The demand for low carbon products and services will be increased dramatically by a slew of legislation and initiatives including The Climate Change Act; the EU Emissions Trading Scheme; the Renewables Obligation; the Carbon Reduction Commitment and a target of 15% of all energy coming from renewables from by 2020.

In an increasingly competitive global market, businesses and workers need to be supported to be able to compete for these opportunities and this will include advances in infrastructure, skills, R&D and investment opportunities.

The drivers of fundamental change proposed in the Low Carbon Industrial Strategy are to be found in four key areas:

• Energy efficiency 
• Creating a low carbon energy infrastructure: renewables, nuclear, Carbon Capture and Storage (CCS), and ‘smart' grid
• Making the UK a global leader in the development and production of low carbon vehicles
• Making the UK an example of the best place for low carbon business to locate and develop.

Energy efficiency is a quick and cheap tool to saving businesses and consumers billions of pounds every year. Such savings could be channelled into new investment.

Greater energy efficiency can improve the competitiveness and productivity of UK businesses and support the creation of thousands of jobs.

The Government recognises that a lack of information and finance can hinder the undertaking of energy efficiency measures; to remove these barriers further business support and advice is provided under Business Link's Solutions for Business and the Real Help campaign being offered during the downturn.

To promote energy efficiency the consultation document identifies two main objectives to the strategy: to ensure the greatest number of businesses and public sector operations make the shift to low carbon operation, and to ensure that UK firms have the necessary skills to carry out this work and bring new energy efficient technology to the market.

A low carbon energy infrastructure will be key if the UK is to deliver an increase in energy from renewables by 2020. Controversially, the document suggests that nuclear energy and a shift to clean coal through Carbon Capture and Storage (CCS) will be important in reducing CO2 emissions. Carbon Capture and Storage and nuclear are both longer term strategies, with the technology for the former not yet fully developed or commercially viable and large, long-term and ultimately uncertain investments needed for the latter. Both are also extremely controversial on environmental grounds.

Given the environmental and economic urgency of a transition towards a low carbon future, as well as declining government revenues, there is always a danger that a focus on CCS and nuclear will undermine the push for renewables. At the very least prioritising old technologies like coal (albeit with the new twist of CCS) and the new technologies of renewables sends mixed signals to the private sector which may deter investment in R&D.

The national electricity grid will also need to be transformed and equipped for the rapid connection of new forms of energy, including small-scale generation and local district heating networks. A £5bn investment over the next five years is already planned for upgrading of the grid but many commentators wonder if this will be sufficient

Low carbon vehicles are considered to be the only sustainable future for private and public transportation, and the Government has set out the vision for the UK as a global leader in the development and manufacture of low carbon automotive technology, in both vehicle technology as well as other systems such as rail transport. Companies like Ricardo Engineering based at Shoreham airport already have a world class reputation in this field.

£350 million has already been committed to encourage uptake of ultra-low emission vehicles, but there are still barriers to private sector investment which will need to be removed.

The Government wants the UK to be the leading inward investment location for innovative low carbon business: this means having the right skills in place across all sectors, a solid research base, as well as public procurement, public policy and a regulatory framework conducive to low carbon investment.

The final Low Carbon Industrial Strategy will set out how the Government will work with leading employers and key strategic partners to stimulate demand, support business innovation and create the framework for developing low carbon skills.