The Hunt for a Coherent Net Zero Strategy

But
is
it
the
greenest?
Probably
not,
after
a
September
U-turn
on
key
climate
change
targets,
most
notably
a
delay
to
the
ban
on
petrol
and
diesel
cars
from
2030.

As
focus
groups
probably
tell
the
ruling
party
every
week,
net
zero
has
dropped
below
the
cost
of
living
on
the
average
briton’s priority
list,
if
it
was
ever
above
it
in
the
first
place.
Fiscal
events
are
always
designed
to
match
the
mood
of
voters,
so
unsurprisingly
there
wasn’t
a
huge
push
for
climate
change
mitigation
measures.
The
environment
is
still
important,
of
course,
but
times
are
tough
and
the
Conservatives
have
an
election
to
win.

Or
so
goes
the
logic.

The
first
mention
of
green
energy
came
some
way
into
last
week’s
speech
under
the
auspices
of
“infrastructure,
housing
and
planning”.
Loosening
planning
restrictions
–
making
it
easier
to
build
houses
and
overcome
“NIMBY”
objections
–
are
the
main
thrust
of
this
package,
which
also
takes
in
electricity
grid
access.

“It
is
taking
too
long
for
clean
energy
businesses
to
access
the
electricity
grid,”
Hunt
said,
adding
the
findings
of
a
review
by
Electricity
Networks
Commissioner
Nick
Winser
had
now
been
published.
The
idea
is
now
to
revamp
up
the
grid
network
that
supports
renewables
such
as
wind
and
solar,
as
well
as
electric
vehicle
(EV)
charging
points.
Electricity
demand
is
expected
to
soar
in
the
coming
decades
across
the
world,
so
perhaps
it
was
a
sensible
move.

Apart
from
the
obvious
incentive
for
people
living
close
to
grid
upgrades,
it
did
feel
likea
subsidiary
of
the
day’s
main
business,
however.
Namely,
more
money
is
being
targeted
at
the
“Green
Industries
Growth
Accelerator”
You
can
do
your
own
research
about
what
this
actually
involves,
but
the
exciting
title
perhaps
tells
you
all
you
need
to
know
about
where
it
scores
on
the
style-versus-substance
scales.

And,
as
the
saying
goes
in
frontline
politics,
there
are
no
new
ideas.
Like
many
“green
initiatives”
announced
at
such
events,
many
aren’t
aren’t
actually
new
at
all.
Moreover, 
commentators
implied
they
were
“broadly
welcome”
but
failed
to
go
far
enough.

Dan
Parker,
partner
at
consultancy
Newton
said:
“the
clean
energy
measures
from
the
chancellor
are
a
step
in
the
right
direction
and
could
go
a
long
way
to
helping
renewables
and
crucially
offshore
wind
successfully
deliver
on
their
potential
for
the
UK.
But
we
must
get
the
balance
right
between
quality
and
pace.”

Cash
for
Qashqais

In
the
chancellor’s
main
speech,
green
energy
was
lumped
together
under
the
£4.5
billion
package
for
the
wider
manufacturing
sector,
but
this
does
include
£2
billion
investment
in
automotive
sectors.
Nissan
has
pledged
an
identical
figure
for
its
car
plant
in
Sunderland,
where
the
“pure
electric”
Qashqai
model
is
being
produced.

These
measures
seem
hard
to
argue
with;
the
Qashqai
is
one
of
Britain’s
most
popular
cars
and
the
Sunderland
car
plant,
while
also
providing
jobs
in
a
less
affluent
area
of
the
UK,
also
exports
80%
of
its
production.
It’s
where
loving
the
planet
and
levelling
up
meet.

But
if
electric
car
sales
are
so
important
to
the
chancellor,
why
did
the
government
just
two
months
ago
change
the
deadline
for
the
phasing
out
of
petrol
and
diesel
cars
from
2030
to
2035?
Fuel
duty
was
also
frozen
again
in
the
autumn
statement,
shielding
drivers
from
the
worst
of
the
pain
at
the
pump,
especially
as
oil
prices
have
risen
again.
Still,
the
2035
deadline
brings
back
into
line
with
the
EU.

