Climate

Boris Johnson is under pressure to outline the United Kingdom’s path to net zero emissions.

This is the fourth part of an FT series asking whether Boris Johnson is pursuing reforms that will change the face of Britain. Follow UK politics & policy with myFT to be alerted when new articles are published.

Sheila Sloggie’s Victorian terraced house in southern England was by now meant to be swaddled in thousands of pounds’ worth of new insulation to keep it warm in winter and cool in summer.

But nearly two years since Sloggie embarked on the project, her house in Great Yarmouth is still draughty after a contractor she thought would improve it under England’s failed green homes grant scheme pulled out.

Boris Johnson’s government launched the £1.5bn scheme last year, hailing it as the “biggest upgrade of the nation’s buildings in a generation” and a significant first step towards decarbonising homes, which are a large source of greenhouse gas emissions.

But in March, amid angry criticism about the scheme’s botched implementation, it was scrapped by ministers. “I do hope [the government] learns from this,” said Sloggie, who has found a different contractor to do her insulation work.

Sheila Sloggie
Sheila Sloggie outside her home in Great Yarmouth © Si Barber/FT

The scheme’s failure is one of several factors that threaten to undermine the Conservative party’s 2019 election manifesto pledge to “lead the global fight against climate change”, by raising questions about whether the government has the political courage and policy chops to reach its goal of net zero emissions by 2050.

The government needs to lead by example this year: in November it will host the UN COP26 climate summit in Glasgow, when nations will seek to accelerate progress towards the agreed goal of limiting global warming to “well below” 2C from pre-industrial levels by 2100, and ideally to 1.5C.

Climate experts say the prime minister must start convincing Britons to make significant changes to the way they live their lives: from how they heat their homes to the type of cars they drive. And they are clear that the course to net zero must be set this decade — Johnson hopes to be in power for much of the 2020s — in order to hit the goal by 2050.

The prime minister sees decarbonisation as part of a UK “green industrial revolution” that creates high-skilled jobs which can help his agenda to “level up” the country by tackling regional inequalities.

But he is now facing a rebellion by Conservative MPs who fear net zero will hit voters hard in the pocket. The Treasury’s own modelling suggests the costs will fall disproportionately on low-income households.

A large bill will come with net zero. The Climate Change Committee, which advises the government, has calculated that decarbonisation could cost the UK about £1.4tn by 2050, and it has been estimated the state might fund a quarter of the expense, with the rest borne by companies and households.

However, the committee has also said the transition to a low-carbon economy will generate almost £1tn of savings, the majority of which will be secured by businesses and households.

Johnson has yet to set out a detailed plan for how the UK will reach net zero by 2050, or who will bear the costs, even though his predecessor Theresa May enshrined the goal in legislation in 2019.

How the government thinks it can cajole or compel people in order to hit the target should become clear in a series of much-delayed decarbonisation strategies that ministers say will be published before the COP26 summit.

The government has not issued its overarching road map for securing net zero. Two other key documents — a Treasury review of where the costs of the transition will fall and a decarbonisation plan for household heating and buildings — were expected earlier this year but are also yet to be published.

“What we haven’t seen really [from the government] is any willingness to try to confront some of the more difficult policy areas where a wide group of the public is going to have to pay some cost,” said Tom Sasse, associate director at the Institute for Government, a think-tank.

A chart showing how the UK's energy supply has quickly decarbonised while emissions in other sectors remain stubborn - in particular from surface transport and buildings.

While the green homes grant scheme provided a lesson in poor execution, experts support what the government set out to achieve.

Many of the UK’s 29m homes leak heat in the winter and swelter in hot weather. Buildings are the country’s second-largest source of emissions, mostly generated by fossil fuels burnt for heating.

Eliminating that pollution is a mammoth task: it will involve insulating homes and switching to green heating systems, and these changes will be expensive. Installing a low-carbon heat pump currently costs about £10,000, while insulating a home can also cost thousands of pounds.

The government is expected this year to announce a ban on the sale of new gas boilers from the mid-2030s, and it wants 600,000 heat pumps installed each year by 2028.

But the Climate Change Committee has said the UK must go faster, by installing 900,000 heat pumps each year by 2028, and 1.1m by 2030. Only 36,000 were installed last year.

Experts agree that people able to pay for changes to their homes should eventually be required to do so, after a phase-in period.

