Sam Hall: How to help poorer people meet the costs of net zero

6 Jul

Sam Hall is the Director of the Conservative Environment Network.

Last week marked two years since MPs unanimously put into law a target to achieve net zero greenhouse gas emissions by 2050. Since then, the target has been reaffirmed in the Conservatives’ election-winning manifesto, a raft of carbon-cutting, job-creating policy measures have been implemented, and many other large economies have followed the UK’s lead in setting net zero targets.

Our main challenge now is not the overall cost of the target, which is both affordable and dwarfed by the many benefits, but ensuring fairness in how costs are allocated.

While it is certainly true that net zero will require significant new investment in clean infrastructure and technologies, these investments will bring wide economic benefits, notably a net increase in employment, and will cost less as a share of GDP than the damage caused by unchecked climate change.

As we accelerate emission cuts over the next few years to achieve the UK’s more stringent targets for 2030, this will trigger additional investment in building retrofits, renewable energy, and transport infrastructure, which will ease post-Covid unemployment.

Thanks to the ingenuity of British scientists, engineers, and entrepreneurs in developing new technologies and making existing technologies better and cheaper, the overall costs of net zero are being revised downwards all the time. And since clean technologies like electric cars and heat pumps are much more energy efficient than the fossil fuelled equivalents, there are likely to be significant fuel savings for consumers in the long term.

More important than the overall costs is how they will be distributed across society and the economy. Many of net zero’s critics highlight the impact of net zero on the poorest as one of their chief concerns. They are right to make this a priority, although fortunately so far negative distributional effects have been minimal. According to the Climate Change Committee, household energy bills have remained flat since the passage of the 2008 Climate Change Act. But we need to ensure that forthcoming technology changes aren’t regressive either.

This distributional analysis is one of the main focuses of the Treasury’s net zero review, which is currently being finalised on Whitehall. But as well as identifying potential regressive effects, the Treasury must also provide policy solutions. To do this, they can look to a number of excellent recent centre-right think tank proposals on how to drive forward net zero in a way that both enhances fairness, and boosts jobs and the economy.

Take critical clean technologies like carbon capture or low-carbon hydrogen, which due to a lack of scale remain expensive, yet are a promising source of green jobs. When commercialising these nascent industries, we should follow Onward’s recommendation and avoid subsidising them through energy bills, since low-income households spend a greater share of their income on energy.

The government was right recently to cut subsidies for more expensive electric vehicles (EVs), lowering the cap for the Plug-in Car Grant so that vehicles with a sticker price of more than £35,000 were ineligible. Ministers should also consider Bright Blue’s recent call to subsidise second-hand EVs, so that low-income people can benefit from this government funding pot too, and access these cheaper-to-run vehicles.

Similarly, as more people switch to EVs and need affordable overnight charging, we should protect people without private driveaways from paying extortionate prices to use on-street charge points. Policy Exchange has proposed a system of price caps for charge point operators in receipt of public funding.

Fairness is particularly important in the drive to retrofit Britain’s homes for net zero, given the scale of investment required. As Bim Afolami has advocated on this site and Simon Clarke more recently, the Treasury should offer vouchers for the most expensive types of insulation, such as solid wall insulation, and heat pumps. Even though a home’s running costs will be lower after it’s been retrofitted, the upfront costs are often a barrier to people installing these home energy improvements.

Finally, if the Treasury does extend carbon pricing to more of the economy, as is rumoured, it should consider giving some of the money back, in the form of a carbon dividend, to low-income households, as the Centre for Policy Studies has argued.

Once these investments have been made and these technologies adopted, our society will be fairer. People on lower incomes who typically live by busy roads will be less exposed to harmful air pollution. The fuel poor, who live in draughty homes, will spend less on their energy bills each month, while avoiding cold-related ill-health.

And if we replace Fuel Duty with dynamic, congestion-sensitive road pricing, driving will be cheaper for people living in rural areas and towns, who after all have few alternative transport options compared to city dwellers. But to realise these benefits, the government needs to help people make the necessary investments.

If we were to pursue the alternative approach of not mitigating climate change, unfairnesses in society would be exacerbated. Low-income households, for example, are disproportionately exposed to flood risk and to the health impacts of heatwaves, according to the CCC, and due to a lack of savings, they are more financially vulnerable to climate-related hazards. Similarly workers in traditional fossil fuelled industries – concentrated in ‘red wall’ constituencies – would have less opportunity to transition into new green industries and could end up in ‘stranded jobs’ as other countries switch to clean energy.

