The Conservative Party leadership race is fuelling fears the government could dilute its decarbonisation efforts - such a move would amount to a catastrophic economic and strategic error
Predictions at the moment feel like even more of a mug's game than usual. But after a frenetic first weekend of the Magical Thinking Steeplechase that is the Conservative Party leadership race (first prize a crash course in economics 101), here are a few things that are likely to happen in the coming weeks.
With the gap between many of the leading candidates on fantasy uncosted tax cuts, inhumane asylum policies, and their complicity in the last six months of rolling scandals as slender as Boris Johnson's sense of propriety, climate policy, net zero, and how to respond to soaring energy bills will become critical issues in the leadership election.
The two candidates who have come out explicitly against the UK's net zero target - Suella Braverman and Kemi Badenoch - may or may not be joined by others, but all the candidates will be forced to map out some sort of position on how they would respond to the interlocking climate and energy bill crises. Unlike the 2019 leadership election, there will be no cosy consensus where all the top candidates look to highlight their commitment to bolder climate action.
Braverman and Badenoch will double down on one of their key points of differentiation with the other candidates, while at the same time recognising that full blown climate scepticism is no longer much of a vote winner, even amongst the Tory Party's ageing membership. As such, we'll hear more about the "better ways" of tackling climate change that somewhat bizarrely do not involve pursuing net zero emissions, which Badenoch hinted at in her Telegraph interview over the weekend. There will be lots of talk about the power of innovation and market-led approaches to decarbonisation, although there will be very little talk about how you actually catalyse said innovation or impose higher carbon prices to drive investment. There will be proposals to "pause" the transition to net zero emissions, rather than scrap it altogether, so the UK can invest in fracking before then decarbonising at a more 'responsible' pace at an undefined point in the future. Proposals to cut VAT on energy bills and move green levies into general taxation will help create the misleading impression that suspending net zero is easing pressure on domestic energy bills, even as bills keep climbing.
This marginally more defensible rationale for rolling back near-term climate ambitions will provide more moderate candidates with cover to try and woo climate sceptic and culture warrior MPs by promising a dilution, rather than a full-blown ditching of net zero policies. Policies such as the heat pump roll out, the 2030 end date for the sale of new petrol and diesel cars, energy efficiency funding, green farming subsidy reforms, the fracking moratorium, and the rapid roll out of renewables capacity could all be under threat. Those candidates who remain in favour of such policies will do their best not to talk about them, for fear of alienating Conservative Party members.
There is a distinct possibility that the final two candidates that will be presented to the circa 150,000 Tory Party members who will select our next Prime Minister will include one candidate who wants to broadly keep the current climate and environmental policy regime - which the Climate Change Committee and Office of Environmental Protection both recently concluded is horrendously underpowered - and one who wants to delay and dilute action to decarbonise our economy on multiple fronts on the spurious grounds the UK cannot afford such luxuries. Adherence to the manifesto they were all elected on will be a minor consideration.
It cannot be said often and loudly enough that these arguments are, not to put too fine a point on it, economically and environmentally illiterate bullshit.
There is a school of thought that to argue with soft climate sceptics about the wisdom of the UK's net zero strategy is to howl into the void, while only drawing attention to their misinformation. Better to challenge candidates to come up with credible policies to tackle the fuel poverty crisis that is looming this winter, which will almost inevitably have to involve steps to enhance energy efficiency and boost domestic clean energy generation.
Such a challenge is important - this campaign cannot simply focus on reckless tax cuts and culture war posturing when an all too real economic and energy security crisis looms. But a failure to properly defend both the principle of the net zero transition and the practical policies required to deliver it would represent a high risk and short-sighted strategy. If parts of the Conservative Party wants to draw battle lines over the most important long term economic, environmental, and security issue facing the UK then it is important to win that battle.
To that end, the premise that underpins the attacks on net zero - that it is unaffordable and the driving force behind soaring energy bills - needs to be rejected at every turn. Braverman needs to be challenged to explain precisely how net zero is a drag on growth and asked how scrapping the UK's net zero target would make her constituents any better off. Badenoch needs to be asked to explain what actual changes to climate policies she has in mind.
Is the plan to repeal the Climate Change Act and quit the Paris Agreement? Do these candidates want to axe green levies on energy bills and scrap all interim clean tech deployment targets? If so, how exactly and what would they do about the resulting impact on investor confidence? How much do they expect such disruptive moves to save households? Have they read the comprehensive reports detailing the costs and benefits of the net zero transition? Will they be calling an election to get a mandate for plans that tear up one of the key economic planks of the last manifesto?
The reality - the reality that polling repeatedly shows the vast majority of the voting public recognises - is that recent increases in energy bills are driven almost entirely by surging gas prices. Ditching the UK's net zero strategy so as to boost gas production in the North Sea, revive fracking, and curb clean tech support mechanisms would have a negligible impact on energy bills, and, as with the previous attempt to 'get rid of the green crap', would lead to higher bills and leave the UK reliant on expensive fossil fuels for longer, even before you consider the climate impacts.
