• Home
  • News
  • In-depth
  • Opinion
  • Energy
    • Wind
    • Marine
    • Solar
    • Biomass
    • Nuclear
    • CCS
    • Infrastructure
  • Policy
    • Politics
    • Legislation
    • Taxation
  • Management
    • Marketing
    • Risk
    • Skills
    • Incentives
    • Carbon Accounting
  • Technology
    • Waste
    • Recycling
    • R&D
    • Efficiency
    • IT
  • Investment
    • Carbon Trading
    • Offsets
    • Venture Capital
  • Net Zero Now
  • Events & Awards
  • SDG Hub
  • Industry Voice
  • Newsletters
  • Sign in
  •  
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
    • You are currently accessing BusinessGreen via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • Facebook
    • YouTube
    • Instagram
  • Free Trial
  • Subscribe
  • Events & Awards
    • Upcoming events
      event logo
      NZF Pathway - Finance

      This exclusive half day online event will investigate how all businesses can support and accelerate the transition to low and net zero carbon buildings, while maximising the financial and productivity opportunities that will result.

      • Date: 16 Mar 2021
      • Online Event
      event logo
      Net Zero Festival 2021

      Net Zero Festival is the world's first business festival dedicated to exploring, advancing, and celebrating the global transition to a net zero emission economy. Join us at BusinessGreen's Net Zero Festival – for leaders who won't wait until 2050 to build a better business, and a better world.

      • Date: 27 Sep 2021
      • Worldwide
      View all events
  • SDG Hub
Business Green
Business Green
  • Home
  • News
  • In-depth
  • Opinion
  • Energy
  • Policy
  • Management
  • Technology
  • Investment
  • Net Zero Now
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
  • You are currently accessing BusinessGreen via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
  • Hot topics
  • Green recovery
  • Net Zero Now
  • Net Zero Leadership
  • Net Zero Finance
Blog post ribbon image

Rishi Sunak's first Budget provides a down payment on a net zero future

Rishi Sunak's first Budget provides a down payment on a net zero future
  • James S Murray
  • James S Murray
  • @James_BG
  • 11 March 2020
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
0 Comments

Critics are right to highlight the many gaps in the government's climate plans, but the Budget needs to be seen as part of an evolving and genuinely ambitious strategy

The green economy reaction to Rishi Sunak's first Budget provides almost a perfect encapsulation of the cognitive dissonance and inherent tensions that define the climate crisis. It was both the greenest budget of modern times and a disappointing missed opportunity. It was compelling evidence of the government's very real commitment to the net zero transition and a dereliction of duty in the face of a climate emergency. Personally, I err more towards the former than the latter analysis, but the apparently conflicting assessments are not actually mutually exclusive.  

The scale of the climate crisis means that until a government embeds the net zero transition into every single policy and spending decision, while mobilising an unprecedented infrastructure spending blitz and full spectrum public engagement programmes, then justifiable accusations that the policy response is underpowered will only continue. But at the same time the increasingly rapid ratcheting up of the government's decarbonisation efforts means that each major set piece political event should be greener than the last, providing ever bolder policy interventions and more ambitious spending plans. It would be churlish not to recognise that progress, even while highlighting how it does not go far enough. The political response to the climate crisis is invariably a curate's egg, in the truest sense of the term. 

Related articles

  • Presidential possibilities
  • The Boy Who Cried Wolf: Redux
  • No hugging, no learning
  • 2020: A year of crisis, crossroads, and alternative histories

Today's Budget was a perfect case in point. By any measure this was one of the greenest Budgets in years. Sunak dedicated a lengthy section of his speech to the UK's net zero transition, stressing that "there can be no lasting prosperity for our people, if we do not protect our planet" and highlighting how the government was committed to getting green growth and environmental protection "done".

And it wasn't just rhetoric. There was a doubling of flood defence funding; £800m for at least two CCS clusters; important new taxes on gas, plastic pollution, and red diesel; a massive increase in R&D funding, including support for nuclear fusion and electric vehicles; a further £500m for extended EV grants and charging infrastructure; a call for evidence on hiking VED on the most polluting vehicles and more funding for local clear air zones; another £270m for green heat networks; confirmation of the extension of the Renewable Heat Incentive (RHI); and a £640m Nature for Climate Fund. There was even £10m for green whisky innovations. And all this after the government recently announced it is to pull forward the phase out date for petrol and diesel cars, step up green hydrogen funding; and enable a new wave of onshore renewables development.

