Of elephants, gorillas and chimps
Some folks are saying the UK should drop Net Zero. Is this the green elephant in the room?
Since Net Zero was written into British law, successive governments seem to have grown progressively cooler on achieving it. Liz Truss gave Net Zero only a cursory mention or two during her short time as First Lord of the Treasury. She walked straight into the trap of relaxing the ban on fracking - which might have made good sense were it not for the case that environmental pragmatism rather than economic dogmatism should arguably have been her guiding principle.
In the meantime, some flagship Net Zero ventures don’t seem to be faring too well. Take British Volt, with its £3.8bn gigafactory aiming to employ 3,000 skilled workers in Blyth. Bit of a rescue scramble going on right now, we note, including what seems to be a fair bit of uncertainty on the Government’s £100mn commitment to the project. Oh dear.
Image: British Volt
At the very least, the path to Net Zero does tend to wind around the (hopefully retrofitted) houses. As we’ve commented several times in previous posts, the task of tracking progression, particularly in our chosen focus of green skills and occupations, is often like a massive join-the-dots puzzle. Going all the way back to July 2021, we felt the Green Jobs Taskforce did a creditable job in its final report. But while the Taskforce’s notional successor, the Green Jobs Delivery Group, was much mentioned ahead of time (including this letter received from Alex Burghart MP during his time as Parliamentary Undersecretary for Skills at the DfE) all we’ve seen so far is a press release back in May and…well, that’s about it. We do note, however, that in the game of ministerial musical chairs we’ve all been enthralled and exasperated with in recent weeks, all four ministers present at the inaugural meeting of the Green Jobs Delivery Group1 have been reappointed as ministers, but only two of them - Mims Davis and Rebecca Pow at DWP and DEFRA respectively – have been reappointed to the same departments they represented at that inaugural meeting. An element of continuity in the Group at least?
So, how will Net Zero fare under Rishi Sunak as PM and Grant Shapps at BEIS? We shall see. But in our humble opinion, Rishi has made a decent start by reversing the reversal of the fracking ban, showing perhaps that while he’s a canny economist, he’s a cannier politician, or at least cannier than his predecessor at reading the public mood. His initial soundbites on skills and the continuation of levelling-up2 have been promising too.
But is there an elephant in the room here? The Green Edge, along with many other initiatives such as the UK Business Group Alliance for Net Zero, was founded at least partially on the assertion that Net Zero is going to happen. We assume so, at least. But is Net Zero going to happen?
Ross Clark, for whose writing we have a certain degree of respect, wrote recently that Rishi is right not to attend COP 273 and to ‘prioritise his efforts to salvage the public finances instead’. He continued:
Britain is beginning to look increasingly isolated in its net zero fundamentalism. Only we really do look like we're going to be silly enough to close down our industries, sacrifice our agriculture and pile taxes on the poor in the name of achieving a self-imposed target which will mean absolutely nothing if other countries do not follow suit.
Source: The Spectator
So, is Net Zero going to be too economically, socially and politically damaging to the UK that we should drop it? Or at least, to find some middle ground that meets the triple-bottom line criteria all the way up through society, corporations, nations and out into the world? Who can say? Certainly not us: The Green Edge is simply a commentator here, we’re in no position to make recommendations. But we can reflect on a few points made by respected and – in our opinion at least – properly-balanced writers on the subject.
Around the time of COP 26, the International Energy Agency said yes, we can do it, but only if our energy systems are totally transformed and we – ie. the world – adopt a roadmap something like the one below:
Image: IEA
Earlier in 2021, a trio of respected academics took a different view. A pessimistic piece, perhaps, but many good points were made, including the view that the goal of Net Zero to balance residual emissions of greenhouse gases against technologies removing them from the atmosphere only serves to ‘perpetuate a belief in technological salvation and diminishes the sense of urgency surrounding the need to curb emissions now’. A good point, well presented, we feel.