Some will argue that, in the face of these challenges, we should just abandon net zero, but that would be economically foolish, diplomatically isolating, electorally damaging, and much more besides. Others will argue that it’s not the government’s job to intervene to tackle inequality. But since the government isn’t a passive observer of this technological change, it can and should make sure it doesn’t adversely affect the least well-off and instead reduces their cost of living and makes their lives more convenient.

Now that our climate targets are becoming embedded, net zero politics is entering a new phase. Now is the time to put fairness at the heart of our net zero strategy.

Sam Hall: Conservative lessons from Houchen and Street about how to respond the Greens

11 May

Sam Hall is the Director of the Conservative Environment Network

The dominant stories from last week’s elections were the Conservatives’ hat-trick of English triumphs in Hartlepool, Tees Valley, and the West Midlands, and the SNP falling short of a majority in Scotland. But amid these headline-grabbing results, a new trend emerged: the quiet rise of the Green Party.

The Greens won 88 new council seats across England, including from Conservatives. Yes, they did well in their traditional strongholds, such as Bristol, Sheffield, and around Liverpool, where their main competitor is Labour.

But they also defeated incumbent Conservative councillors across England in places as diverse as Surrey, Sussex, Derbyshire, Stroud, and Northumberland. They won an additional two seats in the Scottish Parliament and an extra member of the London Assembly, recording their highest ever vote share in both contests.

Despite two brief surges around the 2015 general election and the 2019 local elections, the Greens have for decades struggled to break past five per cent of the national vote. But the signs from Thursday are that they are on the rise, and could become an electoral threat not just to Labour, but to the Conservatives too.

The reasons for the Greens’ recent electoral success are varied. Public concern about the environment is at historically high levels, with media and government focus on the issue growing, and climate change impacts becoming more visible. It’s understandable that, as the environment becomes more salient, more voters turn to the party whose defining mission is to save the planet.

Factionalism on the left is undoubtedly boosting the Greens, too. As Keir Starmer repudiates Corbynism, he is pushing some of the party’s more left-wing supporters towards the Greens, who have long supported some of the more radical ideas of John McDonnell, such as a universal basic income. The Liberal Democrats remain toxic to many on the left for going into coalition with the Conservatives. And in Scotland, the Greens provide a more environmentally-conscious alternative to the SNP.

Greens across Europe have benefited from a similar trend. Just a few months out from federal elections, the Greens are currently the highest polling party in Germany, two points ahead of the CDU. Greens are part of the coalition government in Austria, after securing 14 per cent of the vote in the last year’s elections. There was also a green surge in the 2019 elections for the European Parliament, with the green bloc growing from 50 seats to 74.

However, this phenomenon isn’t simply about splintering on the left. Nor is it the case that the Greens are just taking votes off Labour and allowing the Conservatives to come through the middle. As Thursday’s results show, the rise of the Greens threatens both the main parties.

That said, the threat shouldn’t be overstated at this stage: the Greens only control one council, Brighton and Hove (where they are a minority administration), and they still only have one MP. But a response will be needed nonetheless.

First, here’s what to avoid. Counteracting the Greens doesn’t entail copying their policies, which are a bad combination of the unfeasible (net zero by 2030), the unpopular (a meat tax), and the economically damaging (a four day week). But neither should they Conservatives shouldn’t become hostile to the entire green agenda, which is popular with a majority of voters. Nor should they ignore other policy priorities in favour of an exclusive focus on the environment. As James Frayne has argued convincingly on this site, this approach wouldn’t keep the party’s voter coalition together.

Instead, Conservatives should unite behind the strategy that the Prime Minister articulated in his ten point plan for a green industrial revolution, linking net zero to people’s immediate economic concerns. This prospectus has the best chance of binding together the Conservatives’ diverse supporter base and stalling the rise of the Greens.

This strategy has worked well for Ben Houchen, whose tireless advocacy for Teesside is helping to attract many of the UK’s leading net zero investments to his area, from GE’s new turbine manufacturing factory and BP’s blue hydrogen plant, to one of the first carbon capture projects and a hydrogen transport hub. He has been one of the biggest advocates for the PM’s green industrial revolution, including on this site, and was re-elected by a landslide.

