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Climate promises destined to fail without Treasury commitment to net zero test - WWF analysis

Ahead of the Government’s Spending Review and less than a fortnight before world leaders will gather for COP26, WWF is urging the Chancellor to ensure that the UK delivers on its climate promises by applying a Net Zero Test to ensure spending and taxation decisions help protect the planet and create jobs, instead of contributing to dangerous climate change. This must build on the Net Zero Strategy from government to make sure spending is aligned with its plan to reduce emissions. 

WWF is launching the second phase of its Net Zero Test, which assesses whether government is spending public money on green policies or on polluting ones that cause dangerous climate change. The test estimates spending impact on carbon emissions to help understand if a Budget or Spending Review is consistent with the UK’s legally binding Net Zero commitments.  

Applied for the first time to the March 2021 Budget, the test demonstrates that measures did not align with the government’s legally binding net zero commitment, increasing net emissions by 16.4 Mt CO2e over the six-year period, equivalent to 5% of 2020 UK emissions. This follows recent analysis of the same budget which found that new climate positive policies equated to just 0.01% of GDP.

To demonstrate international leadership, WWF is asking the Government to commit to applying a full Net Zero Test, involving both budget tagging and emissions estimates, to all future Budgets and Spending Reviews.

The test would help the Treasury comply with the recommendations of the Climate Change Committee to introduce a Net Zero Test and of the Public Accounts Committee that the 2021 Spending Review be subject to a full environmental impact assessment.

Isabella O’Dowd, Head of Climate Change at WWF, said:

“Our world is our one shared home, but it’s on the brink of irreversible harm. The COP26 climate conference will prove a critical test of whether governments can deliver on their climate promises. The UK Government cannot stand by its commitments unless spending is aligned with its plan to reduce emissions. 

“What’s right for the planet is right for the public purse and the Chancellor can lead from the front by introducing a Net Zero Test for all future fiscal events. Building a greener future now will save us all money in the long term and is full of opportunities for better jobs, improved health and thriving nature. 

We won’t forget which leaders step up to meet the greatest challenge we’ve ever faced, and which shrink away.”

A range of organisations across the economy have expressed support for the Net Zero Test, including the CBI, the Climate Change Committee, the Corporate Leaders Group and Energy-UK.

Emma Pinchbeck, CEO of Energy-UK said:

“We have long supported a Net Zero Test and welcome WWF’s tools for measuring whether the Government’s policy and spending decisions are supporting progress towards the 2050 target.

“Reaching Net Zero is a huge collective endeavour, requiring the transformation of our economy and significant changes to our daily lives, so the Government must do the same with a consistent and cross-departmental commitment which sees Net Zero as a central part of every decision. 

“With less than three decades to go, we cannot afford to have policies and decisions that delay or undermine the UK’s efforts to reach Net Zero, costing us both precious time and money and holding back all the benefits a truly green economy can bring.”        

Beverley Cornaby, Policy Lead, at the UK Corporate Leaders Group, said:

“As a group of leading, progressive businesses, the UK Corporate Leaders Group is actively collaborating towards the delivery of a dynamic net zero economy that creates high-quality green jobs across the country and attractive export opportunities for low-carbon products and services.

“Introducing the Net Zero Test will accelerate that aim and help align economic policy with the UK’s net zero target, demonstrating that government is focused on building the green economy of the future. By giving business the confidence to act at speed and scale, this will help accelerate investment in low carbon industries and create jobs across the country.

“Failing to seize this opportunity risks exposing UK businesses to increasingly volatile fossil fuel prices and supply chains, as well as greatly increasing the overall cost of the transition.”

The call for a Net Zero Test comes as a WWF-commissioned literature review, also published today, sets out how acting on climate change now will bring numerous benefits to people, nature and the economy across the UK. Outlining a UK Vision for 2030: Policies for a just transition demonstrates how individuals, families, business and communities would benefit from green policies, through improved health, better and greener jobs and lower energy bills by 2030.

