'We need to let everyone know what the plan is': Is the government finally starting to get its act together on net zero?
With the Chancellor Jeremy Hunt attempting to woo green business leaders and a flurry of fresh policy reforms this week, the government is suddenly very keen to show it is in 'listening mode' when it comes to net zero
"You've got the financing, you've got the academic research, you've got the entrepreneurs, and you've got an incredible opportunity for us as a country," the Chancellor Jeremy Hunt said from the stage at a venue in London's Olympic Park on Tuesday. "And you are one of the five key industries that we want to make sure succeed."
That "key industry" the Chancellor was trying to woo? Britain's burgeoning green economy, which he proceeded to trumpet as "absolutely strategic" to the government's growth plans.
Hunt's comments were made before an eager audience comprising around 100 senior figures from across Britain's green economy, including top investors, clean tech entrepreneurs, corporate executives, leaders from some of the UK's most influential trade bodies, and Bank of England Governor Andrew Bailey.
Such overtures from the man with his hand on the government's purse strings were warmly welcomed by much of the audience, especially after the political and economic turmoil of the past year which has provided the antithesis of what the private sector always craves: stability, clarity, and certainty.
"We believe it is incredibly important for us that you succeed, and we want to know what it is that we need to do in order to help you be more successful," Hunt continued, flanked by his cabinet colleagues Energy and Net Zero Secretary Grant Shapps and Environment Secretary Therese Coffey.
It is a worthy - if long overdue - request. But it could hardly be said that green policy proposals have been in short supply in recent years. The government is inundated each year with letters to the Treasury calling for tax incentives for clean technologies, more ambititous green spending programmes, and urgently needed planning and policy reforms. Meanwhile, detailed reports from the Climate Change Committee (CCC), last month's 340-page Mission Zero report from Chris Skidmore MP, and the CBI's repeated demands for Ministers to seize the green growth opportnuity, have all offered a cornucopia of policy options.
Their asks have rarely been revolutionary or overly onerous, either. Mostly, they just want more clarity on how the government plans to navigate the net zero pathway to which it is already committed and a bit more ambition to ensure the UK's legally binding emissions targets are actually met. A handful of common examples spring to mind - ease planning rules for new onshore wind farms, bring forward zero carbon homes requirements, boost public engagement with the net zero transition - but there are plenty more where they came from. Some within the audience gathered together by the Treasury were minded to privately ask, what more does the government need to know?
The problem, of course, is that the government has repeatedly failed to embrace many of these policy proposals. And consequently the world's first major economy to legislate for net zero is still struggling to secure investment for an EV battery factory, has little in the way of a clear plan for decarbonising its steel industry, has repeatedly failed to deliver on its energy efficiency goals, and has just approved plans for a new coal mine.
Moreover, new onshore wind farms are still largely blocked, there is ongoing talk of preventing solar panels being installed in the countryside, more fossil fuel licenses are being handed out in the North Sea, and potentially thousands of critical green regulations could disappear overnight on New Year's Eve simply because Whitehall was unable to muster the time to review them ahead of an arbitrary deadline set by a former Eurosceptic cabinet minister. Even the more positive policy efforts, such as the Boiler Upgrade grant scheme, are facing widespread criticism that they remain underpowered.
There is a lot to do, and "the clock is ticking", as the president of the National Farmers Union (NFU) Minette Batters put it this week. Every three months that passes marks another percentage point of the available time to build a net zero economy by 2050. And as Skidmore pointed out last month, time is of the essence for the Conservative Party given there is less than 300 hours of legislative time available between now and July 2024, by which point a General Election will loom.
The government is also rightly desperate to return the UK economy to growth, but it now faces huge competition from both flanks, with the Inflation Reduction Act in the US pumping $360bn of subsidy support into Amercia's domestic clean tech and renewables sector, which in turn prompted the European Commission to come forward with plans for new net zero legislation, fesrh clean tech funding, and an easing of state aid rules. It is little wonder senior British business leaders are warning the UK is in danger of losing out to the US and EU in the race to secure investment in a new wave of clean tech factories and infrastructure.
But - whisper it - is the government finally starting to get its green act together in response to these multiple challenges?
Having carried out a Whitehall reorganisation last month by breaking up BEIS and creating the new Department for Energy Security and Net Zero, there has been a flurry of positive green rhetoric and policy moves from the government this week.
Just today, the government responded to long-standing calls for it to boost support for energy intensive industries and tackle the risk of 'carbon leakage' by unveiling a new 'British Industry Supercharger' scheme to help 300 industrial firms with their energy costs. Hot on its heels, it also today launched a sweeping plan aimed at speeding up the planning process for national infrastructure, amid longstanding frustration that it takes so many years to get the greenlight for much-needed clean energy projects such as offshore wind farms. The moves followed Defra's announcement on Tuesday of £168m grant funding to support farmers with deploying greener technologies to cut emissions and achieve more efficient food production.
Critics will rightly point out that the new plans remain light on detail and subject to consultations that will not be launched for several more weeks. But these imminent consultations hold out the prospect of reforms being finalised and enacted well ahead of the next election, potentially providing a fix to some of the biggest barriers to the net zero transition.
There are hopes too, that yet more policy and spending commitments could emerge in the coming weeks as the government puts together its Spring Budget and revamped Net Zero Strategy. Writing for BusinessGreen today, Exchequer Secretary to the Treasury James Cartlidge described net zero as a "£1tr opportunity". "Together, we will put UK businesses at the forefront of the new global green industrial revolution," he wrote.
