UK’s Rishi Sunak avoids climate pain and hard choices

UK budget did little to bring down emissions or address the hard parts of climate policy.

UK’s Rishi Sunak avoids climate pain and hard choices

If he talks about climate change at all, Rishi Sunak isn’t ready to talk about the pain.

The British chancellor took more than half an hour to get to the green section of his budget speech on Wednesday, despite the tub thumping his government has done over net zero, green recovery and hosting this year’s COP26 U.N. talks.

When he did, it was to announce a grab bag of new investments in industrial projects: carbon capture and storage and offshore wind ports in Teesside and Humberside; a hydrogen hub in Holyhead; a huge tax cut for business investment and a new infrastructure bank.

It was all upside on Teesside, where the Conservatives hope to reinforce their grip on former Labour strongholds. “When I look to the future of Teesside,” Sunak said, “I see old industrial sites being used to capture and store carbon, vaccines being manufactured, offshore wind turbines creating clean energy for the rest of the country … I see innovative, fast-growing businesses hiring local people into decent, well paid, green jobs.”

But actually cutting emissions means asking the residents of Teesside to renovate their homes, change their diets, buy different cars and fit new boilers. It means some will lose jobs before they get new ones. It means, according to the U.K.’s independent Climate Change Committee (CCC), that a new mine, which is set to deliver two million tons of coal through the Teesside port of Redcar, cannot go ahead. 

Net zero means doing all of it, everywhere. The government’s net zero review, expected in the summer, may provide more answers for sectors like building and transport, which were ignored in this budget.

Transforming the homes people live in “is not easy, but we cannot afford to duck the challenge any longer,” said Julie Hirigoyen, the chief executive of the UK Green Building Council, an organisation focussing on the environmental impact of buildings.

But Sunak’s climate vision was limited by politics, said Josh Buckland, a former U.K. government energy advisor, now at Flint Global, a consultancy. The government “believes that the way to build political and popular support for the climate drive is through delivering real pay-offs through green jobs and regional infrastructure investment,” he said.

But its climate efforts “will ultimately be judged on whether it can deliver the necessary carbon savings and fund the transition in a fair way,” he said. “[The] budget did little to materially advance either.”

“The treasury is clearly still in survival mode, so not ready to start shaping the recovery just yet,” said Jonny Marshall, head of analysis at the Energy and Climate Intelligence Unit, a non-profit, which aims to support debate over energy and climate questions.

There were policies that will actually push emissions higher, including a continued freeze on fuel tax and the carbon price support. 

There were also examples of the type of structural elements seen as required for a full-economy shift to net zero. The new infrastructure bank will have €12 billion startup capital. New green bonds will shift investments. The Bank of England was given an updated mandate for economic growth that is “consistent with the transition to a net zero economy.”

But those looking for the Treasury to take on the hard work of decarbonizing the economy were disappointed.

Chris Stark, who leads the CCC advisory body, is rarely short of a word on the government’s climate policy. But on Wednesday, all he had was: “Not much to say about this budget — a comment in itself.”