COMMENT With our attentions over the past 18 months diverted to Covid-19, it has been easy to overlook significant policy developments that are not within this sphere. However, the government’s proposals for a “green revolution” have emerged through the post-pandemic clouds. The UK will soon host the international climate change summit, COP26, which has this year fuelled post-Brexit ambitions of becoming world leaders on “green” policies and initiatives, and in technology and manufacturing.
Cambridge has always been a centre for innovation, science and technology and, indeed, Cambridge-based developers, investors and landowners are already taking steps to invest in and develop clean energy supporting initiatives, such as battery energy storage systems, which are a key element in the UK’s transition to decarbonisation. This is just the beginning. Recent government activity and, indeed, the fallout of the highly anticipated COP26 will inevitably result in the creation of new markets and investment into low and zero carbon solutions.
Here’s a recap on recent activity:
1. The Ten Point Plan for a Green Industrial Revolution. Announced by the prime minister on 18 November 2020 in the wake of the pandemic, the plan sets out how the UK would meet its legally binding target to reduce carbon emissions to zero by 2050. Its ambitious objectives inevitably encountered some criticism. The overriding reservation is whether or not the investments and strategies behind the plan will be enough. However, it is indicative of the change in mindset of the government to bring climate change to the forefront of its policy agenda and, with it, a commitment to invest £12bn in greener energy.
2. The Environment Bill 2020. The Bill had been laying in the shadows of parliament having been first introduced in October 2019. It was shelved in the wake of Covid-19. But it returned to parliament in November 2020 and the race is now on for it to reach Royal Assent before COP26 opens on 1 November. It will set targets relating to nature, water, air and waste, as laid out in the 25-year plan, A Green Future: Our 25 Year Plan to Improve the Environment, to become legally binding from 2022.
3. The energy white paper, Powering our Net Zero Future. Published in December 2020, the white paper sets out the practical steps the government will take to implement the Ten Point Plan – how it will “decarbonise” the UK. The theme is electrification, and the paper sets out further detail as to how the government would like electricity to be produced, stored, distributed and used.
4. Brexit. Critically, the trade deal confirmed that all cross-border energy supplies will be tariff-free. It also set mutual guarantees and commitments that neither the UK nor the EU shall renege on current climate change and carbon pricing commitments. However, there have been possible deliberate moves by the government to diversify and set its own competitive standards. There is no mechanism to link the UK and EU carbon pricing programmes. In July, the government issued its Green Trade report. One of the key features is that the UK will not follow the EU’s proposal to address carbon leakage through implementing a carbon border adjustment mechanism, recommending a more sophisticated approach. The UK introduced the world’s first net zero cap and trade market, which has subsequently been adopted by the EU. Perhaps this does give some credence to the bold statements flowing from Westminster that the UK really is ready to “lead the world again”.
5. UK Climate Change Committee. In June, the committee delivered a report on the UK’s progress in reducing emissions and adapting to climate change. The government excelled, scoring 9/10, in the setting of targets and commitments for emission reduction. However, it has been criticised for the delay so far on implementation and delivery of these policies.
6. UN Intergovernmental Governmental Panel on Climate Change. The IPCC recently issued its “last chance” report, which made headlines. The UK’s chief scientific adviser reported that this should lead to a renewed emphasis on science and innovation – a message consistent with the UK’s desired post-Brexit image of a “science powerhouse”. The upcoming COP26 summit will include a dedicated day of science and innovation, and the emphasis will be on using science to not only understand climate change but also to produce solutions to it.
The aspiration is that the UK will be a world leader on climate change, however, much depends on domestic action meaning the path to net zero is still very much a joint endeavour. The details on the revenue mechanisms to bring through the level of private action, investment and change needed, are still awaited. Is the UK up to the challenge and, if we don’t act, who will?
Rosanna Clarke is an associate in the commercial property team, Cambridge, at Birketts
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