The UK Government is likely to miss its targets for reducing emissions to net zero by 2050 because of a failure to “put in place credible plans” needed to encourage essential investment by consumers and businesses.
This is the conclusion in a report published by the House of Lords Industry and Regulators Committee.
The committee found that there is insufficient policy detail to incentivise the £50bn a year of investment that will be required every year to transform our energy system.
The committee stated that the “targets have not been matched by the policies and the clarity over financial incentives necessary to unlock the substantial private investment needed to fund new energy technologies for both industrial and domestic use”.
Providing greater clarity requires political decisions over the range of options available and their consequences for consumers, taxpayers and security of supply, decisions which cut across government and cannot be left to independent regulators.
The committee is calling for the urgent establishment of a Transformation Taskforce within government, reporting to the Prime Minister and housed within the Cabinet Office.
This taskforce would work across Government departments, including the Treasury, to set out a clear roadmap for the development and implementation of energy policies, and act as a coordinator and monitor of progress.
The report also demands that the Government act urgently to explain how the transition to net zero will be funded and calls on the Government to consider the full range of funding options for energy investment, including reviewing its opposition to the use of government borrowing.
“Expecting the costs of net zero to be met exclusively by energy users through their bills is regressive and would place a severe burden on many consumers, particularly given the present surge in energy prices which is putting intense pressure on those least able to pay,” stated the committee.
Commenting Lord Hollick (pictured), Chair of the Committee, said: “The Government has set ambitious targets for net zero including a carbon-free power system by 2035; however there is no point planning a carbon-free energy future if you haven’t got a clue how you will get there or how it will be paid for.
“We now need urgent action from the Government to answer outstanding questions on issues such as how they will incentivise households to replace gas boilers with heat pumps – and what plans there are for the 6 million homes where heat pumps may be unsuitable – what funding mechanisms will be established to encourage investment in small modular nuclear reactors and how the upgrade of our infrastructure to allow the use of hydrogen for heating will be funded.
“These are basic questions that need to be answered before we will get the investment we need to get to net zero.”