greenest ever”, just before the first anniversary of the pledge this weekend. Vince Cable, Lib Dem business secretary, has taken the unusual step of writing to Nick Clegg to call for a lower target .

But a lower target would imperil jobs and growth, said Andrew Raingold, executive director of the Aldersgate Group of more than 30 large businesses. “David Cameron should intervene and show clear leadership. Cable’s view that jobs and growth don’t go with green targets is misguided: there is clear evidence to show stronger targets would stimulate jobs.”

Huw Irranca-Davies, the shadow energy minister, said: “It needs David Cameron [to decide] – the sooner he does, the better.”

These views were echoed by green campaigners. Martyn Williams of Friends of the Earth said: “Clearly, it is the job of the prime minister to settle this disagreement, and whether he accepts the recommended targets will be a test of his commitment.” Greenpeace is planning to send a team of huskies to the House of Commons on Friday, a satirical reminder of Cameron’s trip to the Arctic while in opposition.

The carbon budget drawn up by the CCC, setting out the reductions that need to be made in the 2020s to meet the UK’s longer-term targets, was “robust and considered”, said David Kennedy, chief executive of the committee. He refused to be drawn on whether Cameron should intervene, but said: “We have given a very well-evidenced proposal and I am not aware of any other well-evidenced alternative that would be consistent with the Climate Change Act. We urge the government to accept our recommendation.”

The renewables industry, which is likely to be the source of many of the promised green jobs, is also deeply concerned about future government policy. Turbine-maker Vestas signed a deal on Wednesday to develop land – the equivalent of 93 football pitches – on which it wants to construct a huge new North Sea turbine production facility at Sheerness in Kent. But it said the project would go ahead only if ministers took decisive action to help.

“Before our customers can provide us with the needed order pipeline, they need stability in the market and a long-term political and regulatory certainty that ensures their business case,” said Anders Søe-Jensen, president of Vestas Offshore.

“Making that happen lies in the hands of policymakers, so we are looking forward to seeing the UK government providing the best possible terms for the offshore wind market to truly take off and the potential jobs becoming a reality,” he added.

The Vestas executive said the timing of a report from the government-established CCC on Monday, which raised questions about the high cost of offshore wind, “could not be worse for us.” Søe-Jensen warned it would be a “shame” if a great new job opportunity at Sheerness was lost.

The report suggested that offshore wind might be more expensive than nuclear power, but was rebuffed by the renewables industry, which said the figures did not take account of the very high cost of dealing with nuclear waste.

The industry lobby group, RenewableUK, said it was now time for ministers to stop the debate about offshore wind and come down firmly in favour of pressing ahead.

“We have an unprecedented situation where some of the best-known companies in the world are queuing up to invest in the UK. The government now needs to seal the deal on offshore: it needs to bag the first 8,000 jobs and hundreds of millions of pounds already pledged, by firmly supporting the technology,” said Maria McCaffery, chief executive of RenewableUK.

The same message came from Friends of the Earth. “Uncertainty over energy policy has put companies off investing in the UK for too long,” said Tony Bosworth, FoE’s national climate change campaigner. “To reassure investors, the government must guarantee long-term support for renewable energy and allow the new green bank to borrow money straight away so that it can help clean energy projects such as offshore wind farms to get off the ground now.”

Vestas said it was still optimistic that it could obtain the orders from the deep-sea round 3 projects that would allow the Denmark-based company to build vast new turbines, which would be as big as the Gherkin office block in the City of London.

Vestas has also built a new research and development centre on the Isle of Wight, but created controversy when it closed a facility for building smaller turbines in the summer of 2009.

The worldwide renewable energy sector has been facing tougher times as politicians worry about bigger budget cutbacks and seek to reduce subsidies to wind and solar, despite a continuing desire to cut carbon emissions and tackle global warming.

But there was a boost on Tuesday from Japan, where the prime minister promised to scrap a plan to obtain half its electricity from nuclear power and said it would promote renewable energy as a result of its nuclear crisis.

Naoto Kan said Japan needed to “start from scratch” on its long-term energy policy after the Fukushima Daiichi nuclear power plant was heavily damaged by an earthquake on 11 March, and began leaking radiation.

A United Nations report out earlier this week predicted that, if the regulatory and other conditions were right, renewables could provide nearly 80% of the world’s energy needs after 2050.

