The U.K. could earn 20 billion pounds ($31 billion) a year from clean energy products, which accounted for about a third of the nation’s economic growth in the past year, the Confederation of British Industry said.
The nation’s biggest business lobby group estimated that Britain boosted its share of the 3.3 trillion pound global “green market” by 2.3 percent last year. About 122 billion is invested in the U.K. clean energy industry, accounting for about 8 percent of gross domestic product, the CBI said.
The figures are aimed at pressuring Prime Minister David Cameron’s Conservative-led government to step up support for wind and solar developers. Ministers are debating cuts for subsidies and are due to make an announcement by the time Parliament rises for its summer recess on July 17.
“With the right policies in place, green businesses will be a major pillar of our future growth,” John Cridland, director general for the CBI, said in a statement released with a report on the issue in London today. “The U.K. could be a global front runner in the shift to low-carbon.”
By 2015 the country’s trade deficit would be about double current government projections, or more than 10 billion pounds, without low carbon goods and services, the CBI said.
Britain is aiming for 15 percent of its energy to come from clean sources such as the sun and wind, by 2020, up from about 3.3 percent now. The government is starting a 3 billion-pound Green Investment Bank this year to provide financial support to emissions-reduction technologies. It also has curbed subsides for solar power and may slash support for wind energy next week.
“In a time when we have a trade deficit and when export is part of a way of rebalancing our economy we found the U.K. has a green trade surplus running at 5 billion pounds a year,” Cridland said at a press conference today. “Mixed signals from the government are setting the U.K. back.”
China buys about 7 percent of the low carbon goods and services produced in Britain, the CBI said. Sudden policy changes such as cuts in subsidies given to solar power developers has created uncertainty and shaken confidence, making planning and financing of renewables more difficult, he said.
The CBI recommends the government simplify existing policy, work more closely with the European Union, and ensure market signals have “stability and longevity.” The Green Investment Bank should also start raising funds from the capital markets as soon as possible, it said, with priority projects receiving direct government support in the short-term.