Delivering Net ZeroBy Samantha Boyle
The UK Government is due to announce its Net Zero strategy later this year, in line with the upcoming crucial climate summit COP26 being held in Glasgow in November. The summit will bring parties together to accelerate action towards the goals of the UN Framework Convention on Climate Change with a goal to securing global Net Zero. The Net Zero strategy is arguably the most important single document the government will publish this year and will set the tone for the UK’s hosting of COP26. The strategy will link in closely with the government’s Build Back Better ethos, seeking to support economic growth through significant investment in infrastructure, skills and innovation, while keeping sustainability and the environment front and centre. As we proceed through the Covid-19 pandemic and as the UK begins to forge its reputation outside of the EU, the government is keen to adopt a leadership position on climate change - COP26 provides the ultimate stage for this. However, despite the reasoning and benefits to be gained, questions remain over how deliverable the targets are and who will pay for it.
The UK’s commitment to Net Zero
To date, the UK has been unafraid to take a bold position on achieving Net Zero. Out of the 131 countries committed to achieving that objective, the UK is one of six to have legislated for it. In a similar vein, the expected Net Zero strategy will incorporate the UK’s share of international aviation and shipping emissions for the first time as part of the decarbonisation roadmap for transport. So far, rather than alienate businesses, the progressive targets appear to be driving change in the corporate world. In the last month, the UK’s leading airlines, airports, and aerospace manufacturers have reasserted their commitment to Net Zero by setting out a number of decarbonisation targets. New interim decarbonisation targets of at least 15% by 2030 and 40% by 2040 have been announced by the sector while reaffirming their commitment to Net-Zero by 2050. This is an important part of the government’s decarbonisation efforts and will bring the country more than three-quarters of the way to achieving Net Zero and help the government reach its 2050 target. At the same time, while driving forward the UK’s sustainability agenda, both the government and the sector have spied new commercial opportunities through more sustainable flight.
The government is hoping to engender similar activity in other sectors. In order to comply with the targets set out in the strategy, businesses will have to find new and inventive ways to reduce their energy consumption, improve their energy efficiency, as well as take steps to offset any emissions they produce. However, efforts must go beyond ensuring the immediate operations of a business comply with regulation. Instead, businesses will have to ensure that their suppliers are sustainable and will be in the future, this may involve switching those suppliers and searching for ones who fit the criteria. Forty-seven of the UK’s FTSE 100 companies have now signed up to the United Nation’s Race to Zero campaign, a global alliance committed to achieving Net Zero carbon emissions by 2050 at the latest, with many opting to go even faster. Participating companies include the likes of AstraZeneca, BT Group, Sainsbury’s, and Unilever, in total, representing a total market capitalisation of £650 billion. Nonetheless, despite the list of glamourous household names taking bold steps, a recent report indicated 99% of British businesses are likely to be unprepared for the increase in carbon reduction policy and regulation. While the government has focused on larger businesses producing a greater amount of carbon emissions, without help for SMEs to become greener, overarching Net Zero targets are thrown into doubt. The Committee on Climate Change has already indicated that the 2050 Net Zero target was not on track, and while the government might be unabashed in aiming high when it comes to tackling climate change - no bad thing - implementation must run alongside it.
Managing the cost
Of course, turning rhetoric into action is one challenge. Yet, just like everything else, reaching Net Zero comes at a cost. A recent report by the National Infrastructure Commission warned that tax payers will have to pay up to £400 million over the next ten years in order to help the UK deliver its promise. Those sectors who have little chance of meeting Net Zero carbon emissions by 2050 will have to start covering the costs themselves. This will do little to appease government concerns, with polling earlier this year showing only 37% support new road taxes, which will be needed to replace fuel duty as more cars go electric. While public opinion has been strongly in favour of the Net Zero target, when it comes to cost, maintaining that backing is far from certain.
Looking ahead to COP26, Prime Minister Boris Johnson has promised that the new Net Zero strategy will allow the UK to become the “home to pioneering businesses, new technologies, and green innovation as we make progress to Net Zero emissions, laying the foundations for decades of economic growth in a way that creates thousands of jobs”. This promise supports his ambitious ten-point plan for a green industrial revolution which will create and support up to 250,000 British jobs covering clean energy, transport, nature and innovative technologies. This commitment to green innovation, with the commercial success to match, will remain steadfast in the government’s plans for the economic future of the UK, and its global positioning. The UK has already made substantial strides when it comes to decarbonisation and the shoots of commercial success through green innovation have been seen by many. Yet, even with this, much work still needs to be done if the UK is to meet its Net Zero targets and truly lead the world in tackling climate change and heralding a green industrial revolution. When it is finally published, the Net Zero strategy really does have the capacity to be one of the most influential policy documents seen this year, maybe even this decade. For the UK’s future as a global leader on this issue, the Net Zero strategy could set the standard to be emulated globally.