Sunak vs Starmer: What the UK Election Means for Climate and Energy - Ep169: Dr Simon Evans

Michael Liebreich  

Hello, I'm Michael Liebreich, and this is Cleaning Up. 2024 has been described as the year of elections, with voters in 64 countries representing 49% of the world's population going to the polls. We've had the Indian election and the European Parliament elections, but there's a lot more to come, with a vital race shaping up in France in the next few weeks, the US presidential election on November the 5th and also the UK election on July the 4th. That is the topic of this week's episode of Cleaning Up. I'm going to start this week's episode with a little bit of a background briefing, perhaps for those in the audience who are not intimately familiar with the UK political system. Generally, UK elections are two horse races between the Conservatives and Labour. Every so often, it's close enough for the Liberal Democrats, or Lib Dems, as they're now called, to act as king makers and form a coalition. This time round, however, the polls would have us believe that it's not even a two horse race. It's a one horse race with Labour almost certain to win by a considerable margin. Analogous, perhaps, to 1997, when Tony Blair swept to power. Like in 1997, the Conservatives have been in power for a long time, 14 years this time around. The first five in a coalition with the Lib Dems, but since 2015, on their own. It's been a turbulent time, particularly given the 2016 Brexit vote. Since the Brexit vote, the conservatives have had five leaders, subjecting the country to a psychodrama that saw one prime minister last less than a lettuce and their popularity plunge from a high that gave them an 80 seat majority in 2019 to being on track, according to some polls, to achieving fewer than 80 members of parliament after the coming election. Labour, meanwhile, under the bland but seemingly competent Keir Starmer, is predicted to win comfortably and form a government with a huge majority. The Liberal Democrats, the Scottish National Party, and the Greens are hoping to add enough seats to be relevant in Westminster in years to come. And the wild card in this election is the Reform Party, which follows in the footsteps of other nativist, pro-Putin, anti-climate parties in Europe, and is buoyed by the decision of Nigel Farage to take time off the speaker circuit and media to try to break his run of seven consecutive UK General Election losses.  

Come Friday, we'll know who's won and by how much. And even though a Labour victory might seem like a foregone conclusion, the extent and shape of it could still have a significant implication for the UK's climate and energy policy. For the past couple of decades, the country's main political parties have been largely in agreement on climate efforts. This has helped the UK become the leader among the G20 countries when it comes to decarbonisation, with emissions falling 45% since 2000 and over 50% since the iconic date of 1990. In 2019, the UK became the first country to pledge a net zero target under former Conservative Prime Minister Theresa May. As recently as 2012, coal generated nearly 40% of the UK's electricity. Today, it is almost zero. And in September, Britain's last coal station will close for good. Renewables have flooded in to take coal's place: 2020 was the first year in the UK's history that renewables produced more electricity than fossil fuels, with 43% coming from wind - onshore and offshore -solar, hydro and bioenergy. A number of policies have been key in achieving this extraordinary - and for many people - quite unexpected success under the coalition and then the Conservative government. There's the carbon floor price, introduced under David Cameron in 2013, which signed the death knell for many coal-fired power stations at a time when the EU ETS - the carbon price in Europe - dropped to just a few euros per ton. There was the explicit decision in 2015 to exit coal entirely by 2025, which will be achieved earlier than schedule sometime later this year. There was the introduction of contracts for difference (CfDs), which guaranteed electricity prices to developers. And then switching them to reverse auctions, which drove down renewable energy prices so dramatically. Support for wind energy, particularly in Scotland and offshore, was strong under both successive UK governments, but also crucially, Scottish governments. There was a surprising level of energy efficiency improvement as well, which contributed to UK power demand falling 22% between its 2005 peak and 2023. And last, but not least, all of those happened under the purview of the Climate Change Act, which came into law in 2008 and whose lead author was my cohost, Bryony Worthington.

All of this is so far so good, but the UK faces considerable challenges. We have a very congested grid, which needs vast investment and upgrades across the system, particularly North South between where the renewable energy is and where the bulk of demand comes from. We have an aging nuclear fleet, currently producing about 15% of UK power, but most of it due to shutdown around the end of this decade. The UK is trying to build new nuclear plants, but the flagship project, Hinckley point C, which was originally promised to cost £8 billion and be cooking the country's turkey dinners by Christmas 2017, is now going to cost over £45 billion pounds, and we'll be lucky if it's cooking as much as a mince pie by 2030. The UK also has declining oil and gas reserves in the North Sea, making the transition to renewables even more pressing. And following a concerted campaign of misinformation about hydrogen boilers by the UK gas industry, the country is coming plum last in the European league tables for the electrification of heat. When it comes to the UK public, it is actually strongly in favor of climate action. According to polling by Ipsos, 77% of Brits are worried about climate change, and 52% support strong measures to support it. Despite this, Prime Minister Sunak is trying to turn it into a wedge issue between his Conservative party and Labour. In his great climate reset last year, he weakened several targets relating to the phasing out of boilers and EVs, and announced hundreds of new oil and gas exploration licenses in the North Sea. Although to be fair, in the detail, government policy remains strongly supportive of many emissions reduction measures. Labour, meanwhile, has tried very hard to position itself as the climate friendly party, with an eye-catching manifesto target to deliver 100% clean power by 2030, compared to the Conservative's 2035. However, earlier this year, the party got some very bad press by pulling back on its flagship £28 billion pound per year climate package ahead of the election, leaving the public to doubt its commitment to serious climate policy.

We'll be trying to sort through all of that in today's episode, and we'll be trying something of a new format. I'm going to be joined by my cohost, Bryony Worthington, who knows a thing or two about UK politics, climate and energy, given that she sits in the House of Lords, as well as by Dr Simon Evans, the deputy editor and senior policy editor at Carbon Brief, an expert on all things UK climate policy. So please join me in welcoming Bryony Worthington and Dr Simon Evans to Cleaning Up.

Before we get started, if you're enjoying Cleaning Up, please make sure that you like episodes. Subscribe on YouTube or your favorite podcast platform and leave a review. That really helps other people to find us. Please recommend cleaning up to your friends and colleagues and sign up for our free newsletter at cleaninguppod.substack.com. That's cleaninguppod.substack.com.

Cleaning Up is brought to you by the Liebreich Foundation, the Gilardini Foundation and EcoPragma Capital.

ML  

So Simon, welcome to Cleaning Up.

