Delaying clean energy transition would be ‘lose-lose’ for UK energy security, households and the climate
Friday 25th Mar 2022, 11.21am
Since the 2014 invasion of Crimea, the UK has spent in excess of £22 bn importing oil and gas from Russia. To reduce such dependency, the Government is actively considering approving new oil and gas fields in the North Sea. Some are calling to start fracking, too. But these will not help either in the near or the long term.
We would eliminate the need for Russian oil and gas imports as early as 2024 – if we follow the ‘Balanced Net Zero’ pathway between 2022 and 2030
Based on estimates from the Climate Change Committee’s (CCC) 6th Carbon Budget, a recent Smith School analysis shows we would eliminate the need for Russian oil and gas imports as early as 2024 – if we follow the ‘Balanced Net Zero’ pathway between 2022 and 2030. The UK could potentially save $90bn (£70bn) in avoided oil and gas demand (based on forward projections of oil and gas prices).
If we are to have energy security, we need to reduce our reliance on fossil fuels. Although there are calls to deprioritise net-zero at this time, the current geopolitical disruptions emphasise the volatility of fossil-fuel energy markets – and this will continue to be the case in the coming decade. The choices made now will determine the course of the next 10 years – in terms of energy security, cost and our future environment. More renewables actually raises security and lowers cost – and breaks reliance on the vagaries of fossil fuel prices and on suppliers with whom we would rather not do business.
If we are to have energy security, we need to reduce our reliance on fossil fuels….More renewables actually raises security and lowers cost – and breaks reliance on the vagaries of fossil fuel prices and on suppliers with whom we would rather not do business.
This makes it imperative that energy strategy is informed by a longer-term plan to make us resilient to inevitable disruptions in the transition to net zero, and not by ineffective short-term fixes.
The net-zero pathway needs to be strengthened, not weakened.
The development of new fossil fuel reserves would not reduce price pressures, because the price of UK gas is set on international markets, not domestically.
Some suggest fracking is the solution. But building such an industry would take a decade or more, by which time UK gas consumption will be much diminished in line with carbon targets. And a fully-fledged UK fracking industry would not be large enough to affect international prices.
The reality is, it would either lock our infrastructure into yet more dependence on fossil fuels or it would no longer be needed just as it comes online, creating stranded assets at an enormous opportunity cost.
Climate policy contributes to energy security and lower bills
Investing in zero-carbon energy will improve security, affordability and climate in the long term. In the nearer-term, pressure on energy bills is best addressed by actions to reduce energy waste, such as better insulation and households, which are not vulnerable or struggling with heating, turning down thermostats. All such measures cut carbon, they can be rolled out fast and they will help the UK to build back better post-pandemic.
Investing in zero-carbon energy will improve security, affordability and climate in the long term. In the nearer-term, pressure on energy bills is best addressed by actions to reduce energy waste
Renewable energy (including wind and solar) does not rely on fuels subject to price fluctuations and geopolitical instabilities. UK renewables are already helping to mitigate the present crisis. Rather than receiving top-up payments, they are currently paying into the contract-for-difference system, reducing price pressure on the power sector as a whole.
Building a zero-carbon energy system will also take time, but it will reduce dependence on imported gas and oil, protect consumers from the volatility of international fossil fuel markets, and decrease costs for consumers.
The net zero transition needs to be affordable for everyone. Whether it is fair or not for households is not inherent to the low-carbon options themselves, but is largely within the gift of the Government. There are multiple policies that can be used to incentivise clean energy whilst offsetting the impacts on vulnerable households
Any short-term increase in UK oil and gas production will be ‘borrowing’ emissions from the future.
It may be tempting to think that a ‘pass’ on near-term carbon targets is all right, provided we still achieve net zero by 2050. But that is not the case for the climate. While net zero will ensure the UK ends its contribution to global warming, the size of our contribution is driven by total CO₂ emissions up to that point.
Abandoning targets in the near term will lead to greater warming. This logic is reflected in the UK’s statutory carbon budgets. Deviating from them materially would undermine the UK’s leadership following COP26 and would set a dangerous precedent for other countries to follow. If there is additional fossil fuel use, it must be tied to lower emissions or increased carbon removal.
Giving up on emissions in the short-term would be devastating. In just a few years, any perceived savings from a ‘softer’ carbon constraint will be dwarfed by the cost of inaction
The impact from giving up on emissions in the short-term would be devastating. In just a few years, any perceived savings from a ‘softer’ carbon constraint will be dwarfed by the cost of inaction. As last month’s IPCC report showed, impacts of climate change are already being felt – including human suffering from floods, heatwaves and shocks to the food system – and the need for action is even more urgent than previously thought.
There is a high opportunity cost in delaying the transition to net zero.
Fundamentally, net zero is a requirement of physics, not just policy. Global temperatures will only stop rising once we have brought down carbon emissions sufficiently to balance out any residual with removals back out of the atmosphere. Decisions made now must be consistent with a limited carbon budget and a pathway to net zero.
The UK Government will be publishing its new energy security plan in the next few days. It must ensure that energy security is compatible with climate security and a rapid net zero transition, by putting in robust policy safeguards.
With thanks to Emma Walsh and Kevin Tang at the Smith School of Enterprise and the Environment.