Net-zero emissions and a Green New Deal for the UK: Key business questions, answered

The climate strikes have created a unique backdrop for Government to raise ambitions

The UK has a well-versed rhetoric when it comes to combatting climate change. Trawl through any major climate-related speech from the likes of Greg Clark, Claire Perry and – less frequently – Prime Minister Theresa May and the facts begin to repeat themselves.

Since 2012, the carbon-intensity of UK electricity has fallen by more than twice that of any other major economy, it has decoupled and decarbonised at a faster rate than any other G20 country and there are already more than 400,000 jobs in the UK’s low-carbon economy.

However, the UK’s self-proclaimed “world-leader” title in the area of climate policy is slowly beginning to stagnate. Estimates suggest the nation is off track to hit its fourth and fifth carbon budgets by about 10% and climate activist Greta Thunberg has criticised historic approaches to “mind-blowing historical carbon debt” and “very creative carbon accounting”.

Against a backdrop of climate strikes and Extinction Rebellion protests, the UK is entering a potentially transformational and defining week for climate policy.

Firstly, the CCC will provide highly anticipated advice on how the UK could realistically enshrine a net-zero target into UK law, with a report set to be released on Thursday (2 May). At the same time, calls for the UK to discuss the creation of a Green New Deal in order to combat a “climate emergency” continue to simmer, gaining popularity amongst green organisations and politicians alike.

Ministers will also meet this week to discuss whether Central Government should declare a “climate emergency”. Led by Labour leader Jeremy Corbyn, MPs will be urged to discuss the issue or explain why they refuse to do so – a bold move considered the current furore around climate change.

With this in mind, edie has explored how the UK can set a new gold standard for climate change policy through both a net-zero target and a Green New Deal, as well as looking at the benefits that these ambitious new targets could usher in.

What is a net-zero target?

A “net-zero” target is a somewhat vague terminology. It refers to reaching net-zero carbon emissions by a selected date, but differs from zero carbon, which requires no carbon to be emitted as the key criteria.

Net-zero refers to balancing the amount of emitted greenhouse gases with an equivalent of emissions that are either offset or sequestered. This should primarily be achieved through a rapid reduction in carbon emissions, but where zero carbon cannot be achieved, offsetting through carbon credits or sequestration through rewilding or carbon capture and storage needs to be utilised.

—- READ THE NET-ZERO EXTENDED DEFINITION HERE —-

What is a Green New Deal?

The Green New Deal movement has been around for over a decade, but has recently hit mainstream media following Democratic congresswoman Alexandria Ocasio-Cortez’s intentions to create a US iteration of the deal. While her first offering was unanimously rejected by senators, the movement has picked up pace, notably in the UK.

The Green New Deal focuses on a new approach to economic prosperity that guarantees decent work, ownership and democracy across sectors, by placing society and the planet at the heart of all key policies and growth opportunities. It encapsulates all the requirements of a net-zero target, but does so by focusing on societal prosperity. 

In the UK, a Decarbonisation and Economic Strategy Bill has been tabled, which aims to place duties on the government to “decarbonise the economy and to eradicate inequality”. Specifically, it calls for a ten-year economic and public investment strategy “that prioritises decarbonisation, community and employee-led transition from high-carbon to low and zero-carbon industry and the eradication of inequality”.

It also calls for the Government to report on its implementation of the strategy, and for higher environmental standards for air, water and green spaces, as well as protecting and restoring natural habitats.

—- READ THE GREEN NEW DEAL EXTENDED DEFINITION HERE —-

Who supports these policies?

Advice on a net-zero target is being published by the CCC on Thursday (2 May), and was specifically requested by Government officials following a host of business, academic and green economy experts clamouring for a target to be set that raised the UK’s climate ambitions.

More than 100 MPs have now signed a letter calling on Prime Minister Theresa May to establish a net-zero emissions target for 2050, while a group of business and civil society leaders, including Paul Polman, Christiana Figueres, Sir Richard Branson and Arianna Huffington have called for a similar target to be set at an EU level.

As for the Green New Deal, Green Party MP Caroline Lucas and Labour’s Clive Lewis put together the Bill to draw focus on the issue of climate action – and with the hope that they could begin to sow the seeds of a potential revolution across climate change legislation.

Although it is a long way from becoming official government policy – and is yet to even be formally acknowledged by the Conservatives – the Decarbonisation and Economic Strategy Bill is the culmination of momentum on holistic climate action legislation.

Young Labour activists have already created a Labour for a Green New Deal group – and since Lewis is a shadow minister for sustainable economics, it is likely that a variant of the policy could feed into a future Labour manifesto. Additionally, Plaid Cymru are behind a “Rebalancing” GND for Wales, which includes proposals for investment in clean energy plants, green infrastructure and transport work.

Where are we now?

Under the Climate Change Act, the UK is currently targeting an 80% reduction in emissions by 2050 against a 1990 baseline. This covers all sectors, although international aviation and shipping are measured on a territorial basis. Emissions in 2017 were 43% below 1990 levels, while the economy grew by two-thirds. However, if the territorial approach was replaced, it is believed that total emissions reductions are closer to 10% since 1997.

The target was based on advice from the CCC, which considered the impacts of climate change in relation to limiting global temperature rise “to, or close to, 2C”. However, following the report from the Intergovernmental Panel on Climate Change (IPCC) in October 2018, the necessity for a net-zero target has been made clear.

Net-zero emissions by mid-century would create a reasonable chance of limiting global warming to 1.5C – the more ambitious target of the Paris Agreement. The UK would, therefore, fulfil its commitment to the Global Accord through a net-zero target.

