‘A game-changer’: UK’s green economy leaders react to the Sixth Carbon Budget
Green groups and trade bodies have broadly welcomed the Climate Change Committee's Sixth Carbon Budget, headlined by a recommendation to cut annual emissions by 78% by 2035. But they want to see the Government act rapidly and boldly to prove it can deliver.
The Budget was published today (9 December) after much anticipation, covering the period between 2033 and 2037 and outlining how the UK can get on track for net-zero.
Its headline recommendation is for the UK to deliver a reduction in net annual emissions of 78%, against a 1990 baseline, by 2035. The UK was notably targeting an 80% reduction against 1990 figures by 2050 under the original Climate Change Agreement.
Delivering this decarbonisation, the CCC has warned, will require decisive policy action in the 2020s, matched with equal ambition from the private, public and financial sectors. Key focus areas include scaling up renewable electricity generation and improving grid infrastructure; decarbonising heat; promoting active transport and electric vehicles; restoring woodlands and peatlands; scaling up technologies like hydrogen and carbon capture and storage (CCUS) and making buildings more energy-efficient.
The CCC believes that meeting the budget will be “challenging” yet “feasible” – and that its recommendations for alignment will be popular across the UK.
Here, edie rounds up some of the key reactions to the Budget – described by the CCC as its “toughest yet”.
Dr Nina Skorupska CBE, chief executive, the Association for Renewable Energy and Clean Technology (REA)
“The headline from the Sixth Carbon Budget will be the 78% reduction in GHG emissions being brought forward by 15 years and that this can be achieved whilst supporting green jobs growth and an economic recovery. There are many additional and welcome elements within the report – the support for a range of bioenergy technologies and energy crops; the doubling of electricity generation which will all be low-carbon; and the restoration of peat landscapes and new woodland, are particular highlights.
“We do believe that more needs to be done with regards to the aviation sector and the heavy goods vehicle market for road transport. The plans to transition to low-carbon alternatives by 2050 and 2040, respectively, are too conservative to have a significant impact. We know that the Capex and Opex savings will balance out any short-term cost if there is the ambition to take action sooner.
“Nevertheless, this Carbon Budget does provide a basis from which the government can look to build their carbon reduction agenda. If we start reducing emissions today rather than tomorrow, we will have a far greater chance of avoiding global temperature rises and tackling climate change.”
Ana Musat, head of policy, the Aldersgate Group, said:
“The CCC has set a huge but feasible investment challenge for the UK economy for the next 15 years and one where the private sector will have to do most of the heavy lifting. This budget represents an opportunity for the UK to get the economy going again as it emerges from the Covid-19 crisis and to invest in innovation, grow supply chains and create jobs in areas such offshore wind, EV manufacturing, low carbon industrial goods, building renovation and green finance.
“As more countries take on net zero emissions targets, the export opportunities for the UK could also be significant: by 2030, the global market for low carbon goods will be worth more than £1trn a year, representing an increase of seven to 12 times on today, with the market for low carbon services growing in tandem.”
“To support the private sector in delivering the ambition of the sixth carbon budget on time and at low cost, the Government now needs to put forward a comprehensive net-zero delivery plan, which sets out clear policy signals for all key emitting sectors of the economy.”
Mike Thornton, chief executive, the Energy Saving Trust:
“We congratulate the Committee on the clarity, detail, and optimism of the report, and urge the government to adopt the recommendation for a target of a 78% reduction in carbon emissions by 2035. This report provides a world-leading route map to address the climate emergency. By setting out a comprehensive and clear process to replace all fossil-fuel infrastructure within 30 years, it provides the scale of ambition we need policymakers to commit to in full.
“Everyone will have a role to play and we all stand to benefit.”
Tom Greatrex, chief executive, the Nuclear Industry Association:
“The CCC’s recommendation that we should build enough new nuclear to replace the current fleet by 2035 is a good start, but we will have to build twice that amount to be on track for net-zero. Right now, we regularly rely on gas and coal for most of our power, and we need to replace all of it in the next 15 years.
“Replacing the current fleet should be the starting point, not the limit, of our ambition.”
Luke Warren, chief executive, Carbon Capture and Storage Association (CCSA):
“Today’s advice from the CCC is clear – to deliver net-zero across the UK economy, we need to be moving further and faster with emissions reductions from Carbon Capture, Usage and Storage.
“The Committee recommends an increase in the amount of CCUS that the UK must deploy in the next decade. The CCUS industry should now be aiming to store over 20 MtCO2 every year by 2030. This requires the UK to develop CCUS clusters in all our industrial regions. Industry is ready to deliver this ambition and is actively progressing work on the CCUS clusters, helping the UK to demonstrate to the world its commitment to tackling climate change whilst ensuring a green post-Covid recovery”.
