Untangling the mess of the UK’s net-zero policies – edie.net

In August of last year, a group of major investors representing £1.5trn in assets under management called on Prime Minister Rishi Sunak to deliver clear policy signals for the net-zero transition, warning that wrangles over electric vehicles (EVs) and oil and gas licenses are threatening investment opportunities.

In September 2023, Sunak announced rollbacks on key net-zero policies including electric vehicle (EV) manufacturing, home heating and building energy efficiency, causing discontentment and disappointment within the green economy.

Following that, Sunak announced legislation designed to force mandatory annual licensing rounds for expanded North Sea oil and gas extraction, despite last-ditch pleas from climate scientists and activists.

As such, seven out of 10 of the UK public are not confident that the Government will deliver policies to transition to net-zero by 2050.

To gain a better understanding of the business frustrations towards this volatile political environment, edie recently surveyed more than 300 UK businesses, revealing that political instability is the primary macro-level concern for corporates, cited by 27% of respondents. With the upcoming general election later this year, 79% of businesses view it as a crucial opportunity to reinvigorate the UK’s net-zero transition.

To address these challenges, edie organised a panel at its flagship conference in London to analyse UK climate politics in the past few years and the implications of the next election on future climate policy.

Building back public confidence

Speaking at the panel discussion at edie 24 conference today (20 March) in London, the Climate Change Committee (CCC)’s outgoing chief executive officer Chris Stark responded to the many green policy changes. “We have got to try and gain some of the enthusiasm back. We used to have that, and we were confident in our ability to reach our net-zero goals.

“Messing around with messaging has a deep impact that destroys investor confidence.”

After the policy U-turns, the UK fell from fourth to seventh in EY’s biannual ranking of the attractiveness of renewable energy investment markets, with grid delays being a top concern for investors.

In the lead-up to the upcoming General Election, environmental advocacy groups have asserted that the goal of achieving net-zero emissions has been politicised and has created a division of narratives.

WBCSD’s imperatives advisory board co-chair Claire O’Neill noted that policy changes were at risk of creating a division. “You could argue that the Prime Minister was not wrong for calling out targets that were set out by ex-Prime Minister Boris Johnson, without referring from the CCC. However, what is wrong is the Prime Minister is using this to create a divide.”

“Weaponisation” of net-zero

Last year, when the Conservative Government backtracked on its net-zero commitments, they cited the challenge of the cost-of-living crisis, while portraying net-zero as an additional burden for UK households.

However, research demonstrates that with the establishment of a strong green industrial sector, the UK has the potential to unlock billions of pounds to gross value added (GVA), safeguard more than 450,000 jobs, enhance supply chain stability and generate economic growth nationwide.

“It is a political choice to not move things forward,” says Belu’s co-chair Natalie Campbell, speaking at the panel discussion alongside Stark and O’Neill.

Moreover, while the Labour Party had been long touting its £28bn green investment pledge as a core part of its environmental policy pre-election, the party leader Keir Starmer officially watered down the pledge last month, cutting it by more than half.

Campbell adds: “We were talking about net-zero policy last year; we will be talking about it next year too. What will be different is we might have a new government; a government that pushed back on its £28bn green finance pledge. So, is it going to be any different? Probably not.”

General election: On-the-ground action

Campbell highlights that the in the run-up to the mayoral elections in May this year, close to none of the organisations have hosted hustings asking candidates about their goals and aspirations regarding climate resilience.

She emphasises the need for on-the-ground action and realistic solutions, pointing out the disconnect between ambitious goals and actual action.

Labour party member and London’s Mayor Sadiq Khan launched a new campaign for a third term as London Mayor with a pledge to build 40,000 new council homes by the end of the decade.

“You can’t say you’re going to build 40,000 council homes and achieve your 2030 net-zero targets,” argues Campbell.

She encapsulates that in order to build a major number of homes, there has to be some trade-offs between environmental sustainability and social sustainability, underscoring the importance of working holistically across the two sides of the sustainability spectrum including people and the planet.

Campbell adds: “We have to make the net-zero narrative about people. People want to feel safe and secured, but without climate resilience, that is not possible.”

Global emissions and competition

Bringing the panel discussion to a close, Stark emphasises the need for responsibility and accountability in the global climate conversation.

He highlights that one of the often-discussed political arguments is that the UK is merely accountable for nearly 1% of the global carbon emissions, whereas large nations such as China and India are the causing the majority of the emissions.

However, he argues that many countries with similar emissions levels collectively have a significant impact on global emissions.

“If you add all the countries in the world that account for 1%, that would be equal to one third of the global emissions.”

Additionally, Stark points to China’s proactive measures in EV adoption, suggesting that the UK should learn from its example to remain competitive in global markets and address emissions effectively.

China currently commands 78% of the world’s cathode production, leaving EV battery manufacturers vulnerable should China decide to restrict exports of essential battery materials and components.

He adds: “China started years ago and now they have the manufacturing capacity for cleaner cars, which has led to economic growth and jobs creation. You don’t want to be asking why we weren’t there before.”