Pain
Free
Net
Zero?
No
Such
Thing

This
balancing
act
is
one
most
European
governments
have
to
make;
aiming
for
net
zero
and
investing
in
domestic
renewable
industries,
while
also
trying
to
shield
citizens
from
the
inevitable
costs
of
that
journey.
Not
all
of
them
are
going
to
get
it.
Some
will
suffer
electoral
defeat.
UK
asset
managers,
hardly
known
for
their
radicalism,
were
clear
in
September
when
they
said
the
u-turn
was
the
wrong
decision.

“The
short-termism
of
allowing
UK’s
cumulative
emissions
to
increase
for
sake
of
cost
does
not
take
into
account
the
medium-long
term
impact
on
taxpayers
wallets
due
to
increase
by
three
fold
in
2050
with
increased
affects
of
climate
change,”
Ninety
One
said
at
the
time.

“The
incoherent
approach
means
our
long-term
ambitions
to
reach
net
zero
becomes
less
likely”.

Thomas
Hansen,
Gulf
Investment
Bank
AM
fixed
income
portfolio
manager,
agreed
the
messaging
was
confused.

“It
is
worrying
how
the
decision
is
being
framed
as
helping
with
the
cost-of-living
crisis.
Hopefully
this
narrative
will
not
serve
as
a
template
for
more
populist
governments
around
the
world,”
he
said.

Renewable
investors
like
to
plan
ahead
and
shifting
deadlines
creates
the
wrong
“optics”
for
external
asset
allocators
and
domestic
businesses
trying
to
make
decisions.
As
Guy
Anderson,
manager
of
the
Mercantile
Investment
Trust
(MRC)
put
it,
the
short-term
damage
may
not
be
significant
in
practice
now,
but
will
have
wider
implications
later
on:

“The
government’s
U-turn,
whilst
not
directly
material
to
many
UK
companies,
does
increase
uncertainty
for
businesses
when
planning
ahead,”
he
said.

Can
We
Afford
It?

So
the
Autumn
Statement
didn’t
exactly
shift
the
UK
government’s
position
dramatically
after
September’s
reversals;
it
just
slotted
into
the
bigger
narrative
about
what
the
UK
has
achieved
economically
in
the
last
13
years
under
one
party;
in
some
respects,
we’re
ESG
leaders,
in
others
we’re
laggards.
I
looked
into
this
political
dimension
in
more
detail
in
October
in
my
article How
Green
Are
the
Tories?

“Business
needs
stability
and
predictability,”
NetWealth
economist
Gerard
Lyons
said
after
the
chancellor’s
statement.
There
isn’t
an
awful
lot
of
that
around
at
the
moment.
But
a
general
election
could
provide
some,
at
least.
Simultaneously,
nobody
is
pretending
a
new
Labour
government
(as
opposed
to
a
New
Labour
government)
wouldn’t
be
constrained
by
poor
fiscal
forecasts
and
the
now-entrenched
call
to
cost
every
single
manifesto
commitment,
however. 

Nor
is
there
really
any
political
appetite
for
a
US-style
Inflation
Reduction
Act,
despite
how
painful
the
headline
rate
of
inflation
has
been.
Debt
incurred
during
the
pandemic
and
in
the
energy
crisis
will
still
need
to
be
paid
off.
Energy
bills
are
still
set
to
go
up
again
in
January
2024.
If
this
sounds
too
gloomy,
there
is
still
the
potential
for
pension
fund
reforms
to
unleash
a
wave
of
institutional
backing
for
renewable
industries.
The
only
thing
is
Jeremy
Hunt
and
Rishi
Sunak
may
not
be
around
to
see
this
bear
fruit.

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