Environment: Energy | guardian.co.uk

Masdar is just a showcase – existing cities must forge their own green future | Martin Wright

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The sci-fi sparkle of Masdar City is impressive, but sustainability will come from less flashy changes to our own home towns

So, Masdar, which was planned to be the world’s first zero-carbon city, is experiencing a few teething troubles and, as John Vidal has reported, its ambitions have been dramatically cut back.

We’ve been here before. Masdar is the latest in a long line of brave new worlds that appear to promise the earth and then in practice deliver rather less. Remember Dongtan? That vast eco-metropolis that was supposed to rise up from the marshlands outside Shanghai? Nearly a decade on, the marshes still lie empty, the project mired in local politics. Or think of the huge hopes invested in Britain’s new towns after the war; or the tower blocks that were going to sweep away the slums with bright, airy living. Grand designs often go awry.

But talk of Masdar as a failure is premature. Sure, the ambition may have been scaled down – along with virtually every other project under the sun in these cash-crunched times. And some of the more fanciful features – such as the magnetic pilotless cars – have been dropped in favour of a more banal approach.

But this is still a scheme with some scale. If there are no more cutbacks, by 2021 Masdar will be a desert city of 40,000 powered entirely by renewables. It will have proved that it’s possible to slash water consumption – arguably even more important than cutting energy – and eliminate waste almost entirely. All of which is no mean achievement in a region whose main urban claim to fame – Dubai – is the living epitome of an unsustainable future. By then, Masdar shouldn’t be alone. On China’s Pacific coast, the Tianjin eco-city development is promising green living powered by solar and geothermal, with nine out of 10 journeys to be made by foot, bike or public transport.

But if we see these new developments as a model for the green cities of the future, it will be us who have failed, even if they’ve been a (qualified) success. Why? Because by 2040, two-thirds of the world’s population will be living in urban areas, and all but a tiny fraction of these will be in today’s vast conglomerations.

So the green city of the future already has a name: it’s called Mumbai or London, New York or Lagos. And if we can’t transform our existing urban areas into something approaching sustainability, then we are, frankly, stuffed. These don’t have the luxury of starting from scratch – let alone doing so with a budget funded by years of oil revenue.

But there is a huge amount that can be done. A lot of this consists of boring old efficiency techniques, from lagging lofts to reusing greywater. These can save far more resources than can ever be generated by covering roofs in solar PV – sensible though that is. But there could be shiny new tech too – for example, laser-guided “shoals” of driverless travel pods, running on a fraction of the power used by today’s electric vehicles, could replace the noisy chaos of traffic jammed streets.

In this context, the real value of Masdar is as a showcaseand laboratory for the innovations that will help shape our urban future: from radical new public transit systems to smart mini-grids. But some of the most innovative changes will be in attitudes and behaviour, rather than gizmos. Forum for the Future’s report Megacities on the Move highlights the need for radical shifts in ideas of ownership – of cars, for example. Already, schemes like Whipcar – which allow members to borrow neighbours’ cars as and when needed – are emerging.

But why drive at all, if everything you need is in walking or cycling distance? Rather than building endless Masdars, we could reconfigure existing cities around local hubs, avoiding the need for constant crosstown traffic. Community-owned energy and food schemes could go a long way towards meeting local needs too. In Britain, the Transition Towns movement – about as far away from oil-rich dream metropolises as you can get – is buzzing with ideas like these.

The challenge may be enormous, but so are the possibilities. So let’s enjoy the sci-fi sparkle of Masdar by all means. But be prepared to get down and dirty to transform the mean streets of our home towns too.

Environment: Renewable energy | guardian.co.uk

Is hydropower exploitation of the Nu river in China ‘a must’? | Meng Si

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The government is ramping up hydropower ambitions, despite long-standing controversy over impact on ecology and displaced people

After seven years of silence, an official from China’s National Development and Reform Committee (NDRC) has made public his views on hydropower exploitation on the Nu river, China’s last great waterway without large-scale dams – announcing that development is “a must”. Read more

Bristol’s biofuels plant must be refused planning permission | George Monbiot

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Burning biofuels in power stations is environmental vandalism on a staggering scale – both in terms of emissions and habitat loss

Today, the government will make what should be a very simple decision: whether or not to give planning permission to a power station in Bristol burning biofuels. The answer must be no.

