A Sustainable Future: Rt. Hon. Chris Skidmore MP, on the UK's Net Zero Commitment and the Next General Election

Listen to Jason Mitchell discuss with Rt. Hon. Chris Skidmore MP, former Minister and Chair of the UK Net Zero Review, about what’s at stake in the next general election for UK climate policy.


What’s at stake in the next general election for UK climate policy? Listen to Jason Mitchell discuss with Rt. Hon. Chris Skidmore MP, former Minister and Chair of the UK Net Zero Review, about why it’s critical that the UK maintain its international climate leadership; what should the UK do about domestic oil and gas production in another energy security crisis; and how the UK can respond to the US and EU clean energy stimulus programmes.

Recording date: 19 July 2023

Chris Skidmore

The Right Honourable Chris Skidmore is the Conservative Member of Parliament for Kingswood. He was the UK’s former Energy and Clean Growth Minister attending cabinet who signed the UK’s net zero commitment into law in June 2019, and also served as Minister for Universities, Science, Research and Innovation twice between 2018 and 2020. In September 2022 he was appointed Chair of the Net Zero Review, an independent review into the delivery of UK net zero climate commitments. The report of the review, Mission Zero, was published in January 2023.


Episode Transcript

Note: This transcription was generated using a combination of speech recognition software and human transcribers and may contain errors. As a part of this process, this transcript has also been edited for clarity.

Jason Mitchell:

Welcome to the podcast, Chris Skidmore. It's great to have you here today and thank you for taking the time.

Chris Skidmore:

Oh no, thanks Jason. My pleasure. Looking forward to the conversation.

Jason Mitchell:

Absolutely. I'm really looking forward to this as well. So let's start with some level setting. When you announce the decision not to run for the next elections, you said that, quote, "The next general election will perhaps be the most important election for climate policy that has ever been fought. For whoever forms a government, it will be under their stewardship that between 2024 and 2029 we must achieve our 2030 goals. To fail, cannot be an option for the rest of the world is watching." End quote. So what is at stake for the UK? It's a big question but it's a great one to start off with.

Chris Skidmore:

Yeah, well I think for the UK what's at stake very simply is its position as an international climate leader. We've very successfully in the past demonstrated a model of decarbonization that has gone hand in hand with economic growth. So we've been able to decarbonize our economy, reducing our emissions by 49% on 1990s levels, and at the same time grow our economy by 70%. And for the UK, having set I think one of the most ambitious national determined contributions, 68% emissions reduction level or 1990 levels, if we fail to achieve that, then in a way that sense of being able to demonstrate the economic growth opportunity within decarbonization sort of falls at the first hurdle.

And there are a number of sub-targets that the UK has also led on. So we can see now talk about the US sort of coming forward with new ways of investing in climate technologies, but in the UK we're committing to no new petrol diesel cars from 2030, no new sales. Whereas in the US they may be hoping for 50%. So we've made these really bold commitments. Other ones are on heat pumps where at the moment we're currently selling around 32,000 heat pumps a year. We've committed to 600,000 heat pumps a year. So some really revolutionary shifts in the energy transition.

And if the UK fails to achieve this, then what's to say? Any other country might look at the UK and say, "Well, you've got a bit slower than what you committed to. We'll do the same." And then everything starts to unwind. So the entire Paris Agreement, I think, does rest on the UK maintaining the pace of change, the pace of progress that it's committed to so far and we have less than 80 months in which to achieve this. And I think that's what is at stake and why it's so important that UK maintains its commitments and demonstrates how you can be a pioneer because even though we have 1% of global emissions, it's trying to use that power to convince other nations that they too can make the shift and they can do so in a way that will economically advantage them, and grow their economies, and create new jobs, and create new forms of wealth.

Jason Mitchell:

It seems like a lot is working about these net-zero commitments being written into the statute books, but what isn't? In other words, the most recent climate change committee progress report released just last month is a pretty stinging appraisal of government climate inaction. The committee described progresses as worryingly slow with lower confidence than last year's assessment that the government would hit its carbon reduction targets. In fact, Lord Deben has observed that, quote, "If you pass laws in order to do something like net-zero but then don't provide the means, then you're failing." So what's missing between the UK's net-zero legislation, which you've been a big part of, that would provide a more powerful signal and transmission to the wider real economy?

Chris Skidmore:

So I think this is a challenge that the UK is not alone in facing. Everyone at the Glasgow in COP26 made these commitments so that we now have I think 92% of global GDP under a net-zero target of some form. And the fact is that because the UK has gone further and has that target written into legislation, it's the reason why we can be so tough in having these regulators and independent bodies like Committee on Climate Change coming out and demonstrating transparently where we're failing and holding the government's feet quite literally to the fire in terms of demonstrating inaction.

And the reality is that these net-zero commitments that been made across the world are but words on a page unless we have that sense of delivery and progress. And that when we look at what the UK can do to demonstrate to other countries that we are effectively working on that delivery and not just talking about it is so important. Personally, I'd like to see, aside from having these carbon budgets that we set ourselves across a seven-year cycle, actual sort of annual targets that might actually demonstrate where we're slipping behind because the real risk, and it's the same with NDCs for other countries, is that sort of kicking the can down the road. You have five years in which to achieve the other targets and actually leaving it all to the last moment is going to be totally unrealistic and impossible.

