"We Need Some Relatively High-Risk Investment": Julia King, Vice-Chancellor of Aston University and the UK's Low-Carbon Business Ambassador

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Could investment in the green economy hold the key to economic recovery?

It can be a significant contributor. It lines up very well with the intent to rebalance the economy, to grow the engineering and manufacturing sector.

Does growing green business require big investment?

Almost inevitably. We need to replace the UK's power system. For renewables and nuclear, it's not the fuel cost, it's the infrastructure cost.

Is such infrastructure investment possible, given the economic downturn?

Clearly, that's challenging. We need some relatively high-risk investment, and that is not something that investors are very eager to do. We may well need more in the way of government support, perhaps giving some insurance to those making the investment.

In which areas do you see green business expanding most vigorously in the next ten years?

Replacing the electricity system will create huge business opportunities for the UK. We've got an outstanding aerospace industry. For aviation there aren't any magic solutions other than increasing efficiency, which will probably mean faster replacement of aircraft fleets. That will be a big opportunity where the design manufacturer is still in the UK.

Where does the greatest challenge lie?

Anything that involves decisions by individual members of the public - actually persuading people to insulate their homes, for example. In a way, that's because our energy is not expensive enough. We don't recognise it as the precious resource it is and the even more precious resource it is going to be, going forward.

How can those behavioural changes be encouraged?

Incentives which don't have a particularly great monetary value but make people think they are getting something special have quite a high impact. We need to do more of that. But from the outset, we need to plan how to remove those incentives gradually, because, as we've seen with solar panels, it's very disruptive if you suddenly cut off a subsidy or stop giving people something they've come to expect.

Is the coalition sufficiently committed to green business?

It is looking very closely at this issue of industrial strategy. It's important to get government departments working together - particularly the Department for Business, Innovation and Skills, the Department of Energy and Climate Change, and Transport. They are not yet working together as effectively as we need for the stimulation of the green business agenda. Things are coming along slower and at a smaller scale than many of us had been hoping.

Which countries are leading on green business?

Europe is strong. Scandinavia and the Nordic countries are way ahead of us on things like low-carbon homes, low-carbon building materials, use of heat pumps and insulation. …