Simon Evans 

Hi. Michael, great to be here.

ML  

So let's start off, if we might, with you explaining in your own words who you are, what you do.

SE  

Yeah, thanks. So I'm the deputy editor and senior policy editor at Carbon Brief, which, if your listeners are not familiar, is grant funded journalism, doing indepth reporting on climate and energy.

ML  

And I'm a huge fan, have been right from the beginning. If people are not aware of Carbon Brief, they really should be, and in fact, they probably have read tons of stories not even knowing that it's Carbon Brief, doing the thinking behind the stories.

SE  

Yeah, I hope that is the case. I recently passed a big milestone with Carbon Brief in May, it is 10 years since I started, which is pretty incomprehensible, but it's been great fun.

ML  

Astonishing, yes, in fact, I remember the day you joined. Well done on that. So now the topic today is this UK election, and let me just say we are recording this about a week before. And so by the time this goes out, as long as nothing really weird has happened, the election will be the day after, will be tomorrow, when this goes out. And the results should come out the day after that. So we should be able to reflect today as we record this everything that's happened until about a week before the show goes out, but anything really weird, we will not be talking about it because we don't know it's about to happen. And with that, could we start perhaps by just going through... We've got the runners and riders, all the manifestos are out. Maybe you could give us your thumbnail summary of the main points as they relate to energy and climate. And perhaps we could start with the Conservatives. They are the party of government, so perhaps we could just start there.

SE  

Yeah, so the Conservatives, it's a little bit of a mixed bag to be honest. So they say that they're proud of our record and remain committed to delivering net zero by 2050. Perhaps reading a little bit too much between the lines, but 'remaining committed' doesn't sound like a full-throated commitment to me. But then they say what they want is an affordable and pragmatic transition that will cut the cost of tackling climate change. And quite notably, when he was launching the manifesto, Prime Minister Rishi Sunak attacked - I guess Labour predominantly - but he attacked 'unaffordable echo zealotry,' and he's been using this kind of negative framing of climate action, pretty much over the last year. And you know this goes all the way back to the Uxbridge byelection - this is a constituency on the edge of London - and the Conservatives won that by election. And it was seen as a referendum on the Labour Mayor of London Sadiq Khan's ULEZ policy.  And that got elided into this idea that all the voters are rejecting climate action. And that was certainly the conclusion that Conservatives took from that. And that's filtered all the way through into the way they're presenting their climate action and their record.

ML  

And for those in our audience who are not intimately familiar with the geography of London and where Uxbridge is, it was actually the parliamentary seat of a very famous Boris Johnson. And then there was the byelection after he bowed out of parliamentary politics. And the contentious issue... you mentioned ULEZ we have an acronym claxon, which I should use. ULEZ is the Ultra Low Emission Zone, which means that everybody who's got an old car, essentially has to scrap it and get a new one. And it's very contentious. It became a real flashpoint, it became the issue in that byelection. And the byelection was won by a very small majority from this stonking, huge majority. And many people would say the Conservatives, Rishi Sunak the Prime Minister, took the wrong message from that, deciding that by holding onto the seat, it proved that people were sick of eco-zealotry. Whereas others would have taken the lesson that your stonking majority just became a small, tiny majority, so perhaps you ought to tack towards the center and do a bit of eco-zealotry. But that's the sort of overall strategic background to the Conservative manifesto, isn't it?

SE  

Yeah, absolutely, I think you're right that they clearly drew that message. And there's obviously a little bit which is about personal conviction here. You mentioned Boris Johnson. He was one of the previous Conservative Prime Ministers. And I don't know if he particularly has any personal conviction about any issue, but he certainly grabbed hold of net zero as a big thing that he was going to talk about. And advocate strong action and do lots of tub-thumping speeches in the run up to COP26 in Glasgow and so on. And I think it's fair to say Rishi Sunak personally is not motivated by by climate action, it's not something that he gets out of bed for. And I think that's reflected in the way that he's approached the topic.

ML  

Okay, and now let's go into the manifesto commitments. I mean, there's quite a lot of small print. Bryony, you wanted to come in there.

Bryony Worthington 

Well,  just on the macro-political situation. There's also the effect of the Reform Party, and we probably won't get into the depths of their manifesto, but the effect of the far right pulling the Conservatives over to the right is another factor. You've got an anti-climate party now in the race as well.

SE  

Yeah, I think that's a very good point, actually. And it's not just about Reform. It's actually parts of the Conservative Party that Rishi Sunak is attempting to manage. You've got figures like former prime minister - another former prime minister - in Liz Truss and the former lead Brexit negotiator, David Frost, all effectively saying very similar things to Reform. Basically attacking net zero, saying we should scrap it. And so that's certainly part of the backdrop to Rishi Sunak choosing to  tack away from what's ultimately one of the success stories of 14 years of Conservative government. They put net zero into into law. They've done quite a lot in terms of cutting emissions from the power sector, continuing the UK's progress in cutting emissions by more than 50% since 1990 levels. And yet somehow he's now treating it as something to have a go at, rather than something to celebrate.

ML  

Okay, so that's the overarching picture for the Conservatives. You've got Rishi Sunak's Great Reset, partly because of the Uxbridge byelection and as Bryony points out, also to do with the forces on the party coming from Nigel Farage and Reform and then the internal infighting. But let's just go briefly into the manifesto, the actual detail of the document. What are they saying when it comes to energy and climate? What is in there?

SE  

Yeah, so just to reiterate that they are remaining committed to netzero by 2050. It would have been an absolutely enormous change of heart if they'd said anything different. And then underneath that, there's actually not a great deal of detail. So they say things like 'we're not going to force anyone to rip out their boiler in the shift to cleaner heating.' They kind of reiterate the changes that Rishi Sunak made late last year, where, for instance, he delayed the ban on combustion engine cars, and scrapped rules for rented accommodation. They won't have to meet energy efficiency standards. And then, in terms of actually positive commitments, they talk about tripling offshore wind. And then in terms of onshore renewables - onshore wind and solar - it's very equivocal. So it's talking about democratic consent only in the right places, avoiding building solar on the best agricultural land, and so on. So again it's hardly a full-throated endorsement of the cheapest forms of new electricity generation.

ML  

It sounds very much like an attempt to thread the needle. You know, you talk about onshore wind, there was famously the ban, or a near-ban, on onshore wind, and then that was famously recanted, ultimately, just a couple of years ago. So it's maintaining these positions, but it feels very equivocal from the way you're describing it. As I say, threading the needle between all these different constituencies and messaging, but there's no whiz-bang new announcement, right?