Frances O’Grady, general secretary, Trade Unions Congress (TUC):
“To reach net-zero, we need a shared sense of national purpose. Everyone must understand how they will benefit from a climate-safe economy, clean air, healthy land, restored wildlife and new green industries.
“For working people, a just transition means knowing that job security and quality is guaranteed, with training for the great new jobs in green industries. This must begin quickly, to prevent mass unemployment following the pandemic. By fast-tracking public investment in green infrastructure, the government can create over a million jobs in the next two years.”
Chris Richards, director of policy, ICE:
“This budget clearly demonstrates the importance of infrastructure development in meeting the 2050 net zero-target. It also shows the scale of the action needed. Achieving such an ambitious target will require swift action from government, and industry alike.
“The first step in achieving that is setting out a comprehensive plan. While the recent National Infrastructure Strategy and Green Book are a start, making progress relies on a clear net-zero plan being developed, one that sets out how we pay for the transition, and the preferred pathway to decarbonisation. The CCC rightly recognises that the 2020s will be a crucial decade – our actions now will determine our successes in creating a net-zero future.”
Rebecca Williams, head of policy and regulation, RenewableUK:
“The CCC is right to urge Government to move faster to reach net-zero by taking a series of key steps which will benefit consumers by delivering cheap energy, as well as slashing carbon emissions.
“Low-cost offshore wind will play a major role as the backbone of our future power system with up to 140GW installed by 2050 – a fourteen-fold increase in our current capacity – and we also need a ramping up of onshore wind and innovative technologies like floating wind, tidal stream and renewable hydrogen to get there. The report highlights the fact that this will deliver tens of thousands of new jobs throughout the UK, especially including regions which need levelling up most, as part of the Just Transition from fossil fuels to renewables. As the report points out, certainty over consenting issues and auctions for contracts to generate power will help to increase investment in the UK renewable energy supply chain.
“Billions of pounds in investment by the private sector will help to achieve this. The CCC highlights the fact that this can only be achieved by Government enabling the construction of new grid infrastructure for offshore wind and ensuring that the planning system is improved by resourcing environmental bodies appropriately, as well as working closely with other sea users and addressing aviation radar issues.”
Clara Goldsmith, campaigns director, The Climate Coalition:
“The Government must accept this advice and unleash a decade of ambitious action to get on track to net-zero and give a turbo boost to our economic recovery. There is no downside to the Government embracing this plan. It can transform our society and create hundreds of thousands of green jobs. This is the leadership the UK must show ahead of the decisive UN climate summit we are hosting next year.”
Mike Childs, head of science, Friends of the Earth:
“This is too conservative given the havoc and misery extreme weather is already causing, particularly to the poorest people in the world who have contributed least to climate breakdown.
“Areas like energy efficiency and eco-heating are challenging but would come on in leaps and bounds with immediate and sustained investment. For example, heat pumps are a proven technology and we should be aiming to phase out the installation of new gas boilers well before 2030 and fitting approximately 10 million heat pumps by the same date. Rapid investment in training fitters and hiring new apprenticeships will get this done.
“It’s what government does right now that will determine if we meet our carbon pollution reduction goals. And what the government is doing is ploughing £27 billion into climate-wrecking roads as well as funding damaging fossil-fuel projects overseas.”
Dr Jonathan Marshall, head of analysis, the Energy and Climate Intelligence Unit (ECIU):
“These stretching targets will see climate policies increasingly overlap with everyday life, bringing changes in the cars we drive, how we heat our homes, and how the products we buy are made. The overwhelming backing among the British public for climate action, at both governmental and individual levels, means that these measures are likely to be popular and well-supported, as long as well-thought policies are used to bring about change.
“Setting targets is all well and good, but the next few years is key to whether we hit them or not. The Government is currently sitting on a slew of strategies, frameworks and plans that are tasked with decarbonising the economy; the recent increase in ambition only highlights the need for these to contain policies that match the rhetoric.”
Julie Hirigoyen, chief executive, UK Green Building Council (UKGBC):
“The advice on the Sixth Carbon Budget is a game-changer and the message is clear: if we don’t act decisively this decade, we will not meet our climate targets. The step-up in ambition being advocated by the CCC should be embraced by Government and will demonstrate leadership on the world stage ahead of COP26.
