UK Chancellor criticised for trying to change decarbonisation targets

THE UK Chancellor, Phillip Hammond, has come under criticism for claiming that adopting a strategy to bring the country’s emissions to net zero by 2050 will cost £1trn (US$1.25trn), and for considering taking advantages of flexibilities in the carbon budget.

The Committee on Climate Change (CCC) released a report in May urging the Government to adopt a target of net zero emissions by 2050, a more ambitious goal than the current legally-binding target to reduce emissions by 80% from 1990 levels by 2050 through the Climate Change Act 2008. Prime Minster Theresa May is expected to accept the CCC’s recommendation and is reported to be aiming to put the target into law on 11 June, according to The Guardian.

However, a letter from Hammond to May, seen by The Financial Times, claims that meeting this target would cost the UK more than £1trn by 2050 and leave less money for schools, the health service, and police forces. He said that unless other countries adopted similar policies, key industries could become economically uncompetitive.

The CCC has estimated the cost of a net zero by 2050 strategy to be £50bn/y, which would be 1-2% of GDP in 2050, but Hammond used a figure of £70bn/y calculated by the Department for Business, Energy, and Industrial Strategy (BEIS). The CCC noted that its model didn’t account for the cost benefits associated with decarbonisation, such as improved air quality and increased energy security.

According to Business Green, some economists have argued that the net zero target will deliver net gains for the economy and the cost of inaction will be far greater than the cost of implementing a net zero policy. Mainstream businesses have also expressed support for the CCC’s net zero target, including the Confederation of British Industry (CBI). Tanisha Beebee, Senior Policy Advisor at CBI tweeted that the opinions in the letter are the complete opposite to that of the business community.

Hammond’s letter also calls for an “explicit review point” that would allow the targets to be reconsidered if other countries don’t commit to similar action.

Doug Parr, Chief Scientist for Greenpeace UK, said: "The Treasury is putting their ideology before our wellbeing, and trying to shape the public debate for political ends. If you want to know whether a policy is a good idea, you include the benefits as well as the costs, and in this case the benefits include an economy fit for the 21^st century, cleaner air, warmer homes and maximising the chances of civilisation surviving. The Treasury need to put the necessity of a green future above their nostalgia for a time when environmental threats could be dismissed as a niche issue. If reality doesn’t fit with their models it’s the models that need to change."

Creative carbon accounting

In Hammond’s letter, he also noted that “we are currently off track to meet our existing carbon budgets (set on the basis of an 80% 2050 target), so the Government would need to enact an ambitious policy response in this Parliament for any new target to have credibility.” However, The Financial Times also reported that the Government has been accused of trying to “fiddle” with the county’s climate change targets.  

As part of the Climate Change Act 2008, the Government committed to a series of five-year carbon budgets. The second budget period, from 2013 to 2017, resulted in 384m t of CO₂ less than the cap of 2,782m t. Hammond is reported to be considering carrying over 88m t of the surplus from the second carbon budget to the 2018-2022 budget, in stark contrast to the CCC’s recommendations.

“The Committee’s unequivocal advice is that surplus emissions from the second carbon budget should not be carried forward,” said Lord Deben, Chairman of the CCC, in a letter to Claire Perry, Minister for Energy and Clean Growth, in February. “Carrying forward surplus emissions would not be consistent with the Paris Agreement.”

On 6 June, acting Energy and Clean Growth Minister Chris Skidmore responded to Lord Deben’s letter, however Skidmore insisted that the Government only intended to take advantage of the surplus emissions in exceptional technical circumstances.

The UK Government had previously been accused of “very creative carbon accounting” by climate activist Greta Thunberg over the UK’s failure to include shipping and aviation in its carbon budgets. Sam Fankhauser, a professor at the London School of Economics, writing in The Financial Times, said:  “Allowing more emissions in the future instead of making actual progress on cutting emissions is short-term thinking of the worst kind.”

According to Business Green, Norman Lamb, Chair of the Science and Technology Committee, and Rachel Reeves, Chair of the BEIS Committee, said in a joint statement: “It's time for the Government to put to one side short-term political considerations and for it to focus on taking decisions to achieve its long-term commitment of net zero by 2050. If the Government is to achieve net zero, the UK's Carbon Budgets will need to be strengthened, not weakened and the Prime Minister will have to overcome the Chancellor's foot dragging."

“Parliament has declared a climate emergency, yet there is no evidence that this Government take it seriously,” said Shadow Business Secretary Rebecca Long-Bailey, speaking at Prime Minister’s Questions on 5 June. She queried “de facto Deputy Prime Minister” David Lidington on why the Government was off track in meeting its carbon budgets, and also cited the accusation of trying to “fiddle its emission figures”. Lidington responded that the UK is not off track to meet those targets, prompting Long-Bailey to later seek a correction to the record.

“Earlier today, the Minister for the Cabinet Office may have accidentally said, in response to a question about the UK’s carbon budgets, ‘We are not off track’ to meeting those targets at all. The Government’s official adviser on climate change, the Committee on Climate Change, has reported that the UK is off track to meeting its fourth and fifth carbon budgets, and official statistics published by the Department for Business, Energy and Industrial Strategy have also shown that it is off track. It is therefore a matter of established fact that the UK is off track to meeting its targets.”