SE  

Yeah, I think that's a fair summary. Of course, the other thing that they've done through this campaign, that's reiterated in the in their manifesto, is this attempt to draw a big dividing line between themselves and Labour. We'll come on to Labour in a minute, but the big thing that they're doing is about promising to have annual licensing rounds for new North Sea oil and gas exploration.

BW  

This is the big dividing line, isn't it? That because of concerns about security of supply, the Conservatives are pushing hard to extract every last drop from the North Sea, and there was a commitment to do that in the last Parliament, which actually fell away. They ran out of time to get across the line, but they're still pushing ahead on this idea that we can get back to the glory days of extracting from the North Sea, which actually is hard to believe, given that the decline in that part of the basin is really steep now. So you can't really catch up and get back to anything which is going to really address it. But it's a very good political point to make, I guess. That's that's a big dividing line.

SE  

Yeah, absolutely. And I think the missing context - you've already pointed to it really - is they're trying to draw this dividing line and say Labour's putting energy security at risk by pledging to end new licenses. But what they're not saying is that production is down by two thirds since even just 2000, so just in the last quarter century. And the projections from the government's own North Sea transition authority show that effectively, we burned all the oil and gas already, We just extracted it all and burnt it, and we got lots of tax revenues in the early 80s and that was great for Nigel Lawson and tax-cutting budgets. But now there's really not that much left. And regardless of new licenses or not gas production is expected to drop by more than 90%.

ML  

At least we ended up with this colossal sovereign fund. I think it's about $1.5 trillion worth of sovereign fund based on all... Oh, wait a minute. No, no that was Norway. Sorry.

BW  

Exactly.

ML  

Let's move on, because that is one of the big differences between the parties, the treatment of new offshore oil and gas leases, but there are others. Let's move on to Labour. What is the overarching philosophy behind Labour, and then we'll get into the manifesto commitments. Simon?

SE  

So Labour's offer is basically a much more positive vision about what climate action can deliver. They talk about the climate and nature crises being the biggest challenges the world faces. And then they say that the action that they take in response to that is a huge opportunity. At the heart of their manifesto, they've got these five missions, and one of those is about making Britain a clean energy superpower. And that involves things like creating this publicly owned GB energy, and it involves getting to clean power - so a net zero electricity system by 2030 - which is obviously incredibly ambitious. And then there's a bunch of targets beneath that as to how they're going to do it. But the offer overall is a positive one. They say this is about cheap bills, green jobs and boosted energy security.

ML  

And overall, at that kind of overarching level, do you think it is achievable?

SE  

I mean, this is the big question. So Labour's 2030 clean power target. I think at the most generous, it's seen as incredibly optimistic, incredibly challenging, something that would require Herculean efforts to achieve. I think one of the big unknowns is actually about Hinckley Point C, which is this new nuclear power plant that's being built in Somerset at the moment. And they relatively recently announced yet another delay to the completion of that. And, you know, it was meant to be online before 2030 and now that's in doubt. So I think that's a big piece of the puzzle. But obviously it's not just about that. There's massive amounts of renewables that would need to be built. There's grid upgrades, there's all of the things that you would need to complement renewables, whether that's low-carbon hydrogen generation — Michael might have something to say about that — perhaps it's gas CCS, long duration energy storage, and so on. And so there's plenty of people in the industry saying it's totally crazy, not possible. And then at the other other end there are a few people saying it's achievable, but massively demanding.

ML  

Have they got a definition in there of what they mean by 'clean power.' Because you could say, well, it's clean power as long as we get Hinkley. You could say, well, it's clean power but what we mean by that is there's still a strategic reserve, which is doing 5% or 10% or 15% of fossil but we don't count that. How will we be able to hold them to account when it comes to 2030?

SE  

So I think they've deliberately not been very specific. Indeed, the government's got its own target of clean power by 2035 and that was also pretty wooly. And you know, looking back to when Labour made this commitment, I think they drew quite heavily on modeling from a think tank called Ember, and that effectively had 99% low carbon with 1% gas. And Labour has been pretty clear that they would consider themselves to have met the target even if there was a bad year for wind and there was a bit of gas generation in the mix. And you mentioned gas reserve, they talk in the manifesto about having a strategic gas reserve which would be quite different to the current capacity market that we've got. So they're obviously prepared to, you know, to put up with a bit of gas in the mix if we need it.

ML  

Simon, you need to be very careful about Ember, very dodgy outfit, you know. So my research and analyst who helped prepare me for this show, Matt, I poached from Ember and Bryony was one of the forces behind its creation, it used to be Sandbags... So if Ember has modeled it, I think in all in seriousness it is achievable. But certainly I don't think that even 2035 is realistic in the light of some of the problems that we've got, particularly around the transmission grid. Do the manifesto say anything about the transmission grid?

SE  

Yes, surprisingly. I don't know if this is a first. I would be surprised if it wasn't at first, to be honest, but there's a surprising amount of content in several of the manifestos talking about about the grid. So for the Conservatives, they're talking about using offshore cables to reduce the amount of onshore infrastructure, obviously thinking about rural Conservative constituencies where people are unhappy about new pylons being put up. They also talk about locational pricing to try and encourage investment in the right places, which they say would would cut bills. Labour talks about the grid as being the single biggest obstacle to the deployment of clean, cheap power. And so they're wanting to sort that out. But they don't talk a lot about grid expansion and how they would do that.

ML  

So I think we'll get on to locational pricing and to the transmission grid when we talk about Scotland and the Scottish National Party, the SNP. But let's stick to an order of size, or likely seats. The next one would be most likely the Lib Dems.

SE  

Yeah. So they've got quite a lot of detail in their manifesto, as you might expect, but I guess the headline for them is that they're looking to bring the UK's net zero target forward to 2045 at the latest. So obviously that would be a big step up in ambition, and they're also targeting 90% renewable power by 2030, so slightly different permutation on that.

ML  

But it's, I mean, I'm slightly losing the will to live, because whether your target is 2050 or 2045, it can hardly be the motivating issue for people on July the 4th. What happens 20 years time as laid out in great detail, no doubt, by the Lib Dems, who are not going to be in power, not now and not in 2045. Is it generating much excitement?

