6 December 2022

‘Make-or-break moment’: Why business, unions, and campaigners are united in urging government to fix faltering climate strategy

'Make-or-break moment': Why business, unions, and campaigners are united in urging government to fix faltering climate strategy

The CBI, the TUC, and Green Alliance are all issuing much the same message: the government has just weeks left to deliver a genuinely credible net zero plan

It is not every day that you find that the UK’s biggest business group, most influential trade union bosses, seasoned policy experts, and protestors blocking motorway junctions are in broad agreement. But such is the breadth of support for the UK’s net zero transition and the mounting frustration at the government’s failure to come forward with more ambitious decarbonisation plans, that the coalition calling on Ministers to end the internal wrangling over the cost of climate action and deliver a wave of new green policies is now broader than ever before.

That is not to say any mainstream groups will be rushing to endorse the hugely disruptive and divisive tactics of ‘Insulate Britain’, the group that this morning blocked slip roads to the M25 causing even more traffic chaos than usual. But backing for a drastic acceleration in the roll out of green building retrofits is now backed by business groups and environmental campaigners alike.

Think tank Green Alliance today provided a broad overview of the current state of UK climate policy, with the publication of its latest report on progress against the country’s short term carbon budgets and long term net zero goals. It made for damning reading.

The analysis concluded that currently government plans add up to just under a quarter of the emissions cuts needed to achieve the UK’s 2030 climate goals. The report acknowledges that some progress has been made in the past six months, with the Department for Transport now almost halfway to meeting its target thanks to the recent publication of the Transport Decarbonisation Strategy.  

But it also warns that “almost no progress” has been made towards the 2030 targets in areas such as farming and land, energy and power, and waste.

The latest edition of the report – titled the Net Zero Policy Tracker – stresses the government could “rapidly close the gap” by implementing known solutions, including many that are already being consulted upon – a fact underlined by this morning’s confirmation of better than expected funding for the next wave of clean power auctions under the government’s Contracts for Difference (CfD) regime. But the report also highlights how repeated delays to crucial climate policy decisions and relatively modest levels of support from the Treasury are fuelling fears that the UK will not be able to go into the crucial COP26 Climate Summit with a sufficiently ambitious domestic net zero strategy.

“This is a make or break moment for the government’s record on climate change,” said Caterina Brandmayr, head of climate policy at Green Alliance. “Over the next eight weeks, in the run up to COP26, the UK public want to see bold and ambitious action to unlock thousands of new jobs in the industries of the future. The analysis we’ve published today shows how much the Prime Minister and Chancellor have yet to do. 

“The Glasgow Summit will fail without the major emitters such as the US and China making genuine commitments in these final 50 days – and as President, the UK has to lead the way to raise ambition globally. Unless the imminent Net Zero Strategy and Comprehensive Spending Review meet the scale of the challenge and opportunity, the UK will be headed into Glasgow with little to show by way of progress on cutting its emissions in this crucial decade.”

Her comments were echoed by Ana Musat, head of policy at the Aldersgate Group, who said the Net Zero Policy Tracker “illustrates the urgent need to close the gap between the current pace of decarbonisation and the carbon budgets”. “Progress to date in sectors such as transport has been encouraging, but it is crucial that all areas of the economy are supported to cut emissions in a timely and cost-effective way,” she added. “We need to see a detailed policy framework for decarbonising sectors like buildings and heavy industry, with clarity on the future of funding support and phase out of high carbon alternatives. In addition, fiscal incentives like the removal of VAT for energy efficiency retrofits and business models for low carbon hydrogen will be essential to attract the private investment needed to reach net zero.”

It was much the same message as that delivered yesterday by the TUC, in the form of a report that warned 660,000 jobs were at risk from continued government “inaction” on reaching net zero.

The report argued that around 260,000 manufacturing jobs and a further 400,000 supply chain jobs, mostly located across the UK’s industrial heartlands, could be at risk of being “moved offshore to countries that offer superior green infrastructure and greater support for decarbonising industry”, unless the government comes forward with a credible and adequately funded net zero strategy.

“Companies overseas are already setting target dates for green steel,” said Alan Coombs, a workplace rep for the Community union who has worked at Port Talbot’s steel works for 40 years. “But the UK isn’t even putting our toe in the water. We have families here who are third or fourth generation working at the plant. If we don’t have apprenticeships in green steel technology soon, there won’t be another generation. If we put ourselves at forefront of green innovation, we can protect the workforce. But it needs government action.”

Consequently, the TUC is calling on the government to unleash a £85bn green recovery package capable of creating 1.24 million green jobs, arguing that to date the UK’s green stimulus plans lag badly behind the US, Canada, France, and others.

