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. Germany has for a long time been working with hydrogen. China is also coming up very fast. Chinese activity in the solar market drastically reduced prices.
Do old country distinctions remain important?
My personal view is that we need to crack this anxiety about collaborating with China. China is going to have many of the problems we're looking at in the UK at the moment. So - it's a partner that can afford to invest, and it's going to need the technologies that we're trying to develop and use now.
Should we be more worried about not having enough energy in the future, or about not having the right kind of energy?
The right kind of energy. There's a danger that the discovery of all this shale gas will delay us. It's not a long-term solution, and it is not going to get us to the carbon-dioxide reduction we need by 2050.
Where does the main responsibility lie for cutting carbon - with consumers, business or government?
At one level, of course, it lies with all of us as individuals. But all of us acting as individuals separately won't add up to a big change quickly enough, so it has to be government taking initiatives and giving the right stable, long-term signals so that industry can deliver the solutions.
Over your scientific career, have you had your assumptions proved wrong or revised your opinions?
That's how scientific method works. In the area of climate-change research, we don't 100 per cent know that global warming is being caused by man-made CO2 emissions, but most new research is strongly stacking up. Over the four years I've been on the Committee on Climate Change, nothing has changed my thinking in terms of the importance of this agenda.
Are we all doomed?
The human race is highly ingenious and we'll find solutions. I am worried that we won't find solutions fast enough, so parts of the globe will become barren and we will end up living clustered in a smaller part of it. But let's hope that some of the approaches which may help us take CO2 out of the atmosphere come to fruition.
1975 First-class honours degree in natural sciences, University of Cambridge
1979 PhD in fracture mechanics
1980 Becomes senior lecturer at Nottingham University
1987 Returns to Cambridge to teach materials science
1994 Joins Rolls-Royce
1997 Is elected as fellow, Royal Academy of Engineering
2002 Becomes chief executive, Institute of Physics
2004-2009 Non-executive member, Technology Strategy Board
2006 Vice-chancellor, Aston University
2007 Chancellor of Exchequer appoints her to lead review of road transport
2010 Becomes UK low-carbon ambassador