The recent letter from conservative backbenchers supporting the fifth carbon budget reminds us again that the Climate Change Act is worth its weight in gold. Eight years on from its agreement the act retains strong cross party support, despite concerted attempts to make climate change a partisan issue. Its regular budget setting cycle means the government regularly has to restate and reappraise the longer term direction of the economy. Carbon budgets have provided one of the few points of stability in a period of high policy volatility.
The government is very close to agreeing the fifth carbon budget (for 2028-32) and, given that the 57 per cent recommendation of Committee on Climate Change (CCC) was ‘the minimum level of ambition needed’, it’s hard to see that it won’t accept this advice. The prime minister has been a consistent and strong supporter of carbon budgets and is unlikely to encounter significant parliamentary opposition. We should celebrate the next act of carbon budget leadership from the UK when it happens. We should then prepare for the biggest and most wide ranging Whitehall battle on the UK’s low carbon policy for years.
Little pressure to deliver
That battle will be over the carbon emissions reduction plan, which is meant to contain new policy to deliver both the fourth (for 2023-27) and fifth carbon budgets, and has to be agreed by the end of the year. Unfortunately, a weakness of the Climate Change Act is that it creates very little pressure across government to actually deliver the budgets it sets.
Reading back copies of the CCC’s annual progress report confirms this. Every year they have said much the same thing: ‘the UK has done some good things but is off track to meet its long term target, and needs a step change in delivery of emission reduction’. Every year for the past seven years they have recommended that the government urgently addresses the same delivery gaps: slow domestic and business energy efficiency uptake, delays in carbon capture and storage (CCS) commercialisation, and the need to increase investment in renewable energy.
The previous two governments tried to overcome some of these weaknesses but with mixed results. There were slow but steady improvements in domestic energy efficiency and a big growth in renewable energy investment as a result of EU, Labour and coalition government policy, but business efficiency and CCS didn’t get the attention they deserved, and the rate of emissions improvement remained resolutely off course for our long term target. Climate targets are a whole lot easier to agree than delivering changes in energy or transport policy.
Absence of energy efficiency policy is damaging
Former governments may have dragged their feet but the current government has kicked policy out without replacing it. The losses of Zero Carbon Homes and the Green Deal were perhaps the most damaging for the UK’s emissions trajectory because the absence of coherent energy efficiency policy slows the progress of emissions reduction in the economy at a time when the CCC says we should be redoubling our efforts.
These losses are not entirely the fault of the Treasury, but much of the delay and confusion of the past year can be attributed to its cavalier approach to energy policy which has such a big impact on investor confidence. The Treasury requires bulletproof economic evidence to agree new policy, but will cut a widely supported initiative on short term cost saving grounds, as it did with the last minute decision to scrap the CCS programme. We should expect to play ‘off track’ bingo again when the CCC publishes its eighth progress report this summer.
Number 10’s intervention is pivotal
Where this government has made good progress is on coal phase out and long term offshore wind funding. In each case, Number 10’s intervention was pivotal. Number 10’s desire to have a strong platform for Cameron at the Paris climate summit led to an early agreement to phase out coal power generation; and it was the PM’s close involvement with Siemens’ decision to base a new wind turbine factory in Hull which gave him the appetite to back DECC’s case to give certainty to offshore wind investors.
The question is whether the government has the appetite to use the forthcoming carbon plan to accelerate emissions reduction. A strong plan would reboot the market for energy efficiency, exploit the cost reduction it is helping to achieve in the renewables sector and speed up the electrification of transport, where the UK has a real lead.
But DECC won’t be able to do this without help because the Treasury can use its dominance of Whitehall to delay and water down the plan. It will require the prime minister to roll up his sleeves and return the fray on domestic policy after a bruising referendum campaign.
If the British public votes for Brexit then the subsequent political and economic turbulence would be so great that better policy will be the least of our concerns. It will be all hands to the deck to protect the Climate Change Act, and many other areas of environmental protection that we currently take for granted. If, as we hope, there is a vote to remain, a strong plan is possible but far from inevitable. Without Number 10’s backing, expect a document which waxes lyrical about a low carbon future, and then kicks the delivery can down the road once again.
