More steps in the wrong direction on net zero, at precisely the wrong time
Yesterday’s King’s Speech has paved the way for a further weakening of climate policy in the UK by introducing a bill to support future oil and gas drilling in the North Sea. Esin Serin and Anna Valero explain how this approach endangers global efforts to keep the 1.5°C target alive in the run-up to COP28 while also lacking environmental, economic and political logic at home.
A recent study estimates that the world will exhaust its remaining carbon budget for limiting global warming to 1.5°C by the end of this decade if emissions continue at current levels. With the window of action for avoiding the worst impacts of climate change narrowing rapidly, advanced economies have a responsibility to go faster. This should include committing to no new extraction of oil and gas.
But the UK’s weakening of some key climate policies in recent months is in stark contradiction to the country’s need to accelerate action to meet its net zero target, not least as the first advanced economy to have put this into law. A new bill, announced in the King’s Speech, to support future licensing of new oil and gas fields is the latest example of this shift. This approach calls into doubt the UK’s credibility on the climate agenda on the world stage and could undermine its ability to influence other countries to step up efforts at COP28 – the crucial UN climate meeting that begins in a matter of weeks.
Setback to the domestic path to net zero
Providing support for increased oil and gas production greatly threatens the UK’s ability to deliver net zero. The Secretary of State for Energy Security and Net Zero Claire Coutinho frequently refers to the Climate Change Committee (CCC), the UK’s independent climate advisory body, in reasoning to support new oil and gas production in the North Sea. In a statement published on 30 October, she said that the CCC recognises the continued need for these fuels over the coming decades. But this does not justify new drilling in the North Sea (a mature and declining field), and it also calls into question why the advice of the CCC is not heeded when it comes to considering the signalling impact of UK government decisions on further oil and gas extraction (both in the UK and internationally), or on closing the substantial policy gap that remains for the UK to meet its 2030 emission reduction target (let alone net zero by 2050).
Poor choice economically
Slowing the UK’s transition away from oil and gas is set to cost the country more in the long run. First, take energy security and resilience – a key concern for the UK given the recent energy crisis and risks of future ones. Previous delays in transitioning to clean, homegrown energy and energy efficiency in buildings have left the UK particularly vulnerable to price shocks in international markets. One estimate suggests that the UK’s failure to adopt technologies like renewables and energy efficiency faster added £1,750 to household bills in 2022. The reality is that the vast majority of any newly extracted oil and gas will be exported, and prices set internationally – new licences will do little to improve affordability in the UK (as admitted by the Energy Security Secretary herself).
Investing in future oil and gas production rather than a faster transition would also be, in the words of Lord Stern, a “bet on the failure of international agreements to tackle climate change” from a commercial point of view, risking stranded assets and job losses down the line in a world that needs to see falling demand for oil and gas. Instead, the focus now should be on building renewable energy infrastructure for net zero and energy security and planning job transitions for those likely to be displaced.
Moreover, this direction of travel is likely to be another hit to confidence levels in the UK as a place to invest in clean technologies, given the fact that the US and EU are pressing ahead with major investment packages. This could prove to be a huge missed opportunity for growth for UK firms that have the potential to serve growing domestic and international demand for net zero products and services.
The UK has existing technical strengths in areas like offshore wind, carbon capture and storage and tidal stream energy, which it could leverage to serve growing global markets competitively. In addition, given the location of such strengths around the country, support for the net zero transition has the potential to boost the performance of some of the UK’s less productive regions. But these opportunities can only be realised if policy provides the certainty and continuity that business needs to invest and develop associated supply chains domestically – ideally as part of an overall growth strategy for the UK.
Threat to crucial public support
Public support for climate policies – a necessary condition for their feasibility and durability – is high in the UK. The successful delivery of the country’s transition to net zero is contingent on the continuation of such support. Sending confusing messages on net zero and diluting the urgency for emissions cuts could be detrimental to the public’s buy-in to necessary changes, while also making little sense politically from the perspective of the Conservative Party. While it is right to highlight that net zero must be implemented in a fair way without adding undue burdens on specific groups, that means understanding the distributional aspects of net zero for households and workers, offering targeted support in difficult areas such as upgrading the housing stock and ensuring that appropriate skills programmes are in place.
Ultimately what is needed is a clearly communicated and fair transition to net zero – yes, this requires significant structural change across the economy but it will leave the UK stronger and more resilient in the future.
This commentary was co-published with the LSE British Politics and Policy blog.