Deep retrofits, community energy and net-zero stress tests: Green Alliance publishes Covid-19 recovery recommendations

Green Alliance has issued a string of policy recommendations for creating a "green and resilient" Covid-19 recovery package, which, if enacted in full, could close the £14.1bn annual investment gap between current levels of finance and those needed to meet net-zero by 2050.

The UK's recovery package is due imminently, with Boris Johnson having repeatedly assured that its measures will create a greener economy

The UK's recovery package is due imminently, with Boris Johnson having repeatedly assured that its measures will create a greener economy

The think-tank’s ‘Blueprint for a Resilient Economy’ briefings warn that the Government will fail to meet its 2050 net-zero target and to create a national economy that is resilient to future systems shocks unless it transforms its processes for investing in infrastructure.

Since 2017, the briefings state, the Government has invested more than £9bn in high-carbon transport infrastructure. A further £8bn of procurements in roads, airports and shipping is also earmarked for this Parliament, with no “green strings” currently attached. This second figure is likely a conservative estimate, given that Ministers have not published specific information on all projects due to begin after 2021.

When buildings, nature and heavy industry are added to the mix, the UK Government’s annual spending is currently £14.1bn below the levels needed to meet short, mid and long-term climate targets, Green Alliance warns.

In order to change this trend while dealing with the economic fallout of the Covid-19 pandemic, Green Alliance concludes that departments across Whitehall must collaborate to strengthen digital infrastructure, improve energy efficiency in both the domestic and business spheres, bring more renewable energy generation and supporting infrastructure online, increase investment in low-carbon transport and bolster policies around nature restoration.

As an overarching requirement for all of these sectors, the briefing urges, the Government should publish the National Infrastructure Strategy “without delay”. The Strategy was due to be published in March, alongside the 2020 Budget. The Treasury claimed that the delays would allow civil servants to ensure that the framework is net-zero compatible but, given the long life-cycle of major projects, green groups have voiced concerns that any significant delay could undermine that aim.

Green Alliance is also calling for all aspects of the recovery package to be “stress-tested” against net-zero requirements – a process which could be undertaken by the Committee on Climate Change and the Office for Budget Responsibility. A survey of the members of the UK's Climate Assembly, who were chosen to resemble the national population in terms of both social demographics and views on environmental issues, found that almost eight in ten want net-zero alignment embedded in all facets of the upcoming Covid-19 recovery package.

Specific recommendations

On energy efficiency, the briefing recommends that £300m is earmarked for a pipeline of “deep” retrofit projects for social housing – enough to account for 40,000 properties. Domestic suppliers should be contracted to complete this work wherever possible, in order to ensure maximum benefits for the national economy. A further £1bn should be allocated by central Government, the devolved Governments and local authorities for energy efficiency improvements in homes, and be backed by a further £3.5bn from the private sector.

Such investments should be complemented with VAT breaks for renovations and a mandate for all building operators to disclose in-use energy performance publicly. Stronger policies for digital infrastructure could support these aims.  

On renewable energy, the briefing states that “a more strategic approach” is needed to ensure that, as generation capacity grows, so does supporting infrastructure. Teams working on the electricity sector’s decarbonisation should collaborate more closely with those working across heat, transport and heavy industry. While noting the UK’s success in bringing large-scale projects online, Green Alliance warns that more must now be done to support community energy projects and assets which allow for greater flexibility. On the latter, 5.5GW of energy storage capacity should be installed within a decade.

The briefing notably cites previous research by National Grid, which concluded that 117,000 new jobs could be created and hundreds of thousands more safeguarded if the UK Government implements holistic plans for a net-zero energy system.

“Investment in infrastructure that is both aligned with the UK’s net-zero emissions goal and delivers wider environmental benefits provides more and faster economic and social benefits than higher carbon alternatives, helping to get people back to work in the short term and building low-carbon capacity into the long-term,” the briefing summarises. “Public and private finance should be mobilised to create the building blocks for a resilient and green future.”

On this point, recent research from McKinsey concluded that for every $10m (£8m) invested by a Government in energy efficiency, 77 jobs could be created. For investment in renewable generation technologies, the figure stands at 75 jobs. In comparison, funnelling $10m into fossil fuels would create just 27 jobs.

Boris Johnson is expected to lay out the fundamentals of the UK’s Covid-19 recovery package in the coming days. Meetings to debate and confirm the specifics will then begin in July.

The Environmental Audit Committee (EAC) has just launched a fresh inquiry into the measures which should be included in the package to ensure that it is truly "green". The Committee will scrutinise the impacts of specific funding pots and policies unveiled in the plan in the future. 

Sarah George



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