As the country hosting this year’s crucial COP summit in Glasgow, the UK government’s approach to net zero falls short on many fronts.
Relying on the private sector to raise £90 billion by 2030 – the same amount that has been invested in renewables over the last nine years – simply amounts to business as usual. Given the scale of the crisis, with the International Energy Agency saying that investment in clean energy needs to more than triple to around £3 trillion by 2030, the figures announced by the government today are a drop in the ocean.
Huge levels of public investment will be needed to make sure of a fair green transition, so it is concerning that the government’s net zero review is pushing back on this by warning about costs being passed onto ‘future taxpayers’.
Public spending to build new infrastructure and create the green jobs of the future will not be a burden on future generations, but a prudent investment that will pay for itself and deliver huge dividends for the whole of society.
There is also nothing about the emissions the City of London are responsible for through the billions of pounds they are pouring into fossil fuels overseas. To reach net zero by 2050, the International Energy Agency has said no new fossil fuel projects are required – the government needs to ensure its Green Finance Strategy reflects this.
The Net Zero Strategy estimates that additional capital investment must grow to “an average of £50-60bn per year through the late 2020s and 2030s” and intends for the private sector to fill most of the gap, with the government aiming to leverage £90bn of private green investment by 2030. Targeted public spending, for instance through the UK Infrastructure Bank and British Business Bank, will seek to catalyse private investment and stimulate innovation in low-carbon sectors, but critics argue this isn’t enough.
An accompanying “Greening Finance” roadmap, backed by the Treasury, the Department for Business, Energy and Industrial Strategy and the Bank of England, set out new requirements for big companies to outline detailed plans for how they will reach net zero by 2050 or “provide an explanation if they have not done so”.
The government also confirms that a full Green Finance Strategy will set out how the UK financial system will “transition to net zero as a whole” in 2022.
Earlier this month, 60 MPs and 25 peers from across the political spectrum wrote to the Bank of England governor, asking him to do more to regulate fossil fuel finance and support the green transition.