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On 26 January 2023, the House of Lords is due to consider the following question for short debate moved by Baroness Hayman (Crossbench):
To ask His Majesty’s Government what steps they plan to take in response to the report by Chris Skidmore MP ‘Mission zero: Independent review of net zero’, published on 13 January.
1. What is the net zero target?
The ‘net zero target’ refers to a government commitment to ensure the UK reduces its greenhouse gas emissions by 100% from 1990 levels by 2050. If met, this would mean the amount of greenhouse gas emissions produced by the UK would be equal to or less than the emissions removed by the UK from the environment.
The net zero target stemmed from a recommendation made by the Climate Change Committee (CCC) in May 2019. The CCC is a statutory body that provides independent advice on climate change to the UK and devolved governments.
The net zero target was made legally binding by the Climate Change Act 2008 (2050 Target Amendment) Order 2019. Prior to this, the UK’s legally binding target was to reduce emissions by 80% compared to 1990 levels by 2050. The government said the UK was the first major economy to pass a net zero emissions law.
To set out how it planned to achieve this target, the government published the ‘Net zero strategy: Build back greener’ in October 2019. This contained policies and proposals for decarbonising all sectors of the UK economy and meeting the net zero target by 2050.
In September 2022, the government commissioned an independent review of the net zero target.
2. Why did the government commission the review?
The economic landscape in the UK has changed since the publication of the net zero strategy in 2021. Several global factors including the Russian invasion of Ukraine have placed pressure on UK businesses and households through high energy prices and increased inflation.
As part of her Conservative Party leadership campaign to replace Boris Johnson as prime minister, Liz Truss pledged to hold a review of government policies on climate change. She said this was to ensure that the UK’s climate change commitments were being met in the “most economically efficient way” and did “not pile unnecessary costs on consumers”.
Following Liz Truss’s appointment as prime minister, the government commissioned Chris Skidmore (Conservative MP for Kingswood) in September 2022 to lead an independent review of net zero. He is the former energy minister responsible for signing the UK’s net zero target into law and is the current chair of the All-Party Parliamentary Group on the Environment.
Chris Skidmore launched the net zero review on 26 September 2022. Its purpose was to identify how the UK could meet its net zero commitments in an affordable and efficient manner, specifically one that is “pro-business, pro-enterprise and pro-growth”. It examined:
- what the most pro-business, pro-growth and economically efficient path to reaching net zero would be
- how to maximise the economic opportunities that the net zero target presents, as well as increase innovation, investment, exports and jobs in the UK
- what economic costs and benefits are associated with new and emerging policies and technologies
The review engaged with businesses, organisations, local government, academia and the public across the UK. A call for evidence also informed the review and received over 1,800 responses.
The review’s findings were published in its final report, ‘Mission zero: Independent review of net zero’, on 13 January 2023.
3. What did the review conclude?
The review described net zero as the “economic opportunity of the 21st century”. Citing an analysis by global consultancy firm McKinsey, the report said the supply of goods and services to enable the global net zero transition could be worth £1tn to UK businesses by 2030. As part of the British energy security strategy published in April 2022, the government estimated that the energy transition could support 480,000 UK jobs by 2030. The British energy security strategy set out how Great Britain would accelerate homegrown power for increased energy independence.
The review said the UK should be proud of the steps it has taken so far to achieve net zero. However, it stated that actions were needed from government, industry and individuals to make the most of net zero opportunities. It noted the UK had been assessed by the CCC to be lacking in progress in some areas:
[…] the need for further action is clear. For all the UK’s successes and clear ambition shown by government, it is not on track to deliver on all of its commitments according to the latest progress report by the CCC, which shows risks across most sectors […].
It said challenges remained in delivering on the UK’s ambition. Evidence obtained during the review had shown that the UK was “not matching world-leading ambition with world-leading delivery”, the report said. For example, it said economic opportunities had been lost due to a lack of consistent long-term policy or investment.
To identify potential barriers to the future delivery of net zero, the review engaged with a variety of sectors. It said the common message received from sectors was the need for “clarity, certainty, consistency and continuity” from the government on net zero policies.
The review also considered actions taken by other countries in response to net zero opportunities. It said “bold and ambitious” interventions were being made across the international arena. For instance, countries such as the USA, Germany and France had each introduced investment plans to accelerate action on climate and energy. The report said other parts of the world had also recognised the market shift and were acting too. As such, the review warned that the UK needed to respond to this shift or “risk losing out on new opportunities and seeing current economic activity move away”. It recommended the UK provide incentives for investment, alongside wider opportunities for job creation and local and regional regeneration. This would ensure the UK not only maintained its international leadership on climate action but could also compete with other nations that were making strategic decisions over their own energy transitions.
The review endorsed the government’s net zero strategy and agreed the policies outlined within it should still go ahead. However, it said a new approach to the strategy was needed. It advised the creation of ‘mission zero missions’ to be launched in 2025 and achieved by 2035. These long-term goals would be established across sectors and provide the vision and security for stakeholders and investors, the report said. It also stated these missions would help to establish a “stronger, better planned and co-ordinated, long-term delivery for net zero”.
In addition to these long-term missions, the review said the government should also take immediate action. It recommended 25 short-term policies that the government should achieve by 2025. The review called these policies the ‘25 by 2025’. The aim of these short-term policies would be to help remove barriers that prevented business and industries from supporting the UK’s net zero ambition. The report said the 25 by 2025 would also provide an immediate signal of the government’s intention to deliver its net zero target.
The ‘mission zero missions’ and ‘25 by 2025’ policies formed a series of recommendations to the government.