SE  

Well what's quite interesting is if you look across all of the manifestos, particularly compared to the last election in 2019, there's actually not that much mention of net zero. And in some ways, you might say, well that's perhaps a good thing. People are moving on from grand targets way off into the future and focusing more on surprising details that you wouldn't expect manifestos to talk about, like grids, like locational pricing, whatever it might be. And so in some sense that could be seen as progress. But obviously it's inevitably also a result of changing political priorities. We've had the global energy crisis, cost of living crisis, and put the focus much more on things like energy security, and indeed that is reflected just in terms of the language that the manifestos use.

ML  

So let's do the Greens next and the UK Greens, it's very interesting. I travel around the world, travel around Europe a lot. And how can I put it? There are some sensible Greens, if you look at Vice Chancellor Habeck, the German Greens seem very mature and sensible. Also the Irish Greens, a very good friend of mine who's been on Cleaning Up, Eamon Ryan, who's actually just stepping down as leader of the Irish Greens, who's been in government, and I can definitely attest to him being a sensible type. The UK Greens don't give off that same vibe, let me just put it that way. What does their manifesto say?

SE  

Yeah. So I mean in terms of the way they frame things, one thing that struck me as particularly notable is they're quite down on net zero. They're obviously down on net zero for very different reasons to Reform, which is basically full-on, climate skeptic and say, 'It's natural. We can't do anything about it so we should scrap Net Zero policies.' The Greens are different. They basically don't like the 'net' in 'net zero.' So they explicitly talk about a zero carbon economy and they want to bring that forward as well. And they're also talking about 70% of power to come from wind by 2030, so again another slightly different permutation. But I think the language around zero carbon as opposed to net zero was the thing that that really struck me.

ML  

Wasn't there a bit of a scandal where one of... was it a co-head, or one of their senior leadership, was asked whether they have actually got a heat pump, and they hadn't bothered to get a heat pump?

SE  

Yeah, so they've got two co-leaders, haven't they? I think there's Carla Denyer and Adrian Ramsay? I can't remember quite. But yeah, I think it was Carla that was asked about heat pumps. To be honest, heat pumps are still pretty rare in the UK, and it's quite notable that Ed Miliband has gone and got himself a heat pump. He's obviously preparing for similar lines of questioning from journalists.

BW  

It seems a bit unfair to focus on that particular scandal, given the number of scandals we've had in British politics over the last decade. I mean that that makes it personals...

SE  

It's certainly mild compared to insider gambling, you know, gambling using inside information about the date of the election, for example.

ML  

Oh 100%, I mean, we could go into scandals and sleaze, and there's all sorts of others. But it's slightly different, I tell you why, because if you are a Green Party leader, and if this is the major issue, and if it's not that difficult to actually take a big bite out of your emissions, you really should be doing it. It does come across as extremely, extraordinarily insincere not to.

SE  

Yeah. I mean, I don't know anything about her personal circumstances, or whether she has a house even suitable for a heat pump. Whether she lives in a flat, for example. We don't know the details, so it's pretty hard to judge. And I think it probably is a little bit unfair to make it about her.

ML  

Maybe she's waiting for a hydrogen boiler, or hydrogen-ready boiler.

SE  

Yeah, she might be waiting a while.

BW  

I mean, the bigger issue I have with the [Green's] perspective is that you've got a very ideologically driven viewpoint that hasn't quite caught up with the realities of what it actually takes to get to these targets, and it's taking it to an even greater extreme. So it almost denies the progress we've made. Two thirds of the power is already clean. And then it tries to then portray this vision, which seems to be somewhat disconnected to the realities of how you get there. I feel like if you push it too far, you just lose the credibility story, really.

ML  

Absolutely, and I'm struck in a lot of these conversations that we've done in the UK - Simon, talked about it - 50% reduction in emissions since 1990. We're the leading country in the G20 and so on, and we've got these huge opportunities: decarbonize heat, decarbonize transport, decarbonize industry, and then you have these micro discussions, of enormous interest no doubt to some in Westminster, about whether we're going to do 90% by 2030, or 100% by 2030 or by 2035, or what we're going to do in 2045 or 2050 and those big opportunities. I want to know how they're going to deliver the big opportunities, but I'm not hearing that here.

SE  

Yeah, I think that's fair. You know, quite a lot of the debate around climate action in the manifestos, and in the media and political conversation generally, is very shallow. You had this huge furore earlier in the year when Labour dropped its commitment spending £28 billion a year on climate action, but that whole debate that played out over the course of a number of weeks really failed to get into the details. Like, what exactly was that money for? How are we going to fund the massive investments we need? You know, if you're not going to do that, how are you going to do it instead? And similarly, for the clean electricity targets, there's a lot of discussion about whether it's achievable or not, which, again, is quite shallow, and very little discussion about what are the things that you need to deliver alongside renewables? How are you going to deliver that massive uptick in renewable deployment? You know, what the industrial opportunities is? Much more interesting stuff that we could be talking about, and we're not.

ML  

And talking of shallow and not focusing on what we really need to deliver, we should also talk about Reform. You've mentioned that they're full on climate skeptic, and I'll be honest, I've not read their manifesto — I have other things that I'd rather do. But Simon, I understand you have plowed through it and it's gory details. What does it actually say?

SE  

Yeah, so they talk about net zero not being the way. Basically saying that you can't stop climate change by getting to net zero emissions, which is just completely contradicted by all of the best available science that says not only do we need to get to net zero to stop climate change, it's literally the only way to do that. So that's kind of the starting point. And then after that they have stuff that is I guess, equally detached from reality. Stuff about how the government could save £30 billion a year by scrapping net zero targets, which is considerably more, probably more like three times, than what the government is actually spending at the moment. So quite how you can save more than you're already spending, I'm not clear.

BW  

What I found curious was that despite their climate skepticism, they obviously felt the need to say something slightly green, and so they say they're in favor of recycling and banning single-use plastics. You know, these are terms and popular topics, but in terms of actual environmental impact, they're by and large a distraction. But even the Reform Party felt they needed to say something that looked and sounded a bit green, which I thought was interesting.

ML  

Wonderful. Because, of course, the biggest use for single-use plastics is actually the health service. That's where single-use plastics is absolutely everywhere. So presumably, they've not really thought even that through.

SE  

Yeah, and there are some other little bizarre additions in their manifesto. They talk about fast tracking nuclear with new small modular reactors (SMRs) built in Britain, and they also talk about clean coal. So yeah, all in all, it's pretty bizarre.

