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DepartmentforBusiness,EnterpriseandRegulatoryReformDepartmentofEnergyandClimateChangeFirstpublishedMarch2009.CrownCopyright.URN09/571:AvisionThisvisionishelpingustoDepartmentforBusiness,EnterpriseandRegulatoryReformDepartmentofEnergyandClimateChange1LowCarbonIndustrialStrategy:AvisionLowCarbonIndustrialStrategy:Avision2LowCarbonIndustrialStrategy:AvisionAchievingthismeansthatbythatdate,everyunitofoutputinBritainwillneedtobeproducedusingonaveragejustonetenthofthecarbonusedtoday.Thistransitionwilltransformourwholeeconomy.Itwillchangeourindustriallandscape,oursupplychain,andthewayinwhichweallworkandconsume.Foraswellasbeinganenvironmentalandeconomicimperative,theshifttoalowcarboneconomyisalsoaneconomicopportunity.Businessesandconsumerscanbenefitfromsignificantsavingsthroughenergyandresourceefficiencymeasures.AndsupplyingthedemandsofthelowcarboneconomyoffersasignificantpotentialcontributiontoeconomicgrowthandjobcreationinBritain,notonlyaspartoftheshorttermeconomicrecovery,butalsothroughsustainablegrowthoverthedecadestocome.Theglobalmarketforlowcarbongoodsandservicesisalreadyworthover£3trillionandgrowingrapidly.FortheUK,whichisalreadyaleaderinmanylowcarbonandresourceefficientservices,technologiesandprocesses,thisisahugepotentialopportunity.Thetransitiontoalowcarbonworldwilltransformourwholeeconomy.LordStern’slandmarkReviewin2006setouttheeconomiccaseforactiononclimatechangeandforinvestmentinalowcarboneconomy.Recognisingthateconomicnecessity,theUKhasthroughtheClimateChangeActbecomethefirstcountryintheworldtoadoptalegallybindingtargettoreducecarbonemissions–byatleast26%by2020andby80%by2050.ThechallengeforbusinessandgovernmentistomakesurethattheUKbenefitseconomicallyandindustriallyfromthemovetolowcarbon–ensuringthatthejobsandgrowththatitcouldbringsupportourrecoveryfromthedownturnandourlongtermindustrialfuture.Alowcarbonindustrialstrategymustseizetheopportunitiesthatwillcomewithchange:anewindustrialactivismforanewgreenindustrialrevolutionWealreadyhaveinplacethekeytargetsandregulatorydriversforcarbonreductionsintheareasofhouseholds,transportandpowergeneration.TheframeworkGovernmenthasputinplaceaimstogiveindustrytheconfidencetoinvestinbringinglowcarbonproductsandservicestothemarket.ItincludestheClimateChangeAct,whichsetsbindingcarbonbudgetsfortheUK,theEUEmissionsTradingScheme,whichcoversalmosthalfofallemissions,theRenewablesObligationandourtargetof15%ofallenergycomingfromrenewablesby2020,thenewCarbonReductionCommitment,buildingregulations,vehicleemissionsstandards,anddynamicproductstandardsforconsumergoods.Allthese,alongsidethepublicspendingandplanningprocessestheGovernmenthasputinplace,willdrivedemandforlowcarbonandresourceefficientgoodsandservices.ButwemustalsothinkabouthowwebestequipUKbusinessesandworkerstocompetefortheseopportunities.InanincreasinglycompetitiveglobalmarketitisvitalwecreatetheconditionsthatmaketheUKthebestcountryintheworldtogrowalowcarbonbusiness.Weneedanewindustrialactivismthatbringstogetherdifferentstrandsofgovernmentpolicytoensurelowcarboncompaniesbasedherehaveaccesstotheinfrastructure,skilledworkers,researchanddevelopmentandinvestmentopportunitiestheyneed.Weneedtomakesurethatwedrivethegreenindustrialrevolutionfromtheregionsaswellasnationally,buildingondistinctregionalandlocaladvantagesacrosstheUK,andmarketBritishstrengthsinacompetitiveglobalmarketplace.OpportunitieswillexistinsectorsrightacrosstheUKandglobaleconomyForbusinesses,thetransitiontolowcarbonoffersbothcommercialopportunitiesandthechancetosavemoneyandrelease3LowCarbonIndustrialStrategy:AvisionLowCarbonIndustrialStrategy:Avision4productiveresourcesthroughgreaterenergyefficiency.AttheheartoftheLowCarbonIndustrialStrategyaredriversoffundamentalchangeinfourkeyareas:•Energyefficiencytosavebusinesses,consumersandthepublicservicesmoney•PuttinginplacetheenergyinfrastructurefortheUK’slowcarbonfuture–inrenewables,nuclear,CarbonCaptureandStorageanda‘smart’grid•MakingtheUKagloballeaderinthedevelopmentandproductionoflowcarbonvehicles•Ensuringourskills,infrastructure,procurement,researchanddevelopment,demonstrationanddeploymentpoliciesmaketheUKthebestplacetolocateanddevelopalowcarbonbusinessandmakesureinternationalbusinessrecognisesthat.Theglobalshifttoalowcarboneconomycouldhelptodriverenewedgrowththatwillliftusoutoftheeconomicdownturn.ItwillbekeytotheUK’slongtermindustrialfuture.SetoutherearetheareasinwhichtheGovernmentbelieveswecanbuildonexistingworktocreateacomprehensiveandambitiousstepchangethatensuresUKbusinessescanbenefitfullyfromglobalmovestoalowcarboneconomy.Incloseconsultationwithbusinesses,unions,environmentalexpertsandotherstakeholderswewillnowdevelopourapproachforensuringUKbusinessescanbenefitfromthetransformativechangetoalowcarboneconomy.TheresultingLowCarbonIndustrialStrategywillbepublishedinthesummer.Savingbusinesses,consumersandtheGovernmentmoneythroughenergyefficiencyMoreefficientuseofenergyandotherresourcescouldsavebusinessesandconsumersinBritainbillionsofpoundseveryyear.Muchofthisca