Anthropy Conference

Navigating the net zero landscape – insights on climate policy, politics and progress.

With the party conference season now well and truly behind us, Andrew Whitehead, senior partner and head of energy at Shakespeare Martineau, who is attending Anthropy 23, discusses what we have learned about how the battleground is shaping up on net zero and climate change ahead of an election next year.

Labour is clearly seeing a point of differentiation as it positions itself against the government’s recent back-pedalling on key decarbonisation policies. The party could have gone the other way and reacted to the government’s repositioning on net zero by softening its own stance, but it has done the opposite and made net zero an election battleground.

Announcements included an existing plan, reiterated by Ed Miliband, to launch a national energy champion for the country. ‘GB Energy’ will be publicly owned, and intended to rival the likes of EdF from France and Sweden’s Vattenfall as owner and investor in major UK energy infrastructure. This will include wind, where Labour aims to double onshore wind capacity, and quadruple offshore wind, as well as tripling solar.

Another focus of Labour is the current grid connection queue, with a plan to open up new grid construction to competitive tendering, and investment in local authorities’ capacity to speed up planning decisions. As with just about everything when it comes to energy, the devil is (or will be) in the detail.

Ultimately Labour’s goal is to decarbonise the UK power sector by 2030 – five years sooner than the government’s 2035 target.

Targets, clearly, are important. They set a trajectory, a direction of travel. If set in stone – in other words made legally binding – they provide welcome certainty for business and a solid foundation for investment decisions. Hence the importance of the Climate Change Act 2008 and its net zero targets (or ‘budgets’), legally binding on the sitting UK government. The act established a series of ‘stepping stones’ towards the ultimate 2050 net zero target, made up of carbon emission caps over five yearly periods, set at least 12 years in advance.

We’re currently in the fourth carbon budget, covering 2023 to 2027, and it’s a budget the UK may achieve thanks to the increase in EV sales and reduced road traffic post-Covid. But the prognosis beyond that, as we head towards the 2030s, is presently gloomy.

The independent Climate Change Committee, set up under the 2008 Act with various tasks including to report to Parliament on progress against the budgets, expressed concerns in its latest June report about the pace of change required to meet the UK’s climate goals over the 2030s. It noted significant policy gaps and delivery risks, and considered that we are not on track to meet our international commitments under the Paris Agreement, for a 68% reduction in emissions by 2030.

Despite some positive developments, notably the deal with Tata for industrial electrification in Port Talbot, events since June have worsened the outlook. The latest Contracts for Difference auction round failed to attract any bids from offshore wind, an outcome which could have been avoided had the government heeded warnings from the committee in its June report. And we had Rishi Sunak’s September announcements about exemptions and delays to the phase out dates for petrol/diesel cars and boilers, and a decision not to regulate for improved energy efficiency of rented homes.

It’s hard not to get immersed in the detail, but the bigger picture is undoubtedly the government’s new messaging on net zero, specifically its loosening of short-term ambition – aka, kicking the proverbial can further down the road. Moving targets undermines business and consumer confidence, as does perpetuating a policy gap, which erodes any belief that achieving those targets is credible.

Despite protests to the contrary, it feels like our political leaders are blowing with the wind, in a short-sighted chase for votes, rather than leaning into our legally-binding targets and international commitments and making the positive case for change with voters. Treating net zero as a vote loser is short-termism at its worst, and a dereliction of leadership.

This advocacy should include a strong and compelling narrative around economic growth and how driving the net zero transition is not incompatible with addressing the cost-of-living crisis. And it should be made using arguments honed through genuine debate and engagement with business and other stakeholders. This is the far-sighted leadership the country – and business – needs and deserves. And with it, our political class might begin to regain trust and respect from voters, and as a country we may begin to reclaim international leadership on this vital agenda.

Join Andrew at Anthropy 2023 between 1 and 3 November at the Eden Project, when we will be discussing how our political leaders can adopt meaningful collaboration across multiple stakeholders, and long-term thinking to address climate change and the many other shared issues we currently face as a country.