The UK government’s net-zero plan might be on the right side of history, but it’s at a crucial tipping point when it comes to delivery
Co-Founder and Partner, Christian Hernandez at 2150
In the race to tackle the climate crisis, timing is everything. With the most important climate conference in our history now underway, the pressure to deliver airtight strategies to meet net zero carbon targets has never been greater.
As the host of the COP26 UN climate talks in Glasgow, the UK finds itself front and centre of this debate. Last week the government set out its long-awaited climate blueprint, involving ambitions from further growth of offshore wind and electric vehicle expansion to renewable energy and £120m towards one large-scale nuclear power station. Yet, while considerable funds are outlined in pursuit of these ambitions, it still requires further depth and detail when it comes to delivery.
For example, take the government’s high-profile promise to move the UK closer towards uptake of low-carbon heating and insulation. The plan represents a good start but it is difficult to see how the current proposed funding will enable the stated aim of installing 600,000 heat pumps per year by 2028, if the next three years are only set to provide 90,000 homes with electric heat pumps.
But, perhaps the more important question is if speed and certainty in meeting net zero is the ultimate objective, shouldn’t there be a greater focus on incentives to adopt low-carbon technologies at scale? They are a crucial component in decarbonising the built environment, but gas boilers are not set to be banned until 2033.
Against the backdrop of rising consumer bills and high energy prices, the plan is also unclear when it comes to addressing the concerns many homeowners still face in switching to heat pumps. Not to mention, how it intends to support a number of trained installers with an incentive to promote heat pumps over boilers.
A clear overall direction is one thing, but it is important that the government moves quickly to focus on weaving incentives into the plan throughout the net-zero transition. To truly put the UK on course to meet the Sixth Carbon Budget, clearer regulatory targets and fiscal incentives need to be mapped out in order to drive private sector backing of greentech solutions that will either mitigate or significantly draw down CO2 emissions.
Technology has a huge role to play in securing the future of our planet and in the UK alone, there is an entire ecosystem of innovators waiting in the wings to deploy at scale. The UK government has a major opportunity to show real climate leadership today and happily they have already begun to do so, with Prime Minister Boris Johnson and Bill Gates announcing a £400m partnership last month to supercharge green tech investment across the UK over the next 10 years.
The UK is also not alone in recognising the importance of such public-private partnerships, with many governments across the EU taking concrete action to put in place funding initiatives that take them well on the way to fulfilling their climate pledges. It has become abundantly clear over time that financing innovation for green infrastructure is not for the private sector to carry alone.
Norway for instance has set up a new climate investment fund, Nysno, to which it will allocate NOK10bn (€970m) over five years in renewable energy, with the aim of reducing greenhouse gas emissions. Likewise, Denmark’s Green Future Fund which was established last year is expected to become a lever for private financing, generating up to €15bn for financing green companies and projects. This pattern of increased involvement of sovereign funds in sustainability is what we need to see more of.
It is vital that the UK not only takes note, but aims to set an example in pushing forward green finance initiatives to develop climate solutions. Whilst finance is available to drive this transition through, it will need a real shift in mindset. What it needs instead is a system-wide response to net zero investment to ensure that solutions for every sector and region of the economy are being driven forward. Only then will we create the best conditions for the private sector to invest with confidence to generate and grow new green industries and subsequently drive the UK to hitting net zero.