The Climate Change Committee (CCC) has praised the government’s Net Zero Strategy as “ambitious and comprehensive,” marking a “significant step forward for UK climate policy”.
However, the climate watchdog said “further steps will need to follow quickly” to implement the policies and proposals mapped out in the strategy.
In its assessment of the document, the CCC said the strategy fully aligns with the UK’s emissions targets, “setting a globally leading benchmark to take to COP26.”
The committee said the “overall vision” is similar to its own, with the power sector fully decarbonised by 2035 and transport, heating and industry all being rapidly electrified.
This vision is backed by “clear commitments across the economy, which send strong signals to businesses, investors and consumers,” including the targets for 40GW of offshore wind and 5GW of hydrogen production capacity by 2030.
The CCC said across the economy the government has “proposed, or begun to implement, credible mechanisms to drive delivery and rapidly scale up private investment.” It said many of the proposals align with recommendation, “combining regulation, carbon pricing and enabling measures.”
“Some of the policies for delivering the UK’s ambitions are already in operation,” it added. “For many of those that are not, consultations have been undertaken, initiated or tabled for the coming year. This is consistent with full implementation by 2024, as the committee has recommended.
“The government will report on its progress annually. Implementation must move quickly, and when needed adjustments to plans must be rapidly identified and acted upon.”
Overall, the CCC said the strategy represents “a credible package that reflects the scale and breadth of the challenge.”
Heat
Alongside its Net Zero Strategy, the government also released its Heat and Buildings Strategy, which according to the committee “backs electrification of heating (via heat pumps) as the primary route to decarbonisation, alongside heat networks and with development of hydrogen as a potential alternative.”
The Heat and Buildings Strategy included commitments to provide £5,000 grants for the installation of heat pumps, shift policy costs from electricity to gas bills over the next decade and impose a heat pump sales mandate on gas boiler manufacturers.
“These are welcome steps, but significant delivery risks remain, notably for energy efficiency in the 60% of UK homes which are owner-occupied but not fuel poor,” the CCC responded.
“Targets for mortgage providers have been proposed, initially voluntarily, with an option to make these mandatory in future, and the government plans to consult on further options,” it added.
“These plans must progress quickly and be implemented robustly, with more public funding likely to be required, if the government is to meet its goals for efficiency improvement.”
The CCC said the government’s proposals for achieving its target of installing 600,000 heat pumps per year by 2028 “aim for stronger cost reductions than the committee assumed and move more quickly away from public funding to a market mechanism. If successful, this would be a desirable outcome, but it brings different delivery risks, which will need to be carefully managed.”
The committee said the Heat and Buildings Strategy is more reliant on standards and market mechanisms than it had envisaged. It said overall funding, in particular for heat pumps and heat networks, remains “relatively low” and the absence of an “integrated offer on home retrofit for the majority of households remains a real source of concern.”
Power
The CCC also welcomed the government’s commitment to fully decarbonise electricity by 2035, subject to security of supply, describing this as a “big step forward”. It said developing and implementing a plan to achieve this target must be “a key near-term priority.”
The committee noted the government’s plans for the sector, including securing investment in at least one more new nuclear power plant this parliament, reforming the Capacity Market to incentivise low-carbon generation, supporting the development of long-duration energy storage and reviewing the frequency of Contracts for Difference auctions.
“The strategy also commits to consider whether broader reforms are needed to electricity market frameworks,” it added. “The committee has been calling for such a review as part of a broader strategy for fully decarbonising the power sector by 2035; it should proceed without delay and complete by 2023.”
Funding the transition
The Net Zero Strategy was also accompanied by the long-awaited final report from the Treasury’s Net Zero Review.
The CCC said the two documents start to set out principles for fairly funding the transition to net zero, including working with the grain of consumer choice, ensuring the biggest polluters pay the most, protecting the vulnerable and working with businesses to deliver cost reductions.
As household characteristics will determine their exposure to the costs of decarbonisation in each sector, the Treasury’s Net Zero Review additionally highlighted the need for targeted support in each rather than universal changes to taxes and benefits.
The CCC said whilst policies in some sectors align with these principles, others remain “under-developed and under-funded”. It said further clarity is needed on how these policies will affect different groups.
It said details of funding beyond 2024 are “still missing”. Whilst relatively generous in some areas such as electric vehicle charging infrastructure and innovation, funding is low in others.
The Net Zero Review flagged the significant reduction revenues that will come from the loss of fuel duty and vehicle taxes. “Decisions on how to address this have not yet been made, however, despite a growing recognition that a shift to road pricing is likely to be needed, and that the transition will be easier to manage the sooner it is initiated,” the committee commented.
Conclusions
“Together, the proposals represent a strong foundation for policy to reduce emissions across the economy,” the CCC concluded.
“In most areas, the government has set goals aligned to the path to net zero and put forward credible policy packages to deliver them. Funding and incentives appear to be being set at around the level required and generally plans involve a balanced mix of the possible solutions.”
However, the committee said the government has not quantified the effect of each policy and proposal on emissions: “So while the government has proposed a set of ambitions that align well to the emissions targets, it is not clear how the mix of policies will deliver on those ambitions – albeit in theory they could.
“This makes it hard to assess the risks attached to the plans and how best to manage these.”
It said policies are still under development in most areas and warned: “Good policies cannot be designed and implemented overnight, especially if they are to meet the needs of businesses, investors and consumers.
“The failure of the Green Homes Grant shows some of the challenges in rushed implementation, although we note that other schemes with longer gestation periods such as the Green Deal have also failed.
“There is little time to develop, test and refine policies and meet the net zero path; work must proceed apace,” it added.
CCC chair Lord Deben said: “The Net Zero Strategy is a genuine step forward. The UK was the first major industrialised nation to set net zero into law – now we have policy plans to get us there. As we welcome world leaders to COP26 in Glasgow, that is an important statement.
He continued: “Ministers have made the big decisions – to decarbonise the power sector by 2035, to phase out petrol and diesel vehicles, to back heat pumps for homes. And they have proposed policies to do it. I applaud their ambition.
“Now they must deliver these goals and fill in the remaining gaps in funding and implementation. My committee will hold their feet to the fire, as we are required to under the Climate Change Act. This is the UK’s climate governance working as it should.”