So making sure you have that sort of ability to, I think, have a more granular approach to delivery is critical. And then within that, the two things I wrote in the mission zero, Net Zero Review, which I think are most important to me is firstly we almost need a separate body of net-zero delivery agency, an office for net-zero delivery that would hold our government departments to account and make them commit to demonstrate pathways year-on-year of what they could achieve. And at the same time work on pipeline delivery of certain projects helping to unblock some of those delays that are enshrined at the moment in issues around infrastructure grid capacity capabilities and to unblock these pipeline delays.

And then secondly, we cannot allow us to simply just wait on politicians and central government to act. Actually, there is an effective way of delivering on the ground and recognizing that progress is by handing more powers to do so to cities, to communities, to regional areas. And that's something that we need to work harder at because at the moment too many decisions around energy and net-zero are being sort of held at the top. And as the old saying goes, the bottleneck is at the top of the bottle. And the challenge is if we want to unblock that, if we want to go further faster, we're going to have to work out a way in which we make more people actively responsible as authors of their own net-zero story.

Jason Mitchell:

Yeah. I'd like to talk about those policy objectives at the top. In many ways the notion of the energy trilemma has been a pretty valuable framework for thinking about the policy objectives of decarbonization, price affordability, and energy security. What have the last two years taught you about the UK's ability to balance and fulfill all three of these objectives through times of obviously energy volatility and security risks like the Russia-Ukraine conflict? And I'm also curious, is the decarbonization objective faded, and this I worry, is it faded to be the lesser among these three objectives?

Chris Skidmore:

So I personally feel that the events that have occurred over the past year, or slightly longer than a year now since Russia's illegal invasion of the Ukraine, has come up with a new model by which we have seen the energy trilemma become a synergy of those three separate parts in a way that we would never have envisioned before because the cost of energy crisis in Europe and in particular in the UK was a cost of gas crisis. It was driven by the volatility of fossil fuel prices, fossil fuels that were not co-owned or energy dependent on a particular country. They were in the hands of foreign petrol states.

And the reality now is that when it comes to price affordability and energy security, those are delivered hand in hand through decarbonization. Those countries that invested more in homegrown renewable and clean energy were more resilient in the face of price shocks against gas and fossil fuels. So actually the energy trilemma is only an energy trilemma in regards now to the industries of the past and fossil fuels. Actually, when we look at decarbonization both in terms of energy supply and reducing energy demand, this has now become more closely aligned with the question on delivering on affordability.

Now, there's still issues that we need to take forward to the trilemma is relevant for that around rebalancing gas, electricity prices. But as the learning cost of these technologies comes down, as the price of some of these auctions come down, we are now seeing wind and solar as the cheapest forms of energy. So in a way the trilemma has been solved. I'm not saying that sort of from a position of thinking we have everything in the right place at the right time. We certainly don't, but we now know that renewables are not juxtaposed to cheaper forms of energy. They are the cheapest form of energy, they will be even cheaper, whereas the cost of fossil fuels will remain either constant or only go in one direction, which is higher.

And industries and governments that don't recognize this fundamental shift that has now happened will be worse off because they will be the nations and the industries that are stranded in the past rather than facing the future, and that future which is the economic opportunity of the century to move to a more renewable form of electricity and energy production.

Jason Mitchell:

That seems unequivocally true, but I'm wondering, is there a clear answer to the question? How do you wrestle with the dilemma of what to do about domestic UK oil and gas production in an energy security crisis? In my mind, it's got to be one of the most difficult questions for political leaders on climate still today.

Chris Skidmore:

Yeah, I think you're absolutely right. The Net Zero Review I took forward, mission zero, sort of set out that when it came to our current use of oil and gas existing fields that we have, there is a pathway that has been set out by the CCC a balanced pathway of 68% emissions reduction. The industry is the North Sea Transition Authority has set out a 50% decarbonization pathway and I try to suggest ways in which we can really demonstrate that we do need oil and gas for the future, we'll be using 60% of that oil and gas critically if we are able to focus on issues around decarbonizing home heating of which we're dangerously overdependent, 80% of heating in the UK is driven by gas, then actually those calculations can perhaps change.

But nevertheless we should be working on the existing oil and gas and to making it the greenest gas possible, greenest oil possible, and using that as a USP to demonstrate leadership. But then when it comes to new oil fields, new gas fields, that's I think a different question entirely. Partly, that is one of climate leadership just like with the potential new coal mines. If the UK is continuing to open up new oil fields, then what's the reason why any other country with available oil fields should do so? This just simply breaks down the rationale and the justification and you'll have a sort of whataboutery sort of at scale where that moral argument for moving to industries of the future is lost.

So I'm sort of keen to set out equally a balanced trajectory by which we can come to an end date for new gas and oil fields, which aren't going to be needed, potentially put at risk the transition because there's only a limited workforce and that workforce needs to now be reemployed elsewhere in creating wind, and energy, and other offshore opportunities for renewable clean power but also CCUS as well. And so understanding that it isn't a position where I'm aligned with just oil. It's not an extreme position to take to set out that we need a destination to travel and that we need to work with industries of the past to make sure they have that just transition. But that just transition starts with being open and honest about when we will cease to have the economic use of oil and gas.

And I'm confident that the pace of renewable and clean energies and technologies mean that we will see investment in fossil fuel generation. And there will be a tipping point which that if we maintain blindly that we are going to need to continue to invest in fossil fuels, actually that potentially creates an economic shock and economic risk that would set the country back. So I think framing the argument not just around a moral one but an economic one is also absolutely critical to win hearts and minds because we are in a rather emotive state with a number of protest groups making the case for no new oil and gas licenses.

