Clueless on Net Zero cul-de-sac
Today’s Times editorial reveals its absolute cluelessness about the looming economic and political cul-de-sac Boris Johnson and his government find themselves in as a result of their utopian Net Zero agenda.
On the one hand the Times warns that achieving Net Zero ‘can be ruinously expensive’ and cites Steve Baker’s warning that burdening working families with its astronomical costs could deliver “a political crisis greater than the poll tax”.
On the other hand it claims that ‘the government will miss the opportunities that arise from the transition to clean energy ‘ — without spelling out what kind of ‘opportunities’ would arise from burdening the country with ruinous costs and unreliable forms of energy.
What’s more, the editorial’s key question (‘Who is going to be able to pay that much? The homeowner or the government?’) reveals the economic illiteracy of Net Zero advocates who seem oblivious of the fact that these costs will hit households hard regardless of whether they have to pay directly or through higher taxation.
It is becoming ever more likely that these irreconcilable contradictions, rising costs and growing discontent will eventually sink Net Zero.
When it comes to climate change and Britain’s green future, the prime minister talks a good game. Boris Johnson has flamboyantly predicted that the UK would become the “Saudi Arabia” of wind power, heralded a revolution for hydrogen fuel and promised a green economy that would deliver hundreds of thousands of jobs. As ever with this prime minister, well known for his tendency for “boosterism”, there is the lurking suspicion it is all hot air.
Now it is in writing. In a critical report on the government’s net-zero and adaptation targets, the Climate Change Committee (CCC) gave a detailed description of the gaping chasm that exists between rhetoric and reality. Running to almost 500 pages, the report states that policy has not matched the ambitious targets set by ministers to reduce greenhouse gas emissions.
Long-overdue green policy packages for critical areas such as transport, hydrogen and housing have been repeatedly delayed. Meanwhile present proposals, which centre mostly around offshore wind and hydrogen technologies, fall far short of what is required. As it stands, the government will cut only a fifth of the emissions required to hit the sixth carbon budget, which commits it to reduce emissions by 78 per cent by 2035. “Almost all things that should have happened,” Lord Deben, the CCC chairman, summarised, “have either been delayed or . . . haven’t hit the mark.”
Of course, there is an obvious reason why the government is dithering. It has realised that while setting targets is cheap, achieving them can be ruinously expensive. When he was chancellor, Philip Hammond warned Theresa May the Treasury estimate was that the cost of hitting her proposed target of net zero by 2050 would be £1 trillion. Now his successor, Rishi Sunak, is similarly balking at the likely cost of the green transition. The expense of replacing existing gas boilers with heat pumps, for example, is currently about £10,000 a home. Similarly the cost of electric cars remains beyond the reach of most families. Who is going to be able to pay that much? The homeowner or the government?
The danger for the government is that this risks becoming a political problem with its party and voters. Already Steve Baker, an influential backbencher, has warned that pushing the cost of net zero onto working families could deliver “a political crisis greater than the poll tax”. Indeed Mr Sunak himself showed his wariness about pushing the costs of cutting emissions onto families when he declined to raise fuel duty in the budget. At a time of intense strain on the public finances, he is understandably reluctant for the Treasury to pick up the tab.
These hard choices cannot be ducked for much longer, and not just because the targets are legally binding. One risk is that by delaying decisions, the government will miss the opportunities that arise from the transition to clean energy. The European Union has started dispensing an €800 billion pandemic recovery fund, much of which is to be spent on clean energy projects. Having led the pack in setting ambitious targets, Britain may find itself left behind in new technologies such as hydrogen, just as it has been in wind power. Meanwhile the lack of a coherent strategy could have global consequences. As the host of this year’s Cop26 summit, the world is looking to Britain for climate leadership. Bluster will not suffice.