In a report out today, Green Alliance warned that if the government dropped its £60 billion investment plans in low carbon projects, there would be a 2.2 per cent drop in GDP by 2015, resulting in the UK economy plunging back into a recession.
If all of these plans were to go ahead, it is predicted they would boost GDO by 0.7 per cent by 2015.
The report also warned that £180 billion worth of low carbon investment predicted up until 2020 is at risk because of political uncertainty.
The research concluded that a clearer commitment to low carbon from the government is needed to “unlock the huge potential of private sector investment”.
Matthew Spencer, Green Alliance director, said: “The big beasts of British politics have been largely silent about this opportunity, and investor confidence has dropped as the perception has grown that the UK is not fully committed to its current low carbon direction.”
Shadow chancellor Ed Balls, backed the assertion that “greater certainty on energy policy and a stronger commitment to a low carbon future can unlock long-term investment”.
He added: “The government should start by ending the dither and finally setting a decarbonisation target for 2030.”
However, climate change minister Greg Barker, defended the coalition government’s position, saying it is “unleashing an unprecedented investment in clean energy and low carbon infrastructure”, and that the electricity market reform proposals will ensure “we have in spades”.