But the key thing here is to recognize it doesn't make economic sense in the longer term to continue to invest and exploring new oil fields wouldn't go on stream until at least 24 years later. That's the average length of time it takes from actual the granting of an exploration license to actually the drilling taking place. That would be 2047. And the reality is that our gas and oil use will have dropped to the point where other industries and other technologies will be far cheaper than the use of gas and oil at that point.

Jason Mitchell:

The UK was the first economy to pass net-zero emissions legislation thanks in part to you, and its leadership at COP26 was undeniable. Looking back, is there a first mover disadvantaged, does that exist either politically or economically at least on a near-term basis? Is net-zero legislation by the fact that it is inherently long-term in nature, i.e., 2050? Is it destined to be a victim of short-term political cycles and shifting government priorities? In a sense we've already seen that occur in the US.

Chris Skidmore:

No, I think from a first mover advantage and free rider opportunities, what we've seen this year with the first sort of investments in the Inflation Reduction Act, the 45Q tax credit and obviously what's happening in Europe as well, particularly Germany with advanced investments, is because that sense of a commitment has also been married with long-term investment commitments, a programmatic sense which has been able to de-risk the cost of private inward investment. That's meant that there is now a choice for investors to make between which countries they wish to invest. And my challenge now is I really don't think there are any free rider benefits in following. I think that there are only first mover advantages to be had in demonstrating the opportunities for these technologies to be embedded in certain countries to be able to build out the workforce that then can be exported abroad.

We saw that with offshore wind in Denmark and what they have been able to achieve themselves in the past and other companies such as Orsted that made that shift earlier and now reaping the economic advantages. So I would say that there isn't a first mover disadvantage. The laws of traditional economics don't apply now when it comes to recognizing that the transition is moving at scale. The recent report by the Rocky Mountain Institute suggests there is an S-curve underway. And if we don't get on board, we'll slide down that and the challenge is there are only second move of disadvantages.

And in terms of the legislation, obviously I signed that into law as minister in 2019 and I simply wouldn't have envisaged that. We'd be in a situation four years old with 92% of global GDP having sort of taken up a net-zero target. So we've come so far, so fast. The question is obviously we can't just put in our entire faith in net-zero, innovation must happen not just at a technological level but also when it comes to future policy framework. So while we have the carbon budget sort of principle that was sort of set out by Myles Allen of a trillion tons left in the atmosphere and we really commit to recognizing as we know more and more about the science, I guess, we have the 1.5 degree target. That obviously is now being challenged in terms of whether we are rapidly approaching that sooner rather than later.

If the science changes, obviously we might need to move further faster ahead of 2050, but basic principle of net-zero still needs to be embedded and we need to wrap our arms around that. I mean, the biggest challenge would be if we just kept on chopping and changing, we need policy stability. And net-zero provides that long-term stability of a pathway we've got to be able to follow. Within that, however, I think there are opportunities to humanize the target to create not just those sort of co-benefits but to think through additional opportunities to articulate the transition with new mandates. And I think mandates are the most effective way of doing so.

I'd love to be able to think about how we could create mandates around adaptation as well as mitigation because that's not happened and the challenge we have now certainly from a politician's perspective is that the effects of climate change are already here. So even if we do net-zero, there's only a 50% chance that we hit the 1.5 degrees warming target, but then also the effects of climate change are here to stay. So understanding how we work to create benchmarks and opportunities to coalesce around commitments and outcomes that we need within the existing warming planet that we now have, unfortunately.

Yeah, I'm sure there will be new policy frameworks that come on board. What we need to do now is to make sure that these aren't put at risk by the politicians of today and tomorrow. That actually what we've seen most effectively I think is this move away from top level multilateral negotiations which are important, but then to have the breakthrough agenda, have these opportunities for these horizontal approaches, intersectoral challenges where countries can commit because if a country commits to another, there's almost a diplomatic imperative for that to succeed and to commit and honor the commitments you've made to other countries. So I'm in favor of also sort of now working sectorally on coming up with new targets and that's not to disparage net-zero, it's to work within the framework.

Jason Mitchell:

You touched on this earlier, but I'd like to talk a little bit more about the development of the UK's international climate leadership since COP26, their proposals to reduce the UK's 11.6 billion pound climate finance commitment to international funding for climate vulnerable countries. There also seems to be an emerging misalignment between UK messaging about limiting fossil fuel expansion and domestic efforts to approve the first deep coal mine in Cumbria and the new Rosebank oilfield of Scotland. What's the risk that the UK is perceived as a less credible partner in international climate negotiations going forward?

Chris Skidmore:

So there is the challenge that the UK having sort of set out international leadership, both the Glasgow COP26 and before, as a result has to demonstrate to other countries that it is maintaining that commitment because it is so important for other countries to see a leader, a pioneer, and to know that this can be achieved, and that's where UK leadership is so important in that we continue to hold this. In terms of the climate finance package, the challenge I think is not necessarily whether the UK government is now going to commit to it or not, they say they are going to commit to it. The challenge is how they're going to be able to spend the 11.6 billion pounds in time.

And I've just written to the Prime Minister Rishi Sunak with a number of cross-party MPs asking for greater clarity because at the moment, and it's this challenge as I said earlier around how do you set out a delivery plan? Because there's not been a delivery plan of how that money's going to be spent. The former ministers at Goldsmith who stood down on this point of climate finance a couple of weeks back was that actually we've not spent the money and we're going to run out of time, so as a result we fail to meet the pledge. And then there's a separate question about sort of making sure this is dedicated money for climate and not taken out of the aid budget, which is also what we've asked clarity for the Prime Minister.

