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Boris's eco-optimism will get the better of him

18 November 2020

11:18 PM

18 November 2020

11:18 PM

Vote blue for green jobs in the red wall. That’s the message we’re supposed to take from Boris Johnson’s ten point plan for reaching zero carbon emissions. The launch follows some shallow Westminster chatter about how this stuff relates to the departure of Dominic Cummings, chatter which somehow overlooks the fact that said departure has made precisely no difference to what’s being announced.

Do the Tories new voters in red wall seats care about eliminating carbon emissions? My think tank, the Social Market Foundation, has been investigating this question. For what it’s worth, our polling and focus groups don’t find much regional variation in attitudes here: broadly speaking, voters are quite positive about a greener economy, though their level of knowledge about what that means is fairly low.

The big variations in attitude are found in income: unsurprisingly, the more money people have, the more relaxed they are about the costs of net zero. And there will be costs, though you wouldn’t learn that from the PM’s op-ed in the FT today. I worry that he’s being far too positive about the transition to a green economy and that his excessive optimism could come back to bite him and his policies.

I’m in favour of pretty much all the stuff Johnson has announced today: it’s a sensible package. I think decarbonising the UK economy makes good sense, in terms of overall climate policy and our long-term economic interests. But when I see politicians talking about net zero as some sort of free lunch, all upside and sunshine, I worry.

Weaning an advanced industrial economy off carbon is a huge undertaking, arguably the biggest economic transformation since the first industrial revolution — and one being undertaken to a timetable, driven by policy choices. The sort of transition that the UK will attempt in the next 20 years will have very big impacts on the lives of many, many people in the UK, and not always in a positive way. It will also require some political choices that are far from straightforward.

Start with jobs. There are undoubtedly lots of jobs that will be created in all sorts of places doing many things that will underpin a greener economy, whether it’s designing and building the kit needed for more renewable energy, making lots and lots of new batteries, carbon capture and storage, decarbonising homes. The list is long and the PM is far from the only politician who wants to talk about those jobs.

But moving away from carbon will cost some jobs too. The six most carbon-intensive industries in the UK are agriculture, mining, manufacturing, energy, water supply, and transport. While those aren’t the biggest employers in the UK, they are sectors that employ a lot of people with low and medium levels of education, who tend to have lower incomes.


Now, decarbonising those sectors does not have to mean lots of job losses. But it’s likely to mean higher costs for employers, which could well mean some of those people do lose their jobs. If so, some will doubtless get some of the new jobs that the PM is talking about today. But this sort of economic friction is not painless for individuals — someone who loses their job because of net zero is unlikely to think better of a politician who suggests net zero is all positive.

Then there’s the question of how to allocate costs. And yes, there will be costs, and not just because buying a new white van could become a lot more expensive.

To hit net zero, we need to replace more than 24 million gas boilers in UK homes in the next two decades with stuff like heat pumps. Heating homes is one of the hardest bits of this agenda, which is why Johnson’s plan largely glides over the issue.

When my think tank investigated the question of heating homes, we found that most people don’t know about the need to decarbonise their homes, let alone how to do so. That’s understandable, given how complicated the issue is, how under-developed the market is, and how little politicians talk about it.

Who’s going to pay for those new boilers and heat pumps? What about people who can’t afford it? What about social housing landlords? If we follow the approach of earlier years, energy consumers will help subsidise the decarbonisation of heating homes through tariffs added onto their bills. But that proved unpopular and rightly so: it’s a crude and often unfair way to raise money for a policy, not to mention one that lacks transparency and thus legitimacy.

Similar questions arise over the huge network of charging points and power lines that will be needed to charge the millions of electric vehicles required for a net zero economy. If it’s left to industry to fund that infrastructure through bills, there’s a risk that the charging network won’t reach everyone (especially rural areas) and a risk that too much of the cost falls on the wrong people.

Better, then, for politicians who want the green transition to be upfront about funding it, and find the money from taxation. But where should that tax burden fall?

Normally, allocating taxes is done along an income scale. By and large, we try to make sure that the more someone earns, the more tax they pay. But does that work with this policy? One issue is carbon use: should people who emit more carbon pay more to fund decarbonisation? There are good arguments for a shift to carbon taxes, but that shift is far from easy in terms of politics, because of the distribution of carbon use. Rural households emit more carbon than urban ones: should they pay more?

And generally, the older someone is, the more carbon they emit. (Pensioner households travel less than others, but use more electricity and heating). So is it fair for them to pay more for a carbon reduction policy? Bear in mind that, bluntly, some older people won’t be alive when the 2050 net zero date is reached, so should they be required to pay for an economy that they won’t be part of?

On the other hand, we have the argument that older households have spent their lives contributing to the carbon problem that will be left to younger generations to solve. Younger generations who already face a host of economic and social grievances relating to unstable employment, house and asset prices and longer working lives.

The bottom line here is that the journey to zero carbon, necessary as it is, will not be the simple, wholly positive experience that Boris Johnson risks suggesting today. If a New Jerusalem with windmills sounds too good to be true, there’s a good reason for it.

The net zero agenda is a net positive for the UK, and it’s good that the PM is pushing it. But it’s also a project that is complicated and involves trade-offs and hard political choices. It’s a project that is more popular among richer people with higher levels of education. It’s a project that is strongly backed by political elites and supported by political consensus: all the main parties support net zero, arguing only about how and how fast to do it. It’s a project that is poorly explained to and imperfectly understood by a lot of voters. It’s a project that is good for the country in aggregate but affects different people and places very differently. It’s a project that is politically vulnerable.

Boris Johnson doesn’t have to look to France’s Gilet Jaunes revolt, or any of the other European populist challenges linked to environmental policy to see how that vulnerability could play out. He just needs to think back to how he and his friends ended Britain’s EU membership. When it comes to selling net zero in a sustainable way, we need less sunshine and more realism.

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