The Government should copy this formula in other parts of the country. It should invest in enabling infrastructure, fund large-scale green demonstration projects, and put in place market frameworks to attract private investment in new clean industries, such as battery manufacturing, floating offshore wind, heat pumps, and green steel production.

But while it can unite Conservatives, this approach to net zero is divisive on the left. The red-greens can’t decide if they support ‘degrowth’ as a route to tackling climate change. They debate whether people’s lifestyles must be drastically curtailed, or whether to focus on clean technology. And they are divided over whether to attach radical cultural policies on race and gender to their environmental agenda.

The other main element of the Conservatives’ response should be to implement ambitious but practical environmental policies that improve people’s communities and their quality of life. Here, the Conservatives’ other great election-winner from Thursday, Andy Street, provides a blueprint.

He has overseen major improvements in public and active transport in the West Midlands, reopening rail stations, extending metro lines, putting in segregated cycle lanes, and freezing bus fares. He is showing how mayors can connect up their region, reduce the cost of living, and improve the local environment at the same time.

National government should enable more pragmatic local environmental leadership like this. Ministers could give councils the powers and funding to create and safeguard a new network of wild green spaces (a ‘wilbelt’) around towns and cities. They could devolve more funding to metro mayors to insulate social and fuel poor homes in their regions. And they could fund transport authorities to replace old diesel buses with electric or hydrogen ones, and to install electric charge points along the strategic road network.

The Greens, by contrast, have a poor record of delivery on the few occasions when they’ve been entrusted with office. Remember their failure in Brighton and Hove to arrange the bin collections, which lead to strikes and images of rubbish piled up on street corners. There is a political opportunity here for Conservative environmentalism that sets ambitious targets, actually delivers them, and does so in a way that benefits the economy and people’s standard of living.

The Greens had a good night on Thursday. But by uniting behind Boris Johnson’s green industrial revolution, and replicating the approach of Ben Houchen and Andy Street, the Conservatives can prevent them rising further and can make the environment a winning, unifying issue for the party.

Sam Hall: The Government must secure tougher emission-reduction commitments at this year’s COP26. Here’s how.

28 Jan

Sam Hall is the Director of the Conservative Environment Network.

It is hard to overstate the centrality of COP26 to UK domestic and foreign policy this year. It will be the most significant international summit of 2021 and the most important set of climate negotiations since the Paris Agreement in 2015. Having failed to plan properly for a global pandemic, the world still has time to mitigate this potentially much greater threat to our security and prosperity. At COP26, the UK has an opportunity to direct and shape this critical global effort, and in the process strengthen its own national mission towards net zero and post-Covid economic recovery.

The political context for COP26 is, on the whole, favourable. The Biden administration has made climate action a priority for American diplomacy. Last year, a slew of major economies followed the UK in setting net-zero targets, including Japan, China, South Korea, and the EU. But economics, rather than politics, are increasingly driving climate action. The costs of clean technologies, particularly solar, wind, and batteries, continue to fall, thanks to innovation, scale, and competition, and good green jobs are being created along the way.

That being said, there are a number of tricky challenges that Alok Sharma, President of COP26, must navigate. Despite new climate commitments from China and others, some big emitters, such as India and Russia, are still reluctant to up their game. And the finance flowing towards clean energy and nature-based solutions is still well short of what’s needed, undermining political support for climate action among developing countries whose fiscal resources have been badly depleted by Covid.

The Government’s primary goal at COP26 must be to secure tougher emission-reduction commitments from nation states. In Paris five years ago, countries agreed a set of climate goals: to limit the global temperature rise to well below two degrees, and to pursue efforts to keep it below 1.5 degrees. But the national pledges that countries made towards achieving those global goals were, and remain, insufficient. Despite lots of recent progress, we’re still on track for more than three degrees of warming by the end of the century, according to the UN.

To deliver the Paris Agreement goals, new national commitments must include both short-term targets, which are important for limiting the cumulative emissions that drive the greenhouse effect, as well as long-term net-zero targets, which are needed if countries are to stop contributing to climate change altogether. They must include concrete plans that deliver those targets while also creating green jobs and clean growth. Developed countries must also follow the UK in honouring their commitment to allocate an annual total of $100 billion for climate finance for developing countries.