So could the UK’s ‘Net Zero fundamentalism’ cripple the economy? Well, not necessarily, according to a number of learned resources. The LSE opines that ‘under current policies, the total cost of climate change damages to the UK are projected to increase from 1.1% of GDP at present to 3.3% by 2050 and 7.4% by 2100’. Meanwhile, the Office for Budget Responsibility wrote in October 2021 that:
…unmitigated climate change would ultimately have catastrophic economic and fiscal consequences for the UK. By contrast, while the fiscal costs of getting to net zero could be significant, adding around 21 per cent of GDP to public debt by 2050 in our ‘early action scenario’, they are not exceptional relative to the costs of other recent global shocks, such as the financial crisis and the pandemic.
Source: OBR
So, going back to The Spectator, is it time to drop the Net zero agenda? We don’t believe so. Despite the naysayers, downplayers, hair-shirters and moodbreakers, we still think ours is a great nation and if any country can do it, the United Kingdom can. Certainly, we don’t have the clout that we did when we led the world into the Industrial Revolution – the cause of all this smoke in the first place – but we’re still a nation full of ideas, even if we don’t necessarily keep our collective eye on the ball long enough to see every good idea through. The Green Edge has posted in previous months about innovations in sectors like green shipping and hydrogen power, while the Department for International Trade - incidentally, Greg Hands’ new brief after his move away from the Green jobs Delivery Group chair at BEIS – lists pretty much every green sector there is in its claim that ‘The UK's cutting-edge technology and revolutionary research is leading the race to a net zero carbon economy’.
There’s no doubt the markets are out there. McKinsey has highlighted the many markets emerging for net zero products and services, listing a whole bunch of sectors where it considers the ‘net-zero capex revolution’ will create opportunities for UK-based companies:
Source: McKinsey
And there are other green growth industries too: hydrogen, waste, industrials, and carbon management being among them.
We’ve also posted a fair bit about B Corps, which we feel are a good indicator of grass roots business commitment to a sustainable future. We note that the US – B Corp Labs’ home country – has around 1,600 certified B Corps, while the UK is not too far behind with a thousand or so. In comparison, France has 230, Germany 60 and China, er, 30.
But there’s only so much the UK can do. As we write in this month’s reports roundup, with 800 cement plants compared to the UK’s 17, if China were to put its mind to converting the world to green cement, then it’s much more likely to happen than if the UK pushes it. Let’s face it, the UK will never be the green gorilla, but in sectors like green finance and innovation and fintech, we can still be a successful chimp.
And, of course, the Net Zero snowball is rolling. As a nation we spend heavily on new capital each year and many commentators are saying that a shift to green capital accelerates the transition to net zero as well as providing other economic benefits. We agree. Also, let’s not forget that there are other big things at stake here. Energy security and resilience, health, and new skills and jobs opportunities in levelling-up areas, to name but a few.
Just to finish on the subject of skills and jobs. The Green Edge is proud to be involved in a new initiative by our friends at IEMA. The Green Careers Hub has just been given a limited launch focused on IEMA members and a major launch is planned for next year with a wide range of new content for anyone, from any sector or background, to understand how they can play a role in greening the economy. We wish IEMA the very best with the venture.
What’s your opinion? Should the UK drop Net Zero or continue on as the conscience leader of the free world? We’d love to hear your views.
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Greg Hands, Minister for Energy, Clean Growth and Climate Change (BEIS); Mims Davies, Minister for Employment (DWP); Alex Burghart, Minister for Skills (DfE); and Rebecca Pow, Minister for Nature Recovery and the Domestic Environment (DEFRA).
Michael Gove is back too as Levelling-Up Minister to oversee the spending of the £26bn of public capital investment for the green industrial revolution and transition to Net Zero he presented to Parliament in February 2022. As he was saying before he was so rudely interrupted…
At the time this post is released, Rishi has, of course, changed his mind on that one.