Forty-First Report - Achieving Net Zero: Follow up

Select Committee

Public Accounts Committee HC 642 2 March 2022

Report Status Government responded

Conclusions & Recommendations 29 items (11 recs)

Source View on Parliament website

Government Response (AI assessment · 29 of 29 classified)

Accepted 12

Acknowledged 14

Not Addressed 1

Rejected 2

Recommendations

11 results

2 Accepted

Significant uncertainty remains as to whether consumers will rapidly change their behaviours in line with...

Recommendation

Significant uncertainty remains as to whether consumers will rapidly change their behaviours in line with the expectations of government’s Net Zero Strategy. For government to achieve net zero by 2050 requires extensive consumer engagement with its policies and behaviour change … Read more

Government Response Summary

The government agreed to include consumer take-up relative to expectations and how different social groups are being impacted in its annual progress updates, conduct scenario planning for consumer take-up shortfalls, and evaluate the causes of any consumer take-up shortfalls; this will be implemented by Autumn 2022.

HM Treasury

3 Not Addressed

Government’s Net Zero Strategy relies heavily on private investment and innovation driving down costs; however,...

Recommendation

Government’s Net Zero Strategy relies heavily on private investment and innovation driving down costs; however, government has a poor track record of providing investor confidence. The Strategy relies on government leveraging billions of pounds of private investment to spur innovation … Read more

Government Response Summary

The response is unrelated to the recommendation, referring to a delayed SEND review instead of technology costs or private investment in Net Zero.

HM Treasury

4 Accepted

We are disappointed by government’s apparent lack of urgency in clarifying how it will work...

Recommendation

We are disappointed by government’s apparent lack of urgency in clarifying how it will work with local government to achieve net zero. We have previously reported that local authorities have significant scope to influence emissions in their local area, but … Read more

Government Response Summary

The government states that the Net Zero Strategy already sets out how it will work with local government, by creating a Local Net Zero Forum and exploring simplifying funds for net zero initiatives at the local level.

HM Treasury

5 Accepted

We are concerned that neither the private sector nor the civil service yet have the...

Recommendation

We are concerned that neither the private sector nor the civil service yet have the necessary skills to deliver the Net Zero Strategy. The Department acknowledges that the private sector does not currently have the skills to deliver key aspects … Read more

Government Response Summary

The government agreed to set out its strategy for encouraging the private sector workforce to develop skills needed for net zero, drawing on the Green Jobs Taskforce recommendations, and work with the Cabinet Office to analyze and fill civil service skills gaps through cross-departmental working, training, or recruitment; this will be implemented by Spring 2023.

HM Treasury

6 Accepted

Increasing focus on its domestic Net Zero Strategy should not detract government from leading global...

Recommendation

Increasing focus on its domestic Net Zero Strategy should not detract government from leading global action to tackle climate change. Climate change is a global challenge which requires a global solution. Government aims to lead by example domestically to help … Read more

Government Response Summary

The government plans to help empower people to make informed choices about the goods and products they buy by exploring how the government better labels these with their emission intensity and environmental impact, including work with the FCA, product labeling, and exploring environmental labeling within food production and disposal.

HM Treasury

1 Accepted

We took evidence from the Department for Business, Energy & Industrial Strategy (the Department), and...

Recommendation

We took evidence from the Department for Business, Energy & Industrial Strategy (the Department), and HM Treasury, on government’s Strategy to achieve net zero by 2050 and how it will fund the transition to a green economy.

Government Response Summary

The Treasury will continue to conduct a routine review of COVID-19 costs and provide annual public updates for the next two years, including loan costs and costs of specific public services measures.

HM Treasury

14 Accepted

The Strategy sets out plans for how central government will work with local government in...

Recommendation

The Strategy sets out plans for how central government will work with local government in pursuit of net zero.49 The Department will take overall responsibility for improving coordination with local government and other local actors on the design and delivery … Read more

Government Response Summary

The government states that the Net Zero Strategy already sets out how it will work with local government, by creating a Local Net Zero Forum and exploring simplifying funds for net zero initiatives at the local level.

HM Treasury

16 Accepted

The Energy Systems Catapult highlighted the importance of expanding local authority competence and resources to...