Alongside targets and plans, the Government should champion some sector-specific campaigns – such as the phase-out of coal power stations or combustion engines, or the transition towards more sustainable agriculture. Thanks to successive Conservative governments, the UK has strong commitments in all these areas. COP26 is an opportunity to bolster support for these important international coalitions.

The most effective solutions to climate change are market-based. They harness competition and private capital to keep down costs for consumers, while avoiding the need to adopt economically damaging left-wing policy solutions. The Government should use COP26 to enable three of them in particular.

First, the Government should accelerate the growing momentum behind border carbon adjustments (BCAs). BCAs are carbon charges levied on carbon-intensive imports, and carbon charge rebates for exports. This policy – recently advocated on this site by Jerome Mayhew MP – is already being considered by the EU and the US. If implemented carefully, BCAs could unlock the use of higher carbon prices to enable market-based decarbonisation, without harming the competitiveness of UK businesses exposed to international trade.

Some countries regard BCAs as protectionist, but with careful design, this doesn’t need to be the case. With a transparent process for measuring carbon intensity, and by ensuring imports and domestically-produced goods face the same carbon price, the risk of a legal challenge at the WTO can be kept low. The UK should try to shape the international BCA debate, and build a supportive coalition at COP26.

Second, the Government should finalise an agreement on the rules governing carbon markets. Carbon markets enable countries to buy carbon credits from emission-reduction projects overseas and include them in their national carbon accounts. Carbon markets let countries find the most cost-effective pathway to net zero, and provide much-needed private funds for nature-based solutions.

Five years on, this element of the Paris Agreement (known as “article six”) remains highly contentious and is still unresolved. In previous iterations of carbon markets, carbon credits were of dubious quality, were sometimes double-counted by appearing in two different carbon accounts, and diverted investment from crucial domestic emission reduction projects. Using some of the findings from Mark Carney’s new taskforce on voluntary carbon markets, the Government could forge an international consensus behind scientifically rigorous, environmentally-ambitious carbon markets ahead of COP26.

Third, there needs to be much greater focus on the role of the private sector. The Government should urge as many companies as possible to commit to net zero, set a scientifically robust deadline for reaching it, and publish a comprehensive and credible action plan. As happens currently with nation states, we should ask these private sector actors to report against their commitments, and to review their targets every five years with a view to ratcheting ambition. Broadening the scope of the Paris Agreement framework to include the private sector would be a really significant legacy of COP26, and would encourage more businesses to take the lead on climate action.

Finally, the Government must engage its conservative counterparts elsewhere in the world on climate change, and extend the climate discussion to encompass more voices from the right of the political spectrum. Almost a quarter of global emissions comes from countries with centre-right governments. We won’t solve climate change without the support of conservatives, yet too much of the international climate movement remains dominated by the left.

This lack of conservative voices is in large part a result of the historic but shrinking climate scepticism on the right. It must now be rectified. The Government should focus on making the economic case for climate action to its overseas partners, highlighting the UK’s world-leading record on clean growth. The UK enjoys broad cross-party support for climate action – among all sections of the public as well as elected politicians. Thankfully, climate change is not a front in the culture war. We should try to export that model around the world.

This is an exciting year for climate policy in the UK. COP26 will be the culmination of the UK’s recent climate leadership, and a chance to internationalise our clean growth-focused approach. It could also pave the way for a more market-based approach to net zero. It might prove to be one of Boris Johnson’s most significant legacies.

Sam Hall: Extinction Rebellion is completely wrong in its approach to climate change

15 Sep

Sam Hall is the Director of the Conservative Environment Network

As a Conservative environmentalist, I believe passionately in the need for stronger action on climate change. I initially regarded Extinction Rebellion as wrong, but well-meaning. I’ve now come to the conclusion they are not only wrong, but actively harmful to the cause they claim to champion.

During their first action in 2019, I was sympathetic to the urgency with which XR demanded action on climate change, and the importance they attached to the issue. I shared, to some extent, their frustration that it wasn’t given the prominence in political debates that its seriousness merits. And I admired their skill in triggering a national conversation on climate change.

However I now believe Extinction Rebellion have gone badly off course with their use of polarising tactics, and that their approach to fighting climate change is completely wrong.

