CCC: UK could face civil unrest over net-zero costs

The UK government should look to the ‘gilet jaunes’ movement in France as evidence of the importance of a fair distribution of costs when setting decarbonisation polices.

This is the warning from Committee on Climate Change (CCC) chairman Lord Deben, who has written to the Treasury outlining considerations for its review of how a transition to a net-zero economy should be funded.

In his letter to the exchequer secretary to the Treasury, Simon Clarke, Lord Deben also announced that the CCC is bringing forward its sixth carbon budget by three months. The advice, which will guide ministers on the volume of greenhouse gases the UK should be allowed to emit during the period 2033-2037, will be published in September 2020. It has been moved forward to ensure it precedes December’s COP26 in Glasgow.

In his letter, Lord Deben urged the Treasury to closely examine the distribution of costs for businesses, households and the Exchequer. He insisted this was vital to “enable decarbonisation to be delivered while minimising negative impacts on society, particularly the most vulnerable”.

He also stressed that the review should consider the near-term as well as long-term decarbonisation funding needs and policy implications. While accepting funding commitments cannot be made that bind future governments, he said concrete proposals for action and funding over the next five to ten years be made. These should include tax and spending levers over which the Treasury has direct control as well as clear indications of where regulation and private investment is required, he said.

Support for demonstration and “learning-by-doing” for existing technologies will be important for bringing down costs and developing jobs, said Lord Deben, pointing to the impact on the offshore wind.

The letter reiterates the CCC’s view that there is a need to take immediate action, including:

• The large-scale roll-out of energy efficiency and low-carbon heating
• A scaled-up market for electric vehicles
• Increased share of electricity from low-carbon sources
• Significant investment in CO2 transportation and storage infrastructure
• Increased tree planting rates
• Various other actions including the encouragement of societal change to diets and travel habits, and international coordination on aviation and shipping

Lord Deben said: “The Treasury review will be crucial in ensuring a successful transition. The key challenge is how the required changes, near-term and long-term, can be funded in a way that distributes costs fairly.

“My committee’s view is that this must be a priority consideration in public spending decisions. The review should therefore be a key input to next year’s spending review and budget, as well as setting the longer-term direction for policy.”