Public policy must catch up with private sector initiatives if the UK is to meet its targetsby Nick Butler / July 31, 2020 / Leave a comment
Against expectations, the corporate sector has overtaken government in the seriousness of its commitment to the energy transition. In the UK the government’s grand commitments to deliver zero net emissions by 2050 still have no grounding in detailed policy. Perhaps Dominic Cummings, in his battle against the old culture of Whitehall, will spare a moment to shake up the structures which are failing to produce a viable energy policy.
Across Europe, the major energy companies by contrast are embracing the reality of the energy transition. Shell, Equinor, Total and Repsol have all committed to becoming net-zero emissions businesses by 2050 or sooner. Next month BP will publish the details of a radical shift in its business model over the next decade. The routes to the target vary—some are concentrating on the development of hydrogen and wind power, others on solar and energy storage technology. The moves are matched by shifts in capital expenditure and reductions in the carbon impact of both their own operations and the products they sell.
Such moves will no doubt be regarded with deep scepticism by some climate campaigners and there will be accusations of “greenwash,” since the companies are not abandoning their interests in oil and gas. But the shift in the balance of investment is clear. This is a commercial decision. Oil and gas are both oversupplied—a fact evident well before the arrival of Covid-19—and with prices low and unlikely to rise on a sustained basis, few projects open to investment by international companies look commercially viable. Low-cost supplies—from the Middle East and other producers, including the US shale industry—will pick up any growth in demand as we emerge from the current recession. The industry is therefore being entirely logical in embracing rather than resisting the transition to a lower-carbon world.
Climate campaigners should be celebrating the shift and focusing their concern instead on governments which have become the laggards in the climate story. Their contribution so far has been to offer commitments in most cases without any supporting plans to deliver on the promise.
The UK is a case in point, though by no means the only offender. The UK’s achievements on climate to date have been built on the decline of manufacturing industry and the removal of coal from the energy…