BW  

And just to clarify, it's not bizarre that they should be backing SMRs, because that's quite mainstream. It's bizarre that a party that's set against climate will still have these funny green ideas.

SE  

Yeah, exactly, yeah.

ML  

It's a smorgasbord of bizarre. And let's get on to the SNP, because that's a significant party, significant players in Westminster, and obviously very significant in the signals that it sends for future Scottish elections. The SNP has had a torrid time, they have had some real scandals, as in misuse of funds, being investigated-type scandals. But what do they say in their manifesto?

SE  

Yeah, so just before talking about the manifesto, it's worth explaining to your listeners. So the Scottish National Party is obviously in office in Scotland, they're the ruling party of government in Scotland. And quite apart from their bigger, broader political scandals around misuse of funds, they also had quite a big moment, I guess in climate terms, recently, where they effectively scrapped Scotland's near-term emissions targets, because it became clear that they'd set these very ambitious targets for 2030 that had simply become unachievable. And they're like the Conservatives, I guess, they're trying to thread a little bit of a strange set of different competing interests and priorities in their manifesto. So they talk about Scotland reaching net zero by 2045 but that's broadly in line with UK reaching net zero by 2050. And then, the big issue for Scotland, apart from from wind energy, is obviously about the oil and gas industry, which is a big part of the economy in  northeast Scotland. And so obviously Labour said that they're going to ban the oil and gas licenses, the SNP have come out against that, but have said that they want to apply a strict climate test to new licenses. It's not totally clear how those things could could quite fit together, but that's certainly what they're saying.

ML  

That reminds me of some of the fantasyland discussions in Alberta in Canada, where you could say lots of nice things about climate and climate action, but what you can't do is say anything that remotely threatens the oil and gas industry. Because, in Scotland, of course, it provides an enormous number of jobs and a lot of wealth, so you've somehow got to get to net zero whilst still extracting every drop you can, and promoting oil and gas, and that's a very unique perspective within Scottish politics, right?

SE  

Yeah, I think that's right. But I guess the slight difference between what the SNP is saying and what what the Conservatives are saying is that they have the starting point that the oil and gas industry is in decline. They at least admit that that is the reality of the situation, and that regardless of whether you have new licenses or not, the number of jobs actually extracting oil and gas is going to go down. And if you want to actually do something about a just transition for workers, ensuring an economic future for those communities, you have to think beyond oil and gas as well.

ML  

And that change in the targets for 2030, where the SNP, the ruling party in Scotland, said... I can't remember what the number was that they wanted to achieve by 2030, but clearly not on track. So they said, look, let's be realistic, let's not have this. That actually brought down the leader, did it not?

SE  

Yeah, that's right, because the SNP were in coalition in Scotland with the Green Party. And the Green Party obviously weren't too keen on scrapping the target. I think effectively this is about an overly ambitious target, which at the time the Climate Change Committee (CCC), which advises all of the UK administrations on climate matters, they advised a less ambitious target for 2030, and Scotland just went ahead. They had a bit of a bidding war between the parties, and they just went ahead and set something well beyond what the CCC had advised would be achievable. And they're just catching up with that reality now, effectively. And I guess, what's interesting about that episode, in a way, is that it's actually not that far to 2030 now. The UK has set targets on the basis of advice also from the CCC, and you know, the Westminster government went along with the CCC advice. Nevertheless, those targets are looking quite distant at this point. The CCC has been saying for years that the UK is not on track to hit its targets. 2030 is five years away, it's all about what happens in the next parliament. So whoever is elected, most likely Labour, in the election tomorrow, it's going to be up to them to hit those targets.

ML  

And just on acronym alert, CCC is the Climate Change Committee, which is the statutory body created by Bryony. So if you like the work of the CCC, Bryony is responsible. It was part of the Climate Change Act that kind of marks the government's homework and a brilliant piece of legislation it was, which we covered when Bryony came on the show, originally in 2021. I think there's going to be quite a lot of this issue of targets, having to admit that targets are not achievable. By the way, there's a general point, which is that if you want 1.5°C, we all know that you need to be 45% down in emissions by 2030 vis-a-vis I think it was 2010 or 2015 when those were set. It's an enormously steep reduction. And although the UK is doing well relative to 1990, it's not doing well in terms of being on track — as you point out, the CCC, the Climate Change Committee says not on track — for 2030 targets. But there's an awful lot of companies and countries and investors who are nowhere near to what they've all committed. There's a lot that have committed to 1.5°C, which is consistent with net zero by 2050, but the 1.5°C requires this enormous reduction by 2030, almost none of which are actually going to achieve their targets. And how people deal with that, I think, is going to be one of the stories between now and 2030. Being sensible, being honest, being open, or trying to maintain the fiction for just a bit longer, for political or corporate expedience.

BW  

Can I come in there, because I think that one of the things that we should talk about is how the parties are considering climate change in an international context. Because, as you say, Michael, the UK can beat itself up over getting to ever cleaner electricity by a certain time and date, but that's a very small part of the challenge of what we're trying to actually do here, which is provide blueprints for other countries, use our diplomatic efforts to make sure that we're not the only country acting, that everyone else is moving too. And so Simon, could you talk a bit about whether there's any international dimensions to these manifestos that you've noticed?

SE  

I'm going to admit to ignorance on this point, I think there are some small little snippets in there. I think a little bit beyond the manifesto, what the Conservatives have been saying is that actually the UK is a small part of global emissions. Everyone knows that, and that line is often used by climate skeptics to argue that we shouldn't bother. But they're using a slightly different version of that saying, 'Well, obviously we need to cut our emissions, but we need to do it in a way that effectively amplifies the actions that we take here.' So you know whether that's innovating new solutions that other countries can adopt. They think that that's the way to spread the UK's efforts internationally. I think the Labour approach is philosophically a little bit different to that. I think that they see the North Sea pledge about no new new licenses as very much a part of an international pitch. I think they're hoping to go to the COP in Azerbaijan in November, and make a big song and dance announcing that the UK is doing this. And, let's face it, would be a significant move. Of course the North Sea is in decline, it's not a major source of of oil and gas production by any means internationally. But the UK is a major economy, it has historically been a major oil and gas producer. And foregoing future exploration in the North Sea, that is quite a big deal. So I think they're going about that international dimension in different ways.

