Rebecca Paul

More people are now recognising that all is not well with the current approach to energy policy or net zero. That matters because the cost of energy is deeply tied to the cost of living, the cost of doing business, and the security and resilience of our country. It therefore follows that any energy policy which sees us spend £250 million per month to import energy from Europe because our own production cannot meet demand can only be called a failure and a security risk. The country urgently requires an energy policy that is realistic, reliable and rooted in the pursuit of prosperity, yet what successive Governments have legislated for has been anything but. The net zero agenda is not working and it is time we were honest about that fact. The target may have been well-intentioned, but the current pathway is unaffordable and unworkable. What many people will be wondering is, how did we get to this point? To address that, we must look back to the Climate Change Act 2008. When the Act was passed, it was the first legislation in the world to set a legally binding national framework for reducing greenhouse gas emissions, but it applies only to territorial emissions; that is, emissions that occur within the UK’s borders. This means that while it can be made to look as though we are meeting our climate targets, with a reported 54% reduction in territorial emissions since 1990, we are in fact exporting an increasing share of our emissions elsewhere. This phenomenon, known as carbon leakage, occurs when UK-based industries shut down or relocate overseas to avoid high carbon costs, only for the UK to continue importing the very same goods, often with higher embedded emissions. Net zero by 2050 may lower UK emissions on paper, but perversely, it is also driving up global emissions in real terms as we become more reliant on imports. Several forces contribute to this situation. First, UK electricity prices are now among the highest in the developed world, driven in no small part by net zero policies. Secondly, under the UK emissions trading scheme, firms in energy-intensive sectors must buy allowances for every tonne of carbon dioxide they emit—a cost their foreign competitors may not face. Thirdly, the rise of green finance regulations such as mandatory environmental, social and governance disclosure and climate stress testing has constrained domestic investment into high-emissions sectors, even as our competitors around the world forge ahead without similar constraints.