With the recent election of the Labour government, they now face the challenge of steering the country back on track.
The climate policy laid and built by Labour has been constructed around energy plans, overhauling existing regulations and closing the loopholes that industries and corporations have been taking advantage of.
According to the Labour manifesto, their strategy is to transform Britain into a clean energy superpower, steering the nation into a circular economy. This plan emphasises clean water and power, warm homes, improved infrastructure resilience, high quality jobs and accelerating net-zero targets. Their central goal is to decarbonise the UK’s electricity system by 2030.
Some of these plans are starting to take shape with the new draft of the National Planning Policy Framework (NPPF), which has lifted the ban on onshore windfarms, encouraging energy companies to develop new wind projects. Additionally, Labour’s commitment to a net-zero future includes a pledge to halt further oil and gas exploration and extraction licenses.
The transition to net-zero will be a significant financial undertaking. Labour has announced plans to fund this transition by way of a National Wealth Fund (NWF) aimed at organising over £21 billion of private capital alongside Labour’s commitment of £7.3 billion.
Environmental Reporting and Accountability
While the UK already enjoys the status of being the world’s financial hub, according to the Global Financial Centres Index, Labour plans to transform it into the world’s green financial capital. Accordingly, Labour has laid out plans to mandate that UK financial institutions - including banks, asset managers, pension funds, insurers and FTSE 100 companies - develop and implement transition plans that align with the 1.5C goal of the Paris Agreement.
While the previous government’s plans for decarbonising the UK’s automobile and real estate industries by 2035 were seen as ambitions, Labour plans to achieve this goal by 2030. Despite only being in power for 12 days, Labour has moved swiftly to ensure they meet their manifesto promises on time. In addition to their new initiatives, they are expected to manage the backlog of overdue projects and plans in the pipeline.
These plans are clearly a key priority of the Labour government and, according to Ed Miliband, are second only to economic growth. “Labour is offering the country the most ambitious climate and energy plan in British history, “Miliband stated recently.
With key announcements on planning reforms and the NWF, the Labour government plans to utilise the existing framework laid out by the Transition Plan Taskforce and the Glasgow Financial Alliance for Net Zero to define the parameters for the successful deployment and use of the NWF.
Challenges
As their term is in its infancy, Labour’s only action to date has been the removal of the ban on onshore wind projects. Critics argue that this decision will mar the scenic beauty of the Cumbrian region with numerous eyesores, while proponents emphasis the urgent need to tackle climate change and enhance energy security.
The Institutional Investors Group on Climate Change (IIGCC) has noted that the Labour manifesto lacks details on transition finance and ensuring global coherence, both of which are critical for investor confidence and operational effectiveness in achieving their goals. Another significant concern is the government’s ability to raise funds to support their net-zero aims. The current contribution of £7.3 billion is a marked reduction from their campaign promise of £28 billion per year. Consequently, Labour will need to borrow substantial sums to fund their promises.
In summary:
Labour’s key climate intentions
- Decarbonise Electricity: Achieve a fully decarbonised electricity system by 2030.
- Clean Energy Superpower: Transition Britain into a leading clean energy superpower
- Sustainability Disclosure: Implement sustainability disclosure requirements aligned with international standards.
- National Wealth Fund (NWF): Mobilise £21 billion of private capital with £7.3 billion government funding for net-zero transition.
- Regulation Overhaul: Close loopholes in existing regulations exploited by industries.
- Onshore Wind Farms: Remove the ban on onshore wind farms to boost renewable energy projects.
- Oil and Gas Licenses: Issue no new oil and gas exploration or extraction licenses.
- Circular Economy: Promote a circular economy focusing on clean water, clean power, warm homes, and infrastructure resilience.
- Green Finance: Make the UK the global leader in green finance by mandating financial institutions to align with the Paris Agreement.
- Automobile Industry: Decarbonise the UK’s automobile industry by 2030.
- High-Quality Jobs: Create high-quality jobs in the green energy sector.
Similarities to previous government
- Net-Zero Target: Both parties are committed to achieving net-zero emissions, although they have different timelines.
- Green Energy: Both support the expansion of renewable energy sources.
- Infrastructure Investment: Both parties plan to invest in green infrastructure to support the transition to a low-carbon economy.
Labour’s action to date
- The only action to date is the removal of the ban on onshore wind in England
Implications
- Critics of onshore wind: Critics argue that this policy will result in more eyesores in the scenic Cumbrian region.
- Supporters of onshore wind: Supporters point to the greater importance of tackling climate change and enhancing energy security.