“A major nationwide investment programme as recommended by the CCC, led by Government but leveraging private investment, should focus on improving the energy efficiency of our homes and non-domestic buildings and decarbonising heat. The built environment industry is crying out for the clarity and long-term certainty that must be provided by the upcoming Buildings and Heat Strategy.
“We wholeheartedly endorse the CCC’s call for a robust definition of the Future Homes Standard in advance of 2023 and accelerated plans for a new in-use performance standard for commercial properties with all commercial efficiency renovations to be completed by 2030. The new recommendation that no home should be sold after 2028 without a rating of EPC C is a radical but welcome proposal and would send a clear message to both consumers and lenders.”
Harriet Lamb, CEO, Ashden:
“The CCC has recognised that we can get out carbon footprint down in time and meet the Sixth Carbon Budget if Government and local authorities work hand-in-glove.
“The new report features a sector summary for local authorities emphasising the critical, though often downplayed, role of local government.”
James Watson, head of decarbonisation, Osborne Clarke:
“The Sixth Carbon Budget will be key in helping to define the UK’s carbon reduction agenda. Many of our clients will be watching it closely to see what opportunities it will present, not least in the field of green finance.
“This Budget looks ahead to 2033-2037, but it will also act as an end goal which governments will have to work backwards from, especially as it seems likely that the targets set under the Fourth and Fifth Carbon Budgets will be missed.
Of particular interest from a compliance perspective will be the measures the government will need to take to drive change, either by way of carrots or sticks, or perhaps both. The announcement is, therefore, a key part of the UK’s transition towards a net-zero economy.”
Dr Matthew Lockwood, senior lecturer in energy policy, University of Sussex:
“Taking the long view, and looking at total costs and benefits, it is entirely feasible to meet the challenge. However, as the CCC analysis shows, benefits come later and investment costs rise sharply over the next seven years, and net investment costs will be running at £40-50 billion a year in the second half of the 2020s.
“A lot of investment will be undertaken by the private sector, but they will want a fast return, and ultimately need to be paid either by consumers or by the government.
“Increasing taxes to cover investment costs would be fairer, but there is also a strong case for using long-term public borrowing for at least a part of the costs, especially if increasing bills and taxes mean that keeping us on track to meet the 6th Carbon Budget becomes politically too difficult. Future generations will benefit from swift action in particular.”
Dr Richard Leese, director of industrial policy, energy and climate change, the MPA:
“It is positive to see these detailed recommendations…We now need to see a net-zero roadmap from Government which provides greater clarity for essential industrial sectors to help business plan ahead and ensure that the UK remains an attractive place to invest.
“The CCC’s recommendations are clear about the need for technologies like CCUS and it’s now critical that the Government develops a strategy for its deployment at scale as well as a package of financial support.
“The UK concrete and cement industry stands ready to support net-zero by 2050. We will build on the extensive early action that we’ve taken which has seen the sector deliver a 53% reduction in absolute carbon dioxide emissions since 1990 and decarbonise faster than the UK economy as a whole.”
Andrew Grover, CEO, Advantage Utilities:
“The need to decarbonise our economy is clear, and consumers are becoming ever more conscious of the rising cost of inaction. This will inevitably begin to factor into consumers’ buying behaviours so it pays for businesses to take a proactive approach and forge new business models that will be compatible with a completely low-carbon future. Equally, change will not occur overnight, and while we may not know all the steps that we must take to transition, we agree that it is a journey that we must begin now.”
Sanjay Neogi, head of UK and Europe, Enzen Group:
“The Sixth Carbon Budget highlights that the journey to net-zero will involve a significant transformation of our energy use. As such, we need a plan to match, with a clear end goal and the steps to get us there.
“We can clearly identify the pillars of change from heating and buildings to waste, transport and aviation. But the success of this transformation will depend on getting the details right. Crucially, we can’t make such changes in isolation and need a joined-up approach across all aspects of energy efficiency to ensure the transformation delivers maximum benefit.”
Jay Zoellner, CEO, Kiwi Power:
“To achieve a completely low-carbon system by 2035, as the CCC suggests, flexibility will be paramount. While it will be important to build new flexibility assets through hydrogen, storage, and interconnection, we must not overlook the significant role that businesses and householders can play. Further, this additional flexibility must be built hand in hand with renewable integration.”
Flemming Sørensen, VP of Europe, LevelTen Energy:
“It is encouraging to see the CCC’s clear recommendation for policies to ensure the energy transition is just and fair for all. Following the events of this year, businesses are taking a much deeper look at how they can positively influence social justice through the investments that they make including in renewable energy. New levers that will allow businesses to more easily achieve their social justice goals will be very welcome by corporate buyers and renewables developers alike.”
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