The Low Carbon Economic Area Car Crash

Posted on 15. Feb, 2010 by Ross in Government Policy, United Kingdom

The UK government concept of Low Carbon Economic Areas is now looking like the ultimate in Whitehall greenwashing, and whilst the first blunder looked like the government had fallen asleep at the wheel, the latest news would suggest that they don’t know how to drive the car at all.

The concept of Low Carbon Economic Areas first emerged in the world’s first Carbon Budget in April 2009. The idea was for different areas of the country to specialise in different forms of low-carbon technology, with the specialisation driving both innovation and jobs in order to assist the UK’s drive towards being a key player in the emerging international market for green technology.

The first Low Carbon Economic Area was designated in the Carbon Budget to be the South West of England. Due to the peninsula having a huge amount of exposure to the Atlantic Ocean, the counties of Cornwall, Devon, Dorset and Somerset were declared to be the primary intended beneficiaries of wave power research and engineering.

A week later, the North East of England was designated as the country’s second Low Carbon Economic Area. This time the specialist technology was to be green cars, and the announcement was made to coincide with Nissan’s announcement of a new lithium battery factory in Sunderland to produce the energy storage technology for electric cars.

Fast forward six months, and the green glow bestowed upon both areas of the country has been washed away. The South West was ignored in the latest wave power research funding allocations, whilst the announcement of the latest Low Carbon Economic Area has led to direct competition for funding between it and the North East.

Low Carbon Car Crash

The Midlands has been declared the latest region to be afforded the status of Low Carbon Economic Area, but unlike the other areas it has been allocated a technology already covered by another area: cars. With the North East already supposedly specialising in low-carbon car manufacture, the Midlands - with its massive history and capability in car manufacture - has been given the same task, albeit with a different twist.

The Midlands is set to specialise in hydrogen car technology, with part of the investment in the area going towards the creation of a ‘hydrogen corridor’ along the M4 from south Wales to Swindon.

Given that electric cars are anticipated to go mainstream in the next 5 years, whilst hydrogen cars are not likely to be seen in appreciable numbers until 2030 or beyond, this puts the ball firmly in the North East’s court. However, with this the first strong commitment by the UK government to a long-term vision of a hydrogen economy, the Midlands will be fighting with the North East for every penny in the automotive innovation pot.

With the prospect of hydrogen car manufacturing jobs a long-distant and unreliable prospect, many in the Midlands will feel that they have drawn the short straw in the Low Carbon Economic Area lottery so far. Interpretations of the government simply running out of ideas for near-term low-carbon solutions are likely, as well as that the title of Low Carbon Economic Area is little more than Westminster greenwashing.

Falling off the Green Wave

Another Low Carbon Economic Area wondering about the benefits of the title is the South West. The latest round of government funding for wave power resulted in five of the six beneficiaries of the money being based outside of the South West. At the same time, Cornwall-based wave power firm Orecon announced it was closing up shop due to lack of funding - their venture capital backers had earlier withdrawn, and the Carbon Trust’s Marine Renewables Proving Fund was a match fund.

The South-West still has a commitment from government for the area to realise the economic benefits of wave power, but with most of the research being done in Scotland, the short-term benefits are negligible. Instead, the hope is to realise the benefits of medium and long-term manufacturing and maintenance, the latter of which is projected to make up 50% of the costs of wave power.

High Greenwash Economic Area

The latest developments in the Low Carbon Economic Area saga reveal the fundamental flaw with the government’s commitment to the concept. Funding and support is largely going to the leaders in the fields of low carbon technologies, wherever they may be based. The areas have been designated largely on pre-existing areas of expertise or manufacturing capacity, but there will still be plenty of investment available to businesses geographically outside of the region chosen for their speciality.

By declaring regions as Low Carbon Economic Areas, the government is simply playing politics by promising new investment to parts of the country struggling under the grip of the recession. Money will still flow for that speciality into other regions, creating bitterness for those who believe they have been promised more, whilst there is no incentive for businesses to actually relocate themselves into a relevant area. As a result, the strong interplay of related companies and services which could be achieved by geographic concentration is not being realised, whilst those promises made are already starting to ring more hollow.

Image of a car crash by Uberto @ Flickr