Source · Select Committees · Public Accounts Committee
Forty-First Report - Achieving Net Zero: Follow up
Public Accounts Committee
HC 642
Published 2 March 2022
Recommendations
29
In addition to direct costs to the Exchequer of achieving net zero, HM Treasury also...
Recommendation
In addition to direct costs to the Exchequer of achieving net zero, HM Treasury also recognises the impact of behaviour change reducing tax revenues. Revenues from Fuel Duty and Vehicle Excise Duty amounted to £37 billion in 2019–20, and if …
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HM Treasury
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Conclusions (28)
2
Conclusion
Significant uncertainty remains as to whether consumers will rapidly change their behaviours in line with the expectations of government’s Net Zero Strategy. For government to achieve net zero by 2050 requires extensive consumer engagement with its policies and behaviour change in line with its objectives, from installing heat pumps and …
3
Conclusion
Government’s Net Zero Strategy relies heavily on private investment and innovation driving down costs; however, government has a poor track record of providing investor confidence. The Strategy relies on government leveraging billions of pounds of private investment to spur innovation in pursuit of its objectives. Despite this, in some areas …
4
Conclusion
We are disappointed by government’s apparent lack of urgency in clarifying how it will work with local government to achieve net zero. We have previously reported that local authorities have significant scope to influence emissions in their local area, but government had not sufficiently engaged with them on their role …
5
Conclusion
We are concerned that neither the private sector nor the civil service yet have the necessary skills to deliver the Net Zero Strategy. The Department acknowledges that the private sector does not currently have the skills to deliver key aspects of the Strategy, such as for buildings and low-carbon heating. …
6
Conclusion
Increasing focus on its domestic Net Zero Strategy should not detract government from leading global action to tackle climate change. Climate change is a global challenge which requires a global solution. Government aims to lead by example domestically to help drive action and ambition internationally. However, delays in publishing targets …
1
Conclusion
We took evidence from the Department for Business, Energy & Industrial Strategy (the Department), and HM Treasury, on government’s Strategy to achieve net zero by 2050 and how it will fund the transition to a green economy.
7
Conclusion
Although the Strategy relies on private investment, government does not have a good track record of providing investor confidence in climate policy.18 For example, government set out plans for zero carbon homes in 2006, but cancelled these in 2015.19 Even today, on the back of Net Zero and COP 26 …
8
Conclusion
Despite its track record, the Department considers that the Strategy will have greater permanence than previous climate policies that have subsequently been reduced or withdrawn.24 This is partly because the Strategy was developed in conjunction with HM Treasury’s 2021–2 to 2024–5 multi-year spending review, and partly because it contains long-term …
9
Conclusion
In March 2021 we reported that as much as 62% of future emissions reductions would rely on individual choices and behaviour but that government had not yet properly engaged with the public on substantial behavioural changes that achieving net zero would require.28 In our current inquiry, the Department told us …
10
Conclusion
Achieving net zero will clearly be challenging. The Department stressed that although many of the technologies the strategy relies on are currently very expensive, it is confident that the cost of these will reduce over time.33 For example, a heat pump is currently more expensive than a gas boiler; however, …
11
Conclusion
We questioned whether the Department was also monitoring and collecting data on the impacts of net zero policies on individuals and groups with different characteristics.38 The Department pointed to HM Treasury analysis of household exposure to net zero ‘abatement’ costs by income deciles, but also described why it does not …
12
Conclusion
We previously reported in 2021 that local authorities have a key role to play in achieving net zero as they have significant scope to influence emissions in their area, by leading decarbonisation of sectors such as housing and transport, and by influencing local businesses and residents to take climate action. …
13
Conclusion
The Department reiterated that local government is key to achieving net zero particularly in delivering emission reductions in buildings, transport and waste management.45 Government analysis suggests that more than 30% of emissions reductions to deliver the Sixth Carbon Budget rely to some extent on local authority involvement, and in evidence …
14
Conclusion