But it comes down to leadership and articulating that sense of vision and purpose. And I think what we've seen with the climate finance commitment is indicative of potentially what could happen elsewhere, which if you don't set out the detail, if you don't set out a plan, then the time, the grains of sand take away and you've missed your opportunity. And I think there is this sense of where the money has been committed. Again, it was just words on a page but we really needed to see earlier, even beyond before issues to be honest. I mean, I think Boris Johnson's at fault for not actually coming forward and to really setting out early enough where that money was going to be spent and how it should have been frontloaded rather than left at the last sort of possible moment.

And then also the challenge around the coal mine in Cumbria, coking coal, the challenge around Rosebank and what might happen there with the opening of a new field which would be for export and not even used in the UK market. The idea that you can bottle this gas and oil up, which isn't even sort of usable in the UK market and then keep it for yourself is a fallacy that we need to keep on demonstrating that somehow on international gas and oil markets, that the UK's not going to hardly benefit from this at all.

The challenge is that if we had been in a place where we'd done the work to create climate compatibility checks in legislation, in regulation, in our institutions that coal mine wouldn't have got through the planning inspector in the UK. So my challenge in the Net Zero Review is like we're yet to create the architecture of government both at a central level and at the local and regional level, particularly when it comes to planning, that actually prioritizes our net-zero delivery, both clean renewable energy and a new net-zero grid but also begins to sort of phase out any future fossil fuel projects because they simply shouldn't have been given the permission if we'd had the legislative checks in place.

Jason Mitchell:

Yeah. As you say, it seems critical to maintain a dedicated role of a minister for climate change. Graham Stuart, the current minister for energy security and net-zero is obviously responsible for climate change but he doesn't attend cabinet and he's generally kept a pretty low profile. I'm curious, how does his title conflate energy security and decarbonization, which as we just discussed on the energy trilemma, are potentially in conflict or at least at tension with one another?

Chris Skidmore:

I think the thing is that too much can be read in sometimes to these titles. And yeah, it's great that we've got this new department for net-zero and energy security, but it does feel that the government wants to sort of stress the question of energy security more than net zero at the moment. I personally would argue that net-zero is energy security and that's how we should be looking to make the argument above all and not to place them in conflict with each other. I think that's a dangerous path to go down and that we should be focusing on technologies that we can establish now as quickly as possible to demonstrate how we can create a new diverse energy mix that is less susceptible to the shocks of high gas and oil prices.

I think regardless of the department, you do need leadership from the top. I mean, you talk about government, and there's no such thing as a government in the UK, it's a collection of departments and obviously you need Number 10 and you needed the Treasury. And I think the Treasury gets this and it'll be interesting to see whether Jeremy Hunt come forwards with new fiscal measures to meet some of the challenges that have been set out by the Inflation Reduction Act, but we also need climate leadership from the center. Even if Graham Stuart was made climate minister and was attending capital, it's still not necessarily to do enough to really sort of change the program of government, which is what we need.

And so trying to have that sort of critical leadership from the prime minister, from the chancellor, is what I want to see happen because that's when other departments sit up and listen. There's no reason why our Department of Agriculture, DEFRA, is going to necessarily listen to the Department for Net zero and Energy Security. They consider themselves sort of on a par and equals, they're not going to be sort of told what to do by the department. You need those two departments at the center to crack the whip if we want to see real change.

Jason Mitchell:

As you mentioned about the United States Inflation Reduction Act, or IRA, was rolled out at points more than $400 billion in tax credits and other incentives to renewable industries. Since then, the EU has responded this past February with the European Green Deal. Why has the UK been so slow to follow up and what should we be looking for in Autumn and how should it be different if it is? If Joe Biden can show that every second job in the US is a green job, what should the UK want to point to?

Chris Skidmore:

So the challenge has been in the UK that we have got sort of legislative processes that are already underway. So we have the energy bill, which is I think the largest energy bill that's ever been sort of committed in House of Commons, and that has some really important measures around business models for CCUS and hydrogen production for the future that needs to be passed in order to set a price for hydrogen and provide sort of government stability in the same way the government provides stability with this contract for difference model that was so successful in the past.

I would argue that for the UK that you have this opportunity of being agile demonstrating regulatory and legislative certainty of having the certainty that all political parties are supportive of net zero, which isn't necessarily the case in the States, isn't necessarily the case in some European countries. So it's still a good place to recognize that we've got certainty, consistency, clarity, and continuity. The four Cs that I identified as absolutely critical for future net-zero policy development in the mission zero report, the Net Zero Review.

But we also have this challenge that the Treasury, as I said, is critical for delivering government, will only look at fiscal measures in the budget process. So we have two fiscal events and we just missed the first fiscal events earlier on in the year and in response to the net Net Zero Review, I made 129 recommendations to government. I think the government's accepted about 100 of those 129, which is great and some of them, they're taking forwards with new task forces to deliver at speed, and there's a lot of work that's going on and I do feel that we have sort of really stepped up and we're in a better place than where we were this time last year certainly, but those fiscal incentives measures that we need to establish the carrots, as it were, as opposed to just the sticks, have yet to come.

