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This post is by John Cridland, chairman of Transport for the North and of the Home Group, and chair of the Green Innovation Policy Commission.
The UK’s commitment to achieving net zero by 2050, and the prominence that climate and environment are having in the current election campaign, suggests that politicians understand the need for action on climate as well as the benefits that decarbonisation could offer to the country’s economy. The low carbon transition could be a huge industrial opportunity for the UK, a chance to position itself as an attractive place for low carbon investment and foster comparative advantage in the growing low carbon market worldwide.
But this opportunity will need to be translated into action by the next government. The transition will require innovations in products and services across all sectors and parts of the country. Some businesses are already getting ahead, investing in low carbon and resource efficient technologies, processes and business models. For example, automotive manufacturers are gearing up for the switch to electric vehicles, with the number of models available on the European market expected to triple by 2021. And innovative construction methods using renewable materials, like timber, are being used to deliver lower carbon buildings. The Enterprise Centre at the University of East Anglia only has about quarter of the embodied carbon of a conventional university building.
But, as the Committee on Climate Change has pointed out, current policy is holding early starters back and is failing to encourage other businesses to join them. For example, the logistics firm UPS couldn’t easily electrify its central London fleet, because current energy system regulations meant the distribution network couldn’t be upgraded without a burdensome process. While UPS ultimately was able to innovate and invest in smart grid technology to circumvent these issues, other businesses with more limited resources would struggle to do the same and would therefore be prevented from switching to cleaner options.
It’s not only businesses facing barriers. Individuals, who increasingly want more rapid change and to play their part, are frustrated too. Recent citizens’ juries, held in Wales and northern England by Green Alliance and Britain Thinks, showed that some people are keen to do more on climate, but feel that businesses and government need to step up action to make it possible.
It can be done. Well designed and appropriately funded policies for low carbon energy over the past decade have proved that government has the tools to provide the necessary alchemy. The remarkable fall in the cost of renewables and their rapid deployment has vastly exceeded expectations. Today we are regularly seeing over a third of our power generated by renewables.
To reach net zero, we now need to replicate this type of green innovation across all sectors. There are three milestones in the coming months which will show just how serious the UK is about it.
First, the forthcoming National Infrastructure Strategy will set the priorities for long term infrastructure delivery. This is a strong driver and enabler of innovation: how public spend is directed towards cleaner transport, low carbon housing and smart energy systems will dictate whether UK businesses are given the right incentives and support to switch to cleaner options. The Green Innovation Policy Commission, a newly launched initiative that I chair, has outlined seven priorities for future infrastructure delivery and, over the next year, will be researching in depth the policy needed to address these.
Second, while the previous government committed to raising the national R&D spend, policies are needed to direct and support innovation towards rapid decarbonisation. Policy decisions made across all the relevant departments, from the Department for Business, Energy and Industrial Strategy to the Department for Transport, will be shaping the way forward. It remains to be seen whether this will include incentives for businesses to innovate on low carbon.
Finally, at the end of 2020, less than a year away, the UK will host COP26, the most important international climate conference since the Paris agreement in 2015. Strong domestic policy on climate and low carbon innovation will be essential for the UK to be seen as a credible host.
If the UK gets this right, it will be in a much better position to foster international partnerships that will see it prosper in a low carbon future. And there are not many such opportunities to improve UK competitiveness. We cannot afford to let this one slip.