Public Accounts Committee unveils scathing assessment of UK’s net zero strategy

MPs on Parliament’s Public Accounts Committee (PAC) have today provided a withering assessment of the government’s Net Zero Strategy, claiming the UK still has no clear plan for how the transition is to be funded, nor how much decarbonising the economy could cost consumers and businesses.

Despite taking two years between enshrining the 2050 net zero target into the UK statute book in 2019 and producing its formal Net Zero Strategy late last year, the Committee said the government still has “no clear plan” for how to fund the net zero transition, nor how to replace income from fuel duty and other forms of pollution-based taxation as more drivers switch to electric cars and the economy shifts towards cleaner infrastructure.

It also criticised the previous government for “stop-start strategies”, which it said could undermine confidence for business, investors, and consumers in committing to measures which could reduce CO2 pollution. Over the past decade the government has repeatedly cut subsidy schemes earlier than expected, leading to boom and bust cycles in the deployment of clean technologies and energy efficiency measures. Similarly, just last year the government axed its flagship Green Homes Grant scheme just months after hailing it as a critical component of the UK’s economic recovery package and decarbonisation plans.

The PAC also called on the government to work more closely with local councils on developing regional climate plans, carrying out environmental assessment for all decisions, and funding a major upskilling of workers to enter the expanding green economy workforce.

PAC chair, Dame Meg Hillier MP, said the government’s Net Zero Strategy lacked answers for businesses on how it plans to fund the transition to net zero over the next 30 years, and who could be most heavily impacted.

“Government is relying heavily on rapidly changing consumer behaviours and technological innovations to drive down the costs of green options, but it is not clear how it will support and encourage consumers to purchase greener products or incentivise businesses and drive change,” she said.

“Every government department has a responsibility for delivering policies towards the target of net zero but two years after enshrining the ‘Net Zero’ by 2050 target in law, the government has unveiled a plan without answers to the key questions of how it will fund the transition to net zero – including how it replace significant income from taxes such as fuel duty,” Hillier added.

Hillier said the government’s strategy for delivering net zero should unite central and local government, as well as regulators, consumers, and businesses.

“A top-down strategy from government won’t deliver on its own,” she stressed. “There is a risk that a series of disconnected initiatives announced by central government will not bring about the changes that are now set out in law.”

It marks the second intervention this week alone that has accused the government’s Net Zero Strategy of lacking the policy detail and scale of support needed to sufficiently accelerate decarbonisation efforts across the economy. Just yesterday, the CBI urged the Treasury to use the upcoming Spring Statement to unleash a more ambitious suite of green policy support and funding measures, arguing such moves were urgently needed to both get the UK on track to meet its climate goals and boost productivity and growth in the wake of the pandemic and the face of the energy crisis unleashed by Russia’s attack on Ukraine.

In its assessment of the Net Zero Strategy last year, independent advisory body the Climate Change Committee similarly warned that crucial gaps still remained throughout the plan, but nevertheless described the Strategy as “ambitious and comprehensive”. Campaigners similarly gave the strategy a mixed welcome, praising the overarching focus on decarbonisation and innovation, but warning that there was still insufficient clarity on how to decarbonise key parts of the economy, such as buildings, industry, and farming, and on-going concerns over how the transition will be funded.

Responding to the PAC’s findings today, a spokesperson for the government pointed to its track record of slashing emissions 44 per cent since 1990. It also said the Net Zero Strategy promised to support up to 190,000 jobs in the mid-2020s and up to 440,000 jobs in 2030.

“Gas prices are at record highs, so we need to move away from expensive gas,” the government said. “The more clean, cheap and secure power we generate at home – like renewables and nuclear – the less exposed we will be to expensive gas prices set by international markets.”

However, today’s PAC report will play into an increasingly fierce debate within government and business on how to accelerate the net zero transition and harness it to bolster energy security in the face of the renewed threat from Russia.

On the one hand, observers fear the Russia-Ukraine war risks distracting from the need to accelerate climate action and bolstering calls to ramp up domestic fossil fuel production. On the other, a growing band of Ministers from the Prime Minister down have repeatedly stressed how a more accelerated clean energy and energy efficiency programme could both slash emissions and energy imports, helping to curb Russia’s revenue streams and influence over energy markets in the process. Which side of the debate wins out looks set to determine the pace and direction of a net zero transition, which as the PAC today highlights, is still moving much too slowly.

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.

Leave a Reply

Your email address will not be published. Required fields are marked *