People, planet and profit: how can the UK government supercharge the transition to net zero?
Climate change is one of the world’s biggest and most urgent problems – and tackling it provides a huge economic opportunity. During a webinar hosted by Deloitte, panellists discussed what the UK government is, could and should be doing to accelerate in the race to net zero
The UK government has committed to reach net zero by 2050. But in order to transition to a green economy, it will need to take a systematic approach, galvanising action across departments and influencing and incentivising the whole of society.
During a Deloitte webinar, four public and private sector experts discussed how the UK government could speed up the pace of change, touching on the link between the green agenda and growth, regulatory alignment, harnessing the power of nature, and the need for clear and consistent communication with citizens.
Selvin Brown, director, net zero buildings – domestic, at the Department for Energy Security and Net Zero, outlined the UK’s 2050 net zero pledge and its target to reduce emissions by 78% of 1990 levels by 2035, and his team’s efforts to help deliver this through decarbonising homes and buildings.
The government’s heat and building strategy was published alongside the net zero target policy paper in 2021 and in an update last year, the government committed to reducing the energy consumed by industry and buildings by 15% by 2030, said Brown.
The UK has the oldest building stock in Europe with almost six million homes built before the First World War. To help make them greener, the government has committed to spending £6bn (US$7.7bn) between 2025-28 on top of the £6.6bn (US$8.4bn) already allocated to fund social housing decarbonisation programmes and home upgrade programmes up until 2025.
But, as Brown explained, “net zero for us is not just about reducing emissions. There are important things here for us about how we sustainably grow the economy”.
As he pointed out, between 1990 and 2021, the UK economy grew by 65% while emissions were reduced over that period by 48%.
“We’re very, very keen to see the green agenda and growth being taken together,” he said, explaining that in order to decarbonise the country’s building stock, 250,000-300,000 jobs would need to be created over the next decade.
Regulatory alignment
Dr Stephen Bass, manager and net zero lead at the UK Regulators’ Network began his opening comments by reflecting that the level of climate change we’re seeing now is right at the top end of projections being made by colleagues 20 years ago when he was studying atmospheric physics, particularly when it comes to extreme weather events. “I think that’s a real wake up call to all of us,” he said.
He went on to explain the role of the UK Regulators’ Network, a members’ organisation that represents 14 of the UK’s larger regulators and works to promote collaboration among them.
Bass focuses on coordinating the organisation’s work around net zero and governance and regulatory reform. Traditionally, the network’s main area of focus on climate change has been mitigation but it is now turning its attention to promoting investment in net zero and infrastructure adaptation.
Aligning regulators’ goals and actions could be a complex task, he said, because some have direct net zero duties, others do not, and some interpret net zero through the lens of fiduciary duties, such as the long-term sustainability of financial investments.
However, one of the recommendations of the Net Zero Review – a report by former energy minister Chris Skidmore published earlier this year – could help.
Skidmore recommended that government set up a cross-regulator forum to coordinate signals sent to business and investors, and progress on this had been made, Bass said, with the government committing on 30 March to work with the UK Regulators’ Network on establishing such a forum.
“We see this really as an opportunity to fill a bit of a gap in the machinery of government, to bring together government and regulators across sectors to promote systems thinking – coordination and alignment of actions and decisions to deliver the 2050 target,” Bass said.
‘Biggest economic opportunity of 21st century’
Charlotte Warburton, head of transport & public sector sustainability and climate leader at Deloitte – which hosted the webinar – emphasised that her passion is national sector level transformation and how to make change stick.
Aligning with Brown’s earlier point, she said linking the green agenda to growth is “the biggest economic opportunity of the 21st century” and the “next version of the industrial revolution”.
However, she said it is a “wicked problem to solve” and, agreeing with Bass, would need a whole system view.
To do this, she believes what is needed is to “map the complexity and look at the interaction points and then really pick the key kicks and shifts we can make to trigger us forward”.
Making progress would rely on action in four key areas, she said: taking current strategy and policy and using it to deliver at pace; convening power across government, the private sector and citizens; leveraging technology and green energy; and changing the behaviour of citizens and organisations.
On the first point, she said some believe more policy and regulation is needed before any real progress can be made but that in her view, “we’ve got enough to get going”.
