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NAO: achieving net zero will be ‘extremely challenging’

4 December 2020: The National Audit Office reports that there are significant hurdles to be overcome if the government is to reach its net zero target by 2050.

The National Audit Office (NAO) has issued a report on the challenges facing the government in achieving carbon neutrality or ‘net zero’ by a target date of 2050. This is when greenhouse gas emissions fall below the level that is removed from the atmosphere by the natural environment or through other means, such as carbon capture technologies.

Getting to net zero in such a timeframe will require wide-ranging changes in how the UK economy operates and how we live our lives. A massive expansion in renewable electricity generation is only part of it, there will need to be significant changes to how people travel, how land is used, and – importantly – how buildings are heated. 

To achieve this goal, the entire government must be fully committed. Not only will it need to achieve carbon neutrality in its own activities, but it must implement major changes across the economy. The Department for Business, Energy & Industrial Strategy (BEIS) has the overall accountability for achieving the target and for monitoring progress, together with the Cabinet Office, which supports the Climate Action Strategy and Climate Action Implementation cabinet-level committees, coordinates activities across government and is responsible for eliminating government’s emissions.

Other key departments include the Department for Environment, Food & Rural Affairs (Defra), the Department for Transport (DfT) and the Ministry of Housing, Communities & Local Government (MHCLG), which together with the devolved administrations have policy responsibility for sectors of the economy where there are high emissions.

Achieving net zero in only thirty years is far more ambitious than earlier targets set by the government, especially for sectors where there is significant uncertainty over how best to reduce emissions. There is not much time to decide on the optimal route to take, then develop a plan, and then implement it. The uncertainty is compounded by not knowing how much individuals will be willing to change their behaviours where needed.

BEIS estimates that further action is needed in the short-term to meet existing UK emissions targets and that speedier progress will be needed in the sixth carbon budget to be set in 2021, covering the period from 2033 to 2037. Only by significantly accelerating the pace of reduction will it be possible to achieve net zero by 2050.

None of this progress will come without cost. New technologies are likely to be expensive, as is the new infrastructure that will be required. However, these costs are likely to be far outweighed by the costs of doing nothing, as reported by the Climate Change Committee in 2019. 

Cross-government working will have to be at its most efficient to give effect to net zero arrangements and the government does not have a good track record in this space. The redeployment of resources to deal with the pandemic has already caused some delay, while the NAO has highlighted the lack of routine sharing of information and learning across departments as a concern.

Outside of central government public bodies need to be clear on their role. In particular, local authorities will be critical to the success of this ambition, but there is a lack of clarity from central government about what they should be doing. 

The government does have plans to reduce its emissions. For example, in 2018 emissions from public sector buildings amounted to 9% of all emissions in the buildings sector. A Public Sector Decarbonisation Scheme announced in September 2020 aims to invest £1bn in reducing emissions from public sector buildings and £32bn in a Public Sector Low-Carbon Skills Fund.

BEIS is aiming to launch a comprehensive net zero strategy prior to the UN Climate Change Conference (COP26) in November 2021. This is intended to encompass all the sectors that need to decarbonise, but the NAO is concerned that the pandemic may make it difficult to finalise a full strategy in time.

As with other ambitious projects that governments embark upon, the importance of a clear strategy cannot be underestimated. Only then will it be able to identify the people, policies and funding needed and set milestones for when critical decisions need to be made. It will also need to consider how this one ambition of achieving net zero impacts on and relates to other government priorities. These interdependencies need to be well managed so there are fewer unintended consequences. 

The NAO also flags concerns about how BEIS reviews progress towards net zero as current monitoring arrangements are limited. Clear and consistent data on the progress of net zero policies needs to be developed and monitored so that if things go off track the government can act promptly. 

Similarly, the NAO believes more work is needed to collect information on the costs incurred and benefits achieved from the actions taken to achieve net zero. This is an area where the government has struggled, such as in the difficulties it had in tracking the cost of preparations for exiting the EU. Accountability requires good quality information as does good financial management – the government risks wasting significant amounts of public money if it doesn’t know the real costs and benefits of the actions it is taking. 

Other areas of concern highlighted by the NAO include the requirement for strong public engagement to get buy-in to the changes that will be needed, as well the need to attract private sector investment into green technologies and infrastructure. 

Alison Ring OBE FCA, Director for Public Sector at ICAEW, said: “Achieving net zero should be right at the top of the government’s priority list in 2021. Thirty years may seem like a long time but given the scale of change required to the way we live our lives it is likely that we are already behind schedule. Developing a comprehensive net zero strategy and then setting about implementing it cannot come too soon.”

Francesca Sharp, Technical Lead Climate Change at ICAEW, said: “Whilst the UK’s target is for 2050 – we have until 2030 to get serious on climate change to be in line with the Paris Climate Accord. The public sector will be expected to walk the talk in committing to deliver on climate action as many businesses have already done so.”