The Net-Zero Scrutiny Group (NZSC), a new group of 20 Conservative MPs and peers, advocated for a temporary suspension of the 5% VAT rate on energy bills, among other green initiatives which raise money for government programmes in the areas of renewable energy, home insulation, and reducing fuel poverty. The NZSG is a modest, relatively new organisation but has good connections in the media and business worlds.[i] The faction represents growing discontenttowards net zero initiatives, especially in light of the cost-of-living crisis (COLC) that has many worried about the challenges the winter will bring. The public has a low degree of trust in the parity of some net zero plans, with particular worry that individuals on low incomes and other marginalised groups would suffer. This is related to the increased support for programmes that include choice and are incentivised rather than compelled. Unsurprisingly, this means that certain net zero initiatives are more contentious than others, making communication more difficult.[ii] The connection between net zero and the climate crisis has been brought into the public conversation, perhaps due to our new prime minister putting forward a COLC-busting initiative that focuses on cutting green levies on energy bills.[iii] Whilst, according to YouGov, the public believes largely that the government should be spending more on tackling climate change (51% saying more should be spent, 17% saying too much is being spent), a separate survey of 2019 conservative voters reported by the telegraph, showed that 59% supported a freeze on net zero targets.[iv],[v] In the turbulent political atmosphere of the past seven years, we have seen a shock presidential win for Donald Trump and an unexpected (in the minds of many commentators) decision in the EU referendum here in the UK. If this teaches us anything, it should be that laurels should not be rested on when it comes to anything of national or international significance. Although net zero may seem like it is going nowhere, for many, so did membership in the EU. In fact, the European Research Group (ERG), which successfully lobbied for the Brexit referendum inside the Tory party, was home to more than half of the NZSG members, according to an analysis by the Guardian.[vi]
Maybe you personally have been noticing a shift in opinion when it comes to net zero and conversations that lay some blame at its door for the COLC, so it’s important that the facts are heard.
Carbon Brief’s analysis of the COLC concluded the following. Due to the 11-fold increase in gas prices since 2019, energy costs are increasing. Given that 40% of the electricity in the UK is produced in gas-fired power plants and 85% of houses are heated with gas boilers, the country is particularly vulnerable to rising gas costs. Less than 50% of households in France and Germany are heated by gas boilers. Additionally, because of how the energy market is structured, the cost of gas almost invariably determines the price of electricity. The market arrangements "had mostly been constructed for a fossil fuel-based power system," according to a government consultation on how to improve this system.[vii] This means that wholesale gas prices (blue line in the chart below) significantly influence UK wholesale electricity pricing (red line): The correlation between the two is 98%.
Source: Carbon Brief
With a drive for the greening of the power generation sector in the UK intrinsic to net zero, it would appear that attribution of blame for the COLC to net zero is misplaced.
The University of Cambridge Institute for Sustainable leadership (CISL), together with the Corporate Leaders Group (CLG), have produced a policy paper outlining how addressing decarbonisation and the COLC in tandem can generate the best results for the UK economy. The report begins by outlining the issue: rising energy prices have significantly contributed to greater UK inflation. The number of fuel-poor households doubled overnight when the energy price cap increased dramatically for the second time in a year in April 2022. Further price cap changes have been announced, so by the end of 2022, household energy costs will have roughly doubled from the year's beginning. As a result, the government has offered assistance, paying special attention to vulnerable households. While these initiatives have received positive feedback, they have also come under fire for failing to help businesses or offer a comprehensive package of support to help households become more energy efficient and pay less in long-term energy costs.[viii] Their modelling led them to the suggestion of three policies:
Source: YouGov
The CISL & CLG report also highlights that businesses can lead the way on net zero but are also particularly at risk due to surging energy prices with uncapped commercial use, and thus motivation for businesses to engage with and advocate for the policies put forward could be high.
[i] Edie- The cost of net-zero: The latest disinformation problem facing the climate crisis
[iii] The National- Energy UK to ask next prime minister to commit billions of taxpayer cash for businesses
[iv] YouGov- How is the UK government handling climate change
[v] The Telegraph- Hit pause on Net Zero, Tory voters advise next prime minister
[vi] Ibid
[vii] Carbon Brief- Analysis: Why UK energy bills are soaring to record highs – and how to cut them
[viii] University of Cambridge ISL- The Best of Both Worlds: How tackling cost-of-living and decarbonisation creates win–wins for the UK economy
Oscar is a recent graduate with a background in earth science. He is currently studying an MSc focussing on disaster responses, emergency planning and community resilience. His postgraduate research project will assess the link between climate crisis risk perception and attitudes to green energy projects. “Adapting to the climate crisis through the pursuit of net zero requires community engagement and understanding. Zero Carbon Academy’s goals closely align with this approach and I’m excited to have the opportunity to research and communicate a variety of topics relating to our environment and sustainability”.
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