We welcome the publication of the Carbon Budget and Growth and Delivery Plan (CBGDP), outlining the government’s approach to meeting statutory carbon budgets 4-6.
By setting out clear deployment plans and policy frameworks, the CBGDP articulates how the government intends to translate political commitments into delivery on the ground, supporting long-term investment in the UK economy and the transition to net zero.
The explicit focus on growth within the Plan is an important new development. This rightly recognises the need to capture the real and growing economic opportunities presented by the transition. Growth of the UK’s net zero segments continues to outpace the wider economy and now generates £83.1 billion in Gross Value Added. The Plan’s focus on pursuing growth and net zero in tandem is crucial to maintaining the UK’s position as a leading hub for green finance.
The CBGDP sets out a robust policy framework with deployment plans to reduce emissions across all sectors of the economy. We welcome the Plan’s comprehensive alignment with the suite of policy initiatives published recently by the government, including the Industrial Strategy, 10-Year Infrastructure Strategy, the Clean Power Action Plan and the forthcoming Warm Homes Plans. Collectively, these policy initiatives strengthen the enabling environment for green investment, address critical dependencies for portfolio alignment, and illustrate how policy frameworks underpin the delivery of the UK’s carbon budgets.
For the first time, the Plan is accompanied by a dedicated investor prospectus. We are pleased to see the role of investors in enabling the transition explicitly recognised in this way, and the clarity the prospectus provides over how targeted public finance and supportive policy can accelerate private investment flows. We look forward to further dialogue with the government on this critical topic and await the publication of more detailed documents, notably the factsheets for key sectors.
The CBGDP’s focus on supporting whole-of-economy decarbonisation should build on and account for the Net Zero Council and Transition Finance Council’s recent work on sectoral roadmaps. We stress the importance of implementing these roadmaps swiftly and in partnership with industry stakeholders, as set out in our paper on principles for sectoral roadmaps.
The Climate Change Act covers all major greenhouse gases, including methane, we were therefore pleased to see the UK’s Methane Action Plan published in parallel today. This document outlines the actions Government will take domestically and internationally to reduce methane emissions, including to meet its NDC, and we particularly welcome the Government’s desire to take on a visible leadership role to support global efforts to reduce methane emissions, including in the agriculture, energy, and waste sectors.
Early, targeted investment in the transition helps avoid higher costs later, and we welcome the efforts outlined in the Plan to address barriers to the decarbonisation of key sectors and scaling investment in clean technologies. Investors stand ready to continue supporting policymakers to seize the growth opportunity that the net zero transition offers.
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