Whitehall needs to set itself a 'net zero test'

WWF’s Gareth Redmond-King argues that the crucial upcoming Autumn Budget and Spending Review has to deliver on promising ‘green recovery’ rhetoric

If we were living in normal times, we would be less than four months away from COP26 in Glasgow now. British diplomats, the UK COP presidency team and Ministers would have been in a whirl of frenetic influencing activity globally (we hope) to drive up ambition, and drive out those new nationally-determined contributions (NDCs) from all the parties to the Paris Agreement. We might have hoped to have been assessing the UK’s own NDC by now – for scale of ambition, and therefore strength of leadership. We would have been pushing for imminent publication of a synthesis report, adding up the sums to tell us where the new NDCs are taking us – further away from disastrous 3°C+, and closer to the Paris goal of 1.5C. Five years on from Paris, consistently high levels of public concern and demand for action to tackle the climate crisis would have been building towards an incredibly important international moment of action.

But these are not normal times, and the COP has been delayed by a year. That doesn’t make it any less important; arguably it makes it even more important – one year further into a critical decade of action.

But we now also have another reason to focus our minds on climate action – on what we need to do to get the UK on track for that historic commitment last year that we would be net-zero emissions by 2050. And that’s the economic impact of ‘not normal times’ – the need to recover from the huge shrinking of national and global economies from having shut down for several months to tackle the covid-19 pandemic.

These are two unprecedentedly large undertakings – decarbonising our economy in 30 years, and recovering our economy from a public health lockdown. But happily, as enormous tasks go, they can have an awful lot in common – in fact, they can be mutually reinforcing.

This is because, as the Keeping Us Competitive report which WWF published recently with Vivid Economics showed, investing in reaching net zero can be very good for our economy. Green investment gives returns of between £3 and £8 for every £1 invested. And investing in net zero action can deliver co-benefits to the UK of £90bn a year – through things like avoided healthcare costs from, for example, cutting air pollution and improving energy efficiency in homes. Many of the things we need to invest in for net-zero are also pretty job-intensive, which is good for building back our economy. And this evidence reinforces what we’ve known since the landmark Stern report on the economics of climate change – the longer you leave it to act, the more expensive it all gets.

Taking just one example sector: green buildings can support the highest number of jobs in the short-run, as well as offering health benefits and cost savings.  Energy efficiency investments to-date already save households something like £500 a year, and we have around 19 million homes across the UK which need work to bring them up to decent standards of energy efficiency.  As that WWF/Vivid work and a recent report for the Energy Efficiency Infrastructure Group sets out, investing £12bn annually to 2030 in retrofitting homes to meet existing government targets can support anything from 85,000 to 150,000 direct jobs.  Decarbonised heating and cooling add another 7,000. And in Germany, their energy efficiency programme has succeeded in leveraging €6 for every €1 of public money spent.

We saw an encouraging sign towards a green recovery, recognising these allied economic and decarbonising benefits, in the Chancellor’s statement the other week. Up to £2bn for a home energy efficiency voucher scheme and a billion for public buildings – to be spent this year – is a very nice start. But it is only a start. The 2020s need to be a very intensive decade of climate action and we need £18bn of public investment up to 2030, to unlock some £35bn of investment from other sources to do the whole job on improving and decarbonising British homes.

We also need to be constructing better new homes. If we’re going to ‘build, build, build’ new houses, cutting regulations and easing planning rules as we go, then we need to make sure that we build net-zero, build net-zero, build net-zero. Because if we don’t, then we’re just adding to the problem – passing the cost of dealing with it and of the climate impacts on to younger people and to future generations.   

In short, we have to expect that there is more to come – more to build on to develop and implement a truly green recovery.  There’s a Budget and Spending Review due in the autumn. We strongly suggest that government needs to set the parameters for those decisions now. We need a test or rule that can be applied to the whole package, to ensure that it is in line with what we need to be doing to get on track for net-zero by 2050. A net zero test, or a resilience fiscal rule – ensuring that decisions are taken in the interests of people, nature and climate, for the long-run; not taken piecemeal, with good stuff (£3bn for energy efficiency) undercut by bad stuff (huge investment in new roads, for instance).

The Committee on Climate Change advises on the sixth carbon budget in the autumn; that will be in line with a net-zero pathway for the UK. Build that into a net-zero test or fiscal rule, and we can assess the whole government spending package against that pathway. Which can make building back from covid, and decarbonising the UK’s economy, the mutually reinforcing cornerstones of UK leadership at COP26 next year.

Gareth Redmond-King is head of climate change at WWF-UK

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