The UK generates a mere 1.1 per cent of global emissions of greenhouse gases. This makes it the 16th largest emitter. Even if all its emissions were to cease tomorrow, the world would hardly notice. So what might be its role? The answer is that it could be both an example and a leader. It can demonstrate what first-rate policy would look like, and it can nudge the world on to a different trajectory before it is too late. The former is vital. It cannot be influential in the world if it is not successful at home. So how is it doing?
The answer is: not well enough. Unlike lunatic Republicans, the Conservatives do not deny the science. Progress has already been made towards decarbonisation. The government has also committed the UK to reducing emissions by 68 per cent in 2030 and 78 per cent in 2035 below 1990 levels. Moreover, the 2035 target will, for the first time, include its share of international aviation and shipping. But neither progress nor policies are as good as they should be. If the UK is to be a model and leader, it must try harder.
Between 1990 and 2018, UK territorial emissions of CO2 fell by 39 per cent. More impressively, they fell by 21 per cent just between 2013 and 2018. But 63 per cent of the reduction over the longer period, and 85 per cent of that in the shorter period, was due to decarbonisation of energy supply alone — primarily the elimination of coal and growth of renewables. Business also reduced emissions significantly. But little happened elsewhere.
Above all, almost 40 per cent of the emissions for which UK residents were responsible in 2016 were outside the country. The most important of these were from net imports (34 per cent of the UK’s carbon footprint), aviation (4 per cent) and shipping (1 per cent). The UK has the second most carbon-efficient economy in the G7 group of high-income countries, behind France. But it has a long way to go to get to net zero, especially if we focus on its global footprint.
What needs to be done? The good news is that the transition to net zero is feasible and also far cheaper than most feared even a decade ago. If one takes into account the benefits of cleaner air, making the transition is a “no-brainer” for the UK alone. Yet it is also complex and will require tough choices.
In terms of sectors, the important challenges up to 2035 are energy, transport and residential heating.
On energy, a set of regulations, incentives and procedures is needed to drive the necessary investments in a fully renewable system. This is now more or less on track. In transport, too, the shift to electric vehicles may be even quicker than most people now expect, as the costs fall and the efficiency of batteries continues to rise. The UK’s commitment to ban the sale of cars with internal combustion engines by 2030 is important. Its biggest omission is the failure to invest in the needed expansion in charging infrastructure. A third of UK households lack off-street parking. This lacuna has to be filled quite quickly.
Yet too little is happening on residential heating. A shift to heat pumps, for example, will be demanding and costly. Many people will need financial help, including on improving insulation.
As important as such sectoral plans are the right incentives, via taxation of emissions and subsidisation of negative emissions. A 2020 report by the Zero Carbon Commission (authored by my daughter) analysed the politics and economics of carbon pricing in the UK.
Pricing emissions is a necessary but not sufficient condition for reaching net zero efficiently. A price would cover all activities, make polluters pay, harness the motive of economic gain and encourage people to exploit their knowledge. A carbon price would also raise revenue, which could be used to help poorer households pay for the costly changes they will need to make.
The Zero Carbon Commission recommends a price of £75 a tonne of CO2 in 2030, which would also raise a little over 1 per cent of gross domestic product. In addition to generating revenue, a uniform levy would eliminate the current divergences in implicit prices of emissions across the economy. Today, for example, electric heating is more heavily taxed than gas. That makes no sense.
Yet, if the UK were to tax energy-intensive tradeable activities more heavily, they would shift offshore even faster. That would be politically unacceptable and is also quite likely to end up increasing global emissions. The answer has to be a border tax adjustment. That might even accelerate a move to global limits.
The UK has ambitious targets and some good plans. But these also have obvious holes. Above all, it has failed to announce a credible levy on emissions. It needs to do better if it wishes to lead.
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