Green groups call for ‘bold’ Government action to ignite UK’s low-carbon transition

The UK Government can embed a "world class" low-carbon environment that could mobilise significant investment streams, but only if current policy gaps and mixed legislative signals are addressed with "bold" action.

That is the overarching view of the Future low carbon investment in the UK report, published today (16 November) by a group of leading NGOs, which claimed that the UK’s carbon plan and industrial strategy could generate billions in clean revenue streams if the Government sharpens policies in the low-carbon heat and transport sectors.

“Integrating the carbon plan and industrial strategy can unlock investment in the power, heat and transport sectors into the 2020s,” the report noted. “Public investment in such projects brings significant benefits to the UK. Alongside attracting private investment, low carbon projects generate jobs, improve health and increase the competitiveness needed to export the UK’s skills and knowledge to global markets.

“The government can address current policy gaps with supportive spending and policy decisions in this parliament that set a clear direction for the future.”

The report, produced by the Green Alliance, RSPB, WWF, CAFOD, Christian Aid and Greenpeace, claimed that “bold” action is need to stimulate the UK’s low-carbon transition. According to the report, clearer policies on renewables could attract around £47bn of investment between 2021 and 2026, while £8.6bn could be saved annually during the 2020s by retrofitting domestic buildings with heat efficiency measures.

The report praised past and existing UK Governments for creating strong policies for renewables, but noted that “unexpected” policy changes – such as reductions to Feed-in Tariffs, and a veto on onshore wind planning consent – had stunted confidence in the sector.

Despite cuts, the report suggested that continued policy certainty would enable the Levy Control Framework (LCF) – which places a £7.6bn cap on how much can be raised through green surcharges on energy bills – to shrink by two thirds beyond 2020 and allow renewables to be subsidy free by 2025.

However, the report did note that the funding under the LCF would have to continue until the 2025 timeframe, with funding levels for mature and emerging technologies in need of definition. Fortunately much of the needed funding could be facilitated through the latest contract for difference (CfD) auctions.

In total, the report suggested that the Treasury should allocate £2bn towards low-carbon power through next week’s Autumn Statement for post-2020 funding.

Can’t handle the heat

With the approval of the fifth carbon budget – which sets the UK on a trajectory to reduce emissions by 57% by 2032 compare to a 1990 baseline – now in place, the report urged the Government to revamp the heat and transport sectors, which it claimed are “lagging” behind.

The report warned that the Government’s “stop-start” approach to low-carbon heat – including changes to the Energy Company Obligation, scrapping the Zero Carbon Homes, and the poor uptake of the Green Deal – had led to stalled action and dampened investor confidence. Even the Renewable Heat Incentive (RHI) has suffered from a lack of political focus, the report noted.

Intotal, investment into domestic energy efficiency has dropped by more than 50% since its most recent peak in 2012. The £1.5bn spent in that year has now fallen to £0.7bn, despite the report claiming that retrofit measure could reduce energy bill savings by £ in the 2020s.

More than 4.5m homes could be pulled out of fuel poverty and the NHS could reduce costs by £1.3bn annually if the number of winter deaths related to poor domestic efficiency was reduced. The report recommended that ratcheting energy performance standards for new and existing builds should be introduced up to 2030.

Policy in the fast lane

In regards to the transport sector, the report claimed that technology is overtaking policy, as the deployment of ultra-low emission vehicles (ULEVs) reaches the “cusp of a step change”. Decreases to battery costs, longer range electric vehicle (EV) models and increased numbers of charging points are all accelerating the market, the report noted.

However, political certainty is “waning”, with the Government focusing on large infrastructure projects – such as the Crossrail in London – to boost public transport capacity while neglecting investment in other areas.

The report called that all new cars sold are ULEVs by 2030 at the latest, while vans, buses, HGVs and other vehicles are also subjected to a low-carbon evolution through road pricings, low-emission zones and tax reliefs.

The overall economic and social benefit of EVs, connected and autonomous vehicles could be in the region of £51bn per year by 2030, with the potential for 320,000 newly-created industry jobs if the Government acts now.

Matt Mace

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