Rachel Wolf is a partner in Public First. She had co-charge of the 2019 Conservative Manifesto. She was an education and innovation adviser at Number 10 during David Cameron’s premiership and was founding director of the New Schools Network.
At last, we’re having a debate about Net Zero. The commitment to hit ‘net zero emissions’ in 2050 – much more serious than Brexit in its scope and scale – was adopted with barely a murmur. Now, belatedly, we’re discussing what it means.
But the debate is confused and unhelpful. Opponents are fighting on different fronts – some arguing about whether to do anything while others arguing about who pays for what we do. This is overlaid by the usual reports of cabinet in-fighting that precede spending reviews.
That makes it impossible to judge the Government and impossible to decide where compromise might be reached. Take boilers: are we asking about how necessary costs to change our heat should be distributed (some MPs and the Treasury), or the point of net zero at all (other MPs)? With the latter, there can be no common policy ground. Yet all questions are framed in terms of ‘costs of Net Zero.’
This is particularly unhelpful for the public, who we know from extensive research want serious action to be taken, are open to reasonably radical policies, but want to make sure it’s done in a fair way that doesn’t impact living standards too much.
I have therefore attempted – with no doubt many omissions – to clarify some the questions that need to be answered by the government, and MPs, as they debate.
Is there a problem?
Is climate change likely to have terrible global consequences without significant action? Will this impact the UK?
What is the UK’s role?
Does the UK have a responsibility to move to Net Zero?
Here are some arguments for this: we are richer than other countries, historically responsible for the industrial revolution, and technologically capable of helping. Or: someone has to be a first mover, and our own public want us to do something. For example, since the UK announced ts commitment to close coal, 41 other governments have followed.
Alternatively, are we too irrelevant – too small to have an impact or persuade others to follow in our footsteps and doomed to rack up costs for our citizens for no global benefit?
Or finally, does the UK need a leading position on net zero so we can have a good relationship with the US and the EU, or because it will allow us to develop new industries and improve energy security? In other words, a practical rather than a moral reason to act?
How much should the UK spend, and which numbers to believe?
Is net zero so existential, any cost is reasonable? Or is there a sum the UK should be willing to spend, but no further?
Or should everyone refuse to answer, because we can’t believe the estimates (the Committee on Climate Change thinks it will be one per cent of GDP a year – about half the defence budget. There are also estimates that the cost of not acting would be eight times that. But these are only persuasive if you think they are correct. Some think it will be higher, and others think it will be lower as the technology costs come down, with health policy benefits from cleaner air).
Will there be new jobs? The Government estimates 250,000 new jobs revitalising large parts of our traditionally industrialised areas, and that we can protect our current industry through trade tariffs. Others think industry will inevitably move abroad to areas with lower carbon costs.
How should the UK distribute the costs?
There are lots of ways we could distribute the cost of net zero, but they come down to:
- Is there transparency (The Government is clear about how much it will cost, who pays for it and how), or is it better to place the costs on bills or hike through regulation, and hope people don’t notice?
- Where it requires government spending, should net zero costs be paid for through increased taxes, through reduced public expenditure, or through a higher deficit?
- Who pays – subsidise middle and lower income households, for example, but expect wealthier people to pay a lot more? Or charge ‘business’ and let it filter into prices?
What would maintain public consent, and what would give the best incentives to industry?
How do you trade off cost, disruption, and choice?
Not all the technologies for net zero are mature. Many have trade-offs – in cost, or disruption, or other policy goals. But until we start investing in them in bulk, they’re unlikely to become more efficient or substantially better.
Let’s take heating: there are four choices (other than doing nothing).
- Heat pumps, which use electricity (which can in turn be powered by low carbon sources of energy) but which are currently quite expensive and may require disrupting houses.
- Hydrogen – which we can’t do at scale yet, and might be overall more expensive, but with less disruption.
- Heat networks where local areas share a heating source (but which probably only works in some areas and removes choice)
- Or capturing emissions (which we can’t afford to do at enough scale yet, but maybe could one day and would involve no disruption at all).
- Or all four?
Do you invest in all of them – they will all require government subsidy until the costs come down. Or do you hope a new technology will come along in time?
This is beside the question of who pays and how – it’s about what they are paying for.
What is the alternative?
The reason I’ve fleshed out these questions is that if, when the Government sets out its strategy on Net Zero, people need to be clear what exactly they are disagreeing with.
And if they don’t like the proposed measures, but think Net Zero is important, they need an alternative. Do opposers think the Government is doing the right thing, but it should be paid for with borrowing instead of bills? Or do they think the Government is backing the wrong technology – in which case, what exactly should they do instead?
If we are to have any hope of getting to Net Zero, we need to be clear about what we are trying to achieve, and where we disagree. We need to send the strongest and clearest of signals to investors and most importantly to the public, who sit bewildered: keen to make progress on climate change, but without having the faintest idea what it involves and how. They deserve a clearer debate than this.