Tory leadership candidates failing on net zero policies, says thinktank

The two Conservative leadership candidates are failing to promise the policies needed to achieve net zero greenhouse gas emissions, a right-leaning thinktank has warned, despite a clear need for measures that would cut consumer bills as well as carbon.

Insulating Britain’s draughty homes would cost the government just over £1bn a year in grants plus a similar amount in subsidised loans, while a 50% cut in stamp duty could encourage people to install low-carbon heat pumps when they move house, according to the proposals from Onward.

Ministers could also increase the uptake of electric vehicles and other green technologies through “salary sacrifice” schemes, and reduce the number of car journeys through “nudges” such as personalised public transport plans that inform people of their local public transport timetables and cycle routes.

However, while both Liz Truss and Rishi Sunak are committed to the UK’s legally binding target for net zero greenhouse gas emissions by 2050, both want to curtail solar power and onshore windfarms, and support fracking and increased fossil fuel production. While Sunak has promised government support for insulation too, neither has set out a detailed plan on the issue, or on net zero generally.

Alex Luke, author of the Onward report, said it was “natural” that the candidates were focused on immediate issues such as the cost of living crisis, but said the quest for net zero must be “a key priority” for the next prime minister.

“I’m glad to see both candidates committed to the net zero target, but we need to hear more from both on how exactly they will do that,” he said. “It’s clear that retrofit [of homes, for energy efficiency] will need to be a massive part of reaching the net zero target.”

He pointed out that polling showed net zero was still a top five issue for most Tory voters, and a top four issue for the wider public.

The Onward report, Going Green, which will be published on Monday, found that an insulation programme for 15m households offering a combination of government grants and loans subsidised with very low interest rates through the government’s Infrastructure Bank would cost the Treasury about £31bn in total by 2050, plus about £40bn in total by 2075 in subsidising low interest rate loans.

Homeowners would save about £20 a month on their bills after the cost of repaying the loans each month at current energy prices, and far more if prices leap again as expected this autumn and next spring.

Luke said a previous attempt to do this, the “green deal” programme introduced under the coalition government but scrapped in 2015, had failed owing to “astronomical” market-based interest rates of more than 10%, which meant people barely saw any overall saving.

Onward also suggested that “nudges” could play a key role in changing consumer behaviour, which will be needed to reach net zero. Luke said local authorities could offer personalised transport and commute plans.

He pointed to a trial in Ipswich, costing £27 a person, which gives personalised information on public transport, walking and cycling routes, which resulted in an 11% fall in car journeys and a 14% increase in walking and cycling.

Luke added: “None of these nudges are a panacea, or an excuse for not thinking seriously about investment [in reaching net zero]. But they are small-scale interventions that are low-cost, that have an impact and bring about change.”

The government pulled the plug on its incentives to buy electric cars earlier this year, resulting in an uncertain outlook for the sector. Take-up of the cars had increased markedly, but they are likely to remain more expensive to buy than fossil fuel cars for the next decade, according to Luke.

A government spokesperson said: “The UK is leading the world on climate change. We have driven down emissions by 44% since 1990 whilst growing our economy – more than any other G7 country – and are taking action to help people make greener choices.

“We have committed over £6.6bn to decarbonise homes and buildings, which includes our £450m boiler upgrade scheme to increase the uptake of heat pumps. Further, we have invested £2.5bn to accelerate the rollout of zero-emission vehicles and charging infrastructure across the country.”

Fiona Harvey Environment correspondent