For the Green New Deal, it has been confirmed that the Bill will get a second reading in parliament, but strategies are already in place looking to improve air quality, green spaces and rewilding. However, certain parts of the UK breached annual limits for air pollution during the first month of the year in 2019, suggesting new policies would need to be created.

Things look slightly more promising for the UK’s approach to biodiversity. The most recent Spring Statement included a major global review into the economic value of biodiversity, including the financial risks of its decline and rewards of its stewardship. The review will examine the economic benefits of biodiversity on a global, national and local level, and to determine the most cost-effective and environmentally sustainable interventions which could be taken to protect nature.

Ahead of the review, Hammond has pledged to introduce clauses to the upcoming Environment Bill which will require all developers to generate biodiversity net-gain through all projects in the UK and overseas territories.

By aligning environmental stewardship to social prosperity, the UK has a unique opportunity to strengthen its contributions to the Sustainable Development Goals (SDGs). The UK Government announced in October 2018 that it would finally launch a voluntary national review into UK contributions towards the SDGs. The reviews are generally used by nations to outline policy areas that can be strengthened to mobilise multi-stakeholder action towards the Goals.

It has been estimated that the UK is only performing well on 24% of targets considered relevant to the domestic delivery of the Goals.

What needs to change?

For net-zero, the short answer is pretty much everything. The UK has created strong foundations for decarbonisation, particularly in the power sector, but it is widely believed that a lot of the long-term propositions either lack tangible targets or need to be pushed forward.

The UK is still struggling to implement plans to decarbonise the national heat systems, and solutions such as hydrogen and heat pumps have only been backed by regional pilots.

The built environment has been urged to look at lifecycle emissions as part of any net-zero agreement and currently accounts for around 40% of global greenhouse gas emissions.

UK policies are also in place to transition to zero and low-carbon emission vehicles, but the 2040 deadline to ban sales of new diesel vehicles has been constantly criticised by green groups urging that the deadline be brought forward.

Efforts to decarbonise in highly emitting industries will likely focus on carbon capture and storage (CCS), but the UK has scrapped large-scale demonstration projects in the past and is yet to implement any national policy. BEIS has outlined plans to deliver a major CCS project in the UK by the mid-2020s, but this is unlikely to be enough to spur rapid decarbonisation.

Aviation, shipping and even heavy goods transportation will all need to be addressed. While the latter transport method can benefit from both electrification and the use of hydrogen, shipping and aviation are the laggards of the climate movement, with innovation only just starting to disrupt the market. However, it remains unclear whether the UK will have to remove its “territorial” accounting process when it comes to emissions in these areas.

The UK is also at a crossroads regarding its ability to offset emissions through carbon trading. The EU emissions standards and trading need to be replaced with a stronger equivalent if Brexit goes ahead, and the UK will be excluded from participating in the EU Emissions Trading System (ETS) in a no-deal scenario from the withdrawal date. Ministers have proposed a new carbon-emissions tax, which combined with the Carbon Support Price, creates a combined cost of £34/t, higher than the current EU ETS price of £22/t.

As for the Green New Deal, many of the stumbling blocks will appear around establishing higher environmental standards for air, water and green space and to protect and restore natural habitats.

The Environment, Food and Rural Affairs, Environmental Audit, Health and Social Care, and Transport Committees have published a joint report castigating the UK Government’s Air Quality plan – launched in 2017 – for failing to treat air pollution as a national health emergency.

The Air Quality Plan includes a ban on all new petrol and diesel cars and vans from 2040 and a £255m fund to help councils crack down on emissions. The report argues that the UK Government has failed to produce a plan that adequately addresses UK air quality levels, which breach the World Health Organisation (WHO) recommended guidelines across 44 towns and cities.

Regarding biodiversity, the Green Alliance has claimed that 70,000 hectares of new woodland will need to be planted each year, alongside banning peatland burning and promoting low-carbon and regenerative farming practices, in order to combat climate change.

The US version of the Green New Deal has also been criticised by the Conservative Environment Network (CEN), which includes environment secretary Michael Gove. The director of the CEN, Sam Richards, called the US version of the GND “a divisive and counterproductive socialist platform”, and told think tank the Green Alliance that bringing such a concept to the UK would damage consensus politics on the environment.

Will this become reality?

There is little information on what will happen next following the publication of the CCC’s report, but against the backdrop of the climate protests, the UK Government has an ideal opportunity to appease public concern in the short-term by backing the recommendations.

The Financial Times has already shed some light that the CCC will recommend the net-zero target for 2050 – the same timeframe as existing climate goals and that implementation will reduce the UK’s GDP by 2% at the most – which again aligns to estimates for the current Climate Change Act.

The CCC has previously claimed that bettering the approach to the fourth and fifth carbon budgets would pave the most cost-effective pathway to net-zero, so ministers may instead decide to focus on those intermediate targets before rolling out a fully fledged net-zero strategy.

Notably, Prime Minister Theresa May has confirmed that the UK will be joining 18 other countries that have committed to reaching net-zero emissions by 2050 at the earliest through the Carbon Neutrality Coalition. The 19 members of the Coalition have now adopted a Plan of Action.

As for the Green New Deal, Labour’s Ed Miliband, the Green Party’s Caroline Lucas will launch the Environmental Justice Commission today (30 April), set up by the IPPR.

The Commission aims to combine expertise from business, activists and academia to create policies and roadmaps that not only help will the acceleration of the net-zero target, but also set up the parameters for a Green New Deal.

While the Bill is set for a second reading, it is unclear whether it will act as an add-on to an official net-zero target that sits within BEIS, or is propositioned across all departments, including Defra and the Treasury.

Matt Mace