The less well-off will need financial support, even if costs come down as the market scales up. Energy supplier Octopus Energy thinks it can cut the price of a heat pump to £5,500 by next year, but that is still three or four times the cost of the average combination gas boiler.

Ministers have promised to launch a scheme next year offering grants of up to £4,000 to all households for heat pumps, and are considering increasing the amount to £7,000.

“What we really need is for government to offer a suite of finance and funding solutions that work for all consumers,” said Dhara Vyas, head of future energy services at the charity Citizens Advice.

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Green mortgages are one potential solution to easing the financial pain of improving homes: better interest rates for borrowers who are looking to purchase well-insulated buildings or make energy-efficient upgrades.

But the problem currently is a “lack of awareness” among homeowners about the need to make changes, said Lloyd Cochrane, head of mortgages at NatWest Group. The government has “a crucial role to play in this” and should educate homeowners about the changes and how green mortgages could help, he added.

While the government has yet to release its plan to decarbonise homes, it did in July outline a strategy to reduce pollution from surface transport, the UK’s largest source of emissions.

But experts said the document dodged a key question, providing a case study of ministers’ inability so far to level with the public about the trade-offs that will need to be made to reach net zero.

The strategy confirmed plans to ban the sale of new petrol and diesel cars from 2030, but it failed to address the contentious issue of road charges.

Fuel taxes and vehicle excise duty generate about £40bn each year in government revenue — or 5 per cent of the total — but will dwindle inexorably as fossil fuel-powered cars are phased out. There are about 30m petrol and diesel cars on UK roads today.

Although road charges have been discussed by Whitehall departments for more than a decade, July’s strategy noted only in passing that a solution to the problem of falling fuel taxes and vehicle excise duty needed to be found.

According to government insiders, debate about whether to include details of charges continued up until the document was published, but Downing Street blinked at the last minute.

Experts warn that failing to articulate the need for charges, as sales of electric cars increase rapidly, heightens the risk of a political backlash in the years to come.

“The discussion on road pricing seems to have gone nowhere, but the government has to open the conversation with the public if it ultimately wants to carry the public with it,” said Tim Lord, a former civil servant at the business department.

Chart showing how electric vehicles, and plug-in hybrids, will account for more than half of cars on UK roads by 2035. Before the pandemic, fuel duties contributed almost £28bn to government tax receipts each year. As EV take-up increases, a large hole will be left in the government's budget.

Amid an apparent policy vacuum in Whitehall, political resistance is gathering pace. A new caucus of backbench Conservative MPs dubbed the net zero scrutiny group has been formed to ensure net zero does not impose unbearable costs on the public.

“I have become increasingly concerned that the government doesn’t have the necessary plan and costings to make this happen,” said Steve Baker, a former Tory minister. “Unless we can make it economically viable, I don’t think we can make it politically viable.”

Many experts question whether Johnson has the stomach for the fight over net zero, given that he is a libertarian and instinctively resistant to rules that dictate people’s behaviour.

“We have a government of people who are, within their DNA, against regulation,” said a former senior government adviser.

Although the UK’s relatively small size makes decarbonisation easier, climate sceptics have started to question the value of Britain’s efforts — and the sacrifices required of households — when set against the massive emissions of countries such as China.

Can Boris Johnson change the face of Britain?

With Johnson seeking to be in power for a decade, the FT is examining whether he is pursuing reforms that will have a lasting impact on the UK.

Part 1 Can Johnson turn his levelling up slogan into a substantial set of domestic reforms?

Part 2 Will the plan to provide skills for workers through an overhaul of further education succeed?

Part 3 What does the proposal to turn Britain into a “science superpower” mean in practice?

Part 4 Does Johnson have a detailed plan to put the UK on a course to net zero emissions?

Part 5 What does the reform of immigration rules mean for business and the economy?

To be successful with its net zero target, the government will have to respond to the naysayers, and probably have to push through legislative changes that will force changes to people’s lives.

And the billions of pounds required of the government to hit the goal will have to be found, as ministers also strive to ensure that the burden placed on households and businesses is spread fairly.

“It is the moment of truth for everybody,” said Laura Sandys, a former Conservative MP who chairs the Energy Digitalisation Taskforce, a government-funded research group.

Johnson must demonstrate “political leadership” to ensure that the path to net zero is clear, she added. “At the moment, we have a 2050 target. Until we have 2025, 2027, 2030 targets, no politician is really being held to account. We still don’t have exact plans . . . It is now the time for the rubber to hit the road.”

The government did not immediately respond to a request for comment.

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