13-01-2023

Net Zero Review: UK could do more to reap economic benefits of green growth

The UK’s leadership on tackling climate change has delivered real change at home and led to a global transformation — but more should be done to reap the economic benefits that presents, Chris Skidmore says today.

Mission Zero, his Net Zero Review, makes 129 recommendations covering areas including the greater role that business can be supported to play, making better use of infrastructure and delivering more energy efficient homes. Every one is designed to maximise economic investment, opportunities and jobs — all while working towards achieving legally binding targets to reach net zero carbon emissions by 2050.

He urges ministers to grasp the ‘historic opportunity’, highlighting how the government’s Net Zero Strategy offers the right direction, and the right policies to do so.

Chris Skidmore’s proposals include:

• backing business — these include reviewing incentives for investment in decarbonisation, including via the tax system, and launching a Help to Grow Green campaign offering information and advice to small businesses so they can plan ahead
• backing local action — these include reforming the planning system to put net zero at its heart nationally and locally, and backing at least one Trailblazer Net Zero City, local authority and community that can work towards reaching net zero by 2030
• delivering energy efficient homes — including legislating for the Future Homes Standard so that no new homes will be built with a gas boiler from 2025, adopting a 10-year mission to make heat pumps a widespread technology in the UK
• using infrastructure to unlock net zero — including developing a cross-sectoral infrastructure strategy by 2025 to support the building and adaptation for new green energy sources such as hydrogen to support the green economy

Official statistics show there are already around 400,000 jobs in low carbon businesses and their supply chains across the UK, with turnover estimated at £41.2 billion in 2020. Both the British Energy Security Strategy and Net Zero Strategy aim to leverage an additional and unprecedented £100 billion of private investment, while supporting an additional 480,000 British jobs by 2030.

Read the full Net Zero Review report.

The main recommendations to the government in the Review are as follows:

1) Using infrastructure to unlock net zero

• accelerating the implementation of the British Energy Security Strategy to update the mandate of Ofgem, creating the Future System Operator and accelerating the connection of cheaper renewables such as solar and onshore wind
• developing a cross-sectoral infrastructure strategy by 2025 supporting the building and adaptation of infrastructure for electricity, hydrogen, other liquid and gaseous fuels and CO2 networks that support the green economy
• reforming our approach to planning, so that where locally supported, more solar and onshore wind can be developed more easily, helping communities reap the benefits of cheaper low-carbon electricity

2) Creating sustainable governance structures for net zero

• developing an over-arching government financing strategy by the end of 2023

• establishing an Office for Net Zero Delivery, responsible for placing net zero delivery at the heart of government thinking

3) Backing businesses to go green

• reviewing incentives for investment in decarbonisation, including via the tax system and capital allowances, and protecting British industries from environmental undercutting by progressing plans on carbon leakage measures and providing more detail on the UK’s new Emissions Trading Scheme (ETS)

• building skills needed for the transition by driving forward the Green Jobs Taskforce recommendations and launching a ‘Help to Grow Green’ campaign, offering information and support to SMEs to plan and invest in the transition

4) Catalysing local action

• reforming the planning system at local and national level to place net zero at its heart
• back at least one Trailblazer Net Zero City, local authority and community, with the aim for these places to reach net zero by 2030

5) Increasing transparency and engaging people

• expanding the government’s public reporting on net zero
• ramping up public information through a new engagement plan, a new carbon calculator on the carbon cost of choices, and a standardised approach to ecolabelling on products
• developing a Net Zero Charter mark, acknowledging ‘best in class’ among firms for their work in reaching net zero

6) Delivering cleaner, cheaper, greener homes

• legislating for the Future Homes Standard, meaning no new homes will be built with a gas boiler from 2025, and for all homes sold to be EPC C by 2033
• adopting a 10-year mission to make heat pumps a widespread technology in the UK and legislate for the end of new and replacement gas boilers by 2033 at the latest
• reforming EPC ratings to create a clearer, more accessible Net Zero Performance Certificate (NZPC) for households

7) Capitalising on international leadership

• conducting a strategic review on the UK’s international climate leadership and introduce environmental and climate protections in future free trade agreements, removing trade barriers to environmental goods and services

8) Setting ourselves up for 2050 and beyond

• ramping up investment in research and development (R&D), with a new net zero R&D and technologies roadmap up to 2050, supporting up to 3 10-year demonstrator projects

Mr Skidmore was commissioned to lead his rapid review of the government’s approach to delivering its net zero target by former Secretary of State for Business and Energy Jacob Rees-Mogg last September. It followed major changes to the economic and political landscape, with Russia’s illegal invasion of Ukraine, historically high global energy prices and high inflation.

The Review is split into 2 parts, with the first part exploring the opportunity, and benefits to individuals and the economy, emphasising that the UK must go further and faster to realise economic benefits. The second part sets out a roadmap for how government and industry can work to better exploit the opportunities and catalyse action in individual sectors of the economy, enhancing the role of local authorities, communities, and the individual to deliver the green transition.

The review was informed through a call for evidence and direct engagement with businesses, organisations, local government, academia and the public. The Net Zero Review travelled to all 4 nations of the UK, received over 1800 responses to the call for evidence, and heard evidence at more than 50 roundtables across the country, making it one of the largest engagement exercises on net zero delivery in the UK.