The Green Transition: Don't mention the "B" word!
Weekly analysis of the shift towards a new economy.
Dear Readers,
Happy Friday from the Spotlight on Policy team. As ever, you can find our policy coverage on our section of the New Statesman website.
Hot on the heels of last week’s analysis on a potential round of EU tariffs on Chinese-made electric vehicles (EVs), news broke that the UK is considering its own round of tariffs on Chinese EV imports. That is either: a) a very smart move to help protect our domestic EV manufacturing industry; or b) a needless way of jacking up the price of going green during a cost-of-living crisis.
It all depends on your point of view, I suppose, and whether you’d rather prioritise shoring up domestic jobs or getting to net zero as soon as practicably possible. A reminder, if ever we needed one, that those two aims are increasingly being framed as in tension, despite lofty promises of green investment-led growth allowing a thousand high-paid jobs to bloom.
Anyway, in light of all that, we’ve got a great guest-authored piece from climate policy specialist, Ben Westerman, of Public First, and Adam Berman, a deputy director at Energy UK, which is the trade body for the whole energy industry.
They talk about how UK-EU cooperation could help smooth the journey to net zero. Opening the old Brexit wounds might be the last thing Keir Starmer wants to do in an election year, but a single-market-aligned strategy could be the answer to the pained question of how to boost growth and go green without the kind of fiscal stimulus that he is so reluctant to promise.
Let’s get right into it.
Don’t mention the “B” word!
If a week is a long time in politics, the eight years since the Brexit earthquake feels like several lifetimes. Those years have been defined by acrimony between London and Brussels, with minimal political space to discuss shared problems. But times are changing. The bitterness of the Brexit years belongs in the rear view mirror: global challenges are too great to tackle alone. With an election on the horizon, minds are turning to what UK-EU relations might look like under a Labour government.
For Labour, recent travails over its green spending plans reflect the challenges of achieving net zero and increasing prosperity in a sluggish, low-growth economy. The UK’s relationship with the EU provides an opportunity to tackle these challenges.
Labour may be nervous about reopening the wounds of 2016, but it is faced with reality: for a nation with a 69 per cent trade-to-GDP ratio, economic growth depends on a better trading relationship with Europe, and energy and climate policy provide both sides a golden opportunity to strengthen ties. Their climate goals are almost identical. Both are committed to net zero by 2050, and both plan to rapidly increase clean energy capacity. Both face the threat of the Inflation Reduction Act’s protectionism and the challenge of weaning themselves off a reliance on Chinese imports. Challenges around investment, supply chains, planning, and grid infrastructure are as common on the continent as they are in the UK.
As relations warm, there is political space to tackle these challenges together. With net zero under pressure from the populist right and public finance constraints, now is not the time for an approach to net zero that will take longer and cost more for the sake of tribalism. As resources reduce and competition increases, collaboration is king. Energy and climate is the obvious place to start.
This isn’t just about reaching net zero faster and at lower cost. The Inflation Reduction Act and the EU’s Net Zero Industry Act demonstrate that the EU and US see the green transition as an economic opportunity. Rather than mimicking US protectionism we could never hope to compete with, the UK’s best bet lies in cross-border collaboration to grow low-carbon industries and the wider economy…
Continue reading here (links to New Statesman site).
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The Green Transition is produced by Spotlight, the New Statesman's online policy section and print supplement. Spotlight reports on policy for the people who shape it and the business leaders it affects. Explore our in-depth reporting and analysis here.
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