Zac Goldsmith: Greenest government ever' must do better – but so must green groups, too

Green leaders are right to shout loud towards government, but they will be ignored unless they give due credit as well 

When the coalition was formed eighteen months ago, the new prime minister said that his government would be the greenest ever. To that end, the coalition agreement included more than twice as many green policies as any other area.

But there have been doubters, and last month saw the publication of a letter in the Observer declaring that the government is not only not "the greenest ever", it is "on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born". It was signed by, among others, Forum for the Future director Jonathon Porritt and Green party leader Caroline Lucas MP.

As someone who advised the Conservatives on green issues before the election, and who as an MP has since been willing to vote against the party on such principles, I believe it is vital to weigh claim and counterclaim in the interests of driving forward the correct green agenda for Britain.After eighteen months, the government has undoubtedly made progress with the green economy. Despite the sudden change in solar power tariffs resulting from bad planning, the government has kept £867m available for feed-in tariffs over the next four years, launched the £860m renewable heat incentive, is expected to increase investment in green heat technologies by £7.5bn by 2020, invested £3bn in a green investment bank that is expected produce £15bn of private investment, and the Treasury is introducing a carbon support price – a world first.

In addition, the government has legislated for the green deal, in what may be the most ambitious energy efficiency programme in Europe. The Treasury has said it will introduce additional incentives, worth £200m, to encourage households to take up the green deal. 

Perhaps most surprisingly, the government has signed up to the committee on climate change's fourth carbon budget, putting it on a carbon-cutting trajectory that exceeds any other country in the world. And it will meet those targets in part by massively incentivising energy efficiency through electricity market reforms, which will put energy saved on a par with energy generated. It means that if a company delivers savings of 1GW, it will be paid as if it had generated a new gigawatt. If the government is bold, and if it gets this right, it has the potential to revolutionise the energy markets.

There are question marks over some of these policies. For instance, while the green investment "bank" is bigger than expected, to have the necessary impact, it needs to be able to issue bonds sooner than 2015. Also, if the green deal is to succeed, it may need a Treasury boost like VAT reductions, stamp duty rebates or council tax holidays.

But nevertheless, all this has happened in 18 months, and amid the toughest economic conditions since the war. So when the Observer letter described the government as "the most environmentally destructive government since the modern environmental movement was born", it seems to me that this sort of analysis lacks seriousness.

For instance, the letter cites as evidence of a government U-turn, the chancellor's "tax breaks for the country's most polluting industries". But even the environment audit committee has acknowledged the need for measures to help energy-intensive industries. It said: "When setting carbon budgets the government needs to be mindful that strong action on climate change may result in some production and jobs moving abroad to countries with less stringent policies. Without care, this could harm UK industry and could increase global emissions."

But the biggest problem with this sort of green critique is that it lacks strategy. It is important that where the government gets it right, the department responsible is championed by environmentalists so that it is empowered to win the next battle. Without this happening, the cynics and naysayers in government will always be able to fall back on the excuse that no matter what the government does, it will never find friends in the green movement, and that there is therefore no political upside pursuing green policies.

It is vital that this is understood because despite the undoubted progress in some areas, there is a very serious risk to green policies. At its core it is the belief by some in government that addressing the environmental crisis can only happen at the expense of the economy.

This is a flawed position that has precipitated, among other things, a forceful trend against any form of environmental regulation (without which standards simply won't rise). The "war on red tape" is welcome in many areas. But in the case of things like food standards in schools and producer responsibility laws to cut out unnecessary waste, it is essential.

We also have hugely controversial proposals to reform planning, an early draft of which sent shivers down the spine of countless conservation groups. While the emphasis on neighbourhood plans and local democracy is welcome, talk by some in government of the planning system being used as a tool to promote growth sounds like a blank cheque to developers.

As well as contradicting the government's own pioneering work on valuing natural assets, the argument is weak. With some 250,000 plots ready for development in the south-east alone, and a system that approves roughly 90% of applications, the problem clearly isn't lack of space or an insufficiently permissive system.

The mood music matters as well. We are told that the government wants to stimulate investment in the low-carbon transition. But ask any green investor what they believe is the biggest risk, and they will cite government. Casual statements by senior figures can send shockwaves through a sector because with the stroke of a pen, policy makers can transform a good investment into a catastrophic one.

It should be obvious that in a sustainable world, there can be no confilct between economy and environment.

Fortunately the reconciliation of economy and environment is already beginning to happen, and not just in Britain. For instance, 119 countries have renewable energy targets or policies – up from an estimated 55 just six years ago. Global clean energy investment crossed $240bn last year, from about a fifth of that in 2004. Britain's own clean technology goods and services market is the sixth largest in the world and grew by 4.3% in 2009.

Even without these opportunities, there is unavoidable logic in pursuing Margaret Thatcher's "no regrets" approach of weaning ourselves off oil and protecting the economy from rising prices. "It is sensible to improve energy efficiency and use energy prudently," she said, "it's sensible to develop alternative and sustainable energy sources; it's sensible to tackle the problem of waste. I understand that the latest vogue is to call them 'no regrets' policies. Certainly we should have none in putting them into effect."

She was right. E.ON invested £250m under the energy efficiency commitment, and installed measures that saved the equivalent to 2.3 Kingsnorth plants – at a fraction of the cost of building new plants.

There is a battle over green issues. Until we manage to separate growth from environmental destruction, that battle will continue, and the government will need to be pushed incessantly. But to maintain their potency, the green groups need to keep sight of strategy and remember to reward their friends in government, just as they bash the naysayers