The Guardian view on GB Energy: a good idea turns up just in time
Sir Keir Starmer’s legislative plan to green Britain has arrived not a moment too soon. Last week, the government’s advisers warned that only a third of the carbon reductions required by law would be met under existing plans. The Climate Change Committee said that, for the first time since setting itself carbon-reduction targets, the UK is not on track to meet its goal. It is supposed to reduce emissions in 2030 by 68% compared with 1990 levels, to meet net zero by 2050.
The UK should, says the committee, now be in a phase of rapid investment and delivery. But the Tories’ turn against net zero policies has meant little progress on the rollout of low-carbon technology. That is why Labour’s king’s speech, which put the environment at the centre of policymaking, was so welcome. Ed Miliband, the energy secretary, won the argument that the urgency of the climate emergency needed a bigger, more interventionist state.
Greening the economy solely through market mechanisms has not unleashed its potential. To change this, Labour confirmed bills to set up state-owned Great British Energy; to modernise the crown estate so the seabed is investment-ready for offshore renewables; and to reform planning so that key infrastructure such as grid upgrades don’t get tied up in arguments with local communities. Mr Miliband had promised the kind of expansion in clean energy that the committee says is now required. That means much more solar and wind energy secured by GB Energy “which will own, manage and operate clean power projects”.
There are some valid doubts about whether its limited budget – £8.3bn over five years – will mean GB Energy is just a co-investor in schemes rather than a serious rival to private investors. Without well-funded state intervention, the Common Wealth thinktank points out, the government would end up with the current market model of “uncoordinated [investment], replete with barriers and delays and vulnerable to policy errors”.
Mr Miliband won’t deliver a green transition – and good jobs – by sticking to the status quo. He also has to meet two challenges. One is electoral: the Green party came second to Labour in dozens of seats and will capitalise on any failure to make good on the party’s climate pledges. The second is that without sufficient action, acts of civil disobedience are likely to spread.
To demonstrate its superiority, GB Energy must translate low-cost clean energy generation into lower bills. This means probably adopting a policy like the New Economics Foundation’s “energy guarantee” to protect essential needs, reduce bills and cut carbon emissions. This scheme seeks to provide energy for free, or at low cost, while applying a premium to higher levels of usage – which would incentivise investment in energy efficiency and renewables.
Political parties can modify perceptions by creating a plausible narrative that alters the way the public construes salient issues. Thoughtful critics say that may not be enough. Helen Thompson, professor of political economy at Cambridge University, remains sceptical of Labour’s raised expectations and about the utility of its goal to fully decarbonise electricity generation by 2030. She argues that without the state spending large sums of money to electrify the country’s heating and transportation systems with green energy, Britain would still be exposed to inflationary oil and gas price shocks. That is an argument – as Mr Miliband would say – to go big, not go small, when it comes to the climate emergency.
