The climate in Britain
Britain has a new Government firmly committed on the issue of climate change. But there remains a huge gap between pledges and promises and real delivery.
In many ways the UK is a world leader when it comes to the issue of climate change. The UK was the first country to write a target of achieving net zero by 2050 into law back in 2019 – a step which means that every major decision – from building a new airport runway to approving production from a new oil field must pass the test of contributing to the achievement of that goal. The UK has ended the use of coal in power stations, industry and domestic heating. The last working coal mine in Britain closed at the end of September. By contrast Germany, often seen as a leader on climate issue, still uses coal to produce more than a third of its electricity. UK emissions have fallen by half since 1990 – although the figure is somewhat lower if the emissions associated with imports are included. Wind power – mostly generated offshore – was pioneered in the UK and UK wind output is exceeded only by China. Those real achievements are out shone only by the scale of the promises for the future – a 78 per cent reduction in emissions from a 1990 base line by 2035 with the transformation of domestic heating, the vehicle fleet, development of carbon capture and storage and a new hydrogen sector.
Those were the promises inherited by the new Government elected in July. Although there has been no serious ideological gap between the main parties over the last decade, Labour campaigned this year on an acceleration of the transition – with the promise to end the sales of combustion engine cars by 2030 and an immediate ban on all new oil and gas licences in the North Sea.
There was little serious debate on climate issues during the election but equally no serious challenge to Labour’s arguments. But the reality of life in Government is not so simple. Growth is low, the UK has cut itself off from its major trading partners in the European Union and public debt is running at 100 percent of GDP. Public services are stretched – in some cases to breaking point. The jails are so full that thousands of prisoners had to be released early within weeks of the election to ensure that there was space to accommodate new convicts.
Politicians are distrusted – regardless of party – and Labour has already run into trouble over personal donations to Prime Minister Keir Starmer and other cabinet members. The new Government’s honeymoon was vanishingly short.
This is the context in which policy on energy and climate change is being developed. There are few climate deniers in the UK and only a limited number of doubters of the long-term target of new zero. The debate, however, has moved to the detail of the policy measures being proposed to reach that goal and in particular to the question of the costs involved and the fundamentally political question of who will pay the bills.
On each element of policy, the reality faced by the new Government is complicated and resistant to easy answers. Taking the issues one by one:
– The new Government is committed to adding 50 GW of new offshore wind by 2030 with the aim of displacing the natural gas which at present generates the bulk of the country’s electricity. The problem is that even existing wind projects cannot be connected to the power grid for years. Some projects have been offered connection dates in the 2030s – in one case as distant as 2034. Renewal of the grid is essential but carries an enormous cost – on one estimate £58 bn by 2035. Given the level of public debt there is no obvious source for the investment required. The new Government has created Great British Energy – a popular move creating a company designed to invest in the new low carbon economy. The funding of GBE is strictly limited to £8 bn over the next five years which is insufficient to make a material difference in a sector which is highly capital intensive. Labour cannot match the borrowing which underpins the success of the Inflation Reduction Act in the United States. Private funding is possible of course but private investors would require a return which would add to the total cost and over time add to consumer bills.
– Apart from funding the main challenge to the development of the necessary infrastructure comes from local resistance to intrusive developments such as the installation of pylons and large-scale solar farms. The Government is committed to centralising planning decisions – with the national Government overriding local objections in the public interest of the country as a whole. The process makes economic sense but cuts across the powerful force of local environmental protection sustained in many areas by groups of well organised and well-funded local residents. Britain, like the United States, does not always take kindly to decisions imposed by central authorities.
– Then there is the nuclear industry. Both main political parties support new nuclear development. One new station – at Hinkley Point in Somerset is being built and a second at Sizewell on the Suffolk Coast is at an early planning stage.
The problem is that a previous Government chose a reactor design – the European EPR built by the French state-owned company EDF – which in France, Finland, and now in Britain has proved impossible to construct on time and within budget. Hinkley Point is already seven years behind its original schedule and at least £13 bn over budget. The difficulties experienced there and at Flamanville in Northern France which is 13 years late and €11 bn over budget have discouraged private investment in the nuclear sector. That leaves a funding challenge of over £ 20 bn facing the Sizewell plant. At best Hinkley will not now be onstream before 2030 (informed estimates say 2032) and Sizewell if it goes ahead will not produce power before the mid-2030s at the very earliest. One alternative would be to develop a new generation of small modular reactors (SMRs) but they have yet to be approved by the nuclear regulator and although they could be built more quickly they would not be in operation for at least 10 years.
The nuclear challenge is compounded by the rundown of the existing stations – most of which are around 40 years old and showing signs of aging with extensive maintenance programmes required each year. Most are likely to close by 2030, with the consequence that natural gas supply will have to increase rather than decline if the electricity required across the economy is to be available. The amount of electricity needed could rise sharply if the UK manages to become a centre for AI – a clear objective of the new Government.
