Net-Zero Strategy ‘achievable and affordable’ but policy gaps need addressing, CCC notes

The Government's Net-Zero Strategy is an "achievable and affordable" means to reaching its legally binding climate target, but some policy gaps still need to be addressed, according to the Climate Change Committee (CCC).

Net-Zero Strategy ‘achievable and affordable’ but policy gaps need addressing, CCC notes

The CCC warns that some “strategic gaps” exist

Last week, the UK Government finally published its Net-Zero Strategy, a comprehensive run-through of how the nation will decarbonise in a way that “transforms every sector of the global economy”.

The 368-page document outlines how spending will be prioritised to deliver job growth while reducing emissions from transport, power, heavy industry and the built environment. The Strategy claims this will support up to 190,000 jobs by 2025, and up to 440,000 jobs by 2030, and leverage up to £90bn of private investment by 2030. However, some green groups don’t believe the Strategy provides enough clarity to outline how decarbonisation will be achieved.

The CCC, which advised the Government on setting the net-zero target for 2050, had today (26 October) welcomed the publication of the strategy through a new independent assessment of the Net Zero Strategy.

The CCC claims that the Strategy is an “achievable, affordable plan that will bring jobs, investment and wider benefits to the UK” and is broadly in alignment with reaching net-zero by 2050 and delivering a 78% reduction in emissions by 2035 as part of the Sixth Carbon Budget.

The CCC’s chairman, Lord Deben, said: “The Net Zero Strategy is a genuine step forward. The UK was the first major industrialised nation to set Net Zero into law – now we have policy plans to get us there. As we welcome world leaders to COP26 in Glasgow, that is an important statement.

“Until now, only the CCC had offered a path to Net Zero. Now we have the Government’s own plan for meeting the UK’s emissions targets. Ministers have made the big decisions – to decarbonise the power sector by 2035, to phase out petrol and diesel vehicles, to back heat pumps for homes. And they have proposed policies to do it. I applaud their ambition. Now they must deliver these goals and fill in the remaining gaps in funding and implementation. My Committee will hold their feet to the fire, as we are required to under the Climate Change Act. This is the UK’s climate governance working as it should.”

Strategic gaps

The CCC warns that some “strategic gaps” exist, namely that not all sectors have clear plans and pathways to tackle emissions. Agriculture is one such sector lacking clear decarbonisation plans, with the CCC calling for Defra to oversee the delivery of a credible decarbonisation strategy that also aims to improve biodiversity across the sector.

Additionally, the CCC claims that plans to scale-up heat pumps through the Heat and Buildings Strategy remain at an “early stage” and the Committee has called for plans to be introduced to improve household energy efficiency, especially for the 60% of UK households that are owner-occupiers but not in fuel poverty.

The CCC did express concern that the Net-Zero Strategy places less focus on reducing demand for high-carbon activities, such as travel and eating habits, than under previous CCC advice. The Committee believes that implementing such measures will assist with wider technological efforts to decarbonise.

Earlier this year, the CCC proposed a full “nest-zero test” that would outline how different areas of Government and planning are aligned with net-zero. The latest strategy does not take this into account and the CCC warns that there is a risk that planning decisions will be made that are incompatible with the net-zero target.

The CCC also commented on the Treasury’s Net-Zero Review, which stated that the “cost of inaction “significantly outweighs the costs of action”. The Committee notes the unclarity in the Treasury’s review as to how the tax system will be used to support the net-zero transition.

The Review found that revenues from Fuel Duty and Vehicle Excise Duty (VED), amounted to £37bn in 2019-20 – equivalent to 1.7% of GDP. As fossil fuels are phased out in the UK, revenues from these mechanisms decline, with the Treasury noting that most tax receipts from these activities declining near to zero over the next 20 years, leaving receipts lower in the 2040s by up to 1.5% of GDP.

Additionally, the Treasury notes the introduction of carbon pricing mechanisms – most notably through the UK’s own Emissions Trading System – won’t be enough to offset these losses in tax revenue.

Matt Mace

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