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Three net zero announcements that can make Green Day a success

Net zero will be at the forefront of the government's agenda this week as ministers prepare for a so-called 'Green Day'. It has been billed as the moment Sunak's administration will revitalise our net zero plans, which is sorely needed both environmentally and economically. Without bolder plans to accelerate the UK's net zero transition, we risk missing our climate targets and falling behind in the green industrial revolution. It is time to move our country's net zero policies up a gear.

If anyone was asleep at the wheel and unaware that urgent action was needed to limit global warming to 1.5C, the recent Intergovernmental Panel on Climate Change report was a wake-up call. The UN report underlined the enormous scale of the challenge and how we are still not yet turning the corner globally on emissions.

For the few remaining sceptics who believe that UK climate action is pointless as we only emit one per cent of the world's emissions, it's worth remembering we're already seeing the increasingly damaging consequences of climate change in our country. We will face rising sea levels and more frequent and intense extreme weather events, like heat waves, droughts and flooding.

With the consequences of climate change increasingly visible and early leaders like the UK showing other nations that you can decouple emissions from economic growth, more and more places are entering the race for green industries. While we were on the front foot as the first major economy to enshrine net zero in law, we now risk falling behind.

The USA's Inflation Reduction Act, which offers around $370bn in tax breaks and handouts to win green investment, has intensified the competition. The EU's response of loosening state aid rules means the race to attract new clean industries and develop technologies will be even tighter. While the UK has enormous advantages, from existing clean industries and geography, technological know-how and skilled workforces, we haven't yet stepped up our offer to business.

It's against these twin environmental and economic challenges that 'Green Day' comes. With tight national finances, ministers will look for meaningful steps that don't break the bank. But in many ways, ambitious environmental action is the key to solving our economic problems. The two goals go hand in hand. Accelerating the transition to cheap, clean, homegrown renewables and insulating homes is the key to halving inflation and strengthening our energy security. Attracting investment into net zero industries through planning reform and tax breaks will create a fast-growing, more productive economy which levels up the country and generates better-paid jobs. To achieve these goals, ministers should make three net zero announcements this week to make 'Green Day' a success.

Firstly, it's time ministers unveiled the details of the Zero Emission Vehicle (ZEV) mandate, which is due to be introduced in less than a year. This mechanism will require car manufacturers to sell increasingly more electric vehicles in the lead-up to 2030 when the sale of new fossil fuel cars ends. It will drive the transition to electric vehicles and raise car manufacturers' ambition to design, develop and build many more EVs, bringing down the costs for families and businesses.

Getting this policy right is critical to tackling climate change. Transport accounts for almost a quarter of the UK's greenhouse gas emissions, of which privately owned cars contribute the largest proportion. But it's also about encouraging UK car manufacturers to switch production over to EVs by growing the domestic market, safeguarding automotive jobs for the long term. The key is ensuring the mandate is fast enough to prepare our country for 2030's phaseout of the sale of new petrol and diesel cars, and pushes car firms to cut their prices to sell more EVs.

Secondly, the government should unveil a price stability mechanism to scale up the UK's sustainable aviation fuel (SAF) industry. It can cut aviation emissions by up to 70 per cent, meaning building a thriving SAF industry is crucial to achieving 'jet zero'. But like renewables firms, SAF producers need a Contracts for Difference (CfDs) scheme to guarantee a long-term price, so they have the confidence to invest. This subsidy should be industry-funded, through phasing out airlines' free carbon permits. It will help ensure the UK leads the development of this technology and builds the factories to create the fuel here - and in the process, create as many as 6,500 well-paid jobs. Learning from the success of British renewables, which have rapidly scaled up and come down in price due to CfDs, this scheme will ensure the UK stays competitive in the face of US and EU subsidies.

Finally, clean electricity is at the heart of any credible strategy to reach net zero, meaning ministers must accelerate the UK's renewable ambitions again. In the face of increased international competition for renewable investment and high costs due to inflation, ministers must ensure the UK remains attractive to investors. It is a tall order, as we don't have the financial power to win a subsidy trade war. Still, ministers can boost investment by removing planning hurdles that mean it takes up to 13 years to build an offshore wind farm and scrapping the de facto ban on onshore wind turbines today. Making the full expensing policy permanent, so renewables firms can deduct new energy investment from their corporation tax bill, would also help with increased costs and attract investment into the clean energy we need.

Achieving net zero will require the entire economy to transition to clean technologies, but while these suggestions only cover some of the necessary transformations, they will help get the UK on track. 'Green Day' will certainly not solve every challenge in reaching net zero over the next 30 years. However, it is an opportunity for the government to recommit itself to net zero, plug policy gaps and respond to emerging challenges which threaten to derail our net zero goal. If we see action on these three points, I think we can conclude we are a step closer - with a long way to go - to reaching net zero.

First published by BusinessGreen. Lynsey Jones is the Conservative Environment Network's Senior Climate Programme Manager.


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