“The world is moving very clearly in one direction – away from carbon and toward net zero. The UK must keep up with the pace of change,” said TUC General Secretary Frances O’Grady. “There’s still time to protect vital jobs in manufacturing and its supply chains. But the clock is ticking. Unless the government urgently scales up investment in green tech and industry, we risk losing hundreds of thousands of decent jobs to competitor nations.”

It is a fear shared by CBI Director-General Tony Danker who will this afternoon deliver a speech warning the government faces an autumn of “big choices” that it has to get right if it is to “forge a new growth story to compete in the world”.

Warning that a combination of tax rises and policy uncertainty would have a chilling impact on business investment, Danker will tell an audience at the Alliance Manchester Business School that a “return to business as usual in our economic policy, at this unique moment in British economic history, would be a mistake”.

He will also warn that “the lack of detail and pace from the government on some of the big economic choices we must make as a country, are the biggest concerns for business”, and reiterate long-standing calls for the government to come forward with a more ambitious and comprehensive net zero policy framework that can accelerate skills development, catalyse green investment, and create new low carbon markets.

“This autumn requires big choices,” he will say. “Choices that will define a decade.  We’re at an inflexion point. Brexit, Covid, climate change – all demand that the UK forges a new growth story to compete in the world. And believe me this will be a competition – for new markets, new skills, and technological advantage.  

“One of the great risks of the Budget, the Spending Review, and the Global Investment Summit – all set for this autumn; as well as our net-zero strategy, infrastructure strategy, and skills policy – is that we are too complacent, too proud about what we’ve done so far. That we regard the benchmark as beating the policies of UK governments past, rather than global competitors present. But the 2021 reality is quite different. Over the last two years, every country’s strategy to win the future has shifted dramatically. Every country is choosing to invest in the future – the future engines of economic growth.”

Responding to Green Alliance’s report this morning, a spokeswoman for the Department of Business, Energy and Industrial Strategy said: “We are a world leader in the fight against climate change and are absolutely committed to meeting our future climate commitments, having already cut emissions by 44 per cent over the past three decades, and are on track to outperform our current carbon budget plans which takes us to 2022.

“We have clear plans to cut emissions further, having recently published our energy white paper, North Sea transition deal, transport decarbonisation plan, industrial decarbonisation and hydrogen strategies.

“We have also secured new investments in offshore wind, electric vehicles and battery manufacturing and supply chains, and rolled out schemes to decarbonise homes and buildings. Further details will be set out in our net zero strategy.”

The argument that the UK remains a world-leader on climate action was further strengthened by today’s confirmation of £265m of funding for the next wave of clean power auctions, news Centrica is to train 3,500 new apprentices in green skills, and the publication this morning of the government’s latest update on its Plan for Jobs, which contends that 425,000 jobs will be supported over the next four years thanks to “the most ambitious programme of infrastructure investment on record”, including through a raft of green infrastructure projects.

But the focus on the UK’s track record, and not on the hugely ambitious green stimulus programmes now being pursued on both sides of the Atlantic, does little to challenge the accusations of complacency levelled by the bosses of both the CBI and the TUC.

Those allegations were given further credence this weekend by simultaneous reports the government is both rushing to organise a last ditch diplomatic push to secure China’s support for an ambitious agreement at COP26 and likely to delay the passage of its own landmark Environment Bill until after the crucial Summit, as it works seeks to water down amendments tabled in the Lords.

As Ruth Chambers of the Greener UK coalition of NGOs argued in response to the news, yet more delays to the Environment Bill will only fuel questions over the government’s intentions. “Considering that most amendments seek to maintain previous levels of environmental protection, you have to ask why Boris Johnson would prefer to undermine his green agenda on the eve of COP26 than find reasonable compromise,” she said. “It rather appears that a ‘good bill’ for government is one that weakens crucial environmental protections, and that in the long run that is more valuable than creating positive momentum for the climate conference. After three long delays already, this disappointing decision is the opposite of environmental leadership.”

Meanwhile, the summer long briefing battle between Number 10, the Treasury, the Department for Business, Energy, and Industrial Strategy, and the small handful of MPs opposed to the government’s net zero plans continues to suggest the Spending Review is unlikely to contain the game-changing green investments that everyone from the CBI to the TUC and the protestors camped out on the M25 are desperate to see.

The frustration for all parties is that all the components of a truly world-leading policy framework are to be found in the government’s pipeline. What is required to deliver them is some bold political leadership and an end to the short termist economic and policy orthodoxy that, as Danker rightly argues, is no longer fit for purpose in the post-covid era.

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