The UK was the first major economy to put a target of net zero carbon emissions by 2050 into law. Almost 40 per cent of its electricity already comes from renewable sources. But it is in danger of squandering its green energy lead — and losing out on vital investments. The High Court ruled last year the government’s climate plans were too vague on how it would meet its targets, giving it until March 31 to publish a rethink. America’s Inflation Reduction Act has meanwhile set aside $370bn to drive more clean energy — and the EU is readying its own Green Deal. The “powering up Britain” strategy published on Thursday suggests the government has still not woken up to the scale of the effort required.
In a newspaper article, chancellor Jeremy Hunt declared the UK would not go “toe-to-toe . . . in some distortive global subsidy race”. Protectionism was creeping back into the world economy, he warned. Britain would invest £30bn in “kick-starting” industries — including £6bn for energy efficiency and up to £20bn to capture and store carbon — but would leverage billions more in private capital.
Hunt has a point. Some other northern European countries are also wary of a subsidy battle. He also lacks the means to do otherwise: UK public finances are deeply constrained and most of the government’s announcements were based on existing commitments with no new funding. But pulling in large amounts of private money relies on a credible, coherent strategy that investors trust is in place for the long term. Against the firepower the US and the EU are set to deploy, this strategy must make shrewd choices on Britain’s technological and natural advantages. It also requires easing planning and other barriers.
There are elements to welcome in the nearly 3,000 pages of documents. But the plans fall short on several fronts. Investor confidence has been undermined by the merry-go-round of Tory premiers and industrial plans. A general election due next year adds further uncertainty, even if the Labour opposition has committed to an arguably more ambitious green strategy. The Conservative plans also have some questionable emphases and omissions.
Though the UK has expertise in carbon capture, utilisation and storage, the “up to £20bn” commitment represents a very large bet on a technology that has yet to be deployed at scale. Scientists and environmentalists also fret that it will be used to prolong oil and gas development in the North Sea. Russia’s war on Ukraine has put a new premium on energy security, a twin pillar of the UK strategy. Yet the loss of Russian supplies should accelerate above all the shift to sustainable sources. New fossil fuel production should be capped at what is strictly necessary to keep the lights on in the transition.
When it comes to sustainable energy, the promise to speed up planning consents for solar power and offshore wind is encouraging. But the government is dragging its feet on onshore wind. Nuclear power has rightly been identified as a priority, with a new body to support projects, but plans ought to be far more advanced than they are. Plans for home insulation remain puny. The government has also failed to match other countries’ recent efforts to boost electric vehicle charging infrastructure.
Climate campaigners warned on Thursday they might take the government back to court over its plans. Not just green activists, but investors ready to put money into green energy and infrastructure projects have been voicing frustration. The latest strategy has some steps forward. But in a promised “fuller national response” to challenges created by the US IRA in the autumn, the government has a lot still to do.
