Collaboration is essential for our low-carbon future, says CBI Director-General

On 7 May, the CBI put its name to a joint industry statement behind the importance of an ultra-fast charging network in driving the transition to zero emission transport – and asking government to help.

The following day, CBI Director-General Carolyn Fairbairn spoke at the BP/CharIN Powering the Charge Conference to reinforce that message.

She emphasised the role business has played – and will continue to play – in responding to the climate change challenge. Since 1990, we’ve grown our economy by more than 60% while cutting carbon emissions by more than 40%. Last year, 53% of our electricity came from low-carbon sources – and we have just gone 162 hours without coal, by far the longest period since the industrial revolution.

“Let’s be clear – none of that could have been achieved without business,” she said. “And it’s because the energy transition is so pressing and so difficult that we need business to deliver change. It can’t be done any other way.”

But she added change is also not possible without collaboration with government – and cross-party consensus.

“Brexit has been a lesson in the folly of trying to enact large-scale change without political consensus – it just doesn’t work,” she said.

And to pick up the pace and consistency of change across the UK, Carolyn called for a single regulator to oversee the energy transition to avoid businesses having to deal with “multiple regulators and agencies, each of which has different standards, different levels of responsiveness, operating under different legislation”.

Transcript

Thank you, it’s great to be here at such an important conference at such an important time for our car industry and such an important time for our climate, too.

And I’m really pleased to have been invited by BP.

But it’s also nice to have been invited to talk about something other than Brexit for once. Not just because I think we’re all just a bit fed up with it. But because – and this is the more important point – there are other things we need to get on with.

And the energy transition in transport is right at the top of the list.

The transition - why it matters

The energy scientist Vaclav Smil wrote that:

“Energy is the only universal currency: one of its many forms must be transformed to another in order for stars to shine, planets to rotate, plants to grow, and civilizations to evolve.”

His wider point is not only that energy is the basic stuff of existence, but that how we use energy has implications.

The harnessing of hydrocarbons to fuel transport was one of the great liberating forces of the 20^th Century, making possible the mass movement of people and products at speed. And life today is immeasurably better as a result.

But we now know that the use of hydrocarbons for transport also has harmful implications.

To develop the metaphor, the currency of energy can’t always be spent without cost.

We heard it last week from the government’s Committee on Climate Change. Who talked about the overwhelming evidence of the role of greenhouse gases in climate change.

And so the electrification of transport is now perhaps the greatest and most pressing challenge of the 21^st Century.

Business or government – why we need partnership

Now, at the CBI, we work at the intersection of business and politics. We enable a conversation between the two. And whenever society is faced with a challenge, the question we get asked is: is this a problem for business to solve, or for government?

And what worries me is that sometimes I get a sense from people that the transition we need to make is now so pressing, and so difficult, that it can only be tackled by governments, and governments alone.

That business should be involved only as something done to rather than done with or done by.

And my response to that notion is a simple one. It’s because the transition is so pressing and so difficult that we need business to deliver change.

It can’t be done any other way.

It is the free market, with its ability to match demand with supply, its unique power to drive innovation through competition and its capacity to pit technologies one against the other, that will make the transition possible.

So when I visit CBI member companies and talk about climate change I find not hesitancy, reluctance, or fear of the future. But enthusiasm about the prize that future can bring.

• Cleaner air in our towns and cities.
• Better, safer transport.
• Healthier lives for our children, citizens, and employees.
• And a global industry that by 2030 will be worth £2 trillion a year.

That sense of excitement is present in this room too.

And so the answer to the question: “government or business?” is not one or the other. But both. It must be a partnership.

That’s how we’ve succeeded so far.

How, since 1990, we’ve grown our economy by more than 60% per cent, while cutting carbon emissions by more than 40%.

How, last year, 53% of our electricity came from low-carbon sources.

And we have now gone 162 hours without coal - by far the longest period since the industrial revolution.

So let’s be clear. None of that could have been achieved without business.

Two ideas

And yet, while today we’re seeing something of what business is doing to make the transition happen, I want to suggest a couple of areas where politicians can make it easier for business to do our bit.

Two changes that can help us go further, faster.

1. Political consensus

The first has to do with the nature of our politics. And the new importance of political consensus on the energy transition.

And that might sound a surprising statement, given the sheer lack of consensus we’ve been able to achieve over Brexit.

Yet what we’ve learned is not that political consensus on the biggest questions is impossible. But that it is essential.

Brexit has been a lesson in the folly of trying to enact large-scale change without political consensus. It just doesn’t work.

And we’re not used to it in this country.

We’re used instead to governments winning big majorities. And enjoying large mandates.

It’s all too easy to still consider that the norm. But it’s not.

No party has won and sustained a majority in this country for almost a decade. And with the country so divided, it’s not likely to happen again soon.

And that has implications.

The age of adversarial politics is – necessarily – over.

And what we’ve seen with Brexit is what happens if politicians don’t realise that. Adversarialism results only in stasis.

So my first suggestion isn’t a complicated one. It’s simply to ask our politicians to do what they are belatedly seeking to do on Brexit. And come together.

Yes, the political debate on climate change is over. But the debate over the response is not.

So on the precise mechanism, we’re open-minded. It could be something as defined and prescribed as a new, cross-party commission on the energy transition.

Or as simple and as indefinable as a new attitude in parliament.

We’re interested in what people think.

But if Greta Thunberg can get Michael Gove, Ed Miliband and Caroline Lucas in a room together, surely there’s a foundation to build on.

And if we get this right, it could deliver the main thing business needs above all else. Long-term certainty for investment. Making possible more of the kind of investment BP is making in high-power rapid charging.

And the strategic approach that’ll be essential if we are to meet the 2035 electric vehicle target the Committee on Climate Change called for last week.

2. New regulator

But I have a final thought. And it’s about regulation.

Not a glamorous subject, but a necessary one. Especially at a time of radical change and innovation.

And we know from history that change has implications for regulation. We saw it in the 1980s, during the wave of privatisations that took place then. New industries meant new kinds of oversight became necessary.

We saw it during the take-off of the internet economy in the 1990s. 

And what we learnt in both these cases – and others like them – is that when regulatory change lags real-world change, it hampers progress.

And I want to ask whether something like that’s happening with climate change, and green infrastructure. Whether technology and the disruption to business models is lagging behind the regulatory oversight.

Today if you want to install an electric vehicle charge point, you must deal with multiple regulators and agencies. Ofgem. The local planning authority. The National Grid.

Each of which has different standards, different levels of responsiveness, operating under different legislation. It’s a complex picture. And it’s having consequences.

Yes, we already have 22,000 charge points across the country. But the spread is inconsistent, as one area pulls ahead of another.

And so there might be an opportunity here to consolidate some of that variation. To create national oversight.

Perhaps to nominate a single regulator companies must deal with.

Yes, it might mean taking powers from one place and putting them somewhere else. But if it would help, and if this challenge is as great as we believe it to be, there’s surely a compelling case for change. 

Conclusion

But, in conclusion. I began this speech by saying that the harnessing of hydrocarbons to fuel transport was one of the great liberating forces of the 20th Century.

I want to close by saying that our task now is to make the electrification of transport one of the liberating forces of the 21^st Century.

Retaining the advantages of hydrocarbon fuels and their power to move people and products. But doing so in a way that is cleaner, safer and more efficient.

For that, we need business and government in partnership. We need a new era of political consensus.

And we need regulators that don’t hinder change, but help make change.

With all that – I have no doubt we will succeed.

Thank you.