For a Conservative Chancellor to find space to voice such clear a commitment to climate action and announce tangible support for the net zero transition at the heart of a speech that was inevitably dominated by the response to the rapidly escalating coronavirus crisis felt like a significant step forward. The climate sceptic wing of the Conservative Party looks to have been completed routed, confined to the backbenches from where it can pen occasional grumpy columns for the Telegraph or Spectator. Here was further evidence that Boris Johnson was serious when he said net zero was a top priority for his government.

And yet, the various accusations that the Budget "fails to put the UK on track to net-zero emissions" or represents "a huge missed opportunity" will still resonate with many.

The harsh truth is that plenty of gaps remain in the government's decarbonisation strategy. The deferral of the promised National Infrastructure Strategy so as to ensure it does not fall foul of the same legal challenge that hit Heathrow expansion meant there was no news on the government's nuclear and domestic energy efficiency plans. Aviation, shipping, and the North Sea oil and gas industries remain glaringly obvious blind spots in the UK's decarbonisation plans. Even where money has been committed, the £800m for CCS and £1bn for green transport do not compare favourably with the £27bn for new roads. Difficult decisions, such as the continuing freeze of fuel duty or whether to impose mandatory climate risk reporting, continue to be ducked. It is easy to argue that even when the government prioritises climate action, its plans remain worryingly short of what is required.

However, such criticism, while understandable and largely justified, misses what looks like an evolving and potentially effective strategy.

For better or worse this is a government built on focus groups and polling. Political opponents will slam the Tories for their hypocrisy as they ostentatiously ditch the austerity programme they oversaw for a decade and promise the biggest public spending blitz in a generation. But with the government delivering what a large chunk of the electorate say they want such criticism struggles to stick.

Consequently, we are starting to see how the net zero strategy is being phased in a way that is designed to maintain public and political support, while laying the foundations for the cost effective clean technologies that should allow the transition to accelerate later in the decade.

The pre-Budget announcements started the process with the government taking on the Tory shire sacred cow of opposition to onshore wind and solar farms and pulling forward the petrol and diesel car phase out date. The Budget builds significantly on this start with much of the R&D and infrastructure funding focused on pulling down the cost of essential clean technologies and seeding the development of new industries such as CCS and nature-based solutions.

Moreover, largely under the radar measures such as the new tax on gas, the extension of the RHI, the promised plastic tax, and potential changes to road tax could all have outsized impacts reminiscent of the initially largely ignored carbon floor price that led to the UK's coal phase out. The price signals in favour of the electrification of our infrastructure could prove to be significant.

Next comes the heavy lifting in the form of the National Infrastructure Strategy, now expected before the end of May, which could and should provide much needed clarity for investors in renewables, smart grids, nuclear, CCS, and, crucially, domestic buildings. That will be followed by a Spending Review and the crucial over-arching national climate action plan to be submitted to the UN ahead of COP26. A strategy is starting to take shape.

There is even a rationale for dodging some of the tougher measures that the government should arguably be taking to accelerate decarbonisation efforts. As Sunak acknowledged there is a strong fiscal and environmental case for hiking fuel duty, but "many people still rely on their cars" and he is separately "taking considerable steps… to incentivise cleaner forms of transport". Translation: a fuel duty hike will come, but only when we can be sure cleaner forms of transport are in place that can allow motorists to switch without them being excessively penalised. The same calculations apply to the North Sea and other carbon intensive sectors. As a decarbonisation strategy it may be suboptimal, as a political strategy to avert a gilet jaunes style backlash and ensure the consensus around climate action sustains it makes a lot of sense.

The hope is clearly that the fast emerging clean technologies and low carbon infrastructure can become so compelling and competitive that the government can drive the net zero transition without having to grasp the nettle of likely controversial measures. It is arguably a high risk approach that may not deliver sufficiently rapid decarbonisation. It is also deeply frustrating that it is coming several years late and is still not being fast-tracked with sufficient urgency - the continuing absence of a sufficiently ambitious energy efficiency strategy in particular remains a scandal. But this approach could yet drive rapid green economic progress and a new era of deep emissions cuts and clean tech exports.

