Tackling climate change is one of the most important challenges we face. That is why under the Conservative Party the UK was the first major economy to legislate to reach net zero by 2050.
And we have delivered, too. Since 2010, the proportion of electricity coming from renewable energy sources increased from 7 per cent to 33 per cent – and last quarter, for the first time ever, more of our electricity came from renewable sources than from fossil fuels. And in our response to the Committee on Climate Change last month, we committed to go further and faster than ever.
We know that prosperity and environmentalism are not antithetical; rather, they go hand in hand. Since 1990 we have cut carbon emissions by 42 per cent while growing the economy by more than two-thirds. That is clean growth in action.
It is by working with business and industry that we will make the investments, create the infrastructure, and develop the technologies to eliminate our carbon emissions – while simultaneously creating the high-skilled green jobs of the future.
Take offshore wind. In 2012, prices were over £140/MWh and the Carbon Reduction Task Force wrote that “based on the evidence gathered and assuming our recommendations are followed, the CRTF concludes offshore wind can reach £100/MWh by 2020.”
In 2015, the price was £119/MWh. But in September, our latest Contracts for Difference Auction delivered 5.5GW of offshore wind – enough to power 12 million homes – for the record low price of £39/MWh. Wind is now cheaper than gas.
The International Energy Agency has described this as a “game changer”. But it is important to recognise that this transformation has not happened by itself. A series of targeted policy interventions by the Conservative government have supported the industry, allowing business to develop the technology to the point where it can now be deployed at scale to offer real benefits to both greenhouse gas reduction and consumer prices.
We will be adopting a similar approach to deploying other emerging technologies at scale, from carbon capture, usage, and storage to electric vehicles. We have backed the latter with hundreds of millions of pounds of support to install chargers – and in the Queen’s Speech announced a further £1bn of investment in clean car technology.
The market is responding: the number of electric cars has increased ten-fold since 2012. And when we leave the EU, there may be opportunities to do even more, such as reducing the rates of VAT on solar panels and batteries.
This is the heart of the Conservatives’ policy for delivering net zero. We are championing targeted intervention measures to guide and shape the market, steering a careful course between the Scylla of a purist laissez-faire doctrine and the Charybdis of nationalisation and state control.
Contrast this with Labour’s policy. Their heavy-handed approach is rooted in the failed statist economics of the 1970s. It will not just fail to deliver; it will actively set back attempts to tackle climate change. Over the next 30 years we need to mobilise £700bn of capital above business as usual – and we will not do it by government decree.
We have to be realistic. The Committee on Climate Change, the UK’s leading source of independent scientific advice on this subject, has said: “Achieving net zero significantly before 2050 does not currently appear credible.” The plans by Labour and the Green Party to deliver zero carbon emissions by 2030 simply are not possible.
Labour’s recent report calls for a 60 per cent decrease in car usage and more than £40bn of increased government spending every year. Citizens will have to make changes, certainly, but it is more likely to involve buying an electric car or upgrading their home heating system than to mean giving up meat or cancelling the family holiday abroad. And the Conservative Party will make sure that people have the support and financing they need to make these investments.
A Conservative government will support our economy to transition to the low-carbon vision of the future. Through the Industrial Energy Transformation Fund we are investing £315m to help our energy-intensive industries cut their emissions, boost their efficiency, and increase their competitive edge.
And as Minister of State for Business, Energy and Clean Growth, I’ve visited our new offshore wind farms and seen how they are creating new, high-skilled manufacturing jobs in Hull, Grimsby and Great Yarmouth. The UK is leading the world in low-carbon industries.
Delivering net zero is my top priority. It will require an evidence-led approach, including a balanced programme for generation, an electrified vehicle network, and major action to make our heating green. To get there, government will need to shape the market and provide the framework to support business and individual actions. The government, industry, and citizens must all work together to transform our economy and society.
Kwasi Kwarteng is Minister of State for Business, Energy and Industrial Strategy.