Chris Skidmore: 'Net zero is no longer a target, but an economic reality'

Thank you for the opportunity to speak at this Festival today.

If you had told me just over three years ago, when I was the Energy and Climate Change Minister who signed the UK's net zero commitment into law, that a thousand days on I would be attending gatherings like this, devoted to that one policy framework, I'm not sure I would have believed you.

But then if you had told me that thanks to the UK's commitment as the first G7 country to sign net zero into law, and following the success of COP26 in Glasgow, that 90 per cent of the world's GDP would have followed our lead in making a net zero commitment, I'm not sure I would have believed you either.

Net zero is a truly global phenomenon. It is no longer a target, but an economic reality that is leading international markets and investors to make decisions on the future, indeed on our future prosperity here in the UK. Just last year alone, in the UK, BloombergNEF calculate that £24bn of investment was made in industries and businesses related to the energy transition.

Official statistics also show there are already around 400,000 jobs in low-carbon businesses and their supply chains across the UK, with turnover estimated at £41.2bn in 2020. Both the British Energy Security Strategy and Net Zero Strategy aim to leverage an additional and unprecedented £100bn of private investment, while supporting an additional 480,000 British jobs by 2030.

Day after day, week after week, often thanks to BusinessGreen's excellent coverage of current affairs in the energy sector, one reads of stories of inward investment in net zero industries- whether that be Siemens Gamesa, who are investing £186m into expanding its offshore wind blade factory in Hull or ScottishPower, who are investing £150m into a 100MW green hydrogen plant in Felixstowe to power trains, trucks and ships, net zero news is usually always good news for the UK.

In just over a thousand days since I signed net zero by 2050 into law, the UK has continued to demonstrate its leadership on tackling climate change, continuing to decarbonising faster than any other G7 country, but also producing one of the most ambitious NDCs by 2030 at Glasgow, with a commitment to reduce emissions by 68 per cent.

It is a commitment that was re-confirmed last week at the United Nations General Assembly in New York, a clear sign of the government's intention to, in the words of the Prime Minister, "double down" on net zero by 2050.

The Prime Minister been clear also that to meet the net zero target, this must also be achieved in a pro-growth, pro-business way - by focusing on delivering maximum economic growth and investment, driving opportunities for private investment, jobs, innovation, exports and growth right across the UK.

To achieve this, the BEIS Secretary of State has commissioned an independent review of the government's approach to delivering its net zero target.

I am delighted that this week I have formally been appointed to chair this independent review. Its terms of reference were published on Monday, which set out the remit of the review to focus not only on delivering economic growth, but to also ‘support UK energy security and affordability for consumers and business and the need to rapidly increase and strengthen UK energy production and supply' and ‘minimise costs borne by businesses and consumers, particularly in the short-term'.

In addition, the review ‘will assess the economic co-benefits associated with different policies and how we can drive down the cost curve for net zero technologies'. It will consider 'innovative approaches and ways of delivering our target that ensure the government maximises the economic opportunities presented by net zero'.

I want to make clear that this is an independent review, which will draw independent conclusions and recommendations that will be submitted as a report to the Secretary of State for BEIS by the end of 2022. This means, understandably, that I am not going to speculate or provide a running commentary on what the review will seek to recommend. I realise that some may find that frustrating, but this isn't my review. Instead it is your opportunity.

It is your opportunity to tell me how we can achieve net zero better. It is your opportunity to tell me what barriers are currently holding businesses and communities back from decarbonising further; what restrictions are stopping suppliers of clean and renewable energy from deploying faster; what policies might deliver our net zero commitments sooner.

For the moment, I want to be the one asking the questions. For I have a duty to ensure that, if this review is to succeed, I must seek to reach out and listen and learn from as many voices and communities as possible. Already in the past three days since the review's launch, I have held roundtables with renewable industry leaders in the North-East and representatives from our Island communities across the UK. Communities like the Orkneys, which despite being in one of the most remote parts of the UK, are very much at the centre of the net zero transition, having placed sustainable energy in the form of wind power and hydrogen as a key driver of their economy.