Recommendation

The Energy Systems Catapult highlighted the importance of expanding local authority competence and resources to ensure the capacity and capability to conduct project appraisal and to access funding to help deliver net zero.59 The Department explained that local net zero … Read more

Government Response Summary

The government agreed to create a Local Net Zero Forum by Summer 2022 to discuss local net zero issues with local government, and explore simplifying and consolidating funds for local net zero initiatives.

HM Treasury

18 Accepted

The civil service also needs to ensure it has people with the right skills to...

Recommendation

The civil service also needs to ensure it has people with the right skills to address net zero challenges.69 We previously reported that some departments had failed to provide detailed assessments of the climate impacts of their capital expenditure plans … Read more

Government Response Summary

The government plans to work with industry to create the skilled workforce needed to deliver climate targets, including green apprenticeships, retraining bootcamps, setting up the Green Jobs Delivery Group with industry, and publishing a climate and sustainability strategy for education and children’s’ services, while also providing new training offers for all civil servants.

HM Treasury

27 Rejected

In its 2020 report Achieving net zero, the NAO stated that neither the Department nor...

Recommendation

In its 2020 report Achieving net zero, the NAO stated that neither the Department nor HM Treasury collated information on the total costs and benefits of government policies that contribute to achieving net zero.96 HM Treasury told us that costs … Read more In its 2020 report Achieving net zero, the NAO stated that neither the Department nor HM Treasury collated information on the total costs and benefits of government policies that contribute to achieving net zero.96 HM Treasury told us that costs associated with achieving the Nationally Determined Contribution (which commits the UK to reducing economy-wide greenhouse gas emissions by at least 68% by 2030 compared to 1990 levels), achieving the Sixth Carbon Budget, contributing to international climate finance, and any UK commitments made at COP26 are already covered either in the current Spending Review settlement, or will be covered by future spending reviews.97 HM Treasury also told us that the Climate Change Committee produces cost estimates over much longer periods, for example 30 years, and the Office for Budgetary Responsibility produces an official estimate of the future costs of climate adaptation and mitigation in its fiscal risks report over an even longer time horizon of 50 years.98 However, HM Treasury cautioned that such estimates contain ‘heroic assumptions’ with errors compounding over potentially very long periods.99 It concluded in its Net Zero Review that costs and benefits will not fall 88 HM Treasury, Net Zero Review Final Report, October 2021, para 2.33 89 IFRS, IFRS Foundation announces International Sustainability Standards Board, consolidation with CDSB and VRF, and publication of prototype disclosure requirements 90 Qq 109–110 91 Net Zero Strategy, page 254, para 30 92 Q 62 93 Q 63 94 Q 64–65 95 Net Zero Strategy, page 254, para 30 96 Q 70; C&AG’s Report, para 17 97 Qq 87–92; UK Government, United Kingdom of Great Britain and Northern Ireland’s Nationally Determined Contribution, 2020 98 Qq 95–96, 105–107 99 Q 95, 97 18 Achieving Net Zero: Follow up evenly, but that it was impossible to forecast how individual households would be affected over the thirty-year transition given consumer costs would be driven by factors including incomes, prefer Show less

Government Response Summary

The government disagrees with the recommendation, but will write to the Committee by Autumn 2022 setting out the processes for reporting the implementation of net zero policies, including a summary of internal reporting governance.

HM Treasury

29 Rejected

In addition to direct costs to the Exchequer of achieving net zero, HM Treasury also...

Recommendation

In addition to direct costs to the Exchequer of achieving net zero, HM Treasury also recognises the impact of behaviour change reducing tax revenues. Revenues from Fuel Duty and Vehicle Excise Duty amounted to £37 billion in 2019–20, and if … Read more

Government Response Summary

The government disagrees with the Committee’s recommendation but will write to the Committee by Autumn 2022 setting out the processes for reporting the implementation of the government’s net zero policies, including to Parliament.

HM Treasury

Conclusions (18) Observations and findings — click to expand

7 Conclusion Accepted

Although the Strategy relies on private investment, government does not have a good track record of providing investor confidence in climate policy.18 For example, government set out plans for zero carbon homes in 2006, but cancelled these in 2015.19 Even today, on the back of Net Zero and COP 26 …

Government Response Summary

The government will develop monitoring levels of private investment attracted into Net Zero sectors, taking action to address failures, and provide certainty to investors through net zero sector roadmaps; Automotive , CCUS and Hydrogen Investor Roadmaps have been published.

