The key green policy gaps for the UK Government to close in 2024

The past year witnessed a significant regression from the Government’s commitments toward achieving net-zero emissions by 2050. This regression was evidenced by substantial rollbacks on critical net-zero policies including a five-year postponement on the ban for new petrol and diesel car sales, delaying the implementation.

Similarly, the ban on oil boilers in off-grid homes, initially slated for 2026, has been rescheduled to 2035. Moreover, proposals for introducing new energy efficiency regulations for homes by 2025 were altogether discarded.

Further exacerbating concerns, the expansion of oil and gas licensing amplified dissatisfaction within the green economy.

The conclusion of the year witnessed a last-minute shuffle within the cabinet, resulting in a new lineup for crucial positions such as the Environment Secretary, Transport Minister and Housing Minister, and highlighting the potential for shifts in approach and prioritisation.

With expectations of an imminent general election looming on the horizon, edie has compiled a wishlist of green policies. These policies encapsulate the crucial areas where the Tory Government has fallen behind, signalling areas ripe for urgent attention and action.

1) The Land Use Strategy

The Land Use Strategy, which was expected to be released by the end of March last year under the Environment Act, is still pending publication by the Department of Food and Rural Affairs (Defra).

This delay has raised concerns as the strategy is crucial in outlining the UK Government’s approach to fulfilling its commitments in areas such as food security, promoting healthier diets, nature restoration, housebuilding and commercial development.

Various committees of Lords and MPs have recommended the formulation of this strategy. It is intended to address multiple priorities without creating conflicts among them.

The Royal Society, in a published paper last year, argued that the government might be spreading finite land resources too thin across different objectives, suggesting a potential issue of “overpromising.”

The Royal Society emphasises the importance of simultaneously addressing issues such as climate, nature, food, and communities, rather than pitting them against each other. A key recommendation is for the government to enhance its data collection and analysis related to land use, utilising this information to make informed decisions that yield multiple benefits across various sectors.

The current challenge lies in the lack of cohesion among activities and associated policies related to land use, according to Cambridge’s Dame Fiona Reynolds DBE.

Often, these initiatives contradict each other, lacking a systematic process for prioritisation to ensure efficient and strategic use of land.

The absence of a coordinated approach can lead to policies overriding one another, highlighting the urgent need for the long-awaited land-use strategy to streamline and optimise these efforts.

The Government has, this week, made what it is calling “biggest upgrade to the UK’s farming schemes since leaving the European Union”.

Environment Secretary Steve Barclay confirmed that new application processes, funding increases and enhanced environmental incentives have been introduced for British farmers in a bid to strengthen supply chains and reach a commitment to continue to produce at least 60% of food eaten in the UK from national land.

Under the UK’s agricultural transition, new farming schemes will pay farmers to take actions on sustainability that also restore nature and protect the environment. It replaces the Common Agricultural Policy which saw 50% of funding go to the largest 10% of landowners.

Defra’s new Environmental Land Management (ELM) scheme provides a 10% increase on the average Sustainable Farming Incentive (SFI) agreement, provided farmers can showcase practices that contribute to environmental support.

2) The Resources and Waste strategy

In the past year, the National Audit Office (NAO) released an evaluation regarding the Government’s readiness to achieve the objectives set in the Resource and Waste Strategy. The assessment highlighted the Government’s delivery plans as “ineffective” and not up to the expected level of development.

Concerns were raised in the report regarding Defra’s persistent culture of delay, indicating a significant distance from putting an end to this issue.

Initially introduced in late 2018, the Resource and Waste Strategy marked a substantial advancement in policymaking for this sector after more than a decade. However, its progress has been marred by setbacks, particularly due to delays caused by the pandemic.

The NAO’s report underscored that these ongoing delays are causing a lack of readiness among businesses for upcoming changes. Moreover, they are discouraging potential investments in crucial sectors like reusable packaging and innovative recycling technologies.

The Government has been repeatedly urged to swiftly address the delays in implementing the Strategy to prevent further setbacks.

3) Ongoing reforms for grid and renewables

In August last year, the Electricity Networks Commissioner Nick Winser published a major report detailing interventions needed to speed up the delivery of key energy infrastructure in the UK.

As part of the Autumn budget, the Government published its full response to the Winser review and Connections Action Plan, which it claims will cut grid access times for larger projects by half, halve the time to build major grid upgrades and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure.

Additionally, regarding energy generation, the Energy Security Strategy increased 2030 targets for wind, nuclear and hydrogen power capacity. Ministers have also subsequently increased the 2035 target for solar deployment.

Policymakers have been warned by the National Infrastructure Commission (NIC) and by project developers that, unless efforts are made to ease delays impacting most major energy projects, meeting these targets will be impossible.

Last year, the National Grid published a detailed policy statement consisting of five suggestions for the Government and regulators to accelerate an efficient transition.

The suggestions include revamping the planning system for net-zero infrastructure with a streamlined consenting process, expanding Ofgem’s mandate to support new delivery models aligning with net-zero goals, prioritising communities and consumers in the transition, and investing in nationwide supply chain capacity and green skills to strengthen UK’s position in the global race for resources.

4) Transition Finance definition

In December last year, The Treasury and Department for Energy Security and Net-Zero (DESNZ) confirmed a six-month transition finance market review with the potential for a further three-month extension.

Transition finance, as defined by these Departments, pertains to funding that aids higher-emitting companies, activities and sectors in their gradual decarbonisation efforts, with consideration for non-CO2 emissions and alignment with national and global nature goals.

The primary objective of this review is to determine the necessary steps for the UK to emerge as a leading global hub for transition finance services. It aims to propose both short-term interventions and long-term systemic changes in the development, structuring, provision and monitoring of transition finance instruments.

The DESNZ and Treasury review is expected to yield guidelines specifying which financial products can be categorised as ‘transition finance.’

Additionally, there is widespread speculation that the UK Government will finalise its Green Finance Taxonomy in early 2024. This taxonomy will provide clarity on activities eligible for labelling as ‘green’ or ‘transition’ finance.

5) Further clarity on UK response to US Inflation Reduction Act & EU Green Deal

In August of the previous year, the US Government introduced the Inflation Reduction Act (IRA), allocating $369bn for investments in green technologies. Subsequently, the EU responded with its Green Deal to adapt to the market changes catalysed by the IRA. However, the UK has consistently missed opportunities to formally address the IRA by formulating a robust and competitive green industrial strategy.

The Institute for Public Policy Research (IPPR) cautioned last year that the UK is failing to capitalise on the economic benefits arising from the worldwide transition to a net-zero carbon future, primarily due to the absence of a well-defined green industrial strategy.

The green economy had high expectations for the Autumn Statement, anticipating a strong countermeasure to the IRA. Nevertheless, the Statement raised concerns among the industry players regarding its effectiveness in responding adequately to global competition.

While the last year witnessed the UK seemingly lose its position as the global leader for net-zero transition, it is hoped that this year the Government will deliver on their delayed promises and send the right signals through effective policymaking while strengthening the green economy to accelerate the net-zero transition at the required pace.

Although the UK appeared to falter in its role as the global leader in the race to net-zero last year, there is optimism that the Government will fulfil its overdue promises this year. The anticipation is for the Government to not only deliver on its commitments but also to strategically signal its dedication through impactful policymaking. Simultaneously, efforts to bolster the green economy are hoped to intensify, facilitating a swifter and more effective transition towards achieving net-zero targets.