A new Tory green agenda has to be stubbornly pro-growth
In 1990, Margaret Thatcher called for action on climate change, remarking that we all need to “make changes and sacrifices, so that we do not live at the expense of future generations”. The key question is whether Truss will follow in the footsteps of her idol, or take more inspiration from Thatcher’s climate sceptic Chancellor Nigel Lawson. To ensure she follows the former, campaigners need to tailor climate policy ideas to a pro-growth and low cost agenda.
It should be said, the optics haven’t been great so far. Straight off the bat, the prime minister put Jacob Rees-Mogg in charge of energy and climate change policy. It’s fair to say the man is not exactly a fan of the net zero target. He has previously said the cost of net zero was “unaffordable” and that attempts to tackle climate change would have “no effect for hundreds or possibly thousands of years”, despite 99 per cent of climate scientists saying the opposite.
But on closer inspection, there are still climate champions with the prime minister’s ear. For example, the new Chancellor, Kwasi Kwarteng, led the charge under Boris Johnson, when he was responsible for launching a world-leading strategy on net zero. The new Levelling Up Secretary Simon Clarke was once awarded the “Britain’s Greenest MP” award. Truss has also appointed Chris Skidmore, an influential climate campaigning MP, to lead a review into net zero to ensure it aligns with her pro-business agenda. Having signed net zero into law when he was climate minister, Skidmore will want to ensure his legacy stays put.
On top of this, the prime minister will be well aware that ditching net zero is a vote loser. A poll from Onward during the leadership campaign found that a new Conservative leader who ditched or paused the net zero target would face an immediate electoral cost. With Labour currently holding a double digit polling lead, the Tories cannot risk worsening the situation.
Instead of tearing up net zero, Truss is looking to Tory-up net zero. The government’s net zero agenda going forward will be rooted in conservative principles of using the market where possible, fostering technological innovation, maximising synergies with other societal challenges and building efficient institutional frameworks.
So I thought it sensible to put forward a few ideas of how to, in the prime minister’s words, “double down” on net zero in a pro-growth, pro-business way, which crucially won’t cost the Treasury any money.
To start, the government should look at reforming mortgage affordability rules to encourage green mortgages. Such changes would have an immediate impact on 1.5 million households taking out a new mortgage every year, encouraging energy efficiency improvements at a time when energy demand management has never been more important.
They should also harness the power of the voluntary carbon market. This unregulated, private-sector led market for climate change mitigation is the kind of high growth dream that wouldn’t be out of place in Britannia Unchained, the book co-authored by, among others, Truss and Kwarteng. After years of concern over legitimacy, carbon ratings are building credibility and paving the way for a dramatic scale up. Number 10 should be clear about their support for this market and its potential to crowd in private capital for public good.
Truss could create a new Net Zero Secretariat, mirroring the National Security apparatus. This model has proved effective in coordinating the crossgovernment response to complex terrorist and security threats across multiple actors. While the threats are different, the magnitude of net zero warrants a similar command structure. The new unit should be situated in the Cabinet Office and report into a prime minister-chaired committee. Perhaps a unit for Chris Skidmore to run after his review is over?
Clean growth is not an oxymoron. We have managed to grow our economy and reduce our carbon footprint for the last three decades. It is now time to double down on net zero and ensure it continues for the next three.