8 Conclusion Accepted

Despite its track record, the Department considers that the Strategy will have greater permanence than previous climate policies that have subsequently been reduced or withdrawn.24 This is partly because the Strategy was developed in conjunction with HM Treasury’s 2021–2 to 2024–5 multi-year spending review, and partly because it contains long-term …

Government Response Summary

The government will develop monitoring levels of private investment attracted into Net Zero sectors, taking action to address failures, and provide certainty to investors through net zero sector roadmaps; Automotive , CCUS and Hydrogen Investor Roadmaps have been published.

9 Conclusion Acknowledged

In March 2021 we reported that as much as 62% of future emissions reductions would rely on individual choices and behaviour but that government had not yet properly engaged with the public on substantial behavioural changes that achieving net zero would require.28 In our current inquiry, the Department told us …

Government Response Summary

The government will support the public in making green choices, understanding behavioural factors, and following a Monitoring & Evaluation Framework; Government Chief Scientific Adviser will produce a scenario-based foresight report.

10 Conclusion Acknowledged

Achieving net zero will clearly be challenging. The Department stressed that although many of the technologies the strategy relies on are currently very expensive, it is confident that the cost of these will reduce over time.33 For example, a heat pump is currently more expensive than a gas boiler; however, …

Government Response Summary

The department estimates that additional capital investment must grow to an average of £50-60 billion per year through the late 2020s and 2030s, and that most of this investment will come from the private sector.

11 Conclusion Acknowledged

We questioned whether the Department was also monitoring and collecting data on the impacts of net zero policies on individuals and groups with different characteristics.38 The Department pointed to HM Treasury analysis of household exposure to net zero ‘abatement’ costs by income deciles, but also described why it does not …

Government Response Summary

The department's annual progress report will include an update on progress against the targets and ambitions set out in the Net Zero Strategy, commentary on contextual changes that might affect the pathway to meeting decarbonisation commitments, and a summary of key areas of progress made against this pathway and the policies and proposals in the Strategy.

12 Conclusion Accepted

We previously reported in 2021 that local authorities have a key role to play in achieving net zero as they have significant scope to influence emissions in their area, by leading decarbonisation of sectors such as housing and transport, and by influencing local businesses and residents to take climate action. …

Government Response Summary

The government states that the Net Zero Strategy already sets out how it will work with local government, by creating a Local Net Zero Forum and exploring simplifying funds for net zero initiatives at the local level.

13 Conclusion Acknowledged

The Department reiterated that local government is key to achieving net zero particularly in delivering emission reductions in buildings, transport and waste management.45 Government analysis suggests that more than 30% of emissions reductions to deliver the Sixth Carbon Budget rely to some extent on local authority involvement, and in evidence …

Government Response Summary

The government agreed to create a Local Net Zero Forum by Summer 2022 to discuss local net zero issues with local government, and explore simplifying and consolidating funds for local net zero initiatives.

15 Conclusion Acknowledged

We questioned how local authorities access funding to help achieve net zero. The Local Government Association highlighted to us the core issues of uncertainty, spending power and fragmentation in relation to challenges facing council finances.55 The Department considers that the current system run at a national level can ensure that …

Government Response Summary

The government agreed to create a Local Net Zero Forum by Summer 2022 to discuss local net zero issues with local government, and explore simplifying and consolidating funds for local net zero initiatives.

17 Conclusion Acknowledged

The Department recognises the need to upskill the private sector to have the capacity and capability to provide goods and services that will contribute to the government’s net zero goals.63 We have recently reported that while the failure of the Green Homes Grant Voucher Scheme was largely down to design …

Government Response Summary

The government's response outlines existing plans to work with industry to create a skilled workforce, including green apprenticeships, retraining bootcamps, the Green Jobs Delivery Group, a climate and sustainability strategy for education, heat pump installer training, and spending on training for tradespeople delivering green home energy improvements. It also mentions work to improve Civil Service skills.

19 Conclusion Acknowledged

We questioned whether there remained a net zero skills imbalance across government.74 The Department told us that it has a high concentration of relevant skills, and there are secondary but still substantial concentrations in the Department for Transport and the Department for Environment, Food & Rural Affairs. The Department told …

Government Response Summary

The government's response outlines existing plans to work with industry to create a skilled workforce, including green apprenticeships, retraining bootcamps, the Green Jobs Delivery Group, a climate and sustainability strategy for education, heat pump installer training, and spending on training for tradespeople delivering green home energy improvements. It also mentions work to improve Civil Service skills.

