A green prosperity plan must bring the energy we need
The path to achieving net zero is a long journey and by no means an easy one. It represents one of humanity’s greatest challenges, but the scale of the threat that climate change poses means that it is one that cannot be ignored. For too long now, our leaders have put off the difficult decisions that would allow us to accomplish meaningful progress. The fact is that if we continue procrastinating then we will fail to protect the planet and there will be no hiding from the consequences. If someone is running a marathon, they cannot hope to win by simply sprinting at the last minute.
Amid all the political campaigning across parties in the run-up to the election, Labour’s recently announced plans for the energy sector was broadly welcome by those of us in the industry, as an important step forward for Britain’s net zero ambitions. Using a windfall tax on fossil fuel polluters to create a publicly-owned clean energy company shifts resources to where they should be going and will strengthen our domestic energy security while also helping us to decarbonise.
These plans also send a critically important signal to industry that the party would be serious about its commitment to the green transition should it form a government. Evidence of serious commitment has been sorely lacking from the UK government over the past five years due to a lack of consistency on policy. Despite a pledge to make the UK net zero by 2050, subsequent actions by the UK Government have watered down carbon targets. As a result, industry and private finance have lacked the faith needed to provide sufficient funds to companies and projects or invest in the technologies needed to make the transition to net zero a reality.
It is crucial to recognise that we are in a race and other countries across the world are taking action while we hesitate, such as the European Green Deal and the Inflation Reduction Act in the US, which allocated $369 billion to climate action. The UK doesn’t exist in a vacuum, and we do not want to squander a world-leading position on net-zero. If we do not take action quickly to address this slide, the gap will continue to grow.
Unfortunately, on both sides of the divide, there continues to be a watering down of commitments. For instance, despite acknowledging that serious investment was desperately needed to fund the green transition, Labour cut the £28 billion of funds it had pledged to invest in it to £4.7 billion – just over one sixth of the original sum. Such a dramatic reduction did not send an encouraging message on our commitment to reverse climate harms. Meanwhile, the Conservatives introduced the Offshore Petroleum Licensing Bill this year, doubling down on fossil fuels instead of focusing on new, renewable sources of energy.
Nevertheless, it is still possible for the UK to close the gap internationally and the announced plans for Great British Energy do send an important signal to industry about the party’s firm intentions towards realising the green transition. Demonstrating this is key to providing the private sector the reassurance needed for it to seriously invest as well.
The private sector overall remains very united on net zero, and with the right policy frameworks and regulations to encourage investment we can regain lost ground quickly. Any moves that shift the dial this way, such as plans for establishing Great British Energy, should be warmly received. If, as Sir Keir Starmer has proposed, it spurs private investment and stimulates growth, then it would be what the business community has been crying out for, and a clear signal that Labour means business, when it comes to the green transition.
Philippa Spence is the UK Managing Director at global engineering and sustainability consultancy Ramboll.
