Tories’ pathway to net-zero starts to emerge

This year’s Conservative Party Conference may have been as light on policy announcements as it was on attendees, but there were further signs of the Tories' plans for reaching the 2050 net-zero target. David Blackman looks at some of the key discussions and what they mean for the evolving net-zero strategy.

Energy got a walk on part in Boris Johnson’s headline speech at the Conservative Party conference last week.

The prime minister used the recent boom in solar and wind power generation to back up his wider case that Britain can “beat the sceptics”.

He said: “It was only a few years ago when people were saying that solar power would never work in cloudy old Britain and that wind turbines would not pull the skin off a rice pudding.”

Wags were quick to point out that it was a certain Boris Johnson who had used precisely this phrase about wind power in a Daily Telegraph column which he wrote when he was humble mayor of London.

Given Johnson’s reputation for filing copy at the last minute, it wasn’t beyond question that he had included the line in the speech without checking.

Critics would say there are plenty of reasons to dispute his substantive point that there is no reason why the same kind of strides cannot be delivered in nuclear fusion technology.

Nevertheless, Johnson’s speech shows how the Tories have embraced green energy, even if government policy in this area often fails to match its rhetoric.

Any scepticism about efforts to tackle climate change is most likely to be heard on the fringes of the Conservative conference, where free market thinktanks tout their wares to party members.

These are the kind of meeting where it wouldn’t have been that unusual to hear the very concept of manmade climate change questioned a few years ago.

These days, the concerns tend to focus though on how fast emissions can be cut rather than whether it is a good idea in principle.

Victoria Hewson, head of regulatory affairs at the Institute of Economic Affairs (IEA), warned of the risks of pushing ahead too fast with emissions reductions, at a meeting organised by the free market supporting thinktank.

She said that too a rapid push threatened to spark the kind of backlash that French president Emmanuel Macron met from the so called ‘gilet jaune’ protestors just under a year ago after his government hiked fuel duties.

Ben Houchen, elected mayor of the Teesside combined authority, highlighted the impact of the target’s adoption, which he told the IEA meeting net would have a bigger impact on the UK economy than even Brexit.

He said getting to 80 per cent of 1990 emissions levels by 2050, the previous target, was already a “pretty ambitious target”.

However, Houchen said this target was “relatively straightforward”, given that it relied on existing technologies.

Getting to net-zero emissions though relies on technologies, like hydrogen, which are at an early stage of development and “extortionately” expensive, he said.

The way that parliament adopted the net-zero target in July – passed by MPs without even a vote after a debate that lasted just 90 minutes, prompted some disquiet amongst Tories on the party’s fringe.

Conservative backbench MP Bim Afolami suggested that his fellow MPs had been “scared” into unanimously supporting the measure.

Houchen said that there had been a “lot of political pressure” on MPs to vote for net zero, adding that policy makers need to be “very careful” about how they go about implementing the target.

Referring to his own area, he said: “Teesside has done pretty well at cutting carbon emissions, by half. We did that by closing the steel works and putting 3,000 people out of work.

“This is about how we use it to stimulate the market to not only reduce emissions but generate jobs and wages.”

One of those who once might have been sympathetic to such concerns is Kwasi Kwarteng.

The recently appointed minister of state for energy made his name while a newly elected MP as one of the authors of a collection of essays entitled ‘Britannia Unchained’, which was published in 2011.

At a time when the Tory parry had tacked to the centre by forming a coalition with the Liberal Democrats, this book made the unapologetic case for a free market Conservatism.

But Kwarteng was singing from a different hymn sheet when he appeared at a conference fringe event organised by the Centre of Policy Studies, the thinktank which was pivotal in the development of the Thatcherism in the early 1980s.

He said that there is a now a “genuinely wide consensus within the party on the (climate change) issue, which is a lot wider than it was ten years ago.”

While there are “one of two MPs”, who may think that global warming is a “hoax”, he pointed to the unanimous support for the net-zero target legislation within the Conservative parliamentary party during the debate to approve the 2050 target.

“My instincts are for the free market, but there are limits to that,” he said, adding that the energy market has been regulated for “pretty much a century”.

Hewson had argued at the IEA event that the costs of decarbonisation would bear down more heavily on those who were struggling to keep on top of their bills than those with a “comfortable life in London”.

And while the most recent round of CfD (contract for difference) auctions won plaudits for delivering renewable generation that looks set to be cheaper than existing gas plants, Hewson recalled that it had been a very different story when the initial contracts were allocated.

“CfDs have been excellent for investors in renewables at the expense of ordinary consumers,” she said, adding that the subsidy regime is “highly susceptible” to lobbying from interest groups.

Hewson said the desire to decarbonise the economy must be seen in the context of wider concerns about improving the UK’s productivity, adding that an economy wide carbon tax was a better way of cutting emissions.

But Kwarteng defended the operation the CfD market, insisting that what the UK had achieved in terms of decarbonisation should not be dismissed and had not been by accident.

“It’s been way more successful than anyone anticipated. We wouldn’t have reached that if you had left it entirely to the free market.”

Reflecting this pragmatic tone, he admitted that whilst initially unconvinced about the price cap on standard variable tariffs he had been ‘impressed” by how it had worked.

And when pressed on whether the UK should backpedal on emissions cuts, given this country’s relatively small contribution to overall emissions, he insisted that Britain has an important leadership role on the issue, adding that “virtue signalling isn’t bad”.

There was little new in terms of new power policies announced at last week’s conference, although new energy efficiency building regulations were unveiled and transport secretary Grant Shapps signalled that he wants to look at bringing the ban on sales of internal combustion engine cars and vans by five years to 2035.

But it sounds like the government won’t be abandoning its current support for a mix of low carbon generation technologies on Kwarteng’s watch.

“This will cheaper than going down an all renewables or nuclear path,” he said, adding that he would have probably given the go ahead to EDF’s plant at Hinkley Point C.

But hot on the heels of Labour’s decision to endorse the Green New Deal policy to hit net zero by 2030, the Tories are keen to show best placed to deliver this agenda, particularly given the latest Extinction Rebellion protests set to hit London this week.

Afolani said: “I think there is a political will to get quite a long way there. I worry about how easy that will be politically to do. It will require significant acts by the government to put in place

“Lefties will use this issue as an excuse to shut down as much as possible of the capitalist system. We must make it as easy as possible for people to make behaviour change because otherwise it will happen in a much more coercive way.”

“People have used the climate change issue to resurrect a whole range of left-wing anti capitalism and anti-western ideas,” said Kwarteng, who was keen to stress how technology will cut emissions rather than reining in economic growth. As an example, he pointed to the rising use of electric vehicles.

“We’ve got to distinguish the need to deal with the decarbonisation issue, which is a good thing, from the rag bag of left-wing pressure groups.

“We’ve got to be to be very, very vigilant about the fact that there are a lot of people who want to question our entire economic system

“The idea green energy or the environment is opposed to economic growth is very, very bad,” he said, adding that the two shouldn’t be presented as “Manichean opposites”.

“You can be environmentally responsible while having a dynamic growth agenda.”

With an election widely expected before the end of this year, the Conservatives will be under pressure to demonstrate that they have the right policy package for tackling what is increasingly viewed as a ‘climate crisis’.