And it will be absolutely critical for the chancellor to come forward in the Autumn Statement and set out greater clarity and certainty about what it will mean if you are seeking as a company to invest in net-zero technologies and green industries in the UK, how are we going to ensure that we can bring those companies to this country and how can we make sure that we don't lose any companies to the US and elsewhere?

Jason Mitchell:

What's changed since 2019 when you were the minister who signed into law the government's commitment to achieve net zero by 2050? In other words, why did the case for net zero resonate more strongly than as a cross party issue than now, especially with all other factors, whether it's the IPCC alarming reports, the underlying science, and the number of extreme weather events essentially all support net zero?

Chris Skidmore:

I still feel, compared to four years ago, I still feel that bipartisanship is there. I think that the challenge is to make sure that we don't allow climate detractors or smaller parties or certain news channels that sort of wish to use net zero as some kind of clickbait to try to create a populist argument against net zero as being some kind of elite project. That's always going to happen and I think yeah, there's always the challenge that for every action there's always going to be a reaction. That the responsible challenge of policymakers is not to fall into these rabbit holes and think that somehow the reaction is the new policy.

The challenge here is that net zero is better known now by the population at large, taking actual climate change is still I think the number third issue in importance behind the economy, cost of living, and the NHS. So making sure that just because something's on Twitter or just something's on a news channel, those who shout loudest will always get the coverage doesn't necessarily mean as a politician you should necessarily responsibly engage at a level where you think they have won the argument. But the challenge now is obviously that question around we are coming to a point where the level of detail of what is going to be required to meet net zero is becoming more and more apparent.

And obviously with that there are more and more interested stakeholders who are coming forward. Some are obviously wanting to defend the status quo in the industries of the past. Some are wanting to suggest the uses of hydrogen in heating, and there's furious lobbying organizations and industries that are going on. And in a way it's good that we have these debates, I'm not against it. I think the worst thing would be to somehow think that there is a fixed path towards net zero.

What we've got to do now, what's changed since that sort of early stage of doing net zero is once we now have the commitment in place, having the pathways in place but recognizing that there will be wrong turnings, there will be unknowable events, having that sort of sense of a roadmap that looks backwards as well as looking forwards is really important. But not to think that there is one holder of the net zero flame who has all the answers because we can argue about these things. That's not necessarily indicative of a failure of policy.

It's recognition that in this democratic process that we will work towards finding a shared solution, but it's got to be in a place where we co-create with industry, with civil society, and above or with local communities if we're going to land it in a way that's going to actually succeed and yet to avoid those reactions from overburdening and destabilize necessary pathway, public engagement is going to be absolutely critical. We need to do far more of that. With the net zero review that I took forwards, I needed to create that sense of earning the right to be heard and I think that we still need to work closer on earning the right to be heard when it comes to delivering on net zero.

It's still, we can't tell people this is what must happen. We've got to be able to give that a greater sense of ownership and that's across a wide range of policies. And so I think there's a lot more that can be done to move it away from just a simple question of what happens in Parliament and whether it's labor conservatives, liberal Democrats, S&P agreeing on these things to recognizing the complexity of having multi-community approach, that there are far more people who have a stake in this and that we also involved far more regional actors, mayors, cities, local authorities. That would be my vision for how we move to the next phase compared to where we were for this first phase of getting that sort of common agreement in place.

Jason Mitchell:

That's really interesting. But I guess I'm also wondering to what degree it's a reflection of a changing commitment within the conservative party itself where its traditionally strongest advocates of climate action have left, or are leaving, leadership positions? I'm thinking Boris Johnson, Alok Sharma, Zac Goldsmith, and even yourself. A commitment to net zero was one of the six promises of the 2019 Conservative manifesto, but it appears increasingly deprioritized at least by the Climate Change Committee's judgment.

Chris Skidmore:

Yeah, I think the challenge, I mean and myself and Alok and Zac, all sort of came forward in the last conservative leadership election in June, July 2022. And we to all candidates, it must commit to net zero, we created a conservative environment pledge. We held sort of the hustings I organized where we got all the candidates before they went to the membership to commit to net zero because I could see this sort of world in which potentially this was used as a sort of bathroom mechanism or some kind of low-hanging fruit to throw to the membership they would look to sort of challenge the commitment. I think ultimately it is still a question of political priorities and political leadership.

Obviously climate action, a future screen economy wasn't one of the next five priorities that he sets out at the beginning of this year in January. However, when you look at the opportunities for a green economy and investing in net zero to bring industries here and create those 480,000 new jobs that are set out in the review with a trillion pounds with whom would investment come to this country, if we set out a clear pathway actually that helps reduce inflation disproportionately in the UK again because of high gas and oil prices because we were disproportionately on the hook for that because 80% of our heating is through gas compared to 50% in Europe.

So it's sort of a lot of those challenges which are set out. And for me it's about mainstreaming net zero and climate action, sort of hot-wiring into our political way of thinking about what are the voters priorities? As I said, it is the number three priority, but critically it's also going to deliver priorities number one and two, which is better healthcare outcomes and also a stronger economy. So I'm really keen to make sure that we don't see this sort of sense of another and a nice thing to have and to be tagged on as the sixth priority. It informs the core priorities as well.

And if there's more I can do to make that case and that narrative, obviously the whole point of the net zero review was to create a new narrative around net zero that it's not just a climate commitment, it is an economic opportunity and trying to embed that from center-right principles of how we set out new net zero markets, how we incentivize business and industry to deliver and to recognize the new world that is out there. People have new ideas, I'm keen to take them up and to champion them because I think that sort of sense of like we can't just rest on what's happened or rest on our laurels and actually coming forwards with new ideas.

