In June 2019 government committed to achieving net zero greenhouse gas emissions by 2050. In October 2021, more than two years after the net zero target was enshrined in law, government published its plan for achieving this. To achieve its net zero goal by 2050, government has committed more than £25 billion up to 2024–25.
The government has unveiled a plan without answers to the key questions of how it will fund the transition to net zero, including how it will deliver policy on and replace income from taxes such as fuel duty, or even a general direction of travel on levies and taxation. The Government has no reliable estimate of what the process of implementing the net zero policy is actually likely to cost British consumers, households, businesses and government itself. The HM Treasury witnesses we questioned were reluctant to be drawn on what the future costs of achieving net zero would be, cautioning that while the Climate Change Committee has provided estimates, they contain ‘heroic assumptions’ with errors potentially compounding over very long periods. Government is relying heavily on rapidly changing consumer behaviours together with technological innovations driving down the costs of green options but it is not clear how it will support and encourage consumers to purchase greener products. Certainty for business and consumers is critical but as highlighted repeatedly in this Committee’s recent reports into Achieving Net Zero (HC935), Environmental tax measures (HC 937), Low emission cars (HC 186), and the Green Homes Grant Voucher Scheme (HC 635), government has too often pursued stop-start strategies which undermine confidence for business, investors and consumers in committing to measures which would reduce carbon emissions, especially when some green alternatives are still significantly more expensive than current options.
The government’s net zero strategy requires government, local government, regulators, businesses, and consumers to deliver its targets. A top-down strategy from government won’t deliver on its own. There is a risk that a series of disconnected initiatives announced by central government will not bring about the changes that are set out in law. Instead, government now needs to be clear about what impact new measures will have across the board, particularly for local government.
The government needs to monitor and report its progress including on how it will ensure consumer engagement and buy-in; and how it plans to ensure both the civil service and private sector are equipped with the technical skills to deliver government’s ambition. In addition, Government rightly recognises it has much more work to do to understand the emissions impact of international supply chains, including the risk of domestic emissions being only window dressing if these are merely shifting emissions offshore to other countries.