– Alternative sources of energy are needed but for the moment the UK remains dependent on oil and gas for more than three quarters of its daily energy needs. Even if electricity is decarbonised freight, much of the rail system, home heating, and most manufacturing will still be using fossil fuels. Hydrogen and other possible alternatives are still more than a decade away from large-scale deployment. This makes the future of the North Sea – the UK’s main source of oil and gas supply for the last half century – a topic of live debate. Production is already running down and will fall further and faster if new development of the remaining resources is constrained by regulation or by aggressive taxation. A number of companies have already withdrawn, and more are threatening to follow. The issue is beginning to open a division between campaigners ready to celebrate the end of oil and gas production and a workforce who fear a rundown process comparable to that which faced the coal mining industry. Whatever the pace of decline, the demand for oil and gas will remain. Electricity powers only a fifth of the economy and even if that could be completely decarbonised the rest of the UK will remain reliant on fossil fuels for the foreseeable future.
– Although supply has been the main focus of past policies on climate change – swapping out fossil fuels in favour of wind and solar – there is now of necessity a sharper focus on the demand side of the energy market. The take up of heat pumps to replace gas-powered home heating systems and the replacement of internal combustion engines by battery powered electric vehicles is slow. Lack of infrastructure – such as vehicle charging systems – and doubts about the efficiency of heat pumps especially in Britain numerous older buildings – have limited the spread of both. Half the railway network is electrified but the other half is not. Some industrial plants and many office buildings could use different forms of energy to meet their needs but the challenge for many businesses who are already struggling financially is the upfront capital costs involved and the unwillingness of consumers who already believe they spend too much on their energy supplies to pay more in a time when the cost of living is the main issue of concern. For the industrial sector the challenge of the costs involved is increased by the prospect of international competition from countries whose climate policies tolerate the continued use of unabated (and therefore lower cost) fossil fuels. In contrast to the US where protectionist measures offer a practical alternative because of the size of the domestic market, the UK economy is oriented to trade and could not afford the retaliation which carbon border tariffs would provoke. Promises that the transition will produce cheaper bills in the future are greeted with scepticism.
The net result of all these factors is that despite general public support for action to mitigate climate risks the pace of change is slow. Without major immediate investment the upgrading of the grid will take decades to complete. Consumers will continue to use their existing nonelectric vehicles. Homes and offices will continue to be gas-powered. There will be progress, but Net Zero electricity is very unlikely to be achieved by 2030, particularly if as Labour hopes economic growth picks up. Labour has a mandate for action on climate change but not for the imposition of the costs involved on consumer bills. In the long term, the greater use of renewables and other low carbon sources such as small nuclear reactors can improve energy security. In the short term, however, as the North Sea declines, imports of oil and gas will increase making the UK vulnerable to a world market shaped by growing Asian demand and increasing reliance on a limited number of vulnerable lines of supply from the Middle East, North Africa and Russia.
Each of these issues can be worked out over time. The long-term goal stands and still carries substantial political support. Decarbonisation of the electricity sector will proceed even if the deadline of 2030 cannot be met.
The bigger problem facing the new Government is that the cross-party consensus which has shaped policy since the UK’s Climate Change Act of 2008 is breaking down. The candidates for the leadership of the opposition Conservative Party have not defined themselves as climate deniers but their criticisms – mainly on cost grounds – of the measure being proposed will turn climate policy into a divisive issue over the next few years. For Labour this risks opening up a cultural gap between the liberal elite who fully embrace net zero and the red wall voters whose focus is on jobs and the cost of living. The issue carries echoes of Brexit and the continuing debate on immigration. The new Labour Government has to focus on closing this gap by concentrating on what can be achieved at a low cost and by building up the new low-carbon industrial base which can offer work and opportunities.
Labour must also answer the charge, partially articulated by Rishi Sunak during his last year in office, that the UK’s actions are irrelevant to the global problem given that Britain produces less than 1 per cent of worldwide emissions and that the costs of Labour’s plans are disproportionate and competitively damaging.
The answer both practically and politically probably lies in harnessing the UK’s strong science and engineering base to develop technologies which can offer low-cost low carbon solutions to the benefit not just of British consumers but also, and more importantly to energy users across the world. Climate change cannot be solved in one country and a clean Britain in a dirty world would be a pointless achievement.
Labour will not win the climate debate by asserting a moral imperative or by making unrealistic promises to deliver unattainable targets. The UK electorate is tired of politicians who trade on bluster and rhetoric. After the failures of Boris Johnson and Liz Truss the desire is for practicality and pragmatism. Finding the correct balance which both delivers on the long-term goal of decarbonisation and the short term public concern with the cost of living will be a major test for Britain’s new Government.
Nick Butler