Now, in terms of whether it's the conservative party or whether it's the Labor Party in government, I don't know. Obviously we will form the next administration, but we will see, I think, the next election obviously not just being critical for delivering on the climate commits as we said earlier. Actually, I think that those parties that come forward with bold agendas around how the transition is going to empower local communities will be rewarded by the voters. If we look at the colleague of mine, Ben Houchen, the conservative mayor of Tees Valley, he won his reelection and increased his votes share by over 10 points. On the back of putting net zero really at the front center of economic regeneration Net Zero Teesside, it's setting out what this is going to mean in terms of jobs and how we were going to bring international inward investment.

Today there's been an announcement of a 4 billion pound battery gig of factory Jaguar Land Rover in the UK. That's great, and Rishi Sunak's come out to champion this announcement, but we've got to be able to weave this together into a golden green tapestry of actually the narrative of why this matters and why it's not a cost but it's actually a benefit and setting out that benefit in that vision, whoever does that I think will be rewarded. We've seen local elections where the Green Party has taken conservative seats in the south, the liberal Democrats have come back and taken conservative seats again in the south and elsewhere. I think voters want a sense of someone who's going to come forward and say, "This is where we feel the UK can set out a vision, not just in international leadership, but actually an economic opportunity for the UK internationally to create those global solutions, those global industries that can be exported abroad." And that has yet to properly happen. Yeah, that's the prize, I think, whichever political party is willing to be bold at the next election.

Jason Mitchell:

That's encouraging and the economic rationale makes sense to me. I just keep coming back to this point or this question of what does a cross-party consensus on net zero, if it even exists, looks like with general elections over the next 12 to 18 months? And in particular, how can the UK escape the gravity of the US culture war around climate change?

Chris Skidmore:

I often think about, are there new frameworks? We created this conservative climate pledge, I've been trying to work on thinking about a climate declaration that I can get all members of parliament from across political parties to sign up to and what would be those broad principles? Well, we can demonstrate common agreement. I work very closely with Caroline Lucas and the Green Party. I work closely with Ed Miliband and Kerry McCarthy from the Labor Party. For me it's absolutely integral with the success of landing the Net Zero Review that not just this government who was going to take up its recommendations but actually any future government. So I met with the Labor Party, I met with the SMP, I met with the Welsh government and really sort of said, "Yeah, we want this to be independent."

I really tried to think through how can we get back to that space of long-term political stability through common commitments and where do those land? And obviously, I think there's quite a lot of common commitment around renewable power. I think really encouraging, I've just signed an amendment today that Alok Sharma's put down on the energy bill where we've got 30 conservative MPs backing a commitment to getting rid of the moratorium on onshore wind. So I think there are areas and sectors where I think we can find common agreement. Then there's the challenge around phase down of fossil fuels and what that looks like.

And obviously we've seen in the past couple of weeks unhelpful, totally disagree obviously with the tactics of just stop oil and what's happening. But that is setting the climate calls backwards, undoubtedly losing popular support, but now it is filter into the political mainstream where we've now seen sort of Labor Versus Tori, but setting out sort of like who's in the pay of just stop oil. And that's the challenge we need to avoid because again, coming down to responsible sense of how we reduce our dependence on fossil fuels, how we move away from new oil and gas licenses is a question that a sensible government and opposition will work towards a common shared solution because both of them will be in power at some stage in the 24 years by which a new license might come on the stream.

We need to get to that sense of shared decision-making responsibilities and of course we can disagree about the details. So yeah, I'm sort of interested in thinking ahead of the next general election about whether I can get members of parliament or parties to sign up to common pledges and I'm quite sort of finalized the detail of that sort of pledge yet, but I've got this idea of a Westminster climate declaration or a Westminster climate charter that I've been working on that I hopefully might bring forward in the autumn.

Jason Mitchell:

When you look at the critics in particular, I'm tempted to ask you how you would respond to Nigel Farage's question, which essentially echoes the Net Zero Scrutiny Group. He asks, what purpose is being served by deindustrializing the UK, which produces less than 1% of global CO2?

Chris Skidmore:

So I think the key thing is to break that question into two parts and disprove the first sort of assumption that decarbonization equals deindustrialization because that simply is not the case if the right frameworks are put in place. If we can avoid carbon leakage mechanisms through creating carbon border adjustments by looking at how we effectively support our industries to decarbonize, then actually the price to be had will be UK green steel that we'll want to be exported abroad because all these companies that have made net zero commitments require green steel. When it comes down to low-carbon product standards have embodied carbon within cement and elsewhere, the materials of the future.

It's the UK that's led on both the creating the standards which can be exported abroad, but also materials that can be exported abroad, we are seeing a reindustrialization, not a deindustrialization potentially take place and that is the opportunity that I wish to see this government set out a clear vision for how it can be achieved. Deindustrialization takes place if we haven't thought through how to support industry moving as a whole towards this new world.

But the reality also, and I made a speech in Europe in Brussels a couple of weeks ago, is that we do have this new European model of decarbonization that if we can take quality and place at the heart of quality the sense that also involves low carbon, then that Chinese steel, those cheap goods that are deficient will not be sold abroad. They won't cost jobs. So trying to make sure that we set out a clear strategy, which is why they're having a coal mine a coking coal mine is so pointless because actually the work that the UK steel industry wants to do is not through coking coal steel, is creating electric arc furnaces and potentially hydrogen opportunities for creating steel in the future as Sweden has demonstrated.

