Achieving the UK's net-zero emissions target
In June this year, the UK became the first major economy in the world to commit to a legally binding target of net zero emissions in order to end its contribution to climate change. The previous target was achieving 80% emissions reduction from 1990 levels. The problem with this narrative was that companies relying on heavily polluting operations for income considered themselves part of the 20% and therefore would not commit to change. The new, more ambitious, target was recommended by the Committee on Climate Change, the UK’s independent climate advisory board. Putting this goal in place positions the UK as a global leader in the fight against climate change and sets the standard for other nations to follow.
The European Commission appointed a new Executive Vice President in charge of the Green Deal, Frans Timmermans, who is set to guide the EU towards implementing vital climate action. He is concerned with finding a balance between reducing emissions and maintaining the bloc’s economic competitiveness. The UK has proven how this is possible, having already reduced emissions by 42% while growing the economy by 72% since 1990. Timmermans seeks to implement the climate effort by revamping the way that the EU uses and produces energy, unlocking private investment and supporting new clean technologies. Additionally, he wants to ensure that tax policies enable the delivery of climate ambitions, and that countries implement existing climate legislation. Timmermans has therefore identified infrastructure, finance and policy reform to be the most important pillars to achieving emissions reduction targets.
Despite the optimistic changes happening in UK and EU legislation, significant challenges remain to achieving the targets set. Firstly, decarbonising building emissions from heating and cooking appliances is an extremely costly project, and would be disruptive to millions of households. Secondly, the transport industry including shipping and aviation is growing at a rapid pace, which cheap flights becoming increasingly accessible. Low carbon alternatives to jet fuel have not yet been developed which poses a significant challenge to the net zero emissions target.
There is also a caveat that must be considered. Setting the target as net zero allows for emissions as long as they are offset by various means. This includes planting trees, removing CO2 from the atmosphere with technology such as Carbon Capture and Storage (CCS) as well as the use of international carbon credits. This is somewhat problematic, because it allows the UK to offset its emissions elsewhere in the world rather than making changes domestically.
Private investors are playing an important role in EU climate action. Meryam Omi, head of sustainability and responsible investment strategy at Legal & General Investment Management, states that “policy certainty is needed for businesses to innovate, and for investors to accelerate capital towards a sustainable future’’. Setting targets is crucial in order to provide the direction that investors and businesses need. As such, last year more than 400 investors with over €32trn in assets already called for governments around the world to step up measures to limit global warming.
Changes in infrastructure play a crucial role in achieving net zero emissions in the UK. Within the transport sector, there have been government recommendations to prepare for 100% electric vehicle sales by 2030. Similarly, the institution of Civil Engineers has recommended a pay as you go policy for England’s busiest roads in order to reduce congestion. There has also been much progress in the energy sector. Renewable capacity for electricity has tripled in the last 5 years and is set to continue to grow at a rapid pace. Although there are obstacles to overcome, such as protests against windfarm construction, the use of renewable energy is vital in order to curb fossil fuel development. To match the expansion of renewable power, accelerated investment in storage is also required. The European Bank for Reconstruction and Development (EBRD) are currently focusing on improving energy efficiency, especially in Eastern Europe. The EBRD emphasise the power of finance in making a difference and stress that investments into renewable technology and sustainable infrastructure is more important than making changes in the transport sector. The financial system thus needs to be transformed in order to deliver the scale and quality of investment needed.
In order to encourage the necessary shifts towards greener infrastructure, national and local policies are crucial. Targets such as the UK’s Net Zero emissions by 2050 help maximise the impact of investments. The legally binding agreement encourages people to take action and partnerships to be built, joining together the public and private sector. We must also keep in mind the global nature of climate change, and stress the importance of international co-operation in climate action. This is more pertinent than ever with the world’s second largest emitter of CO2 retracting from the Paris Agreement in 2017. International agreements and national policies must work to create the right environment to attract investment and put pressure on private companies responsible for high levels of emissions. Climate action must therefore transcend different scales to tackle the issue most effectively.
The views expressed in this article are those of the author and do not reflect the views of Strategy International.