20 Conclusion Acknowledged

In 2020 government established the Government Skills and Curriculum Unit. The Strategy indicates that this Unit is working with the Department to review the skills, training and networks that civil servants need to achieve net zero.76 In addition, the Department told us that government is also building its talent pipeline …

Government Response Summary

The government plans to work with industry to create the skilled workforce needed to deliver climate targets, including green apprenticeships, retraining bootcamps, setting up the Green Jobs Delivery Group with industry, and publishing a climate and sustainability strategy for education and children’s’ services, while also providing new training offers for all civil servants.

21 Conclusion Acknowledged

The Department recognises that climate change is a global challenge requiring a global solution. The Strategy identifies international collaboration as a key aim for the UK’s presidencies of COP26 and the G7. The Strategy further commits to lead by example internationally on climate policies, in part by building on a …

Government Response Summary

The government agrees with the Committee’s recommendation. The government plans to help empower people to make informed choices about the goods and products they buy and services they use by exploring how the government better labels these with their emission intensity and environmental impact.

22 Conclusion Acknowledged

We previously reported in 2021 that it was critical that actions to reduce the UK’s emissions did not result in moving emissions abroad, so-called ‘carbon leakage’, which would undermine global efforts to tackle climate change. At that time, government did not have a clear way of determining whether its actions …

Government Response Summary

The government agrees with the committee's recommendation and will explore labelling goods with their emission intensity, working with the FCA on sustainable investment labels, using product labelling for durability, and updating Ecodesign product regulation.

23 Conclusion Acknowledged

In its new Strategy, government recognises the importance of addressing the risk of carbon leakage so that its net zero interventions do not lead to increased emissions elsewhere, and to ensure that UK industry has confidence to decarbonise.82 The Department sought to assure us that it has not found serious …

Government Response Summary

The government plans to help empower people to make informed choices about the goods and products they buy by exploring how the government better labels these with their emission intensity and environmental impact, including work with the FCA, product labeling, and exploring environmental labeling within food production and disposal.

24 Conclusion Acknowledged

The Department told us consumption emissions are more difficult to measure than territorial emissions, the latter being the standard approach of the United Nations Framework Convention on Climate Change (UNFCCC).85 The Department told us that it intends to use product standards and carbon adjustment mechanisms at the border as long- …

Government Response Summary

The government agrees with the committee's recommendation and will explore labelling goods with their emission intensity, working with the FCA on sustainable investment labels, using product labelling for durability, and updating Ecodesign product regulation.

25 Conclusion Accepted

The Strategy commits government to providing an annual public update on progress made in the previous year towards net zero. This will include progress against the ‘targets and ambitions’ set out in the strategy, commentary on contextual changes that might affect the expected pathway to meeting decarbonisation commitments, and a …

Government Response Summary

The government states that the Net Zero Strategy already commits to providing an annual public update on implementation progress, including the items the committee recommends.

26 Conclusion Acknowledged

We questioned the Department as to whether it felt measures relating to the energy efficiency of buildings cast as best endeavours, such as ‘as many as possible’ and ‘as many… as reasonably practicable’ were transparent, clear and effective.92 The Department told us that a one-size-fits-all measure cannot be applied to …

Government Response Summary

The department's annual progress report will include an update on progress against the targets and ambitions set out in the Net Zero Strategy, commentary on contextual changes that might affect the pathway to meeting decarbonisation commitments, and a summary of key areas of progress made against this pathway and the policies and proposals in the Strategy.

28 Conclusion Acknowledged

The Department pointed to the cost-benefit analysis it prepared as part of government’s consideration for legally adopting the Sixth Carbon Budget, and also its financial resources (expressed as capital and operating expenditure limits) set against different targets including net zero and contained within its Outcome Delivery Plan.101 The Department told …

Government Response Summary

The government disagrees with the Committee’s recommendation, and restates its plans to write to the Committee by Autumn 2022 setting out the processes for reporting the implementation of the government’s net zero policies, including to Parliament and reiterates the clear performance metrics they have already committed to report against publicly, and a summary of the internal reporting governance in place to ensure net zero by 2050 remains on track.