US Hesitation Over Environmental Controls Could Benefit UK says Warwick Business School Specialist

There has been a great deal of talk over the past week regarding the failure of the environmental talks in The Hague to come to any consensus. Attempts to attribute blame have ranged from the current US political stalemate causing a lack of clear leadership to French fatigue and British chauvinism.

Conspiracy theorists have mooted that the US simply wanted to maintain the commercial advantage that low fuel costs undoubtedly give their industry against their European competitors.

This may be true, but only in the short term, suggests Dr Catherine Mitchell of Warwick Business School. Dr Mitchell specialises in sustainable energy, distributed generation (utilities) and energy and environmental regulation and takes a much longer view than the current speculation.

She sees the failure to agree at the recent talks as a major setback but that is certainly not the end of the story, there will be more talks and eventually there will have to be changes. It is not 'if' but 'when'.

The silver lining for UK and European industry and business is that, whilst the US seems to be in denial, refusing to take the politically suicidal decision to make realistic increases in the cost of energy, we are getting on with it. Yes, in the short term the US gain an advantage with lower costs and prices, but whilst they are guzzling gas as if there were no tomorrow, we are being forced to find other solutions - and this is setting us up to gain a significant advantage in the future.

By the time that the US inevitably decides to bite the bullet, business and industry in the UK will have already adapted and may even be in a position to capitalise by selling their expertise to the US. Even the gradual transition has had positive effects. Business does not like to deal with major changes; the gradual increase in fuel costs in the UK have allowed business to come to terms with change more easily than their US counterparts where change - when it comes - is likely to be much more radical and introduced over a far shorter time scale.

Note to editors: Dr Catherine Mitchell (Principal Research Fellow at Warwick Business School) is a member of the Government's Energy Advisory Panel; DTI/OFGEM Working Group on Embedded Generation; and Advisory Board member of various sustainable energy bodies, both nationally and internationally.