The report contained 129 recommendations. These aimed to help the UK secure net zero investments and meet its net zero target in an affordable manner. Key recommendations to the government included the following:
Using infrastructure to unlock net zero by:
- accelerating the implementation of the British energy security strategy to establish the ‘future system operator’ that would drive the UK’s overall energy transition and oversee the UK energy system
- developing a cross-sectoral infrastructure strategy by 2025 to support the development of infrastructure for electricity, hydrogen, other liquid and gaseous fuels and CO2 networks that support the UK’s green economy
- reforming the government’s approach to planning by streamlining processes so that locally supported solar and onshore wind generation systems could be developed in communities more easily
Creating sustainable governance structures for net zero by:
- developing a government financing strategy by 2023 to give business and investors long-term clarity on the length of funding commitments
- developing a long-term programmatic approach to net zero projects
- creating an ‘Office for Net Zero Delivery’ that would place net zero delivery “at the heart of government thinking”, be responsible for ensuring best practice for key projects, and take ownership of net zero priorities where they span multiple departments
Backing businesses to go green by:
- reviewing how HM Treasury (HMT) incentivises investment in decarbonisation by the end of 2023, including via the tax system and capital allowance
- delivering the Green Jobs Taskforce recommendations—convened from November 2020 to July 2021 by ministers from the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Education, this taskforce published recommendations on the skills needed in the UK job market to transition to net zero— and the commitments from the net zero strategy, reporting regularly on progress and starting by mid-2023
- launching a ‘help to grow green’ campaign that offered information resources and vouchers to help small and medium-sized enterprises plan and invest in the energy transition
Catalysing local action by:
- reforming the planning system at local and national level to ensure it supports net zero and the economic opportunities that come with it
- simplifying the local net zero funding landscape to make it more efficient and productive for central and local government
- backing a set of ‘trailblazer’ places that want to go further and faster on net zero
Increasing transparency and engaging people by:
- expanding the government’s public reporting on net zero to increase the information available to the public
- publishing a public engagement strategy to increase public engagement on net zero
- creating a ‘carbon calculator’ to provide consumers with information on carbon costs
- working with industries to introduce a standardised approach to ecolabelling by 2025 and reviewing options for a ‘net zero charter’ mark as a gold standard for sustainability
Delivering cleaner, cheaper and greener homes by:
- adopting a 10-year mission to make heat pumps a widespread technology in the UK and regulating for the end of new and replacement gas boilers by 2033 at the latest
- reforming EPC ratings to create a clearer, more accessible net zero performance certificate for households
Capitalising on the UK’s international leadership by:
- conducting a strategic review of the UK’s international climate leadership by 2023
- establishing a baseline for environmental and climate protections in future free trade agreements and removing trade barriers to environmental goods and services
Setting the UK up for 2050 and beyond by:
- working with sector leaders by autumn 2023 to create a research and development (R&D) and technology roadmap that outlines key decision points to ensure priority technologies deliver on the UK’s net zero and growth ambitions
- BEIS and HMT reviewing how to incentivise greater R&D for net zero
4. What was the government’s response?
Business and Energy Secretary Grant Shapps said the report offered a range of ideas and innovations for the government to consider. He noted the UK’s talent and expertise meant that the UK was well placed to ensure that addressing climate change brought new jobs and investment for businesses and communities.
The government referred to official statistics that had shown there were already around 400,000 jobs in low-carbon businesses and supply chains across the UK. He said these had an estimated turnover of £41.2bn in 2020. The minister said the British energy security strategy and the net zero strategy aimed to bring an additional £100bn of private investment, whilst supporting an additional 480,000 British jobs by 2030.
5. What other reaction has there been?
The reaction to Chris Skidmore’s report has been mostly positive. House of Commons Environmental Audit Committee Chair Philip Dunne (Conservative MP for Ludlow) said the report demonstrated the “countless” opportunities net zero could bring. He said “inconsistent policies” and a “lack of coherence” across government in implementation had meant that sectors had not been given confidence to develop green skills and drive change.
The chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, Lord Stern of Brentford (Crossbench), commented on how the UK could benefit from the increasing demand for net zero goods and services if it made the right public and private investments. Lord Stern also said it was important for the government to create an environment that was conducive to this investment by providing clarity, certainty, consistency and continuity of policy.
The Cities Commission for Climate Investment (3Ci) also welcomed the report’s findings. 3Ci is a network of London councils, the Connected Places Catapult, Core Cities UK and other local authorities aimed at supporting local areas to secure finance for achieving net zero. 3Ci Chair Greg Clark welcomed the report’s acknowledgement of the role of local authorities in getting to net zero. He said climate change was increasingly becoming too complex to solve at a national level alone. Success would only come by “place leadership working in tandem with the custodians of major financial institutions”, he said.
Speaking to the BBC, Chris Stark, the chief executive of the UK’s independent adviser on climate change, the CCC, praised Chris Skidmore for highlighting the risks of the UK not acting fast enough on net zero. The chief executive of the World Wide Fund for Nature (WWF), Tanya Steele, expressed concern about the government’s “stop-start” net zero policies. She said the WWF urged the government to “deliver on its promise to meet the net zero target with a clear strategy”.
However, some climate campaigners have suggested the review may not go far enough to avert the climate crisis. A Guardian article cited the policy director for Greenpeace UK, Doug Parr, as saying that the review “stop[ped] short of recommending the kind of muscular policies that would really drive change towards the massive growth in renewables” required.
In the same article, some parliamentarians criticised government actions taken on climate change so far. Ed Miliband, the shadow climate secretary, is reported to have accused the government of failing to act with the “urgency and consistency” required to address climate crisis demands. He said such delays had meant the UK had been deprived of the economic opportunities climate action offered.