Saving the economy and saving the planet

Tuesday 21 April 2009

Is the recession an opportunity to move away from some traditional, and environmentally unfriendly, industries to cleaner, greener industries to create new and sustainable employment? The potential economic benefits offered by the green economy in the current economic downturn will be explored on Budget Day by three leading experts in the fields of economics and environmental research: Dr Alex Bowen, of the LSE's Grantham Research Centre, Prof Paul Ekins of Kings College, London and Dr Ralf Martin part of the ESRC's Centre for Economic Performance.

Research Economist, Ralf Martin, proposes an interesting opportunity for the Chancellor to consider in the forthcoming budget, commenting: "If the revenue raised through carbon taxation or auctioning of carbon permits is used to reduce payroll taxes then climate change policy would not only address climate change but indeed would act as a direct stimulus package without straining the government's budget."

Prof Paul Ekins is Prof of Energy and Environment Policy at Kings College, London. He states that public policy needs to act on four fronts to ensure that the UK comes out of the recession better able to respond to low-carbon and climate change agendas.

"First, any fiscal stimulus in the Budget will have to be far more low-carbon oriented. There is no reason why all the public investment in any fiscal stimulus package should not support low-carbon objectives. Second, the stimulus will need to support employment. The greatest opportunity here is in labour-intensive measures to increase energy efficiency in the building stock."

"The Budget will also need to incentivise private investment in low-carbon opportunities," he added. "And, finally, it should clearly signal an environmental tax reform that will give a robust price to carbon across the economy."

Prof Ekins is joined by Dr Alex Bowen, who recently took up an appointment at The Grantham Research Centre as a Principal Research Fellow. Dr Bowen points out that strong action against human-induced climate change is urgent and the current financial crisis could prove a timely opportunity. He says: "The need for a global fiscal stimulus provides an opportunity to lay the foundations for more sustainable low carbon growth when recovery comes - and at a lower cost than if the world economy were already working at full capacity."

The lecture is the last in the Global Financial Crisis series hosted by the Economic and Social Research Council, which has explored the impact of the recession on health and happiness and poverty.

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Notes for editors

  1. The seminar is scheduled to take place on 22 April 2009, at Sixty One Whitehall, Westminster, London, SW1A 2ET from 18.00 to 20.00 (registration from 18.00).
  2. The event is free and open to the public. Media are welcome to attend this event. For further information and to register, please contact Saskia Walcott.
  3. The Economic and Social Research Council (ESRC) is the UK's largest organisation for funding research on economic and social issues. It supports independent, high quality research which has an impact on business, the public sector and the third sector. The ESRC's planned total expenditure in 2009/10 is £204 million. At any one time the ESRC supports over 4,000 researchers and postgraduate students in academic institutions and independent research institutes.