She called on the audience to help her convince those who see a distinction between green or growing, because “we have looked over into the abyss of economic turmoil,” so now is the “moment at which we have to rethink our growth models.” International competitors such as Brazil, India, China and South Africa appear to have recognised this imperative: they “want to grow, and they want to grow in step with their environment.”

Next year the United Nations Conference on Sustainable Development in Rio will be, “an incredibly important opportunity for all of us that believe in green growth”. Having met environment ministers from around the world, Mrs Spelman voiced her conviction that “there is political will building to achieve some tangible outcomes from Rio; it just won’t do to have another wordy communiqué.”

Mrs Spelman highlighted some of the Government’s progress on this agenda, but acknowledged “there’s a lot more we could do”, such as public procurement undertaken on a green basis, which is “something the Aldersgate Group, I know, has highlighted” and incentivising R&D into new technologies. Regulation is another key area for government and Mrs Spelman argued against “this rather simplistic argument that regulation equals bad and de-regulation equals good.” She voiced support for changes to the planning regulations, which should ensure that the system “is simpler, fairer and faster”, and has sustainable development at its heart.

Mrs Spelman foresaw a constructive role for Government in green investment, helping investors which are currently struggling to identify which companies are true leaders in sustainability. She voiced her hope that the Government can increase transparency, helping investors “to identify the benefits of investing in companies that have invested in their sustainability in the future.”

“I hope that you will join me in this partnership that the Aldersgate Group provides, help me to go out there and give the message to people who haven’t got it yet that you really can be green and growing … not just at home, but abroad, we can make that green growth absolutely at the core of our economy recovery.”

The Green Deal will allow home owners to borrow funds to invest in energy efficiency measures for their homes, saving money on future energy bills. The problem, Mr Adams commented, is that “I can’t see people, frankly, queuing up on a mass scale because it’s going to save lots of money. It saves some.” So what is the way forward?

Mr Adams proposed “factoring stamp duty based on the energy efficiency of the home,” with inefficient homes paying more and ensuring no lost revenues for HM Treasury. “Of course, there’s going to be people that complain,” but if there are homeowners who do not want to undertake energy efficiency measures even though the Green Deal is available, “one must assume they’re happy paying a higher stamp duty.”

Stamp duty, as a tax, would drive take-up of the Green Deal “because people are very emotional about tax. The same £100 given to you by the tax man is a celebration; taken off you is one of major complaint.”

While recognising that more work is required on this scheme, Mr Adams reported that Willmott Dixon is extremely supportive. He advocated that policy be formulated to drive confidence among the businesses that will need to invest to make it happen. If stamp duty were used to drive demand, it could help build business confidence because it represents a “credible, sustained commitment by government and one that businesses can look at it and say, ‘We think it’s highly unlikely this will ever be reversed’”.

“I argue that that, from an economic perspective, is profoundly mistaken.” Although the economic climate is challenging, Mr Zenghelis argued that the risk of another recession is largely due to “a pervasive and chronic lack of confidence.”

Consumers and businesses are paying off debts rather than spending and that retrenchment brings about a slow-down in job creation and economic activity. “It becomes a self-fulfilling prophecy that then breeds another decline in confidence. Let’s not forget that there is no shortage of money out there, we are sitting on record levels of private saving as a result of this retrenchment."

“Green”, however, is “uniquely placed as a sector to try to rekindle confidence and demand”, firstly because it is primarily policy driven. The market failures that have led to an accelerating stock of greenhouse gases, limited innovation and resource inefficiency in addition to those which exacerbated the current economic situation, require policy to correct them and consequently “have the advantage of being sheltered to some degree from the economic headwinds”. Policy must manage the transition to a green economy, with an awareness that there will be winners and losers, distributional consequences and vulnerable sectors that must be re-tooled and re-trained. Secondly, “green investment is long term credible.” HSBC estimates that the low carbon energy market will triple to more than $2trillion by 2020 and is already one of the fastest growing markets.

The green economy is also attractive because it does not rely excessively on public spending. Carbon pricing (either through tax or trading), standards and regulations that change consumer behaviour and the Green Investment Bank can leverage public money and stimulate the economy. Businesses are being restricted by lack of demand, not costs, so a “small incremental change to business cost that we talked about through green pricing, for example, is going to be more than offset in terms of the benefits from creating a confident tangible new market.” Moreover when the economy is running at full capacity, there is a genuine concern that green investment could crowd out productive alternative investment. But “right now, capital is incredibly cheap, real interest rates are negative, there are unemployed resources in form of labour and capital…. Crowding out is not the main concern.”

The message is clear: “act now. This is not, as Caroline already said, a horse race between green and growth, it’s about green and growth. What we really need in this country is to avoid moving towards weak or confused government policy, because ignoring the many multiple market failures … delays recovery and raises the cost of embracing the real growth story of the future, which is a green growth story.”

Signed by a wide range of businesses and members, the Statement aims to give the Government confidence in the second phase of its Plan for Growth by demonstrating a broad base of support for an ambitious vision for the green economy – a vision in which businesses can then feel confident to invest.

The AG believes that “it is essential that we not only remove barriers to growth but that we now also use this as an opportunity to shift the economy to a more resilient and resource efficient mode.” The green economy can make the UK more competitive and the economy less vulnerable to resource price shocks. “It will also meet the objective of local regeneration around the UK … focusing around the high tech manufacturing and many of the other strengths that we have in terms of our science and engineering base.”

The Growth Statement calls for energy and climate change policy to be streamlined, to raise ambition and reduce complexity. It also encourages progress on the Government’s commitment to increase the proportion of tax revenue accounted for by environmental taxes. “We must move our tax onto pollution and resource depletion and away from jobs and wealth creation.” Meanwhile the Green Investment Bank must be at “the forefront of the growth strategy,” established in legislation in 2012 and able to borrow from capital markets once operational.

Mr Young commended BIS’ recent publication of ‘Skills for a Green Economy’, but emphasised that more engagement is needed with businesses, to develop a comprehensive action plan.

The six demands in the AG Growth Statement are that the Plan for Growth and Autumn Statement should:

1. Streamline the climate change and energy policy landscape to raise ambition, reduce complexity and provide stronger, clearer signals for organisations to invest in energy efficiency.

2. Set out clear rationale and objectives to meet the Government’s commitment to increase the proportion of tax revenue accounted for by environmental taxes.

3. Ensure the sectoral growth reviews and enterprise zones are driving forces to meet the Government’s vision for a green economy.

4. Put the Green Investment Bank at the forefront of the growth strategy by ensuring it can borrow from capital markets when operational and commit to pass legislation by 2012.

5. Following the publication of Skills for a Green Economy, work with business to develop a comprehensive action plan to address green skills gaps.

6. Enhance the role of public procurement and increase support for research, development and demonstration (RD&D) to drive innovation.

This event was supported by Willmott Dixon. Read their latest sustainability report here.