“We will meet the global climate emergency but not with panicked, short-term or self-destructive measures as some have urged.
“Instead we will unleash the unique creative power of capitalism to drive the innovation that will bring down the costs of going green, so we make net zero a net win for people, for industry, for the UK and for the planet.”
This is the message from Prime Minister Boris Johnson as he unveiled the government’s 366-pages Net Zero Strategy this morning.
The Net Zero Strategy will be submitted to the United Nations Framework Convention on Climate Change (UNFCCC) as the UK’s second Long-Term Low Greenhouse Gas Emission Development Strategy under the Paris Agreement.
Last year, the Prime Minister set out his 10 point plan for a green industrial revolution, laying the foundations for a green economic recovery from the impact of COVID-19 with the UK at the forefront of the growing global green economy.
This strategy builds on that approach to keep the country on track for UK carbon budgets, the UK’s 2030 Nationally Determined Contribution, and net zero by 2050, says Mr Johnson.
The strategy includes:
- Decarbonisation pathways to net zero by 2050, including illustrative scenarios
- Policies and proposals to reduce emissions for each sector
- Cross-cutting action to support the transition
For transport the existing measures previously announced are confirmed, including the removal of all road emissions at the tailpipe and kickstart zero-emissions international travel.
The government says its key policies are:
- A zero emission vehicle mandate to improve consumer choice and ensure we maximise the economic benefit from this transition by giving a clear signal to investors. This will deliver on our 2030 commitment to end the sale of new petrol and diesel cars, and 2035 commitment that all cars must be fully zero emissions capable.
- Further funding of £620 million for zero emission vehicle grants and EV Infrastructure, including further funding for local EV Infrastructure, with a focus on local on street residential charging.
- Allocating a further £350 million of our up to £1 billion Automotive Transformation Fund (ATF) to support the electrification of UK vehicles and their supply chains.
- Building on the success of our £20 million zero emission road freight trials, we will expand these to trial three zero emission HGV technologies at scale on UK roads to determine their operational benefits, as well as their infrastructure needs.
- £2 billion investment which will help enable half of journeys in towns and cities to be cycled or walked by 2030.
- £3 billion to create integrated bus networks, more frequent services and bus lanes to speed journeys.
- Transformation of local transport systems, with 4,000 new zero emission buses and the infrastructure to support them, and a net zero rail network by 2050, with the ambition to remove all diesel-only trains by 2040.
- Building on the success of the Clean Maritime Demonstration Competition, we will be extending this to a multi-year programme, delivering real-world demonstrations and technology trials of clean maritime vessels and infrastructure to decarbonise the maritime sector. This is part of our commitment to a UK Shipping Office for Reducing Emissions.
- Significant investment in rail electrification and city rapid transit systems.
- Aim to become a world-leader in zero emission flight and kick-starting the commercialisation of the UK sustainable aviation fuel so people can fly, and connect without guilt. Our ambition is to enable delivery of 10% sustainable aviation fuel (SAF) by 2030 and will be supporting UK industry with £180 million funding for the development of SAF plants.
The Strategy admits that the road to net zero is not straightforward, for example it contains this diagram showing interactions in the roll-out of electric vehicles.
Transport remains the biggest emitter of UK emissions – accounting for 32% – with heat and buildings (17%), industry (15%) and power (11%) following.
The strategy plans a 47-59% reduction by 2035, compared with 1990.
It was one of three documents published this morning, alongside the Heat & Buildings Strategy and the Treasury’s Net Zero Review Final Report
The latter is an analytical report that uses existing data to explore the key issues and trade-offs as the UK decarbonises, against a backdrop of significant uncertainty on technologies and costs, as well as changes to the economy over the next 30 years.
The Treasury says: “It is not a cost-benefit analysis but a first step in understanding tradeoffs over a 30-year economic transition.”
The analysis identifies that the net-zero transition has “material fiscal consequences” and that the “biggest impact comes from the erosion of tax revenues from fossil fuel-related activity.”
It adds: “The government may need to consider changes to existing taxes and new sources of revenue throughout the transition in order to deliver net zero sustainably, and consistently with the government’s fiscal principles.”
One of the biggest issues to address is taxation – which will involve political choices – and needs to be fair to all income groups, observes the Treasury.
The largest loss of current taxation revenue, says the Treasury, principally concerns Fuel Duty and Vehicle Excise Duty (VED), amounting to £37bn in 2019-20.
“Were the current tax system to remain unchanged across the transition period, tax receipts from most fossil fuel related activity will decline towards zero during the first 20 years of the transition, leaving receipts lower in the 2040s by up to 1.5% of GDP in each year relative to a baseline where they stayed fixed as share of GDP.”
The Treasury adds that the Office of Budget Responsibility (OBR) “reaches a similar conclusion on the size of this risk, highlighting the impact that these lost revenues can have on the long-run sustainability of the public finances.”
The Treasury’s document doesn’t offer any solutions, although these clearly are being discussed with No. 10, ahead of a possible announcement in the Autumn Budget Statement on 27 October 2021.
Download the Net Zero Strategy: