Wera Hobhouse MP
Liberal Democrat Spokesperson for Energy & Climate Change and TransportAs the US announces huge investment in green technologies and Europe rushes to catch up Wera Hobhouse MP looks at what the UK is doing to meet our climate commitments.
Our vital Net Zero targets are not like buses – once we miss one, there is not just another we can catch. That is why I was so keen to hear the announcements made at the Government’s much anticipated ‘Energy Security Day’. It could have been a major turning point in our fight against the climate emergency and put us on track for Net Zero. But as I listened to the proposals, I realised that this was just a set of old, repackaged policies.
The UK is Being Left Behind in the Fight Against Climate Change
The UK should have been putting forward its response to the Inflation Reduction Act (IRA) in the USA, as well as the EU’s impending large-scale investment into green technologies. Our reply is not only an economic necessity but mandatory if we want to keep pace with our vital Net Zero targets. Unfortunately, the proposals that were laid out were widely viewed as missed opportunities.
The IRA is a game-changing piece of climate legislation. The $369 billion investment package will boost Net Zero technology innovation, consolidating the USA’s position in the global green economy by reducing its dependency on China. It is a piece of legislation that covers all aspects of the energy transition. Revenue from corporate tax and other sources will be channelled into tax credits. It also makes grants and loans available for companies engaged with carbon capture and storage, renewables, and sustainable aviation fuels. The Act will provide households with incentives to move toward cleaner cars, heat pumps, and insulation. This multi-angled approach places the USA’s industry in a prime position to gain a competitive advantage in the renewables and Net Zero market. The legislation also does well to address agriculture and forestry. Some European and Asian companies are already investing in the USA on the back of the landmark law.
“Humanity is on a ‘highway to hell’ and the battle for a liveable planet will be won or lost in this decade.”
Wera Hobhouse MP, Liberal Democrat Spokesperson for Energy and Climate Change.
At the same time, the EU recognises the USA’s threat to move ahead in the green economic race and that they must reply. This has materialised in the proposed Green Deal Industrial Plan (GDIP), alongside the Critical Raw Materials Act (CRMA). The GDIP will simplify regulation, speed up project financing, create Net Zero Academies to address perceived deficits in skills and workers and cooperate with global partners to promote resilient and open trade. The CRMA, however, is the EU’s attempt to shake its dependence on China, it will increase the extraction of strategic raw materials that are key to the energy transition.
The story in the UK is notably different. Last year, private and public investment in the green transition fell by nearly 10 per cent when compared to 2021, from $31 billion to $28 billion. In comparison, Germany saw its investment rise by 17 per cent to $55 billion. The USA and EU saw their total investment rise by 24 per cent and 17 per cent respectively, to $141 billion and $180 billion.
A clear example of this lack of investment, especially from the Government, can be seen in the latest allocation round for the Contracts for Difference (CfD) scheme. There was £80 million, or 28 per cent, less on the table compared to the allocation round directly before it. CfDs have been pivotal in boosting our renewable energy generation, yet this move could jeopardise future increases to our green capacity and needs to be reversed.
We Must Act Urgently to Tackle the Climate Emergency
The missed opportunity of ‘Energy Security Day’ has left our green potential to stagnate, or even regress, as the rest of the world races ahead. We need to act quickly and at scale, and we Liberal Democrats have proposed exactly this. Our plan would be backed by a £150 billion public investment programme to put ourselves, once again, at the forefront of tackling the climate crisis. By 2030, there will be a $650 billion a year global green energy market that we cannot afford to miss out on. Any more delay between now and having a plan to respond to the USA and EU is putting us farther and farther behind in the race to be a major player in the industries of the future.
Beside the need for an overhaul of our green economic thinking, there are other steps that are being missed on the road to Net Zero. Despite our climate commitments and commitments on ocean conservation, 900 locations have been offered as sites for development in the latest offshore oil and gas licensing round. Of these 900, over a third overlap with Marine Protected Areas. Underwater habitats in the North Sea, which host a vast range of wildlife and play a crucial role in preventing climate breakdown and supporting the health and wellbeing of the UK population, have come under threat from these developments. Putting an end to new oil and gas developments in Marine Protected Areas should be a straightforward decision to take.
Banning New Coal Mines
A similarly straightforward decision should be for the Government to back the Liberal Democrat amendment to the Energy Bill, which would ban new coal mines. However, they fought against it in the Lords, and lost, and look set to fight against it in the Commons too. Coal is a fuel of the past and must be treated as such. We should not be approving new mines, as happened in Cumbria just months ago – a mine that has the potential to release the equivalent emissions of 200,000 cars a year.
It is no wonder we cannot formulate a response to the EU or the USA if we cannot even bring ourselves to stop new coal mines or protect our marine wildlife from oil and gas developments. These are the basic hurdles we need to get over. The words of the UN General Secretary should be ringing in our ears every time a policy decision is made. Humanity is on a “highway to hell” and the battle for a liveable planet will be won or lost in this decade.