Rishi Sunak urged to boost green spending or miss net zero target

HS2 trees

The UK chancellor, Rishi Sunak, must radically overhaul the Treasury’s response to the climate crisis, reforming the department’s longstanding hostility to green spending and resetting its priorities, experts said.

The Treasury is poised to introduce its long-awaited review of the government’s net zero strategy, and its recommendations will help determine whether the UK meets stringent targets on greenhouse gas emissions in the next 15 years.

Boris Johnson has already agreed to accept tougher climate targets – a 78% cut in carbon compared with 1990 levels by 2035 – as advised by the Climate Change Committee in its sixth carbon budget last December.

The prime minister said: “We want to continue to raise the bar on tackling climate change, and that’s why we’re setting the most ambitious target to cut emissions in the world. The UK will be home to pioneering businesses, new technologies and green innovation as we make progress to net zero emissions, laying the foundations for decades of economic growth in a way that creates thousands of jobs.”

But what is still lacking is a government roadmap to net zero setting out the policies, investments, new regulations and other measures needed.

Adair Turner, the chair of the Energy Transitions Commission, who acted as first chair of the Climate Change Committee from 2008 and was previously head of the Confederation of British Industry (CBI), said the Treasury had the power to make or break a net zero roadmap.

“The Treasury has a deep institutional belief that the rest of government are crazy people who want to spend money everywhere and the institutional role of the Treasury is to tell them not to,” he said.

Andrea Leadsom, the Conservative MP and former cabinet minister, agreed. “The number one thing is that the Treasury has to support the [net zero] transition, and has to stick to policies that are consistent with that.”

James Diggle, the head of energy and climate at the CBI, said the Treasury had a key role to play in setting taxes and other incentives that could be done quickly to make a difference in the short term, as well as in pursuing long-term investments.

The way VAT was charged on energy, which penalised people using public charging points for electric vehicles, and the VAT put on green goods, could be changed immediately, he said. “The Treasury can make that happen.”

In recent months the government has taken numerous measures that climate experts say has run counter to the prime minister’s low-carbon rhetoric. These include the road-building programme, the slashing of incentives for electric vehicles, the cut to air passenger duty for domestic flights, and the end to the green homes grant, the government’s only green recovery measure meant to encourage home insulation and low-carbon heating.

A new coalmine in Cumbria was also planned, though it is on hold pending a public inquiry, and airport expansion was on the cards.

Such is the extent of these reversals, and the lack of a clear net zero policy, climate experts are worried the pace of emissions reduction across the UK economy could slow down further instead of speed up.

Chris Venables, the head of politics at the Green Alliance thinktank, warned: “Unless there’s a serious step-change in climate action, the UK’s emissions may start to creep up again.”

To meet the net zero target the government will need short-term measures, or a reversal of some of its recent policy decisions, and set the scene for long-term investments. People will also need to change some aspects of their behaviour, particularly in the short term.

Recent research from the Cambridge Sustainability Commission on Scaling Behaviour Change found that a small number of people – the “polluter elite” – generated far greater emissions than the average UK citizen. Frequent flyers should face tough new levies, and SUVs should be banned or restricted, the report recommends.

Changing behaviour could be tricky and Leadsom said governments would face a backlash if they approached it in the wrong way. “We have to be very careful not to lose members of the public. If you confront people over a pint of milk or roast beef on Sunday that is very dangerous path to go down as a politician.”