The Strategy sets out plans for how central government will work with local government in pursuit of net zero.49 The Department will take overall responsibility for improving coordination with local government and other local actors on the design and delivery of local net zero policies.50 The Department will establish a …
15
Conclusion
We questioned how local authorities access funding to help achieve net zero. The Local Government Association highlighted to us the core issues of uncertainty, spending power and fragmentation in relation to challenges facing council finances.55 The Department considers that the current system run at a national level can ensure that …
16
Conclusion
The Energy Systems Catapult highlighted the importance of expanding local authority competence and resources to ensure the capacity and capability to conduct project appraisal and to access funding to help deliver net zero.59 The Department explained that local net zero hubs exist to help local authorities secure funding, and that, …
17
Conclusion
The Department recognises the need to upskill the private sector to have the capacity and capability to provide goods and services that will contribute to the government’s net zero goals.63 We have recently reported that while the failure of the Green Homes Grant Voucher Scheme was largely down to design …
18
Conclusion
The civil service also needs to ensure it has people with the right skills to address net zero challenges.69 We previously reported that some departments had failed to provide detailed assessments of the climate impacts of their capital expenditure plans for spending review 2020, despite HM Treasury requesting that they …
19
Conclusion
We questioned whether there remained a net zero skills imbalance across government.74 The Department told us that it has a high concentration of relevant skills, and there are secondary but still substantial concentrations in the Department for Transport and the Department for Environment, Food & Rural Affairs. The Department told …
20
Conclusion
In 2020 government established the Government Skills and Curriculum Unit. The Strategy indicates that this Unit is working with the Department to review the skills, training and networks that civil servants need to achieve net zero.76 In addition, the Department told us that government is also building its talent pipeline …
21
Conclusion
The Department recognises that climate change is a global challenge requiring a global solution. The Strategy identifies international collaboration as a key aim for the UK’s presidencies of COP26 and the G7. The Strategy further commits to lead by example internationally on climate policies, in part by building on a …
22
Conclusion
We previously reported in 2021 that it was critical that actions to reduce the UK’s emissions did not result in moving emissions abroad, so-called ‘carbon leakage’, which would undermine global efforts to tackle climate change. At that time, government did not have a clear way of determining whether its actions …
23
Conclusion
In its new Strategy, government recognises the importance of addressing the risk of carbon leakage so that its net zero interventions do not lead to increased emissions elsewhere, and to ensure that UK industry has confidence to decarbonise.82 The Department sought to assure us that it has not found serious …
24
Conclusion
The Department told us consumption emissions are more difficult to measure than territorial emissions, the latter being the standard approach of the United Nations Framework Convention on Climate Change (UNFCCC).85 The Department told us that it intends to use product standards and carbon adjustment mechanisms at the border as long- …
25
Conclusion
The Strategy commits government to providing an annual public update on progress made in the previous year towards net zero. This will include progress against the ‘targets and ambitions’ set out in the strategy, commentary on contextual changes that might affect the expected pathway to meeting decarbonisation commitments, and a …
26
Conclusion
We questioned the Department as to whether it felt measures relating to the energy efficiency of buildings cast as best endeavours, such as ‘as many as possible’ and ‘as many… as reasonably practicable’ were transparent, clear and effective.92 The Department told us that a one-size-fits-all measure cannot be applied to …
27
Conclusion
In its 2020 report Achieving net zero, the NAO stated that neither the Department nor HM Treasury collated information on the total costs and benefits of government policies that contribute to achieving net zero.96 HM Treasury told us that costs associated with achieving the Nationally Determined Contribution (which commits the …
28
Conclusion
The Department pointed to the cost-benefit analysis it prepared as part of government’s consideration for legally adopting the Sixth Carbon Budget, and also its financial resources (expressed as capital and operating expenditure limits) set against different targets including net zero and contained within its Outcome Delivery Plan.101 The Department told …