If the Tories want to achieve any progress on climate emission reductions, and its not clear that they do want to, despite the Rt Hon Amber Rudd’s speech last week, then they have to set out clear market signals that they mean to do so and that they will do so in a way that supports a market which lasts beyond this Parliament. This is too serious an issue to be left to individual Governments to deal with and to be subject to political whims. If ever there was an issue that needed cross-party agreement, this is it.
Clouds over the Capital
Amber Rudd’s speech on climate change at Aviva sets out some important pointers for how the Government plans to deal with a low carbon economy over the next decade. Having wiped the slate clean of environmental legislation over the last month, their plans appear to be based on a fairly simple idea, that the markets can solve the problem. Given that the environmental problems that we face have arisen because of what Lord Stern called ‘the largest market failure the world has ever seen’, it seems optimistic to me to believe that this approach will work. That the markets can actually do the work that is required without some significant action by the Government through legislation and policy seems to me to be both unproven and naïve. It is unfortunate that the regulations that the Government has recently abandoned were all sending the right signals to the market; that this Government supports concerted action on climate change mitigation and would use a series of long-term initiatives to achieve that. In contrast to this, large numbers of the companies who should be lining up to enter this new ‘market’ have objected in the strongest terms to the recent dropping of ambitious environmental targets. It is hard to believe that Amber Rudd has the backing of the Cabinet when she said. ‘We are committed to taking action on climate change and we are clear that our long-term economic plan goes hand in hand with a long-term plan for climate action.’
However hard it may be, I feel that there is little to be gained by complaining that this Government is heading in the wrong direction, because we simply cannot see into the future. There is no getting away from the fact that progress in achieving emission reductions through policy and regulation has been achingly slow. The Committee for Climate Change reflects that much of our current emissions reductions have come about because of the recession and less than one percent of the emissions reductions have come about through environmental improvements. In order to achieve our Carbon Budgets we will need to de-carbonise at a rate of 3% per annum. In order for this Governments plan to work, the market has to be three times more effective in delivering emission reductions than regulation has already achieved.
All of this effort could have been achieved more easily if we had kept some of the previous Governments policies going and not abandoned the ones that were working. I agree that the Green Deal was flawed, but it could have been rescued with a proper finance package, instead of abandoning it entirely. Similarly the zero-carbon housing regulations were heading in the right direction and had massive support from industry, ( with the usual exception of the housebuilders who don’t support any regulation that impacts on their bottom line) and also could have been made to work with some effort. Again this has been unceremoniously binned, sending housing regulations back to 2013, there to stay for the foreseeable future.
What the Tories don’t appear to understand, or are just ignoring, is that in order to create a functioning market you need investment. In order to attract investment, you need certainty, and in order to create certainty you need good governance that doesn’t change the rules without consultation. The stated objective of this Government, to achieve emission reductions through the market, has already been made very difficult by their wilful and short-termist treatment of the companies already active in the market. There is no way that we can achieve the emission reductions we need under the Climate Change Act, without the help of companies providing solar energy, wind farms, low-carbon energy, and insulation. But in dropping planned regulations including zero-carbon housing and the Green Deal, this Government will have alienated most of the companies in all of these sectors.
When the Green Deal closure was announced Amber Rudd MP said,: “ It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.”
Having spent a good deal of time working on the development of the Green Deal and on the zero-carbon legislation I imagine I would be one of the people that the minister means when she says ‘building industry’. But why should I spend my time working with Government? The time I spent with the last three Governments has been wasted, as they have shilly-shallied with policy and regulation for a decade, only to bin all that effort when the colour of the party changes. I am certain that many large companies who have invested in Green Deal training and certification will think long and hard before coming back to the table for more.
Angus MacNeil, chair of the Energy and Climate Change Committee said, commenting on the Green Deal announcement: “The government has once again slipped out another announcement about cuts to green policies after parliament has risen for the recess. The Green Deal wasn’t working as well as ministers had hoped, but removing government support without bringing forward an alternative strategy is likely to cause further concern among businesses investing in and delivering energy-efficiency measures.”
It is possible that the long-term plan to reduce emissions will be met by extracting large amounts of shale gas to replace existing coal-fired generation, and by constructing new nuclear power rather than insulating homes and building new energy efficient ones. But both of these strategies are very risky propositions, and will continue to meet opposition among voters, and neither are likely to deliver much in the way of emission reduction during the life of the current Parliament. For every Tory who supports a ban on onshore wind, there will be two Tories who would be anti-fracking. Nuclear will continue to be eye-wateringly expensive and it will be difficult to convince an electorate that you are looking after their energy bills when you spend billions on a few projects that will always cost more than budgeted, and leave an expensive radioactive mess to deal with for the next 10,000 years or so.
A long-term decarbonisation plan for the UK needs to be just that, long-term. Energy efficiency measures in the building stock will need a programme of improvements and finance that lasts from now until 2050. Regulations for new housing that meets EU targets for 2020 needs to be considered now, and once set, needs to be left alone for the industry to develop solutions to meet it. Industrial research needs time and money, time that lasts longer than the life of a parliament, and longer than the political life of most politicians.
“We are committed to climate action; committed to economic security; committed to decarbonising at the least cost.” A. Rudd Aviva speech.
The future of our planet is at stake, nothing less. If the market is to be the vehicle that we use to cut emissions, so be it, but it needs to be a market with solid foundations that is left to function for decades, and not moments. The Tories have started their term in office badly, and have lost the trust of many in industry within a few months. If they are going to deliver on their promises, they need to start acting on them and delivering real change that both those in industry and ordinary people can understand and support. In the year of COP21 Paris when the world expects the UK Government to lead on climate action and to sign up to a global deal, they could have hardly gotten off to a worse start.