The 2017 Clean Growth Strategy was generally well received, but as with any new strategy the real challenge is implementation. So what will help it to gain the traction that it needs?
In 2016 I wrote in anticipation of, and I have to admit with a growing modicum of excitement, about the forthcoming Industrial Strategy for the UK. The Industrial Strategy has the potential to weave together the strands of our economy (skills, companies, institutions, innovation and research capacity and so on) with a clearer sense of purpose, and also place.
I also wondered if the strategy could provide a not so gentle nudge to the country’s transition to a low carbon economy after a period of, well, a little confusion. In unlocking the cleantech premium for the UK’s Industrial Strategy I wrote about the potential for the strategy to unlock an exportable economic premium from the UK’s cleantech expertise. Looking to play to our strengths, I also highlighted that we do have years of practical experience deploying environmental technologies, industrial and engineering solutions in a densely populated country with limited resources.
Since then much has happened, on paper anyway. As a backdrop the global approach enshrined in the Paris agreement has been followed up, and has started to be followed through, by most countries and businesses alike. In the UK, consultation on Building our Industrial Strategy early in 2017 preceded the October publication of the consultation draft of the Clean Growth Strategy. Clean growth was then framed as one of four Grand Challenges in the Industrial Strategy: building a Britain fit for the future white paper in November.
Also let’s not overlook what is perhaps the critical third leg of the refurbished low carbon economy stool. That is the interim National Infrastructure Assessment from the National Infrastructure Commission which looks out to 2050 and pinpoints carbon alongside congestion and capacity as the big priority areas. We may now also have some slick wheels to bolt onto said stool in the form of industrial digitalisation, as articulated in the Made Smarter review and in turn its potential highlighted by some commentators to improve productivity through resource efficiency.
The implementation conundrum
So assuming that the Clean Growth Strategy and its counterpart strategic documents are on the right lines, all we have to do now is implement all of this stuff. It is definitely a “we” by the way, as businesses, communities nor Government could possibly do this alone.
Of course as many leaders will attest, fully embedding and implementing a new strategy is tough. But without proper implementation, a strategy is rather like visiting a restaurant, admiring the menu over a quick aperitif and then going home with an empty stomach.
Or in the words of business guru Jim Collins, “Building a visionary company requires one percent vision and 99 percent alignment”. And so it is for the Clean Growth and Industrial Strategies, we are now at that crucial point where the recycled rubber needs to hit the solar paneled road, so to speak.
How has the Strategy stood up to initial scrutiny?
It is important to touch on the content of the Clean Growth Strategy – though I cannot do it justice here to the extent of many others have reviewed and considered it from various perspectives (* see below). The consensus seems to be that the Strategy is indeed on the right track and should be welcomed. The multi-faceted benefits of a low carbon pathway for the UK are certainly embraced by the Strategy i.e. productivity, jobs, distribution of earning power, environmental and global climate protection.
Whether the Strategy is largely back to the future (i.e. that we had similar plans that did not reach fruition), or a genuine sea change with the notable shift in mindset from a “least cost” approach to securing industrial and economic opportunity is an interesting debate. There are also naturally criticisms over certain omissions or areas of emphasis. But the overwhelming concerns do centre around it only being a strategy rather than a fully worked plan as it was originally mooted to be, and whether it establishes a clear enough pathway to deliver with the right players involved. As one commentator puts it, “Ambitious but toothless”. We are therefore back to the question about how to implement it, and I think a critical and entirely related point about confidence.
Catalysts for implementation
There is still a lot to do then to ensure that the Clean Growth Strategy as a component of the Industrial Strategy can move into delivering action and creating opportunity.
Implementation is a complex task, particularly when doing it at the country scale where systems of systems will need to adjust to accommodate the change.
At this stage I believe that two catalysts could be particularly important to make the jump fully into implementation mode: 1) confident commitment; and 2) new metrics.
1) Confident commitment
Despite statements such as “our Strategy for clean growth starts from a position of strength”, and the backdrop that our international and national emissions reduction commitments that are stronger than ever, parts of the forward Strategy do still feel somewhat vague, even tentative. In places the concept of clean growth is described in terms of an option that we “can” or “could” take forward if we take on a challenge that “will not be easy”. And it is widely recognised that the UK’s energy and industrial sectors in are wary following perceived inconsistencies and false starts in policy and funding decisions (e.g. on business and domestic carbon reduction/energy efficiency and carbon capture & storage). In the context of the scale of investment and rapid pace of industrial transformation elsewhere in the world, even small seeds of doubt or uncertainty about the overall direction of travel could prove costly.
