News and Media Releases

Climate change to be £30bn opportunity for British business over next ten years

12/10/2006

New research shows tackling climate change for UK affordable at less than 0.5% of the economy.

New research released today by Shell Springboard shows that the challenge of tackling climate change could create a market of up to £30bn for British business over the next ten years.

The research, carried out by independent consultancy Vivid Economics for Shell Springboard, quantifies for the first time the potential size of the market for businesses that develop technologies, products and services that help combat climate change. The findings include:

• A market in the UK created by the government climate change programme which could be worth over £30bn cumulatively over the next ten years. By 2010 the market will be double the current size;
• The cost of tackling climate change in the UK in 2010 will be affordable at 0.3% of the economy;
• Concerted international action to avert climate change could create a global market worth $1 trillion in the first five years alone;
• Clearly identified opportunities for small and medium sized enterprises (SMEs) across all climate change markets, with case studies of nine SMEs in the UK with leading edge products.

Shell Springboard commissioned the research to demonstrate the commercial opportunity that tackling climate change offers to SMEs. Shell Springboard is a Shell awards programme that encourages companies to see climate change as not only a major environmental challenge but a substantial business opportunity.

The research identifies major opportunities for small and medium sized enterprises in a wide range of markets, by both responding to consumer demand for environmentally friendly goods and to demands created by government action. The biggest identified markets for SMEs in 2010 will be:

• Building regulations for commercial and industrial use - £950m
• Renewable electricity - £800m
• Renewable road transport fuels - £500m
• Domestic energy efficiency - £400m
• Building regulations for domestic use - £275m

In addition, the study identifies the UK as a world leader in the international emissions offset market, with UK firms already involved in about £400 million of projects a year, with the market rapid increasing. The UK voluntary offsets market could be worth another £100–200m per year.

The study is launched today with a panel discussion involving former CBI head and Chair of the Carbon Trust Clean Energy Fund Adair Turner, Dr Steve Howard from the Climate Group, Karl Watkin from D1 Oils and report author Robin Smale. It will be chaired by Lord Oxburgh, the former chairman of the House of Lords Committee on Science and Technology.

Lord Oxburgh, said: “The urgent need to reduce greenhouse gas emissions offers opportunities to the nimble.  There is now scope for a wide range of devices and services, which a decade ago would have made no economic sense, and for which there would have been no demand.

“Shell has created the Springboard programme to help people to grasp some of these opportunities, and to take the first steps towards turning their ideas into viable businesses and products.”

James Smith, Chair of Shell UK, added: “For business, tackling climate change is both a necessity and a huge opportunity. This creates a huge new opportunity for British business nationally and internationally. We have to step up to the challenge.

“Our small businesses and the scientific depth in our universities are going to be vital contributors.

“The wisdom of the market is a powerful force for tackling climate change.  The Shell Springboard programme recognises this by focusing on the market opportunities for small businesses.”

Shell Springboard encourages and celebrates those smaller companies who are making the business of combating climate change commercially viable. In 2007 at least nine awards of up to £40,000 will be given across the UK to small and medium sized businesses that satisfy business and environmental experts that their ideas are both environmentally sound and viable businesses.

The deadline for applications to the Springboard competition is 10th November 2006. Full details can be found at www.shellspringboard.org - opens in new window - opens in new window.

 
 
 
 
Notes to editors
 
Report authors Robin Smale and Cameron Hepburn of Vivid Economics advise government, private companies and NGOs on the economics of climate change. Their full biographies can be found below. Their report was commissioned by Shell Springboard, an awards programme that supports action to mitigate climate change.

Shell Springboard winners receive up to £40,000 with no strings attached. In return they will only have to write a follow up letter, provide material for publicity and be part of a future judging panel.

The 2007 Springboard awards close for entries on 10th November 2006.

Companies with less than 250 employees which have been operating in the UK for more than three months and have an innovation that they are willing to disclose are eligible to apply.

The 2007 Shell Springboard awards are the second year of Shell Springboard. In the first year there were nine regional winners of awards of £20 – 40,000. The national winner was Barry Johnston of Scotrenewables, a tidal power technology, and the national runner up was Tor Hoie of Mantle Panel, a low emission building system. More information on the winners and finalists can be found at www.shellspringboard.com - opens in new window - opens in new window.

Robin Smale has advised the UK government on climate change policy, including the biggest government study of domestic energy efficiency for a decade. He has advised the Cabinet Office, Ofgem, DTI, NAO, DEFRA, OFT, and the Environment Agency. He has also advised almost twenty major utility companies and a wide variety of businesses and trade organisations with energy interests from banks to the Association of British Insurers.

Cameron Hepburn is a James Martin Fellow in Climate Policy at the Environmental Change Institute, University of Oxford. He is actively involved in public policy as a member of the DEFRA Academic Panel and the Ofgem Environmental Economists Panel. He advises a number of companies on carbon trading.

Shell Springboard is part of Shell’s Social Investment activities in the UK, along with Shell Livewire, Shell Step and the Shell Education Service. Shell Step is a 21st Century placement scheme, giving students relevant and meaningful experience of the world of work. Shell Livewire’s mission is to help unearth and support the young entrepreneurs of today who will create the jobs, wealth and innovations of tomorrow. The Shell Education Service seeks to inspire tens of thousands of children each year, by encouraging them to explore and question science through hands-on investigations.  A programme of workshops reaches some 50,000 children as expert workshop leaders travel to 600 primary schools across the country each year.