Britain’s big government is a winning hand in incentivising green technology
The US might have the financial heft, but Britain benefits from a centralised government with the ability to make sweeping decisions to incentivise renewable technology across the country, writes Will Cooling.
The terror alert level in Northern Ireland may have risen to severe this week, but it’s a very different IRA keeping politicians in Britain and Europe awake. The Inflation Reduction Act is what’s left of the Democratic left’s dreams of radically reforming American society through a Green New Deal. It may not have fulfilled the wilder dreams of the likes of Alexandria Ocasio-Cortez, but it was more than enough to give politicians on this side of the Atlantic nightmares.
The cry from key industries was that its marrying of “buy-American” provisions with the promise of $369bn in subsidies for environmentally friendly consumption and production, would put America at a fearsome advantage in the race to develop green technologies.
Typically, the European Commission responded by announcing now was the time for greater cooperation in Europe. It launched a new Green Deal Industrial Strategy promising member states greater leeway to invest in decarbonisation, both by relaxing rules against state aid and allowing them to repurpose pandemic recovery funding they have yet to spend.
The British government meanwhile has responded with the usual homilies about global free trade, whilst pleading with the economic superpowers to play nicely with us. So much for taking back control. Such feebleness is to be expected from a government who is painfully embarrassed at its signature achievement being the erection of trading barriers with our nearest neighbour and largest market.
But neither America nor Europe’s green investment drives are as formidable as they sound. America has still to pass the permitting reform that was due to complement the Inflation Recovery Act. Without it, it will be much harder for new green projects to secure planning permission to be built, and the Republican House seems increasingly disinterested in pursuing meaningful compromise with the Democrats in the Senate or White House. The European Commission has identified permitting reform as essential to fulfil its objectives, but it’s struggling with other disagreement amongst its members, with Germany at the heart of several arguments with other major nations about what can be included in the list of green technologies.
The billions of dollars and euros that have been pledged to build the future are nothing but science fiction if there isn’t the political will to push through the bureaucratic reforms needed to allow building work to begin, let alone proceed in a timely and efficient manner. But it is incredibly difficult for these cumbersome federations to get such reforms onto the statute book, never mind making them stick.
This is where Britain has the advantage – if we choose to use it – as our government can more easily move to create regulations that sweep away the obstacles in deploying green technologies. With its supremacy over the devolved assemblies recently reaffirmed by key court cases, Westminster could pass a law tomorrow that stopped local busybodies from blocking much needed development projects, whether that be new factories or energy production.
Unbound by a separation of powers, ministers could formally instruct key quangos and bureaucrats to adopt a more positive attitude to innovation. We could have a state which encourages risk-taking to improve the environment rather than seeing environmentalism as an excuse for inertia. And unlike America or Europe, we have a strong central state. This means we can easily collect and disseminate data that will help guide future breakthroughs and innovations, if we were to use our newfound ability to break free of the EU’s overly restrictive data regulations. Meanwhile our centralised public services put us in a strong position to incentivise innovation by making meaningful promises of public contracts for emergent technologies.
We will never be able to promise to spend as much money as the Americans or the Europeans, but we have our distinct advantages. The centralisation of the British state is often held up as a cause for concern; here, it’s a trump card we could play, if our politicians are committed to making us a leader in green industrial development.
And if they’re not willing to push through the necessary reforms, then whatever money could be spent in this area will be wasted.