Burning biofuels in cars is mad enough, as it causes more environmental destruction – in terms of both carbon emissions and the loss of habitats – than petroleum. I’ve been campaigning against it since 2004. But at least in this case it’s a response to a limited set of options: finding a green substitute for liquid fossil fuels is a tough call (which is why electric cars are the best way forward). Read more

Europe must ban flawed carbon credits | Damian Carrington

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Millions of pollution permits in Europe’s emissions trading scheme do very little for the environment. A vote on Friday could change that

Paying €14 for something that costs just 17 cents is clearly good business for the seller. But in the strange case of the European Union Emissions Trading Scheme, it’s not a bad deal for the buyer.

Why? Because the buyers, European emitters of greenhouse gases, mostly power companies, find it easier to buy in carbon credits from China and India to meet their targets than to cut the emissions of their own operations.

So who loses out? The environment, of course. Instead of the money going to schemes that genuinely tackle emissions and slow global warming, it pays for a scheme in which there is a massive incentive for industrial plants to keep producing the gases they are then paid handsomely to destroy.

This Friday, the European Commission has a chance to tackle this lunacy, by banning the use of so-called industrial gas pollution permits in the EU ETS. I reported this proposal first in October, when the commissioner for climate action, Connie Hedegaard, told me:

“There are too many examples of projects with industrial gases, primarily HFC-23, where if you dig into it you can find there is a total lack of environmental integrity.”

HFC-23, an extremely potent greenhouse gas, is a by-product of the manufacturing of the refrigerant gas HCFC-22. According a UN assessment panel, it costs 17c to destroy HFC-23 equivalent to a tonne of CO2. Today’s price for that in the EU ETS is €14.4. Another industrial gas underpinning lucrative carbon credits is nitrous oxide (N2O), mainly resulting from adipic acid production, which in turn is used to make nylon.

This is not a minor loophole in the EU ETS. In 2008-9, 84% of all the offsets used in the EU ETS were from industrial gas projects in China and India, according to data from the carbon trading thinktank Sandbag. Buying this amount of permits – 134m – in the ETS would cost €1.9bn (£1.6bn) at today’s prices. The use of offsets was meant to be a safety valve for industries covered by the ETS but campaigners say it is being used far too much.

So the vote by the EC’s climate change committee to ban the industrial gas offsets from 1 January 2013 should sail through, right? Hardly. The turkeys enjoying the current system are not lining up to vote for Christmas.

Let’s take an example, Italy’s power giant Enel, which has argued hard against the EC’s proposed ban. The company, 30% state-owned, is gargantuan: £57bn turnover in 2009, present in 23 countries with about 95GW of net installed capacity and 60m customers, according to Mint.

It is also a major user of industrial gas offsets, according to data provided by Sandbag. In 2009, Enel surrendered 4.3m HFC-23 permits, 40% of all of Italy’s HFC-23 permits. Furthermore, according to the UNEP’s Risoe Center, Enel has financial interests in seven HFC-23 projects, i.e. it is active on both sides of the bargain.

Enel says banning the industrial gas offsets could lead to a carbon credit shortage “leading to a potential increase in cost for compliance players” and endanger investment in other offset projects. It says the UN’s Clean Development Mechanism, which accredits the projects, is taking action on HFC-23. (Campaigners say the action is far too slow).

There is no suggestion that Enel has done anything other than play by the existing rules. But can its heavy lobbying for the continued use of industrial gases be squared with its environmental statements: “Enel intends to play a role of leading global player in policies of environmental sustainability.”

It is clear to me that the industrial gas projects are far from sustainable and if the ending of their use in the EU ETS means the cost of cutting greenhouse gases goes up, then that’s because the true cost is not being paid now.

Fionnuala Walravens, a campaigner at the Environmental Investigation Agency, says: “This is Europe’s chance to influence the direction of global carbon markets for the better, and any delay of a ban undermines integrity of the ETS and CDM reform.”

Sandbag’s Rob Elsworth says: “The timing is hugely important. The 1st Jan 2013 is the first possible date and is the date proposed by the European Commission. Corporate lobbyists are working hard to push back the date to ensure they are able to flood the market with industrial gas credits. Member States must not cave into business interests.”

The EC has a chance on Friday to claw back some of the climate change leadership it has lost since the debacle in Copenhagen. It must ignore the carping of companies and take it.

Environment: Energy | guardian.co.uk

UK must shake off the dominance of the energy giants | Catherine Mitchell

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Any move to a sustainable future is unlikely while it is not in the interests of the energy companies to deliver more efficiently

After more than 25 years working on energy issues, I have recently come to an extraordinary personal realisation: there is very little need to have heating bills at all. Since refurbishing my coastguard’s cottage in July, I have – to my total surprise – been able to more or less rely on solar heating for warm water and a wood burning stove, occasionally, for heating.

