Energy Transition Outlook 2019

Re-allocation of resources

In addition, more rapid action may also create issues around capacity of the sector to deliver new technologies since the amounts required already go well beyond the amounts delivered to date. The required expertise, skills and supply chain for such a programme will only emerge over time. In addition, although some new technologies are emerging rapidly, others will take time to reach their full potential in terms of performance or cost reduction. Developing legal and regulatory structures also takes time. Governments will need to learn from experience in how the net-zero economy is delivered; for example, to avoid consumers being harmed by unfair practices or to develop new health and safety or planning requirements. Finally, although the desire from society for the energy transition is clear, it may take considerable time for consumers to understand and accept the behavioural changes required to achieve net-zero set out in the CCC report. Government also needs to consider that UK industry could be significantly disadvantaged if other nations don’t adopt the same level of ambition to decarbonise.

The Paris Agreement requires countries to set emissions reduction goals that are consistent with their “highest possible ambition”, and that are “fair and ambitious in light of their national circumstances”. In its recommendations for the UK government, the CCC assessed a 2050 target to be a “necessary, feasible and cost-effective target” to meet the UK’s commitments as a signatory of the 2015 Paris Agreement, noting the Committee “did not currently consider it credible to aim to reach net-zero emissions earlier than 2050”. There are a number of reasons why a more rapid target may be difficult to achieve at this stage, given the need to sustain massive amounts of investment whilst driving radical change to societal behaviour. A faster transition would require a larger and more rapid reallocation of resources into energy sector investment. An even more rapid increase could begin to compete more obviously with other priorities. The increased cost of this could negatively impact household and business customers. As noted by the CCC, “the design of the policy framework to reduce UK industry emissions must ensure it does not drive industry overseas, which would not help to reduce global emissions, nor the UK economy.”

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