Grant Shapps declares ‘we need to combat the idea that it costs you money to go green’, but campaigners insist government is failing to deliver policies that could curb energy costs

The government has this week quietly stepped up its defence of its net zero strategy in the face of growing criticism from some of its own MPs who are attempting to erroneously argue that climate policies are driving up energy bills, despite ample evidence it is soaring wholesale gas prices that are to blame.

COP26 President Alok Sharma used his first major speech since the Glasgow Summit to insist that there was “no connection” between the net zero agenda and the gas price crisis, arguing the turmoil consuming energy markets was due to “macroeconomics and geopolitics” and should be tackled through an increased build out of renewables and nuclear that could secure domestic supplies of clean energy. “Domestically the answer to cutting emissions, keeping bills under control and ensuring security of supply, is to continue to build out our world-leading offshore wind sector and invest in nuclear and hydrogen, as the government is doing,” he said.

He also offered a message that appeared to be directed at the Chancellor, arguing that the economic costs that would arise from unchecked climate change meant “anyone who believes in fiscal responsibility should baulk at the idea that we would laden future generations with such unsustainable levels of avoidable debt”.

His comments were followed today by the publication by the Bright Blue think tank of an interview with Transport Secretary Grant Shapps in which he similarly argued that efforts to decarbonise were not to blame for recent inflation. “We need to combat the idea that it costs you money to go green,” he said. “It doesn’t need to, and in fact, it can actually be good value for money as well. There’s a lot of pressure at the moment on energy bills and we know they’re very high. When you shift your tariffs to a zero-carbon tariff, you might think it is going to cost you more. In fact, it’s very easy to find some of the best and cheapest tariffs on the market which happen to be the ones that come from renewables and nuclear, not from fossil fuels.”

He added that electric vehicles (EVs) provide a further example of how a switch to clean technologies can help reduce costs for households and businesses. “They are still a bit more expensive to buy, but I was out looking at cars the other weekend with my wife, and the price differential is really coming close,” he said. “Once you factor in relatively little servicing as well, EVs compete.”

Shapps said he had now been driving an EV for two and a half years and “it’s never been in for service”. “I’ve had no engine oil changes, no petrol, far fewer parts to go wrong, no road tax, no Ultra Low Emission Zone charges in London, or wherever else new schemes are coming into place,” he added.

And he rejected arguments from some critics of the UK’s net zero strategy that it is pointless trying to decarbonise domestically when large developing economies like China are seeing their emissions rise. “I don’t believe that China and other countries are going to sit on their hands,” he said. “China is going great guns with the electrification of cars, because they never led in internal combustion engine vehicles, they jumped at it and they’re starting to export … Batteries come from there, and they are going to be doing their bit on this faster than most people appreciate.”

However, the government’s defence of its climate strategy came as WWF today published a major new report, which concluded that Ministers had last year squandered the opportunity to cut emissions in the short term and in the process bolster the UK’s energy security and curb energy bills.

The campaign group released the latest edition of its Net Zero Test, which assesses the government’s spending plans against a net zero compatible decarbonisation scenario. It reviewed the spending and investment decisions announced in the 2021 Autumn Budget and Comprehensive Spending Review, and concluded that very few of the “climate-positive” policies will deliver emissions reductions in the short term.

“In fact, on balance, the package is expected to drive up greenhouse gas emissions by 38.4MtCO2e over the next four years,” WWF said, given policies designed to curb emissions are set to be undermined by £55bn of spending on high-carbon, “climate-negative” policies, like investment in new roads and the cut to air passenger duty for domestic flights.

“Ultimately the Net Zero Test concludes that the overall spending package has the potential to reduce net emissions by 745 MtCO2e, but only over a 25-year period, and assuming future spending moments align with net zero,” the report said. “This reduction is less than 12 per cent of what would be needed to bring the UK into line with the Climate Change Committee’s Net Zero Pathway.”

It added that even where ‘climate positive’ were adopted the emissions impact of longer-term investments was difficult to quantify, especially given much of the government’s net zero strategy is focused on research and development projects.

“The science is clear: without urgent action we face climate catastrophe,” said Isabella O’Dowd, head of climate change at WWF. “The latest UK government spending package was a missed opportunity to prioritise the deep, rapid emissions cuts we urgently need and instead risks relying on technologies of the future to drive down emissions.”

She added that there was compelling case for the government to apply a net zero test to all spending and policy decisions. “Adopting a Net Zero Test will help to lock in a climate-positive trajectory as well as improve transparency, ensuring future public spending adds up to a greener future,” she said. “Investing to cut emissions as quickly as possible is also cost effective, reducing our reliance on volatile fossil fuels, creating green jobs and increasing the UK’s resilience to the physical and economic impacts of climate change.”

WWF’s report echoes a number of similar analyses, which argued that the Budget and Spending Review – delivered on the eve of the COP26 Climate Summit – offered surprisingly little support for the government’s net zero strategy. Ministers have delivered a wave of policies that have helped drive the rapid growth of the renewables and electric vehicle industries, but campaigners fear that efforts to decarbonise buildings, industry, and agriculture, in particular, are badly off track.

And a separate report today from the Regulatory Assistance Project (RAP) warns that the government is failing to maximise the savings households could enjoy from energy efficiency measures, despite evidence that a combination of energy efficiency regulations and policies are already saving the average household around £1,000 a year. The report joins a growing library of studies showing how a properly funded suite of energy efficiency policies could slash domestic energy bills, drive economic growth, reduce emissions, and enhance UK energy security.

Ministers may be mounting a robust and welcome defence of the government’s net zero strategy, but they would find it easier to neutralise some of their colleagues’ criticism if the Treasury had delivered more of the proven policies and programmes that can help reduce energy bills and gas imports.

Want to find out more about how the net zero transition will impact your business? You can now sign up to attend the virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.

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