July 24, 2024
Investors

UK ‘not exciting’ for green investors, says former climate adviser


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The UK is losing out on green investment to other countries due to Prime Minister Rishi Sunak’s rollback on net zero targets and a failure to respond to the US’s Inflation Reduction Act, the former head of the country’s climate watchdog has warned.

In an interview with the Financial Times, Chris Stark, who last week stepped down as head of the Climate Change Committee statutory body, said developers and capital markets were turning away from Britain — once a leader on renewable energy — towards more attractive destinations.

“We are definitely seeing evidence of lost investment to other parts of the world,” Stark said, adding that the UK was “not exciting” when it came to green energy.

The CCC has been critical of the government’s record on climate action under Stark’s watch, who admitted he was more “outspoken” than his predecessors, but insisted he had “the evidence to stand up what I’m saying”.

Stark is leaving the CCC after six years in post to run the Carbon Trust, a group that advises and tracks progress by the public and private sectors on reaching net zero.

The UK became the first big economy to set a legally binding net zero target in 2019. But Sunak has since come under fire from across the political spectrum over his climate inaction since being appointed prime minister in 2022.

Last September, Sunak scrapped a pledge to force landlords to upgrade energy efficiency in their homes, and delayed the phaseout of a ban on the sale of new petrol and diesel cars.

The government failed to attract any bids from offshore wind developers for its most recent round of contract auctions for new projects, indicating waning appetite among investors.

Stark said the UK had failed to respond to the IRA, President Joe Biden’s landmark legislation to boost decarbonisation through a package of measures, including $369bn in green subsidies and tax breaks.

He said the legislation’s impact had been “astonishing” as it had prompted businesses and investors to prioritise green developments in the US over other countries.

“Around every board table, if you have any scope to put your operations in North America to do clean stuff, then you’ve definitely had that discussion,” Stark said.If the US is looking exciting, that’s where you go.”

The government said the UK had attracted £300bn in public and private low-carbon investment since 2010.

“Instruments like the contracts for difference (CfD) scheme make the UK an attractive place to invest in green industries, with companies having announced plans for £24bn in low carbon investment since September alone,” it said. 

CfD contracts help developers secure financing for projects by guaranteeing a price for their power output.

Stark noted the UK was losing “soft power” around the world because there was a view among many countries that Britain was stepping back on climate action.

The country was no longer at the centre of global discussions about climate action and was missing out on crucial conversations on other issues, he said. 

“Climate is the lens through which we discuss a host of global issues and not being at the table, at least not being perceived to be at the table as amongst the most ambitious countries, is a hindrance to that [influence you can have on other issues],” he said.

While the UK has cut its greenhouse gas emissions in half since 1990, Stark said he was not confident the country would meet its 2030 target to reduce emissions by 68 per cent.

He was also critical of the Labour opposition, saying he was “disappointed the party had slashed its planned expenditure on the green transition from an annual £28bn to less than £5bn a year. “It looked like a retreat,” he said.

While the party had “very ambitious policies” for energy, Labour — like the Tories — was failing to look at the trickier aspects of net zero, such as how to decarbonise farming, industry and buildings, he said.

Labour said it would “deliver the most ambitious investment in clean homegrown energy in British history”, adding its plans would make Britain “a world leader in tackling the climate crisis” if it won the general election, expected this year.



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