Alongside the much-anticipated Net Zero Strategy, 20 supporting documents were published by the Government just days before COP26 kicks off. From the Heat and Buildings Strategy to the Treasury’s Net Zero Review, from the consultation on phasing out fossil fuel heating for homes and businesses off the gas grid to research papers on behaviour change – there are close to 2,000 pages to make your way through as the UK seeks to demonstrate leadership. To save you time and your personal energy, Naomi Harris gives her top takeaways.
The Strategy meets legal, political and communications objectives
This Government has consistently underlined its support for the transition to Net Zero, but some argue it has – until now – failed to meet the legal obligation of the 2008 Climate Change Act requiring it to set out proposals and policies that would see the UK meet the five yearly carbon budgets. By publishing the Net Zero Strategy, the Government has met this obligation. The proximity of the Net Zero Strategy’s publication to the start of the COP26 also puts the UK in a position of leadership as it can say that it has met requirements set out in the Paris Agreement and seek to chivvy other countries along to do the same. Whether it can do so is another question, but the Government now speaks from a position of greater credibility.
We’re still waiting for a lot of detail
It is a definite step in the right direction, but questions remain as to whether it and its supporting documents are strong enough to meet the sixth carbon budget that takes us close to 2040. The Heat and Buildings Strategy is a case in point. Heating our homes and businesses is responsible for 20% of the UK’s emissions so cutting into this is vital if we are going to meet Net Zero. Delayed by a year, there was an expectation that the contents of the Strategy would set out a panoply of bold actions. It did not. It announced £450 million in funding over three years to give people up to £5,000 to put towards a heat pump. Friends of the Earth calculate this will pay for just 90,000 heat pumps (on top of the 200,000 already installed), and it won’t go towards covering the cost of insulation or new radiators. To put that into perspective, the Government’s target is for 600,000 heat pumps to be installed every year. A decision on meaningful support for hydrogen was put off until 2026 – much to the disappointment of the gas network operators.
The Treasury gave the green light on principles, but flashed amber on payments
HMT started its review of the transition to Net Zero in 2019 and its final report this week confirms that the cost of inaction is far greater than action. It also reflects on the limitations of its own modelling – noting that the cost of technology had fallen far faster than anticipated. That is not to say that the brakes are off when it comes to public spending. Rather than reaching for lever of public borrowing to pay for policies outlined in the Strategy, the Treasury expects private sector investment to increase to £90 billion – noting that the UK’s investment levels are the lowest in the G7. Funding was reserved for kick-starting innovation in heat pumps, supporting the exploration of direct carbon capture and storage, and promoting supply chain development.
This is just the beginning with bumps in the road expected
With the strategy now published we move into action. Electricity Market Reform 2.0 is on the cards with changes to Contracts for Difference and new finance models expected, while the consultation on moving levies from electricity on to gas and phasing out oil and gas tanks for off grid homes are likely to draw significant political and media scrutiny as the Government seeks to decarbonise without penalising billpayers. These are just two examples from what is going to be a busy agenda of policy development over the coming months.
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