The Green Transition: Going for growth?
Weekly analysis of the shift towards a new economy
Dear Readers,
Welcome to this week’s edition of the Green Transition from the New Statesman’s Spotlight on Policy team.
This week’s headlines have been dominated by geopolitical events, culminating in the Prime Minister’s trip to Washington DC yesterday to meet Donald Trump for the first time since the new US president’s inauguration.
Keir Starmer made history on Tuesday when he announced that defence spending would reach 2.5 per cent of GDP by 2027, cutting the amount of money allocated to international aid spending in the process, from 0.5 per cent of GDP to 0.3 per cent of GDP (also by 2027). I wrote about it for the New Statesman here, but you can also read NS Political Editor, Andrew Marr’s cover story the UK’s place in this new international world order.
Meanwhile, this has been a surprisingly busy week in the UK climate and environment world. Below, I take a look at some of the occurrences of the past seven days and what they might mean for the UK’s climate ambitions, the government’s growth mission and, of course, for Climate Secretary, Ed Miliband.
Let’s get to it!
Ed Miliband versus growth
It’s been a tricky week for Ed Miliband. First, on Tuesday the energy regulator Ofgem announced it would be raising the price cap on energy bills by 6.4 per cent. This will make Labour's pre-government mission to cut bills by £300 per year by 2030 even less achievable. Then, on 26 February the Climate Change Committee (CCC) published its seventh carbon budget which advised that the sale of new oil and gas boilers should be banned in a decade’s time – a move which Miliband has previously opposed.
The former Labour leader and clean power aficionado has a tough job on his hands. As Energy and Net Zero Secretary, he must oversee the UK’s transition away from its dependence on fossil fuels to a renewable future while also ensuring that little to no harm is done to the economy in the process. His job is made even more difficult considering that the net zero consensus enjoyed by his Conservative predecessors has ended and increasing opposition to the green transition is mounting from an insurgent Reform-led right. As an old hand, having previously been Climate Change secretary under Gordon Brown, Miliband is no stranger to the difficulties involved in the net zero brief. But the political climate in 2025 is very different to the one he enjoyed in 2010.
The CCC’s publication of its seventh carbon budget – independent advice to keep the UK on track with its 2050 net zero target – is a key milestone. The CCC’s former chief executive, Chris Stark, is currently working alongside Miliband at DESNZ as the Head of Mission Control for Clean Power. In the thirteen years since the committee’s creation as part of the Climate Change Act 2008, the government has never rejected its suggestions. (Though, of course, when the government “accepts the recommendations” of a quango it doesn't really mean anything.)
Banning the sale of new boilers could be a flashpoint for Miliband (he has previously said he is “very wary” of the idea). Might this be the first time the government is at odds with the CCC's advice? But with buildings responsible for 60 per cent of the UK’s carbon emissions, decarbonising our domestic heating system may be the biggest climate challenge facing this government.
Indeed, his cabinet colleagues are not making things easy for him either. Speaking at the Scottish Labour party conference on Sunday, Keir Starmer announced an additional £200m to transform the fortunes of the declining oil refinery at Grangemouth, fixing the site up for an alternative future in bioengineering, biofuels or hydrogen. Starmer told delegates that oil and gas would be part of Scotland’s future for decades to come. This statement is seemingly at odds with the government’s stance on oil and gas – during the election, Labour said they would take out no new licences if elected although they will honour existing ones.
Starmer is also said to be supportive of further drilling at Rosebank, a large oil field in the North Sea, which was recently found by the High Court to have been approved unlawfully. As is the Chancellor, Rachel Reeves. The final decision over whether the project will go ahead now lies with Miliband, who himself has previously been publicly critical of the project describing it as a “colossal waste of taxpayers’ money and climate vandalism.” But with the government’s two head honchos publicly voicing their support for the project, Miliband may have to bite his tongue.
Reeves’s support of a third runway at Heathrow, alongside further expansion of Gatwick and Luton, is also likely to prove a headache for Miliband. The energy secretary, who has historically been opposed to Heathrow’s expansion, has now been brought round in support of Reeves’s big ticket growth item. The CCC, too, are no longer advising against net airport expansion (which they have in previous carbon budgets) but they report that aviation is likely to be the UK’s largest source of emissions by 2040 (they will be 69 per cent higher than in 1990). To ensure that these emissions stay within the level required, the sector will need to decarbonise and fast. But the CCC warns that the cost of this decarbonisation will need to be shouldered by the airlines themselves, likely driving up ticket prices. (One wonders how much growth a larger airport with higher ticket prices will actually manage to sustain).
All this again points to the difficult bind Miliband finds himself in. He must ensure the UK is matching up to its net zero targets while appeasing the growth targets sought by Reeves and Starmer. This is all beginning to look totally incompatible. And we have to wonder how long Miliband will be able to navigate it.
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Please send any news or comments to: megan.kenyon@newstatesman.co.uk