Net zero carbon: 6 recommendations that affect UK business

Last week’s report from the Committee on Climate Change (CCC) set an ambitious new goal. “We recommend a new emissions target for the UK: net zero greenhouse gases by 2050.”

The CCC, independent advisors to the Government, state that reducing emissions by 100% in the next 31 years is not just possible but essential to avoid a runaway climate change scenario. Obviously that can’t happen without getting British business on board. So how does the CCC suggest the Government involves business in its ambitious plans?

1. Transport: Businesses that rely heavily on transport need to anticipate significant changes. The CCC wants all new cars to be zero emissions by 2035, and as of next year it wants changes to vehicle and fuel taxation to incentivise the purchase of zero-emission HGVs.

Much stronger approaches to tackling emissions from aviation and shipping are also required, says the report, although the technology for zero emission planes and ships are not yet developed/commercially available. The aviation industry may need to cover the cost of removing emissions from the atmosphere: if this happens then the price of flights may increase.

2. Low-carbon power: The report says that the supply of low-carbon power must continue to expand rapidly, and increasingly, from around 2030, some may need to run for only part of the year.

It says that while many options no longer need subsidies, government intervention may still be needed, for example by backing long-term contracts aligned to expected wholesale prices. It wants policy and regulatory frameworks to encourage flexibility too – so we could expect continued support on business uptake of demand response, storage and interconnection.

3. Buildings: The report wants an overhaul of the current approach to low-carbon heating and energy efficiency. It says the Government’s planned 2020 Heat Roadmap must establish a new approach that will lead to full decarbonisation of buildings by 2050. We may see more ambitious energy efficiency compliance standards set for landlords and owner occupiers in order to achieve this goal.

4. GHG removals: Some carbon intensive sectors may need greenhouse gas removals to offset their emissions. The report says the government should expand support for early-stage research across the range of greenhouse gas (GHG) removal options, including trials and demonstration projects. It says it should also signal the longer-term market, which is clearly needed to meet a net zero target, by developing the governance rules and market mechanisms to pay for emissions removals.

5. Upskilling and infrastructure spending: Reaching net zero emissions with the help of business means developing shared infrastructure such as power networks and carbon storage. It might also mean more investment in low-carbon transport infrastructure. This boost in infrastructure spending could be a boost for UK industry.

The CCC also suggests Government tackles any skills gaps that might slow down decarbonisation of the UK economy. This probably means training in a wide range of sectors, from construction to transport to agriculture. If this happens it will mean a more highly skilled workforce, which is great news for business.

6. Compensation: In sectors where UK businesses are exposed to international competition, it could be counterproductive to demand emissions reduction in the UK alone. If we make UK businesses less competitive, we just pass the emissions to overseas businesses rather than eliminating them. As the report puts it, we want “to ensure that emissions are reduced, not offshored”. To avoid this offshoring, the CCC suggests Government compensation for costs resulting from UK climate policies. Other options include using the EU’s Emissions Trading System to incentivise low-carbon business or changing product and building standards to drive demand for low-carbon goods.