Investment holds key to tackling climate change issues

Policy: Rachel Anderson, North East England Chamber of Commerce assistant director – policy, outlines some of the key challenges faced by the North East economy as it moves forward with the ‘green revolution’. We have the drivers for change, she says, but maybe not, yet, a complete response

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Rachel Anderson

OK, right from the off I’ll say categorically that the case on climate change has been made. No-one is arguing that we should be tipping plastic into the oceans, or that the rise in sea levels is a good thing and no-one thinks we should uprooting trees and plunging them into furnaces Lord of the Rings style to power a never ending dark industrial march.

The environment and human impact upon it is the single issue which has risen meteorically up the agenda over the past year. The second David Attenborough showed us the mess of our making and a turtle eating a plastic bag public opinion shifted, single use became a dirty phrase, coal and its extraction was questioned, fracking shelved and the oil and gas industry had some PR to do.
Every company is now looking at its environmental credentials, how much plastic it uses, where there is waste and where they may be judged in the court of public opinion. In terms of procurement, a sound environmental policy probably won’t win a contract but not having one can certainly lose one.

At the Election in December, every Party manifesto contained a commitment to zero net carbon emissions in the UK on a timescale between 2030 and 2050. Parties all had comprehensive environmental policies. Some policies were more achievable than others, but the fact that the Parties recognised public concern over the issues and were acutely aware of the consequences of not acknowledging them is a clear indication on how far the issue has progressed.

This shift in opinion and the waking up of companies to their responsibilities will pose some interesting challenges for the North East Economy. Whilst the vast majority are signed up to reducing their impact on the environment the technologies probably aren’t yet there to make a huge impact. Technologies will improve and recycling will find a way to make more plastic recyclable but what happens to areas where economies are based on the way we do things now?

This is a particular issue for the North East. On Teesside there are three plants producing Polyethylene Terephalate (PET) the key material in food packaging, drinks bottles and synthetic clothing fibres. The plants employ a lot of people and generate a huge amount for the local economy in terms of business rates and the supply chain.

Then there’s our coal industry, we do still have one. Whilst we don’t use coal for large scale electricity generation any more it is a vital component of steel making and crucial to the UK’s industrial capacity. There are still users of coal such as heritage railways and many households using coal products. And how would they cook the fish and chips at Beamish?

Turning our attention to energy generation, we have a nuclear power station in the region which has served us well for 36 years. It’s aging and we’d like a replacement as it puts over £40m per year into the local economy. If we are going to cut emissions, then nuclear power generation must play a part, but it may not be one of those things politicians are willing to sign up to in the current climate. Then we get to the two biggies, our car industry and our offshore sector. Both are moving to be greener and the North East is leading the way in electric vehicle production which has seen significant investment, but we still have a huge industry relying on petrol and diesel vehicles both for the domestic and commercial markets. Offshore is still dominated by oil and gas with some movement into offshore wind but the revenues from the sector still significantly contribute to the North East economy each year.

So, whilst we all want to be green, doing it might not be quite so simple and our region may end up paying a disproportionately heavy price for political expediency and environmental policies.

Therefore, if we are to meet our obligations to the planet, the will of politicians and the public and maintain large parts of our economy, change must come quickly. We have the drivers for change but maybe not, yet, a complete response.

That response will have to come in the form of innovation. We are already seeing this with projects such as Industrial Carbon Capture and Storage and some of the upgrades to the plants at Wilton with the announcement of a Dupont Teijin plant to recycle previously non- recyclable plastics. Nissan has made a significant investment in its battery plant at Sunderland to expedite the production of the Leaf.

However, innovation costs money, lots of money. Some of that money will need to come from Government or the devolved authorities. In truth though, much more will need to come from industry who must see the business case. It has long been a feature of the North East economy that we have a large proportion of multinational companies but very few headquarters. That means the decision on investment, particularly for expensive process upgrades lies elsewhere in the world. Many of our plants are used to making business cases for investment for growth or indeed, to justify their existence in the UK at all; but making that case based on public opinion and British Government policy could be tricky.

Whilst there are many challenges in our greener world there are significant opportunities, particularly in the circular economy. The key trick will be to secure investment in the new an innovative before the old is obsolete to ensure that the economy moves forward with the green revolution. We can do it and we can do it without tearing up trees or harming newts or any other such environmental catastrophe, we have it all here in the region – we just need the investment to make it work properly.