BW  

And it's not just oil and gas in the North Sea, right? There's also a domestic fracking ban being maintained. There's the famous coal project that was agreed pre-Glasgow. There's a potential for that to be brought in and looked at again. So you can see a narrative where the UK is leaning in on the idea that climate leadership doesn't just mean the bean counting of your own emissions, it also means a much bigger thing around the narrative of moving beyond fossil fuels. That would be a big shift, because that's exactly the opposite of what the Conservative Party is saying, which is, 'we can be great in our own domestic emissions whilst at the same time maximizing the use of our fossil fuel resources,' which for a lot of people seems quite hypocritical.

ML  

So we had a guest on Cleaning Up, and Bryony, I know it's somebody you know well, Tzeporah Berman, and she's created and is promoting this thing called the Fossil Fuel Non Proliferation Treaty. There's a bunch of countries that have decided that they will not extract fossil fuels. There's a few countries, but it's New Zealand and Tuvalu and so on. Wouldn't it be an incredible signa;, I mean, if you want to really send a signal, for the UK to actually sign up to the Fossil Fuel Non Proliferation Treaty. Now, if that was in Labour's manifesto, that might catch my eye. But lots of sort of minor statements about trying to do this and thinking about that and generally being disapproving of the other feels a bit bland.

BW  

There's also the Beyond Oil and Aas Alliance, there are these other diplomatic efforts. I can't remember the exact details, but I'm pretty certain there is more in the Labour Party manifesto about the need to work internationally. Because Ed Miliband, who's the potential future Secretary of State, he has got a background of climate negotiation history and has got an interest in that outward-facing role. So anyway, let's see what happens. But I do think getting the UK back into a proactive stance internationally is going to be one of the big things that might change come Friday.

ML  

I'm not going to get at all partisan. I think at this stage, not only probably would be unwelcome, also pointless, but there is also the Powering Beyond Coal Alliance, which I helped to launch... Sorry?

BW  

The PPCA — Powering Past Coal Alliance.

ML  

The Powering Past Coal Alliance, which I helped to launch in Bonn at one of the COP meetings with yet another of our guests, Claire O'Neill, under the Conservative leadership. So there are precedents for making these big statements. Even the decision to exit coal, it sounded bizarre. There was no constituency for it when the decision was made actually under David Cameron to get to zero coal. So maybe we can see a little bit more bravery around those statements going forwards. I want to come back to, just to finish off, whether it's to do with the SNP or to do with Scotland... I have a pet topic, which is around locational pricing. And for the audience, we have one power price - wholesale power price - in the UK. And when it gets really windy in largely where the wind comes from, which is Scotland and the north of England, the power price drops, but because of our grid constraints, what actually happens is the price drops, and the French can buy cheap power, and in the south of the UK everyone can run their heat pumps and charge their EVs, but national grid has to step in and actually generate power, because it can't actually make its way from the north to the south. So there's a growing body of analysis that shows that the single best way to stimulate the economy in Scotland would be to let Scotland benefit from its low cost power. And the way you do that is by splitting the prices on the UK power markets into zones. Is there anything on that in the SNP manifesto? Has the SNP realized that the single best thing they could do for the Scottish economy is actually split the power price from the rest of the UK?

SE  

Again, I'm going to have to confess ignorance on this. I haven't looked into that in the SNP manifesto, but it's certainly something that the Conservative manifesto talks about. The government's been going through this review of electricity market arrangements and consultation which has been rumoring on for, I mean, it feels a bit endless at this point. I think it's at least a year now, there's been multiple different consultations. And that's all about should we do something radical like splitting up the wholesale market into different zones, whether that's regional or even more granular pricing signals? And the Conservatives say that they would like to have some sort of regional pricing, and they even put a number on it, and say it could save households £20-45 pounds a year. And obviously it's very unlikely that the Conservatives are going to be in government come Friday after the election, and we don't really know what Labour is planning to do on this. They haven't really said a great deal about it, they've been doing this deliberate strategy of saying as little as possible about the details of policies that they might enact. So we'll have to wait and see what happens with that. I think it's worth saying that the reason that this has rumbled on for quite so long is that it isn't straightforward, and it isn't universally agreed to be a good idea. There's lots of people that think locational pricing, being such a massive change the wholesale market, could be quite disruptive, and in the context of getting to very ambitious roll outs by 2030 or 2035 that's not necessarily what you want. But perhaps in the end it's more efficient, at least in models anyway. ,

ML  

Well there are also those who argue that the reason it rumbles on, and it's contentious, is that the renewable generators love getting the South of England high price even when they build things in the north, even if those things in the north are then getting extra payments to be constrained off. So, I mean, there's a good reason why it's contentious, because there's a fantastically lucrative system in place right now under the CFDs (contracts for difference), as they stand.

BW  

But you've hinted there the nub of the problem, right? Because the wholesale market really is only for things that don't have contracts, and increasingly most of the grid is going to be under some form of contract or other. So are you finding a solution for something which essentially is only really applying to a very shrinking part of the market. So the other way of viewing it is that we've just got to get better at the way that we view those contracts and encourage more integration between the contracts that we are writing and the offers that the consumers are getting, making them more agile and more price sensitive, so that it's the suppliers, rather than upstream in the generation side that's broken, and that should be the focus. But what you're pointing to there Michael is completely right. We're currently overpaying because we're all paying the marginal price of the gas that comes on to sort of fill in the gaps, and then everyone benefits. So there is this intrinsic windfall that everyone gets, which is very nice for the generators, but not so great for the public. And it then doesn't give you that really good price signal, as you're saying, that if you are able to get very, very cheap electricity when the wind's blowing, then you'd be much more likely to fit that heat pump, move to that electric vehicle, etc.

ML  

Bryony, thank you, because you've just short circuited 18 months of that review of electricity market arrangements, the REMA study. I sit on some advisory panel as well, and I wish we could conclude our work as quickly as you just spoke. What I would suggest... I want to just dive into a few areas which we haven't yet spoken about, but I think they're quite important, I don't know if they're in the manifestos... And a big one is transport. And Simon, you talked about pushing back bans on vehicles at various points, but that's really only a small part of the transport challenge to get to net zero. And transport, as our electricity has gotten cleaner and cleaner, has become a bigger and bigger part of the problem, has it not?

