How is the U.K. Powering Clean Growth Opportunities?
In November 2021, more than 190 nations are expected to gather at COP26 in Glasgow, U.K. and present updated plans on how they will help save the planet and achieve the climate targets set by the 2015 Paris Agreement. Chief among them is the ambition to limit global warming to preferably 1.5°C, or a maximum of 2°C, above preindustrial levels, and to create a carbon-neutral world by 2050.
The U.K., host of COP26, is leading by example, becoming the first major economy in the world to pass laws to end its contribution to global warming by 2050, and investing in a green recovery to create sustainable jobs and address the challenges of public health, climate change and biodiversity loss. Alongside government, business action on climate is vital to achieve a successful summit, and the U.K. is eager to showcase how its businesses are finding solutions to tackle climate change.
But progress on the monumental climate challenge needs to be accelerated worldwide. “We are nowhere near the level of ambition needed to meet the Paris Agreement goals,” tweeted United Nations (UN) Secretary-General António Guterres on Feb. 26. “Long-term commitments must be matched by immediate actions that people and planet desperately need,” he said, calling for major emitters to “set more ambitious targets for 2030.”
Creating the Ambition Loop
“This year represents a huge opportunity for the U.K. to demonstrate that it really is a global leader in making the kind of sweeping changes to our industrial economy that are needed for us to thrive as a civilization on this planet,” says Nigel Topping, who was appointed in January 2020 as the U.K.’s High-Level Climate Action Champion ahead of this year’s U.K presidency of the UN Climate Change Conference.
“It’s my job description to be pushy. So every time somebody says, ‘We’re going to become carbon neutral by 2050,’ I say, ‘Why don’t you do it by 2040?’ Or they say, ‘We’re going to get a hundred companies to do this,’ and I say, ‘Why don’t you get a thousand?’”
In his crucial role, Topping is encouraging businesses, investors, institutions, city authorities, regional governments and civil society globally to cut greenhouse gases and commit to a net zero carbon emissions target. “It’s quite a simple mandate,” he explains. “My job is to drive ambition and action from non-state actors to accelerate implementation of the Paris Agreement, and by doing that, help countries go faster, as well.”
As Climate Action Champion, Topping is encouraging industries to strengthen their efforts to cut carbon emissions, supported by the climate strategies of governments, creating what he calls an “ambition loop.” He holds the U.K. government to an especially high standard.
“It’s going to take real leadership, and the U.K. is uniquely positioned because of what it’s already done on climate change. And because of its position as the president of both the G7 and COP26, I think getting it right will significantly enhance the U.K.’s reputation internationally.”
Key areas of opportunity for domestic and international businesses have emerged from the government’s Ten Point Plan for a Green Industrial Revolution. New funding will create two carbon capture clusters by the mid-2020s, with another two planned by 2030, supporting the U.K.’s hopes to be at the global forefront of carbon capture, usage and storage technology.
Hydrogen is another area of focus. Homes that use hydrogen for heating and cooking will be constructed, starting with a “Hydrogen Neighborhood” by 2023 and a “Hydrogen Village” by 2025, with the aim to build an entire “Hydrogen Town,” with tens of thousands of homes, before the end of the decade.
The U.K. has also announced plans to end the sale of new gas and diesel cars and vans by 2030, 10 years earlier than initially planned. Topping supports the government’s Green Industrial Revolution strategy and its aggressive new target for the U.K. to cut carbon emissions by 68% against 1990 levels by 2030. He calls the U.K.’s pledge to end the sale of gas and diesel vehicles “courageous” policy making.
“The U.K. is the first country with a significant car-producing industry that has committed to phase out combustion engines. It’s all very well if you don’t have an indigenous industry—then there’s no risk, right? But if you’ve got eight companies producing combustion-engine cars, and you say that technology is going to be phased out within 10 years, that’s quite courageous.”
Such bold announcements are spurring the low-carbon transformation of the U.K. and the global economy, and the phase-out of combustion engines is setting off a chain reaction of green investments across the automotive industry.
Attracting Investment into Sustainable Sectors
Attracting investment into net zero-related sectors and promoting green exports are critical to grow Britain’s clean supply chain and reduce carbon emissions globally.
The U.K. has developed expertise in zero-carbon powertrains, batteries, motors and power electronics, backed by substantial government R&D funding. As 80% of U.K.-made vehicles are exported, transitioning the U.K. automotive industry to production of zero-emission vehicles (ZEVs) will also contribute to decarbonization in other countries.
Developing domestic production of advanced batteries will be key to Britain’s electric vehicle industry. Through the Faraday Battery Challenge, the government is supporting an investment of up to £318 million in research and innovation projects and facilities to drive the U.K. battery industry.
“We are calling on all countries to bring ambitious commitments to the table to drive confidence and momentum ahead of the UN Climate Change Conference (COP26) next year.”
Graham Stuart, U.K. Minister for Exports, Department for International Trade
The U.K.’s Department for International Trade (DIT) has put clean growth at the heart of its trade policy, British exports and foreign direct investment, and is playing a key role in the country’s shift to a net zero economy.
From trade missions to a virtual U.K. pavilion at the 2020 Greentech festival in Berlin, DIT supports innovative companies from across the U.K. and the world that are applying their sustainable commercial solutions and green technologies to tangible trade and investment opportunities. The DIT’s newly created Office for Investment will play an important role in realizing the government’s Green Industrial Revolution plan by funneling investment into the U.K. and helping to land high-value investments that match the country’s green priorities.
This value is already being created. For example, Danish sustainable energy company Ørsted has built a sizeable group of offshore wind farms close to coastal areas in the North of England, including the world’s largest offshore wind turbines at the Burbo Bank Extension in Liverpool Bay. Such projects are putting the U.K.—the world leader in installed offshore wind capacity—on track to achieve the quadrupling of the country’s offshore wind electricity generation by 2030.
Businesses Double Down on Cutting Carbon
From heavy industry to power generation, supermarket chains to banks, businesses are accelerating their commitments to cut carbon. Large global companies are moving toward increasingly stringent targets; PepsiCo recently vowed to reach net zero carbon emissions by 2040, and last year, Unilever committed to achieve this by 2039. Many cities are even more ambitious, and Glasgow, among others, has announced a 2030 decarbonization target.
As the global economy attempts to bounce back after a difficult year, governments face the double challenge of creating growth while reducing carbon emissions. Clean growth requires tough government action, as well as the support of business and society.
“Ensuring we rebuild our economies in a cleaner way, which unlocks growth and creates jobs in green technology and industry, will require close work across the public and private sectors and include increasing the availability of financial support for the countries that need adaptation and resilience most,” says Graham Stuart, U.K. Minister for Exports, Department for International Trade.
Across the U.K., there is a clear commitment to work in partnership with other countries to raise ambition, drive investment, accelerate adoption and make COP26 a significant turning point in achieving humanity’s goal of protecting the environment and building back better and greener.
“The U.K.’s climate leadership has allowed us to share our vision with the world’s largest sovereign wealth funds and green businesses to unlock their investment into the U.K., not only to deliver our domestic net zero agenda but build the capabilities to grow global exports and help deliver other countries’ commitments too," says Stuart.
“The development of blue and green hydrogen, CCUS, biomass, nuclear and small modular nuclear reactors, not to mention electric vehicles, will all continue apace in the U.K. as we combine investment in research and development with continued openness to foreign players.”
