The Clean Growth Strategy

By Lydia Newman

HM Government released The Clean Growth Strategy report in October 2017; an account of where investment will be made into research and implementation of low carbon technologies by identifying which sectors require the most attention.

What is the Clean Growth Strategy?

The strategy focuses on building a relationship between Government, business and society in order to strive for clean technologies that will cut future greenhouse gas (GHG) emissions. The Clean Growth Strategy’s approach is to satisfy domestic responsibility at the minimum net cost to UK taxpayers, businesses and consumers. It aims to deliver protection from high energy costs while maximising economic and social benefits during this transition.

 

Why did the Clean Growth Strategy emerge?

The Clean Growth Strategy derived shortly after the success of the Paris agreement in 2015, in which 195 countries pledged their commitment in working toward reduced GHG emissions and the long-term goal of restricting global temperature to below 2 degrees. The agreement urged countries to formulate a long-term plan with the aim of reducing GHG emissions by 2020. It sought to exemplify the values of the Paris agreement and position the UK as a leading climate change activist.

In common with the Paris agreement, progress is thoroughly reviewed every five years. This is particularly vital for ensuring that budgets are not being exceeded, and if this is the case there are flexibilities in place for up to 1% of later carbon budgets to be ‘borrowed’ from later budgets if it is evident that future budget requirements can still be executed effectively.

What does The Clean Growth Strategy strive to accomplish?

Each person on average was responsible for 14 tonnes of GHG emissions in 1990, however in order to meet net-zero targets, it is expected that this should reduce to 2 tonnes per person. The Government’s aim states that by 2032, 85% use of UK generation must be from low-carbon sources.

In addition, the Government intends for the UK economy to grow correspondingly with the reduction of GHGs. The low-carbon economy has the potential to grow 11% between 2015-2030, quadruple the speed of the rest of the economy. There is evidence to suggest that by 2030 the UK has the potential to earn between £60 billion and £170 billion through the exportation of low-carbon services and goods.

What have we achieved so far?

In 2016, the UK had the highest offshore wind installation capacity and costs have reduced significantly over recent years. Since 1990, GHG emissions have been cut by 42 % while our economy has grown by two thirds. Moreover, our first carbon budget (2008-2012) is one percent better than the indicator and there has been significant progress in the power sector, for example in 2016 renewable energy generated nearly a quarter of the UK’s electricity.

What progress has been made in the home sector?

The average household energy consumption has decreased by 17%. Greenhouse gas emissions in the home sector reached 80Mt in 1990 whereas in 2015 this was reduced by 20% to 64Mt. The 2017 Clean Growth Strategy report states that since 2010 energy efficient lamps have become 80% cheaper, encouraging more people to improve the energy efficiency of their homes. In 2005, only 39% of homes had an Energy Performance Certificate (EPC) rating of band D or above, which increased in 2015 to 79% of homes. Smart meters are beneficial for identifying our individual energy use and in 2017, it was recorded that 7.7 million of these were operating across the country in homes and small businesses.

What are the advantages of the Clean Growth Strategy?

There are many advantages to the Clean Growth Strategy for example:

  • Decreased consumer bills
  • Driving economic growth
  • Improved air quality
  • Improved quality of life

High value jobs are being created with the rise of low-carbon technologies, opening up many opportunities for employment (approximately 430,000) in low carbon businesses and their supply chains.

To put this into perspective, it is possible to save £380 per year on average, simply by upgrading your home from an EPC band E to band D.

Mental and physical health will be improved as there is a direct correlation between cold homes and ill health. The Building Research Establishment (BRE) has estimated that it costs the NHS approximately £760 million per year to aid the consequences of cold, damp homes.

What can we expect for the future?

The UK is undertaking a challenge to have as many homes rated at EPC band C by 2035, initiated with an aim of 2.5 million ‘fuel poor’ homes by 2030. Furthermore, private tenants who are most vulnerable are of great concern and therefore landlords with the lowest performing buildings must improve their buildings to at least EPC band E in order to be able to let from April 2018.

Increased effort will be made by energy suppliers to ensure smart energy meters are offered to every home by the end of 2020. If we can pinpoint where the energy in our homes is being unnecessarily wasted then we can target these areas effectively and improve efficiency.

The Government insists that by 2030, off the grid homes should not have fossil fuel heating installed. We can expect an increase in the installation of heat pumps and use of biomethane in our homes, however, there is still an increasing need to develop low-carbon technologies. Consequently it is vital that investment is made to deliver:

  • Higher education in STEM subjects in Institutes of Technology
  • Development in technology requires reforms to technical education with the expectation for a new qualifications (T levels) to be constituted
  • High quality work placements will also be available.

How will leaving the EU affect the Clean Growth Strategy?

The UK relies on the EU for the EU Emissions Trading System (EU ETS) which involves targets and solutions for eradicating fluorinated gas and new car and van regulations. The EU is also influential regarding minimum standards for various products such as white goods and lighting, set by EU Product Policy and climate and non-energy EU policies and frameworks. Despite this, leaving the EU will not reform any of our sanctioned commitments to reduce our emissions. In fact, our targets exceed EU legislation in terms of ambition; the UK remains committed to the Paris Agreement and is enthusiastic to continue being an international leader to end climate change.

What is the Climate Change Committee’s impression of the Clean Growth Strategy?

In general, the climate change committee approves of the policies put in place by the Clean Growth Strategy, however many of these policies and proposals are in dire need of refining. What is a policy without a plan to implement it? There are currently policy gaps in the fourth and fifth carbon budgets. These gaps need to be urgently closed, especially concerning the lead time pressures for supply chains for future projects.

The CCC has forewarned the Government against planning 2050 targets without Carbon Capture Storage (CCS), and indicated that plans should be set out in 2018 to initiate a UK CCS industry during the 2020s. Net-zero targets are expected to be more expensive and challenging without CCS.

What improvements need to be made by the Government in order for the home/building sector to meet targets?

The Government is advised by the CCC to clarify the ambition and scale across housing stock, for example, a proposed number of homes as well as stating what is meant exactly by ‘affordable’, ‘cost-effective’ and ‘practical’ measures needed to achieve targets. Currently targets are too ambiguous.

Ambitions for 2032 private rented sector, social housing and fuel poor homes require a decisive framework in order for progress to be made.

There is a desperate need for a policy framework that will work alongside effective conformity and monitoring procedures in order to reduce the performance gap between how a building’s energy use is perceived to be able to perform against how it actually performs. Often systems that are installed to improve the energy efficiency of a home are not used how it is intended to be, therefore calculations concerning the expected overall energy use of the UK are filled with uncertainty.

Flexibility mechanisms – what are the risks?

Flexibility mechanisms refer to investment transferring from previously exceeded carbon budgets to following ones. The CCC is concerned that using flexibility mechanisms risks:

  • Development of low-carbon industries risk failing
  • Accumulating costs for future generations
  • The UK’s position of leadership will be subverted

The CCC advises Government to ensure a prompt delivery and outperform goals, ensuring that we do not get delayed with the need to compensate for unresolved carbon targets. If flexibility mechanisms are used, it must not result in weakened aspiration.

Conclusion

The Clean Growth Strategy has an abundance of good intentions. However, what is lacking is a clear framework to put these good intentions into action. Sufficient progress has been made to meet and exceed past carbon budgets, although it is only going to get harder as we strive for net-zero, therefore it is essential that the UK population contributes and that low-carbon technologies are rapidly implemented. We must adapt quickly to rapid change and be prepared for future development.

For more information, take a look at the details within the Climate Change Committee’s Progress Report to Parliament, released annually in June.