The Taxpayers’ Alliance (TPA) has today taken the extraordinary step of writing an open letter to the Energy Secretary, Chris Huhne, calling for the abolition of the Carbon Trust. This is in direct contravention of the truth – that climate change is, in the words of Lord Stern, “the greatest market failure the world has seen.”
The Taxpayers’ Alliance (TPA) has today taken the extraordinary step of writing an open letter to the Energy Secretary, Chris Huhne, calling for the abolition of the Carbon Trust.
In its letter, the TPA makes the claim that:
“The Carbon Trust doesn’t address a genuine market failure.”
This is in direct contravention of the truth – that climate change is, in the words of Lord Stern, “the greatest market failure the world has seen.”
The TPA’s attack manages to ignore the fact that much of the Carbon Trust’s funding goes directly to developing innovative low-carbon technologies. This is a vital process which overcomes another major market failure: the reluctance of businesses to invest in far-sighted RD&D in the energy sector, and transferring ideas from the lab into commercial products.
As respected investment analysts Bloomberg New Energy Finance point out in a recent paper,
“traversing… this so-called commercialisation ‘Valley of Death’ – located somewhere between Silicon Valley venture capitalists and Wall Street banks – poses a long-standing challenge to the clean energy sector.”
The Carbon Trust helps bridge this ‘valley of death’ – as a recent report by the independent Committee on Climate Change clearly shows. Unfortunately, the TPA seems not to understand the vital role the Carbon Trust performs here.
Indeed, the public funds put into the Carbon Trust’s grant programmes are in fact an excellent investment, as they encourage businesses to invest more of their own money. The TPA complain that £100m is invested in the Carbon Trust annually, but as they state, “Every year we help to leverage £700 million of private sector investment into projects that support the development of the UK’s low carbon [sector].” In other words, for every £1 put in by the taxpayer, £7 is leveraged from the private sector that would not otherwise have been spent.
What’s more, the Carbon Trust has already seen their funding streams cut earlier this year, when in July the Coalition removed £12.6m from their innovation programme for low-carbon technology enterprises. The Committee on Climate Change has warned that
“Current levels of public expenditure for RD&D should be regarded as a minimum, and cuts would be detrimental to the achievement of our climate goals and the new Government’s objective to build a green economy.”
This is not the first time the TPA has singled out an environmental organisation and then lobbied for its abolition. In 2009 it repeatedly called for the abolition of the Sustainable Development Commission – the Government’s watchdog on sustainability – and was duly rewarded when Caroline Spelman announced it would be dissolved in July. Matthew Sinclair boasted it was a “#tpapolicywin” on Twitter.
The TPA appears to have declared war on all public bodies dispensing climate change funding and services – regardless of how effective they are. Their annual review declares they will “continue to campaign for the wasteful 2020 renewables target to be abandoned, and put pressure on politicians to re-think climate change policy…”. And in a blog last week, following revelations in the Telegraph that 177 public bodies were being axed, they stated:
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“Whilst the news is initially encouraging… the Telegraph also lists a number of bodies still under review. It names the Carbon Trust, The Advisory Council on Public Records and the Energy Savings Trust among others whose future is yet undecided. This shows that there are still lots more quangos that can be added to this growing bonfire.”