Disposable cup in hand, Rishi Sunak stood at the parliamentary despatch box yesterday and asked the country to, once again, trust that Tory austerity will lead the country to stability.
In his opening remarks, the Chancellor used a phrase that has become synonymous with green ambition: “I do want to be honest about what I mean by sustainable public finances and how I plan to achieve them,” Sunak said – before defining such sustainability in terms that made no reference to the climate crisis.
A similar pattern – of green hope followed by omission and obfuscation – characterised the rest of the Budget and reflects a wider trend within the government: green rhetoric is not being matched by reality. As Keir Starmer noted in his parliamentary response, the Budget stopped “way short” of what the climate crisis demands.
There were nods to concerted action: the new National Infrastructure Bank, with £12bn of funding, has tackling climate change as one of its objectives, £15bn of government bonds will be dedicated to supporting the transition to net-zero emissions, and the Bank of England’s monetary and financial policy committees have been set new green remits.
Yet Sunak also made no mention of new policies to improve the take-up of electric cars or to reduce air travel. Nor of the former Green Investment Bank, which was privatised by the government just under four years ago. Nor of the flop that has been the Green Homes Grant, which was intended to improve energy efficiency but has now been slashed.
Meanwhile, the cumulative effect of over a decade of frozen fuel duty has not only cost the Treasury more than £10bn in lost revenue, it has led to a 5 per cent rise in the UK’s CO2 emissions, as past analysis by CarbonBrief shows.
Optimists may point to the ability of sweeping new green finance reforms to put the country (and the wider world) on a new economic footing – yet the unspecified nature of what these entail left worrying gaps. Simon Youel of the Positive Money campaign group has been pressing for exactly the kind of updated Bank of England mandate that Sunak announced. He welcomed the opportunity to create “genuinely green investment” and hopes to see this enacted in policies that, at the very least, exclude unsustainable assets from the bank’s asset purchases.
But he also cautioned that the central bank must stand up for the public interest, not merely the interests of the City: “We must make sure the UK’s taxonomy is not decided by vested interests behind closed doors, and that it overcomes greenwashing by explicitly classifying what is unsustainable, as well as what is green.”
More widely, the current state of the burgeoning green finance sector leaves much to be desired. Mark Carney, the former Bank of England governor and current climate adviser to Boris Johnson, caused a storm when he recently described his asset management portfolio as “net zero”. His error? Implying that emissions avoided through investments in renewable technology can offset those from polluting energy sources, when in fact true “off-setting” requires technologies that can actively suck carbon from the air. (Although he later rowed back on this definition, the damage to the term was done.)
Recent research for the Common Wealth think tank by Adrienne Buller has similarly found that a third of the UK’s so-called “climate-themed” ESG funds hold stakes in fossil fuel companies. While the carbon offset markets that Sunak wants the City of London to promote have to date been riddled by a lack of accountability, as research by Simon Lewis, Mark Maslin and others has revealed.
[Hear more on the New Statesman podcast]
Addressing the discrepancy therefore between Sunak’s appeal to “honesty” and the confusion left hanging over so much of the government’s green policy must now be a priority for the Conservatives and Labour alike. The World Wildlife Fund has called for “a Net Zero test for overall government spending”. While Sam Hall, the director of the Conservative Environment Network, has raised the need for the government to set “further measures” to mobilise private capital towards environmentally-focused jobs.
A little over a week ago, Boris Johnson made the case to the UN for “tree-hugging tofu munchers”. Or, more accurately, he began to undo the harm that years of his own, similarly ill-considered attacks on green thinking have done.
To truly address the climate crisis abroad, however, the public needs to trust that its politicians can deliver at home. As the Budget made clear, that trust has yet to be won.