'Axing' green levies on energy bills would actually be a progressive move that many green groups would support, but it would only save households around £150 on bills that are soaring due to spiralling wholesale gas prices. And these levies are impossible to scrap altogether without breaching long term contracts with green energy suppliers and axing funding for domestic energy efficiency schemes. They would have to be funded through general taxation. Is this what Braverman, Badenoch, and others have in mind? In which case how do they plan to fund it, especially if the leadership race turns into a competition to see who can cut taxes fastest?
Blaming net zero for soaring energy bills is to blame the one strategy that can reduce energy bills in both the short and long term for a crisis it is not causing. It is a level of about-face logic entirely of a piece with the 'natural party of government, business, and sound finances' (citation needed) electing its third leader in six years while promising uncosted tax cuts and the further dismantling of already crumbling public services.
The only way to tackle fuel poverty this winter and beyond is to invest in energy efficiency improvements, advise people on how to use less energy, ramp up clean energy capacity to reduce reliance on gas, push through market reforms to limit the influence of high wholesale gas prices, and, if such moves are still insufficient, cut VAT on energy and provide more targeted support to the poorest households.
Similarly, on the industrial and infrastructure fronts, what does a pause in the net zero transition actually look like in practice? Fewer charge points for the soaring numbers of electric vehicle owners that the embattled auto industry has bet its future on? Further delays to the carbon capture and hydrogen projects that the UK's industrial hubs expect to secure their future and create hundreds of thousands of highly skilled jobs? A continuation of the Common Agricultural Policy that we were told was one of the worst things about EU membership? An increased reliance on imported gas and all the high costs and energy security risks that go with it? Cuts to innovation budgets and demonstration projects that could establish the UK as a world leader in everything from green steel to smart grids?
Candidates flirting with a dilution of the UK's net zero strategy need to challenged to explain precisely what programmes and policies they want to cut. They should then be asked to justify how short-term savings that would amount to a rounding error in the national accounts would be worth the resulting demolition of investor confidence and undermining of UK competitiveness. They should also be asked how they intend to bolster climate resilience if they don't want to accelerate decarbonisation efforts - people sweltering in new build homes that are not fit for purpose would like to know.
More important still, the terms of reference for this upcoming debate cannot be set by that small band of MPs who do not think climate change is a problem. Given the Climate Change Committee just warned the UK was badly off track to deliver on its emissions goals, the questions posed of candidates should not be 'will you ditch or defend net zero targets', but rather 'how are you going to accelerate efforts to deliver on net zero targets?'
Candidates will spend the next few weeks invoking sun lit uplands, promising to fix the problems created by the past three Conservative Party leaders, and asking what sort of economy we want to build for the future?
One of the strengths of Boris Johnson's campaigning was that he recognised the answer to that question lies in net zero and levelling up. That clean technologies and green infrastructure would not just cut emissions, but would also create jobs, improve health, boost economic competitiveness, generate pride in local communities, reduce energy bills, enhance energy security, generate trade, and provide the UK with a vital role on the international stage as an exemplar low carbon economy for others to follow.
The many, many businesses that want to see net zero retained as the UK's core long term economic policy understand absolutely that with over 90 per cent of global GDP covered by net zero targets, with China positioning itself to dominate global renewables industries, with the EU adopting targets to switch to EVs and decarbonise the continent, with Silicon Valley betting on clean tech as the next big thing, the UK risks marginalising itself by failing to embrace this green industrial revolution.
The vision being proposed by Braverman, and flirted with by others, is of a UK economy run on coal mines and fossil gas and internal combustion engine factories and dirty boilers, at a time when the world's most competitive economies are working to 'electrify everything' through clean technologies, and even petrostates are investing billions in renewables and hydrogen.
Finally, as Lord Goldsmith and Chris Skidmore pointed out today, if the candidates to become the next Prime Minister can not be convinced of the economic wisdom of climate action they should simply look at the polling. In both the Red and the Blue Wall the environment is a top priority. In multiple marginal constituencies from north to south, green jobs are the big economic bet for the next decade and sewage overspills are on the front page of the local papers. There is no surer way to turbocharge tactical voting among the now large majority of voters who want a change of government than demonstrably deprioritising action on the environment. Just ask Scott Morrison.
After a decade of flatlining wage growth and political turmoil, the UK is once again at a crossroads. With the prospective breaching of international laws, the repeated devaluation of the currency, and the adoption of GOP-style culture war antics and fever dream economics, the UK is at real risk of choosing a path that takes it out of the top tier of geopolitical powers. The other path - one fixated on repeating the UK's 19th century position as industrial and technological trail-blazer, just this time without all the colonialism and pollution - could finally bring an end to the years of post-imperial decline and provide the country with both a cleaner, healthier, and happier economy, and a clear sense of 21st century purpose.
It is mad this debate is now playing out against the backdrop of a record-breaking heatwave, which like all such heatwaves now is climate-induced, and the Kremlin using fossil fuel supplies as a weapon of war. But it apparently still needs saying that ditching or pausing the net zero transition is not an act of bold leadership. It is to reach for the comfort blanket of 20th century technologies and economics in a world that has changed beyond recognition and is now staring down the barrel of a borderline existential climate crisis. It is to condemn the UK to irrelevance and insecurity. And that is one of the safest predictions you can make.