Criticisms of the UK Prime Minister’s recent announcement that several net zero policies will be diluted are fuelling debate on whether the UK can continue to lead on climate action if it is seen as back-tracking on climate policies. Do his comments signal that net zero in the UK could be at risk?
Concerns raised in response to this announcement have certainly questioned whether the UK can stay on track, despite the UK government outwardly remaining committed to the legally binding target of reaching net zero by 2050.
In particular, a letter to the Financial Times from the leaders of 15 manufacturers’ trade bodies puts forward the view that “This announcement sends entirely the wrong signal and suggests if we aren’t looking forward, we are simply going backwards.”. An editorial in Nature begins with “It could have shown vision and leadership. Instead, the country that proudly hosted the 2021 COP26 climate summit is ignoring the advice of its own researchers.”.
The case for greater ambition towards net zero has been made by, among others, the International Energy Agency, IEA, whose updated Net Zero Roadmap shows that we have the tools needed to go much faster. An acceleration of innovation and an increase in investment – each supported by appropriate government policies - to deliver net zero remain essential, nonetheless.
On net zero innovation, a snapshot of the UK performance in a global context can be found in Cambridge Industrial Innovation Policy’s 2022 UK Innovation Report. Findings include:
- Although the UK’s public R&D budget in low-carbon and renewable-energy technologies is comparable to other leading nations, the country underperforms slightly in terms of patenting1.
- Most of the low-carbon and renewable-energy sectors in the UK have been declining over the last five years.
- There are some national disparities, with Scotland performing strongly.
On net zero investment, the IEA reports that the world is set to invest a record $1.8 trillion in clean energy in 2023, but this needs to climb to around $4.5 trillion a year by the early 2030s to be in line with their pathway. Elsewhere, the US hopes Europe will join a 'race to top' on green subsidies.
Despite the announcement containing some positives2, a bold commitment to net zero with widespread positive reception is clearly absent. As such, confidence from investors, start-ups, spinouts, SMEs, and corporates to continue to innovate and invest in the UK on net zero risks becoming diminished.
Also, some technology areas that are aiming to impact climate change, biotechnology in particular, are a long way from being adopted widely due to the unfavourable techno-economics compared to oil based incumbent technologies. The development of and investment into these technologies relies on a certain inevitability - at some point we will have no choice but to employ these new methods and the “market pull” that investors look for will be there. That “point” now seems to be further away than ever since it will require policy changes to favour non-oil based technology over oil-based technology.
Over the coming decades, this could mean that the UK falls behind other major economies on climate action (and its benefits). The US in particular is leading the way with strong policies and investment drives in areas such as biomanufacturing3. There is already a concern that UK founded companies have to seek US investment. The gulf between approaches in this area between the UK and the US means that the UK is at increased risk of seeing these companies relocating overseas.
A long-term, regionally balanced UK industrial strategy now appears more necessary than ever.
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- This report also noted “It is unclear, however, whether this strength in patents is translating into economic performance for the UK or if the economic benefits are being exploited elsewhere.”.
- A new, £150m Green Future Fellowship to support the development of breakthrough green technologies, for example.
- Federal Register: Executive Order 14081 Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy-Request for Information; National Biotechnology and Biomanufacturing Initiative-Measuring the Bioeconomy.