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The net-zero consensus is over

Sir Vince Cable
August 23, 2023

Environmental alarm bells are ringing loudly. There are daily reports of mounting climatic disasters – wildfires out of control, extreme hurricanes, unprecedented flooding -related to global warming.

At the same time, we may be seeing the end of a political consensus around ambitious targets to reduce Britain’s Greenhouse Gas Emissions. The government has over-ridden the advice of the official Climate Change Committee – established under 2008 legislation which would make the decarbonisation target of net-zero emissions by 2050 legally binding. It has, instead, began issuing licences for exploiting the major oil and gas resources in the North Sea, west of Shetland.

Furthermore, the Conservative government is creating a dividing line on green issues with the Opposition: attacking costs on consumers in general and motorists in particular. The assault on what David Cameron once called green crap is haphazard: the main targets so far have been Ultra-Low Emissions Zones which are essentially a public health measure and local traffic management schemes. In addition, the Prime Minister continues to block the expansion of renewable onshore wind on aesthetic grounds despite it being the cheapest source of electricity.

Haphazard or not, attacks on green policies put the net-zero ambition in doubt. It is difficult to sustain controversial policies if one of the major parties seeks to weaponize them. Yet consensus is crucial for those making long-term investment decisions or developing technologies for the green transitionF.

Until very recently the Conservatives were fully part of the consensus on climate. It was Margaret Thatcher who originally embraced the global warming issue and wider environmental stewardship and who demonstrated by championing the Montreal Protocol on the Ozone Layer the force of British leadership. David Cameron (initially) and Boris Johnson continued this tradition. The resigning Environment Minister, Zac Goldsmith, has told us, however, that this Prime Minister is simply uninterested. Or hostile. Or cynically preparing for what I call the CAT strategy in the coming election: climate; asylum; and transgender; a culture war campaign.

Environmental campaigners are alarmed. The political tide seems to be turning against green policy elsewhere. In Germany, the powerful Green Party’s insistence on expensive but low-emission domestic heat pumps has been deferred after meeting serious resistance. Dutch plans to curb methane emissions from farming led to a big political swing to populist parties. In the USA, where climate scepticism is powerful, President Biden’s ambitious plans for renewable technology have been counterbalanced by sweeteners for fossil fuel industries and attempts to calm panic over rising petrol prices.

We should not be surprised that painful green policies meet resistance. The Blair government was forced by motorists’ and hauliers’ protests to abandon the duty escalator on motor fuel. No government since has dared to raise fuel duty. Macron’s carbon tax was also abandoned after a motorists’ revolt. Australia’s recent Conservative (Liberal) governments aggressively and successfully campaigned to undo their predecessors’ climate policies and to promote coal but have recently been defeated themselves.

What is now better understood amongst democratic governments and politicians. if not by single issue campaigners, is that climate policy involves difficult trade-offs. Net-zero isn’t, and cannot be, the exclusive focus of government. It involves choices and choices can be painful especially for the losers. It is often forgotten that the most important single step to reduce Britain’s carbon footprint followed Thatcher’s successful war against Scargill’s NUM and the socially damaging closure of coal mines.

Until very recently the Conservatives were fully part of the consensus on climate Quote

Campaigners had persuaded themselves that net-zero had a special protected status because it was embedded in law. But we have seen how easily the legally binding commitment to an 0.7% aid target was ditched, with the emasculation of the aid programme, because of competing demands on public spending. As with the aid programme, the net-zero commitment involves an idealistic commitment to act for the global common good. It is, similarly, fragile.

To survive, net-zero must be sensitive to difficult trade-offs and able to navigate them. One of those trade-offs is cost. Nothing fuels populist anger more than regressive levies on environmental bads. For families whose sole practical, means of transport is an old banger, environmental taxes are resented, no matter the impact on the planet or local air quality. Politicians may choose to press ahead but they cannot ignore the negative side effects. In practice, the trade-offs are more complex. The environmental levy paid on fuel bills to provide support for new renewables was criticised for increasing energy bills but has helped to drive down the cost of offshore wind to a point that it is now consistently cheaper than gas. Good policy requires thought and clever design.

Another big trade-off is with energy security: a rather abstract concept until the Ukraine war made it real. Advocates of nuclear power have long argued that we should follow the French example, but the trade-offs involve large up-front and waste disposal costs and public worries, however exaggerated, about accidents and foreign ownership. Indeed, hostility to this impeccably zero carbon and energy secure domestic source has been led by the same green campaigners who oppose fossil fuel use. What we need is a portfolio of different, low carbon and secure sources including new renewables, nuclear and carbon capture.

Energy security has motivated the expansion of North Sea oil and gas capacity so that predicted future demand will be met by domestic rather than imported supplies. The case for doing so may be wrong, on balance, but is not stupid. Shrill and self-righteous opposition misses the point and is counterproductive.

Much of the vehemence of the opposition is because of the involvement of oil companies. They are an attractive scapegoat for global warming. It is, unsurprisingly, easier to direct hostility to the companies which produce the fossil fuels than the general public whose demand provides the market. But there are trade-offs here also. Punishing or condemning British–based fossil fuel companies merely helps Saudi Aramco and their ilk.

A third and increasingly dangerous trade-off is geopolitical. China is an economic superpower and one of its achievements has been to anticipate future demand for renewable technology in solar power and electric vehicles. It dominates global battery production and supply chains. It will soon be the dominant producer of low cost, low carbon vehicles. If net-zero is the priority it will involve the government defending cooperation with Chinese companies and facing down those more concerned with superpower rivalry or the human rights record of China (and the interests of European car companies).

The Conservatives’ opportunistic dabbling in anti-green populism and net-zero scepticism is deeply unhelpful to maintaining a political consensus but is a symptom of a deeper problem: the fragile nature of the net-zero commitment. It will not survive without an honest acknowledgement of the tricky trade-offs involved as well as careful design of policies to minimise costs and losers and to maximise self-interested benefits from the green transition.

Vince Cable profile

Sir Vince Cable is a former Secretary of State for Business, and led the Liberal Democrats from 2017-19.

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