IPPR: UK Government must spend £33bn annually to combat climate and nature crises
The UK Government is allocating just £4bn annually to initiatives designed to reverse nature loss and tackle climate change, when the scale of the challenges requires some £33bn.
That is according to a new report from think-tank IPPR, published to mark what would have been the start of COP26 in Glasgow before Ministers opted for a one-year delay in light of Covid-19.
The report states that there are multi-million or even multi-billion-pound gaps between the Government’s decarbonisation-related funding provided to many of the highest-emitting sectors.
While welcoming recent investments in walking and cycling infrastructure, low-carbon aviation and electric cars, the IPPR touts a £10bn annual investment “gap” in the transport sector.
The report also highlights that the Government is spending just one-quarter of the funding needed annually to align domestic heat with net-zero by 2050. This finding chimes with recent research from the UK Energy Research Centre (UKERC), which found that the rate of government-supported upgrades to home heating systems is just one-fifth of what is needed by 2035.
Other sectors analysed include nature restoration – which the IPPR argues should receive £4.7bn annually – and heavy industry. On the latter, the Government has committed to fully decarbonising at least one industrial cluster by 2040. This has spurred a race between clusters in the North West, Teesside, Humberside, Grangemouth, South Wales and Southampton to become the first to do so. The IPPR estimates that an upfront investment of £1.5bn annually is needed to scale up key technologies in this space, including green hydrogen production and refuelling and carbon capture and storage (CCS).
As in previous policy briefings, the IPPR reiterates the importance of allocating funding in a way which supports a just transition to net-zero – supporting the most vulnerable groups and providing positive social outcomes. It has been proposing a Just Transition Fund and the creation of a central investment bank with decarbonisation as a core remit.
“Making future-proof investments that tackle the climate crisis can boost business, generate jobs and provide people with income security,” the IPPR’s senior economist Carsten Jung said.
“The UK can prove that an enduring, strong economic recovery is feasible if only we grasp the plethora of business opportunities in low-carbon products and services. So, the Prime Minister must back his ambitious words with real investment commitments. So far only about a tenth of funds needed for the clean investment revolution has been made available.”
In light of the fact that this week would have seen the start of COP26, Johnson is reportedly planning to unveil his ten-point plan for a green recovery later this week.
The Prime Minister unveiled the first facet of the plan, a £160m pot to support the offshore wind sector, a month ago. Plans to announce the other nine steps have been delayed due to the Cabinet’s work to introduce the three-tier system for Covid-19 and, latterly, a second national lockdown for England.
Media outlets had reported that Johnson was also set to confirm support for hydrogen production and infrastructure; CCS; low-carbon synthetic fuels for aviation; small modular reactors and electric vehicles. On the latter, he is expected to bring the ban on new petrol and diesel car sales forward for a second time, to 2030.
The Guardian has speculated that the plan may also contain fresh measures for low-carbon domestic heat and for reforestation.
Aside from the plan, businesses and green groups are waiting on several key policy packages related to the net-zero transition. The Environment Bill, for example, is returning to Parliament this month. Also anticipated by the end of 2020 are the National Infrastructure Strategy, the Energy White Paper and the Heat and Buildings Strategy.
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And where’s that money going to come from? Oh yes us taxpayers