09 July 2020
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The government's commitment to a green recovery is a big step forward, but impatience is growing as green businesses continue to wait for key policies and spending decisions that have been in the pipeline for months
Veteran followers of economic statements will be familiar with the format. The Chancellor gets about halfway through their speech and then pivots to underscore their commitment to climate action, before announcing a handful of green policy measures.
They then return to their central argument and more headline-grabbing giveaways, as environmental groups prepare their reaction statements welcoming the latest policy moves while warning a bolder and more comprehensive plan is still urgently required. 'Next time,' everyone tells themselves, 'the big green decisions will come in the next Budget/Spending Review/Spring Statement'.
Over the years these green sections have tended to get longer and the rhetoric in support of climate action more committed. Meanwhile, those policy measures that have been announced have delivered tangible results, driving down UK emissions faster than any other G20 economy. But too often the Treasury's environmental pledges have felt like a bolt-on to the main event. And as a result the long-promised transformative net zero-compatible strategy has never quite materialised.
Hopes were running high that yesterday would be a little different. That the government is serious about engineering a 'green recovery', of delivering a step change in the UK's decarbonisation rate and establishing the UK as one of the world's premier clean tech hubs. But ultimately the same format applied.
Chancellor Rishi Sunak did at least nod to environmental aspirations, declaring that the government will deliver "a green recovery with concern for the environment at its heart". But then once again the accompanying policy measures singularly failed to match the rhetoric.
The trailed £3bn energy efficiency package was hugely welcome, even if questions remain over precisely how it will be administered and what will happen when the single year Budget is exhausted. Similarly, the new £100m fund for direct air capture R&D, support for zero emission vehicle innovation, and funding for greener courts and thousands of new jobs in nature recovery are not to be sniffed at. Green businesses will also welcome the new funding for skills programmes and incentives to bring back furloughed staff.
It is all good stuff and it is particularly encouraging to see the Treasury finally accept the argument for a more interventionist approach for driving energy efficiency improvements. But it does not add up to "a green recovery with concern for the environment at its heart". There was nothing on clean energy and smart grids, nothing on hydrogen and industrial emissions, nothing on aviation and shipping, nothing on electric vehicles and green buses, nothing on carbon capture and negative emissions, nothing on agricultural impacts and diets, nothing on green building standards and biodiversity offsets, nothing on green finance and corporate reporting, nothing on green VAT cuts and carbon levies, nothing on climate resilience and COP26.
In fairness, the government is working on policies and programmes that would deliver progress on all of these fronts. But evidently none of them were ready for public consumption today. We will have to wait a few more months yet.
Sunak has evidently calculated that no further macroeconomic moves are needed between now and the autumn to keep the embryonic recovery from advancing - that vouchers for double glazing and Nandos can keep things ticking over, giving him a few more months to gauge how big the spending blitz has to be to deliver the promised 'rebuild' phase.
This represents a big gamble both economically and environmentally.
Taking Sunak's pledge at face value it is reasonable to expect the autumn will finally see the emergence of a full spectrum green recovery package. A comprehensive programme that features the planned National Infrastructure Strategy, Energy White Paper, and Green Heat Strategy, as well as mooted increases in support for hydrogen, EVs, renewables, and a lot more besides. A vision that when stitched together puts the UK on track to meet its net zero emissions targets and provides the basis for a world-leading national climate action plan to submit to the UN before the year is out.
It is the promise of this long-awaited reward that meant most green groups yesterday resisted the temptation to criticise the gap between Sunak's bold environmental promises and limited new policies.
But be in no doubt that concerns and frustrations are growing. Many of the necessary policies have been in the pipeline for the best part of a year - a year during which the government's wider decarbonisation progress has been far too slow, according to the most recent Committee on Climate Change report.
Meanwhile, both Germany and France have already launched wide-ranging green stimulus packages and the EU yesterday unveiled a sweeping green hydrogen strategy to go alongside its fast-evolving multi-billion Euro Green Deal plans. Their plans are not perfect, but they have notably eschewed the phased approach of the British government, instead rushing to provide businesses and investors with confidence that multi billion Euro green recovery plans are being mobilised.
In contrast, British green businesses that are poised to mobilise billions of pounds of low carbon investment and create hundreds of thousands of jobs are asked to wait another three months for clarity on the scale and direction of the government's plans - a period which, as ever, will see another one per cent of the available time to build a net zero emission economy ebb away.
There are good reasons to hope that the wait for a truly comprehensive, net zero-compatible plan may be nearly over. Sunak's interest in a green recovery seems genuine and the Treasury has shown itself to be more radical in its policy thinking and more wary of long term risks than at any point in recent history.
And yet it is easy to understand why campaign group Plan B yesterday warned the government it is preparing legal action over the Ministers continued failure to adequately act on the UK's net zero targets. People are getting tired of waiting.
A version of this article originally appeared in the BusinessGreen Overnight Briefing newsletter, which is available to all BusinessGreen subscribers.
