Matthew Farrow on the PM’s 10 point plan for Net Zero and what it means for members.
It’s been a long time coming but the Prime Minister finally announced a 10 point plan for Net Zero last night. With, as Boris Johnson pointed out, one year to go to the postponed COP 26, he needed to show a sense of UK ambition and leadership.
Did he manage this? The broad consensus across the environmental community this morning is that he did, with some important caveats. The 10 points are framed to address the issues that are toughest nuts to crack in the Net Zero transition. And there are a lot of tough nuts out there…
Some, such as the heavily trailed announcement on bringing forward the ban of the sale of petrol and diesel vehicles to 2030, are strong regulatory changes. Others, like the funding for hydrogen demonstrations and Carbon Capture Storage (CCS), are intended to overcome market failure through Government using pump priming funding to bring in additional private sector investment.
Not surprisingly, many commentators have pointed out that a significant chunk of the £12 billion has been has already been announced and that even this is small beer compared with the size of the French and German green funds. Nonetheless, with the economy and public finances turned on their head by COVID-19, the fact that the Treasury is willing to stump up this amount of funding in the current climate is to be welcomed and indicates that the green agenda will remain an ongoing priority.
Of course, EIC members know all too well that the devil is in the detail. Unless investors can see that these initiatives will genuinely create a stable long-term market to invest against, then they will go elsewhere for easier returns.
One area where the Government has always tripped up in its attempts to build new environmental markets is forgetting the about the need to properly enforce regulations it brings forward. Energy efficiency is a classic example where compliance with existing regulations and schemes such as ESOS, is scandalously low. EIC will be scrutinising the detail of the plans and lobbying firmly for this attention to detail. Our forthcoming report to be published in a few weeks on net zero infrastructure will include some assessments around this.
Having said all of that, overall the plan should be welcomed by all EIC members. It recognises that private sector investment and innovation are essential to delivering net zero ambitions. It also confirms that they should be incentivised, which is exactly what EIC has been saying for years.
Matthew Farrow is director of policy at the Environmental Industries Commission (EIC)