Austerity talk could cripple the actual green investment the UK government is making, says Peter Judge
Last week President Obama backed nuclear power and “cleaner” fossil fuels in a speech from Georgetown University. He pledged to bypass Congress if necessary, to get the measures passed. The new policy was praised by environmentalists, although some thought it too optimistic about “clean coal” and nuclear power.
Over here, you’d never get such a speech from David Cameron, or even Chancellor George Osborne. They are reluctant to talk of investing in anything because it might sound like heresy against the austerity gospel. And austerity is supposed to be the thing that will return us to riches.
But it’s just possible that the government may actually be doing some environmental things right. And its reluctance to talk about them may be enough to sabotage the benefit those things could bring.
No change in the spending review
Last week, in Britain, we had a Spending Review, where the Chancellor George Osborne set out what the government’s budget strategy would be for the next couple of years. The chancellor had a couple of crumbs of comfort for the tech industry, but he didn’t say anything to compare with Obama’s promises.
The main focus of his review was another round of spending cuts, designed to continue the “austerity” drive. This policy was supposed to have cleared the budget deficit by now, but the deficit stubbornly remains.
Osborne is sounding like a scratched record, and a growing chorus says that austerity is counter productive: what is needed is investment in infrastructure.
To transition to a new lower-carbon economy we need new capacity built, and new industries developed.
In fact, as so often, this is partly a matter of perception. Osborne’s cuts are actually not huge, but are marketed as such by a party that still wants to blame government spending for a crash that was caused by banks.
And infrastructure spending need not break the government’s budget. A Green Alliance response to the spending review by economist Julian Morgan points out that infrastructure spending is now mostly made by the private sector.
Believe it or not, the government’s investment programme is already green: Morgan’s analysis suggests 71 percent of planned investment by the government is low-carbon in nature (wind farms and smart grids and the like).
Those projects could be part of an expanding economy, leading to a growth in British exports – if the private sector trusts them and comes on board with its own projects.
And data centres could be part of that export business. An abundance of low-carbon energy at a good price would encourage data centres to set up in the UK. We don’t have enough renewable power on stream to match the energy prices of Iceland or Norway – but we don’t have to. Britain’s connectivity, its skills and its language should help swing the deals.
The potential of the green sector is strong. But it requires confidence from business partners. And the danger is that the government could stunt its potential. With the public commitment to cuts, it’s difficult to talk up investment.
Without an Obama-like speech trumpeting the new economy, there’s a danger that firms won’t trust it, and won’t back it. Banks and private companies are sitting on cash piles at the moment, fearing that what they build will be stranded by changes in government policy.
But climate change is an established reality, and the UK government has a legally binding promise to reduce the UK’s carbon emissions by 80 percent before 2050. The need and the will for a low-carbon transition are there; it just needs some more emphasis in what the government says.
The results for the data centre industry would be positive. So no matter that I am always suspicious when Conservative politicians put on a green front. In this case, they actually have something to say, and it’s very important that they say it.
An earlier version of this article appeared on Green Data Center News.
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