It was disappointing to learn of the prime minister’s decision last week to delay and reverse key net-zero policies. Ultimately, this is an announcement which will create more problems than it solves.
Technology is an ace up our sleeves in the fight against the climate crisis, underpinning many of the advances necessary to make net-zero targets possible. UK clean tech has emerged as a particularly high-growth space, entering the top three sectors for investment with 372 funding rounds in the 12 months up to Q1 2023, according to Beauhurst data.
Reneging on commitments to net zero will create reputational risk for the UK as an attractive location to invest in these burgeoning industries. With this announcement, the government is endangering the UK’s potential to be a green economic superpower, hampering the tech space and its ability to be at the forefront of the green revolution.
The announcement is all the more surprising given the prime minister’s background in innovation and his stated ambition to turn the UK into a science and technology superpower. Ongoing uncertainty and roll backs will not attract the capital investment needed to support the UK’s economic recovery.
The key points from the prime minister’s announcement were threefold: firstly, there will be a delay to the ban on the sale of new petrol and diesel cars to 2035, previously 2030; secondly, a relaxation of targets to get households to switch away from fossil fuel boilers; and somewhat confusingly, a new £150m Green Future Fellowship, supporting at least 50 leading scientists and engineers to develop breakthrough green technologies.
While the prime minister is correct in stating that the UK has been – and continues to be – a world leader in emissions reduction, applying the brakes at this crucial moment risks causing uncertainty not only to this rapidly expanding industry, but also to the wider economy.
This uncertainty risks pushing investors in green tech away from the UK and towards other major economies. While the UK may have cut emissions more than any other G7 country since 1990, it has fallen behind Germany in terms of reductions since the 2015 Paris Agreement. While the German green industry looks increasingly fertile ground for investment, indecision and backtracking risks blighting the wholly commendable progress the UK has made on this issue.
This isn’t hyperbole either – the automotive industry’s response to rolling back the EV deadline demonstrates as such. As Ford’s UK Chair put it:
“Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.”
The economic case
While this debate can be politicised, the government must look past this and see the economic potential of climate tech industries. According to the PwC’s ‘State of Climate Tech 2022’ report, more than 25% of venture capital funding is directed towards climate technology and London is ideally positioned to take advantage of this, with the highest number of green startups per tech hub in Europe.
The industrial revolution is exalted as key to much of Britain’s success in the 19th and 20th Century – now is the opportunity to embrace the technology of the 21st Century, and British pioneers who can drive us toward a cleaner future.
One example is Olio, a North Yorkshire-based business aiming to tackle food waste. The App currently boasts more than two million users across 49 countries. Not only can this type of company contribute to the British economy, but its approach can save money for British households too – £800 worth per family per year in this case. Such an example won’t solve the climate crisis overnight, but building an ecosystem in which innovation like this is encouraged can only be positive for the environment and the wider economy.
With COP28 around the corner, the prime minister must rethink this climate strategy and embrace the tangible benefits a positive outlook can have. For many years, Britain has been a leader in the technological space – there is no reason why our position in the emerging green economy shouldn’t be any different. Rolling back on commitments will only hamper the UK’s ability to attract the critical investment the tech sector needs at this economically turbulent time