Now, my house faces south and I have triple-glazed windows, van loads of insulation under my floors and in my roof, cavity wall insulation and passive lighting. I know not every home can be like this, but I’ve cut my energy use by 80-90%, which is the sort of ambition needed nationally if the UK is to meet the carbon emission cuts set in its climate change law, and it is comfortable, warm and dry.

This week, the government is expected to publish proposals for what it says must be a revolution in the electricity supply market, to boost the UK’s tiny levels of renewable energy. It follows last week’s “green deal” bill, which aims to banish the upfront cost and hassle of refurbishing the UK’s leaky homes.

The government is right that our business-as-usual energy policy – one of the most liberal energy markets in the world – has to be abandoned. Sadly, the proposed electricity market reforms and the green deal do not include anything that will move the UK forward in anything other than an incremental manner. At the heart of the problem is a seasonally appropriate difficulty: asking turkeys to vote for Christmas.

It is simply not in the interests of the handful of dominant energy companies and their shareholders to dramatically transform the energy system, whether on the supply or demand side. In particular, an increase in the energy efficiency of buildings will undermine a company’s future sales and profits. Only when the government confronts head-on the interests in maintaining the system largely as it is, will the energy system change.

Energy companies sell energy or services and have to comply with various rules and incentives. The rules and incentives are being tweaked so that energy companies can make more money from low-carbon energy supply and reducing energy demand. But reducing the UK’s greenhouse gas emissions by 60% by 2030 means developing a completely different energy system. Energy companies doing what they can within the current energy system is not nearly enough.

The issues of supply, demand and energy transmission are highly complex. For example, building new low-carbon power plants, such as offshore wind farms, nuclear power stations and clean coal plants, is laden with many billions of pounds of upfront cost. It is hard for the big energy companies to raise this capital, given that the payback, via customer bills, is over decades.

But cutting total energy demand makes it all far simpler. If less energy is used, then fewer capital-intensive plants need to be built. This in turn leads to less need for new transmission cables and connectors. Thus, a central policy should be to reduce energy demand. In theory, it already is: the practice is very different.

A typical energy policy argument is that an energy company has to move from selling energy units to providing services. In this way, it is argued, the loss they take from reduced energy sales can be made up through new profits or new services. But, thinking of my cottage, this simply is not the case. I paid for my energy-efficient house upfront. I don’t need any services and my bills are now minute. From the perspective of an energy company which makes most of its money from supplying energy, installing the equivalent energy-efficiency measures I had in my house into another house will effectively get rid of a customer. But this is what is required.

The current key executors of government energy policy, including energy-efficiency programmes, are the energy supply companies. I simply don’t believe, however responsible they are, that they are able to implement serious energy-efficient programmes. They have not done so in the past, despite many policy initiatives, and the new green deal does not force them to make more than incremental improvements.

In parallel, the consultation on electricity market reform is a missed opportunity. Various ideas have been put forward, but these again are about incremental change to the same system. The proposed market reforms leave market and network rules and incentives more or less the same, thereby enabling energy companies to largely continue what they are currently doing if they want to. Additional proposals, for example for long-term contracts for low-carbon energy and carbon floor prices, are all major sticking plasters on the current market design rather than changing the energy market to deliver a new type of energy system.

So what’s the answer? We need regulated obligations on the scale of the transition from town gas to natural gas. Tendering for street-by-street or area-by-area contracts to make homes energy efficient is cost effective, but crucially creates a mechanism for new companies to enter the market, thereby potentially diluting the dominance of the current energy companies.

Can it work? I lived in Brixton during the riots of the 1980s and the subsequent Scarman Report identified poor housing as an important factor. It recommended creating Aim areas (Areas for Improvement and Modernisation), which were subsequently put in place by the Greater London Council. Result? Areas of Brixton were systematically brought up to a decent standard.

No one is saying that transforming how we generate and use electricity as we move to a sustainable future is easy. However, government policy which ignores the reality of economic interests, thereby tacitly accepting that energy companies will not try too hard to reduce energy consumption, betrays a government which continues to hope against hope that it doesn’t have to make any difficult decisions which upset anyone. Not only is this a sad cop out, but if it confronted economic interests, particularly on the demand side, then it would find the supply side and security questions would become a lot easier and cheaper to solve.

• Catherine Mitchell is professor of energy policy at the University of Exeter.

Environment: Energy | guardian.co.uk

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