As the review continues, I intend to travel across the UK, to every devolved nation, to engage with communities on how we can make our energy transition a smoother and more profitable one for businesses and households across the country.

Today, I can further announce the launch of a formal call for evidence as part of the Net Zero Review. The consultation document sets out some of the key questions that I am seeking answers to: from business and industry, from regional and local authorities, from academia and civil society, and from households and individuals. It consists of thirty questions that I hope cover the broad span and scope of the review, and which will provide me with additional written evidence to draw upon, to supplement the hundreds of groups and organisations I hope to speak to as part of the roundtables that I will continue to convene as part of my engagement process.

Net Zero requires a whole of society approach to achieve our emissions reductions by 2050. It is therefore right that I take a whole of society approach to this review. The findings of the Net Zero review won't simply be my own. I intend for its recommendations to come not only from yourselves, industry leaders and climate experts who have worked for decades on how best to decarbonise, but also from small businesses and members of the public who are hesitant about how they are going to achieve their own net zero transitions. For I have a duty not merely to listen to every community geographically spread across the UK, but to listen to every spread of opinion on net zero, to engage with those who raise concerns about how they will be able to afford to decarbonise their own lives.

We know that taking action on climate change is popular with the public. Polls consistently demonstrate that it is the third most important issue behind the economy and healthcare provision. Households, businesses and communities want to play their part in achieving net zero, yet many remain uncertain how they can afford to change their boiler, insulate their roofs or switch to an electric car. I want to provide reassurance in this review that, with the right policies and incentives in place, everyone can do so without additional cost.

I also want to provide reassurance in this review that, with the right policies and incentives in place, net zero can deliver even greater economic growth across the UK. Already the energy transition has delivered significant economic growth across every region of the country. This week alone, the Northern Powerhouse Partnership published data showing that Foreign Direct Investment into renewable energy in the North of England has increased by over 193 per cent since 2016.

And there is much, much more to come. If we get this right, net zero can unlock hundreds of billions of pounds of inward investment, at the same time as presenting new green trade and export opportunities for the UK. Yet we have no time to waste. The Inflation Reduction Act in the US, with its commitment of over $1tr to tackling the energy transition, together with France and Germany together investing half a billion euros into clean and renewable technologies demonstrates how our G7 colleagues all recognise that the solution to delivering greater energy sovereignty and independence lies in sustainable energy sources.

The Net Zero Review will also seek to promote and demonstrate how the UK can take advantage of new and emerging technologies, as well as deployment of existing renewable and clean sources of energy, to maintain our position as a global leader in the net zero transition.

I am looking for the review to provide a ‘big bang' moment for net zero: providing the opportunities for greater agency and ownership across society to deliver decarbonisation faster and at reduced cost. But we can only do so if we retain public support across every part of the country, and every section of society, for net zero being seen as a benefit and not a cost.

The Net Zero Review is, as I have said, our - your - opportunity, to restate the argument for why the energy transition can make our country and every person warmer and richer. It is your chance to demonstrate why net zero matters: not merely for our environment, but for our economy and our future growth. It is a moment not to recoil from our climate commitments, but to reframe them not as a challenge or burden to be borne, but to make the positive case for change, through creating new incentives to change. If we have seen remarkable instances and examples of that change over the past 1,000 days since I signed net zero into law, just imagine the opportunities that can and will present themselves over the next 10,000 days until we reach 2050, if we provide the certainty and commitment that a net zero pathway requires.

It is with that positive commitment I have decided to take up this review. But I need your own commitment too, to help me, by providing the evidence and the examples, the problems and the possibilities, that will allow me to produce the best report I can. So I have come here today to say: get involved. Get involved in the consultation, get involved in the discussions, have your say, so that I can listen and learn from you. After all, net zero is our common responsibility, and I hope you will view this review as our common responsibility too. Thank you.

Chris Skidmore MP is chair of the Net Zero Review.