UK’s Green Industrial Revolution is a chance to lead outside Europe

MarketLine 8 December 2020 (Last Updated December 8th, 2020 15:30)

UK’s Green Industrial Revolution is a chance to lead outside Europe

As the EU faces severe opposition to its ambitious green deal, the UK should ramp up its commitments in order to lead with equal ambition.

The UK could influence future climate action from outside the EU

In Q4 2020, the UK published its ten-point plan for a ‘Green Industrial Revolution’ and the EU parliament voted for 60% carbon reduction by 2050.

These actions, the latter being foundational to the EU’s ‘European Green Deal’ published in Q4 2019, represent serious attempts at some form of a Green New Deal.

While the EU’s deal has faced questions over feasibility, the UK’s ten-point plan is considered by many to be insufficient.

As the UK looks to take a leading role outside of Europe, growing international support for ‘green new deal’ style policies should be its top priority.

If it can ramp up its ten-point plan and placate its own critics, the UK Government could influence future action in the EU.

The EU hopes to hit on an authentic Green New Deal but could miss

The Green New Deal is a set of economic policies proposed around the 2008 financial crash, aiming to build a fairer economy while ameliorating the worst effects of climate change.

The ideal scenario for a model deal is one where most policies become mutually beneficial, meaning that gains on any one front expedite gains on other fronts.

The European Green Deal and the UK’s yet-hypothetical Green Industrial Revolution have their sights set on this ideal, but only the EU has grasped the scale of the proposition.

The comprehensive climate bill, which the EU parliament passed in October, centres around a controversially high 60% target for the reduction of emissions from 1990 levels.

Green Deal policies hoped to fulfil this target were estimated in 2019 to require over $1tn of investment although many experts estimate more.

The 60% target will now be negotiated with each EU member state, along with the EU’s Green Deal policies, hanging it precariously in the balance.

The UK’s admirable ambitions rely heavily on hypothetical private investment

As the UK leaves the EU and looks for its own approach to carbon reduction, its ten-point plan published in November is widely being seen as insufficient.

£12bn has been pledged to target key green deal strategies – including renewable energy transition and greener buildings and infrastructure – in order to hit carbon neutrality by 2050.

This financial commitment, described by experts as insufficient to meet the UK’s otherwise encouraging objectives, aims primarily at encouraging private investment. However, there is no clear strategy for achieving this.

The UK’s commitments could be highly influential in the EU and elsewhere

Many more fossil-fuel-dependent economies expect the UK to lead on climate investment. These economies include EU states, which will be pivotal in negotiating the EU’s green deal.

If the UK can ramp up public investment to make its hopes of private capital more convincing, this would send much-needed positive signals through Europe, leading by example.