As CCC chairman Lord Deben noted, today marked "a realistic start". The big question now is whether the next phases in this strategy deliver at the requisite scale. Will Sunak build on his promise to get net zero done and ensure the promised fiscal stimulus is demonstrably green, or will the government prove too committed to returning to business as usual, in every sense?

The government and the economy is going to face unprecedented and deeply worrying pressures over the next few months. It needs to come out the other side with a compelling and credible net zero strategy in place or risk proving its critics right. Today provided an encouraging down payment on that strategy. Now Sunak must deliver.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Politics
  • Policy
  • Budget 2020
  • In-depth
  • Rishi Sunak
    • Policy
President Biden signs order confirming US return to the Paris Agreement
    • Policy
    • 21 January 2021
Credit: Biden-Harris Transition Team
Presidential possibilities
    • Editor's Blog
    • 21 January 2021
Joe Biden being sworn in as US President in Washington today | Credit: USA TODAY Network/SIPA USA/PA Images
    • Politics
'A cry for survival comes from the planet itself': Joe Biden issues climate action rallying call as he is sworn in as 46th US President
    • Politics
    • 20 January 2021
Extreme weather events and other climate-related threats remain the biggest risks facing the global economy, according to the latest Global Risk Report
    • Policy
Covid and climate: Annual Davos report raises alarm over escalating, intertwined risks facing the global economy
    • Policy
    • 20 January 2021
There are fears the UK will have to accept chlorinated chicken as part of a US trade deal
    • Policy
Trade Bill: MPs vote against greater post-Brexit trade deal scrutiny
    • Policy
    • 20 January 2021
West Cumbria Mining plans to build a new coking coal mine have faced widespread criticism from climate campaigners
    • Politics
'Slight tension': From coal mines to nuclear, new Business Secretary hints at delicate decisions at heart of UK's net zero ambitions
    • Politics
    • 19 January 2021
The Trade Bill is set to return to Parliament on Tuesday
    • Policy
Trade Bill: Business leaders and green NGOs urge PM to back greater scrunity of trade deals
    • Policy
    • 19 January 2021
Banque de France in Lille | Credit: Velvet
    • Investment
French central bank vows to cull coal and cap oil and gas investment by 2024
    • Investment
    • 19 January 2021

More news

'Giant opportunity': Why achieving a net zero emission supply chain could be cheaper than you think
  • Supply chain
'Giant opportunity': Why achieving a net zero emission supply chain could be cheaper than you think

Supply chain decarbonisation is possible at relatively low cost to consumers, World Economic Forum and Boston Consulting Group research suggests

  • 21 January 2021
Tesco issues €750m bond linked to science-based climate goals
  • Investment
Tesco issues €750m bond linked to science-based climate goals

Retailer issues its first sustainability-linked bond aimed at supporting efforts to reduce its Scope 1 and 2 greenhouse gas emissions

  • 21 January 2021
'Call to action': Are Business Schools failing the climate?
  • Management
'Call to action': Are Business Schools failing the climate?

A major new global study suggests Business Schools are more engaged than ever before with the sustainability agenda, but are they doing enough to prepare their students for the decades ahead?

  • 21 January 2021
President Biden signs order confirming US return to the Paris Agreement
  • Policy
President Biden signs order confirming US return to the Paris Agreement

World leaders, top businesses, and investors unite in welcoming new US administration's commitment to global climate action, as return to Paris Agreement is backed by raft of new green policy measures

  • 21 January 2021
blog comments powered by Disqus
Back to Top

Most read

Mars and DHL plot £350m UK logistics hubs to slash one million road miles
Mars and DHL plot £350m UK logistics hubs to slash one million road miles
Octopus Energy launches 'world's first' tariff to get cheaper when its windy
Octopus Energy launches 'world's first' tariff to get cheaper when its windy
UK housebuilders to face 'zero carbon ready' standard from 2025
UK housebuilders to face 'zero carbon ready' standard from 2025
Vauxhall faces mass action lawsuit over alleged emissions test 'cheating'
Vauxhall faces mass action lawsuit over alleged emissions test 'cheating'
Scaling up sustainable finance: How can investors accelerate the net zero transition?
Scaling up sustainable finance: How can investors accelerate the net zero transition?
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • Facebook
  • YouTube
  • Instagram

Incisive Footer Logo

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading