While innovators are overcoming the immediate threat of the pandemic, the Government also wants to set more of them to work on the longer term challenge of combating climate change.
To this end, the Prime Minister announced a ten-point plan this week, which is a smorgasbord of policies – mostly funnelling more money into areas where the Government thinks the UK is already leading the way. It’s ambitious and no doubt welcome for those entrepreneurs running offshore wind farms, producing electric vehicles, capturing carbon, and the many other technologies that will see the cash.
But while more funding is one way to solve the problem of climate change, it shouldn’t be the main or only policy lever.
The main lever for cutting carbon emissions should be pricing carbon. Unlike pet projects, this let’s the market decide the best way to cut carbon, with behavioural changes and business decisions rippling throughout the economy. It means the lowest hanging fruits are picked first and creates an incentive to innovate. If you’re concerned about its effects on competitiveness and are worried that it will just shift emission overseas, then it can be border adjusted, as is being considered in the EU.
Though pricing carbon should be the main lever, as argued in Green Entrepreneurship our recent report with the Enterprise Trust, there are plenty more tweaks in that report the Government could make beyond funding, including simply stopping subsidies to fossil fuels companies.
Read Eamonn Ives, author of Green Entrepreneurship, on why carbon pricing would incentivise polluters to solve the simplest problems first at the lowest cost. And after our successful launch of Green Entrepreneurship with Bim Afolomi MP earlier this week, register here for our launch with Luke Pollard MP, Shadow Environment, Food and Rural Affairs Secretary.
World goes round
While at the margin entrepreneurs are motivated by money – which group isn’t? – having met thousands of them over recent years, it’s not what gets them out of bed in the morning.
The great British public doesn’t agree, with a YouGov survey finding that 40% of respondents chose ‘money-motivated’ as a key descriptor of entrepreneurs, and 50% thinking money was the biggest motivator for entrepreneurs.
The survey was commissioned by the Entrepreneurs Institute at King's College London, which also asked 100 of their own ventures what motivated them, finding that a majority said that solving problems and driving change were at the heart of their endeavours.
Personally, I don’t think there is anything much wrong with being motivated by money. After all, someone wiser than me once said that individuals in pursuing their own self interest act as if they are led by an invisible hand to promote an end which was no part of their intention. However, some people don’t subscribe to this world view and we don’t want them being put off becoming entrepreneurs just because they don’t feel like money matters (or should matter) to them.
Unhidden GEM
The latest Global Entrepreneurship Monitor report has just been released. It reveals that last year nearly 1 in 10 working age adults were in the early stages of starting or running a business, with women catching up with men.
However, the author Professor Mark Hart of Aston Business School thinks this progress is in jeopardy because of the gaps in support for people in the early stages of running a business since the pandemic.
According to Professor Hart: “While the pandemic has hit all businesses hard, the decision by the Government since March to exclude three million early-stage entrepreneurs and company directors from any financial support has created an arbitrary and unfair distinction that can only harm enterprise.”
Read the press release here, and the full report here.
Carbon Copy