Charlotte Street Partners

BEYOND THE STREET

BEYOND THE STREET

Winds of change

Written by Alex Massie
10 December 2020

When things begin to change, they can change extraordinarily quickly. Change is not a linear or constant phenomenon; often it accelerates. That is one conclusion to be drawn from the United Kingdom’s approach to climate change. As recently as a decade ago, the country still relied upon coal-fired power stations; now coal has been all but eliminated from the UK’s energy-producing mix.
 
That is something that is too frequently forgotten, for it is in the nature of our current politics that successes receive much less attention than failures even though you might feel, sardonically, it should be the other way round, what with successes being so much rarer.
 
Next year the UK hosts COP26 in Glasgow, an occasion that is correctly concentrating minds. Despite Covid and despite Brexit too, climate change has become an opportunity for the United Kingdom. Or rather, it may have become so because of Brexit and because of the ‘reset’ opportunities afforded by the Year of the Virus. COP26 is an opportunity to demonstrate UK leadership and relevance. It is too important an occasion for the world to waste but there is an additional urgency to it for Britain as well.
 
This week the Climate Change Committee, chaired by the former Conservative environment secretary, released its latest report. The headline figure was its recommendation that the UK needs to cut greenhouse gas emissions by 78% by 2035 (as measured by 1990 levels) if it is to have any chance of reaching net zero emissions by 2050. That is, plainly, a demanding target and one that will require much greater and faster change than anything hitherto experienced. Happily, however, the committee believes such targets are real in the sense that they are achievable and not merely aspirational.
 
Net zero is now a target entrenched in law. That alone marks what is sometimes called a ‘step-change’ in the UK’s ambitions. The destination is settled; all that is left is the wrangling over how to get there. This is not, to be sure, a trivial caveat but it is a secondary matter of less immediate importance than the cross-party acceptance that the journey is a necessary one. The science is settled and so, despite some countering from the Tory backbenchers, is the politics.
 
So too, at last, is the economics. The report argues that £50bn of investment in low carbon will be required each year if net zero is to be delivered on schedule. That is chunky but, as the report notes, “this investment generates substantial fuel savings” that in time cancel out the costs of investment itself to the point that “our central estimate for costs is not below one per cent of GDP throughout the next 30 years”. Put like that, this is a cost that is more expensive to ignore than to bear.
 
Given these trends, there ought to be a significant first-mover advantage for companies – and, indeed, entire sectors of the economy – that put flesh on the bones of their rhetorical commitments. This is more than a question of public relations, too, for there is, it now seems clear, an obvious commercial interest in exploiting new technology,  and a low-carbon future, to the full. There are opportunities here if business – with the backing of government – is willing to grasp them.
 
Paradoxically, of course, if commerce is incentivised to switch to net zero policies as rapidly as possible, consumer incentives often run in the other direction. Electric automobiles are a fast-growing niche of the overall market, but it is rational for would-be purchasers to bide their time before dumping the petrol combustion engine. Choice, though rapidly improving, remains limited; waiting a few years before making the switch is liable to be rewarded with better performing electric vehicles available at a lower cost than is currently the case. Besides, for many drivers, the infrastructure needed to support the switch to an electric future is not yet in place. Here, plainly, is another area in which government may lead. For unless that charging infrastructure is built, progress will be slow.
 
At present, ambitions on this front are often pitifully inadequate. Edinburgh City Council, for instance, has an ‘Electric Vehicle Infrastructure’ plan that aims to deliver an additional 221 on-street charging points by 2023. That will not suffice. The council’s disinclination to invest properly in such infrastructure may be linked to a preference for achieving “modal shift” away from cars entirely. However sensible that may be in aggregate, it all but guarantees fewer residents will choose to go electric than might otherwise be the case. City leaders, like national politicians, must work with the grain of human preference, not against it.
 
In that sense, not every recommendation made by the committee is sensible. Alongside sensible – and popular – commitments to tree planting and decarbonising households, it suggests there should be a 20% reduction in the consumption of “high carbon” meat and dairy products by 2030 with further reductions thereafter. Perhaps consumer preferences really will change in this fashion, but it is more likely that a combination of (relatively) low-cost methane-reducing supplements added to cattle feed and the steady but, I think, certain development of lab-grown meat will do more to reduce agricultural emissions than government-sponsored hectoring.
 
Still, overall the picture is both clear and encouraging. If much more needs to be done, the platform from which it may be achieved is slowly but surely being built. Government must lead on infrastructure investment but most of the gains to be made on the road to net zero will be sponsored by the private sector. That means greater use of hydrogen energy, of carbon capture, ensuring that all new-build houses are ‘green’ and so on.
 
Last week, Boris Johnson’s government set a more ambitious target for 2030. In place of a 57% reduction from 1990 levels, the country is now expected to reduce emissions by 68% from that level. As a declaration of intent, this seemed significant. The winds of change are blowing harder than ever and the direction from which they come is now wholly obvious. This will, necessarily, be a disruptive process but it is also an opportunity. Here at least, and in contrast to many other areas of government activity, boldness is both necessary and something to be welcomed.

About Beyond the Street and Alex Massie

We are all guilty of being too inwardly focused sometimes, especially as we navigate these changed times. It is all too easy to be caught up in the problems close to home, and for overarching trends to pass us by.

To remedy that short-sightedness, Charlotte Street Partners has enlisted the ingenuity and talent of the writer and commentator Alex Massie. As our new correspondent at large, Alex will look at the bigger picture for us each week. We have challenged him to come up with something a bit different: broad, lateral thinking, thematic insights and a more global perspective.

Alex is a freelance journalist and commentator based in Edinburgh. Not only is he Scotland editor of
The Spectator, but he also writes a political column for The Times and The Sunday Times. He features regularly on the BBC as a political commentator and has written in the past for The Telegraph, Politico, The Washington Post, the Los Angeles Times, The New York Times, the New Statesman, The Observer, and TIME magazine, among others. He was also the Washington correspondent for The Scotsman and assistant editor of Scotland on Sunday

We hope you enjoy his work – and do feel free to forward this email on to colleagues and friends you think might be interested. They can subscribe to Beyond the Street and our other regular briefings here

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