SE  

Yeah, so historically, the power sector was the biggest source of emissions in the UK. That hasn't been true for a very long time now. The power sector has been cleaned up, you know, we have moved away from coal. Our last coal fired power station is due to close later this year. And transport has really made very little progress. Effectively, emissions in the sector have been flat over the last 30-40 years. And so it's really like the next big challenge if the UK is to make progress on cutting emissions overall, in terms of the manifestos. You already mentioned there's been some shifting about in terms of the move away from combustion engine cars. So the Conservatives have brought in a zero emissions vehicle mandate, which says that manufacturers have to sell a rising proportion of EVs as part of their sales. Both parties, Labour and Conservatives are committed to keeping that in place. What Rishi Sunak did late last year was to say that, whereas previously under Conservative policy, you wouldn't be able to buy a combustion car from 2030 onwards, he pushed that back to 2035. And now Labour in their manifesto are saying they're going to reverse that. So that's grabbed a lot of headlines. And underneath that, in the Conservative manifesto, there's quite a lot of the stuff that they've been talking about. You know, a war on drivers that they want to push back against. They want to get rid of things like low-traffic neighborhoods and 20 mile per hour zones. But yeah, in terms of detail, there's not a great deal. And both of them talk about railways, but again with little concrete detail as to exactly what they would do.

ML  

So no huge pledges there to differentiate the two parties? Bryony?

BW  

I'm just going to say that next week's episode we're going to take a deep dive into the zero emission vehicles mandate, and this move into how do you switch from a combustion engine economy to an electric economy? So perhaps we can deal with that post-election and have a think about what that all means. But for now, I just wanted to broaden out from cars because other areas, of course, are still contentious and hard to abate, including aviation. And Simon, you said there are mentions in the manifestos of aviation.

SE  

Yeah, so the Conservatives in government have had this approach that effectively they don't want to do anything about constraining demand for aviation. They have this Jet Zero strategy, which is all about basically guilt free flying. They even use that kind of phrasing. And so the government policy is reflected in the Conservative manifesto, which is about supporting the continued growth of aviation sector. And yet, at the same time, promising that you'll be able to cut emissions through things like sustainable aviation fuel and support for domestic flights even. In terms of the Labour Party, they say they're going to secure the UK aviation industry's long-term future, including promoting sustainable aviation fuels, but it really doesn't say much beyond that. I guess the takeaway in terms of the two main parties' manifestos is that they're not engaging at all with the idea that it may not be possible to decarbonize the sector purely through supply-side measures like sustainable aviation fuels, and that it may be necessary to think about demand as well.

ML  

Aviation is one of those areas where there's just this colossal gulf between the aspirations — the hopes and dreams, oh yes, we're going to be net zero and the future aviation, and everybody's going to fly, but it'll be okay — and what reality actually is going to constrain. Which brings us on rather nicely to one area we must touch on, which is hydrogen. What is in the manifestos of the major parties on hydrogen? Labour has got this £500 million pot of money. The government has got a set of policies in place, including 2026 making a final decision to probably drive a stake through the heart of space heating with hydrogen. Is there anything in the manifestos about either of those, or any other aspect of this industry?

SE  

So I mentioned this already, but both Conservative and Labour manifestos go out of their way to say that they're not going to force anyone to rip out their existing boiler and replace it with a heat pump. Now that's very much to the point about this debate over how we're going to decarbonise heating. Both of them talk about insulating homes: The Conservatives say they want to insulate 1 million homes over the next few years with something like £6 billion or £7 billion of funding. Labour say they want to double planned investment in insulation and insulate 5 million homes. But in terms of hydrogen heat, I think they're both steering a little bit clear of that topic. I think for Labour in particular it's a tricky one, because obviously, you know some of the unions, GMB union in particular - bearing in mind that the 'B' in 'GMB' stands for Boilermakers - they have this constituency within the party, which is extremely strongly in favor of of hydrogen heat because it is the business and the trade of their members. Quite how Labour navigates that given the increasingly clear reality that hydrogen heat is not going to be a thing simply because of the physical thermodynamic reality of it all, they haven't really addressed that directly. But again, they're doing their best to say as little as possible. And something contentious, like hydrogen, it's not really a surprise there's not much in the manifesto on it specifically.

ML  

That will be a fascinating one to watch play out with the GMB, the Boilermakers Union, because there needs to be a constituency within the Labour Party which is as powerfully in favour of physics and economics. Because we all know that clean hydrogen, unit for unit, is going to cost two to five times as much as natural gas. So this pretense that you can switch easily to hydrogen and not drive up utility bills by a factor of two to five, it has to fall away at some point, but how that gets navigated will be fascinating. I want to close, if we might, with a conversation about finance. It crops up in the debate in a couple of places. One is obviously GB Energy, which is in the Labour manifesto to create this thing called Great British Energy. And I'd love to know if there's any detail on what that's actually going to do and what problem it solves. And the other place that finance comes up is in the broader conversation about costs of capital. Because all of this is wonderful, as long as money is cheap. But of course, if you destabilize the market, either through ill-thought through reforms to electricity regulation, or through just macro spending like a drunken sailor, then the cost of capital goes up and you do none of the above. Is there anything in the manifestos or in the discussion on first GB energy and UK PLC's cost of capital for this sort of investment?

SE  

So I think there's an unspoken conversation going on around cost of capital. You know, the whole debate about Labour's plan £28 billion. The whole broader debate about the manifestos and the spending commitments that they contain or don't contain, is very much framed around public debt and the fact that public debt has grown enormously over the past 10 years as a result of series of crises: global financial crisis, Brexit, and so on. And so the Conservative government has these fiscal rules about debt falling as a share of GDP at the end of the five-year forecast, and Labour has effectively adopted all of the government's fiscal rules. And as a result of that, that's the reason why they've had to drop major spending commitments like the £28 billion a year. Now there's lots of big arguments outside the manifestos about whether or not that's a smart fiscal rule, whether, in fact, investing in productive capital assets through government spending is actually a way to drive greater productivity in the economy, and whether actually the markets - quote, unquote - would react badly to that. If the Labour government comes in on Friday and says, actually we are going to invest money in supporting economic growth in the country, is that going to generate a spike in interest rates and therefore filter through into a cost of capital increase, which would obviously be quite damaging for investing in renewables and all sorts of other things. I think that seems quite questionable, but Labour have effectively bought that that argument. They've bought into that debate, and they've tied their own hands in that sense.

