Academics warn political uncertainty could blow the carbon budget

The UK is in danger of blowing its carbon budgets amid heightened political uncertainty, leading academics warned in a major report published on Wednesday.

Energy price rises, the 2008 financial crisis and energy security concerns have all challenged the government’s commitment to climate change targets, the report found.

Authors of the report, compiled from more than 30 energy experts by the UK Energy Research Centre (UKERC), urged government to reduce uncertainty.

Jim Watson, research director of the UKERC, said: “Policymakers are right to be sensitive to the financial pressures facing the public and businesses, but action to relieve these pressures shouldn’t come at the cost of progress towards a low-carbon economy. Current uncertainties about the direction of UK energy policy run the very real risk of making energy less affordable, less secure and less sustainable in the long-term.”

In particular, the report recommends government expand energy efficiency programmes, which can help consumers cut their bills as well as carbon emissions.

As for investment in low carbon generation, the researchers said there is no shortage of capital but changes to policy, market structures and business models may be needed to attract that capital to the UK power sector.

“Raising the billions of pounds needed to fund the UK’s transition to a low-carbon economy will be challenging, but is achievable,” said Rob Gross, director of the Centre for Energy Policy and Technology at Imperial College London and a co-author of the report.

“Most low-carbon projects rely heavily on existing utility companies for funding but these companies are facing multiple pressures on balance sheets and a key challenge for policymakers is to create the conditions that either allow utilities to raise the finance needed by themselves or permit new forms of project finance, in order to attract sources of international capital into the sector.”