The UK Government’s British Energy Security Strategy highlighted that “energy is the lifeblood of the global economy”. If they are right, then the UK is on its deathbed. Successive governments have failed to take action on energy, and it is only now, when UK households are facing the lowest living standards on record, and energy bills are showing no signs of halting their exponential rise, that they have decided to finally move forward to energy efficiency and independence, or at least, claim they have.
Yet, as this government has shown us countless times, their action fails to make real significant progress, and they are as likely to stick to its “Ten point plan for a green industrial revolution” as you are to your New Year’s resolution (new year, new energy…right?). But regardless of the slogans, plans, committees, strategies and proposals, the British government’s (failed) attempt to address the energy efficiency crisis in the UK has come much too late; here’s why.
The current goal is to invest £100bn into the private sector by 2030, which, we are told, will provide 480,000 clean jobs by the end of the decade. This comes at a time when households in the UK are facing a serious economic climate, with living standards falling at the fastest rate since the 1950s, with economic forecasters saying it will take us until 2024 to return to pre-covid levels. And whilst many of the country’s lowest income households face the decision whether to heat their homes or feed their children, the government is getting excited by wind turbines.
Never fear, there is a section of the strategy dedicated to helping families. It reads “the first cut in fuel duty in over a decade” — that’s 5p by the way, saving the household £3.30 when filling up their 55-litre family car (well at least I can buy a loaf of, oh wait no that’s going up too). Yes, prices are on the rise, incomes are on the decline, and this government has done precious little to help families who are suffering the most. So what do we do?
No one can say that the need for efficient, independent, and clean energy solutions shouldn’t be a priority for leadership around the world, and the fact that the UK officials have published this strategy shows that they are recognising the task we have ahead,
Over 90% of homes in the UK are heated using fossil fuels, and so changing to low carbon heating is a major undertaking, and meeting our current target for Net Zero by 2050, the UK may still use a quarter of the gas used now. The security strategy says we must “fully utilize our great North Sea reserve, use the empty caverns for CO2 storage, bring through hydrogen to use as an alternative to natural gas and use offshore expertise to support the offshore wind sector”.
As of 2020, the UK leads in offshore wind, and that is definitely something to be proud of.
The Prime Minister has planned to ensure that by 2030, to have enough wind capacity to power every household in Britain, and that Britain will be the “Saudi Arabia of wind power”. This is all well and good, but as the strategy points out, the development and deployment of offshore wind farms still takes up to 13 years. So, what is being done in the meantime?
As Rishi Sunak, the UK’s Chancellor of the Exchequer, explained, the Government has committed to the first cut in fuel duty in over a decade. Although this is not a huge help to families struggling, it shows that 11 Downing Street are acknowledging that the current economic pressure on families is making the transition towards green solutions, a momentous task, even harder, and that something needs to be done in the short-term.
The Adam Smith Institute, a neoliberal think tank and lobbying group based in the UK, supports targeted taxes stating “a tax on carbon will incentivise market actors to substitute away from using fossil fuels and innovate by developing new low-carbon energy products”. This highlights that the move away from carbon isn’t just about funneling to projects, or what food we buy in our supermarkets, but about a huge political, economic, social and cultural change that relies on the actions and habits of all market participants, producers, governments and consumers alike. That is why here at Fair we are opening the dialogue in finance, and developing an ethical space within the sector that much of the world’s affairs begin; finance.
Investment, economics, markets; everything begins, first, with an idea, and then finance. In order for substantial cultural change to take place, we need scientific and technological discourse to produce ideas that we can turn into solutions with sound finance and investment. With financial markets, such solutions can become international, which they need to be. Without a global effort, green solutions cannot work, and we cannot commit to targets of keeping global warming to below 2 degrees Celsius. To stay on course funding is needed, and a lot of it. The recent Mckinsey report estimated that the annual spend to reach Net Zero will be $9.2 trillion (£6.8tn) with a further $3.5tn every year to develop alternative energy sources.
It will require enormous commitments from global powers to ensure we adhere to targets and can truly combat climate change, global warming and prevent environmental catastrophes around the world, even greater is the commitment to act amidst rising inflation, falling living standards, surging energy prices and a war in Eastern Europe. The role of finance among all this? To make our money green so we can sleep sound at night, and begin the transition away from carbon by day.
Author: Archie Rankin (Editor @ helloFair)