Market News

 January 11, 2012
Could HS2 move green infrastructure out of the sidings?

 Occasionally, a story comes along that offers such a compelling insight into the wider issues that inform it, that the standard 500-word summaries of what has happened feel strangely inadequate. What you really need is a comprehensively researched book, and even this would probably fall short of truly explaining what is happening. The High Speed 2 (HS2) rail line and the government's decision to approve the project is one such story.

The proposed £32bn project crystallises so many of the challenges and opportunities presented by the low-carbon economy that it almost feels like a test -- a chance to determine the pace and direction of the UK's green economy.

Virtually every significant debate impacting those business leaders and policymakers committed to slashing the UK's carbon emissions is present and correct in the row surrounding the decision over the HS2 line.

Firstly, there is the predictable scrap between supporters and opponents of the project over whether or not the scheme will deliver promised emissions reductions and economic benefits. It is a fight that is familiar to anyone who follows the renewable energy industry, with dubious assumptions and suspect methodologies being used to strengthen or weaken the case for investment based on the stance of the party commissioning the report.

This plays into the broader tension between the low-carbon economy and conservation groups, which accept the need to tackle climate change as long as it does not impact their back yard. Again, it is a fight familiar to every proposed wind farm, tidal array or nuclear power plant, whereby the impact of low-carbon infrastructure on local environments results in intense opposition and huge planning delays to projects that would otherwise deliver net environmental benefits.

Then there is the opportunity cost debate over whether the money spent on one green project would be better spent on another more effective green project. As Friends of the Earth eloquently argued this morning, should we be ploughing £32bn into a high-speed rail network that will only deliver net emissions reductions years down the line, when the same money could be used to improve existing rail and bus networks that are shown to cut emissions now and are desperately in need of upgrading? It echoes the argument, presented in a different context by those who question whether we should subsidise solar panels when it is more cost effective to cut emissions by supporting energy efficiency measures.

Finally, HS2 offers a perfect case study of the continuous debate surrounding the future mix of low-carbon technologies. Do we need high-speed rail at all when electric cars will decarbonise road transport and video conferencing means we'll all be travelling less anyway? Do we need renewables when nuclear and carbon capture and storage could provide an alternative? Should we look to cut emissions from global supply chains, or should we scrap those supply chains altogether in favour of more localised networks?

All these debates are valid and important. We need to be as certain as possible that low-carbon projects will deliver net emissions reductions and benefits to the economy, respect local environments, be among the most cost-effective emissions reductions available, and not become white elephants that are quickly overhauled by alternative green technologies.

But there is a real danger that these debates are becoming self-defeating -- a recipe for inertia and indecision at a time when urgent action is required to deliver the deep emissions cuts we need over the next two decades.

As Greg Barker argued last week, the low-carbon transition the UK has embarked upon is far more ambitious and wide-ranging than the vast majority of people yet understand.

The scale of this transition means that if any project can adequately show it will deliver emissions reductions and economic benefits, then it needs serious consideration. If some areas are disrupted as a result of these low-carbon infrastructure projects, then that's a price that needs to be paid. And projects must be seen as part of a wide-ranging green infrastructure portfolio, not necessarily replacements for one another.

Short of inventing a crystal ball, we can never be certain that green projects will deliver all their promised benefits. Over the coming years there will undoubtedly be well-meaning projects that result in unfortunate unintended consequences. But there comes a point where the arguing and risk modeling has to stop and we have to get on and start building. I always find the "climate change is like a war analogy" a touch distasteful, but it is still worth noting that when Britain faced an existential threat in 1939 it did not respond with years of reviews on which was the most effective fighter aircraft or battleship design -- it got building the military infrastructure that would be needed.

The government's decision today to approve the HS2 line suggests it might just understand this new reality.

Ministers have evidently been satisfied that on the balance of evidence the project will deliver net economic benefits, and while they are not stressing potential environmental gains there is an acceptance that HS2 can play a key role in the UK's future low-carbon infrastructure, particularly given it will be completed around the same time as major new energy projects such as promised nuclear reactors, carbon capture and storage plants, and increased renewable energy capacity.

Now the onus is on the government to ensure HS2 moves from providing a case study for the debates that inform the planning stage of green infrastructure projects to becoming a case study on how to deliver an effective low-carbon infrastructure project.

More research urgently needs to be done on how to ensure the new network delivers net emissions reductions by drawing power from decarbonised energy sources, maximising operating efficiency, offering a cost-effective alternative to domestic flights and car travel, and freeing up other parts of the rail network to provide improved freight and commuter services.

Equally, greater urgency needs to be injected into the timetable for the project. Former Labour transport minister Lord Adonis was right yesterday to call on the government to deliver legislation enabling the project this year rather than tread water for two further years. I know building an infrastructure project of national significance is not exactly an easy undertaking, but it seems ridiculous that it will take until 2026 to deliver the link to Birmingham when China can add hundreds of miles of high-speed rail each year.

Overcome these challenges and get HS2 right, and we might finally have the template and confidence we need to deliver the wider green overhaul of the UK's energy, building and transport infrastructure that is so urgently required -- and that really would be worth writing a book about.