The government’s Clean Growth Strateg must be complemented by clear regulations and incentives to support decarbonisation in sectors that have shown negligible progress, the Aldersgate Group says.
Overall, UK emissions are down 43% compared to the 1990 baseline while the economy has grown significantly over the same period.
The Committee’s new report ‘Reducing UK emissions – 2018 Progress Report to Parliament’ sets out four key messages to Government to put emissions reductions on track, based on the lessons of the last decade:
- Support the simple, low-cost options. Low-cost, low-risk options to reduce emissions are not being supported by Government. This penalises the consumer. There is no route to market for cheap onshore wind; withdrawal of incentives has cut home insulation installations to 5% of their 2012 level; woodland creation falls short of stated Government ambition in every part of the UK. Worries over the short-term cost of these options are misguided. The whole economy cost of meeting the legally-binding targets will be higher without cost-effective measures in every sector.
- Commit to effective regulation and strict enforcement. Tougher long-term standards, for construction and vehicle emissions for example, can cut emissions, while driving consumer demand, innovation, and cost reduction. Providing long line of sight to new regulation also reduces the overall economic costs of compliance. Regulations must also be enforced to be effective: the consumer is cheated when their car’s fuel consumption and real emissions exceed the quoted test-cycle numbers; or when higher energy bills are locked-in for generations when stated building standards are not enforced.
- End the chopping and changing of policy. A number of important programmes have been cancelled in recent years at short notice, including Zero Carbon Homes and the Carbon Capture and Storage (CCS) Commercialisation Programme. This has led to uncertainty, which carries a real cost. A consistent policy environment keeps investor risk low, reduces the cost of capital, provides clear signals to the consumer and gives businesses the confidence to build UK-based supply chains.
- Act now to keep long-term options open. An 80% reduction in emissions has always implied the need for new national infrastructure – to transport and store CO2 for example, or to provide decarbonised heat. The deeper emissions reductions implied by the Paris Agreement make these developments even more important. We cannot yet define the 2050 systems for carbon capture, zero-carbon transport, hydrogen or electrification of heat, but the Government must now demonstrate it is serious about their future deployment. Key technologies should be pulled through to bring down costs and support the growth of the low-carbon goods and services sector.
Reacting to the publication of the Committee on Climate Change’s 2018 Progress Report, Nick Molho, Executive Director of the Aldersgate Group said: “Despite the positive progress delivered in the power sector and ambition coming out of government, the UK is not on course to deliver its carbon budgets on time or cost effectively.
“Private sector investment and supply chain growth in areas such as onshore wind and energy efficiency is being hampered by a lack of clear regulations (such as binding EPC targets), fiscal incentives (such as stamp duty rebates) and market mechanisms (such as subsidy free CfDs for onshore wind).”
“Private sector investment and supply chain growth in areas such as onshore wind and energy efficiency is being hampered by a lack of clear regulations (such as binding EPC targets), fiscal incentives (such as stamp duty rebates) and market mechanisms (such as subsidy free CfDs for onshore wind).
“The vision set out in the government’s Clean Growth Strategy was a positive one but it must urgently be complemented by clear regulations and incentives to support decarbonisation in sectors that have shown negligible progress, creating project pipelines to drive energy efficiency improvements and low carbon heat provision in buildings, and the growth of an ultra low emissions vehicles market.
“Without project pipelines that attract long-term business investment in innovation, supply chains and skills, the UK will miss out on its climate targets and its industrial clean growth ambitions.”
Nick Molho added: “In the power sector, providing a route to market for onshore wind through a new competitive auction round and providing more clarity on the timing and size of future offshore wind auction rounds would do much to cut power prices for UK heavy industry and support continued cost reductions in renewable technologies.”