So I think demonstrating the first part of the question is not actually technically true, certainly for the future is really important. And then the 1% argument I think that challenge is obviously historically in the past you could say the same about slavery or elsewhere. You either agree or you disagree that this is something that needs to happen and you can have those discussions and we can debate the facts, but the reality is the science has now been proven. And for the science to be been proven, it is a moral imperative that we demonstrate the leadership that then others will follow as we have done in the past. Just because we don't have capital punishment doesn't mean that we sort of think, "Oh, well, why don't we bring that capital punishment to the UK because there's other countries that do?"

We recognize that the case is the right one, that this is the only opportunity we have and therefore we need to then work to bring other countries with us. And it will be trade, it will be exports, it will be these new net-zero markets that bring everyone with us in turn and it's happening. And that's the thing. It is happening. And Nigel Farage, he tried to set up a rally against net zero in Bolton Wanderers' Stadium and it all went rather quiet. He said nothing about it, but he said he was going to organize this rally in Bolton Wanderers' Stadium.

And actually, the stadium refused to allow the rally to be held because they've got their own net-zero commitments. They've got the EV charging points in the car park, they have these sort of lift shares for fans that they see this as the future and it's not some kind of green eco project that's being sort of driven on high by some kind of WEF agenda, all those sort of false arguments that are being made. The reality is on the ground, and when I went round the country, we did 52 evidence round tables, we received 1,800 written responses. It's actually that companies in the UK, SMEs, they see the opportunity in net-zero and they want to get on with it, and they want to receive the support that they need in either taxation or incentives or on energy costs, how they can meet those challenges, but the government's behind the curve.

And so I think the challenge that we have is also some of these groups in Westminster that are sort of Net Zero Scrutiny Group. What else? There's just a handful of people. Sadly, they get quite a lot of disproportionate media coverage that gives them the time of day, which unfortunately gives a platform. But yeah, that's democracy and that's the freedom of the press to do that. The important thing is, and where I came forward with the net-zero support group is to meet these groups and obviously engage with them on the facts and challenge any misinformation, disinformation, but also continue to talk.

So I met with the Net Zero Scrutiny Group as part of net zero review to talk through their concerns and issues. And actually some of the recommendations I put in the review came from the Scrutiny Group, so actually a net-zero new homes standard to ensure that every new home was automatically net zero was a commitment that many groups made to me, but also the Net Zero Scrutiny Group said, "Well, it's unacceptable that we've built 1.3 million homes in the UK over the last 10 years. They're going to need to be retrofitted." And the point was made to me was that we've got to be able to do this process of net zero by working with householders, working that level by which people can see that they're not going to be ripped off. And I understand that.

So I think there's also a question around making sure, of course we don't allow people to pedal misinformation and mistruths, but at the same time we can engage and we don't create a sort of good versus bad, morality versus hell when it comes to delivering on climate action because ultimately we need the whole of society to engage in going net zero. We need everyone to make the changes that will happen and to see the economic opportunities for those changes, and to recognize they're going to become probably wealthier as a result of those changes in the long term.

But that means also working with people who disagree with you, you can't avoid that. And so I think for the climate world, it's also being responsible in recognizing engagement that has happened across every sector that includes the fossil fuel industry and across all political parties and all political actors as well.

Jason Mitchell:

I wanted to touch on that experience. You structured the work behind your mission zero report on a bottom-up basis, taking input from a huge number of participants, including as you said, the Net Zero Scrutiny Group rather than take a top-down approach where government would issue orders on how things should be done. Do you see this as a model for how things can be done more broadly to drive through the sustainability transition?

Chris Skidmore:

I do. I think I was keen with the Net Zero Review, again, to set out a process where I could earn the right to be heard. I think people were very skeptical to start with, it was called the Net Zero Review when it was announced. People thought, "Oh, is the UK getting a review? It's net-zero commitment." And so I was obviously keen to say, "This isn't my review, it's your review." I could have taken forward a strategic review that sort of identified areas of weakness and how we could have balanced that. And the CCC has set out areas where the UK's falling behind and it's up to government to come forward with additional opportunities for meeting the commitments on the carbon budget. So I decided I didn't want to cut across the CCC, so I didn't follow that sort of carbon budget route.

Instead, I thought this was my potential last moment to influence policy. So I was going to go big, but equally I wanted it, again, to use the review process as a template potentially for looking at delivery and implementation about coming back and doing this audit of often seeing where are the challenges, where are the delays, where, as I said, the debris on the tracks and how we put guardrails around some of the policies to make sure those that are flashing amber or red that we can set out what's needed to happen now. We put a timeline to it and having that roadmap is so important.

So I'd be very keen to articulate that other countries should be taking their NDCs and just setting out their strategies. And that's important from a government level to be able to commit whatever civil servant or department to achieving that. But then there is also this sense of how you work alongside all those other agencies that are going to be delivering net zero.

The CCC have set out already that over 50% of all policy decisions to achieve net zero will be taken outside of central government. So it's imperative that this decision-making process of how to create the support mechanisms for the financial funding investment around issues, around regulation legislation do have that continual ability to consult and to demonstrate where are the best practice examples of what's working and how do we end best practice, how do we mainstream best practice and ensure that the just transition happens not just globally, but actually in each country that you're taking every different community with you and you've worked through this.