Amendments to policy and regulation would come, but in the meantime “we’re all accountable for our own operational emissions in the businesses we work in and how we signal to the market through how we procure… and what we expect of the supply chain to help us on that journey”.
On her second point about convening power, she highlighted that the overarching message of the latest report from the Intergovernmental Panel on Climate Change (IPCC), released six months ago, emphasised the need to be moving faster on climate action. “My belief,” Warburton said, “is you don’t grasp that urgency separately – we really have to come together and have some uncomfortable conversations about how we really join up and maybe forego some of our own direct objectives to get the greater good. That convening power, for me, is essential if we’re going to move.”
Some of the key questions for her around her third point, leveraging technology, were how we integrate renewables to build us the required low carbon energy system and, crucially, how we develop the skills and find the people power to transition and then maintain it.
To her last point on changing behaviours, the crux of the problem, she said, is incentivising organisations and individuals to put climate change and the race to net zero at the heart of what they do rather than a “bolt on the side”.
This is a difficult task, not least given headwinds such as the war in Ukraine and the cost-of-living crisis. What governments have to demonstrate, she said, is that by solving critical issues in a sustainable way, there will be better outcomes.
“We don’t just have to talk it but walk it. And incentivising that comes down, in part, to the nudging of behaviours. What can the government do in terms of engagement strategy with citizens or making data available so people can have the power of information?”
All of this isn’t necessarily all that hard, she said. “There is a lot we can do. But I think we really need to come together to do it.”
Nature-based solutions
Neil Hornby, chief executive of the Centre for Environment, Fisheries & Aquaculture Science (Cefas) – whose scientists focus on climate mitigation and adaptation nationally and internationally and sit on the IPCC – spoke of the role of nature in protecting the earth against climate change.
“The first thing to say from a scientific perspective is that supercharging the transition to net zero is absolutely vital,” he said.
He mirrored Bass’s reflection about early predictions about climate change having been realised or exceeded, and gave the example of a marine heatwave in the UK with sea temperatures around four degrees higher than they should be at this time of year. He also pointed to the highest ever UK sea temperature of 21 degrees, recorded last year at Start Bay in Devon.
“These sorts of changes put significant stress on our environment,” he said.
We are, he explained, in the midst of a biodiversity as well as a climate crisis. “Many scientists believe we’re in the middle of a mass extinction event, having lost around 70% of the total amount of global wildlife in the last 50 years. Currently around one in four species are at risk of extinction. And I would argue that these crises are inextricably interlinked. You can’t deal with climate crisis without tackling the biodiversity crisis.”
As such, “it matters how we get to net zero, not just how quickly we get there”, with care being taken to ensure the environment is not damaged further in the process.
What we also need to recognise, he said, is that part of the transition has to involve nature. “Decarbonising the energy supply, transport systems and our buildings is absolutely essential, but so are nature-based solutions that protect the ability of the planet to play its part in helping us mitigate and adapt to climate change”.
Fortunately, he believes more and more governments and businesses do understand this and that progress is being made. For example, in the UK, Cefas is working closely with the multinational energy supplier EDF to build environmental considerations into the design of new nuclear power stations including Sizewell, and with the Crown Estate and the offshore wind sector to ensure offshore wind development is sustainable for the wider marine environment.
He explained just how important nature-based solutions – and in particular oceans – are in the fight against climate change.
“It’s not just about making infrastructure nature positive. To achieve net zero, we’re going to need nature-based solutions as well. And the ocean is absolutely vital for regulating global climate. It currently absorbs about 30% of the carbon emissions that we release, and about 90% of the temperature. And it also contains a huge amount of stored carbon in habitats like mangroves, kelp and seagrass, as well as locked up in seafloor sediments. And it’s been doing a pretty good job for a long period of time to regulate our climate.”
While seas are subject to a number of pressures that risk reducing their ability to continue to perform these functions, some of these, such as warmer water, are linked to climate change.
“Warm water is less effective at absorbing carbon dioxide as well as causing damage to habitats like coral reefs. But when you add to that other pressures from things like marine pollution, increasing pests and diseases, invasive species and overfishing, you reduce the resilience of ecosystems and the climate functions they can provide,” he explained.
What is needed therefore, he argues, is for marine and land ecosystems to be helped to recover so that they can be more resilient to the impacts of climate change and potentially play a greater role in the absorption of carbon.