It was notable, too, that Tuesday's event - a fact-finding effort dubbed Treasury Connect: Green Industries - saw so many government top brass appear in person. There was Hunt, of course, as well as the aforementioned Shapps and Coffey, who together took questions from the audience and spoke about their vision for growing and greening the UK economy. Also in attendance were Cartlidge from the Treasury, and Energy and Climate Minister Graham Stuart. If the government wanted to drive home to green business leaders that it is very much in listening mode, it certainly made sure all the right ears were there to hear their concerns.
But perhaps most crucially, Hunt and his colleagues made a point of addressing arguably the most pressing concern for the UK green economy as a whole: that of growing competition on the global stage for investment now the USA and EU are both ramping up their domestic climate and clean tech efforts.
Hunt conceded on Tuesday that, given present economic headwinds in the UK "this is not a time when it's going to be easy for us to access the equivalent of the £365bn that President Biden has".
But he insisted that despite the challenge presented by the multi-billion-dollar Inflation Reduction Act (IRA), the UK remained in a strong position, arguing the US is playing "catch-up" on decarbonisation after decades of flip-flopping on the issue that even saw the country quit the Paris Agreement under President Trump.
The Chancellor acknowledged the "very real competitive threat that we have to be alive to", but he was also at pains to stress the importance of the avoiding turning inwards, given the very real benefits of trade and sharing expertise and services with the UK's international partners.
"I would argue very strongly that that is not a reason to go back to protectionism," Hunt said. "And we as Western democracies will lose out big time if we start saying that we have to onshore every single technology. I think we can benefit enormously from trade between countries whose values we share, but we do have to be realistic, that we are moving into a world where people do use technological dependence for diplomatic leverage, and unfortunately we've just got to smell the coffee on that."
Later, during a chat with journalists on the sidelines of the event, Hunt went further in emphasising the importance of drawing up a UK response to the USA's IRA. "We're not hanging around on this," he said. "We need to give [green business leaders] a clearer sense of how we're going to respond to the IRA. We recognise that it is creating challenges. We don't agree with every aspect of it, but nor do we have any doubts at all in our ability to compete. So we need to let everyone know what the plan is."
The government may not yet have a fully formed plan to respond to the green investment gauntlet laid down by the US and the EU alike, but it is clearly intent on delivering one sooner rather than later. Hunt also hinted the UK's £5tr-strong pensions assets could have a more central role to play in supporting the net zero agenda.
However, with Hunt telling the audience that the government's response to Skidmore's Net Zero Review will likely not now emerge until late Spring, or potentially even the summer, calls for Ministers to do more are set to continue. When quizzed on next month's Spring Budget and the revamped Net Zero Strategy the High Court has ordered the government to produce before the end of March, both Hunt and Shapps refused to be drawn on any potential further green policies in the offing beyond this week's announcements.
Political pressure on the government is also set to intensify, after Labour leader Keir Starmer today sought to make co-ordinated climate action and his commitment to establish the UK as a "clean energy superpower" a key dividing line between the Opposition and the government.
But, questions over speed and ongoing net zero policy gaps aside, leading government ministers are certainly now making all the right noises and are keen to engage with the green business community's concerns and policy asks.
Shapps even expressed astonishment when BusinessGreen highlighted concerns about whether the government is genuinely commited to net zero. Asked about whether the government's support for net zero was compromised by the way several senior ministers have openly questioned the economic benefits of the 2050 target over the past year and the fact Prime Minister Rishi Sunak made little more than a cursory mention of climate in his 2023 curtain-raising speech last month, Shapps unequivocally rejected the idea there were grounds for concern.
"I'm actually quite surprised to hear you ask that - genuinely surprised, not faux shock - because the PM went out in is leadership election campaign in the summer and said if he was elected he would set up a department that was focused on energy security and net zero, and he has done exactly that," he said. "He didn't have to, he didn't even had to include net zero - which wasn't in the name of the department before he made this change a couple of weeks ago, and we've got it now. So I would have thought that speaks for itself."
A decade ago, Shapps continued, the conversation on Whitehall around climate change was all about convincing the country and the world to take action, whereas now "I just think it's a mainstream thing".
"We are absolutely going to make sure we get to net zero by 2050, but we are not going to do it by hammering on about it everyday," Shapps said. "We are going to do it by embedding it in the work that we do, whether that's insulating our homes or producing those great new jobs that people will retrain for. So I think we just see it as a mainstream activity now.
"And frankly, do you know how many colleagues have been sceptical about the naming of the department with 'net zero' since I've taken over, and who have come up to me and talked to me about it? Zero. Everybody accepts it's just part of the process. People want energy independence and jobs. I think it's an old agenda, I genuinely do. I just think people accept this now. We've moved on to mainstreaming it now."
Shapps may be correct to describe climate action and net zero as having achieved mainstream acceptance among the UK public, business community, and many global policymakers, but there remains factions in his own Party where that is not yet the case. Just last summer several of his colleagues who were vying to become PM were openly suggesting avenues through which the UK's 2050 net zero target could be delayed or ditched altogether. Their ideas commanded significant support among parts of the Tory press.
But if Shapps' intention was to reject those net zero sceptic voices within the Conservative Party by memory holing them altogether, then it only goes to provide further evidence of how the pursuit of net zero has become a central strategic goal for the Sunak administration, even if the Prime Minister failed to include it in his list of top five priorities for the year.
That has not always been the case over the course of a year marred by political disruption and economic chaos, but it seems like the sense of stability and professionalism the new Number 10 operation is trying to instil could yet deliver some belated gains for the net zero agenda in the coming months.
* This article was originally published here