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Sam Hall: Competing in the net zero age


Sam Hall, CEN Director

Within the conservative movement, political support for net zero has remained remarkably resilient over the past year. Despite two changes in prime minister, an energy crisis, and the surging cost of living, the UK’s climate goals are unchanged. And notwithstanding some delays due to political events, progress towards net zero has continued.


But new domestic and international challenges are intensifying, as the UK plots the next stages of decarbonisation. That’s why, yesterday, the Conservative Environment Network held a conference on competing in the net zero age. Featuring speakers from across the conservative movement and green business, the conference sought to generate arguments and policy ideas for a conservative route to net zero. The conference looked at three types of net zero competition.


First, the political competition between the Labour Party and the Conservative Party to win voters’ trust on climate - consistently a top five issue for the British public. With Labour pledging to borrow an additional £28 billion a year to finance green projects, the Conservatives need to show how a more market-based, private sector-financed approach can achieve rapid emission cuts. There can be no opting out of climate change for conservatives - the science, the politics, and the economics demand a response.


In his keynote, the Energy Minister, Graham Stuart set out the Conservative pitch, highlighting several climate policy successes from the party’s time in government. For example,the Contracts for Difference auctions that have lowered the price of new renewable energy projects and the energy efficiency schemes that have raised the share of the housing stock that is well insulated. He also championed the new climate policies under development, from the new funding schemes for carbon capture and low-carbon hydrogen, to the plans to accelerate offshore wind deployment.


But elections are about the future, not the past. So on its own, the historical record and existing commitments are unlikely to be sufficient to win the argument that the Conservatives are best placed to tackle climate change. Inevitably a party of the centre-right is going to favour a lower subsidy route to net zero than a centre-left one, but the specifics of a Conservative response to Labour’s £28 billion-a-year are not yet clear.


Second, the competition of ideologies within the conservative movement over how to deliver net zero. Some conservatives argue for a more interventionist approach that channels subsidies towards domestic green industries in order to maximise new jobs. Others champion a more free market approach that argues for tax breaks and planning liberalisation to reach net zero at the lowest cost. Of course, net zero is far from the only policy area where this debate is raging. Nor is the party bound to pick a single approach. It can and likely will draw from both.


Balancing these competing conservative tribes is challenging when making the case for net zero too. The conference heard how different arguments for net zero can appeal to different segments of the Conservative voter coalition. For ‘Established Liberals’, net zero is a moral imperative and scrapping it is the top issue which would stop them from voting Conservative, while ‘Loyal Nationals’ want the government to tackle threats like climate change and create good-paying, purposeful jobs. Where there is disagreement on the goal itself, panellists also stressed the importance of conservative environmentalists engaging with climate action sceptics, rather than ignoring them.


This ideological competition plays out in the contrasting styles of recent Conservative leaders. While Boris Johnson was an evangelist for the green industrial revolution and favoured a more interventionist approach, and Liz Truss was more of a free market environmentalist, Rishi Sunak hasn’t yet set out his stall on net zero since entering No.10. Panellists expressed hope that the Prime Minister would take the opportunity of the upcoming government net zero announcements to articulate his preferred approach in more detail.


Speakers gave him some inspiration on the main themes he could highlight, drawing on some of his core traits as a politician: harnessing innovation and technology; using market forces to unlock more private investment in the transition; and getting into the weeds to fix complex policy challenges like the lack of grid connections. However, a technocratic approach to net zero is unlikely to capture the public imagination, so a big vision and eye-catching goals are needed too. Perhaps something explicitly net zero-related might feature in the next iteration of the PM’s five priorities.


Finally, international competition for green investment. The USA’s Inflation Reduction Act has fired the starting gun on a green subsidy arms race. With the EU set to announce a response and China continuing to pour money into green technologies, the UK’s head start in sectors such as offshore wind looks at risk. Our ability to win investment in new sectors, like battery manufacturing, looks shaky too, especially following the collapse of Britishvolt.


It was widely acknowledged in the conference that, even if we wanted to, the UK wouldn’t be able to match the scale of the Americans’ green spending. And in fact, the IRA was described by various participants more as the Americans catching up rather than overtaking us. But it was agreed some kind of response is necessary if we’re to avoid capital flight and secure green investments that are important for maintaining support for the net zero transition, particularly in our industrial heartlands.


A host of policy ideas were put forward throughout the day to help the UK ‘box smart’ and deliver its climate targets without resorting to unaffordable subsidies. These included: enhanced capital allowances for energy companies reinvesting profits into new clean generation; a stamp duty rebate for homeowners that retrofit energy inefficient homes after purchase; planning reform to enable new onshore wind farms in England where there is community support, supported by community benefit packages; a more anticipatory approach from Ofgem to building out new grid infrastructure; transferring more powers and resources to local leaders to attract new net zero investment to their areas; and creating clear, long-term regulatory frameworks for emitting sectors that can unlock private finance in clean solutions.


With a revised Net Zero Strategy due soon, and the Energy Bill about to reach the House of Commons, there were plenty of ideas that ministers could adopt immediately to strengthen UK climate policy. But the conference also exposed the need for longer term thinking from conservatives about our approach to net zero, how we communicate it to our voter coalition, and the policy solutions. We also have to get more comfortable talking about the bits of net zero that aren’t energy-related, such as transport, farming, and industry. CEN is keen to play a key role in convening and shaping these debates across the conservative movement as we head towards the next general election.












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