Green light for the green recovery?

It's not… It's not… actually going to happen, is it?

Over the past week the government's most senior figures have all gone out of their way to signal that climate action will be right at the heart of their imminent economic recovery plan. The Prime Minister has highlighted the need to 'build back better', the Business Secretary has warned the world faces a stark choice "between laying the foundations for sound, sustainable and inclusive growth or locking in polluting emissions for decades to come", and the Chancellor has let it be known he wants to engineer a "green industrial revolution" that can create thousands of new jobs.

The Times reported today that offshore wind, carbon capture, and green skills programmes are all set to be at the heart of a multi-billion pound stimulus package that is set to be unveiled next month. Sources indicated that the plans would go beyond the green measures promised in the Conservative Manifesto, which pledged to deliver £9bn for domestic energy efficiency upgrades, a huge increase in renewables capacity, and a major national tree-planting programme, among a raft of other measures designed to put the UK on track to meet its net zero emissions target by 2050.

This is extremely good news. It is hard to work out what the argument against an explicitly green stimulus would be, and thankfully Ministers have not gone out of their way to manufacture one. Instead, they appear to have accepted that the compelling economic, political, and environmental rationale for a green recovery package are so obvious that it would be madness to resist the growing calls from businesses and the public for bolder climate action.

Green infrastructure projects are 'shovel-ready', labour-intensive, and result in good and rewarding jobs. They are spread right across the country, promise to bolster exports, and offer high multiplier effects, putting money in people's pockets and creating jobs in the supply chain and beyond. They improve energy security, reduce air pollution, and boost climate resilience. They are hugely popular with the public, frequently cost effective, and a viable route to restoring Britain's battered reputation and fraying international alliances in the run up to the globally critical COP26 Climate Summit. You can quibble over the details, but there is no good reason for not delivering one of the boldest green stimulus packages the world has ever seen.

However, for all the welcome rhetoric from Johnson, Sunak, and Sharma there are three reasons for green businesses to keep the champagne on ice, while they continue to make the argument for not just a climate-focused stimulus, but a genuinely effective one.

The first is that even if the promised package is bigger than that promised in the Conservative Manifesto it does not necessarily mean it will be big enough. The Tory manifesto was a huge and welcome step forward for UK climate action, but it offered less investment and a slower pace of decarbonisation than that proposed by the other main Parties. Even now as the government promises to do all it can to avert the worst recession in decades, fears remain that the Johnson and Sunak may still succumb to their deficit hawk instincts.

The case needs to be made long and loud that this is no time to nickel and dime the projects that could avoid a depression and remake the UK along sustainable, high tech lines. Every suggestion that we need to avoid loading debts onto our children needs to met with the response that our children stand to benefit the most from a habitable and stable climate and are happy to foot a bit of the bill; our children don't want their parents to get locked in spirals of unemployment and don't want to face the decades-long social trauma that the fracturing of the social contract can lead to; our children don't want to enter a workforce staring down the barrel of interminable post-imperial decline, they want to build back better.

Second, stimulus spending focused on warmer homes, cleaner energy, electric vehicles, carbon capture, and enhanced natural environments is welcome, but it will not put the UK on track to meeting its net zero goals if it is accompanied by a continuing failure to tackle high carbon industries. Canada has made government support contingent on companies committing to proper climate risk disclosure, Air France has had to end some short haul routes and sign off on an ambitious green aviation plan in return for its government loan. In the UK there appear to have been no 'green strings' to date and Ministers are in talks with the auto industry about a scrappage scheme that manufacturers are arguing should not offer preferential grants for low emission vehicles. There is no point helping someone make their home more energy efficient, only to make it easier for them to buy an SUV.

If the government wants to deliver a genuinely effective green stimulus package it needs to be extremely innovative in how it targets support and it needs to resist calls to prop up polluting business models that have to change over the next 10 years regardless.

Finally, funding alone is not enough. Stimulating strategic green industries such as carbon capture, EV charging and active travel infrastructure, sustainable buildings, battery manufacturing, smart grids, and advanced R&D through cold hard cash is of critical importance. Such programmes will create jobs, drive innovation, and cut emissions. But there is a huge amount more the government could be doing through standards, energy network codes, regulatory mandates and reforms, green finance mechanisms, climate risk disclosure rules, streamlined planning rules, and clean energy auctions. The Brexit trade deal the government once promised it would deliver would also massively boost investor confidence, as would the mooted plans to deliver a net zero compatible emissions trading scheme and a green farming subsidy regime.

On all these fronts, the past five years has seen progress edge forward at the proverbial snail's pace, as civil service capacity was eaten up by the Brexit juggernaut, even before the coronavirus crisis. Today's refusal of planning permission for a major offshore wind project that had to wait 18 months for a decision is the tip of an iceberg of glacially paced Ministerial deliberation and repeated delay.

The net zero transition needs investment, but it also needs sustained political urgency and policy stability. Which is why the biggest barrier to a successful green stimulus remains the government's on-going struggle to get a real grip on its response to the pandemic and provide businesses and the public with clear assurances that the country is truly ready for the recovery phase of this crisis.

The green rhetoric from Numbers 10 and 11 is hugely encouraging. It suggests that something good might yet come from this awful episode. But having made the decision to place climate action at the heart of the recovery, the onus is now on the government to deliver.

A version of this article originally appeared in the BusinessGreen Overnight Briefing email, which is available to all BusinessGreen subscribers.

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