Swift action would provide a boost to British manufacturing and jobs with research suggesting a new job in a low carbon industry has a median annual gross income 30% higher than wages in a carbon-intensive industry.1 Cleaner transport would also result in an improvement in air quality. which would lower the number of deaths from respiratory illnesses 2 and reduce absence from work.3 

The study finds that the cost of inaction clearly outweighs the cost of action. Acting now will halve the overall cost of decarbonisation, in comparison to action in a decade’s time4. By avoiding delay, the Government can unleash a wave of green private sector investment and deliver the levelling up agenda, unlocking £90 billion worth of annual benefits5, including high-quality green jobs and export opportunities, warmer homes, and more green space for everyone.

For more information, additional content or to arrange an interview, please contact:

Ruth Cobbe | Media Manager at WWF:   
T: +44 (0)1483 412409 | E: rcobbe@wwf.org.uk   

WWF Out of hours contact: 
T: +44 (0) 7500 577620| E: press@wwf.org.uk   


Images available here.  

(1) Onward: Qualifying for the race to net zero   

(2) CBI: Breathing life into the UK economy: Quantifying the economic benefits of cleaner air 

(3) CBI: Breathing life into the UK economy: Quantifying the economic benefits of cleaner air 

(4) Office for Budget Responsibility: Fiscal risks report, July 2021 

(5) WWF: Keeping us competitive: A UK investment strategy for net zero 

To protect ourselves from climate change and secure the benefits of a net zero future, WWF wants the government to adopt ambitious policies to drive the transition and align both public and private finance with achieving that net zero goal. Ahead of COP 26, WWF is calling on the government to build on its Net Zero Strategy by adopting a Net Zero Test on all future public spending and a legal requirement for all large businesses and financial institutions to publish a science-based target and plan setting out how they will align with net zero by 2050. 

WWF has created a Net Zero Test (NZT), in conjunction with Vivid Economics, which is comprised of two elements: 

  • Phase 1: A budget tagging tool (launched in August), which provides an assessment of the alignment of spending and taxation policies in Budgets or Spending Reviews with a range of climate and other environmental criteria, showing how much is being spent on green policies versus polluting ones. 
  • Phase 2: An emissions estimate tool, which estimates the impact of policy decisions outlined in Budgets and Spending Reviews on emissions, in order to assess the overall impact of fiscal events on progress towards Net Zero. 

The NZT would sit alongside and strengthen existing processes for aligning fiscal policy with environmental goals. The adoption of the NZT would also enable the UK to build on its decision to join the OECD Paris Collaborative on Green Budgeting and demonstrate international leadership in this space. Green budgeting has already been introduced by several countries, including France and Bangladesh, while the UNDP, World Bank and OECD have included it in recent publications. 

WWF has also completed a literature review, alongside WPI Economics, which sets out the advantages for people, communities and wildlife of acting now to reach net zero. The report, Outlining a UK Vision for 2030: Policies for a just transition, highlights a number of benefits:  

  • Hundreds of thousands of green jobs could be created all around the UK, with wages that are on average 30% higher than in high-carbon industries. 
  • The UK could become a leader in emerging green markets, growing green exports to £80bn per year in 2050. 
  • Pension fund values will be 2% higher than if they are not protected against climate change, or if the move to cut emissions is delayed. 
  • Our physical and mental health can improve through cleaner air, more green spaces, and safer and more accessible walking and cycling. 
  • Wildlife can thrive through more and better looked-after forests, peatlands, grasslands and saltmarshes and cleaner seas. 
  • By improving the energy efficiency of our homes, households could spend on average £400 less on energy bills each year. 
  • Electric vehicles could reduce the fuel and maintenance costs of driving by an average of £670 a year. 

About WWF   

WWF (Worldwide Fund for Nature) is one of the world’s largest independent conservation organisations, active in nearly 100 countries. Our supporters – more than five million of them – are helping us to restore nature and to tackle the main causes of nature’s decline, particularly the food system and climate change. We’re fighting to ensure a world with thriving habitats and species, and to change hearts and minds so it becomes unacceptable to overuse our planet’s resources.    

WWF. For your world.     
For wildlife, for people, for nature.    
Find out more about our work, past and present at wwf.org.uk 

Original article link: https://www.wwf.org.uk/press-release/climate-promises-destined-fail-without-treasury-commitment-net-zero-test-wwf-0

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