Conservatives should welcome the new carbon budget as a step towards a market-led net zero

This week, the Climate Change Committee (CCC) has published its seventh carbon budget (CB7). This technocratic-sounding document guides how the Government should approach the next phase of climate action and sketches the shape of our economy in 2040.

Greg Hands

In recent years, many Conservatives have worried that carbon budgets have become too bossy and interfering. It’s true, their advice started to lean too heavily on greater state intervention, taxes, and regulation to get people and businesses to go green.

But, CB7 marks a significant shift in a more market-led, less prescriptive direction. It isn’t perfect, but it does recognise the need to go with the grain of human nature if we’re to bring the public with us on tackling climate change and address their legitimate concerns about net zero. After all, people will not accept giving up their simple pleasures, whether jetting off on holiday or eating what they want.

As someone who helped bring forward the legislation for CB6, our party must not jump the gun and outright condemn the CCC, their recommendations, or the entire carbon budget process. That is what Reform UK will do – but we are the official Opposition, not a protest party looking for a quick headline.

Kemi Badenoch is right about how our party recovers – we need honesty, reflection, and renewal. We have to take our time and work out what our party stands for and against.

That also means carbon budget seven and, indeed, the policies for getting to net zero. But we should remember what the carbon budgets are and why our party supported their creation.

Conservatives have endorsed all the previous six carbon budgets, even legislating most of them into law.

And we did this because our party recognised the significant importance and opportunity of having a clear and stable policy direction, making it easy for businesses to invest in. This, in part, enabled us to harness previous carbon budgets to establish and grow new green industries which now contribute £83 billion a year to our economy by unlocking investment and promoting innovation.

Private investment built the four biggest offshore wind farms in the world which helped improve our energy security; we can and should go further with new renewable and nuclear projects which will only bolster our energy independence. It will help our nation with mitigating and adapting to climate migration, food insecurity, and extreme weather events that will impact our communities.

Although we have had a cross-party agreement on the goal of stopping climate change, we must have vigorous debate about the path to net zero. As all conservatives can agree, we cannot just throw taxpayer money at arbitrary targets and hope to reap the rewards.

We need a conservative, market-led approach that is backed by a credible plan and led by private investment. Only with such an approach will we be able to decarbonise without imposing excessive costs on consumers and businesses, and damaging our economy.

There is a lot to appreciate in this carbon budget. Yes, they have ambitious goals to switch to heat pumps, but only once people’s gas boilers break down and with government support to help lower the upfront cost. They think that up to 90 per cent of the transition will be privately financed. And they aren’t dictating what will be on people’s dinner tables, but simply accounting for consumer trends.

That doesn’t mean we should simply accept the advice on the seventh carbon budget. When there are suggestions that are fundamentally unconservative, we shouldn’t be afraid to challenge them. We must make sure we do not simply offshore our emissions by over-regulating or over-taxing our industry.

We have to ensure it is elected politicians who are accountable to the public, rather than quangos, who decide climate policy. And we should ensure the Government sets out an honest plan for meeting CB7 before parliament votes on the target. But what should be of interest is the CCC’s analysis that net zero could save households money, but only if electricity prices come down.

The UK already has the highest industrial electricity prices in the world. Having promised households £300 off their energy bills during the election campaign, we should use the CCC’s advice to hold the government’s feet to the fire over their reckless pledge.

Labour’s arbitrary 2030 target for clean power is going to make the situation even worse. The only way to achieve this deadline is to pay whatever it takes for developers to build new infrastructure, damaging competition and locking in high prices.

CB7 isn’t perfect. Conservatives shouldn’t be afraid to offer an alternative to reaching net zero that grows the economy, makes us more secure, and creates a cleaner world whilst not bankrupting the economy and disrupting people’s lives.

But, it’s also an opportunity to hold Labour to account for their failures to control crippling electricity prices.

First published by ConservativeHome. Greg Hands is a former Chairman of the Conservative Party, and a former MP for Chelsea and Fulham.