Action is starting to be taken, he said. A recent international agreement was made to place 30% of the global ocean in a marine protected area by 2030. And in May, a new UN treaty was adopted which allows protected areas in high seas for the first time. Meanwhile, in the UK specifically, Defra is making efforts to establish highly protected marine areas where no human activity can occur.
“In conclusion, we need to accelerate the transition to net zero, but we need to do so sustainably and recognise the essential role of nature in helping us get there,” Hornby said.
The green agenda – getting the message out
Following their opening comments, panellists took questions from the webinar’s live audience. One of the questions centred on whether the drive to net zero could further the levelling up agenda.
“The fantastic thing about this agenda is that it does very much lend itself to levelling up,” said Brown.
“In terms of the green jobs that that we all want to see, they have to be hyperlocal.” So, thinking about his team’s objectives “you have to create the jobs in the area where you’ve got the poor housing stock. And these jobs are semi-skilled jobs – they’re very well paid in particular regions. So I think we’re having quite a big impact on the levelling up agenda.”
He believes one of the big challenges in this area is making schools, colleges and careers advisors aware of the job options that will be available in the future and to encourage them to create opportunities for students to study for the required qualifications.
On a question about bringing people along on the net zero journey, and in a fair and transparent way, Bass mentioned the example of Zurich, Switzerland, which is switching off gas networks supplying certain areas, and eventually the whole city, transferring people instead to greener forms of energy.
Over the 20-year project, city authorities have offered households and businesses support for the transition in a way that is tailored to them and their means and have “engaged citizens in the process”.
Engagement, all the panellists agreed, is key, as is communication – particularly at a time when, in a tight fiscal environment, there is portrayal of a trade-off between getting to net zero and dealing with crises like the cost of living.
Bass said we need to be “really persistent and clear as communicators as to the fact that a lot of these net zero measures are of benefit to consumers in terms of lowering costs, and in actually quite short timescales”.
He gave the example of wind versus gas. There had been much debate about the relative cost but the gas price crisis had shown that wind is 11 times cheaper, he said – “it took many attempts to get that in the press”. A similar scenario was going on with electric vehicles (EVs): “We need to get the information on things like lifecycle analysis to squash where there is misinformation going on.”
And he made another point about EVs and the just transition. “How do you deal with those customers who are left on legacy diesel and petrol vehicles, when you have fewer and fewer diesel and petrol stations and the costs go up? How do we balance those just transition issues to maintain the public consent that will be needed for what is a huge transition in the economy?”
For Warburton, encouraging citizens to make change comes down to consistently pushing the message so they understand the benefits, because currently, she said, “it comes in spurts and stops and starts”.
“People need to recognise this as a core part of life, not just as addition to the side of it, she said. “Today, [greener measures] might be more expensive, but in the long term they won’t be… and it comes back to opportunity cost: if you demonstrate that the cost of inaction today is going to impact you later by ‘X’, it helps people make a more informed decision.”
Government incentives play a part – though these were more difficult now in a tight fiscal environment. And they had to be carefully considered. Bass gave the example of the ‘Feed-in tariff’ scheme, which paid consumers for the electricity they transmitted to the grid and, he said, “succeeded our wildest projections at the time”. Indeed, there was so much solar PV put on rooftops in the UK southwest that the grid was overloaded, forcing the government to scrap the scheme. “I think the government probably learned the lesson of that, and it’s much more nuanced now around approaches to incentivising.”
The panellists returned to an earlier topic of conversation and shared thoughts on how greater collaboration and sharing of information across government bodies could be achieved in practice though implementing the right mechanisms.
Hornby said departments would sometimes compete with each other on delivering technologies the fastest, and that while there is a benefit to that, collaboration across government departments is now much better than it used to be.
However, there is still more to do, as public servants need to have a broader understanding of the issues – around housing and transport, for example – so that they can knit them together, he said. Part of that would come down to building skills and expertise and “creating the space for people to look around and bring those conversations together”.
Reaching net zero could indeed be the greatest economic opportunity of the 21st century. But to reach targets and realise the benefits, the UK government will need to develop a whole system approach, and work hard to bring citizens along on the journey.
To learn all this and more, you can watch the full Accelerating net zero: how can government incentivise and supercharge transition? webinar on our dedicated events page. The webinar, hosted by Deloitte with support from Global Government Forum, was held on 29 June 2023.
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