In Short : Green investment is crucial for achieving climate goals and transitioning to a more sustainable economy. It not only helps combat climate change but also creates new job opportunities and stimulates economic growth. It’s important for governments to recognize the potential of green investments and provide the necessary support to drive progress in this area.
In Detail : Jeremy Hunt began his autumn statement with a boast about the new oil and gas licences that the Conservatives had granted, implying that doing otherwise would have been a “short-term decision”.
But for environmental experts listening in, his autumn statement represented little more than short-term fixes and tinkering at the edges of one of the most critical challenges a modern government has to face.
Other major economies including the US and the EU have shaped their fiscal policy around the green transition, recognising that fossil fuels are the energy source of the past, and that those who first create a fully decarbonised economy are more likely to reap the financial rewards. They have each committed billions.
Hunt’s response? A £960m investment by 2030 for a new “green industries growth accelerator” programme. On this, BusinessGreen’s James Murray said: “The support will be welcome, but two things to note: the funding won’t come online until 2025; and the support is orders of magnitude smaller than what is on offer in the US and EU. £960m to support five different clean tech sectors is not really going to move the dial.”
The consensus by environmental groups is that the UK will not, at this rate, catch up with the rest of the world on green investment. Peter Chalkley, director at the Energy and Climate Intelligence Unit, described Hunt’s measures as inadequate. He said: “With the US, EU and China already powering ahead, does this risk looking too little, too late? The government will likely need to do more in the coming months to calm investor nerves.”
Though Hunt promised to “turbo-charge” growth and “build domestic sustainable energy”, the reality is that the economy will not grow when so many constraints are placed on the energy systems of the future. Planning restrictions still prevent onshore wind from being built, there are plans afoot to further curtail solar on farmland, and no new offshore wind projects were successful during the last Contracts for Difference auction.
Meanwhile, the grid is failing to expand at the rate required for decarbonisation. Hunt in his speech promised to “speed up access to the National Grid”, but it remains to be seen whether this can be achieved at the required pace.
Planning is a huge issue for new renewable energy projects, and Hunt promised that councils would be forced to refund companies who do not get a speedy response to their applications. While this will be welcomed, it does not address the fact that so many green energy projects get refused.
There was also no mention of energy efficiency and insulation, despite the fact that energy bills are a huge concern for millions, and that energy efficiency is seen as one of our most vital tools for emission reduction. Chalkley said: “The chancellor had nothing to say on energy efficiency. Many had been calling for a stamp duty rebate for those who invest in upgrading their homes. Coupled with the PM’s recent row-back on requirements for landlords to provide warm, insulated homes, this leaves many families colder and poorer. This will seem particularly painful as Ofgem is set to announce another increase in energy bills tomorrow.”
These measures have failed to impress climate experts. Rebecca Newsom, head of politics at Greenpeace UK,said: “Today, we needed to see bold leadership and a big vision for a green industrial strategy, but all we got was tinkering at the edges. These small reforms will do nothing to tackle the scale of the problems our economy and climate face. The US, EU and China are already light-years ahead of us in supporting investment in green technology, and investors have been left ‘shaken’ by our government’s recent U-turns on net zero. This statement has done nothing to change that.”
Labour’s economic offering promises to invest £28m a year in the green economy, and freeze annual energy bills with a windfall tax, though shadow chancellor Rachel Reeves barely mentioned the climate in her response to the autumn statement.
Some Labour MPs would like to see a more ambitious environmental agenda; the Green New Deal Group, which is co-chaired by Clive Lewis, MP for Norwich South, and counts Labour MPs Zarah Sultana, Nadia Whittome and Debbie Abrahams among its members, today published ideas for its alternative budget, which include bringing energy and water companies into public hands and funding local authorities to insulate and decarbonise all homes, as well as higher taxes on the wealthy to fund more green investment.
These tax plans are heard elsewhere too: 19 respected groups including Greenpeace, the New Economics Foundation, Christian Aid and Patriotic Millionaires UK acknowledge the outsized contribution the wealthiest in society make to global heating and have asked for a range of measures that would ensure the wealthiest individuals and big corporate polluters pay their fair share, including a wealth tax of 1%-2% on assets over £10m that could raise up to £22bn a year.
But these progressive tax plans are so far falling on closed ears. Taxing the wealthy was far from Hunt’s agenda today, and it remains to be seen whether Labour will be brave enough to attempt it.