We must turn up the green heat of technology

The idea of being able to solve both our economic problems and climate change by building a low-carbon economy is enormously attractive. But it looks as though some countries had their Green New Deal years ago.

Take wind power, a huge growth area. We don't make a single wind turbine in Britain. We import from Spain, Germany and Denmark, which got the wind in their sails long ago and now have 90 per cent of all the industry jobs. Or nuclear. We have only one postgraduate nuclear engineering course - at Manchester University. Our nuclear engineers are as few and ageing as our nuclear plants. The consensus seems to be that any new plants will be built mostly with French and American components, and French labour.

Even solar energy is dominated by Germany, where nearly half a million houses have solar roofs because its Government pays above-market rates for individuals selling power back to the grid. You can argue about the specifics of the subsidies. But they have given Germany a market lead. Britain has ambitions to becoming the leading exporter of carbon capture and storage technology. But the kind of demonstration plant it wants to build is already being constructed in China.

Wave and tidal power are a better bet: Britain has some of the world's leading marine engineering companies. Bain & Co, the consulting firm, thinks that the UK could create 2,100 tidal jobs by 2020. That is a trickle, though the export potential must be higher. Offshore wind might generate 57,000 UK jobs, according to Bain - but the Danes are ahead of us there too.

Behind the audacity of hope lies the prosaic reality that green jobs in Britain may be few, at least in the short term, and most will require the kind of brawn that is needed to insulate people's homes, not the kind of brain that generates high-value exports. We still have clever designers and scientists, but someone else is making the kit. John Rose, the chief executive of Rolls-Royce, said recently that we have acted “as if innovation and creativity were not words appropriately associated with manufacturing”. Britain thinks of itself as “post-industrial” - but the energy revolution will involve enormous amounts of manufacturing, which we should be part of.

Britain is behind the green curve for two reasons: lack of funding and lack of clarity for investors. In a paper published this week by the think-tank Policy Exchange (of which I am a trustee) Dieter Helm, Professor of Energy at Oxford, argues that Britain's energy policy is no longer fit for purpose. Britain's liberalised energy markets were created in the 1980s when we produced more oil and gas than we needed. The main objective was to bring prices down. Today we need energy supplies to be secure and low-carbon - not something that the liberalised market will naturally create. Ed Miliband, the Energy and Climate Change Secretary, said this week that the Government must be more interventionist. He is right. But the Government needs to stop dithering on regulation and set a clear price for carbon - the price of pollution - beyond 2020. That will give businesses the certainty they need to invest in green technology.

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