Our thinking

The net zero gamble

22 September, 2023

The fact that Rishi Sunak has reneged on some of the key policy proposals to meet the UK’s net zero target has quickly become the big news of the week.

And understandably so. It includes unsubstantiated claims, the economic rationale is about 180 degrees off, and even politically it’s a huge gamble – while everything points to the fact that the government has identified this as a short term vote winner, its own data show that three-quarters of the British public are at least ‘fairly concerned’ about climate change, and only 12% think the Government is doing ‘too much’ on climate. Net zero is being used as a political football and, as if to illustrate the point, the announcement even included ‘scrapping’ a non-existent meat tax.

The announcements have been roundly criticised by politicians across the spectrum, civil society and business leaders, with suggestions that this will be Rishi Sunak’s ‘Liz Truss moment’. The response from business has been notable. There has been a backlash that reflects the uncertainty that results from shifting goalposts for business decision making, and concern from investors who have flagged concerns about whether the UK remains a good bet for the green industrial transition.

The scale and tone of the backlash to this announcement suggests that while UK legislation may be rolled back, it won’t necessarily stop action, with businesses getting on with phasing out fossil-based transport and heating regardless. Although the UK may be an island geographically, it sells to, and imports from, companies based in countries that will remain committed to moving fast towards net zero. Carmakers are investing heavily in EVs to meet regulations and demand in the EU, US and globally, for example, and there are other factors that will incentivise the shift to low-carbon technologies.

And let’s not forget that the UK has a legally binding net zero target, which (currently) isn’t being revoked. The truth is that while some of the measures that had been proposed may have been expensive in the short term, the longer-term costs of not doing them in a timely way are much higher. For a government driven by the electoral cycle that may not seem like much of a problem. For the rest of us, and the planet, it really is. If ever there was a moment for the business sector to stand up and lead, it’s now. We’re delighted it’s showing all the signs of doing so.

By Patrick Bapty