ML  

And I think it's worth pointing out that both of the major parties have said that they won't raise income tax, they won't raise social security, and they won't raise corporation tax. So you know if, if Labour does want to go on a bit of a spree after the election, I guess it either has to borrow the money with the risk that you point out, or has to find some other way of clobbering somebody.  I'd be pretty sure it'll be me, but I'm not quite sure how they would do that. Bryony?

BW  

It won't be you, Michael, unless you're an offshore oil and gas operator. Because the one thing that is in the manifesto is this continuation of a windfall tax, part of which it is coming from the the unusual profits of the oil and gas because of the elevated global prices. Some of that is now coming into the treasury, and it's not an insignificant number of billions. So continuing that policy is almost certainly going to happen, and then that is being used to capitalize things like the GB Energy. So it's basically polluters paying, so you should be all right.

ML  

Well I publish a full register of interests on liebreich.com, and I can confirm that I am not an offshore oil and gas operator. So let's get that out of the way. What about GB Energy? Simon, tell us what is it? How big will it be, and what is it going to do?

SE  

Yeah, so there's not a great deal of detail. Labour's manifesto says they're going to capitalize it with just over £8 billion in the next parliament, and they say it's going to create jobs and build supply chains. It's going to invest alongside industry to deliver clean power. But there's been question marks through the campaign about is it going to own generating assets? Is it going to do things like investing in port infrastructure or invest in developing technologies like floating offshore wind, for example. There's definitely a commitment for it to invest in locally owned renewables, so onshore renewables, but it's not quite clear how that's going to work and what the ownership structure is going to be. I was at an industry conference the other day and the offshore wind industry is basically quite keen for GB Energy to butt out. They think they've got things pretty well sorted. They're happy if GB Energy does some of that kind of infrastructure piece: floating offshore wind, infrastructure in ports and so on. But they don't want it to be investing in generating assets. I think we'll have to wait and see to find out exactly what GB Energy is going to do. I think it's pretty clear lots of people have have ideas about how it could play a constructive role, and it's just a case of waiting until Labour comes in at the end of the week and finding out exactly how they deploy it.

ML  

And Bryony, if you get that telephone call after the election, and if Labour does indeed win with a stonking majority, and if they said that they would like to hear your ideas, or possibly even have you run GB energy? Who knows, we can imagine all sorts of better futures. What would you do with 8 billion pounds to very explicitly reduce energy bills for UK consumers, right?

BW  

Yeah. It's a really interesting challenge, because, as you say, there's not a lot of detail. For me, what I think it's about is signaling that there is going to be a return to more directional government interventions into things that are political. Now, we used to have the Central Electricity Generating Board (CEGB) back in the day, and that would do crazy things, like it would build a power station in a constituency in order to create the jobs to then make sure that that constituency voted in the right direction. This is a little bit like that, I think. Why is it headquartered in Scotland? It's because it's all about that point we we talked about earlier, about the transition from oil and gas into something different. And left to the private sector and left to the wholesale pricing and not having zonal pricing, it probably won't work out smoothly politically. So having a stake where you can direct capital towards things, and you can then crowd in private sector money in order to shore up the politics is what I think it's about. Now that may or may not be the case. But it seems to me that this is such a political topic that climate change isn't about engineering technology anymore. Really, it's about public acceptability narratives, the press attacking you on all the things you're trying to do. So you've got to have some levers you can pull to keep the politics in favor of this transition. So that's what I think it is. But I've not had the call, I've not had the specific conversation, and I suspect it will evolve over time as as they work it out.

ML  

So there you go, just when you thought there couldn't possibly be any more government or state intervention in the energy market, along comes an £8 billion pound slush fund to paper over the cracks of all the other interventions that you've got, which are not producing quite the outcomes that you thought. That's me paraphrasing, of course, what you've just said.

BW  

You're completely right, Michael. And this is the irony. We've had 14 years of a Conservative government, and we've had so many interventions into this market that there's almost no free market left. And you've got the creation of the National Energy Systems Operator (NESO), which was created under the Conservatives. It's going to be huge it. I mean, it's tripling in size, and it's going to be a planned system of how we do the transition. Now that doesn't sound very Conservative or very market friendly to me. So it's already hugely intervened in by these policies that we've seen over the last decade.

ML  

And the creation of NESO, the National Energy System Operation, that was supposed to actually be launched, I believe, at the end of June or the end of July, and it's been pushed off by three months. I have to assume that Labour will go ahead with that unless Simon, final word, have you heard anything that they have said about not going ahead with that independent system operator?

SE  

I haven't heard anything to that effect. I was going to say the thing about GB Energy is, regardless of the details, regardless of whether it's a good idea or not, regardless of whether it's piping over the cracks, one thing we can say for sure about it is that it's incredibly popular with the public. And it's no accident that Labour have put GB Energy front and center as part of their energy mission, and it just plays incredibly well. So that, I think, explains all that you need to know really, about why they're doing it.

ML  

So taxing oil and gas companies and giving it away in some way - not explained, but no doubt feel good - is popular. Surprise, surprise. That has been absolutely fascinating. This episode, by the time it airs, the election will be tomorrow. If you hear anything that makes you vote one way or the other, that's fabulous. We'll mark that up to our influence. If you don't, then this is the digital equivalent of tomorrow's Fish and Chip wrappers. But I hope you've enjoyed the episode. Simon, I've certainly enjoyed speaking with you and Bryony, also, your perspective is incredibly interesting and relevant for this discussion. So thank you very much to both of you.

BW  

Thank you.

SE  

Yeah, thanks Michael and Bryony. It's been been a fab discussion, and I've had a lot of fun. So yeah, thanks again.

ML  

So that was Dr Simon Evans, deputy editor and senior policy editor at Carbon Brief, helping us lay out the issues in the 2024 general election in the UK as pertains to climate and energy. And if you're watching this the day it comes out and you're a UK voter, it doesn't matter who you vote for, but please, please make sure you vote. Please make sure that you subscribe to Cleaning Up on YouTube or your favorite podcast platform. And if you've enjoyed this episode, give it a like or a thumbs up and leave a comment. That really helps other people find it. Follow us on Twitter, LinkedIn or Instagram, and also subscribe to our free newsletter on cleaninguppod.substack.com. That's cleaninguppod.substack.com. Cleaning Up is brought to you by the Liebreich Foundation, the Gilardini Foundation and EcoPragma Capital. Please join us next week for another episode of Cleaning Up.