The PM would be wise to offer less and deliver more when he unveils his 10-point green recovery plan, argues E3G’s Tom Burke
The Prime Minister’s much heralded action plan to reach Britain’s goal of net zero carbon emissions by 2050 looks set to arrive on Wednesday.
It is a plan. It will have ten points. But to find out how many of them will actually turn into decisions, we will have to wait until the even longer-heralded Energy White Paper appears – hopefully – later this month.
The plan will contain much that is needed. There is a yawning gap between the government’s net zero aspirations and its current performance. Many of the actions in the plan will help to fill it.
As has become customary, there will be re-announcements of actions already announced, on offshore wind for instance. There will also be welcome detail on some of the previous announcements, especially on energy efficiency.
The Chancellor’s recent announcement makes it clear that the government has decided to make London the leading centre for financing the energy transition. A nice example of the circular economy on a grand scale, as London financed the initial development of fossil fuel economy. There is even a rumour that the Green Investment Bank it sold so precipitously will return under a new name.
Internal combustion engines are now destined for an earlier death than previously announced, as there has been considerable pressure to bring forward their exclusion from the car market to 2030. This move was just trailed in the Financial Times so we can count on it being in the plan.
Innovation will also have its place with promises of a great future for hydrogen and carbon capture technologies. Though there is unlikely to be much of a steer about how much, where and at what cost to whom. There may even be a place for that perennial technology of the future: nuclear fusion.
There will also be some brave language on nuclear fission. Recent weeks have seen a hugely expensive battle in the headlines between EDF and Rolls Royce as to whether the government will fund another big nuclear reactor at Sizewell or a lot of small modular reactors elsewhere. The Prime Minister, having a reputation for avoiding hard decisions, may include both.
In many ways this particular issue captures the core problem of the whole action plan. The £40bn French reactor at Sizewell will not be built in time for it to contribute to meeting the net zero emissions target. Big nuclear reactors use a lot of carbon-expensive steel and concrete. By the time it has paid back this carbon debt Britain’s power sector will already have to be carbon free of the net zero target is to be met.
Furthermore, half of the £40bn cost is to pay for the loans to buy the concrete, steel and other expensive materials necessary to build it. Since the private sector has no interest in such a high risk project the only way this will actually happen is if the government puts electricity bills up twice to pay for it – first to buy the concrete and steel to build it and then again to buy its electricity at far higher price than renewable generators will be charging.
Dominic Cummings is widely reported as having been a big fan of small modular reactors. The main problem with them is that no one has one for sale – not even Rolls-Royce. They are actually offering to design one but only if the government will guarantee a £32bn order for 16, and pays half the £400m cost of the design. One word for deciding to go ahead on this basis is ‘brave’. A more appropriate word might be ‘foolhardy’.
The real problem with the Prime Minister’s action plan is that for all the compelling headlines it may attract, it is not matched by an equally compelling case for investors. This matters a lot, because much of the investment to get to net zero will have to come from the private sector.
Both they, and other governments, will certainly be attracted by the headlines. They will see that the Prime Minister is clearly investing a lot of his political capital in Britain’s net zero target. Congratulations will flow.
Then they will look very closely at the detail of who will be paying to do what by when. They will wonder if the ‘all of the above’ strategy set out in the action plan is actually deliverable. They will be puzzled about an action plan appearing before the policy on which it is presumably based.
What they will fear most of all is that an energy policy without a very robust analytic foundation will not deliver. On past experience, this will trigger abrupt and arbitrary changes in policy driven as much by unfavourable headlines as by unforeseen problems.
It will not take them very long to work out that becoming the ‘Saudi Arabia of wind’ is not compatible with building both Sizewell and small modular reactors and possibly other big nuclear generators. They will recall the Prime Minister’s affection for white elephants.
This will dampen their enthusiasm for investing in those bits of the net zero action plan that requires their money. Their reservations will not be as loud as their congratulations but they will make a far bigger difference to the outcome.
The Prime Minister’s commitment to Britain playing a leading role in the global politics of climate change is serious and not without domestic political cost. It is based on a good track record. To make the most of the opportunity he now has in the run up to the crucial climate summit in Glasgow next year he would be well advised to cull some of the white elephants in his energy policy, offer less and deliver more.
Tom Burke is chairman and founding director of climate think tank E3G