That's always going to be the challenge, I think, is that you can move ahead, but if you move ahead without taking the train with you, the caravan with you, across this pathway, then there will be additional challenges that will come up. Known sort of moments where there'll be certain areas that have fallen further behind compared to others. So I think the net zero review was a really useful process as we went through it. Actually, individual groups and sectors became more and more enthusiastic about seeing this as an opportunity to contribute and being given the opportunity to feed into a review that covered every sector.

And as a result of covering every sector, I actually found that the document people have found it incredibly useful, and this is a textbook, by which to sort of understand what is happening and what else needs to happen. And that's not to take away from what the CCC has done, but I think it's also to set out a narrative and I'm a historian and I write sort of before I became an MP. And so that sense of trying to give people a landscape, I felt was something that people really appreciated and hadn't happened before.

So I think it filled a void and I was delighted by its reception. The challenge now is obviously this government's taken forward so many of the recommendations, they haven't necessarily committed to the mission-based approach, the 10-year programs that are set out. I'm now doing more work on what those missions should look like. But that's where I think, yeah, we've got to move to getting cross-party support in the same way that Germany has their KFW program for installation or the 45Q tax credit is guaranteed to the 1st of January 2033 in The States, that long-term approach to allowing labor skills supply chain to be built out, de-risking the cost of capital investment is critical. And that must be I think the next phase of the net-zero delivery.

Jason Mitchell:

My final question, does the government's updated green finance strategy address the issues around green finance that you outlined in your report? Obviously, much of the strategy remains subject to consultation, but as chair of the UK Sustainable Investment and Finance Association, I'm curious about what you'd like to see organizations like UKCIF, and the finance sector more widely, doing to push for the strategy to be fully implemented.

Chris Skidmore:

So when I was minister back in 2019, I launched the first agreed finance strategy. And I think then if I'm right, sort of investment in climate finance was, I think that's 150 billion and it's now shot through to about 750 billion, almost about to touch a trillion I think. So recognizing to start with the power that that sector has is incredible, I think. So we need to do more to articulate that this is an opportunity for the City of London but also for the UK and that the leverage that we have potentially is incredible.

And then with that leverage, I think the challenge has always been the science sector still wants to talk about how we green-finance. And partly that's relating to the ESG agenda and how do you create a sort of net-zero company that's going to have net-zero commitments that's going to last and not be sort of accused of greenwashing? And these debates are constant and it's good that we have them and it's good that we, but it's often I think at the expense of fundamentally thinking through not how we green-finance, but how we finance green, and shifting that position now to articulating more clearly what are the challenges?

Because if we're honest with ourselves, we've seen a reduction in finance going into climate venture capital in the UK. We've actually seen an increase in the thresholds that patient capital wants to invest in certain client projects. So whereas in the past they might've wanted to invest 10 or 20 million pounds in a project, now the threshold's starting at 40 million pounds or 50 million pounds. And that benefits no one because some of these companies don't need that sort of high level of finance, they just want to be able to get on with scaling themselves at a lower level.

So in a way that sort of valley of death used to be talked around innovation and research and development is happening prematurely in climate finance because they can't access the capital that they need to start with. They need to think through how we can maybe create new investment vehicles, pooling opportunities, using the power of cities and regional areas to somehow come together and create climate investment vehicles that focus on regional investment opportunities. And I've seen some great examples of where that's happening.

Ameresco has invested 425 million pounds, they're from Boston. They're setting up this easy network in the city of Bristol and that's a great joint vehicle that's being established. I hope that template and now the legal work's been done can be adopted elsewhere. But I also think that from a messaging point of view around the fossil fuel industry, that again, we need to start seeing clear messaging around the green violence sector, not investing in fossil fuel industries for the future.

And I made that case with fracking. I sort of said, "Well, who's going to invest in this? It's just not going to be realizable a rate of return." And I think that's coming and I think we need to try to do more to articulate that. And then just finally come markets. I passionately leave and I set out in part six of the Net Zero Review that thinking about net zero is not just about what is happening today. Important though you focus laser-like on where we're falling behind, we also have the responsibility of thinking through where we'll be in 15 years time. And we know that there will be new technologies that will come on stream. Obviously, we don't want to be dependent on those technologies. We need to do with what we have now, deliver the renewable opportunities for today.

But I think that, yeah, there will be new ways of trading. There will be new markets, particularly carbon markets, voluntary carbon markets is on an exponential increase. And yeah, will be worth several trillion pounds very shortly. We have an opportunity, I think, in London in particular, to demonstrate leadership on the voluntary carbon market and trying to set out clear regulatory standards for that for the future as well, to be able to row in behind it, otherwise other countries like Singapore already is demonstrating a lead on this. So I think, again, there's that first mover advantage in the finance sector of looking at where these new markets are emerging and how to capitalize on them.

Jason Mitchell:

That's great. I mean, that's a fantastic way to finish with a passionate call to climate arms or action. So it's been fascinating to discuss what's at stake in the next general election for UK climate policy, how the UK can respond to the US and EU clean energy stimulus programs, and why it's critical that the UK maintain its international climate leadership. So I'd like to thank you for your time and insights today. I'm Jason Mitchell, Head of Responsible Investment Research at Man Group, here today with the Right Honorable, Chris Skidmore MP, Chair of the UK's Net Zero Review. Many thanks for joining us on A Sustainable Future, and I hope you'll join us on our next podcast episode. Chris, thank you so much for this. This has been incredibly enlightening.

Chris Skidmore:

Thank you, Jason. It's been a pleasure.

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