green deal

The Green Deal is a UK Government initiative aimed at reducing C02 emissions and increasing Green technology in UK homes and businesses. The Green Deal is going to be launched in October 2012.

The big driving force behind the Green Deal is the commitment that Tony Blair made to cutting CO2 output by 80% of 1900 levels by 2050. Some have speculated that Mr Blair didn’t actually know what he was signing up to at the time. An 80% reduction in anyone’s eyes is a large figure and what the current Government have realized is that this isn’t something easily achievable simply through tax incentives and red tape, hence the Green Deal was born. The idea is to give loans which are paid back through your energy supplier and there is no up-front cost to the loan. The loans will also be linked to the property and no the occupier.

Green Jobs

The Green Deal is going to create 65,000 jobs over the coming years and we all know that politicians just love a job creation scheme. If the Government can get all the proper structure in place before the initiative is launched there is a chance that a lot of new shiny jobs will be created. The politicians will be falling over themselves to be photographed with a young man fitting a solar panel, saying ‘we created these jobs’.

The only fly in the ointment is that the UK Governments track record, they made a huge error over the first time they incentivized Green technology. The UK Government was paying 42p per kWh to people who fitted solar voltaic panels, which lead to a boom in the up-take of solar panels and created thousands of jobs. But it wasn’t sustainable, ironic, and the scheme was slashed to 21p per kWh causing some firms to scale back and make redundancies. The solar industry took the Government to the high court to challenge their discussion and the word ‘fiasco’ was attached to the whole of the Governments Green credentials.

Green Loans

One huge thing that the UK Government can champion is that the Green Deal loans will have no upfront costs, this will be an incentive to people who are struggling in these times of austerity. To be able to fit these new technologies and save money on their energy bills is going to be a driving factor. There is a caveat of course, the loans have to be lower than ones currently available. No one is going to take out a loan if they can get a better deal from there bank. So the loans associated with the Green Deal need to be competitive against the open market.

Green Apathy

One of the biggest problems that western Governments and environmentalists have been facing over the past few years is apathy both for politics and for Green issues. In the UK people are much more concerned about jobs and their finances than they are about green issues. This is an area that the Government really needs to focus on because if people don’t take up the initiative it might all collapse.

The UK Green Deal is a huge opportunity to revolutionize the Green industry in the UK but there are some hurdles in the way as we have observed in this article. With some good incentives and some hard selling the UK Government can produce the jobs and cut carbon in the UK. One thing that does come out of these large scale Government schemes is that the costs for green technology comes down. Economies of scale dictate that cost prices will fall when there is a large take up of an emerging technology, so we can all look forward to lower prices. The knock on effect can be innovations in the technology itself as well as competition within the market which can further drive prices down.

Only time will tell if the Green Deal is going to be a success but what is evident over the last few years is that if you pitch it properly Green technology can create jobs and build sustainable markets.

Article by Ciaran Oliver.