I contrast that with the optimistic standpoint offered by Johan Rockström, director of the Stockholm Resilience Centre, who I had the privilege to hear speaking recently about the earth’s bio-physical Planetary Boundaries at the University of Surrey. He and his colleagues surmise that whilst human growth and development have strained the earth’s resources, our advances have also given us the understanding to recognise this and work out what changes to make and what to do next. An example where we have already already successfully done this is in understanding the impact of CFC emissions and controlling them to stabilise stratospheric ozone in the 1980s and 90s. Looking forwards, the observation is made that the global growth in solar, and renewable energy production more widely, whilst still at relatively low levels, are so far following a path of exponential growth.
Perhaps most worrying for many, including the UK’s Committee on Climate Change, is the proposal in the Strategy to using the flexibilities available to meet carbon budgets. That idea would be to consider using accounting flexibilities or international carbon credits “if this presents better value for UK taxpayers, businesses and domestic consumers” rather than having to take the necessary domestic action in time to meet the carbon budgets. This gives rise to concerns about allowing short term choices that would take the UK away from the lowest cost policy/technological trajectory. It also invites a swath of other questions such as how to assess the overall “better value” across different time periods/generations?; much latitude/”borrowing” should be given and for how long? and so on. In the meantime it is hard to imagine how such a debate would enhance investor and business confidence.
In terms of confident commitment it is certainly not just Government/policy that I am talking about. Businesses, investors, consumers from across the economy, communities, cities, regions and educational institutions will all need to establish and hold true to their part in the clean growth transition. Referring once more to the analogy of business/organisational strategy, it does not mean that a rigid forward plan should be followed dogmatically, at any cost. Rather, partially drawing on the lean startup concepts of business guru Eric Reis, it is to set a goal that can be followed with perseverance, constant feedback and learning. Adjusting the course of action regularly and “pivoting” more significantly occasionally.
2) New metrics
The Clean Growth Strategy has recognised the need for a new measure for tracking the UK’s progress in clean growth and has introduced the Emissions Intensity Ratio (EIR). Though only one out of >120 pages is dedicated to the topic of measuring the delivery of the Strategy. Some recognition of the role of monitoring, targets, metrics and data are to be found peppered throughout the sectoral sections of the Strategy as well as in the new Green Finance Taskforce’s remit around Climate-finance data and disclosures. But apart from highlighting the changing ways to value and manage our natural resources (i.e. via Natural Capital approaches) the Strategy does not as yet offer much new thinking on what needs to be measured, why, how and by whom.
Once again turning to Eric Reis’ work here as he has made a very convincing argument in the business world that trying to measure something new (startups and new business ventures) with old metrics (traditional business accounting) will just not give you the feedback you need to enable you to succeed. Rather that new kinds of accounting are required, providing rigour in an environment of uncertainty. New thinking on metrics, and stronger feedback loops (e.g. more and more rapid evaluations of implementation) seem just as relevant to the Clean Growth Strategy.
I have written before about how capturing co-benefits can be the key to delivering (the 2020) environmental goals for example in the way that infrastructure solutions are designed to deliver multiple outcomes. The Industrial Strategy Commission has also highlighted the need for a significant overhaul of project appraisal methods to properly account for changes in behaviour.
In particular clean growth is requiring and facilitating new business, investment and ownership models that traditional approaches to economic appraisal and evaluation were never designed to serve.
Any new metrics will also be helped by, and need to mirror, the new collaborations of disciplines and industries that are starting to deliver clean growth on the ground. For example the way that technology companies are working with city mayors, planners, environmental experts and engineers on smart, sustainable cities and how community involvement, customer/product research expertise and the sharing economy are being harnessed for renewable energy and potentially circular economy solutions.
As always, I welcome your comments and discussion about this article and the implementation of the UK’s Clean Growth and Industrial Strategies.
* Here you can take a closer look at some of the analysis and commentaries about the Clean Growth Strategy 2017:
- CCC welcomes publication of the UK Government’s Clean Growth Strategy
- 10 Takeouts from the UK’s new Clean Growth Strategy
- The Clean Growth Strategy: Ambitious but toothless
- Does the Clean growth strategy live up to the hype?
- EIC welcomes Clean Growth Strategy
- Back to the future: The Clean Growth Strategy may look like a fresh start, but haven’t we been here before?