It has become apparent, for example, that they predominantly direct their protests against people and organisations on the right of British politics. Boris Johnson, the Centre for Policy Studies, and the Telegraph are some of their recent targets. But to address climate change effectively over multiple political cycles, we need the support of all political traditions – particularly Conservatives.

We need messages and messengers that will appeal to those groups among whom support for climate policies is lowest, not attacks on the political leaders and institutions they trust. We need to celebrate when once-sceptical Conservatives put forward good climate policies, not criticise their lack of purity.

Another problem is their uninspiring message of despair. Remember XR founder Roger Hallam’s claim that climate change will see billions of deaths, or children at school today will not survive to adulthood?

Of course, unmitigated climate change is incredibly dangerous, but fighting it requires us to be hopeful. We must believe that, if we act, we can succeed in stopping the most severe impacts. We shouldn’t dwell on apocalypse, but rather focus on solutions that create jobs and bring new industries to Britain, while making our towns and cities more prosperous, greener, and healthier places to live.

We also have to bring people with us. Yet by letting an all-powerful assembly, made up of a tiny unelected minority, decide our pathway to net zero, XR is attempting to short-circuit the democratic process.

We do need comprehensive public engagement on climate change, and there is certainly a useful role for assemblies in developing policy. But decisions should be taken by elected politicians that the voters can hold accountable and kick out of office if they choose.

Vital public consent for climate action would quickly be shredded by the pace of change they are demanding. Net zero by 2025 would be eye-wateringly expensive, and cause huge economic dislocation. Instead, we need a transition that is as quick as possible, but which gives people time to adjust, and companies the opportunity to invest for net zero as part of the normal business cycle.

Disagreeing with this 2025 target doesn’t mean you aren’t worried about climate change. Far from it. Environmental ambition should not – although frequently is – measured by the earliness of a target date or the scale of government spending. Truly ambitious policies must also be feasible, costed, and command the support of the public.

Nor is it about being ‘anti-science’. The Intergovernmental Panel on Climate Change found that the world must reach net zero emissions by 2050 in order to limit global warming to 1.5 degrees. The UK’s independent Committee on Climate Change agrees that a 2050 net zero target meets our obligations under the Paris Agreement.

While I would be delighted if technological innovation meant we could reach net zero before 2050, it is the case that our 2050 net zero target has a much sounder basis in science than XR’s 2025 deadline.

Nor should we excuse their extreme actions as creating political space for moderate proposals on tackling climate change. For one thing, that is not what most XR campaigners are aiming to achieve. They do not accept compromise.

More broadly, the media and parliamentary debate around Extinction Rebellion is increasingly focused on policing and human rights issues. Note that the statement on XR in Parliament last week was given by the policing minister, not the climate change minister.

Even the climate discussion they provoke is unhelpful. In the media, sceptics of climate science who opportunistically elide XR with mainstream environmentalism, are pitched against left-wing climate activists. XR’s demands and tactics are inimical to a reasoned, evidence-based debate on climate.

But enough negativity. Here is my alternative approach. We need a credible, deliverable and affordable plan to reach net zero by 2050. One that creates millions of well-paid green jobs across the country, that revitalises our towns and cities with the clean industries of the future, and that harnesses the genius of our scientists and the creativity of our entrepreneurs. One that gives consumers freedom to choose between attractive and compelling solutions, and where private-sector competition and government support make them affordable for all.

We need to create the frameworks for businesses to invest in clean technologies, including an appropriate balance of fiscal incentives, regulation, and market signals. And the government needs to make it easier for people to make greener choices in their daily lives, to gain skills to work in clean industries, and to participate in community efforts to improve their local environment.

We have so much more to do to get on track to, and reach, net zero. We need major programmes to upgrade homes, restore nature, and build out renewable energy. We need to deploy new technologies such as green hydrogen, carbon capture storage, and heat pumps, and bring down their costs. In sectors like aviation and shipping, we need to develop and commercialise technologies that are still in their research phase. And we need to do all of this while bringing the public with us and keeping the UK economy competitive.

We have a great prize within our grasp – a clean, reindustrialised Britain, and nature restored to our beautiful landscapes – but we should be clear that achieving it will be hard work.

XR is making that vision even harder to achieve by alienating the public. I fear they are coarsening and toxifying our public discourse on climate change, and fuelling the extremes. For the sake of the climate, I hope they change course.