Jeremy's Blog 6th April 2023: Carbon - Missing Ambitions
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 6th April 2023
In the last week we have seen a step and been shown parts of a map for the long road to net zero. Both illustrate the sheer scale of the journey still to be travelled, once grandly referred to by a minister as "the biggest transition in human history". We should not underestimate what that requires for the target to be met in the next 27 years - and still have to adapt to much climate change.
The step is that, since April 1st, the law for England and Wales, generally prohibts new leases of non-domestic buildings in EPC Bands F and G. That is said to bear on over 100 million square feet of commercial space, raising issues of asset and rental values as well as management, landlord-tenant questions and future uses. A revised methodology requires the great increase in renewable electricity, helping properties relying on electricity but not those on gas.
However, we still await the Government’s next step on let residential property with a problematic methodology substantially unchanged since 2012. The consultation on moving the bar for letting to EPC Band C by 2025 closed in January 2021. Now halfway to that proposed deadline, we have no response while its practical challenges make its timely delivery much harder.
The parts of the larger map came with the reported 2,800 pages of the energy security and net zero papers issued last Thursday. Far from a complete plan, they are again best seen as giving a current snapshot of plans which, if delayed, would require a still steeper, more challenging, disruptive and expensive climb to the target. It is natural that we cannot yet see all the technologies to come or quantify their benefits, while future steps would build on the ones we take now.
Agriculture is recognised as a difficult area, currently expected to give a two-thirds cut by 2050, leaving remaining emissions to be balanced by cuts in the rest of the economy. With accelerating change, the Carbon Budget Delivery Plan looks out to 2033-37 (the Carbon Budget 6 period) when agriculture and land use are to have cut a quarter from 49mtCO2e of emissions. That leaves at least another 40 per cent, likely to be harder, to be found in the remaining 13 years.
Of that 12mt, it appears that just 6.9mt have quantified measures. Three – methane-suppressing cattle feed, peatland restoration and perennial bioenergy crops – are to deliver 4mt. Achieving an optimal pH for farmland delivers more by 2037 than planting trees and would give farming profit.
The Times reports DEFRA officials having expressed caution about the deliverability of most of the measures put forward. Many may presume potentially unrealistic levels of cooperation when farmers could adopt some measures now with profit. The Plan’s review of buildings measures notes that “Over a third of the policies require consumers to make choices to achieve the carbon savings” as well as noting the trade-offs over land use objectives including “maintaining food production”.
As carbon imperatives catch up with policy design, the real change may be the prospect of DEFRA promoting standard carbon auditing in 2024 – giving farmers management information.
Such a gap between aim and action is not peculiar to government. Major businesses face growing pressure to assure their lenders and investors as to the impact of climate change on their supply chains and operations as well as their progress in mitigating it. The Government is to require them to have transition plans, showing how emissions will be cut and the costs of that. 80 per cent of FTSE 100 companies have targets but EY found that only 5 per cent would be sufficiently “credible” and detailed for the standards now being set.
The morals are that this is not easy, it is a work in progress and is much more than putting some solar panels on roofs. The heavy lifting for this needs to be at serious scale, seeking out the economic opportunities. Large underlying shifts in the framework for power production and developing technologies can create a positive undertow even as we see the political difficulty of hard measures bearing on people’s lives. If that larger momentum develops, much else may become easier. We are in a time of transition.