Cooling on net zero isn’t good for business
At least we can all now agree: the UK needs to take another look at its net zero target.
It has been a triumph of timing, if nothing else, that a blazing, dangerous heatwave in the UK has coincided with a Conservative leadership campaign where support for the country’s legally enshrined target to hit net zero emissions by 2050 has been, at best, lukewarm.
True, the candidates throwing most shade on those climate ambitions, like Kemi Badenoch, have been eliminated from the competition to become the next prime minister. But even Rishi Sunak, the former Chancellor who just a few months ago was pledging to make the City the “first-ever net zero aligned global financial centre”, has muttered warnings about going “too hard and too fast”. Liz Truss, foreign secretary, has said it must be done in a way that “doesn’t harm people and businesses”.
Meanwhile, as the country sweltered and combusted, a court found that the government’s net zero plans were insufficiently detailed to assess their credibility, ordering a new strategy be drawn up by March next year. That echoed a recent report from the independent Climate Change Committee that pointed to “scant evidence of delivery” against big picture goals.
There is mounting evidence that the public would like politicians to be doing more, not less. A new poll by the Energy and Climate Intelligence Unit found that 70 per cent of Britons think climate change is behind the extraordinarily high temperatures, with more than half saying that governments and societies need to be more ambitious in tackling the problem. Onward, the centre-right think-tank, found in April that 64 per cent supported the net zero goal, more than seven times the proportion opposing it.
The Tory hopefuls are of course playing to a particularly niche audience: YouGov said only 4 per cent of party members surveyed put reducing emissions in their top three priorities. But think-tank the Green Alliance this week found that among those voting Conservative in 2019 there was widespread support for green policies, including an appreciation that low carbon energy could give the UK more security while also bringing down costs. Onshore wind polled well; the nuclear projects so beloved by policymakers less so.
Meanwhile, the need to make progress towards net zero has been largely accepted in the business world. In finance, in particular, it is seen as a risk management exercise — one that the Bank of England has been clear becomes more challenging, costly and unpredictable the later action is taken and the worse the physical fallout in terms of fires, storms and floods from a changed climate.
Elsewhere, there is a sense of opportunity. Make UK, the trade body for the manufacturing industry, says that companies increasingly cite net zero as meaning better access to finance for investments, benefits from reducing energy consumption and the development of new products.
True, the British Chambers of Commerce last year found only one in seven businesses had set targets to bring down emissions, with smaller firms lagging. But even so, a 2020 BCC survey found that half of respondents saw decarbonisation as a competitive advantage, rising to three-quarters for larger companies.
After several years of government flip-flopping on business policies, one virtue of the legally mandated net zero goal was its supposed certainty. The UK’s record at sticking to any form of long-term economic planning is horrible, with the untimely demise of the 2017 industrial strategy the latest in a long line of examples. Supporting the transition, with the promise of hundreds of thousands of new jobs, was one of the three pillars of the Plan for Growth that was meant to take its place.
“Businesses are desperate for clarity, certainty and stability,” says Will Tanner, director of Onward. Even allowing for a dose of greenwashing, the promise of clear priorities, incentives for boosting investment, job creation and the development of new industries should appeal to politicians and companies alike. Yet a repeated gripe from business has been the lack of detail around government plans: when Make UK rated various government strategies in this area, only two of 11 were regarded as progressing well.
All which is to say, the business world is more likely to agree with the courts than the candidates on this one — and should make that abundantly clear.
helen.thomas@ft.com
@helentbiz