This article first appeared on City A.M.’s website. You can view it here.
Combating climate change and reaching net zero is quite rightly at the heart of the Government’s agenda. In the past few weeks, we’ve seen a significant acceleration of its ambitions to cut carbon emissions – now 78 percent of 1990 emissions by 2035.
This is mirrored by our recent polling in partnership with Yonder revealing that the majority of the public and MPs think that tackling the climate crisis should be the Government’s top priority, irrespective of the pandemic.
There is only one direction of travel in the climate change debate but hitting the ambitious targets in a way that is affordable to the average person is our biggest challenge.
At a quick glance, a decent electric family car is likely to set you back much more than a petrol or diesel one; whilst moving from your traditional boiler to a heat pump can cost anything between £11,000 and £15,000, which is a big stretch from the usual boiler change that is already a significant purchase for many of us.
We know that the public are willing to make lifestyle choices to reduce their impact on climate change, but when it comes to those that require a significant outlay, people are predictably less keen. Our polling showed that people are more likely to switch to a renewable energy provider or cut down on air travel but are less enthusiastic when it comes to buying an electric vehicle (37 percent unlikely vs 34 percent likely) or upgrading their heating systems to a low carbon system (35 percent unlikely vs 31 percent likely). These are precisely the measures that will make a real difference to emissions.
It’s therefore no wonder that conversation often centres around the targets being ‘unworkable’ or highlight a ‘lack of government detail’, but ultimately targets drive ambition and most importantly innovation. Innovation led by business will be at the heart of making sure measures to combat climate change are affordable to the public, and of course, Government must foster the right environment for innovation to thrive.
Innovation requires strong investment in research and development (R&D), but we’re lagging behind. The UK has a target of spending 2.4 percent of GDP on R&D by 2027, but our neighbours across the Channel and the Atlantic are committing more. The Government needs to be more ambitious, but business can also lead the way. Firms that consistently invest in R&D are 13 percent more productive than those that don’t, and with innovation central to hitting net zero, placing this at the heart of business strategy is no longer a ‘nice to have’, it’s of commercial benefit.
At our Net Zero event last week, the Business Secretary, Kwasi Kwarteng highlighted that the UK now leads the way in big businesses being signed up to the Race to Zero campaign, but called for more action – arguing that “without real engagement from business, there’s no way we can get to net zero. The private sector is critically important in this agenda”.
Inevitably we often look to Government for answers, but on net zero they may have set the targets and can certainly foster a positive environment for success; however, it will be the private sector that holds the key to unlock the challenge of meeting net zero in a way that is affordable, and sellable to the public.