An independent review of the government’s approach to decarbonising the economy says infrastructure is ‘the key that will unlock net zero’.
Acting quickly and decisively to deliver net zero will bring major economic benefits to the UK, according to the ‘Mission Zero’ report, the conclusion of an independent review led by Chris Skidmore MP.
It emphasises the risks from climate change to the economy and concludes that the benefits of net zero will outweigh the costs.
This was a message the ICE emphasised in our response to the consultation last year.
Here are five key takeaways from the review for the infrastructure sector.
1. Investing in net zero today will be cheaper than delaying
The report is framed largely around economic growth opportunities for the UK from the green transition. In fact, it says the economic risks from being left behind on net zero are greater than from going too fast.
The UK has shown global leadership on net zero and is well placed to take advantage of the opportunities.
It has competitive advantages in offshore wind, carbon capture usage and storage (CCUS), and green finance.
However, benefits are being missed because of barriers stopping businesses and local areas from going as far and as fast as they want.
These include policy uncertainty, lack of investible propositions, infrastructure bottlenecks, and planning delays.
The report makes recommendations to urgently address these weaknesses amid an international race for capital, skills, and the industries of the future.
The message from the review is clear: investing in net zero today will be cheaper than delaying, as well as increasing the economic and climate benefits.
But we must act quickly and decisively to secure these outcomes. Stakeholders need ‘clarity, certainty, consistency, and continuity from government’.
2. Infrastructure the key to unlocking net zero
The review sets out 10 priority missions to harness public and private action out to 2035. The majority touch on economic infrastructure in some way. They include:
- A strategic framework and delivery plan for the critical grid and infrastructure networks of the future.
- Accelerating deployment of solar and onshore wind technology.
- A programmatic approach for a next generation fleet of nuclear power.
- A clear plan for decarbonising energy intensive industry through investment in CCUS and hydrogen.
- Investing in infrastructure now will save money later.
However, too many projects are being slowed by bureaucracy and a power grid not suited to a modern electrified economy.
The report recommends accelerating implementation of the British Energy Security Strategy – including quickly creating the Future System Operator.
This is needed to address the challenges of a future, multi-fuel energy system and accelerate the connection of cheap renewable generation to the grid.
It also calls for a new cross-sectoral infrastructure strategy by 2025 and reform to streamline planning, particularly for solar and onshore wind projects with local support.
3. A new Office for Net Zero Delivery should be established
The review found a lack of long-term thinking, siloed behaviour from government departments, and uncertainty over the length of funding commitments is impeding net zero delivery.
It recognises the need to embed systems thinking into policy decisions and the design of net zero programmes and funding schemes.
In addition to a new cross-sectoral infrastructure strategy, it calls for an overarching government financing strategy by the end of 2023.
It says the government must take a long-term programmatic approach to net zero projects. It must balance certainty with agile and flexible policy frameworks.
A new Office for Net Zero Delivery should be established.
This would ensure best practice for key delivery projects and take ownership of net zero priorities where they span multiple departments.
It also recognises the importance of transparency for ensuring delivery.
It therefore recommends a major expansion of public reporting to monitor progress and enhance accountability for delivery.
4. Net zero activity at the local level must be supported
The report sets out how the planning system is undermining net zero and the economic opportunities that come with it at local level.
It calls for reforms, including setting a new net zero test for projects and a rapid review of bottlenecks.
Funding for local authorities is also ‘disjointed, unfair, and expensive’. This should be simplified by consolidating funding pots and reducing competitive bidding.
The government should also give full backing to 'trailblazer' places that want to go further and faster on net zero.
Unlocking place-based initiatives and funding will be instrumental in empowering people to make the lasting behavioural changes needed.
There is widespread public support for net zero. The report makes clear the economic benefits to consumers as well: the transition could save an average household a cumulative £400-£6,000 by 2050.
However, the benefits of individual action are being missed because of a lack of information, prohibitive costs and other barriers.
The review calls for a new public engagement strategy and a Carbon Calculator to guide consumers on the carbon impact of different choices in areas like transport and heating.
5. A detailed roadmap for housing, but gaps elsewhere
The review is clear that reducing household energy consumption and make it cleaner and cheaper are critical to achieving net zero.
It recommends mandating the Future Homes Standard by 2025 and for all homes sold to be EPC C by 2033.
It calls for a 10-year mission to make heat pumps widespread in the UK. It also says EPC ratings should be reformed to create a clearer Net Zero Performance Certificate (NZPC) for households.
However, the review skirts around other solutions needed to reduce household emissions.
For instance, it notes that road tax will need to be reformed but falls short on making a recommendation on road pricing – something the ICE has previously called for.
That said, the review’s 129 recommendations are clear, detailed and wide-ranging. They set out immense challenges to be overcome, but also the benefits and opportunities from doing so.
The ICE’s view:
It is extremely encouraging to see infrastructure described as ‘the key that will unlock net zero’.
The review’s recommendations providing policy detail, strengthening net zero governance and increasing public engagement align with factors we highlighted in our submission.
The emphasis on local action and the recognition that economic levelling up ambitions and net zero targets should be linked also aligns with the ICE’s position.
We can’t succeed at one while ignoring the other.
The barriers to progress are numerous and not insignificant.
A great deal of additional government action is required to ensure that the UK achieves net zero in the best way possible for the economy and the public.
It remains to be seen how many of the proposals the government will accept and whether they will be in the updated Net Zero Strategy due in March.
In case you missed it:
- The ICE welcomes responses to a consultation on improving the UK’s infrastructure climate resilience.
- We reflect on our recent ‘Financing Net Zero’ Next Steps Programme online panel debate.
- We look at how strategic infrastructure planning could evolve in Australia.
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