Charting the UK’s path to net zero
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When, in 2019, Britain became the first major economy to commit to reaching net zero carbon emissions by 2050 it was also embracing an ambitious, multiyear agenda of economic transformation. On Tuesday, shortly ahead of the landmark COP26 climate conference in Glasgow, it began setting out what that commitment would mean in practice. The strategy is bold in places while lacking in others but overall represents among the most detailed and impressive blueprints unveiled by any government to reduce its emissions.
Among the ambitious parts are the drive to have the country’s electricity supply be entirely green by 2035 as well as, by 2030, banning the sale of internal combustion-engine vehicles and mandating that 10 per cent of fuel used by airlines will be sustainable. The government is calling for £50bn-£60bn of investment per year, which it says will mostly come from the private sector. For its part, it announced additional spending on the electric vehicle supply chain, nuclear energy, hydrogen production and carbon capture technology. The lacunae, on the other hand, are many: how in detail to insulate the country’s draughty houses or to reduce consumption of carbon-intensive beef.
In keeping with Prime Minister Boris Johnson’s boosterish outlook, the strategy implicitly relies on technological progress — such as electric cars — allowing Britons to maintain their lifestyles without having to make much in the way of sacrifices. There will not be a “hair shirt in sight”, Johnson said. The government has kept its options open — providing insufficient support, at present, for heat pumps as a means to keep houses warm, in case hydrogen proves to be a cheaper alternative. While there is plenty of discussion of all the new jobs that will be created there is little focus on job losses, whether in the UK’s North Sea oilfields or energy-intensive industries.
Ultimately the strategy is a creature of political compromise. While the cross-party political consensus in favour of the target remains intact, the details of the strategy are a clear compromise between the fiscally conservative Treasury and the more ambitious business department. Indeed the Treasury warned that taxes would have to go up to pay for the investment, arguing that borrowing to fund the transition would be both fiscally unsustainable and unfair to future generations — echoing criticism from the conservative fringes of the potential costs of the net zero commitment.
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Borrowing to fund some of the transition, however, is sensible. The spending is a one-off investment, rather than an ongoing commitment like the health service. Future generations stand to gain the most, both in terms of avoiding climate change but also in the savings from energy efficiency. While Britain’s fiscal outlook does present challenges, these are more related to the intractable problems of an ageing society and lacklustre forecasts for growth than to the energy transition. If the spendthrift Johnson wants to play down the costs, his more frugal neighbour, chancellor Rishi Sunak, appears to want to play them up as an argument for fiscal restraint.
Nevertheless, it is right that the costs of the energy transition are shared between the state and private citizens, whether through mandating spending on electric cars or raising the cost of carbon. That will not only incentivise businesses and consumers to make the right decisions but also reflect that many of the benefits — from warmer houses to lower fuel bills — will also accrue to private individuals. Future generations deserve to be insulated from the dangers of a warming planet.
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